Quick Hitter #2: If the FED and Treasury decide to embark on a “TWIST” of the curve what will the impact be on the BOND MARKET? The 30-year BOND has maintained a bid as many in the market are assuming that with the 10-YEAR NOTE trading at 2%, the FED will look to the 30-YEAR where rates are 3.33% and push hardest to drive the longest tradable instrument lower. There will be interest in selling the LONG BOND when the FED decides, but I caution that if the FED “TWISTS” the longest end, a CONVEXITY PROBLEM is going to arise for mortgage holders.
This will also be a problem if the Treasury were to do a massive REFI. Holders of RMBS will be awash in money on a massive REFI program and investors will have to rush to lock up rates at whatever price available, thus putting even greater downward pressure on yields. The TREASURY market is badly disoriented by the QE programs and now the introduction of the “TWIST.” Let the situation clear before being committed to any shorting of BONDS. There will be a time to short the DEBT of the U.S. but let the technicals be your guide.
Quick Hitter#3: A very good article on BLOOMBERG by Yalman Onaran, “Deposit Flight at European Banks Means Risk Piling Up at ECB.” The article details a very large problem in Europe. A problem further compounded by the actions of the Swiss National Bank. As Europeans in the PIIGS worry about their domestic banks, they take their EUROS and place them on deposit at banks in stronger financial positions. It was the effect of the inflows from the PIIGS that drove the SWISS FRANC to such dizzying highs, forcing the SNB to act to curtail its appreciation. As the banks in Greece, Italy, Spain, France and Ireland need to raise cash they exchange sovereign bonds with the ECB, thus making the central bank the ultimate holder of questionable collateral.
The more runs on banks, the more collateral the ECB is forced to accept. As Desmond Lachman points out in the article, “IF there are sovereign defaults, the ECB will be left with the garbage that has been accepted as collateral. It’s putting EU taxpayers’ money at risk in a very non-transparent way. But there’s no alternative. The ECB is the only game in town.”
What is happening here is that Germany’s hand will be forced to support Europe by underwriting the ECB. The longer the CRISIS plays out the more sovereign collateral will be placed on the ECB‘s books–fiscal centralization by stealth. The quiet bank runs have lead to the call by Christine Lagarde for Europe to recapitalize its banks. As banks need liquidity it is the ECB that provides, but will the Germans agree to be the GUARANTOR?
I have never looked at Whole Foods margins but their prices are high to me which makes me think they will do just fine. I also think people will spend way more then $20 bucks when they visit the store.
CP- NO!! Don't a call my bluff...But you knew that :). I can't make heads or tails of it. What's your take? I'm better at energy co's. I don't get the miners like you guys do.
T3D- I don't know their margins either, but all of the cupon/discount stuff is usually covered by the distributors. So the deal was really pay 10 now for 20 when you want? I'm not really sure how those sites work.
I do know I can get, a few times a year, 1.75L of Stoli at CSCO for $16 bucks.
Mark - I'm just not impressed with the amateurish analysis, I expect this argument falls flat on it's face fairly quickly.
Now of course the other side of the coin involves the real motivation behind the cause, which could be considerably more sinister than a simple smear campaign having little basis in reality.
I just noticed that the change from a non-marginable ECU to marginable AUMN created a lot of margin buying power in my accounts! So I just placed a buy limit order for 1000 shares of SVM at $6.
"Although we have chosen to remain anonymous, we clearly state that we hold a short position in Silvercorp. Readers should take this into account when evaluating our analysis and developing their own opinions."
This statement by itself was sufficient for me to stop reading the negative things they had to say about SVM.
From BMO, who is probably the best company for small cap mining and energy stocks in Canada:
Silvercorp released a statement this morning responding to allegations contained in asecond short-seller report accusing it of misrepresenting production figures and reserves/resources from its SGX (Ying) mine, failing to disclose related party transactionsand a failure of other corporate governance practices. The report was published on theAlfredlittle website. Alfredlittle disclosed that it is short SVM stock. SVM has responded to the allegations. The company disclosed various documents to support their position that theallegations are without merit. These include Verification Certificates issued and obtainedfrom the State Tax Bureau ofLuoyang City of Henan Province and bank statementsdisplaying the flow of dividend payments from Henan Found (Ying mine’s operatingentity) to SVM’s Victor Mining subsidiary (77.5% owner of Henan Found) were alsoattached. In addition, SVM has addressed the differences between resources, ore mined and grades as stated in SVM’s North American filings and those reported to the Land &Resource Bureau of Henan Province (L&R Bureau). SVM explained that figures reportedto the L&R Bureau are based on a June 2005exploration report based on limited data. Since the 2005 exploration report, SVM has significantly expanded the size of the Yingmine deposits, which currently contain NI 43-101 complaint resources (inclusive of 57.9Moz silver in reserves) of ~273Moz silver. SVM indicated that under Chinese regulations, SVM is not required to update for mineralization discovered post-June 2005 until 2014. SVM also notes that under Canadian GAAP and IFRS accounting standards, theYongning Smelter is not classified as a related party, due to SVM’s lack of influence over Yongning. BMO Research views the company’s proactive approach toward disclosure torepudiate the short-seller’s allegations as a positive step. At yesterday’s close, SVM tradedat 0.6x the 10% nominal NPV, a significant discount to intermediate silver peers at 1.0x. BMO Research rates SVM Outperform (Speculative) but expects the shares to be volatileand suitable for investors with above-average risk tolerance, given heightened market sensitivity to companies with China-focused operations.
I don't know if this is the right way to describe it, but ouch....Sold my NFLX pre market at $180 for a $4,100 loss. Basically just gave back about 1/2 of my gains from yesterday...oh well.
Just saw NFLX news. I was doing a little research after the bell yesterday. It looks like the postal service is getting close to finally announcing some sort of cuts in service. Not sure if it would have a material impact on earnings but if the USPS were to cut service to M,W,F delivery or whatever, I think it would crush the stock. I sold what little NFLX I had before I stepped out for the day. My trading has literally been so bad that that goes down as my trade of the year.
They say no one wants to own stocks at bottoms. Reading through the financial media recently, it certainly sounds as if few advisers want to own stocks right now.
Wow...glad I bought at market at the open on CSTR...that sucker is going significantly higher in my opinion. I did a lot of research on this thing last night and can't believe the day I wanted to go heavy NFLX pre-announces. Anyway, it's a stock that I feel comfortable holding for a long time even if market goes down. Red Box is a fantastic idea and it has a lot of room for growth. I honestly think CSTR will be a $200+ stock within 3 years.
My assumption is that the big caps and the indexes will stall out going forward and money will flow into the heavily beaten down names which have gone absolutely nowhere on this rally from the bottom. TZOO looks marvelous but I need to find some sort of catalyst before taking the plunge. It looks like they will miss their earnings:(
Mark - I did but then I started thinking about how every time I go there we end up renting a movie because it's the only option...and then I started thinking about how every single time I go there we have to wait in line for other people...and my wife and I were talking about how they have a lot of room to raise their prices and still keep it cheap so it got me thinking. I started looking at their financials and the company is growing rapidly and throwing off a TON of free cash flow. It's a cheap company.
By the way, I just found out why we dropped so hard back in early August. Apparently investors were selling in anticipation of the end of the world in 2012 according to the Mayan calendar. Jeez I don't know why we didn't realize that.
The ones I am leery of are the large dividend players who have held up well as everyone seems to be hiding in these and these could be a source of selling to buy more aggressive stocks.
MDW, this gold stock is safely tucked in Nevada and has involvement by some ex NEM guys from the early days.
This is a $5-7 stock with potential to $9-11 looking forward. I mentioned MDW at .98 to the board and its up 202%. By trading I have pulled out over 127% clearly under performing buy and hold. Happy Trails.
The thing about this recent "crash" is it was different in the sense that not only was/is there tremendous fear, but there was a tremendous fear for the future. VXX, VXZ surged MUCH more than in the past indicating fear went out many months which is usually not the case.
As a general rule, I do not mess with people who have positions going against them, since I know how hard it can be, but if you want to puck with me I'm happy to play the game.
-CEO said in CC that the industry is a total disaster and back at levels from the 80's. Can sentiment get any worse?
-yet company was still CF positive this quarter (may not be next)
-100% return to where it was a few weeks ago. 300% return to where it was 3 months ago. 400% to where it was 5 months ago. 500% to where it was 10 months ago. 1,000% to 4 years ago etc.. (I can dream can't I?? :)
-I have an MBA. I'm thinking at some point there will be demand to ship crude oil from point A to point B :)
-Unfortunately, given my track record of late, it goes lower from here...
I posted buying FRO when it was in he 50's on the Cara board a few years back. Someone there with no discipline followed me in and lost 50% of their money and blame it on me. Hey buddy take a look in the mirror and that's the person who pressed the buy order. Anyway even I lost 17% on that trade which means I did a bad job too. The person has had a hard on for me ever since. Right sweet pea!
"You will notice that forecasting price in this segment is remarkable difficult. You will also notice that at multiple points in the past 10 years, VLCC day rates have been over 200x today's rates."
"Over the past few months, we have seen a number of prominent distressed managers dip their toes into shipping....I've been to a number of shipping event the last few months. I would guess that approximately 50% of the attendees are analyst and portfolio managers from distressed debt funds. Many people think there is real value in that space (pick your flavor - for this post I'll be using the 'tanker' market as the prime example), but very little capital is flowing into the space. How does one reconcile that?....The common reaction I receive when I ask a peer if he / she is looking at the shipping sector: "The fundamentals are only going to get worse from here, so we are going to wait until the supply/demand imbalance gets sorted out." If everyone believes that though, does that not inherently mean the opinion is priced into the various securities of tanker companies? ....The one thing I'm sure of is that by the time the knife has stopped falling, the dust has settled and the uncertainty has been resolved, there'll be no great bargains left. When buying something has become comfortable again, its price will no longer be so low that it's a great bargain. Thus, a hugely profitable investment that doesn't begin with discomfort is usually an oxymoron." ....I can, with VERY high confidence, say that at some point in the future, spot rates for VLCC (Very Large Crude Carriers or 200,000 DWT or more) will be higher. It might not be next year, or the year after, or the year after that. But at some point, VLCC rates will be substantially higher than they are today (negative TCE rates in some instances)."
One of the responses:
"one may also consider who is running the operation...
I like FRO simply because Fro is has Fredriksen at the helm.
considering that Fredriksen basically owns FRO's debt one can assume FRO will weather the storm."
SYMBOL: CSTR Rating: Strong Buy Aggressive Price Target: $300 within 3 to 5 years
ABOUT CSTR: Coinstar, Inc. (Coinstar) is a provider of automated retail solutions. Coinstar's core offerings in automated retail include its digital video disk (DVD) business called RedBox, where consumers can rent or purchase movies from self-service kiosks (DVD Services segment), and its Coin business, where consumers can convert their coin to cash or stored value products at coin-counting self-service kiosks (Coin Services segment).
As of December 31, 2010, the Company had approximately 30,200 DVD kiosks in 26,100 locations and 18,900 coin-counting kiosks in 18,700 locations (approximately 12,100 of which offer a variety of stored value products to customers) in supermarkets, drug stores, mass merchants, financial institutions, convenience stores, and restaurants.
On May 25, 2010, the Company sold its subsidiaries consisting of its E-Pay Business to InComm Holdings, Inc. and InComm Europe Limited (collectively InCommon)
Coinstar currently operates in over 30,000 locations and is within a 5 mile radius of 2/3 of the US population. The company plans to add an additional 5,000 kiosks by the end of Q3 2011. Additionally it is getting into video game rentals – it launched video game rentals to about 22,000 rental kiosks at $2 per day. Redbox has increased market share by 9.4% in the physical rental space over the past year, taking the majority of its share from brick and mortar stores.
FINANCIALS: - Revenue grew 27% overall in the second quarter 2011 to $435 million and Redbox revenue grew 33% to $363 million. - Recently completed a $50 million share repurchase and authorized an additional repurchase of $262 million. - Revenues have been expanding rapidly recently: $342 Million in Q2 2010, $380 Million in Q3 2010, $391 Million in Q4 2010, $424 Million in Q1 2011, $435 Million in Q2 2011. Additionally, over the past 5 months, operating income has grown from $29 Million in Q2 2010 to $58 Million in Q2 2011. - The company’s balance sheet could be improved: with $174 Million in cash and $320 Million in debt and a current ratio of 0.90, this is the one weakness in the company’s financial picture. However, the company generated $162 Million in free cash flow in the past 12 months and that figure is growing rapidly, so it will be able to support expansion of the business and buy back shares. - The company had $2.05 diluted EPS in the trailing twelve months (TTM) and is currently trading at about 23 times earnings. - CSTR generated $162 Million in free cash flow in the TTM and is trading at 9.5 times free cash flow.
INVESTMENT THESIS: Coinstar has three fundamental factors working in its favor that I believe makes it a secular growth story (i.e., one that will grow regardless of the state of the economy): (1) Bankruptcy of Blockbuster has created a options for DVD rentals. (2) Netflix recently raising it’s fees for DVD delivery via mail. (3) At $1 per day per dvd, the price is cheap in an economy that is still fragile and it has room to increase pricing by at least 50% and still remain cheap in comparison to Netflix and the price that people used to pay for rentals at Blockbuster.
CSTR should have room to double it’s footprint of kiosks in the US to about 60,000 locations over the next 2 to 3 years. Additionally, the addition of game rentals should provide a new source of revenue growth for the kiosks. As recognition of the company’s business grows through an expanding footprint and an attractive value proposition relative to Netflix, the number of users of its kiosks will grow. Assuming a 10 to 15% core growth rate per kiosk per year for the next 4 years, along with a double of the number of kiosks, and the room to potentially increase the price of DVDs up to 50% over the next 3 to 5 years and still remain attractively priced, the shares have a lot of room to the upside.
Revenues could grow 5 fold over the next 5 years assuming the following: - Addition of game rentals in each kiosk (assumption is 10% boost to revenue growth) - Up to 40% price increase over next 5 years - Up to 100% increase in the number of kiosks over the next 3 to 5 years - Core growth of 12% per kiosk per year as awareness grows over time
A 5 fold increase would result in revenues of about $7.5 Billion in annual revenues (assuming coin star kiosks sales are flat over the next 5 years) and at an operation margin of 11%, this would result in $829 Million in net income. At a 35% tax rate, after tax Net Income would be $540 Million. Assuming net shares drop 10% due to the recently announced buyback, the shares outstanding of 29 Million shares would yield $19 per share in earnings. Assuming a 15 multiple on earnings, the upside price target in 3 to 5 years could be as much as $300.
RISKS: - DVD Rental business is considered a dying business, as more and more people move to streaming content. - Competitors like DISH Network, which recently purchase Blockbuster out of bankruptcy court, could open up competing DVD kiosks.
-Massive 1 year H+S pattern 60, 67.50, 60. Each shoulder perfectly placed 7 months apart.
-Basically, investor psychology whether or not their earnings increase.
1)Psychology a- MA and V are surging- people all over the world use their credit card more and more everyday. Thus less coins to put in their machines.
2)Psychology b- Joe 6 pack (Mark:)) over time is FINALLY making the plunge to understand and actually utilize streaming movies/tv etc.., thereby making Redbox non-existent 10-12 years from now.
I just think investors have a very long time horizon in terms of turning a stock into a mo-mo play.
I just think that you are the mo-mo master. I just don't see CSTR turning into any sort of momo play. Maybe 5 or 10% depending on market conditions.
And trust me when I say this, the U.S. is the laziest nation on the planet (outside a couple of island nations).
Want a pizza? Walk? Why would I want to expend all those calories? One day, while people are ordering their dominos pizza online, they will make the groundbreaking connection, that they no longer have to walk 1,000 feet to their Redbox. They can now download media directly to their computer or MUCH, MUCH better yet, get a device that streams directly to your plasma tv for a fraction of the cost of traditional media.
And Mark, I'm just using you as an example of those who have not experimented w/ this new media. You appear to be a VERY active member of our society lol:)
SVM - Okay, it seems there's steam building in anticipation of Rui Feng's 14:00 televised interview today, if that $6.35 level isn't tested then $8 becomes the short term target.
Jesse - How's this: I believe CSTR will turn into a momo play. It's all about the Red Box...everywhere I turn and see one I see people at it. You say the US is the laziest? Perfect then...no one will want to learn how to set up their computer to stream stuff through their TV.
Chart wise: I believe CSTR is where GMCR was in 2006-7...trading sideways for a while as people doubted the story. Then it exploded higher.
I'm telling you Jesse...the more I think about this thing the more I am thinking this is the next big buy and hold stock. After they have expanded their kiosks to the point of saturation, then they can just sit back and collect cash, raise prices slightly, charge more for premium titles, etc.
Also, they have some other interesting ideas they're going to develop like coffee machine kiosks and kiosks for buying refurbished electronics that are potential drivers for more revenue growth. I love the business model and think it's the future of retailing. I think the Redbox and Coinstar brands are very powerful brands. I personally think the selection sucks in Redbox kiosks but then again there is no alternative and I'm reminiscing too much about Blockbuster. I think they will expand the selection over time though, and I have to admit that every movie I've rented through them (about 10 total) have all been good.
Alright, let me weigh in on Red Box. I don't use it, and don't plan to.
(a) I don't like transmitting my credit card info for a $1 purchase. (b) I don't like having to physically pick up/return the DVD. Whereas receiving/dropping off DVDs in the mail, COMBINED with the ability to instantly download movies works well for me. My 'instant download' queue is long enough that I'll never have time to exhaust the possibilities. (c) What if I don't like the DVD? I mail it back, and surf for an instant download while waiting for the next delivery. (d) You guys actually have to stand in line at Red Box? Come on. Time is money. (e) The day a company invents a flying robot that can deliver a hot pizza to my door in 15 minutes- that's the company I want to invest in.
2nd - we're all tech savvy here so this market is probably not for us...well, actually I'm probably not as tech savvy as some of you guys since I don't have netflix nor do I intend to stream stuff and I use Redbox quite a bit. But that's just me.
I've always liked the idea of getting out of the house and going to Blockbuster to select a movie that we wanted to see in the spur of the moment. I think a lot of people are like that and like walking to the kiosk and looking for a movie to watch that night...
When I first encountered the instant download stuff I was skeptical. But you'd be surprised. With a 'widescreen' monitor + decent bandwidth (via Comcast cable in my case) the films download immediately, and the quality is great.
The other advantage NFLX offers? Selection! Hundreds of thousands of titles.
One of the reasons we never went with Netflix was we don't have enough time to watch movies....we used Blockbuster online for a little while and got a couple of movies but I think we were paying like $12 a month and we weren't watching 3 movies a month. We cut that service out and watch probably 2 or 3 movies a month and spending like $2.5 a month on average. Not huge savings obviously but better than just throwing money down the drain.
OK guys- This is probably my most important post ever on this board.
I have been sitting in a hotel room in Bangkok for 2 days distraught over recent self-inflicted developments in my personal life.
But, I just made a revelation.
I have never had any "formal training" in technical analysis.
-In 2002, I looked at the charts of the indexes and thought to myself that they dropped a ton, they bottomed for many months...probably a good time to put your savings into the market. So, I did.
-For the next 5 years, I never subscribed to ANY "investment service". I think I may have looked at charts of the S+P, Dow, Nasdaq on literally 1 or 2 occasions over the next 5 years. Really. Unbelievable, I know.
-During those 5 years, I only bought INDIVIDUAL "mo-mo" stocks based on insider buying, ramping PE, and chart patterns. I never once looked at or considered where the market might be heading. As a couple of you might know, my returns were literally Dan Zanger-esque record setting during that time period.
-In 2007, I started subscribing to various services as I had millions to play with Some, $70, $200, $500+ per month. I started analyzing and obsessing over every index that I could. Flipping through thousands of charts per day for maybe 90 hours per week.
-From '07-'11, I lost 98% of my portfolio.
-As 2nd would probably agree, the huge moral of the story is to not obsess over the short term gyrations of the market. Do TONS of research and simply INVEST in the BEST. Do not try to predict the short term. It WILL WITHOUT A DOUBT shake you out of the best positions in your portfolio. Mark is prime example #1 of this strategy. How he held MITK during this turmoil is beyond me.
-Look for multi-baggers regardless of the general market.
-So, from this day forward, even if I think we are heading into a "greatest depression", I will no longer comment on the general market direction. As far as portfolio appreciation goes, there's nothing to gain from it. Being right may juice the ego, but who gives a damn?
Well, I didn't get any SVM at $6 this morning. So I cancelled that buy limit order and instead purchased 500 shares of AUMN at $11.55. This will be my "trading" position in AUMN, and I plan to sell $12.50 covered calls on it when AUMN rises up to $12.50.
SVM is planning to produce 5.45M OzAgEq in 2012. AUMN is planning to produce 1.7M OzAgEq starting 4Q2012, increasing that to 10M OzAgEq starting 4Q2013, when their 2000 tpd mill will be built. Is any of this potential built into AUMN now? No! The current price is equivalent to ECU at $0.58, where it was in 2010 when silver was at $18 and they had no production to talk about.
Right on, Jesse. That's what I am doing with AUMN. With such a production potential, I don't need to care about short-term movements of AUMN, of S&P or even of gold/silver. Just buy and wait. I fully intend to wait it out this time, until they actually build the 2000 tpd mill, and grow my current investment in AUMN to a million bucks.
If AUMN rises above $20 in 2012, I may sell 10% of it and use it as a down payment on a house, since the housing market will bottom in 2012. Outside of this purpose, I'll hold my shares until the 2000 tpd plant is built.
2nd - I agree that NFLX is a great value, but I think Redbox offers a substantial alternative for the people that:
(a) don't have the desire or understanding to set up streaming (as Jesse said, we Americans are lazy) (2) are not willing to pay monthly fees b/c they don't watch enough movies per month to justify it and the price of Redbox is significantly cheaper than the alternatives (3) would do streaming but streaming doesn't offer new movie titles that Redbox does (4) want to rent a movie spontaneously if they feel in the mood to watch a movie that night
Jesse - I have been slowly coming to that conclusion myself. The noise is a way for market participants to steal money from you, investing in stupid things like options, the VIX, and other crazy bullshit that no one needs. Worrying about the daily market gyrations will only impair your ability to find excellent growth companies.
I'm up about 2400% since 2009 and that is including probably $40 to $50k in losses from options. I would probably be able to retire if I hadn't traded options over the past 3 years. Sorry but its a complete suckers game and even if you have a good stretch it will one day end you.
Also, buying leading high growth, micro/small cap stocks is the only way to significantly wealth in my opinion. Can you lose a lot of money on them? Absolutely. But you're not gonna get obscenely wealthy investing in MSFT or CSCO or some other blue chip stock. The caveat is obviously how close you are to actually needing to live off your savings.
TOF, one should ONLY trade options from the short side, where the odds are greatly in your favor. My fiasco with TLT puts is another reminder for me of this simple truth, and that's why I am switching back to the trading strategy that includes selling premium (buying AUMN now with the goal of selling covered calls during the next rally).
jesse/tof- Both of you have arrived at your conclusions at an age where the rest of us only began to realize a stock market existed. So you're way ahead of us.
"Are the services comparable? On size alone, Netflix still dwarfs the iconic red kiosks. Total revenues for Netflix’ U.S.-based business in the first six months of this year was about $789 million – more than six times the top line for Redbox in the same period. "
He might want to check his figures on that one...Redbox did over $360 Million in sales last quarter.
"But he's paid to think (and presumably) act differently, not only wrt to the crowd, but wrt to any existing group of homo sapiens."
There is a big danger here, 2nd_ave, as it gets me used to the fact that as an inventor I "see" things better than "they" (our product groups, to whom I regularly propose new product features). The stock market, however, punishes those who are stubborn.
Well, maybe it punishes the stubborn *traders*, but *investors*, who invest in the right long-term story, actually *need* to be stubborn not to be shaken out of their positions early on...
Well, at least TLT is getting its act together. If it does not shoot up tomorrow, then maybe my September $113 puts will actually be worth something at expiration...
T3D- Thanks, I figured that. Normally, as you know, I'm not a B/O trader, but I've followed, studied MDW since you brought it up and never found a spot I wanted to get in...Too busy with MITK, really.
Looking good, guys. We may in fact have had our obligatory 'down day' on Wednesday. Today we close at the highs. Tomorrow we gap up, leaving behind weak hands who will regret disembarking in panic for a long, long time.
2nd_ave -- I still have my October $115 puts, which is a much larger position than the September $113 ones.
I fully understand that the "Twist" operation by the Fed is in the cards, as well as massive MBS refinancing. In the past, however, I have observed that the bond market tends to buy the rumor and sell the news, and since the "news" have been out for a long time already, it might be time for the bond market to sell off...
This could be MUCH more fear than the 2008 depression. I'll have to look at some more sentiment charts tomorrow, but this may be "buy with both fists territory"
Looking at the monthly's, if this is a pullback in the bull, we do ABSOLUTELY nothing for the next 2 weeks. If so, big caps and indexes would do nothing. Beaten down plays would do well.
TLT is done. 5 waves up like VXX and TVIX. Against my bias, this means rates rise meaningfully, and stocks beyond pre-conceived notions could rise considerably.
ha! I like TZOO but I still think earnings will most likely miss estimates. Having said that, EPS estimates have been getting lowered across the board, yet the stock doesn't seem to want to go down much more. my suspicion is they miss revs, beat EPS slightly, and the stock shoots to $40; however, i'm not willing to take that risk. i'd rather own a company I KNOW will crush estimates and the stock will go up a lot...it's big, it's red, and it's entertaining.
This is sure to stir some SERIOUS debate here given how much we are attached to and love our significant others. Especially given how the courts award 50% of our income to our ex-spouses given their "emotional and loving support to our careers"
Single-2002-2003: return 3,000% Relationship 2004-2004: return -80% (no shit) Single 2004-2007: return 10,000% Relationship 2007-2008: return -99% Single 2008-2010: return 200% Relationship 2010-2011: return -75%
I am totally not kidding guys. I lose total confidence in terms of the market when anyone is looking over my shoulder.
I know, I know. Grill me! But it is amazing in light of the fact that the entire U.S. court system is based on how our spouses "propel us" to be more productive...
Jesse - The chart in TZOO is EXACTLY the same as the chart of NFLX back in 2004. Take a look at it man. If the parallel follows you should get one more nice rally of 25% then a plunge on earnings, which would mark the bottom.
In regards to your returns....WTF! First of all, how the hell could you be up 10,000%? 2nd of all how the hell did you make 3,000% in one year!?!? And last of course: how the hell are you still alive after losing all of that?
Well, 4th question: if you lost it all how are you able to travel as much as you have? And where can I get that job?
TOF- 3 years of growth, personal therapy, inspirational books, and travel (which has helped a great, great deal). Still alive? It was hard. Jesse Livermore style. Now, I can deal with anything and everything that comes my way....good or bad.
Believe it or not, these days I could be penniless, and still be very, very happy considering the people I've met.
And regarding traveling: a 98% decline of 8 figures still gets me from point A to point B.
Unconventional Measures - What happened today, were there some unconventional monetary measures implemented in order to ward off the vampire of economic collapse?
Nikkei +2%.
ReplyDeleteThe Summer of '11 will go down as the Panic of '11. Six months from now, it will be obvious investors dumped positions at the lows.
ReplyDeleteSVM- Feng comes out swinging!! (RB, no, not that way)...
ReplyDeletehttp://www.theglobeandmail.com/globe-investor/silvercorp-ceo-vows-fight-to-the-death-against-short-sellers/article2165262/
Maybe Heckmann should try that? :))
ReplyDeleteHolly cow!!! I just read all of this. I'll reserve judgment until you all comment!!
ReplyDeleteSVM... http://chinastockwatch.com/
I said I'll reserve comment until you all have read this...What do you think!??
ReplyDeleteLivingsocial.com deal today was $20 for $10 at Whole Foods. By the time I saw it it was already sold out at 1 million takers after 15 hours.
ReplyDeleteWhole Foods did $10 mil in sales in 15 hours. Wow!
Quick Hitter #2: If the FED and Treasury decide to embark on a “TWIST” of the curve what will the impact be on the BOND MARKET? The 30-year BOND has maintained a bid as many in the market are assuming that with the 10-YEAR NOTE trading at 2%, the FED will look to the 30-YEAR where rates are 3.33% and push hardest to drive the longest tradable instrument lower. There will be interest in selling the LONG BOND when the FED decides, but I caution that if the FED “TWISTS” the longest end, a CONVEXITY PROBLEM is going to arise for mortgage holders.
ReplyDeleteThis will also be a problem if the Treasury were to do a massive REFI. Holders of RMBS will be awash in money on a massive REFI program and investors will have to rush to lock up rates at whatever price available, thus putting even greater downward pressure on yields. The TREASURY market is badly disoriented by the QE programs and now the introduction of the “TWIST.” Let the situation clear before being committed to any shorting of BONDS. There will be a time to short the DEBT of the U.S. but let the technicals be your guide.
T3D- Margins in the grocery biz are razor thin. I don't get this.
ReplyDeleteQuick Hitter#3: A very good article on BLOOMBERG by Yalman Onaran, “Deposit Flight at European Banks Means Risk Piling Up at ECB.” The article details a very large problem in Europe. A problem further compounded by the actions of the Swiss National Bank. As Europeans in the PIIGS worry about their domestic banks, they take their EUROS and place them on deposit at banks in stronger financial positions. It was the effect of the inflows from the PIIGS that drove the SWISS FRANC to such dizzying highs, forcing the SNB to act to curtail its appreciation. As the banks in Greece, Italy, Spain, France and Ireland need to raise cash they exchange sovereign bonds with the ECB, thus making the central bank the ultimate holder of questionable collateral.
ReplyDeleteThe more runs on banks, the more collateral the ECB is forced to accept. As Desmond Lachman points out in the article, “IF there are sovereign defaults, the ECB will be left with the garbage that has been accepted as collateral. It’s putting EU taxpayers’ money at risk in a very non-transparent way. But there’s no alternative. The ECB is the only game in town.”
What is happening here is that Germany’s hand will be forced to support Europe by underwriting the ECB. The longer the CRISIS plays out the more sovereign collateral will be placed on the ECB‘s books–fiscal centralization by stealth. The quiet bank runs have lead to the call by Christine Lagarde for Europe to recapitalize its banks. As banks need liquidity it is the ECB that provides, but will the Germans agree to be the GUARANTOR?
I have never looked at Whole Foods margins but their prices are high to me which makes me think they will do just fine. I also think people will spend way more then $20 bucks when they visit the store.
ReplyDeleteI just thought it was amazing amount of sales.
NFLX - Yes, but do they offer the new LSD-TV technology format?
ReplyDeleteSVM - Mark, go ahead and comment, I've read all the articles.
ReplyDeleteWe can take each aspect on a case by case basis, and I can probably produce a very reasonable response.
So pick your poison!
CP- NO!! Don't a call my bluff...But you knew that :). I can't make heads or tails of it. What's your take? I'm better at energy co's. I don't get the miners like you guys do.
ReplyDeleteT3D- I don't know their margins either, but all of the cupon/discount stuff is usually covered by the distributors. So the deal was really pay 10 now for 20 when you want? I'm not really sure how those sites work.
ReplyDeleteI do know I can get, a few times a year, 1.75L of Stoli at CSCO for $16 bucks.
i think i like cstr a lot more than nflx
ReplyDeletemark i cant open links on my fon so no comment...
Mark - I'm just not impressed with the amateurish analysis, I expect this argument falls flat on it's face fairly quickly.
ReplyDeleteNow of course the other side of the coin involves the real motivation behind the cause, which could be considerably more sinister than a simple smear campaign having little basis in reality.
I just noticed that the change from a non-marginable ECU to marginable AUMN created a lot of margin buying power in my accounts! So I just placed a buy limit order for 1000 shares of SVM at $6.
ReplyDelete"Although we have chosen to remain anonymous, we clearly state that we hold a short position in Silvercorp. Readers should take this into account when evaluating our analysis and developing their own opinions."
ReplyDeleteThis statement by itself was sufficient for me to stop reading the negative things they had to say about SVM.
Also, just placed buy limit orders for 1000 shares of GMO at $3.50 and $3.60.
ReplyDeleteFrom BMO, who is probably the best company for small cap mining and energy stocks in Canada:
ReplyDeleteSilvercorp released a statement this morning responding to allegations contained in asecond short-seller report accusing it of misrepresenting production figures and reserves/resources from its SGX (Ying) mine, failing to disclose related party transactionsand a failure of other corporate governance practices. The report was published on theAlfredlittle website. Alfredlittle disclosed that it is short SVM stock. SVM has responded to the allegations. The company disclosed various documents to support their position that theallegations are without merit. These include Verification Certificates issued and obtainedfrom the State Tax Bureau ofLuoyang City of Henan Province and bank statementsdisplaying the flow of dividend payments from Henan Found (Ying mine’s operatingentity) to SVM’s Victor Mining subsidiary (77.5% owner of Henan Found) were alsoattached. In addition, SVM has addressed the differences between resources, ore mined and grades as stated in SVM’s North American filings and those reported to the Land &Resource Bureau of Henan Province (L&R Bureau). SVM explained that figures reportedto the L&R Bureau are based on a June 2005exploration report based on limited data. Since the 2005 exploration report, SVM has significantly expanded the size of the Yingmine deposits, which currently contain NI 43-101 complaint resources (inclusive of 57.9Moz silver in reserves) of ~273Moz silver. SVM indicated that under Chinese regulations, SVM is not required to update for mineralization discovered post-June 2005 until 2014. SVM also notes that under Canadian GAAP and IFRS accounting standards, theYongning Smelter is not classified as a related party, due to SVM’s lack of influence over Yongning. BMO Research views the company’s proactive approach toward disclosure torepudiate the short-seller’s allegations as a positive step. At yesterday’s close, SVM tradedat 0.6x the 10% nominal NPV, a significant discount to intermediate silver peers at 1.0x. BMO Research rates SVM Outperform (Speculative) but expects the shares to be volatileand suitable for investors with above-average risk tolerance, given heightened market sensitivity to companies with China-focused operations.
I don't know if this is the right way to describe it, but ouch....Sold my NFLX pre market at $180 for a $4,100 loss. Basically just gave back about 1/2 of my gains from yesterday...oh well.
ReplyDeleteJust saw NFLX news. I was doing a little research after the bell yesterday. It looks like the postal service is getting close to finally announcing some sort of cuts in service. Not sure if it would have a material impact on earnings but if the USPS were to cut service to M,W,F delivery or whatever, I think it would crush the stock. I sold what little NFLX I had before I stepped out for the day. My trading has literally been so bad that that goes down as my trade of the year.
ReplyDeleteWake up and enjoy the gap up, bros. No take at this time on whether/how long it lasts.
ReplyDeleteEEM, FXI look to have formed a trade-able bottom following euro etfs.
ReplyDeleteLong CSTR at the open...$46.5 average. Long big position.
ReplyDeleteSVM kicking ass.
ReplyDeleteThey say no one wants to own stocks at bottoms. Reading through the financial media recently, it certainly sounds as if few advisers want to own stocks right now.
ReplyDeleteWow...glad I bought at market at the open on CSTR...that sucker is going significantly higher in my opinion. I did a lot of research on this thing last night and can't believe the day I wanted to go heavy NFLX pre-announces. Anyway, it's a stock that I feel comfortable holding for a long time even if market goes down. Red Box is a fantastic idea and it has a lot of room for growth. I honestly think CSTR will be a $200+ stock within 3 years.
ReplyDeleteBuying FRO
ReplyDeleteMy assumption is that the big caps and the indexes will stall out going forward and money will flow into the heavily beaten down names which have gone absolutely nowhere on this rally from the bottom. TZOO looks marvelous but I need to find some sort of catalyst before taking the plunge. It looks like they will miss their earnings:(
ReplyDeleteTOF- Didn't you say a few days ago Red Box sucked? Serious question, not pulling your chain.
ReplyDeleteThanks for the SVM comments guys.
ReplyDeletejesse- Actually, I think it's time for beaten down big-cap value stocks. They will lead the indexes to new highs.
ReplyDeleteMark - I did but then I started thinking about how every time I go there we end up renting a movie because it's the only option...and then I started thinking about how every single time I go there we have to wait in line for other people...and my wife and I were talking about how they have a lot of room to raise their prices and still keep it cheap so it got me thinking. I started looking at their financials and the company is growing rapidly and throwing off a TON of free cash flow. It's a cheap company.
ReplyDeleteBy the way, I just found out why we dropped so hard back in early August. Apparently investors were selling in anticipation of the end of the world in 2012 according to the Mayan calendar. Jeez I don't know why we didn't realize that.
and Tim Geithner said the Mayan calendar is wrong so investors are ok with being long equities now
ReplyDeleteThanks!!
ReplyDeleteGS cut EOY SPX target from 1400 to 1250.
TOF- OK. I've only used one once at a hotel. My kids like to use the coin machine for the money they steal from me. I'll take a look at it.
You can make a case for most stocks right now.
ReplyDeletePretty much everything has been beaten down.
The ones I am leery of are the large dividend players who have held up well as everyone seems to be hiding in these and these could be a source of selling to buy more aggressive stocks.
MDW, B/O of resistance.
ReplyDeletelong
Mark - My take on SVM...I have none. I don't really like buying things I don't understand and I have no way of truly valuing gold or silver.
ReplyDeleteMDW, this gold stock is safely tucked in Nevada and has involvement by some ex NEM guys from the early days.
ReplyDeleteThis is a $5-7 stock with potential to $9-11 looking forward. I mentioned MDW at .98 to the board and its up 202%. By trading I have pulled out over 127% clearly under performing buy and hold. Happy Trails.
MDW- Yep, you sure did T3D!! Good job. And I'll take a shot here. Long @ 2.89.
ReplyDeleteStinky on MITK @ 9.84 which is S2.
Yeah and talking about it is probably the kiss of death.
ReplyDeleteFair amount of price to chew through 3 to 3.80.
Eleven days till FED detonates QE3.
ReplyDeleteCSTR - Does Redbox keep The Towering Inferno in stock?
ReplyDeleteSVM - I have to mention that Cramer supposedly rejected SVM when it was a couple dollars higher, FWIW.
They are doing a good job on gold today. Wish I waited a day or two before adding to my insurance GTU.
ReplyDeleteShould I sell it and is "HOPE" a strategy?
The thing about this recent "crash" is it was different in the sense that not only was/is there tremendous fear, but there was a tremendous fear for the future. VXX, VXZ surged MUCH more than in the past indicating fear went out many months which is usually not the case.
ReplyDeleteSVM - Just fell through the PP here, hasn't visited R1 yet today, almost though.
ReplyDeleteSVM - I also see a possible double top target of $4.79 if $6.35 fails.
Gold and silver a little weak, TLT showing weakness as well.
All my greens are turning to reds.
ReplyDeletehttp://www.youtube.com/watch?v=tfGYSHy1jQs
As a general rule, I do not mess with people who have positions going against them, since I know how hard it can be, but if you want to puck with me I'm happy to play the game.
All right guys. GL!
ReplyDeleteBTW Mark, my average price on MDW here on this trade is 2.3783 as I was scaling in. A lot of people buy B/O's but it can be a tougher trade.
ReplyDeleteJust thinking out loud.
Cautiously optimistic about FRO.
ReplyDelete-2008/09 crash low was $16 and change.
-CEO said in CC that the industry is a total disaster and back at levels from the 80's. Can sentiment get any worse?
-yet company was still CF positive this quarter (may not be next)
-100% return to where it was a few weeks ago. 300% return to where it was 3 months ago. 400% to where it was 5 months ago. 500% to where it was 10 months ago. 1,000% to 4 years ago etc.. (I can dream can't I?? :)
-I have an MBA. I'm thinking at some point there will be demand to ship crude oil from point A to point B :)
-Unfortunately, given my track record of late, it goes lower from here...
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ReplyDeleteI posted buying FRO when it was in he 50's on the Cara board a few years back. Someone there with no discipline followed me in and lost 50% of their money and blame it on me. Hey buddy take a look in the mirror and that's the person who pressed the buy order.
ReplyDeleteAnyway even I lost 17% on that trade which means I did a bad job too. The person has had a hard on for me ever since. Right sweet pea!
Anyway FRO seems interesting to me too, it just the capacity issue that bothers me.
ReplyDeleteGL dudes.
No worries T3. Over the past 6 months, anybody who has followed me into a trade has lost money.
ReplyDeleteGreat, great article on distressed debt investing and the shipping sector.
ReplyDeletehttp://www.distressed-debt-investing.com/2011/09/on-value-traps.html
"You will notice that forecasting price in this segment is remarkable difficult. You will also notice that at multiple points in the past 10 years, VLCC day rates have been over 200x today's rates."
"Over the past few months, we have seen a number of prominent distressed managers dip their toes into shipping....I've been to a number of shipping event the last few months. I would guess that approximately 50% of the attendees are analyst and portfolio managers from distressed debt funds. Many people think there is real value in that space (pick your flavor - for this post I'll be using the 'tanker' market as the prime example), but very little capital is flowing into the space. How does one reconcile that?....The common reaction I receive when I ask a peer if he / she is looking at the shipping sector: "The fundamentals are only going to get worse from here, so we are going to wait until the supply/demand imbalance gets sorted out." If everyone believes that though, does that not inherently mean the opinion is priced into the various securities of tanker companies? ....The one thing I'm sure of is that by the time the knife has stopped falling, the dust has settled and the uncertainty has been resolved, there'll be no great bargains left. When buying something has become comfortable again, its price will no longer be so low that it's a great bargain. Thus, a hugely profitable investment that doesn't begin with discomfort is usually an oxymoron." ....I can, with VERY high confidence, say that at some point in the future, spot rates for VLCC (Very Large Crude Carriers or 200,000 DWT or more) will be higher. It might not be next year, or the year after, or the year after that. But at some point, VLCC rates will be substantially higher than they are today (negative TCE rates in some instances)."
One of the responses:
"one may also consider who is running the operation...
I like FRO simply because Fro is has Fredriksen at the helm.
considering that Fredriksen basically owns FRO's debt one can assume FRO will weather the storm."
This chart is simply unreal.
ReplyDeletehttp://2.bp.blogspot.com/-MfNYf2n0J6c/Tm7MgkerEQI/AAAAAAAAAZY/NSGwV-_LCmo/s1600/VLCC%2BRates.JPG
If you are a long-term investor (which I am not...2nd???), you simply HAVE to put money here.
-250% return to prior lows.
-6,000 (!!!)% returns to 2011 highs
-10,000% returns to 2010 highs.
-30,000 (!!!!!!) % returns to 2008 highs.
wtf
The last times VLCC rates hit this point, they returned 1,000% in a couple months (2002), 800% in 3 months in 2009 and 300% in weeks in 2010.
ReplyDeletewow
http://2.bp.blogspot.com/-MfNYf2n0J6c/Tm7MgkerEQI/AAAAAAAAAZY/NSGwV-_LCmo/s1600/VLCC%2BRates.JPG
Man that morning drop was superb. Another example of the failure of investors to believe in this bull. We continue to climb the wall of disbelief.
ReplyDeletejesse- OK, I picked up 1000 FRO. wtf.
ReplyDeleteKyle Bass Likes DSX in shipping sector and is a pretty smart investor/trader.
ReplyDeletehttp://www.insidermonkey.com/hedge-fund/hayman+advisors/324/#/
Seriously guys - Just buy and hold CSTR. It's going to $200+ in the next 3 years.
ReplyDeleteThis is my write up of CSTR
ReplyDeleteSYMBOL: CSTR
Rating: Strong Buy
Aggressive Price Target: $300 within 3 to 5 years
ABOUT CSTR:
Coinstar, Inc. (Coinstar) is a provider of automated retail solutions. Coinstar's core offerings in automated retail include its digital video disk (DVD) business called RedBox, where consumers can rent or purchase movies from self-service kiosks (DVD Services segment), and its Coin business, where consumers can convert their coin to cash or stored value products at coin-counting self-service kiosks (Coin Services segment).
As of December 31, 2010, the Company had approximately 30,200 DVD kiosks in 26,100 locations and 18,900 coin-counting kiosks in 18,700 locations (approximately 12,100 of which offer a variety of stored value products to customers) in supermarkets, drug stores, mass merchants, financial institutions, convenience stores, and restaurants.
On May 25, 2010, the Company sold its subsidiaries consisting of its E-Pay Business to InComm Holdings, Inc. and InComm Europe Limited (collectively InCommon)
Coinstar currently operates in over 30,000 locations and is within a 5 mile radius of 2/3 of the US population. The company plans to add an additional 5,000 kiosks by the end of Q3 2011. Additionally it is getting into video game rentals – it launched video game rentals to about 22,000 rental kiosks at $2 per day. Redbox has increased market share by 9.4% in the physical rental space over the past year, taking the majority of its share from brick and mortar stores.
FINANCIALS:
- Revenue grew 27% overall in the second quarter 2011 to $435 million and Redbox revenue grew 33% to $363 million.
- Recently completed a $50 million share repurchase and authorized an additional repurchase of $262 million.
- Revenues have been expanding rapidly recently: $342 Million in Q2 2010, $380 Million in Q3 2010, $391 Million in Q4 2010, $424 Million in Q1 2011, $435 Million in Q2 2011. Additionally, over the past 5 months, operating income has grown from $29 Million in Q2 2010 to $58 Million in Q2 2011.
- The company’s balance sheet could be improved: with $174 Million in cash and $320 Million in debt and a current ratio of 0.90, this is the one weakness in the company’s financial picture. However, the company generated $162 Million in free cash flow in the past 12 months and that figure is growing rapidly, so it will be able to support expansion of the business and buy back shares.
- The company had $2.05 diluted EPS in the trailing twelve months (TTM) and is currently trading at about 23 times earnings.
- CSTR generated $162 Million in free cash flow in the TTM and is trading at 9.5 times free cash flow.
INVESTMENT THESIS:
ReplyDeleteCoinstar has three fundamental factors working in its favor that I believe makes it a secular growth story (i.e., one that will grow regardless of the state of the economy):
(1) Bankruptcy of Blockbuster has created a options for DVD rentals.
(2) Netflix recently raising it’s fees for DVD delivery via mail.
(3) At $1 per day per dvd, the price is cheap in an economy that is still fragile and it has room to increase pricing by at least 50% and still remain cheap in comparison to Netflix and the price that people used to pay for rentals at Blockbuster.
CSTR should have room to double it’s footprint of kiosks in the US to about 60,000 locations over the next 2 to 3 years. Additionally, the addition of game rentals should provide a new source of revenue growth for the kiosks. As recognition of the company’s business grows through an expanding footprint and an attractive value proposition relative to Netflix, the number of users of its kiosks will grow. Assuming a 10 to 15% core growth rate per kiosk per year for the next 4 years, along with a double of the number of kiosks, and the room to potentially increase the price of DVDs up to 50% over the next 3 to 5 years and still remain attractively priced, the shares have a lot of room to the upside.
Revenues could grow 5 fold over the next 5 years assuming the following:
- Addition of game rentals in each kiosk (assumption is 10% boost to revenue growth)
- Up to 40% price increase over next 5 years
- Up to 100% increase in the number of kiosks over the next 3 to 5 years
- Core growth of 12% per kiosk per year as awareness grows over time
A 5 fold increase would result in revenues of about $7.5 Billion in annual revenues (assuming coin star kiosks sales are flat over the next 5 years) and at an operation margin of 11%, this would result in $829 Million in net income. At a 35% tax rate, after tax Net Income would be $540 Million. Assuming net shares drop 10% due to the recently announced buyback, the shares outstanding of 29 Million shares would yield $19 per share in earnings. Assuming a 15 multiple on earnings, the upside price target in 3 to 5 years could be as much as $300.
RISKS:
- DVD Rental business is considered a dying business, as more and more people move to streaming content.
- Competitors like DISH Network, which recently purchase Blockbuster out of bankruptcy court, could open up competing DVD kiosks.
If this is not the start of a massive bear (good chances that it is), FRO returns 200-300% w/in 3-6 months. Mark it.
ReplyDeleteTOF- I love the fact that we agree on 99.9% of our investments. Outside of a 5% trade, CSTR is that .001% lol:)
ReplyDeleteJesse - What's your thinking on CSTR?
ReplyDeleteTOF-
ReplyDelete-Massive 1 year H+S pattern 60, 67.50, 60. Each shoulder perfectly placed 7 months apart.
-Basically, investor psychology whether or not their earnings increase.
1)Psychology a- MA and V are surging- people all over the world use their credit card more and more everyday. Thus less coins to put in their machines.
2)Psychology b- Joe 6 pack (Mark:)) over time is FINALLY making the plunge to understand and actually utilize streaming movies/tv etc.., thereby making Redbox non-existent 10-12 years from now.
I just think investors have a very long time horizon in terms of turning a stock into a mo-mo play.
I just think that you are the mo-mo master. I just don't see CSTR turning into any sort of momo play. Maybe 5 or 10% depending on market conditions.
That's just my honesty opinion.
And trust me when I say this, the U.S. is the laziest nation on the planet (outside a couple of island nations).
ReplyDeleteWant a pizza? Walk? Why would I want to expend all those calories? One day, while people are ordering their dominos pizza online, they will make the groundbreaking connection, that they no longer have to walk 1,000 feet to their Redbox. They can now download media directly to their computer or MUCH, MUCH better yet, get a device that streams directly to your plasma tv for a fraction of the cost of traditional media.
And Mark, I'm just using you as an example of those who have not experimented w/ this new media. You appear to be a VERY active member of our society lol:)
Sorry TOF- That CSTR pattern I was referring to is on the 2 year chart.
ReplyDeleteSVM - Okay, it seems there's steam building in anticipation of Rui Feng's 14:00 televised interview today, if that $6.35 level isn't tested then $8 becomes the short term target.
ReplyDeleteJesse - How's this: I believe CSTR will turn into a momo play. It's all about the Red Box...everywhere I turn and see one I see people at it. You say the US is the laziest? Perfect then...no one will want to learn how to set up their computer to stream stuff through their TV.
ReplyDeleteChart wise: I believe CSTR is where GMCR was in 2006-7...trading sideways for a while as people doubted the story. Then it exploded higher.
Could be TOF. The chart certainly doesn't look short term bearish.
ReplyDeleteI'm telling you Jesse...the more I think about this thing the more I am thinking this is the next big buy and hold stock. After they have expanded their kiosks to the point of saturation, then they can just sit back and collect cash, raise prices slightly, charge more for premium titles, etc.
ReplyDeleteAlso, they have some other interesting ideas they're going to develop like coffee machine kiosks and kiosks for buying refurbished electronics that are potential drivers for more revenue growth. I love the business model and think it's the future of retailing. I think the Redbox and Coinstar brands are very powerful brands. I personally think the selection sucks in Redbox kiosks but then again there is no alternative and I'm reminiscing too much about Blockbuster. I think they will expand the selection over time though, and I have to admit that every movie I've rented through them (about 10 total) have all been good.
Alright, let me weigh in on Red Box. I don't use it, and don't plan to.
ReplyDelete(a) I don't like transmitting my credit card info for a $1 purchase.
(b) I don't like having to physically pick up/return the DVD. Whereas receiving/dropping off DVDs in the mail, COMBINED with the ability to instantly download movies works well for me. My 'instant download' queue is long enough that I'll never have time to exhaust the possibilities.
(c) What if I don't like the DVD? I mail it back, and surf for an instant download while waiting for the next delivery.
(d) You guys actually have to stand in line at Red Box? Come on. Time is money.
(e) The day a company invents a flying robot that can deliver a hot pizza to my door in 15 minutes- that's the company I want to invest in.
2nd - we're all tech savvy here so this market is probably not for us...well, actually I'm probably not as tech savvy as some of you guys since I don't have netflix nor do I intend to stream stuff and I use Redbox quite a bit. But that's just me.
ReplyDeleteI've always liked the idea of getting out of the house and going to Blockbuster to select a movie that we wanted to see in the spur of the moment. I think a lot of people are like that and like walking to the kiosk and looking for a movie to watch that night...
When I first encountered the instant download stuff I was skeptical. But you'd be surprised. With a 'widescreen' monitor + decent bandwidth (via Comcast cable in my case) the films download immediately, and the quality is great.
ReplyDeleteThe other advantage NFLX offers? Selection! Hundreds of thousands of titles.
http://www.marketwatch.com/story/yahoo-contacted-by-would-be-buyers-wsj-2011-09-15
ReplyDeleteOne of the reasons we never went with Netflix was we don't have enough time to watch movies....we used Blockbuster online for a little while and got a couple of movies but I think we were paying like $12 a month and we weren't watching 3 movies a month. We cut that service out and watch probably 2 or 3 movies a month and spending like $2.5 a month on average. Not huge savings obviously but better than just throwing money down the drain.
ReplyDeleteActually, I don't know how many titles. Many just tens of thousands. Whatever- I'll never get around to watching all of them.
ReplyDeleteWith NFLX, you can watch anywhere, anytime. You can watch on your iPod/cell phone while waiting to board a plane.
ReplyDeleteOK guys- This is probably my most important post ever on this board.
ReplyDeleteI have been sitting in a hotel room in Bangkok for 2 days distraught over recent self-inflicted developments in my personal life.
But, I just made a revelation.
I have never had any "formal training" in technical analysis.
-In 2002, I looked at the charts of the indexes and thought to myself that they dropped a ton, they bottomed for many months...probably a good time to put your savings into the market. So, I did.
-For the next 5 years, I never subscribed to ANY "investment service". I think I may have looked at charts of the S+P, Dow, Nasdaq on literally 1 or 2 occasions over the next 5 years. Really. Unbelievable, I know.
-During those 5 years, I only bought INDIVIDUAL "mo-mo" stocks based on insider buying, ramping PE, and chart patterns. I never once looked at or considered where the market might be heading. As a couple of you might know, my returns were literally Dan Zanger-esque record setting during that time period.
-In 2007, I started subscribing to various services as I had millions to play with Some, $70, $200, $500+ per month. I started analyzing and obsessing over every index that I could. Flipping through thousands of charts per day for maybe 90 hours per week.
-From '07-'11, I lost 98% of my portfolio.
-As 2nd would probably agree, the huge moral of the story is to not obsess over the short term gyrations of the market. Do TONS of research and simply INVEST in the BEST. Do not try to predict the short term. It WILL WITHOUT A DOUBT shake you out of the best positions in your portfolio. Mark is prime example #1 of this strategy. How he held MITK during this turmoil is beyond me.
-Look for multi-baggers regardless of the general market.
-So, from this day forward, even if I think we are heading into a "greatest depression", I will no longer comment on the general market direction. As far as portfolio appreciation goes, there's nothing to gain from it. Being right may juice the ego, but who gives a damn?
Well, I didn't get any SVM at $6 this morning. So I cancelled that buy limit order and instead purchased 500 shares of AUMN at $11.55. This will be my "trading" position in AUMN, and I plan to sell $12.50 covered calls on it when AUMN rises up to $12.50.
ReplyDeleteSVM is planning to produce 5.45M OzAgEq in 2012. AUMN is planning to produce 1.7M OzAgEq starting 4Q2012, increasing that to 10M OzAgEq starting 4Q2013, when their 2000 tpd mill will be built. Is any of this potential built into AUMN now? No! The current price is equivalent to ECU at $0.58, where it was in 2010 when silver was at $18 and they had no production to talk about.
Jesse - that last bullet sounds a lot like Vad's advice to go w/ 'opinion-less' trading wrt market direction.
ReplyDeleteSelf-inflicted developments in your personal life? Alright. I would agree that 'revelations' that occur during times of stress tend to be solid.
ReplyDeleteRight on, Jesse. That's what I am doing with AUMN. With such a production potential, I don't need to care about short-term movements of AUMN, of S&P or even of gold/silver. Just buy and wait. I fully intend to wait it out this time, until they actually build the 2000 tpd mill, and grow my current investment in AUMN to a million bucks.
ReplyDeleteIf AUMN rises above $20 in 2012, I may sell 10% of it and use it as a down payment on a house, since the housing market will bottom in 2012. Outside of this purpose, I'll hold my shares until the 2000 tpd plant is built.
Gold well below 1800.
ReplyDelete2nd - I agree that NFLX is a great value, but I think Redbox offers a substantial alternative for the people that:
ReplyDelete(a) don't have the desire or understanding to set up streaming (as Jesse said, we Americans are lazy)
(2) are not willing to pay monthly fees b/c they don't watch enough movies per month to justify it and the price of Redbox is significantly cheaper than the alternatives
(3) would do streaming but streaming doesn't offer new movie titles that Redbox does
(4) want to rent a movie spontaneously if they feel in the mood to watch a movie that night
tof- Right. Your post is a timely reminder to me that not everyone has the same perspective I do. One of my shortcomings.
ReplyDeleteBAS weekly guys. Tons of insider buying and ramping monthly metrics.
ReplyDeleteThe majors "look" overbought, but individual weekly patterns suggest massive upside potential. TEX, AKS, BAS etc...
ReplyDeleteJesse - I have been slowly coming to that conclusion myself. The noise is a way for market participants to steal money from you, investing in stupid things like options, the VIX, and other crazy bullshit that no one needs. Worrying about the daily market gyrations will only impair your ability to find excellent growth companies.
ReplyDeleteI'm up about 2400% since 2009 and that is including probably $40 to $50k in losses from options. I would probably be able to retire if I hadn't traded options over the past 3 years. Sorry but its a complete suckers game and even if you have a good stretch it will one day end you.
Also, buying leading high growth, micro/small cap stocks is the only way to significantly wealth in my opinion. Can you lose a lot of money on them? Absolutely. But you're not gonna get obscenely wealthy investing in MSFT or CSCO or some other blue chip stock. The caveat is obviously how close you are to actually needing to live off your savings.
For those who held the MSFT's, PG's, CSCO's etc. during the crash, now is the time to thank God and shift focus to stocks beaten down 50-80%.
ReplyDeleteTOF, one should ONLY trade options from the short side, where the odds are greatly in your favor. My fiasco with TLT puts is another reminder for me of this simple truth, and that's why I am switching back to the trading strategy that includes selling premium (buying AUMN now with the goal of selling covered calls during the next rally).
ReplyDeletejesse/tof- Both of you have arrived at your conclusions at an age where the rest of us only began to realize a stock market existed. So you're way ahead of us.
ReplyDeleteThe only hold-out in your generation is David.
But he's paid to think (and presumably) act differently, not only wrt to the crowd, but wrt to any existing group of homo sapiens.
ReplyDeleteHere's a story for you, tof.
ReplyDeletehttp://blogs.marketwatch.com/thetell/2011/09/15/investors-bet-redbox-can-pick-up-netflix-subs/
"Are the services comparable? On size alone, Netflix still dwarfs the iconic red kiosks. Total revenues for Netflix’ U.S.-based business in the first six months of this year was about $789 million – more than six times the top line for Redbox in the same period. "
ReplyDeleteHe might want to check his figures on that one...Redbox did over $360 Million in sales last quarter.
I have been picking up TBSI all day. Given its bolinger band compression and double bottom, it may be the best chart I've seen in perhaps years.
ReplyDeleteW/ creditor forgiveness, the common is free to explore its horizons for the next 3-6 months.
$28 million market cap for a former multi-billion company is more explosive than any option you can buy.
Some of these individual chart patterns represent a multi-year buying opportunity or the end of the world as we know it.
ReplyDelete2nd sees a 1,000 point rally in the cards. It may be the former.
"But he's paid to think (and presumably) act differently, not only wrt to the crowd, but wrt to any existing group of homo sapiens."
ReplyDeleteThere is a big danger here, 2nd_ave, as it gets me used to the fact that as an inventor I "see" things better than "they" (our product groups, to whom I regularly propose new product features). The stock market, however, punishes those who are stubborn.
Well, maybe it punishes the stubborn *traders*, but *investors*, who invest in the right long-term story, actually *need* to be stubborn not to be shaken out of their positions early on...
Well, at least TLT is getting its act together. If it does not shoot up tomorrow, then maybe my September $113 puts will actually be worth something at expiration...
ReplyDelete"multi-year buying opportunity or the end of the world"
ReplyDeleteI bet a silver/zinc/lead miner would fit in there somewhere...
T3D- Thanks, I figured that. Normally, as you know, I'm not a B/O trader, but I've followed, studied MDW since you brought it up and never found a spot I wanted to get in...Too busy with MITK, really.
ReplyDeleteStop @ .82. We'll see!
Wow, great comments guys.
ReplyDeleteTLT- Good to see it backing down. Finally.
ReplyDeleteLooking good, guys. We may in fact have had our obligatory 'down day' on Wednesday. Today we close at the highs. Tomorrow we gap up, leaving behind weak hands who will regret disembarking in panic for a long, long time.
ReplyDeleteI'm pretty sure you'll make a few bucks on those puts, David. No more than a few, however.
ReplyDeleteUnless the DJIA gaps up big time. But what would be the catalyst for that? Perhaps no catalyst is the best catalyst.
ReplyDelete2nd_ave -- I still have my October $115 puts, which is a much larger position than the September $113 ones.
ReplyDeleteI fully understand that the "Twist" operation by the Fed is in the cards, as well as massive MBS refinancing. In the past, however, I have observed that the bond market tends to buy the rumor and sell the news, and since the "news" have been out for a long time already, it might be time for the bond market to sell off...
FLIR - This baby has been rockin'.
ReplyDeleteTNX multi year bottom looks to be in place. Gold top has been in place for 3 weeks. Where does the money flow?
ReplyDelete2nd?
This could be MUCH more fear than the 2008 depression. I'll have to look at some more sentiment charts tomorrow, but this may be "buy with both fists territory"
ReplyDelete100 day p/c ratio at extremes:
https://mail.google.com/mail/u/0/#apps/fwd%3A+charts/12d9c22493c202f8
Looking at the monthly's, if this is a pullback in the bull, we do ABSOLUTELY nothing for the next 2 weeks. If so, big caps and indexes would do nothing. Beaten down plays would do well.
ReplyDeleteLet's see how it plays out.
Placing a sell limit order at $3 for my remaining 3 September $113 TLT puts. Just in case TLT takes a dive early tomorrow, while I am still asleep...
ReplyDeleteDavid-
ReplyDeleteTLT is done. 5 waves up like VXX and TVIX. Against my bias, this means rates rise meaningfully, and stocks beyond pre-conceived notions could rise considerably.
Incredible video showing a 3-D printer actually make something:
ReplyDeletehttp://www.youtube.com/watch?v=ZboxMsSz5Aw
The chart is showing me that TZOO could literally explode over the next few weeks. GRPN is shelved. Earnings will miss.
ReplyDeleteTOF- Please, give me a reason to go all in!
....and at the same time don't give me a reason to invest in a big red box in the back of a grocery store:)
ReplyDeleteha! I like TZOO but I still think earnings will most likely miss estimates. Having said that, EPS estimates have been getting lowered across the board, yet the stock doesn't seem to want to go down much more. my suspicion is they miss revs, beat EPS slightly, and the stock shoots to $40; however, i'm not willing to take that risk. i'd rather own a company I KNOW will crush estimates and the stock will go up a lot...it's big, it's red, and it's entertaining.
ReplyDeleteJesse - One other company that has multi bagger status coming to it: NLS.
ReplyDeletePlease don't show this to your wives!
ReplyDeleteThis is sure to stir some SERIOUS debate here given how much we are attached to and love our significant others. Especially given how the courts award 50% of our income to our ex-spouses given their "emotional and loving support to our careers"
Single-2002-2003: return 3,000%
Relationship 2004-2004: return -80% (no shit)
Single 2004-2007: return 10,000%
Relationship 2007-2008: return -99%
Single 2008-2010: return 200%
Relationship 2010-2011: return -75%
I am totally not kidding guys. I lose total confidence in terms of the market when anyone is looking over my shoulder.
I know, I know. Grill me! But it is amazing in light of the fact that the entire U.S. court system is based on how our spouses "propel us" to be more productive...
Sorry:(
The damn TZOO weekly chart continues to show that it could go to 45 (50% return!!!!) next week or the week after.
ReplyDeleteThey will miss earnings.
The question is why would it explode??
The only thing I can think of is GRPN comes back on board. Is TZOO starting to price this in?
Sorry guys, still looking at TZOO LONG term charts. It is the best buy in the market. For the life of me, I just can't figure out why. Help?
ReplyDeleteJesse - The chart in TZOO is EXACTLY the same as the chart of NFLX back in 2004. Take a look at it man. If the parallel follows you should get one more nice rally of 25% then a plunge on earnings, which would mark the bottom.
ReplyDeleteIn regards to your returns....WTF! First of all, how the hell could you be up 10,000%? 2nd of all how the hell did you make 3,000% in one year!?!? And last of course: how the hell are you still alive after losing all of that?
Well, 4th question: if you lost it all how are you able to travel as much as you have? And where can I get that job?
TOF- 3 years of growth, personal therapy, inspirational books, and travel (which has helped a great, great deal). Still alive? It was hard. Jesse Livermore style. Now, I can deal with anything and everything that comes my way....good or bad.
ReplyDeleteBelieve it or not, these days I could be penniless, and still be very, very happy considering the people I've met.
And regarding traveling: a 98% decline of 8 figures still gets me from point A to point B.
Unconventional Measures - What happened today, were there some unconventional monetary measures implemented in order to ward off the vampire of economic collapse?
ReplyDelete