Friday, July 22, 2011
07/22/11 Prison Etiquette
Solitary is the only way to do time. I won't put up with the crap in the cell blocks- the constant noise drives otherwise stand-up men into acts of insanity peculiar to prisons> flooding their cells with plugged toilets, for instance.
I'll let Gary Oldman demonstrate the proper way to handle market noise, beginning with the boilermaker.
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illini- It's not easy, but it's easy- just ignore the noise and hang on- CSCO will be in the thirties/forties at some point. On its own timetable.
ReplyDeleteAlright- new YTD highs will have to wait until next week.
ReplyDeleteThat's OK. New highs today would have been an invitation to sell on Monday.
ReplyDeleteCSCO - Seems like lean and mean is in vogue...
ReplyDeleteI haven't seen that movie. Good?
ReplyDeleteImm- No problem. Hope you take the tome to post any ideas you have. All welcome!
ReplyDeleteTome? Is that more serious than time?
ReplyDeleteGreat film.
ReplyDeleteA tome, which refers to a sober and weighty (in both senses of the word) treatise on subjects generally not deemed exciting, is definitely 'more serious' and not in keeping with the light tone we prefer on this blog.
ReplyDeleteCool. Headed south this weekend for some grub?
ReplyDeleteNext TT dinner is at that steak house if I have a vote.
Someone changed positions today. Whoever it is, Rep or Dem is a Fing chickenchit. Thus my puking comment earlier.
ReplyDeletePuking all ready? Its only 8:15!
ReplyDeleteSo Boner walked out on Obama after market close?
ReplyDeleteInteresting article: "Time to Switch from a Secular Bear to Bull Market Mentality, Part 1" (http://www.financialsense.com/contributors/chris-puplava/2011/07/22/time-to-switch-from-a-secular-bear-to-bull-market-mentality), which points out a very good correlation between S&P 500 over many decades with the ratio of the size of the 35-49 year old group relative to that of the 20-34 year old group in US. US Census Bureau points out that this ratio was going down 1960 to 1980, rising between 1980 and 2000, was going down since 2000, and will start rising again in 2015.
ReplyDeleteOver the past two months we finally got a major increase in consumer spending on durable goods purchased through the internet, as recorded at:
ReplyDeletehttp://www.consumerindexes.com/index.html
"So Boner walked out on Obama after market close?"
ReplyDeleteMakes mee miss the Clinton whitehouse where the boner stayed where it belongs, in the oval office.
Silver seasonal chart and GPL
ReplyDeletehttp://seekingalpha.com/article/280358-an-extreme-buying-opportunity-in-silver?source=yahoo
BTW, where's Jesse, does he have a girlfriend.
http://www.youtube.com/watch?v=oxY7X11ExUI
Oh Baby
ReplyDeletehttp://screencast.com/t/zqRG6qZCfp
Oh but T3D, likely story. The very best traders all know that commodities like silver, gold and oil along with the entire periodic chart are way overbought and King dollar is oversold...
ReplyDeleteFor example, here's what George Maniere himself, the same guy pumping GMO by coincidence, has to say:
ReplyDeletehttp://www.minyanville.com/businessmarkets/articles/gold-silver-healthy-pullback-comex-comex/7/21/2011/id/35862
http://www.minyanville.com/businessmarkets/articles/general-moly-molybdenum-commodities-rare-eath/7/22/2011/id/35888?camp=syndication&medium=portals&from=yahoo
CP, don't really know who Georgie boy is and read the moly post by Marko yesterday.
ReplyDeleteReally the smartest person to read is Sinclair, especially his early stuff where he laid it out all about eight years or so ago. Talk about a crystal ball. His early stuff was the best and he shared his methods. Now he mostly tries to get those who can see to hold the course.
http://www.youtube.com/watch?v=YCKANiM9tUM&NR=1
$INDU - Multiple choice question, could it be blue sky or mud puddle?:
ReplyDeletea) Inverse H&S
b) Double top
c) Both
d) Broad side of barn
e) None of the above
I'm pretty sure somebody knows...
http://stockcharts.com/c-sc/sc?s=$indu&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736
BTW, LOL, I love the Beavus and Butthead reference, Quite good. Couldn't have made a better one up my own... Somehow I think Boner's no less a Saint.
ReplyDeleteT3D - I don't know who Georgie is either, but something tells me he catches enough of something flung from a ceiling fan to make him look foolish in the short term.
ReplyDeleteWho knows, the S&P RSI isn't quite in the clouds yet, and neither did it fall into the gutter, so for now I'm just watching prices. ;)
USG ? - Remodeling index - "The BFRI for May reveals that residential remodeling activity in May registered growth in every region of the country and signifies the 19th consecutive month of industry growth. According to BuildFax, the data demonstrate that many Americans are remodeling their current homes rather than purchasing new ones.
ReplyDeleteThe May 2011 index was 124.3, the highest number ever. This was a 22 percent year-over-year increase. Each region increased month-over-month with the Northeast up 9.8 points (12%), the South up 7.3 points (7%), the Midwest up 16.3 points (18%), and the West up 8.7 points (7%). Even though the Midwest was up month-over-month, it continues to lag the other regions (as it has for the past three months) in year-over-year performance, down 10.6 points (11%) year-over-year. All other regions were up year-over-year, with the Northeast up 7.2 points (9%), the South up 9.5 points (10%), and the West up 20.7 points (21%)."
"With so many foreclosed properties sitting empty on the market we can expect remodeling and rehabbing to be a leading indicator of a bottom in the housing market. We already know there is a dearth of affordable rental housing available to low income renters. From that perspective, FHA should open its 203(k) program to investors if they want to accomplish their affordable housing goals."
http://www.mortgagenewsdaily.com/07182011_residential_construction.asp
Mark, don't you think it's about time to ditch the Toyota P/U and get a real truck?
ReplyDeletehttp://cgi.ebay.com/ebaymotors/08-MXT-4x4-AIR-RIDE-SWEET-TRUCK-/270785249456?pt=US_Cars_Trucks&hash=item3f0c0f00b0
Hey guys heads up on mitk I just came acrosss a research report written by bud leedom at californiastocks.com from 2009 about mitek...he actually works for mitek as their finance director...that's kind of a red flag for me. Might be nothing but might be something worth looking into. I never like seeing someone pumping their own company's stock.
ReplyDeleteNow that DB had a nice run up, I think I'll buy some puts on it once again so as to hedge myself a little against a market correction. I just placed a buy limit order at $5.50 for 2 October 2011 $57.50 puts on DB.
ReplyDeleteTOF - The last page of the report mentions that the CFO position is vacant at Mitek and lists same as a risk. Appears that analyst Bud Leedom filled that position later. Questionable whether it was payola/reward for the glowing report or whether he saw it as a good opportunity to join a growing company or both.
ReplyDeleteHere is an interest fact dug out by John Mauldin, in his July 2 newsletter:
ReplyDelete"And the last chart is one I had not seen before, and is interesting. Rich notes that if year-over-year GDP growth dips below 2%, a recession always follows. It is now at 2.3%, and growth is clearly decelerating. Another quarter like the first quarter and we should either be close to or actually dip below 2%."
And then he says:
"China is already in tightening mode. A hard landing is still too far away to call, but things could get softer, which will definitely affect commodity prices, which are already rolling over."
Finally, even before the 2008 recession John Mauldin pointed out that in recession the stock market drops on average by 40%. So if we do get a recession in 2012 (a call I made about a year ago) and gold miner prices drop precipitously once again, that will be an amazing buying opportunity. Why? Here is an excerpt from John Mauldin's Outside the Box on June 27, which exactly matches what John Hussman has been writing for years:
“The more substantive driver of inflation is fiscal, not monetary, policy. The forecasted low future real growth and low future government surpluses are synonymous with a prediction of low future production of goods and services. The “New Normal” assumes poor returns to government deficit spending. The stimulus being put to work today (through deficit spending) is predicted to deliver little future output. This phenomenon then leads to high prices (inflation) as nominal prosperity created through increased government outlays cannot be converted, in the future, into increased consumption. The economy, upon recognizing the likelihood of future inflation, will respond with inflation today. This impending fiscal-driven inflation cannot be stopped by the Fed through monetary maneuvers.”
Thus, a recession will only result in more unproductive government stimulus, which will further increase the amount of inflation we will get at the end of the decade. Thus, investors in precious metals with a time horizon of 5 years will benefit greatly from a recession in 2012 and a sharp temporary drop in commodity prices.
I have it on good authority that Boehner has agreed to guarantee a relief rally on Monday.
ReplyDeleteEveryone has skeletons in the closet. And the guys in here know how to find them.
TOF- Interesting find. I don't like it either.
ReplyDeleteCP- No thanks man. I already have one car that get's 8MPH!
ReplyDeleteHere's a recent interview with this Leedom guy. About 2 weeks ago.
ReplyDeletehttp://www.sddt.com/files/media/view7.cfm?media=UFP6953Y
He does briefly mention MITK but doesn't disclose he works there. Not sure what to make of this.
TOF- Is this a legit SD paper/site?
Mark, I'll bet with the turbo V8 that sucker would easily do 120+! Every contractor worth his salt needs one of these, shove it in granny low and wrap a good chain around to give a brief corrective tug for any slight framing or foundation irregularities. ;)
ReplyDeleteSo now we're anticipating a Boner rally? That should prove interesting...
ReplyDeleteJust watched another 'Bud' interview. This one Jan/2010. Mentions a ton of stocks, but not MITK.
ReplyDeleteHe does link MITK on his Facebook page.
Mark > I honestly don't know what to make of it. It could be completely innocent but I do want to find out how he ended up working for the company and why he still writes research reports. Maybe its his hobby and they found him and asked him to work for them? Who knows?
ReplyDeleteHere's another thing I came across that I'm not quite sure what to make of:
http://sec.gov/Archives/edgar/data/807863/000114420411007810/v211037_8-k.htm
"In his letter, Mr. Bealmear states that he is resigning as a director because he disagrees with the Company's decision not to nominate him as a candidate for director at the annual meeting of Company shareholders which is set for 9:00 a.m. on February 23, 2011. Mr. Bealmear asserts that (i) the Company's decision not to nominate him as a candidate for director was an act of retaliation for his opposition to a stock option award that was approved by the other members of the Compensation Committee and issued to Mr. DeBello in November 2010, (ii) that he did not receive notice of the meeting at which the compensation committee approved the option grant, and (iii) the board lacks sufficient independence. "
FLIR - Opportunity knocking?
ReplyDeleteTOF- Could be. It does seen a little strange. The director business means nothing to me. He was replaced by Hart, who is the real deal. Remember, I talked with one of my guys who knows Hart well and says he is a stand up guy.
ReplyDeleteHIT - Still plugging along...
ReplyDeleteYeah Hart seems like a legit guy for sure. The biggest issue I've ever had with MITK is that they have been diluting the hell out of the stock, but given that they're now profitable I doubt they will do that going forward. The issue was brought up on the last call and I think mgmt got the point.
ReplyDeleteMITK - I thought you guys did a great job of analyzing, hasn't the stock actually gone up since this guy left the company?
ReplyDeleteCP > Yeah, and then some. It's a beast of a stock.
ReplyDeleteSo raise your hands if you think the market calls the politicians bluff and goes up...this whole debt ceiling raise nonsense is most likely just an act to get us to ignore something else at hand...
My best guess is there's a slight amount of upside remaining, but I think it'll sell off pretty soon to support levels because of a need to stay in the current trading range until more clarity is provided.
ReplyDeleteAdditionally, the chart seems to be resolving an inverse H&S pattern on which the right shoulder should be nearly complete around Aug. 2nd, it appears. Seems like we need to remain in the current range for that to fully form. The IH&S neckline seems to be ~12,865 or so, which if exceeded, would provide a target of ~13,298 for the formation.
ReplyDeleteOr maybe there's nothing to it...
Silver needs to move above $40.86, otherwise it's liable to revisit the lower trendline.
JOYG - Breakout gonna stick?
ReplyDeleteCVV - I think I would've had to sell that one Friday.
ReplyDeleteHaven't checked out the news, but 10pts? I would have thought much worse.
ReplyDeletePM's look healthy, that's got to be equities positive...
ReplyDeleteBoehner's a dead man.
ReplyDeleteI'm watching 'The Social Network.' I won't comment on the film itself, but I like the kind of ideas being generated in the process of watching it.
ReplyDeleteLook, man. We have some serious brain power on this site. Let's put it to use.
Gold - Nearly hit $1628. Not quite though...
ReplyDeletehttp://www.youtube.com/watch?v=KONNeaMaiPY&feature=related
ReplyDeleteNo worries mates. The debt ceiling Bull shit has nothing to do with equites and eveything to do with bonds! Bonds have barely budged. When a country REALLY DEFAULTS that means they don't pay their bond holders. Why is there no fear? US dollar is still the de facto currency for the world.Debt ceiling or no debt ceiling.Be careful jumping in to a rally when the debt ceiling is raised. That is going to be a dumb money fade. Best thing for intermediate term is probably nothing until the bullshit ends. Still a range bound market.
ReplyDeleteT' default, really? Humm, and I was beginning to think maybe the single largest US bondholder in the world is the Fed... It's a default, just not a bond default.
ReplyDeleteGreece didn't have the luxury of setting it's own monetary policy, we do...
I think more entities then the feds own bonds. Enough to move the price. If it is not a bond default then what else is there? Why is not TBT the trade of the century? Where is the fear. 100 points in the Dow is a tantrum. Certainly not fear.
ReplyDeletehttp://www.bloomberg.com/news/2011-07-25/clinton-assures-china-on-u-s-debt-ceiling.html
ReplyDeleteMaybe TBT is a no brainer!
I still go back to the fact that valuations on stocks are cheap, earnings this quarter are good yet again.
ReplyDeleteAll countries, China, the US, most of Europe, are watching carefully to avoid another recession. Could another one happen, sure, but if we just keep moving forward slowly, things will get better and stocks have a lot of room to the upside. In fact, a slow recovery gives us more upside on stocks than a fast one as people will continue to be skeptical and give us more opportunity to accumulate cheap.
BB > Yeah as this whole debt ceiling thing gets cleared away and pessimism evaporates, this whole period of sideways movement in the market will probably turn into a powerful move up.
ReplyDelete"Why is not TBT the trade of the century?"
ReplyDeleteI think T's are higher stakes than anything else, higher rates are indicative of T' default? Lower dollar helps relieve debt load?
(You borrow from me in gold standard, I repay you in something less worthy)
Perhaps the default will first be observed in the value of the dollar then move into T's? Already fixed income has taken a large haircut due to lower dollar and rates, T's only default when government can no longer roll over debt? As long as the FED can keep that going by buying, it doesn't happen (unless there is a sudden overwhelming rush from privately held T's)?
The dollar (FRN) default begins (began) when the FED began buying with manufactured money?
Anyway, I doubt we're there yet, unless maybe the debt ceiling isn't raised. The part I don't get is I thought the FED had indicated they don't need to expand their balance sheet.
At some point they need to somehow reverse T' receipt trend(down now, right?) or debt expansion trend(up now, right?), else the dollar trend resumes down?
I think they continue to sacrifice the dollar, it's way too high anyway as long as we can buy foreign products cheaper than they can be made here.
How far are we really from the end game, though? Are there a few orchestrated headfakes on the "road to ruin" or are we there now?
Has TBT already broken out this morning? How long can rates realistically remain this low?
Driving to Cloverdale to vist my parents Sat. there was a new billboard from Summit State Bank about...You guessed it, mobile deposit. I'm guessing this is a 5 branch bank.
ReplyDeleteNLY is taking a dive this morn. $17.76
ReplyDeleteGMO off @ 4.79. 7%. I'm betting I can get back in today.
ReplyDeleteBB - Yes, you may be and probably are right about valuations and that's a key point if true!
ReplyDeleteWhat I see are technical reasons in the chart for a pullback, the right shoulder of inverse H&S needs to form before we can move up out of this range.
So I say, wait for bottom of range retest before adding?
Heightened tension, lots of 'activity' in the cell blocks this morning- can't see it, of course, but I can sense it- they'll be leaning on Boehner. Rank and file made the single-roll bets and have lost already- for the wise guys, there's still time for bets to pay off.
ReplyDeleteThat's the way I see it too TOF.
ReplyDeleteNot to pick on most of you, but my experience is most U.S. investors are too inwards looking and make decisions based on what is happening in the U.S. This worked fine in the 80's and 90's, but isn't working any more as China and the other emerging economies have become the drivers for demand growth. For example, I think it is crazy how the U.S. press hammers Wal-mart because US sames stores sales are down a half a percent when overall sales are up 5% due to overseas growth or how the price of oil moves up or down a dollar bases on inventories in Oklahoma when Brent has been the standard for oil pricing for a few years now.
Right now, I think too many investors are hung up on the facts that American job growth is weak and the debt ceiling debacle. Really, the best way to hunt for good new stocks is to look where the demand growth will occur (eg. China energy, food, high end luxuries, financial services, etc.) and buy stocks that meet these
demands - seems a lot easier than trying to figure out which retailer Americans who are low on cash are going shopping at.
Good article in the WSJ about how the S&P 500 companies are driving their growth overseas.
A couple of highlights:
General Electric Co., which reported a 21% increase in earnings to $3.8 billion for the second quarter, saw U.S. revenue in its core industrial businesses shrink about 3.4%. International industrial revenue, meanwhile, soared 23% to $13.4 billion, accounting for about 59% of the company's total industrial revenue.
Earlier this month, Mr. Immelt told workers at a power-turbine factory in Greenville, S.C., that GE would continue to expand employment in the markets where it sells its products, adding that he aims to keep about half the company's workers in the U.S. But every gas turbine manufactured by the 3,000 workers at the plant is destined for export, he said.
http://online.wsj.com/article/SB10001424053111904772304576466003840674770.html?mod=djemTMB_t
But what happens if/when the debt ceiling is passed or eliminated, will the dollar rocket and cause some selling? Does elimination option have a different impact than a raise?
ReplyDeleteThat's what I'm interested in knowing, maybe they don't want a higher dollar but they do want low rates and so are dragging their feet and intend on piss-ant increases as needed for the next couple years?
BB- Right on. One reason I like GE/AA/FSCGX/CSCO/INTC lies in their exposure to foreign markets. Hulbert also made the point this morning that the debt of many blue-chip companies is rated higher than US debt.
ReplyDeleteSilver - resistance at $40.86, gold's resistance was $1604. I want to see if gold can hold this level, it should at least retest?
ReplyDeleteBB > I think the case for emphasis on the US still stands though, given we are the country that brought down the rest of the world in 07-09.
ReplyDeleteChicken,
ReplyDeletethe problem with TBT is it that it is one of those double products and the price decay over time is significant. It is meant to be a short term trading vehicle and works well for that, but as a long term way to play the rise in interest rates there are better ways.
To see this, run a chart comparing TBT to UBT (the 20 year double long bond). You'll see that since the UBT was created, it's up about 18% and the TBT is down 33%, so a net 15% loss. You can also look at option pricing to see the expected decay. You need to get your timing right to overcome this decay.
I like the insurance companies as an easy way to play rising rates or I was reading an analyst who said a lot of companies with pension deficits will have these wiped out by a raise in interest rates and their balance sheets will improve greatly as another way.
I've been saying for years that the US has to reset it's target unemployment levels. Once this is accepted we can move (limp?) forward.
ReplyDeleteTOF,
ReplyDeleteyou can make money looking at the US and it sounds like you are doing a good job.
My point is though that it is just harder to do. Let's say you are looking at the automotive stocks. We get great reporting of sales on the U.S. market on regular basis, but given that the Chinese car market is now bigger than the U.S., I think it is more important to try and know how sales are doing there than the U.S.
CADC - She's got momo?
ReplyDeleteChickenpookie said...
ReplyDeleteBut what happens if/when the debt ceiling is passed or eliminated, will the dollar rocket and cause some selling? Does elimination option have a different impact than a raise?
=> Good question. Reality is no-one knows because it really depends more on how "the market" is positioned relative to what happens than what actually happens.
BB > Yes I totally agree with you just saying that there is still a large weight placed on the US. There is a reason why the market is trading at only 13 times earnings and that has to do with the slow growth of the US. If the US was in pre-crisis mode the S&P would be at 1700 already.
ReplyDelete"CADC - She's got momo?"
ReplyDeleteThat's the same behavior as happened during the last rally from $2 to $3 in a few days. I was actually betting on this momo when I added to my CADC position at Friday's close.
My buy to open limit order for 2 DB October $57.50 puts was triggered this morning at $5.50. So if the whole market crashes now, I'll get a small consolation prize. :)
ReplyDeleteI have a feeling that we may have seen the bottom for CADC (at $1.50), and so I decided to cancel my sell limit order at $2.80 and leave just the one at $2.37 (I bought CADC on margin on Friday, and so I want to sell that share lot with a small profit so as to get out of margin). I will let the rest of my CADC position "run."
ReplyDelete