The way I see it, the Fed jawboned into a 'news event', traders sold into it at the top of a 'V' recovery, and we're sitting in traffic at walking speed.
And yeah, I have serious doubts rates will remain low despite what the FED says unless they put their money where their mouth is by buying DC's debt. Wonder if Ben's buying municipal debt too?
If the Fed hadn't stepped in and lowered yields, then the owners of capital would have demanded higher rates to compensate for the risk of recapitalizing the banks. That is what happened in the Savings and Loan crisis. It didn't matter what the demand for cash was in the economy, the S&L's couldn't loan because they didn't have capital to loan (and neither did the banks). So they had to go to John Q. Public with hat in hand and ask them for capital at rates that reflected the risk.
What happened this time is Ben stepped in, took (STOLE) our money and short-circuited the free market, there-by harming savers to save the incompetent/corrupt bankers.
I'm just buying the dips. No matter what the fed says, rates are going higher. This is just the opposite of what they did on the other side when they eased and said they weren't. Now they will get out of T's (or stop buying/printing) in stops and starts giving the markets fits.
I completely agree with BB on rates. All you have to do is look around at people's comments in reaction to new all time highs in the stock market. There's zero confidence. Rates don't magically go up in that environment.
I think what will happen is sentiment will gradually improve over time. The Univ of Michigan report was around 83 today I think. About the best since 2007. However, that's a far far cry from sentiment readings in the middle of past several bull markets. Screw the AAII readings or any other readings you see...this is the most important one out there. It's the litmus test of the sentiment of the average person in the country. It's still in the dumps. We still have huge slack in labor, the ratio of the cost of owning vs renting in most major markets is still near all time lows...I think the trend continues in the right direction. Rates will gradually go up over time. I disagree with the thinking that they will skyrocket. There's too much slack in the system for that to happen.
That's what we need - a longer term sentiment indicator. Most of them are more short term oriented. What I really want to know is not when the next 3% correction is coming, but when we are getting close to a 20%+ bear market.
BACML - The recurring theme I see their analysts often upgrade and downgrade stuff only after the trend is firmly in place, they seem to be nearly as clueless as me.
I've recommended this guy before for any of you guys that are looking for lower risk income opportunities. He focuses on dividend growth stocks. His sample portfolio has outperformed the S&P by about 25% since he started 5 year ago. He started it in 2008 when the S&P was at 1,400 on its way down to 666.
http://sensiblestocks.com/portfolio-dividend.html
Anyway, he offers really easy to read advice on how he picks his stocks. I'd recommend reading his stuff. He's on SA as well: http://seekingalpha.com/author/david-van-knapp/articles
Starting to think it may be a good time to get more into energy stocks again:
1. Improving economy should drive higher demand 2. Costs for getting new oil out are high 3. LNG exports, etc. should help take off excess supply 4. Oil by rail giving producers flexibility 5. Inventories seem to be starting to come down. 6. China continues to grow it's auto inventory (60 cars per 1,000 people as opposed to 900+ in U.S.) and should continue for a long time
Plus a lot of the Canadian energy stocks at least are quite cheap relative to the market and their historical ranges. I've also read there are cheaper ones in the U.S. that may be worth buying.
I'm not sure which way is up, got disoriented past few days.
ReplyDeleteThe way I see it, the Fed jawboned into a 'news event', traders sold into it at the top of a 'V' recovery, and we're sitting in traffic at walking speed.
ReplyDeleteI sold DRAM yesterday.
Decent pullback in TBT, waiting....at 3 mph.
DRAM - Hell, I forgot all about that one.
DeleteAnd yeah, I have serious doubts rates will remain low despite what the FED says unless they put their money where their mouth is by buying DC's debt. Wonder if Ben's buying municipal debt too?
DeleteI think they are talking their book and selling into the spike.
DeleteIf Ben were not the Fed chair he would go to jail for manipulation.
DRAM probably goes to 5 now that i sold, but it was down a good amount....i will take the 7 %
DeleteCC what is your reentry target on TBT.
DeleteI also disagree with BB on yields and rates.
DeleteIf the Fed hadn't stepped in and lowered yields, then the owners of capital would have demanded higher rates to compensate for the risk of recapitalizing the banks. That is what happened in the Savings and Loan crisis. It didn't matter what the demand for cash was in the economy, the S&L's couldn't loan because they didn't have capital to loan (and neither did the banks). So they had to go to John Q. Public with hat in hand and ask them for capital at rates that reflected the risk.
What happened this time is Ben stepped in, took (STOLE) our money and short-circuited the free market, there-by harming savers to save the incompetent/corrupt bankers.
I'm just buying the dips. No matter what the fed says, rates are going higher.
DeleteThis is just the opposite of what they did on the other side when they eased and said they weren't.
Now they will get out of T's (or stop buying/printing) in stops and starts giving the markets fits.
TVIX at 2.24
ReplyDeleteFMD - PNF target is now $2.65
ReplyDeleteYou have to give me credit for patience, right?
ReplyDeleteYou get no extra credit for patience! Inaction is action, unless you provide reasons.
DeleteAnd, our mREIT play is getting smothered, you receive a D- for such a thin thesis along with me.
DeleteTOF gets an honor roll and A++++ for his FMD suggestion.
BB - Honor roll as well.
AMD - Red, nice upgrade BACML!
ReplyDeleteI completely agree with BB on rates. All you have to do is look around at people's comments in reaction to new all time highs in the stock market. There's zero confidence. Rates don't magically go up in that environment.
ReplyDelete"Rates don't magically go up in that environment."
DeleteWell that's a good point, sentiment seems to suck and keeps on sucking. Rates can't remain low forever as the market proves out though, can they?
I think what will happen is sentiment will gradually improve over time. The Univ of Michigan report was around 83 today I think. About the best since 2007. However, that's a far far cry from sentiment readings in the middle of past several bull markets. Screw the AAII readings or any other readings you see...this is the most important one out there. It's the litmus test of the sentiment of the average person in the country. It's still in the dumps. We still have huge slack in labor, the ratio of the cost of owning vs renting in most major markets is still near all time lows...I think the trend continues in the right direction. Rates will gradually go up over time. I disagree with the thinking that they will skyrocket. There's too much slack in the system for that to happen.
DeleteThat's what we need - a longer term sentiment indicator. Most of them are more short term oriented. What I really want to know is not when the next 3% correction is coming, but when we are getting close to a 20%+ bear market.
Delete9:00 am (or 12pm EST) has been a great time to buy FMD for each of the past 5 trading days. Lets see if this time is any different.
ReplyDeleteStill holding my small position in DRAM. Total crap shoot but the odds of it doing a moonshot are better than 50%.
ReplyDeleteMBI breaking up out of the downtrend since May. Looks like a great buy.
ReplyDeleteThose P/E values on finviz are iiiinnnnttttteeeerrreeessssttttiiiinnngggg.....
DeleteSeven years of college down the drain. Might as well have joined the f***ing Peace Corps.
ReplyDeleteBACML - The recurring theme I see their analysts often upgrade and downgrade stuff only after the trend is firmly in place, they seem to be nearly as clueless as me.
ReplyDeleteI've recommended this guy before for any of you guys that are looking for lower risk income opportunities. He focuses on dividend growth stocks. His sample portfolio has outperformed the S&P by about 25% since he started 5 year ago. He started it in 2008 when the S&P was at 1,400 on its way down to 666.
ReplyDeletehttp://sensiblestocks.com/portfolio-dividend.html
Anyway, he offers really easy to read advice on how he picks his stocks. I'd recommend reading his stuff. He's on SA as well:
http://seekingalpha.com/author/david-van-knapp/articles
Starting to think it may be a good time to get more into energy stocks again:
ReplyDelete1. Improving economy should drive higher demand
2. Costs for getting new oil out are high
3. LNG exports, etc. should help take off excess supply
4. Oil by rail giving producers flexibility
5. Inventories seem to be starting to come down.
6. China continues to grow it's auto inventory (60 cars per 1,000 people as opposed to 900+ in U.S.) and should continue for a long time
Plus a lot of the Canadian energy stocks at least are quite cheap relative to the market and their historical ranges. I've also read there are cheaper ones in the U.S. that may be worth buying.
Yeah, I'm thinking of shorting silver, too.
Delete$SPX - Sneaky rascal closed up another 5 points.
ReplyDeleteI guess Bernanke saved our bacon, three cheers!