How many traders have what it takes? That's the question that runs through my mind when I read about the amount of money flowing out of equity funds and into cash or bond funds.
Every one of them 'knows' the crowd sells at the lows. Every one of them probably 'thinks' they're smarter than the crowd. So who's behind the record outflows seen this year?
Trading is not easy. Not easy- that means difficult. When it comes to 'not easy' and 'difficult,' most Americans are freaking wusses and wouldn't last one round with an Untouchable who scrapes shit for a living. The markets drop -20% and they're out!
Look, man. Relax. The indexes are headed for new highs. It won't happen on the average American trader's timetable (overnight). It will happen in short order (the American equivalent of 'lifetime').
Consider turning off the quotes and the financial news for 3-6 months. You may be pleasantly surprised at your portfolio balance(s) when you check back in.
In the meantime- toss me a beer, bro.
ReplyDeleteFCX - "Freeport-McMoRan lost over $30 million as a result of the eight-day strike at Grasberg in July. In addition, deposits of highly-desired metals are being found at ever-greater depths – sometimes as deep as 6,000 metres (19,685 feet). Production costs of $1,600 per gold troy ounce are thus no longer the exception but the rule in South Africa – where deep mining is particularly common. This is another reason why, despite the rising gold price, many miners share prices are lagging.
ReplyDeleteSoaring costs for exploration and mining activities are weighing on the earnings outlook for many mining companies. For mines in developing nations, this has been compounded in recent weeks by the resurgent US dollar – which has led to losses courtesy of exchange rate differences. All of these factors are supply pressures, and something that will add further upward impetus to the prices of many commodities."
TOF - was ebay one or your fav's? I don't remember. Guy on FM say's to BUY if it hits $30
ReplyDeleteI think in comparison to the rest of the world, Bernanke has done a great job of keeping inflation in check here in the US, perhaps way too good:
ReplyDelete"Despite India's rapidly rising appetite for gold, China could surpass India's physical gold demand by the end of this year, as Goldcorp CEO Chuck Jeannes noted in late July. High inflation in China is probably one of the main reasons for the rising appetite for precious metals among domestic investors. Inflation reached 6.1% in September, slightly down from 6.2% in August, though food inflation jumped to 13.4%. Despite the slight decline (0.1%) in the country's inflation rate in September, this figure remains well above the official inflation target of 4%."
My brother was in India for about 2 years and based on his comments, the standard of living for many of those people can only go up.
ReplyDeleteDavid, Mark There is a new physical natural gas point that just started trading called TGP Z4 MARCELLUS. TGP stand for Tennessee Gas Pipeline and their zone 4 area includes Pennsylvania and some other states. I think the average price for trading today for gas low tomorrow was around $.90 per MMBtu compared to roughly $3.55 at the Hub. It's very similar to what the producers in the Rockies were going through over the last 5 years. Lots of gas but no way to get it out.
ReplyDeletewhoops typo, "gas low" should be "gas flow"
ReplyDeletePort- Wow..Do you have a link that details this further? The spread has to be exploitable.
ReplyDeleteRe- New nat gas point...I'm betting that's exactly why Bud bailed on BEXP.
ReplyDeleteTaking a look at SNE. Am I the only one? :)
ReplyDeleteTOF- We, well really me since I'm the one that brought it up, F'ed up with COOL.
ReplyDeleteNo way for any of us to benefit from local cheap gas.
ReplyDeleteKinder buying El Paso was big news for our world. CHK get's most of the natty headlines but Kinder is THE WARREN BUFFET of the natty world. I like Rich Kinder better actually, he pays his employees better. He will be forced to sell some of the assets but we're wondering if he's going to convert some of the natty lines to liquids. Liquids is where the action is and as long as oil stays up, there's going to be lots of natty coming from the liquid plays.
I need the playbook on the next small producer takeover target. Let me know if you have it.
Port - I like India a lot, the people are amazing! ;)
ReplyDeleteI lose my Real Money Silver subscription tomorrow and I've got the shakes. I really liked reading Doug Kass even though he should stay away from calling market tops and bottoms. The one guy I've been following for the last few months is Ken Goldberg who is an elliot wave tech. He runs a website called Trading With Waves which I have not subscribed too. He's been pretty accurate on his calls for SPY over the last few weeks. He's thinking we could rally to SPY 127 ish and that's it, we go down from there. At least that's his hi probably projection for now.
ReplyDeleteCP - I've only heard good things about the people. I've heard though that the people that live in the slums that survive to adulthood have fantastic immune systems. I'm not sure if that's true but it makes sense.
ReplyDeletehttp://www.youtube.com/watch?v=2ImZTwYwCug&feature=related
ReplyDeleteKass makes a lot of his calls on twitter now.
ReplyDeleteListening to a concall last night from Canada's largest producer of leather goods and one of the interesting comments was on how it is getting harder to source good leather from China as the Chinese population is becoming more affluent and they are keeping more leather for inside the country usage.
ReplyDeleteThat's the type of news that we want to hear because it means China is becoming more of a consumer nation and this will help balance the world economy and make it easier for our North American companies to compete.
hey port > yeah i like ebay a lot, but based solely on the paypal division which will eventually become the majority of the company. We use them a lot with our website and they're trying to make in roads into processing all of our transactions. i have friends that are business owners and they use paypal for all transactions including credit.
ReplyDeletemark > yeah we did f up with COOL huh? nice 100% move off lows from 2 months ago.
Ghadafi was captured, or killed.
ReplyDeleteTZOO popped on earnings. nice return from $22 on the crash.
ReplyDeleteGermany may postpone debt crisis summit?
ReplyDeletethey're putting CSTR up for sale again today...most likely a bear trap going into earnings.
ReplyDeleteWMB - They're still buying this one...
ReplyDeletePM's seem to be receiving support but if the situation in Europe worsens, the dollar will rally.
ReplyDeleteCSTR - Retest $48.5?
ReplyDeleteCSTR's MM is an asshole.
ReplyDeleteIR- That's not encouraging.
ReplyDeleteBEXP - I guess I can take this one off my watch list now...
ReplyDeleteFuck it. I opened a small position in CSTR @ 48.9x.
ReplyDeleteIR - True, but how bad was it really and did anyone really expect a blowout considering the circumstances?
ReplyDeleteIncreasing housing starts (should a trend develop) should help IR, and WHR.
Copper looks sickly though, seems China's sitting tight waiting for lower prices?
Good work 2nd, I hope it runs over $60!
ReplyDeleteFCX - It's nice to see some green in a copper producer.
ReplyDeleteNOC - Cutting 800 jobs in response to lower taxpayer funded defense contracts.
ReplyDeleteTraffic accidents in middle eastern countries dropped significantly during Blackberry outage.
ReplyDeleteAnyone use Stocktwits to follow stocks?
ReplyDeleteSeems to be gaining in popularity, but don't want another info source to follow if its not worthwhile.
BB- I do. Mostly just to find articles on the stuff I follow. It's harmless.
ReplyDeleteHoly shit 2nd, I just checked in and it looks like your purchase of CSTR is what rallied the market. I've never held a more volatile stock than this. I've seen 45 > 49 > 39 > 45 > 39 > 54 > 48 in the five weeks that I have held it.
ReplyDeleteStocktwits? Twits? Need I say more?
I just glanced at the news and saw this:
ReplyDelete"French President Nicolas Sarkozy and German Chancellor Angela Merkel issued a joint statement pledging that the Continent's leaders would have a plan in place by Wednesday at latest."
When I was buying DB puts yesterday, I wanted to buy January ones but bought November ones by mistake. I know from experience that holding short-term options is very risky, and so I decided to use today's decline as an opportunity to close out those puts, especially in the light of a possible agreement over EFSF next week. So I just sold at $5.50 the two puts I purchased yesterday at $4.20. I still have one January $45 put on DB, which I purchased at $8.20 last week -- I'll keep it until expiration as a hedge on my portfolio or until Greece defaults, whichever is earlier. :)
I decided to place a sell to open limit order at $1.40 for 5 January $7.50 puts on AUMN (the bid/ask was $1.20/$1.50 when I placed my order).
ReplyDeleteAnd also a buy limit order for 5 April $5 AUMN calls at $2.80 (the bid/ask was $2.45/$3.20 when I was placing my order).
ReplyDeleteLet's see if either of these two limit orders gets hit today...
"Continent's leaders would have a plan in place by Wednesday at latest."
ReplyDeleteHmm, isn't that identical to what they said last Thursday?
CP- This market is giving me a headache.
ReplyDeleteLooks like the day traders are getting out of V.
ReplyDeleteHave you guys noticed spreads seem to be widening out?
ReplyDeleteToday's action should remove some of the negative overhang. Rally Friday.
ReplyDeleteMark - Yes...neither side has an advantage here. Both shorts and longs could get hammered based on the random turn of events coming out of Europe this weekend.
ReplyDeleteOn a second thought, I just lowered my buy limit order for 5 April $5 AUMN calls to $2.50. This became the new bid for such calls, so why pay more than the others? Especially when I don't have any more funds to throw at this market...
ReplyDeleteKyle- Thanks. I have to say, I've never been more 'uncomfortable' trading in my life.
ReplyDeleteMark - This is indeed one F'ed up mess. Vad posted over at CC that...
ReplyDeleteWhy am I not looking forward to this...
Submitted by Vadym Graifer (2577 comments) on Thu, 10/20/2011 - 14:45 #98140
Senators say Fed's Bernanke will submit proposals to Congress next week on how to help housing market
-So between DC & Europe, these whipsaws could get wild...
I'm completely sick of turning on the streamer and looking at stock prices. Not that I'm trading anything right now, but I think I'm officially done with anything short term for a while. In fact, if CSTR's earnings weren't next week I would seriously consider not looking at stocks for a while. But even earnings shouldn't deter me from doing that.
ReplyDeleteIt's just so silly how people are so short term on everything. Europe sucks? BFD. In 5 years it's not gonna matter whatsoever. Earnings missed by a penny on your favorite stock? Again, BFD. If the trend is up and the company is doing ok, who effing cares?
Have you ever noticed how productive your day can be and how much more fulfilling it can be if you don't pay attention to the market?
Kyle- Great....
ReplyDeleteOf course, I'm sure I'll change my tune in one week just like everyone else in the market.
ReplyDeleteTOF- :)...
ReplyDeleteDavid,
ReplyDeleteOne of my biggest peeves in the market is the spread on thinly traded options like those. It's like a 30% profit spread for the market makers and I'd bet a lot of money if someone wanted to hit your buy order of $2.50 the market maker would step in ahead of you and grab them. I've given up on trading options like those.
Good luck to you though - maybe you're more patient or have a better broker.
Kyle - Just wanted to clarify that my post wasn't in response to your comment. It's more in response to all the nonsense I read on blogs and hear on TV.
ReplyDeleteI laughed when I read your post TOF - all day it's Europe this, Europe that and we end up going up a little bit toady (average S&P and Nasdaq).
ReplyDeleteReality is earnings season is off to a good start and this is what will ultimately drive prices.
I don't know jack about IR but 6 straight months of lower prices? I'd be shocked if someone buying here doesn't make money.
ReplyDeleteOakland - How was the earthquake?
ReplyDelete"I'd be shocked if someone buying here doesn't make money."
ReplyDeleteI agree, that's an excellent observation and picking a bottom is nearly as difficult as picking a top. I wouldn't discount having that July gap (~$42)down close as a nice gift, within months.
SGG - I see Peter Brandt was right, sugar did rally.
ReplyDeleteper CNBC - 'Both governments said that all elements of the euro zone's crisis strategy would be discussed on Sunday, "so it can be definitively adopted by the Heads of State and Government at a second meeting Wednesday at the latest." '
ReplyDeleteBoth governments being Germany and France. If we come in tomorrow and the markets are pretty close to where they closed today, I think I'll buy a DEC SPY straddle. What strike? There's always a risk and it looks like the puts are more expensive than the calls so I may just go with the cheapest setup which is around the 123 or 124 strike. I'll probably start with a bid of $11.15 and we'll see what happens. A small position mind you because I already have plenty of good long term underwater holdings.
I would actually like to the see the market drop one more time before they solve all of our problems and we get our year end monster rally.
Port- Take a look at NFX for a take over target. I'm working on it now, and it reinforces my BEXP take that Bud was sick of doing business there and didn't want to be in another winter waiting.
ReplyDeleteAnd XCO. What a mess that one is. I like it.
ReplyDelete"Four Facts that PROVE the EFSF Doesn’t Matter… At All" (Europe is insolvent):
ReplyDeletehttp://gainspainscapital.com/
NFX what a beating it tool.
ReplyDeleteNFX- Yes, that's the point. It's holdings are VERY liquid. I'm actually starting to get a little bullish here. Seasonality is close.
ReplyDeleteXCO is probably a better play after the botched CEO offer that never came through.
I'll see what's in the INBOX tomorrow.
ReplyDeleteI don't know about you, but I am bullish.
ReplyDeleteAfter all, it will be no time at all before Merkozy announces an agreement to plan to hold meetings tentatively discussing the possibility of a series of discussions for planning for the possibility of announcing the intent to bring resolution to the crisis.
To me, that says "back up the truck"!