Saturday, August 20, 2011
08/20/11 What's being priced in?
What's the market pricing in here? It's pricing in another seventies, bro! The greatest ----ing decade in music history.
Stop worrying and enjoy the show as another generation of anti-establishment rebels sweeps CNBC, Carrot-top and deadbeat CEOs off the table ahead of 'real' political/economic change.
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Just finished reading the ADSK Con Call. Pretty interesting stuff and wide ranging. I highly recommend reading it and the Q&A.
ReplyDeletehttp://seekingalpha.com/article/288456-autodesk-s-ceo-discusses-q2-2012-results-earnings-call-transcript
Scan. Small cap/-50% in 30 days/buy recommendations.
ReplyDeleteAKS/IL/JRCC/MTG/MTOR.
http://finviz.com/screener.ashx?v=111&f=an_recom_buybetter,cap_small,ta_perf2_4w50u
dude - mark....thanks for the link.
ReplyDelete"Thanks, Dave, and good afternoon, everyone. Financial markets grew weaker and more volatile by the week. Today was certainly no exception. It's a bit surreal announcing our results after the close of today's market, since we have lots of positive news to report.
Across the board, our key financial metrics was strong, with growth across all geographies and business segments, better-than-expected operating margins and profitability and continued strong cash flow. Hoping driver growth was an increase in the demand for our suites. "
ADSK looks interesting in terms of oversold bounce being possible, but quite honestly, though, this isn't the revenue growth I like to see from an investment if I'm going to hold it.
ReplyDeletehttp://financials.morningstar.com/income-statement/is.html?t=ADSK®ion=USA&culture=en-US
If I'm going with no growth, then I'm going with BAC...trading at 1/2 tangible book value and 1/3 net asset value. I'm sorry but I can't seem to pass over this...
ReplyDeletehttp://www.cnbc.com/id/38451750
ReplyDeleteCDS spreads continue to blow out in Europe. My game plan for next week is to wait for 1,120 on a closing basis to break, and if it does, then to see it come back up to 1,120 before going long again. I don't know whether we're at a bottom or if we're like the market was on 9/18/1937 (yes, 1937). Only using that as a possible guide, it was just a short term bottom that ultimately turned into much lower lows.
TOF- This guy's blog was linked at SOH. VERY interesting stuff. I've book market it for further study.
ReplyDeletehttp://brucekrasting.blogspot.com/
BAC - There are multiple gaps down all the way from $14.48, sounds like a money maker even if only 90% of those gaps fill.
ReplyDeleteThe tight pinch in this chart seems to suggest a buying opportunity is rapidly approaching, however I'm keeping in mind that stocks do like to retest lows, and that yields a target of ~$3 for BAC if I recall:
http://stockcharts.com/c-sc/sc?s=bac&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
One more stinky linky and I'm out.
ReplyDeletehttp://www.bloomberg.com/news/2011-08-19/global-bank-capital-regime-at-risk-as-regulators-spar-over-rules.html
"9/18/1937"
ReplyDeleteI can't clearly recall that day. ;)
Another interesting chart:
ReplyDeletehttp://peterlbrandt.com/wp-content/uploads/2011/08/dead-cat-bounce-2008_big1.jpg
CP- Obviously, you've been a drinking man your entire life. I don't expect to recall that day clearly- but clearly you were around that day ;)
ReplyDeleteThe week of August 22 now appears to be an important turning point. There's insufficient negativitiy for us to move up on sentiment readings alone. I foresee one of two scenarios:
ReplyDelete(a) The same slow relentless decline that got us to the March '09 low.
(b) A catalyst that gives the markets an excuse to crash.
What I'm looking for is an 'event' or some type of high-volume institutional 'statement' that removes the 'uncertainty and doubt' that characterizes the global stock markets right now. The stock market should not resemble a casino- there needs to be reasonable expectation of decent returns for J6P to participate.
ReplyDeleteWhat if BAC turns out to be the 'big bank failure' that apparently must occur to clear the airwaves of rumors?
ReplyDeleteSoccer-
ReplyDeleteWell, it turns out my little guy will be the star of his team. Not b/c he's a great player, but b/c everyone else, well, you get the picture. So it will be a losing season, but he gets to play BMOC.
Well, of note is the negative correlation between the dollar and market prices having inverted and near(ing) historic extreme(dollar down simultaneous to market).
ReplyDeleteCertainly immediate concern may involve the fate of the dollar, which I would venture to guess isn't in total failure mode. Substantial adjustment perhaps, but far from worst case collapse.
If only PM prices hadn't been managed for decades, the transition would have a reliable metric of reference.
"my little guy will be the star of his team. Not b/c he's a great player"
ReplyDeleteHe can and will be a great player, with dedicated support from the peanut gallery.
Seriously though, my interpretation of these charts leads me to believe we have not passed the point of no return(indicative of a retest of 2009 lows, etc.). I would have to at minimum, witness close beneath 10,500 dow first.
ReplyDeleteZinc - possibly as important as copper, gained (proxy DBB) on Friday, along with copper.
ReplyDeleteNot all doom and gloom, from this perspective.
Hey guys- Read Mark's link: http://brucekrasting.blogspot.com/
ReplyDelete"If I’m wrong, and we get nothing, the European funding markets are going to collapse next week. It will be very difficult to reverse the damage that this will cause. All the central bankers know this. "
I think this guy's analysis is spot on. If the Fed doesn't announce half a trillion in funding THIS SUNDAY night, the funding market will collapse next week.
Is everyone here ready for 2nd's 500 point gap on Monday????
http://brucekrasting.blogspot.com/
I can’t see this going on much longer. We may have already passed the point where the downward spiral on funding availability is irreversible without global central banks stepping in.
That brings us to Jackson Hole. Damn near everyone I read is thinking that Bernanke is going to pull a rabbit out of his hat next weekend. Some new form of monetary stimulus will be announced and all will be well for the markets once again. I don’t agree.
While the US has some major league problems, those issues can’t be addressed by the Fed. There is nothing more that the Fed can do. With short-term rates at zero (and planted there for years to come) and the ten-year at 2% there is nothing left to be done. Or is there?
I maintain the next move by the Fed is to massively open up the dollar swap lines with European central banks. I don’t think Bernanke wants to announce this significant step at Jackson Hole. It is an EU issue and the Fed can’t take the lead on this. Opening the swap lines will prove to be very unpopular in the US. Politicians will jump on it as a bailout of Europe while America is struggling.
Bernanke is going to take some heat, when this happens (I think this is now a certainty, just not sure of the timing). But I also think that Bernanke is pushing (as I write) for this to happen. The only option left for Bernanke is to put another half trillion or so into the global system. He can’t do that in the US, but he has a great excuse today to do it in Europe.
I maintain the forum for this is not Jackson Hole. There is too much theater in all of this already. The Europeans don’t want this to be a circus (more than it already is). They want to be seen as responding to an EU problem, they don’t want to be seen as a slave to Bernanke and the Jackson Hole confab.
The announcement of the swap lines will not come from Wyoming. It will happen on a Sunday night. It either happens before next weekend, or the weekend after. Given that things are rapidly unwinding in the EU funding markets I don’t think they want to wait another two full weeks to put a band aid on the problem. They have to do something sooner than that. If they don’t, they risk a full scale liquidity blowout before September. If the blowout were to happen it would be very difficult to reverse. They have to (attempt) to get ahead of the problem before it is a crisis.
I think there is a decent chance this important next step takes place outside of Jackson Hole. It could happen this Sunday night. If I’m wrong, and we get nothing, the European funding markets are going to collapse next week. It will be very difficult to reverse the damage that this will cause. All the central bankers know this. They know that there is not much time left to act. They can’t wait another two weeks.
Anybody care to comment on Main Street's reaction to us taxpayers giving half a trillion to the EU?
ReplyDeleteI don't know. Wouldn't we have to see a worldwide collapse...some sort of Armageddon before we would support such a thing in light of the great big debt debate of what, just 2 weeks ago?
Jesse - I don't know, except to say the majority out there still seem to believe there's nothing wrong with the dollar and that ancient forms of currency predominant for thousands of years prior to the last 40, are nothing more than rocks, mere fossils left over from some far removed ancient civilization.
ReplyDeleteHesitant to engage?
ReplyDeleteSo how are things going in China these days? About all I've heard lately is that homeowners are not allowed to sell their properties.
Similar to the US, except here, former "homeowners" are allowed to reside in their "rental units" temporarily, at no charge. Sure beats living under a privately owned freeway overpass huddled around a burn barrel...
Man, oh, man. This is one battered port...
ReplyDeletehttp://seekingalpha.com/article/288672-a-look-at-bruce-berkowitz-s-top-stock-picks
Jesse- I went back and read about 10 posts from Krasting. The guy obviously knows his stuff.
Bruce Krasting has some good insights, IMHO. I believe he is correct to emphasize Europe as the immediate problem. USA may be the 1000 pound gorilla but the monkeys are collapsing now and need more bananas.
ReplyDeleteProblem is the USA eats a lot of bananas too. We really do.
ReplyDeleteIt appears there's an immense global shortage of bananas. Yes, we have no bananas...
ReplyDelete" Yes, we have no bananas..." is a classic. I sang it to my 5 yr old grandchild but she did not really get it.
ReplyDeleteWhats to get? The humor I suppose. But it is so true of the political parties that it is no joke.
ReplyDeletehttp://sz0172.ev.mail.comcast.net/zimbra/mail?view=msg&id=407080#1
ReplyDeleteTick toc...
Bananas...
ReplyDeletehttp://www.youtube.com/watch?v=1Enam3uk9Dc
Buy and Hold - I'm for it.... to an extent. After the last debacle I vowed that I would not be in the market during the next one. I wanted to hold cash for the opportunities. That's why I bought the S&T algo (which was still in Beta during 2008/2009). And that's why I am out at 50% now and hoping to get out out of more unless there is a change in technicals.
ReplyDeleteThe danger is that I might miss a buy out or other big event, especially in oil shale companies which I have sold for peanut profits recently (BEXP & GEOI).
ABV - A pretty strong chart, in comparison to many others...
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