Thursday, August 1, 2013
08/01/13 Fading the crowd/ Cool Hand Luke
Empty fields. Deserted farmhouses. The town square at 4 am. Those are the kinds of places I like most.
The marketplace has become too crowded for me. Here are a few vantage points along the highway offering better views:
(a) http://blogs.marketwatch.com/encore/2013/07/29/retirees-best-investment-it-could-be-cash/
(b) http://finance.yahoo.com/news/retirees-face-high-stock-prices-001400176.html;_ylt=A2KJNTvnV_pR0n0A3rqTmYlQ
(c) http://www.marketwatch.com/story/pe-ratios-to-drop-20-in-coming-years-2013-07-31?link=MW_popular
Sometimes, cash can be a 'real cool hand.'
http://www.youtube.com/watch?v=xVXKOb5EE7Y
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How about insurance co's, short bonds and ST CD's?
ReplyDeleteYou could see this coming in the distance.
I tend to agree with this.
DeleteReversion to the mean is a strong investment approach.
DeleteAlso anything beat down on a slow economy. Transports, resources.
ReplyDeleteCash...Well, I've got a REALLY cool hand then. Normally I like to transfer earnings out of my business and haven't even bother lately.
ReplyDeleteNice move out of MET this morning on earnings - up another 6%, now 55% YTD.
ReplyDeleteI think people are starting to realize interest rates will normalize and the lifeco's are an easy way to play this, especially given their still undervaluation to the market and their historical prices.
Easier than try the inverse bond plays like TBF, plus you get a dividend.
After watching stocks move up and down 100% or more in the span of months, I've become pretty disoriented.
ReplyDeleteEfficient pricing is pure BS...
UGAZ...Your welcome CP.
ReplyDeleteYep, sure enuff... Seems like a good transportation fuel at these prices, wonder if low natty would help the transportation industry?.
DeleteF is rolling out a lot of CNG trucks soon. Range is extended to 700 miles.
DeleteWonder who the OEM parts supplier will be?
DeleteDRAM - You guys still have hopes for this one?
ReplyDeleteMaybe I should buy something making new 52wk highs instead, like AEG for instance...
Five Franklins in five minutes on the drop in Jack Flash.
ReplyDeleteHXM - Another 25%
ReplyDeleteTwo more Franklins trading the drop in GDX.
ReplyDelete"Suffering" with ADHD!
ReplyDeleteSold my GDX calls a little while ago at $4.40, which I bought at $3.15. Yesterday (while I was sleeping), GDX briefly violated the low it made on July 24, which I decided to use as my stop out level. After that, GDX rallied nicely, creating what seemed like a double bottom, making a great bullish setup. But today that setup was broken, as GDX violated yesterday's low. Yesterday's Fed announcement seemed bullish for PMs and they briefly rallied nicely, but today they gave up all of their yesterday's gains. When a bullish chart setup gets violated, and a bullish sentiment setup does not materialize, prices usually then go down for a while. Will re-enter if GDX rises above yesterday's high soon.
ReplyDeleteGold (the commodity) has more overhead than silver (the commodity). The miners look good but they require a set up or it's a no go. Overhead resistance/supply (especially recent overhead supply) is hard to break through. I would look for a lot of volatility which may kick you out of a trade.
ReplyDeleteRare earths are looking good here too, but same story.
I know the markets up big on the year etc but consider the possibility that tailwinds from Europe and China/Brazil/India fade. What would that do to earnings? We haven't had nothing but tailwinds at our back for a long long time in the markets. If we get an improving Europe and rebounds in the BICs then what would the market pay for $120 to $130 S&P earnings? 16X? 18X? We have to at least consider that possibility right?
ReplyDeleteI think bonds will be at our back, if only because the cash will need a place to go. It's possible we see a late 90's scenario unfold. It would be very unusual to see both bonds and stocks go down. It could happen (like the title of today's post) but it could also play out just the opposite.
DeleteI think you mean headwinds, not sure if the market is pricing a eurozone recovery but consider the effect of Marconi's promise to keep the eurozone intact by doing whatever it takes? Still, any improvement can't hurt, I guess.
DeleteI'm honestly wondering and asking myself though, how these new highs can be justified. How is it that earnings are greater than 10 years go, how is that possible, is it growth?
most of the same stuff we've talked about here:
ReplyDeletehttp://www.marketwatch.com/story/5-reasons-everyone-hates-this-bull-market-2013-08-01
I agree with almost all but this part of the final paragraph : "But just be sure that your perspective on this rally is rooted in some kind of factual argument."
DeleteThere is really nothing factual about trading/investing. It's great if you have some hard fundamentals to tie into a technical chart, but as CP noted earlier, it's easy to become disillusioned with stocks going up and down 100% in a matter of months.
The only factual thing I know of is human emotions don't change.
I believe the recent selloff in FMD is presenting a good opportunity to get in the stock...despite it being up about 40% from recent lows. This is one of the most levered companies to an improving economy that I can find. I think it has a MTG type run in it ahead.
ReplyDeletethen again I'm talking my book.
DeleteSpeaking of MTG have you guys seen that one lately? Phenomenal. That Reminiscences guy nailed that one.
RENN is riding on the coattails of FB. Could have a mammoth run ahead. About 40% of its market cap is tied up in cash.
ReplyDeleteSaw this - FWIW ...
ReplyDeletejesse stine @InsiderBuySS
Commented on StockTwits: I just have a small posn. in JO. I don't see any skewed risk/reward setups anywhere. Most... http://stks.co/qMtA
http://finviz.com/screener.ashx?v=211&o=-change&t=BEAT,MFRI,PACR,SUNE,SCTY,AFOP,RPTP,SPWR,HILL,RAD,TSLA,CLFD,MKTG,MNKD,CYTK,DANG,XRM,HIMX,TSLA,CSIQ,HSOL,IMMU,LPTH,YY
Also,
Peter Ghostine @PeterGhostine
Whoever asked me to look at $TRLA's chart two days ago, thank you. You made me 8K today.
Personally, I love this bull market!
ReplyDeleteIt's easy to stay fully invested when stocks have good valuations, monetary policy is easy, there is loads of pent up demand in the economy.
Now I'm not trying to time a 5% or even a 10% pullback - most people who have this market have lost out. But I'm really not too worried about a major correction at this time. I guess the only real concern I have is if the central banks lose control if inflation and we see a fast, inflation driven bump in rates. That would derail things, but we should see that coming.
Sometimes, one of the hardest things to do is just stay invested and wait.
I find ignoring "the market" chatter also very useful - doesn't translate well to individual stocks.
DeleteDuring the 2000 crash, there were many stocks that went up, so getting out of the market based on "market" worries was a mistake, in my opinion. Finding the stocks that worked was key and recognizing we had changed from a momentum based market to a valuation based one.
During 2008, everything crashed, so that is possible again, but read recently from one of the long fund managers, that selling expensive stocks and buying cheap ones has worked well for his 40 year history - the only time it didn't was 2008.
Opening RYPMX at the close.
ReplyDeleteGDX @ 26.35.
DeleteP&C Insurer Old Republic (ORI) having a good day, maybe basking in the ALL glow. Stock up 15% from my buy a month ago and 20% from its correction bottom on June 25th.
ReplyDeleteMany of these insurers have had huge moves this year, but are still undervalued. Buying dips in undervalued stocks in strong uptrends almost always makes money, in my experience.
I have over 30% of my investments in insurance companies now, so don't really want to add, but it does seem like a good place for trades if you are inclined.
FMD - Sheesh, can't imagine buying tomorrow following two consecutive days like today.
ReplyDeletePM's - I suppose assuming low rates were PM positive, and once rates bottomed the PM crowd began taking profits, then as rates rise PM's might be bought up again, just not sure how it might work out.
ReplyDeleteLast I checked, the dollar was still globally popular, which probably has something to do with the US continuing it's role as the premier overbearing global military power.
Don't think the correlation between gold and interest rates is very strong.
DeleteRates have been coming down since 1982 and gold went from 1982 to 2000 and up from 2000 to 2011.
Gold prices going up more had to do with China entering the gold market in early 2000's and a dearth of supply from underinvestment in mines for many years.
True, supply also would play a large role in the price. Investors have been selling recently as well probably, which might actually continue.
DeleteNES - Wonder why this one didn't jump 32% in the first five minutes today?
ReplyDeleteGold - Okay, so gold is down a mere $20 to which I say the thesis of insiders buying, shorts covering and banks going long appears flawed:
ReplyDeletehttp://saralinwilde.files.wordpress.com/2013/02/your-argument-is-invalid.jpg
Doubled down on GDX @ 25.62 on the premarket drop, then unloaded it all at 26.25. I know, I know- what happened to my usual real time posts? Just lazy today.
ReplyDeleteBruce D. Hansen, Chief Executive Officer of General Moly, said, "We have spent the past few months in discussions with a number of potential strategic partners and investors as we explore a variety of financing alternatives including equity investments, project level investments and debt financings to determine which would provide the best outcomes for our shareholders in the current market.”
ReplyDeleteMr. Hansen added, “While we expect the financing process to take time, the Company has received interest from potential strategic investors both in and outside of China. Multiple parties have signed non-disclosure agreements and are currently engaged in due diligence on the project.”
Mr. Hansen concluded, “As we proceed towards full financing at Mt. Hope, the Company will continue to prudently manage our unrestricted cash position of $35 million at the end of the second quarter with an additional $36 million in restricted cash. Steps we have taken to trim our cash burn rate include significantly reducing construction activities and engineering expenditures at Mt. Hope and deferring payments on equipment orders.”
ugh...I hate when companies announce their intentions to find financing.
DeleteThey have to. Probably about 200M.
Deleteyeah it's just a sign of desperation sometimes. obviously not always, but that's the way it played out with WLT.
DeleteMM setting up for a long entry. I don't know the story so don't shoot the messenger, but the pullback looks good.
ReplyDeleteTight channel, earnings in 11 days? Up on bad news would be a huge positive I think?
DeleteRalph Acampora CMT @Ralph_Acampora 3h
ReplyDeleteMajor Base Break-Out: Texas Instruments (TXN) is now trading at a level not seen since May 2001.
I always liked TI but never could understand where their bread and butter was. Interface devices, I think, one of my favorite applications.
DeleteIBM - Wonder if they ever get the market hooked on their database vaporware?
Gun time.
ReplyDeleteMystery to me....
DeleteRight, so where was Ralph at 28.50? Anyone can talk their book. Talking at the breakout apparently is something else.
ReplyDeleteExactly what I was thinking, we already passed on this one when risk was low so why now?
DeleteWell to be fair Acampora has been wildly bullish about the market for a while now.
DeleteI think he is pointing out the sectors that are doing the best.
DeleteOne other thing...isn't this sentiment ("we already passed on this one when risk was low so why now" "Right, so where was Ralph at 28.50? Anyone can talk their book. Talking at the breakout apparently is something else. ") exactly why the market continues higher? No one wants to be the guy that bought at the top and people are still fearful of a buying a market up so much.
DeleteYes on the sentiment phenomenon, quite right.
DeleteCP - I don't know the MM story at all but typically very sharp pullbacks of 15 to 25% or so after a big run up have been excellent buying opportunities in this market. There have been so many of these its hard to mention but the ones I've bought over the past year have all had the same patterns after I bought them: big runs followed by gut wrenching pullbacks:
ReplyDeleteYRCW
NOK
FSLR
BIDU
Look at recent ones too:
DANG
NQ
NOAH
GRPN
FB
These sharp pullbacks are HUGE buying opportunities. I don't know if MM is going to be the same but if you understand the fundamentals well enough to give you confidence in the story then it's time to add more.
Agreed, I'm just trying to work the earnings phenomenon into the equation. Naturally there will be some selling in advance, I guess that's what's happening with FMD right now.
DeleteCan we get $7.20's maybe?
Notice the gap down remains open, a potential island reversal and earnings could make this thing move.
Everyone has a different time line, makes prices volatile? I'm hesitant pre-earnings absent some insight, which I can't say I have.
FMD - I think we're going back to $1.30 soon.
ReplyDeletePossibly even $1!
DeleteYeah, I guess I'll have to add in that case. ;)
DeleteURRE...Bag holders unite!
ReplyDeleteYep, these bizarre moves drive me nuts! A Weiner trade for bag holders?
DeleteSR- Where were you guys on this one! Sheesh...
ReplyDeleteWhile you're busy practicing your craft and sharpening your machete we're asleep at the wheel I guess! ;)
DeleteWonder why the book is negative.....
BRCM - This one also qualifies as an island reversal, until further notice?
ReplyDeleteBIDU - Effet, slice me up with Mark's machete..
Chop chop.
ReplyDeleteChow, baby! ;)
DeleteOkay, so today's initial response to economic news isn't to the upside so we're still digesting the news?
ReplyDeleteI'm currently leaning towards a short position.....
JJC - Will copper lead the way?
ReplyDeleteJNS looks dirt cheap. Trades at 9 times free cash flow and has a 3% yield. It doesn't have any growth but that business model throws off a lot of cash...
ReplyDeleteCruise line missing persons report exceeds expectation.
ReplyDeleteWith the mrkets up so much (many at multi-year or all time highs) shouldn't we be screening for basing-breakout charts? There are a bunch out there, mostly in resources.
ReplyDeleteI don't think ADHD held anyone's attention but mine.
ReplyDeleteSold 1/2 position at $14.25.
Ont rsure hwat uare asyign
DeleteADHD and lysdexia? Crap!
Delete"Visa for sale" - With a $500k investment in Greentech automotive, Virginia's candidate for governor Terry McAuliffe will fast track your US Visa application....
ReplyDeleteRYPMX closed down -1.8% (which I closed end of day), offset by gains in GDX (which I was able to close during the morning spike). A -0.038% dent to the port- bummer. As I often point out, being restricted to mutual funds in certain accounts often means being 'right,' but without the ability to capture the gain.
ReplyDeleteMy last statement doesn't sit well with me. I was fully aware of the rules when I opened RYPMX, so I was just 'wrong.' That sounds better!
DeleteIf I can't be honest with myself, I may as well stop trading.
DeleteTrue dat... although not easy to do all the time. If the Fed wasn't...blah, blah, blah...
DeleteCan I start drinking now?
ReplyDeleteWay ahead of you, bro.
DeleteThanks for being there. Tough day at the mine.
DeleteAll miners had a tough day!
DeleteLooks like the US postal service it heading in the right direction with delivering alcohol. Add fireworks and free porn and you got something.
ReplyDeleteOrganized crime watching developments closely, no doubt. Even disorganized criminals are smiling.
Deletehttp://finance.yahoo.com/blogs/daily-ticker/become-nation-hamburger-flippers-dan-alpert-breaks-down-145831220.html
ReplyDeleteAccording to Alpert’s analysis, 69% of the jobs created in the second quarter – and 57% in the first half of 2013 – were in the three lowest-paying sectors of the economy: retail trade, administrative and waste services, and leisure and hospitality. These jobs, which account for 33% of all private sector jobs, pay an average of $15.80 per hour.
“What you’re seeing is now the spreading of low wage growth,” he says, noting those trends continued in Friday's July jobs report. “Really we have become a nation of hamburger flippers, Wal-Mart sales associates, barmaids, checkout people and other people working at very low wages.”
The growth of low-wage jobs helps explain why the majority of Americans continue to believe the economy is in recession, despite a falling unemployment rate – now down to a four-year low of 7.4% – a record-setting stock market rally and a rebound in the housing market.
Yep, I hear it all the time and believe it. The cash has to run out right.
DeleteDT quiz...
ReplyDelete1- How many nights a week do you dine out.
2- Days traveling/staying/spending money one way or another on leasuire per year.
3-$ spent on fireworks.
1- 2
Delete2- Probably 1.5 weekends/month, so 36 days.
3- $300/year.
1. It used to be 1-2 days a week. Now we're cutting back to just once every 2 weeks.
Delete2. Maybe one week out of the year.
3. None.
http://finance.yahoo.com/news/yes-rich-different-dont-retire-165721471.html
ReplyDeleteWhen asked "At what age do you expect to retire?" nearly one-third of those with annual earnings of $750,000 or more answered "over 70." Fifteen percent of them say they never plan to retire.
On the other hand, only 6 percent of those making under $100,000 a year plan to retire after 70, and the same percentage say they never plan to retire. Most plan to retire by 65.
FMS - Volume was up once again today. Pattern looks like H&S, I'm betting it fails.
ReplyDeleteLast time I bet against an H&S I lost big time, it was with SVM.
http://finance.yahoo.com/news/one-worlds-biggest-mobile-ad-144646512.html
ReplyDelete