Friday, September 21, 2012
9/21/12 All good
It never fails to amaze me how often the markets can unexpectedly change my state of mind in a matter of hours.
This morning at 4 am all global markets were green, and I found myself second-guessing my decision to cash out Thursday. Everything I had been holding was trading a percentage point higher- WTF. Adding insult to injury, one of my fund positions (VEIEX) unexpectedly dinged me for a 2% S-T redemption fee! Fortunately (luck over 'skill' any day, bro) I had been holding an 80/20 VEURX/VEIEX split, which softened the blow. I registered a complaint with Fido re the 'hidden' fee- their research site does not display the fee (an unintended omission, as S-T redemption fees are clearly spelled out most of the time). Let's face it, there's no ----ing way I would have opened any positions on Tuesday with a 2% handicap! The mutual fund world is full of landmines!
Back to my original line of thought. As I nosed the Camry into the garage at work, I had the thought that there was a 50/50 chance I'd be feeling a lot better in nine hours. Ha! Despite green Asian indexes at 4 am, VEIEX closed down -0.86%. Despite green European indexes at 8 am, VEURX closed down -1.95%! Occasionally one finds karma in the markets.
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Yes, I'm pretty certain Obama will be serving another term. The Republicans just don't have the critical momentum, Romney was a poor choice over Ron Paul and I told them so when they called me both this year and four years ago.
ReplyDeleteAnyway, you know I believe the dollar is falsely over-valued anyway. It amazes me how commodities haven't run sky-high in anticipation of a weaker reserve currency, must be the slow global economy delaying the inevitable.
Yes, one younger brother resides in HK. He feels fortunate to have gotten out of Shanghai real estate in 2010.
ReplyDeleteI just realized something: since I am ready to start selling my AUMN, I might as well get the "money pump" going. That would be a very good justification for selling AUMN now, even though I know it is going to be MUCH higher a year from now (given its volatility, I might still make a decent trading profit over the next year). So in addition to my sell limit order for 1000 shares at $7, I just placed a sell limit for 500 shares at $6.50. I will try to trade AUMN in a 50c ladder.
ReplyDeleteTrivia question. Wife left the car at a repair shop the other day, and inadvertently left not only the car key, but the remote opener. One of the guys seemed 'off' to her, and she's wondering how easy it would be for someone to 'copy' a transmitter code (using either a programming cable or a smart button) off a remote with the intent to break in later? We've had to replace the remote a couple of times, and I was surprised how easy it is to program a remote. Or are we concerned about something that's just not that easy for someone to do?
ReplyDeleteI have no idea 2nd.
DeleteI don't have any idea either, but I do know this...If the dude works at a repair shop and wants to snag a car he can. Easy.
DeleteThey really should waive that 2% fee if it was not listed and thank you for pointing it out to them. No way you should have to pay because of their error in listing their products.
ReplyDeleteSince it was a Vanguard product, there wasn't anything they could do.
Deletehttp://www.marketwatch.com/story/on-the-cusp-of-a-new-bull-market-2012-09-21?pagenumber=1
ReplyDeletePersonally, I think the odds are good we're heading into a new secular bull. The guy's right in saying the rally that began in March 2009 has run against headwinds since it started.
DeleteThere was an interesting argument in that article about QE3 finally generating some inflation, which finally convinces people that Treasuries are going down, which will create an initial movement from bonds into stocks, while the rates are still low. However, when the rates rise high enough, the market will start worrying about them slowing down the economy, and from that point on, a further decline in bonds will be viewed as a negative for the stock market.
ReplyDeleteMoreover, the analysis of previous episodes of countries high government debt show that the rates stay low until they explode either into a hyperinflation or into a default. There is no middle ground, as the central bank cannot afford rising rates with a high government debt and will keep buying Treasuries for as long as it can. So I doubt we'll get a long bull market here. Those who are looking into a rear view window and seeing a pickup in some parts of the economy are ignoring the fact that at current deficit levels the US has at most a couple of years before people start pricing in problems similar to those happening in Europe now. Moreover, in a couple of years Japan should hit the wall, as the savings rate of their population is already close to 0 and they will very soon stop being able to buy the new issues of Japanese government bonds. At that point, Japan will have to rely on the outside market to buy their bonds, and the market will not like the huge debt levels in Japan. People WILL draw parallels between the US and Japan at that point, and will not want to be in stocks.
However, I think we should at least have a fun 1.5 years until the end of 2013, while Bernanke is still in the Fed and he is still buying MBS trash from the banks. :)
http://realestate.wsj.com/item/2792093?as[country_code]=us&as[location]=95403&as[sid]=93094&as[transaction]=for-sale&item_offset=1
ReplyDeleteCheck it out.
AUMN would have to go up to 260 in order for me to afford this house. :)
DeleteMaybe I need to buy more AUMN while it is still cheap? :)
Delete2nd, the best way to advoid the type of short term trading fees is to trade at Rydex now known as Guggenheim Investments. They generally will let you trade with no restrictions (but some of the newer products may have st fees). I think your plans are connected with work, perhaps you should petition them to add Guggenheim to accomodate people like yourself.
ReplyDeleteI knew the guy that started Rydex, Skip Verah, he came from Rushmore funds after they banned short term traders. Pissed off that they alienated his customers he started Rydex. Skip died a few years ago from pancreatic cancer and Guggenheim is not quite as good as the old Rydex.
FWIW
here's a link
Deletehttp://www.rydex-sgi.com/
One more thing, you want either H shares or INV shares. Forget which one so you do not pay some kind of load or fees. This was a guggenheim change.
DeleteT3d> Holy ----! I transferred my entire 403(b) into what Fido refers to the 'Brokerage Link' option in 2010. This allows me to trade any mutual fund offered through their brokerage, which of course includes funds offered by other companies, such as Vanguard.
DeleteSo I just typed in 'Rydex,' and I'm guessing 200+ fund names came up! I tested mock trades on several at random, and it appears I have access to every freaking one of them!
Thanks for the tip, bro!
My above question actually referred to the remote garage door opener. Martin Doors supplies a 3-pronged programming cable to allow transfer of your private security code to replacement transmitters. I'll just call Martin on Monday to find out whether the cables are 'generic' and available to anyone, or specific to Martin. Thanks for the responses.
ReplyDeleteInteresting visit from the husband of one of my HK cousins. Previously founded/sold a business. He has now started a second company with the intent of marketing 'under the radar' pharmaceuticals. It's a very unique venture. I hope to assist in a peripheral role.
ReplyDeleteA-CLASS
ReplyDeleteThis class of shares carries a front-end load or sales charge that is paid directly
by the investor when the purchase transaction is made. The commission
amount is typically expressed as a percentage of the fund’s offering price,
which is the NAV adjusted for the commission.
ADVISOR CLASS
This class offers shares with a fee structure that includes both 25 basis- point
12b-1 and .25% service fees. RIAs may select this and collect up to a .25%
service fee from the fund.
C-CLASS
Rydex C-shares offer choice and flexibility. Structure one is designed primarily
for registered representatives and pays an initial 1% commission with a
12-month CDSC and an annualized 1% trail that begins accruing in the 13th
month. Structure two is designed primarily for RIAs and allows a waiver of
the initial 1% sales commission. The 1% annualized trailer begins accruing
immediately.
H-CLASS
This class of shares is a hybrid of the Investor and Advisor class shares,
hence the “H.” This share class is offered with a 25 basis-point 12b-1 fee and
is designed for both RIAs and individual investors.
INVESTOR CLASS
Investor class shares are designed for financial advisors and individual investors.
These shares do not include a 12b-1 fee or service fee and are available
to investors through discount brokerage supermarkets and trust companies
or directly through Rydex.
http://www.pfiii.com/newsletters/
ReplyDeleteFREE, just a few charts with some commentary. I though his comment about the transports was interesting.
Below is what stood out for me in Cara's WIR:
ReplyDelete'To sum up my thoughts after going through the data and the indications for global QE, I think the market Bull has another year to run, with about +15% capital growth likely before the Great Reflation becomes the Great Collapse.
'In my scenario, Precious Metals and Metals will take the lead because essentially all that’s happening is currency devaluation. The Oilers will not keep the pace because the market is well supplied today and for many months to come. But at the end of the Bull run in the broad equity market, the point where capital will cease to flow easily out of bonds and into equities, there is usually a blow-off top in Crude Oil as well as precious metals. Only after that point do I expect to see the Great Collapse.
'Until then I like all companies that are labor intensive because there is no wage inflation now or on the horizon. The Consumer Discretionary goods producers will be favored for this reason, and the fact that during the Great Reflation the unemployment rates will fall and there will be more people with discretionary income. I also like the commodity producers, where supply cannot keep up to demand, because this will be a QE-fueled Great Reflation.
'This week Jack Bogle, the king of the index fund industry, was bemoaning the craziness of markets, telling the BNN audience that 30 years ago stocks turned over about once in six years on average and now the speculators and HFT players are forcing turnover about every couple months. I think Jack continues to ignore reality, however. Turnover is happening because it’s possible today. The equity market functions over that say of the housing market because of liquidity. When, back in the 1970’s and early 80’s, it cost 3% brokerage commission on entry and 3% on exit, trading volumes were necessarily very low – except in penny oil and mining stocks – because it was impossible to turnover the entire float of a Fortune 500 company in a couple months and make a net profit over and above the 6% commission. Institutional investors were prudent then, basing trades almost entirely on corporate fundamental and macro-economic factors, just as they are prudent today as almost zero cost commissions changed the game to one of technical trading and risk management. Why blame speculators unless you are talking your book, and Jack Bogle has always talked his book.
'Today the market is most affected by momentum trading. Corporate fundamentals and macro-economic themes still play a role, but the game is about momentum, price series data that is easily computerized and analyzed by statistical tools where the results are entered into sophisticated trading algorithms. Well over 50% of all trading is done this way now on the world’s major stock exchanges. That is not speculation. It’s just different than when index funds were first promoted as the be all and end all for investors. Computers now project prices just like they do election winners.
'I too have a market price forecast – quite different to many of yours or the people you read. The S&P 500 today is 1460. With a +15% gain that I anticipate, based on QE and increased liquidity, and currency devaluation, I see the S&P 500 lifting to about 1675 a year from now and at about that time starting to fall due to what I call the Great Collapse that I foresee.'
Everyone is expecting a collapse in the next year or so...
Delete"we will go higher but wait til next year"
i can see a drop/pullback but definitely not a collapse
http://www.hussmanfunds.com/wmc/wmc120924.htm
ReplyDelete2nd, thinking about your garage door opener. When you get a car with a built-in garage opener, you program it by holding the buttons in and then pushing the button on the remote and the car remembers the code, so you don't need to carry the remote anymore. I would assume this technology could be acquired outside of a new car and then be used for what you are thinking, so it may well be possible.
ReplyDeleteCSTR - Time to get back in?
ReplyDeleteFrom one of my favourite of the old time market analysts, Don Hays, predictions of a 30% market increase with an 84% success rate over the next 12 months.
ReplyDelete"We've looked at the last 50 years, and when you have conditions very similar to today — with monetary policy extremely positive, valuations extremely positive, and psychology a little queasy here — you still have very high odds that in the next 12 months you're going to make money"
http://finance.yahoo.com/blogs/breakout/near-perfect-conditions-suggest-30-rally-stocks-next-165112942.html
Funny how how different he sees things from Hussman who looks at the same data and thinks we are at the worst levels in history.
Looks like we are setting up for another down Monday. If it occurs, will mean we have been down 2 of the last 21.
ReplyDeleteI mean up just 2 of the last 21. 19 of the last 21 Mondays will be down days.
DeleteSeems the odds are stacked against a down Monday, assuming prices aren't controlled by computers.
Delete2000 iPhone assemblers involved in a brawl in their company dormitory.
ReplyDeleteUWM - Wonder what I was thinking when I placed an GTC order @ $34, wishful thinking?
ReplyDeleteLooks like it for now. How's it going? Pretty bored market wise here.
DeleteYour GTC $20 bid on QCOR got filled though!
DeleteNope, my QCOR bid was $15.00! ;)
DeleteFB- Guess they really haven't figured out mobile??
ReplyDelete2nd might get another shot at refinancing this year!
ReplyDeleteBarron's Article Rips Facebook $FB and Flushes Weak Hands Down the Drain http://t.co/P6xLXDjz
ReplyDeleteI heard about that. I can't get my arms around the attraction for FB, but then again I don't use it so there ya' go...
DeleteCSTR - Okay, I'll place a stink bid on this one at $37.80, see what happens...
ReplyDeleteFB stalkers, let's track what you're doing on-line...
ReplyDeleteLEN - Seriously, we really need more new homes?
ReplyDeleteout of all social sites YELP and LNKD have performed best and I believe for good reason.
ReplyDeleteLook at the charts of the Russell, MDY, IYT, and Nasdaq over the past 10 years. Each one suggests that the S&P is going to at least the old highs if not higher. The S&P is the only one that hasn't seen new all time highs since the recession ended.
ReplyDeleteif you think of this from a money manager's perspective...i know a lot of people have said this but it definitely makes sense...they will be feeling the heat if they're underperforming. everyone benchmarks their returns against the S&P 500. if you're underperforming investors want to know why. if you're continuing to be bearish / cautious investors want to know why. when we talk about hussman what is the first thing we do? look at his fund's returns right? someone what that lousy of a return won't get more money from investors. it is what it is but that's the way it works. the S&P is still about 8% or so below all time highs while all other indexes have hit all time highs (well, except the nasdaq because of the bubble but it's 30% higher than the 2007 peak). i don't think there's much of a chance the s&p fails to get to new highs relatively soon.
Deletemost bears have basically thrown in the towel. the next leg up happens when they start buying.
CSTR - Someone hates this stock, or what?
ReplyDeleteWell sheesh, I'm certainly glad I wasn't chasing prices Friday afternoon...
ReplyDeleteAdded a few more thousand shares of YRCW at $6.7
ReplyDeleteProbably worth watching to see if TBT carves out a higher low.
ReplyDeleteTake a look at this chart of biggest winners in the 2000's. Technology is hardly non-existent
ReplyDeletehttp://images.huffingtonpost.com/gen/130062/original.jpg
In the 1990's technology was a big part of the best winners in that decade. I think this decade will have its fair share of healthcare names. Healthcare is the big winner this decade. I'm still shocked every time I check the stock price of SVNT. I sold it 6 weeks ago at $1.10. Part of the reason I like NSPH so much is because of the really strong trends that are emerging in health care stocks.
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ReplyDelete