Friday, July 1, 2011

07/01/11 Slip Away



Friday in the pen. The thing to do here Friday nights is get ---tfaced on Tepache, and slip away...

http://en.wikipedia.org/wiki/Tepache

On a lighter note: In retrospect, the timing of my entry into buy-and-hold was perfect- the six-week correction allowed me time to rationalize my decision and secure defenses against second-guessing the strategy. There is no doubt in my mind that had I opened positions at last week's lows, I would have closed them all earlier this week- and been stranded for the remainder of the summer as the indexes lift off. No, I don't want to be stuck here on the ground watching those kinds of gains slip away.
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20 comments:

  1. MarkWJuly 1, 2011 at 5:55 PM

    TOF- Again, the problem I have with COOL is the shares the CEO sold right after earnings and WAY below the high. Roughly 3.10ish. Sold about 1/3 of his holdings. Yeah, could be a million things, but damn.

    NLS- GL, hard to believe that makes me nervous and MITK doesn't...Go figure.

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  2. MarkWJuly 1, 2011 at 6:01 PM

    Commenting on NY's new fracing policy, Crammer recommended HEK for the 2nd time. Those Fing warrants spook me.

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  3. RoBearJuly 1, 2011 at 8:37 PM

    Mark, I have been hearing all kinds of rumors that the whole United states is the new saudi arabia is a bunch of shit and that only 10% of the wells made through fracking ever turn out profitable. The whole business is a conspiracy to drill for investor money and not gas and oil. I will try to find the articles. The jist is that all the Frac companies are overstating reserves by a factor of ten.

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  4. JBmaderaJuly 2, 2011 at 4:36 AM

    and they are off!!! Tdf 2011 is underway:

    http://live.cyclingnews.com/

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  5. illiniJuly 2, 2011 at 8:04 AM

    RB/Mark - here is one article on the issue of fracking economics:

    http://www.energybulletin.net/stories/2011-06-30/energy-and-its-impacts-30-june

    All this talk is based on a recent article or articles in the NYT, I believe. They got a hold of a lot of industry emails which were very negative of the economics of the gas drilling. Don't think they mentioned oil in the one article I read. BEXP fracs for oil.

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  6. illiniJuly 2, 2011 at 8:26 AM

    Here is the whole series on fracking from the NYT:

    http://www.nytimes.com/interactive/us/DRILLING_DOWN_SERIES.html?scp=5&sq=fracking&st=cse

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  7. 2nd_aveJuly 2, 2011 at 10:10 AM

    Fracking economics. Only on this site would I know you're not just venting about the sad track record of economists.

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  8. MarkWJuly 2, 2011 at 5:10 PM

    One tourny win, with one to go tomorrow.

    RB- I actually had to meet with MOG this am. Short story is all the 'no natty' stuff is bs. It's all there and perhaps much more. His exact line was, 'This is the best possible resource and advantage the US has had in my life time.' Or something very similar. He is also working on a fracing report right now he said he would send me when finished.

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  9. illiniJuly 2, 2011 at 6:36 PM

    "no natty" stuff's bs. That's pretty fracking funny.

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  10. AnonymousJuly 2, 2011 at 6:38 PM

    Mark - my take on CEO sale...dude has skin in game still..but he's been in the game and has seen the highs and lows...mostly lows though. He's being cautious...who knows.

    I think this passes and the company on the back of the zumba craze and ties to zynga through parking wars 2 gets the stock up to $10

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  11. RoBearJuly 2, 2011 at 9:06 PM

    Sweet! Who does he like on the natty side? Lets face it obama is staritng to get real negative toward major OIL. Maybe his reelction plan is to throw them under the bus and go full NATTY. NOt likely, but it could happen. A tax incentive to buy a natty car could cause a huge bull in the space.

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  12. ChickenpookieJuly 3, 2011 at 10:38 AM

    Negative fracking campaign? Maybe the natty nay-sayers can work their temporary magic just long enough to let me back in the door???

    Someone's always floating lies, aren't they?

    Wonder when the oil supply emergency restarts?

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  13. illiniJuly 3, 2011 at 4:35 PM

    CP - From Friday AM: "Something's up, markets don't move like this without good reason.

    So what changed?"

    Per BC's WIR its because bond prices went down and that's because of the Greece bailout which also caused the Euro to rise and the $ to fall. Got it? At any rate, every thing I have read says the Greeks are still insolvent and the fix is only temporary so go figure.

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  14. BB CanadaJuly 3, 2011 at 5:17 PM

    inTERESTING TIDBIT...

    Stocks rallied by +5.6% last week. Putting this into historical context, this was the 29th best week for the stock market out of 3,207 weeks since 1950. Thus, last week’s performance ranked among the top 1% dating back to the middle of last century.

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  15. illiniJuly 3, 2011 at 5:40 PM

    BB - You mentioned KCLI as a holding recently. I like it better than NWLI and am waiting for an entry for a long term play. Any suggestions about KC Life now? This would be my only holding in financials, should I go there.

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  16. AnonymousJuly 3, 2011 at 5:42 PM

    My thinking is we see a break of 1,250 at some point over the next 6 to 10 weeks....

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  17. illiniJuly 3, 2011 at 9:14 PM

    As usual, the Wizard takes credit for giving us a few heads up in WIR's. I have not read it all but am having a hard time keeping my own head above water.

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  18. BB CanadaJuly 4, 2011 at 4:51 AM

    illini,

    I still have KCLI as one of my largest positions. Financials are still quite contrarian now and you will make a lot of money if you pick the right ones. Insurance companies seem especially ignored by the market.

    KCLI is still trading at 52% of book value as opposed to a 10 year average of about 80% and peak valuations on 100% in 2007.

    Company is very safe - conservatively run, no debt, overcapitalized and was just reconfirmed to have Financial Strength Rating of A (Excellent) by AM Best.

    My rational is that nothing has fundamentally changed in the insurance market, so just the stocks and valuations will return to normal over time and you will make an above market return. If KCLI gets back to normalized earnings of about $3.00 per share 80% of book value in 3 years, that gives you an annualized return of about 26%.

    You can always find issues with industries and companies - the current knock against insurance companies are yields are too low, so they can't invest at high enough rates. The reality is that companies aren't stupid and either rates will rise or pricing will increase to offset this - either way, profits and ROE will return to normal (it has to!).

    The other nice thing is the dividend yield is 3.4%, so you get paid to wait for this to happen.

    The only concern I would personally have is that it has risen by 10% in the last 3 weeks, so it may be due for a pullback. My approach to stocks like this would be to buy about 1/3 now, then watch for better entries to get the other 2/3's. You may have a a better approach. I am not great at timing short term entries with stocks, but my equities have returned 17% a year more than the S&P for the last 10 years and I'm quite confident KCLI will as well.

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  19. ChickenpookieJuly 4, 2011 at 7:08 AM

    SPY - RSI(7) is now 76.96, nearly as high as April 29th high that registered 80.26. We may have a little more upside in store but soon enough no doubt, there'll be some profit taking.

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  20. ChickenpookieJuly 4, 2011 at 7:30 AM

    KCLI - I wouldn't be surprised to see $29.50 there again in the next couple months assuming the sector doesn't rally from here.

    It does look as though there's could be a little more upside remaining in the chart:

    http://stockcharts.com/c-sc/sc?s=kcli&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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