Tuesday, October 30, 2012
10/29/12 The effect of downtime on psychology
What happens to crowd psychology when the markets unexpectedly close for an extended period of time?
The last occurrence was a four-day closure of the NYSE beginning 9/11/2001. That's a sample of one, and hardly representative.
The only reasons I can come up with (for unanticipated closure) are negative> disaster and war. So we might 'logically' expect the indexes to decline when trading resumes. We all know crowd behavior defies logic. So my take is the markets rally. But it wouldn't be a rally to buy.
Subscribe to:
Post Comments (Atom)
Clear Cut Posted:
ReplyDeleteBig news on China.
http://www.theepochtimes.com/n2/china-news/chinese-tv-host-says-regime-nearly-bankrupt-141214.html
Interesting article, Lang should employ a food and drink taster. The world is going to a global re-set and its likely going to happen in our lifetimes.
"SSEC
DeleteNovemeber 14 2011: 2529
October 29, 2012: 2062 "
2nd - i've mentioned this a bunch of times, but the USA has managed to go higher during a depression in Japan for 20 years...my thinking is a similar fate to China will only make the USA stronger as it reinforces the desire to invest in here over other locations.
dont forget, in the late 80's / early 90's Japan was the next country to overtake the US. there was a lot of fear being spread by the media about the demise of the US at the hands of the Japanese. one 20 year depression later and we come to find that wasn't true.
DeleteI think this is more psychological than anything. We've come to some sort of conclusion that China is necessary to our economy, but I think we would likely do better.
Delete"regime-nearly-bankrupt" "inflation is 16%"
DeleteIf inflation is a problem, why doesn't China allow the Yuan to trade in the free market?
Experts claim the Yuan is undervalued, right? The real problem is direct governmental intervention and lack of respect for re/enforcing anti-manipulation policies.
When Europe gets out of it's recession, it looks like Ford could really skyrocket. They lost $500 Million in Europe (they made $2.3 Billion in North America). Turn that around to a $200 Million profit and you are looking at some pretty impressive income relative to their market cap.
ReplyDeletehttp://www.businessweek.com/news/2012-10-30/ford-profit-slips-as-north-america-counters-europe-loss
I'm also looking closely at the airlines again. DAL and UAL have both pulled back. Any further weakness on the 'canceled flights' story may take them back to early August levels, at which point I'd be buying. Any stabilization in oil prices should help to support profit margins.
DeleteThis is for CP.
ReplyDeletehttps://www.youtube.com/watch?feature=player_embedded&v=f17fWth3YgA
Looking at charts. I need some cashola.
ReplyDeleteThere might be some action in F tomorrow with all the news/earnings.
ReplyDelete2nd - one thing about the Chinese markets...its been my interpretation that the Hang Seng is the more senior (i.e., respected) of the indexes. Since Nov 11, it's been doing quite well.
ReplyDeleteGod, there's a web site for everything...
ReplyDeletehttp://www.fleetsandfuels.com/fuels/cng/2012/10/frito-lay-seeks-cng/?utm_source=Westport+WatCH4+News&utm_campaign=fe0caa51cf-Westport+WatCH4+News&utm_medium=email
NG spiked last week due to fear of nuclear plant shutdowns, apparently one in particular was flying it's red flag.
ReplyDeleteFIO - TOF, is this one still a go? It's converging on my target area.
ReplyDeleteCP - I've never liked FIO...always thought it was a scam. But I was intrigued by it because my old boss loaded the boat on it...and it looks like a good way to make money on large swings.
Delete"always thought it was a scam."
DeleteOkay, yep... I can certainly comprehend that. Reminds me of Micron(MU) and snowballs in hell.
Just spend some time watching work flow in their fab, if there's no material moving you know something's not working out.
NLY - Has sentiment suddenly changed?
ReplyDeletePCP - Well, the conference call was upbeat on behalf of management, in case you were wondering.
ReplyDeleteBACML - Buy rating, 10/29/2012 787 visibility in sight -> $200 objective
DeleteNG turbine parts for GE as well, BTW
DeleteTTM - I really don't think they're gonna keep selling this one, seriously doubt it hits my stink bid(the July gap up). I just don't see how this could possibly happen.
ReplyDeleteSewage treatment plant failures - I'm really surprised they don't crack down on these guys in a big way.
ReplyDeleteNLY - Watch this bitch fly fellas, now what?
ReplyDeleteI understand the market is shit but jeez look at the Transports:
ReplyDeleteIYT
FDX
UPS
YRCW
SAIA
ODFL
CHRW - what earnings dump?
European banks look strong.
ReplyDeleteFurniture stocks continue to do extremely well. Look at LEG, PIR, ETH, HOFT...FBN is very interesting to me. These are housing and domestic strength plays.
ReplyDeleteShippers with less international exposure also doing well. YRCW has almost 100% exposure to the US economy. It's the FBN of shipping.
Yeah, whatever happened to the crappy economy and the pending China crash?
DeleteMore like Europe's BS banking "crisis" has bottomed as bailouts of euro-trash banker fat cats are in full swing, is my suspicion.
YRCW - Nice! ;)
ReplyDeleteWhenever I get the urge to sell I take a look at this chart:
Deletehttp://caracommunity.com/sites/default/files/screen_shot_2012-10-31_at_9.09.53_am.jpg
(I used CC for the first time in months just to post this).
Show me a good reason for selling?
DeleteWhat's up with that negative book value though, can't say I understand the implication?
Lots of good reasons to sell: negative earnings, history of mismanagement, negative book value, big debt load. that's why everyone doesn't like it.
DeleteWhisper numbers on YRCW? CC on Nov 2
ReplyDeleteit will probably be shitty. but as long as they continue to show improvement it doesn't matter. debt isn't due until late 2014.
Delete1. Mutual funds year end window dressing.
Delete2. A lot of stuff needs to be shipped to the east coast.
PCYC looks like an awesome short…lots of neg divergences. MACD + Stochastic sell signals.
ReplyDeleteIBB looks terrible...shit all biotechs could be great shorts.
DeleteSold my MLNX stock at $76.15 from last week. Still holding a few calls and will just let them ride.
ReplyDeleteGGB - I think I'll place a stink bid on this one at just under $8, about $7.80 or so. Maybe I get lucky and the market takes a scary dump in the near future just to shake out lose hands.
ReplyDeleteFIO - Canceled my stink bid on this one, I don't get why/how they can compete with the real memory device manufacturers.
Re FBN, the furniture stocks do look tempting. Other than FBN, Italian furniture maker NTZ also loks interesting. Better balance sheet than FBN, but have the Europe issues. Both very cheap and should do well on a housing turnaround.
ReplyDeleteFBN reports tomorrow morning and last concall there was some discussion abuot orders that couldn't ship and part of this show flow into this quarter which could make for good results. Plus some changes to the pension laws could help. Might be worth stepping into this afternoon.
BB - Odds would suggest a big move up tomorrow for FBN.
DeleteAHT is still worth buying and is the FBN of hotel stocks.
ReplyDeletePays a 5% yield, pretty much all hotels in the US. Global hotel companies are saying the US is where things are improving. Stock is one of the cheapest on most valuation metrics and management did a lot of smart things during the last down cycle (like buying back half their shares where many other companies had to issue shares at low prices).
REDF / SIFY = ouch
ReplyDeleteVRNG
DeleteStill waiting for my $0.25/g gasoline so many were promising a few years back, folks!
ReplyDeleteTap-tap, umm... Where is it?!?!?
AUMN - Need a hurricane report on this one, was it washed away with the storm or what?
Long FBN at $1.53 before tomorrow's announcement. Q3 has been good for the other furniture guys like BSET, ETH, and they do have a bit of a tailwind as I mentioned above, so worth a shot. Hope tjhis is not already priced into the stock.
ReplyDeleteStill not sure if this the best of the bunch to own longer term, but have the near-term catalyst.
Good luck BB.
DeleteARNA - Oh hot-dammy, could this be the beginning of the $3 gap close?
ReplyDeleteAGO - BB, why are you guys selling this thing again?
ReplyDeleteMoody's extended their review till mid-nov but i really do t are it going much below $14 regardless. A lower rating would make new sales harder.
DeleteSQNM - 19-Jun-12 Initiated Maxim Group Buy $6
ReplyDeleteI've heard this one could move up. It hasn't yet, though.
GMO- Hanlong acquired ownership of warrants that entitle it to buy 10M shares @ 4.23 per share.
ReplyDelete"AUMN - Need a hurricane report on this one, was it washed away with the storm or what?"
ReplyDeleteThe computer algorithms are just f*ing with human traders. I remember countless examples of AUMN trading opposite to GDXJ. It looks like some algos have designated AUMN as a hedge on the main GDXJ position, and so I wouldn't be surprise to see AUMN go up tomorrow if GDXJ goes down. But that's only short-term fluctuations. Long term, the price MUST catch up with fundamentals. When AUMN actually announces some real improvements (such as becoming cashflow positive or reaching the 850 tpd throughput) its price will be adjusted VERY quickly, if it will not be high enough at that point. Recall the 4X jump that happened in AUMN when QE2 frenzy kicked in. So the price WILL catch up with fundamentals, either gradually over the next year or in sudden 2X jumps over the course of one week.
CSTR - What a crazy earnings response.
ReplyDeleteWNC earnings solid. I don't know why the market values it at the price it does:
ReplyDelete" Dick Giromini , president and chief executive officer, stated, "The
record performance in the third quarter highlights the progress we have
made in executing our strategic plan focused on profitable growth,
margin improvement through operational excellence initiatives and
reducing the volatility of our operating results through product
diversification. Our business model has been fundamentally enhanced and
our performance, specifically margin expansion, highlights the fact that
we are a much stronger company with improved profitability and earnings
capacity. While we are pleased with the third quarter results, we know
that further opportunities exist and we remain focused on efficiently
integrating the Walker business, further enhancing productivity within
our Commercial Trailer Products segment and continuing our progress on
diversifying beyond our core products and markets. We realized
considerable gross margin improvement during the third quarter,
achieving double digit levels for the second consecutive quarter and the
highest level for any quarter since 2005. The gross margin improvement
during the quarter was driven by an increasing mix of higher-margin
trailer orders, while our higher-margin Diversified Products segment
increased more than four times in size with the addition of Walker. As a
result, adjusted earnings increased approximately 19 times the previous
year period, generating adjusted diluted earnings per share of $0.30 for
the third quarter."
Mr. Giromini continued, "New trailer shipments for the third quarter
were approximately 12,200, in line with our previous guidance of 12,000
to 13,000 trailers. While we anticipate an increase in customer
deliveries during the fourth quarter, we have revised our 2012 full-year
new trailer shipments estimate to be 46,000 to 48,000 units reflective
of our continued focus on margin growth over volume and consistent with
the business' current rates of production and shipments. As expected,
our backlog decreased seasonally this quarter but remains healthy at
approximately $555 million as of September 30, 2012 which includes
Walker's backlog of $170 million . As we enter the 2013 order season, we
believe the demand environment for trailers will remain at strong levels
as key drivers such as fleet age and size, customer profitability, used
trailer values, regulatory compliance and access to financing all
support continued demand for new trailers. As we now enter the
traditional order season for 2013, we are experiencing strong quote and
inquiry levels for next year and are well-positioned to capitalize on
the demand for new trailers while remaining selective in our order
acceptance consistent with our intent to further enhance the margin
profile in our core trailer business.""
AH response appears quite positive.
DeleteFor WNC, still have high debt and it is a cyclical business, so you are counting on them being able to get the debt down this cycle before the next downcycle begins.
Delete(Plus personally, I almost bought in 2009 for around $2, so hate paying up!)
I actually bought auto parts maker Martinrae (MRE.TO and MRETF) last week. It has a P/E of around 5.5, is involved in a lot of new product launches supporting Ford and GM who are both doing well (and the average age of cars on the road is at an alltime high), have a lot less debt and are trading at the low end of their typical valuation range.
So, p/e is similar to WNC, but much less risk due to lower debt. If I had a better idea re the truck trailer market supply/demand dynamics, I might be tempted to step in, but really don't.
Mark - check out the chart of MWA. Been on fire for a while.
ReplyDeleteYeah, we use a ton of their stuff. Guess I'm too close to the industry to see it...Even though I'm actually very busy. Go figure.
DeleteREDF - What are we gonna do about this one, is this the entry opportunity we were anticipating?
ReplyDeleteAAPL - Will someone please fire off a note to Forstall's replacement explaining the need to update their map app ASAP?
http://en.wikipedia.org/wiki/File:California_island_Vinckeboons5.jpg
HEK - Gonna return to close that $2.75 gap up?
ReplyDeleteBest method for cooking a holiday ham:
ReplyDelete"A man gets married and as he and his wife are getting ready for their first Thanksgiving, he asks her why she is cutting the end off the ham. She replies, because my mother taught me that the ham tastes better that way. He can't understand how that could possibly make any difference but lets it go.
As the time for dinner approaches, his MIL arrives and as soon as he is able, asks her why cutting the end off the ham makes it taste better. She replies that she doesn't know why but it is how her mother taught her and it absolutely makes the ham extra delicious. He still can't see how it can possibly make any difference but does not want to anger his new in-laws so lets it go.
Finally the matriarch of the family arrives just as they are sitting down and as they begin to eat their meal, he can not wait another second and asks her why cutting the end off the ham makes it taste better.
She looks at him as if he has two heads and asks him where he ever got a stupid idea like that. He replied that both her daughter and granddaughter swear that she had taught them that cutting the end off the ham makes it extra delicious.
She laughs and replies, I cut the end off the ham so it would fit in the oven."
new post
ReplyDelete