Saturday, August 3, 2013
8/3/13 The Adjustable La-Z-Boy> Tilt To Cash
Take a look at a 20-year chart of the SPX:
http://finance.yahoo.com/echarts?s=spy#symbol=spy;range=19900801,20130802;compare=;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
It's clear that stock market indexes do not move in straight lines. The return on the SPX since March 2009 has been phenomenal, +148%. However, if we pull the 'measuring tape' back slightly to October 2007 as a reference point, then the return on the SPX has been just +13%. Back up another 7 years to August 2000, and the SPX has returned just +14% over 13 years (not counting dividends)!
So buy-and-hold works well when the market is trending up- in fact, it's an unbeatable strategy. On the other hand, it leaves the portfolio fully exposed to downdrafts, many of which wipe out most (if not all) of the gains from the preceding rallies.
A La-Z-Boy portfolio is an excellent strategy. But you really want one that adjusts to changes in market conditions.
(a) The total US stock market (ITOT) is up +150% since March 2009.
(b) Interest rates (and bond yields) appear to be heading up. This will push bond prices down. In addition, as yields rise, investors will be incentivized to sell stocks and buy (newly issued) bonds. Thus rising rates will also tend to push stock prices down.
(c) Real estate, which appeared inexpensive as recently as a year ago, has now become a seller's market. No longer a great time to buy. Note that IYR (Dow Jones Real Estate Index), after dropping -10% over the past month, is still up +200% since March 2009.
Cash appears to be an attractive position right now. It yields nothing. But should stocks, bonds, and real estate begin to correct in earnest, cash will provide the 'means' to acquire some pretty mean yields. Just my opinion, of course.
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Can we zoom back farther than 13 years?
ReplyDelete"But you really want one that adjusts to changes in market conditions. "
DeleteOne great section of a book I'd suggest you read is the 1st Appendix to the 1972 edition of Intelligent Investor.
tof- I tried a Google search for the Appendix, and unable to find it. If you have access to the relevant passages, would appreciate a link.
Deleteit was an edited transcript of a talk given in 1984 by Warren Buffett titled "The Superinvestors of Graham-and-Doddsville"
DeleteOK, got it. What confused me was the talk was given in 1984, whereas I was looking for something published in 1972.
DeleteAwesome.
DeleteGood stuff right? Now consider the environment in which most of these "Superinvestors" were investing in. From mid 1960's to early 1980's. That was a pretty rough environment. Here are their gains:
Delete1.) 23,104%
2.) 1,661%
3.) 2,795%
4.) 270%
5.) 1,157%
6.) 22,200%
7.) 4,277%
This was in a period where the S&P basically just traded sideways with a couple of 30 to 50% drops.
Title post has been edited.
ReplyDeleteEquity mutual funds and ETFs saw record inflows totaling $40.3B last month, TrimTabs says.
ReplyDeleteBy contrast, $21.1B disappeared from bond funds in July, on top of $69.1B in outflows in June.
Data from the past two months seem to support the popular "there's still cash on the sidelines" theory: Over the past eight weeks, $143.4B has gone into savings deposits and money market funds, three times the amount invested in stock funds and ETFs over the same period.
TrimTabs notes (unnecessarily) non of the inflows went into GMO
DeleteBetter chart to use than SPY is Wilshire 5000, including dividends http://blogs.ft.com/ft-long-short/2013/03/28/getting-high-on-stock-market-charts/
ReplyDeleteGives a more fair and somewhat better view of the markets.
SPY was in a "nifty 50" mode in the late 1990's and very overvalued, especially tech, in 2000.
The key to outperformance the last 12 years was to get out of the US in 1999/2000 and into undervalued markets (like Canada or small caps - IWM has doubled since 2000). But the trend to S&P 500 stocks seems to be turning now.
If you want to be a lazy-boy investor, I think an annual rebalancing into different asset classes would add a lot of outperformance over time.
"None of the inflows went into GMO"
ReplyDeleteYou must've made that up! If true, it could be bullish....?
Boil - At 52wk lows, great call on selling natti, dodged a huge bullet on that one.
ReplyDeletehttp://www.marketwatch.com/story/uk-services-pmi-surges-in-july-2013-08-05-94852751
ReplyDeleteIEV yields 3%.
Here are the dividends on the S&P Europe 350 (IEV) over the past 12 years:
Delete2012: $1.13
2011: $1.27
2010: $1.15
2009: $1.02
2008: $1.08
2007 + 2006: $2.88
2005: $0.94
2004: $0.67
2003: $0.69
2002: $0.54
Total annual dividend boost was 109% over this period. It actually only took 6 years to double from 2002 to 2008. Since 2008 the payout has been roughly flat therefore its not unreasonable to expect the payout rate to increase substantially going forward. Let's assume it doubles over the next 6 years to $2.26 then the dividend yield would be 5.3% on $$ invested today. By itself this is a good return and if you assume an additional 4 to 5% appreciation, you're looking at a total return of 9.3 to 10.3% annually. That's significantly above long term averages of 7% or so. The assumption of course is that the dividends paid out double in only six years but again, since they have been flat for the past 6 years, its not unrealistic to expect them to double over the twelve year period from 2008 to 2019.
The issue I see with that is the obvious, if price moves down more than the dividend, then your return gets wiped out.
Deletein the short term.
DeleteAdded more FMD at $1.54.
ReplyDeleteFMD - Pill wins on this one so far.
ReplyDeleteNot the guys buying at $1.10?
DeleteAdded more at $1.53. Now sells $0.30 below cash.
Yes of course, none of us has eaten the banana on this one so we're all doing good with it and shouldn't complain. I'm not complaining, that's for sure.
DeleteOkay on the cash thing too, can't argue with that much. Especially if that cash gets put to good use, huh? ;)
Can we short $WTIC now?
ReplyDeleteI ran into a guy into silver over the weekend, he was convinced it's going to $500 based on FED QE.
ReplyDeleteAnother method you can use is the sum of assets approach in determining value for FMD:
ReplyDelete(1) TMS - purchased in 2010 for $47 Million - let's assume zero appreciation in the value of this, despite revenues increasing since then and asset valuations improving significantly.
(2) Cology - purchased for $4.7 last year - again, no assumption for increasing value to be conservative (even though revenues grew over 20% last quarter from this division)
(3) Union Federal subsidiary - This is their banking sub that issues loans to students. As of 3/31/13, it had equity capital of $22.7 Million, tier 1 core capital ratio of 9.5% and risk based capital ratio of 25.9% (well above regulatory requirements) - S&L's are trading at 1.6X equity capital right now so 1.6 x $22.7. Let's assume a 20% discount just to be safe: 1.6 x $22.7 x 0.8 = $29.1 Million
Subtotal: $80.8 Million
Ok keep this $80.8 Million in mind because we will be adding that to the amount below.
"The AMOUNT BELOW":
Now we have to take total book value of $195.3 Million and back out the assets and liabilities at Union Federal and Cology/TMS as well as the goodwill and intangible assets on the balance sheet for TMS and Cology to arrive at the sum of the remaining assets on the books. The reason we subtract those is because they're already included in the above $80.8 Million.
Assets already included in Union Federal / TMS:
Cash and cash equivalents - $70.6
Restricted cash - 36.6
Investments available-for-sale, at fair value - 83.9
Education loans held-to-maturity - 62.1
Mortgage loans held-to-maturity, net of allowance - 11.5
Deposits for participation interest accounts, at fair value - 10.8
Goodwill - 20.1
Intangible assets, net - 24.8
TOTAL: $320.4
Liabilities already included:
Deposits - 164.2
Restricted funds due to clients - 76.3
TOTAL: $240.5
Net Assets = $79.9 Million
THE RESULT:
$80.8
+$195.3
-$79.9
=$196.2 Million
Current market cap is $173 Million.
Upside / Downside to this:
DeleteDOWNSIDES First, as always:
(1) The company isn't yet profitable. Net loss shrank from over $13 million a year ago to $7.9 Million last quarter. The company has confirmed that they let go a bunch of executives this past quarter who were probably overpaid as part of further cost cutting. They should be breakeven by some time in 2015 assuming zero upside to revenues from getting into the securitization market or additional lending partners being signed on. Let's assume $30 million more to get to break even given they are losing less and less each quarter.
(2) Economy goes back into recession - Too hard to predict what would happen but their lending standards are extremely high so far: FICO score on their loans is over 750, default rate is currently around 1%.
(3) Government continues to shrink private lending market and/or changes bankruptcy law to allow private loans to be wiped away in bankruptcy: the latter is unlikely as there are a few proposals in place for getting rid of the debt in bankruptcies, but the primary one, H.R. 532: Private Student Loan Bankruptcy Fairness Act of 2013, has an estimated 3% chance of getting past committee and 1% chance of being enacted according to www.govtrack.us. Let's say worst case it gets approved…i think the market would initially sell the news on fears that it would kill the private student loan market. FMD's current loan quality is extremely high so there wouldn't be any risk with their current book of business. the risk would lie with whether or not lenders would want to enter the market should this happen. if this is passed there will most likely be strings attached whereby the borrower would have to make many attempts to repay the loans. Additionally, if this were passed it would revert back to the pre-2005 laws which happened to be right around when FMD's profits were their highest ever.
UPSIDES:
(1) Securitization market - if they tap into this market the returns could be enormous (see calcs below). Remember what the CEO said last quarter: "if anything, we have seen that the subordinated bonds, the A and AA rated bond spreads in the secondary markets have come in the most in the last 3 to 6 months, as the benchmark issuer's last deal was tremendously oversubscribed. As a matter fact, the largest oversubscription I've ever seen in my career" and "We believe that the private student loan asset-backed securities market appears healthier now than at any point since 2007. In both primary and secondary markets, bonds are being placed and traded with increasing certainty. "
(2) Partnered lending - ie getting more banks to extend loans with them as a partner. CEO said last call that talks were "extraordinarily active". From what I've found these take a while to materialize.
(3) I factored in no appreciation of the Cology / TMS assets purchased when equity markets were 25 to 40% lower than now.
(4) I assigned a 20% discount to the value of Union Federal to be conservative.
Good thinking.
DeleteSo downside should be limited and if fair price is realized then there's another $23 Million in market cap remaining on the upside, distributing that among 111 Million shares outstanding would indicate another $0.21 of upside, right? Thus the trading range we're witnessing can be justified based on this.
SECURITIZATION MARKET
DeleteTapping into this market could provide huge returns for them. Back in 2006/7 the market was roaring, so much so that each deal was oversubscribed to the point that more than 100% funds were raised. The excess was being recorded by FMD as income in the current period. That's why they were doing $1+ EPS per quarter at the peak. While the market isn't there, the trends are very clearly going up.
Funds raised in securitization deals (as a percentage of the total deal amount) has risen from 78% to 87% in just the past 3 quarters based on data taken from SLM's earnings calls. This is very significant as it completely changes the return on investment from a securitization deal.
Consider the following simple math:
Fees they generate on a securitization are roughly 5 to 6% over the life of the securitization, discounted to present value. Let's say they now need to only put up 13% to get the deal done (i.e., 100% minus the 87% raised). That means return on the deal amounts to (5 to 6%) / 13%. That's a return of 38% to 46% without factoring in a reserve for losses on loans that go sour (again, around 1% right now for them).
Just 3 quarters ago the return was around (5 - 6%) / 22% > 23% to 27%. So you can see how much it has tilted in their favor. From low 20's to high 30's return on invested capital.
So legitimately, the cash on their balance sheet could go to use right now earning this kind of return for them over the life of the loans, which would make them fairly significantly profitable right now.
Just to Summarize:
You're getting a company selling for a good amount below it's tangible assets, with those tangible assets tied up primarily in the form of cash or cash equivalent assets with shorter term maturity, and with a potential enormous catalyst in the form of a rapidly improving securitization market not even being priced in. I'll buy this risk-reward setup every day of the week.
"Private Student Loan Bankruptcy Fairness Act of 2013"
DeleteLOL, yeah, what's fair about someone making a career from pursuing a higher education and never pay back their loans?
This act can only be passed passed in current form if special interest groups have their way, no doubt there are opposing forces but the entire existence of congress is justified through privatizing gains.
AGO - I dunno, seems like one could effectively argue this one is still rather cheap.
ReplyDeleteThere has been insider selling though, so maybe there's some anticipation of weakness?
If cash were an attractive position at this time, then wouldn't that also render PM's attractive, depending on the content of your PM's thesis?
ReplyDeleteA couple of possibilities:
If cash is attractive, then expected inflation should be muted. (PM bearish?)
Rising rates could be indicative of the investment community demanding better returns in compensation for an inflationary environment going forward? (PM bullish?)
Perhaps this is too simplistic....
Cash is very attractive in the next collapse of the market. Inevitable, IMHO. We are in uncharted territory.
DeleteRide this thing 100 miles in one day, looks challenging to me:
ReplyDeletehttp://images.usa4sale.net/400px_12588729204_1.jpg
"Bloomberg survey of strategists reveals average S&P 500 Year-End Target is 1,677 on earnings of $108.66"
ReplyDeleteDoesn't sound to me like everyone is overly optimistic
DANG! That was quite the knockout blow in late June huh? Now up 83% from those lows.
ReplyDeleteOh man, more of the ridiculous shenanigans that goes on daily and confuses the price discovery process, wonder what/if the lame excuse for that one was?
DeleteDid you see the recent prediction that YRCW would crater to $7?
http://www.objectivetrader.com/2013/08/el-toro-banco-santander-.html
ReplyDeleteAccording to Z, my home has increased in value $150K since Nov. 1012. And they don't even know I fixed the upstairs toilet.
ReplyDeleteYes they do, the NSA provides their data. Or vice-versa, not sure.....
DeleteBought a postion in BSBR.
ReplyDeleteBanco Santander Brasil, the Brazilian bank is
an independently listed subsidiary with its own management team, board of directors, and capital base, but partially owned by Spain's Banco Santander. Banco Santander Brasil is trading at a discount from book value, below 10 times 2013 estimated earnings, and had a dividend yield of approximately 5%. It has a strong capital position (underleveraged), high net interest margins, and among its three local competitors, it has the highest consumer exposure to the
rapidly growing middle class in Brazil.
thanks BB. how did you find them?
DeleteBAP - Is this one in that group as well, or a different animal altogether?
DeleteAnything in Uraguay? I'm thinking of trying to track South America.
DeleteBSBR - I do like this idea, and catching it before it runs and risk is lowish.
DeleteTA - Just got hammered 26%, eh?
ReplyDeletethem and NLS
DeletePIE - Testing 50SMA resistance.
ReplyDeleteFMD - It's green, hallelujah! Just when I though the algos were going to smack it back down to $1 and let me load up.
ReplyDeleteWell then here's to an earnings miss next week for you!
DeleteCP - You know my take on this company as I've beaten the drum loud and clear but let's look at it in very simple terms:
DeleteWith the stable loan origination / banking subsidiary and with $2/share in net assets, the company is as solid as it has ever been fundamentally. Then toss in an environment that they're operating in that is the strongest that it has been since 2007. Sprinkle a little stock near all time lows on top of it and what do you get? Massive upside. It may not happen today or tomorrow but it will happen soon enough.
Yeah, I'm gonna stick with this one for sure, I can smell the good news. Was just hoping they'd beat it down a little more first.
DeleteI had an epiphony: We're going to 2,000.
ReplyDeleteRemember that article I posted here a few weeks ago about how people are ok with missing out on the move in the markets? I call bullsh*t on that. They'll all be jumping in soon enough.
Deletehere it is:
Deletehttp://www.cnbc.com/id/100886899
Oh shit, you're probably right. I had a guy ask the other day (the silver crazy) why stocks were reaching all-new highs and lots of thoughts were going through my head like the big knockout we always notice just prior to ripping to new highs, but on a grand scale, the knockout ala 2008, and the rip higher.
DeleteWas corporate America putting their cash to work buying back shares and/or assets?
See Santoli's Yahoo article on why we could be in a similar position to 1982? Wouldn't surprise me.
DeleteBB - I have a hard time thinking it will happen because the earnings multiples are too high but then you have to keep in mind the entire world view: the US has slow growth, Europe is barely out of a recession and Brazil/India/China are all doing poorly. We have yet to have a period where everything (more or less) is firing on all cylinders. Should that happen then why couldn't earnings be at say $150 for the S&P 500? If that does happen and people pay 18 times earnings for it then you have the S&P at 2,700. That's just hard for me to comprehend but I guess crazier things have happened.
DeleteOr say we get an improving economy with 5% world inflation and 5% world GDP growth, so 10% nominal GDP. The economy then doubles in 7 years, so $200 S&P 5000 earnings by 2020. Again put an 18 multiple on it as people are willing to pay up the faster growth and you're at S&P 3,600.
DeleteOr maybe the stock market growth is more outside the U.S. Most European countries and emerging markets have P/E's far less than the U.S.
While waiting to see whether or not the recent pullback in GDX stops above the June lows, I decided to buy 1100 shares of BALT with the proceeds I got from selling my GDX calls. If BALT violates the recent low at $3.75 -- I am out. Now all my trades will have stops -- no more blind faith trades... Placing a mental stop for my trade with GDX calls allowed me to exit that trade with more than $1K of profits, instead of turning my profit into a loss, if I had been holding until today...
ReplyDeleteYRCW earnings tomorrow morning.
ReplyDeleteNSPH's today.
Deleteyeah saw that. someone out there maybe a ton of money on the long and short side on that sucker.
DeleteRe BSBR, I saw value-oriented investment fund Tweedy Browne made purchases in Q2 at higher prices, then I was flipping through Morningstar and they have it as a 5-star. Morningstar also talk about the oligarchy inplace for banking in Brazil and how BSBR is over-capitalized and therefore safe and positioned for growth. The I thought about the ING spinoff VOYA, and how well it is doing, and looked at the charts and valuations.
ReplyDeleteI also think from a macro perspective, Brazil is a good place to put your money. Growing middle class, good resources, government that seems to be acting well. One of the smartest investment companies in Canada, Brookfield Investment/Properties is there, so it makes me feel comfortable that it is one of the better places to be in South America.
For you guys still interested in gold, Rick Rule from Sprott on BNN, he's on for an hour. 8 clips starting with http://watch.bnn.ca/#clip979532
ReplyDeleteHe is not a Jim Sinclair, gold is going to the moon type guy, but a thoughtful gold and metals investor who does thorough work and has made some excellent investments over the years.
He says that gold the metal may have bottommed, but is still waiting for a 2-3 week, no-bid type washout in the junior miners before he thinks they are done going down.
There is also a written summary of his comments at http://www.stockchase.com/expert/view/1118/Rick-Rule-referenced-with-A-Comment----General-Comments-From-an-Expert
DeleteThese aren't as detailed as his video and sometimes miss the nuances of what he is saying, but a quick way to review.
Thanks bro.
Delete2.00? Probably worth a shot there.
ReplyDeleteThen again take a look at GNMK for a potential look into NSPH's future.
DeleteYRCW- Last time I checked it was down about 14%...messing around with some other things I was going to comment I was surprised it wasn't down more. Then I checked again and it was down 22%. That whole Credit Suise thing is troubling.
ReplyDeleteNot sure how much leverage they will have in a refinancing.
DeleteMight be smarter to buy the debt here, depending on the price, as the bond holders could end up owning most of the company.
Probably something we never could get in on.
DeleteNot sure the report was THAT bad. Haven't had the time to look closer / listen to the call but at first glance the report included some one time items when comparing to PY.
Deletea little late at getting going today. listening to the conf call...honestly i think the report was not nearly as bad as the market sold it down for initially. that's why its rallying now. they had some one time expenses / benefits in this year / last year, respectively, that made the comparison look worse than it was. the results were a decent amount better than last year. additionally, the company spent a good deal on rolling out new handheld technology and on buying new trucks and while i don't know the breakdown of each, the impact would definitely have been lower operating income.
DeleteJust consider the motivation behind the call for $7, you know they're going to try convincing as many sheeple as possible to stay away, and the effort is going involve some expense, especially if the sheeple aren't easily convinced.
DeleteExpect to be mislead.
http://schaefferstradingfloor.com/is-2013-headed-for-a-1987-crash/id=5603
ReplyDeletePer TD Ameritrade:
ReplyDeletehttps://imx.tdameritrade.com/IMX/index.jsp
"TD Ameritrade clients dialed back their equity market exposure in July and were net sellers of equities.
The IMX declined to 4.87 in July 2013, its lowest level since January 2013, but the IMX remained at a moderately high level compared to previous months in its three-and-a-half year history. The S&P 500 rallied to a record high in July following a dip in June. Clients were net buyers on the dip last month, but as markets rallied to record territory clients seemed to anticipate a pullback and were net sellers of most market sectors in July. Like last month, clients were net sellers of fixed income mutual funds and fixed income ETFs, but the level of net selling activity decreased month over month."
In looking at the chart the equity exposure is about 20% below the 2011 peak (right before the 20% drop in August 2011).
Computer attack again today, looks like.
ReplyDeleteCommissioner Chilton's speech on commodity futures and the subject of volatility due to manipulators (hot money flows with disdain for actual fundamentals, I guess you could say):
http://www.cftc.gov/PressRoom/SpeechesTestimony/opachilton-93
NSPH - $2 is too tempting, wishing I could find my nut sack over here.....
ReplyDeletePIE - So this one hasn't recaptured the 50SMA yet, not sure if this is a good one to watch or not but I look at it occasionally anyway...
ReplyDeleteBSBR - Having an issue with retaking $2.90, but otherwise holding up well. So which way do we go, George?
ReplyDeleteMUX - They sure had a convincing sales campaign going on this thing once upon a time.
ReplyDelete"Once upon a time" Sounds like a good start a fairy tale, doesn't it?
NES - Looks like a bull flag formation to me(a failing bear flag).
ReplyDeleteMM - See, this one turned down, I guess the pump has turned dump (not necessarily associative with fundamental reality).
ReplyDeleteI don't follow it close enough but could be a buying opportunity?
DeleteYeah, it could be an opportunity among a sea of opportunity, I just don't know either.
DeleteESI, EDMC, and CECO all have been doing very well.
ReplyDeleteGRPN + TSLA killing it.
ReplyDeleteNSPH - I am shocked, shocked I tell you by the markets reaction to the earnings report and the downgrade. I read the transcript of the conference call. It was not very informative, except for one thing which did not come out until the questions: They have competition now from new technology. A privately held company called BioFire. http://www.bioportfolio.com/corporate/company/43673/BioFire-Diagnostics-Inc.html. Bad news indeed.
ReplyDeleteI'm still a holder. This may be just the road turning into gravel from a road with a few potholes. Or not. I may buy more in the next few days.
Yes but, isn't NSPH's technology patented, and what is it they can do nobody else can?
DeleteThis is part of the answer I never could resolve, NSPH's optical strategy seems to be markedly unique from the others and could be capable of achieving something far in advance of what the others could ever hope for?
Or is NSPH just another "me too" enterprise in the sea of "me too" college-level science experiments.
I thought Hitachi's interest kind of validated/confirmed NSPH's approach?
Hitachi was mentioned. One meeting held, they helping with JP regs, etc. It sounds like a slow process. That is continuing and a good sign.
DeleteYes, NSPH is patented but so I suppose is BioVial. This type of technology is above my cognitive brain level. The CEO of NSPH implied that Verigene had a competitive advantage. In price.
NOR - I've been hearing an growing roar over aluminum price manipulation lately, wonder if producers are about to capitulate?
ReplyDeleteA number of the smart value guys like Alcoa and how it's business is changing and how it didn't go down on it's last earnings miss.
DeletePerhaps it is time for Aluminum?
UGA - Okay, so here we are at the 50/200SMA cross:
ReplyDeletehttp://www.finviz.com/quote.ashx?t=uga&ty=c&ta=1&p=d
Yo, new low, for FIO.
ReplyDeleteHigher marketing costs, so the marketing/sales pukes have been partying down on shareholder cash while the company continues losing money too?
DeleteI don't know. But I have been asked to Rap at their next employee 'convention' in Vegas baby!
DeleteCome on guys. That was funny!
Deletei thought it was really funny when i read it on my iphone but this POS phone doesn't allow me to post anything on this site ever so I have to wait until i go on my laptop.
Delete"I have been asked to Rap at their next employee 'convention'"
DeleteAlarming, was the response that came to mind. ;)
TOF, sure hope you put some $ into that GRPN.
ReplyDeleteFunny, one of the Quant guys who bases his work on analyst estimates was on BNN yesterday talking about how MET was a great buy now that is breaking through $50 and could double or more from here as it is showing people are now starting to trust their balance sheet and give them a higher valuation.
ReplyDeleteI guess the idea is not to get them as cheap as you can, but when they start to move, but then I checked his funds results and he is certainly far worse than average.
Just shows that even with a sophisticated computer model, following analysts is a hard way to make money.
You do some really good DD, I'm always impressed.
DeleteBSBR - There's $5.90, watching to see how it holds...
ReplyDeleteWhen does FMD report?
ReplyDeleteLast was April 29, so it should be real soon. I haven't seen an announcement but haven't been to their site in a week.
DeleteI just checked and couldn't find anything.
Delete8/13/13
DeleteNice correlation...NUGT
ReplyDeleteYo MC Angel Haze, got twerk, yo?
Deletehttp://www.spin.com/articles/angel-haze-no-bueno-video-dirty-gold-nsfw/
:)
DeleteBB - I have a small position on GRPN but not enough to move the needle. My old boss who just got crushed on KNDI went all in on it so he's happy.
ReplyDeleteHe seems like a real home run hitter - hope he's good at managing his capital.
Deletehe has had some huge winners and narrowly avoided huge misses. i don't think it's a bad idea to take large positions but you need to know the business inside and out and understand your downside risk. he just hops into stuff if he likes the story and doesn't really spend a lot of time looking at the fundamentals. i told him about GRPN when it was around $6 and said i thought it would be a $20 Billion+ company. I don't think he got in until around $8ish. He thinks it's going to $50...I wouldn't be shocked. All internet stocks are on fire and for good reason.
DeleteLong NLS at $6.74
ReplyDeleteWent through the quarter notes and the report and its best to characterize their operations as lumpy. They get big orders from time to time prior to advertised price increases that make comparisons the following year look bad, which is what happened in their Retail division. However, the company overall continues to grow and has a great balance sheet. Additionally, margins continue to improve and the company projected that they would improve even more. At 14 times earnings I think this has room to move up to $8 to $9 again and I think the upside is not being accounted for in their estimates. I think this could be one of those rare buying opportunities in a turnaround story that has already gained a lot of momentum.
DeleteEmployment - I guess there was some kind of news on the employment front this morning the market liked....
ReplyDeleteCP,
ReplyDeleteBSBR now through $6.00. Could make the case that you've got a higher low on the chart now. $6.50 would be a higher high. Most of the year has been spent between $7.00 and $7.50, so you could build a trading plan around that.
I just try to get them as cheap as I can. If it pulled back to say the $5.10 area on no bad news, I'd probably double down. You've got good valuation support and the market will pretty much always recognize this over time in the current market.
Yep on the BSBR, shot right through $5.90 I'm gonna get me some I think.
DeleteThere is a MASSIVE bubble brewing in biotech. I would be keeping an eye on this as a potential short opportunity at some point. Very tough to time these but it wouldn't be unrealistic to see a 30%+ pullback in these.
ReplyDeleteI still think TZOO has a massive move in it at some point...assuming that hotel booking platform is launched and gets some traction. That site has so much traffic that they don't make money off of its ridiculous. i still don't understand why EXPE/PCLN/OWW don't buy them out. Their market cap vs traffic is so far out of whack when compared with those other companies.
ReplyDeleteAdded more NLS at $6.64, 6.66, 6.68.
ReplyDeleteI also bought a few calls in TZOO earlier...a whopping 5 x August $30 calls at $0.95. With all of these internet stocks going through the roof I wouldn't be surprised if TZOO gets a big lift.
ReplyDelete