Wednesday, July 11, 2012
07/11/12 The Anti-Trade
The anti-trade is a sophisticated (mental) weapon, a highly effective defense when engaged in spiritual warfare with the Evil Spirit of [Needless] Losses (ESOL)- spell that backward, dude!. The next time I feel like swinging at anything less than a perfect pitch, I need to rebuke the evil spirit> 'Get thee away from me, you POS! Piss off!'
I allowed the LOSEr to whittle my YTD gains down from +9.18% to +8.47%. Lesson learned.
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As soon as I read the title to Hulbert's column ('Insiders betting on a correction'), I knew I was ----ed. There really was no choice other than to cash out. An insider sell-to-buy ratio of 5.5-to-1 is pretty much undebatable.
ReplyDeletewhat are the recent trends in insider sell to buys? i thought it's been sky high for a while.
DeleteThe 'average' ratio is between 2-to-1 and 2.5-to-1 (insider sells will always outweigh buys for the simple reason insiders want to diversify out of company stock or need cash for personal reasons). In early May it was 5.71-to-1, followed almost immediately by a -9% correction. In Mid-may, it promptly fell to 1.63-to-1. Now it's 5.5-to-1. I won't argue with insiders.
ReplyDeleteThink about it. How could any trader possibly know more about the outlook for a particular company than its officers? There's just no way.
Deletei wonder what the volume of the transactions were.
ReplyDeletei hear the insider argument a lot...especially when a stock has tanked and there's no insider buying. that didn't really pan out for MITK. and the coals had a ton of insider buying last summer.
The 'argument' may hold more weight when averaged across all stocks/sectors?
DeleteAONE - Getting pummeled, same ol' same...
ReplyDeleteGasfrac(GSFVF) - Up nicely though(I give this technology a big nod), so what's up with that?
GSFVF- OK, I'll check with MOG again about this one. I love it on the surface.
DeleteWPRT - Successfully retested the rising 200SMA today.
ReplyDeleteInteresting article from a "newbie":
ReplyDeletehttp://seekingalpha.com/article/624211-itgow-investments-to-grow-old-with
Hey BB - I keep coming back to AMNF. What do you think about that one? I also keep thinking about setting up a portion of the port to longer term investments. One that I really like on any dip is CAKE. My whole family loves that place and here in San Diego there are only two of them and I believe they only have about 150 or so worldwide...plenty of room for growth.
1330 - Well, here we are again.....
ReplyDeleteSPX- Bouncing on S2....for now.
ReplyDeleteAdded a little more NOK at $1.91 this morning. Ready to place a bid for 5k NSPH at $2.9
ReplyDeleteRe AMNF, I keep watching it and I've got a few thoughts:
ReplyDelete1. The stock has been dead flat for almost a year trading between $0.78 and $0.84 with the bulk of trades at $0.80 - would be better to buy if it pulled back to say $0.70 on bad market days, but this never seems to happen. Must have good support, but never breaks upwards either and not sure what would be a catalyst.
2. On a valuation basis, it is good, but not great. You've got a P/E of about 11 which is probably fair given the size and liquidity of the company. If you want to be in the food space, you could compare this to Unilever (UL) which has a forward P/E of 14, but is safer due to its size and product breadth and has overseas exposure for potential better growth.
3. The one really nice thing about it is the 6% dividend yield and this could increase. I could see buying this and putting it away and collecting the dividend over time. I've got a few stocks like that, but mainly I buy those in Canada due to the tax laws.
So, for me, I am keeping it on my watchlist and would only buy on a pullback. There are a lot of other cheap stocks out there now that are pulling back, so I am looking more towards these as they have more bounce potential.
I agree...the only thing I would add is I believe AMNF was hit in the past few quarters from input prices and those have subsided in the most part, so earnings could look good for the next few quarters.
DeletePAL - Right to 52wk low
ReplyDeleteBAC - Okay, so when does this one really get the downside momo?
ReplyDeleteFeeling a bit bullish for a trade. Break of support = buying opp.
ReplyDeleteSome traders would argue that break of support=shorting opp.
DeleteCould be getting close to a bottom - things seems pretty negative out there - even a low jobs number, that everyone has been waiting for, is being dismissed as an aberration (maybe correctly). But in a good market, people probably would have jumped on this as a reason to buy.
DeleteI wouldn't say some...i'd say most. which is why i like buying it.
Deletethat was in response to 2nd's comment: "Some traders would argue that break of support=shorting opp.". this market is illogical. breaks of support = buying opportunities while breakouts = selling opportunities. know thy market.
Deleteobviously, it's easy to be wrong in this market, which looks like i could be here for sure. but i'm playing the odds. over the past year we have seen more fakeouts than we can all count.
DeleteLooks like a few buyers betting a reversal to me.
ReplyDeleteThey're not winning.
DeleteLong UPRO at $70.8. Starter position.
ReplyDeleteDoubled at $70.4
DeleteAdded final piece at $70.3. With ultras this is only a day trade. I'm thinking we could easily reverse here but I'll know soon enough if I'm wrong.
DeleteWow, 3K shares now?? :)
Deleteha. not quite!
DeleteBlurb from a MOG email just now...
ReplyDeletetruck sales in Europe falling but breath of life in US housing. Good time to buy oily stocks, can see the turn coming as Iran embargo is hitting now and OPEC is losing their spare capacity.
JOY - This thing's beat to hell and back and P/FCF is still huge.
ReplyDeleteLooks like the dip in NSPH might be over. Who knows. Volume continues to be pretty heavy in that stock. Love the technology.
ReplyDeleteShorts losing grip now?
ReplyDeleteGMO - I'm feeling the urge.
ReplyDeleteEven if the jobless claims numbers are fraudulent, you can't deny that a trend is in place:
ReplyDeletehttp://wsj-us.econoday.com/showimage.asp?imageid=22837
Bespoke seems quite positive on the job numbers:
Deletehttp://www.bespokeinvest.com/economic-indicators/2012/7/12/jobless-claims-fall-to-lowest-level-since-march-2008.html
I suppose jobless claims can be spun whichever way depending on the underlying motive. My guess is a rising dollar is behind today's move to preserve profits short term, however it's difficult to know where the dollar trend reverses?
DeleteI'm trying to consider the coming blow-off top for Treasuries and the effect going forward, being properly positioned in this respect is pretty important to me else if I can't figure it out in advance, cash is the alternative I guess.
Mark, re buying oily stocks, one of the best deep value guys I follow has been reducing cash and mainly buying the small oil-oriented E&P companies with the expectation of a good return over the next 6 months.
ReplyDeleteGreat call TOF!
ReplyDeleteThanks man. Yes is no, Breakout is a Breakdown, Breakdown is a Breakout. This is the Opposite market.
DeleteSilver is doing a moonshot now on a small retreat in $USD, breaking out above yesterday's high. That lion refuses to be held down. At least for today... :)
ReplyDeleteBreak out the Tarnex and give that puppy a bath! CLR would likely be too aggressive.
DeleteSold UPRO $71.48
ReplyDeleteno real reason for selling other than I already have enough long exposure through NOK and NSPH.
DeleteSQNM - I was becoming concerned this one was gonna leave me behind then I remembered how prices tend to bounce.
ReplyDeleteToday could very well have been the bottom in the markets before a move to 1,380/90. I still like the scenario where we:
ReplyDelete(a) bottom around 1,330
(b) move to 1,390 to possibly even marginal new highs
(c) drop to 1,250
(d) move to 1,500
that would be a doozy.
I see where Geoff has a lower line drawn at 1325, pretty good entry call so far.
DeleteAPA - Buy here at weekly low or wait for what might (big if) become $77?
ReplyDeleteSORL is trading at $2.28 now... So I guess there WAS something positive about me getting margin calls in early May with a drop in PMs, as it forced me to sell out all my SORL at $3.30-$3.40, which I purchased in December-January at $2.30-$2.50.
ReplyDeleteMaybe it is time to get back into SORL?
Placing a buy limit order for 2000 more shares of PNPFF at $0.81.
ReplyDeletePicked up a little more NOK at $1.91.
ReplyDeleteAdded a little more NSPH at $3.08/9
ReplyDeleteVIX is staying low during the recent pullback -- should it make us bullish?
ReplyDeleteyes i think so
DeleteI'd have to agree. Man, the worry wall sure has grown for me.
DeleteA lot of commentators and people scared of the markets fail to mention that there have been several recessions where stocks barely went down in the grand scheme of things and then rebounded sharply afterward. And most of those had already fallen before it was known that a recession occurred:
ReplyDelete(1) 1953-4 recession: stocks dropped about 15% from early 1953 to the summer of 1953. The selloff was over. The market rallied 25% from the bottom when the recession ended in mid 1954 and doubled within 3 years.
(2) 1957-8 recession: stocks dropped 20% then rallied 50% over the next 18 months.
(3) 1960-1 recession: stocks dropped 13% then rallied 38% over the next 12 months
The 1946, 1948, 1980 and 1982 recessions all resulted in mild pullbacks (actually in 1946 there was no pullback) and the markets were rallying before the recession was over.
So what type of economy are we in? Maybe we already are in a recession? However, the fact that everyone is braced for one pretty much guarantees that it will be mild and there's a good chance we've seen the bottom already.
the positives? housing is actually getting better. companies are thinly staffed so the chance of big layoffs is slim. people don't expect anything good so the upside surprise factor is definitely there.
Deleteinsiders are selling? maybe they're caught up in the negative feedback loop that everyone is in. maybe they will be kicking themselves in 6 months. maybe the volume of sells is not that heavy? who knows.
Despite my general pessimism, I agree with you, TOF. Even if Hussman is right and we have entered recession in June 2012, this will be a mild recession. But it might be a long one -- a year or two of growth between -2% and +2%. Stocks (and especially PMs) are supposed to do great in this environment, because of continuous attempts to stimulate the economy, which will not work and which will require further attempts, etc., and all that liquidity and 0% rates will keep pushing stocks higher...
DeleteThe other thing that just altogether keeps me from getting bearish is we have been trading sideways for like 13 years. that's insane. During this time there have been hundreds of millions of people in developing countries that have seen vastly improved living standards, millions of new households being formed...this stuff adds up over time and creates demand for goods/services.
DeleteThat would be the basic argument people like MOG/JB use.
DeleteFolks, I really think the greatest opportunity out there right now is playing the declining wedge in SLV over the past 2 years. Such wedges almost always break to the upside, and we have already reached the apex. If you buy SLV now, then there is an easy stop at $25 with a very small maximal percentage loss and a very high gain. Moreover, if you get stopped out at $25 and SLV rebounds about $26 soon after that, then you can (and should) re-enter, as the chances of that drop being a fake before a major move up will be very large.
ReplyDeleteWhat are my chances of getting into SLV at, say, ~$14 or under, then maybe ride it to $25 from there?
DeleteZero chances. :)
DeleteMaybe a better question is what happens to PM's when the Treasuries sell off like some are predicting?
DeleteI know this is heresy, but I think the likelihood of an Apple design misstep (i.e., actual functionality issue or just a creativity issue) increases with each day that passes since Jobs death. I don't think the nail can officially be driven through the coffin of NOK. People forget that NOK only 4 years ago did in net income what its current market cap is...and AAPL at one point was near bankrupt when Steve Jobs was no longer at the helm.
ReplyDeleteI'm kinda wondering if maybe MSFT is interested in buying NOK for their coming technology revamp?
DeleteI say SLV jumps at least 2% tomorrow. The drop below the support at $26 today was a fake, and now there are fewer passengers on the northbound train.
ReplyDeletePNPFF is already up 4% since my purchase at $0.81 earlier today...
DeleteTLT - Volume isn't exactly jumping off scale here as the recent top is coming into focus, neither is that the case for this mornings low in PM's.
ReplyDeleteDollar vented steam at the upper trend line today and volume picked up at the same time but I'm unconvinced I won't wake up to witness a new high tomorrow.
TAXI - Pretty decent dividend, and NY's hate the concept of learning to drive.
ReplyDeleteThose of you who think that the housing market has entered a clear recovery phase, may want to think again:
ReplyDeletehttp://www.boston.com/business/articles/2012/07/12/more_us_homes_facing_foreclosure_risk_in_june/
Yeah I saw that too and wanted to get bearish...then I looked at the charts of the home builders and regional banks.
DeleteThe homebuilder stocks will start recovering much sooner than the housing prices start a steady ascent. Based on that article, I expect the housing prices to bounce around the bottom for another 6-12 months, and then start growing slowly at first (for a year or two) before shooting higher at the end of the decade so as to catch up with a very high inflation we'll have at that point.
DeleteSo I still have another year to cash in my AUMN and make a downpayment on a home. A year is all I need, since AUMN should break out to new highs within a year.
Delete"I still have another year to cash in my AUMN"
DeleteMeanwhile, you could look for a zero-down loan! ;)
Are they still giving out such loans? Who is doing it now?
DeleteYa never know till ya try, you might just be able to finagle one.
DeleteFWLT - Yet another one that is ridiculously cheap. $1.6 Billion market cap, $900 Million net cash. $160 Million free cash flow (i.e., in 4 years they will have as much cash as the value of the biz, assuming cash flow stays around $160MM).
ReplyDeleteYeah, does look pretty cheap. How does the 67 P/FCF figure fit into the picture, misleading indicator? Any idea?
DeleteAssuming WS professionals don't hesitate going as far as reaching for testosterone to find their "edge", what else might we anticipate?
ReplyDeletehttp://finance.yahoo.com/blogs/the-exchange/survey-wall-street-crime-still-pays-163407471.html
I would argue that at current prices, stocks have more than priced in a normal recession, so a mild recession could easily come and go with little effect on stock prices.
ReplyDeleteThere are many stocks which are cheaper now than they've been any time since 2000 other than the financial crisis, but no-one seems to want to buy.
That is why I wouldn't place too much emphasis on the macro noise, but look at individual stocks. If I can buy a stock at a half or even a third of it's value, I really don't see how I can go wrong with a little patience. I also think that few traders are spending the time to dig through stocks because all the news is macro, which is giving us these great opportunities - go where the competition is least.
NGD - Looks like Inverse H&S target is $13
ReplyDeletenew post
ReplyDeleteGold - Descending triangle target looks to be 1225
ReplyDelete