Yields are spiking once more. What do they say about the bond market? Three times the size of the stock market, with prices determined by smarter traders.
Lots of stuff out there now about how EMs are as cheap as they've been in the last 15 years only twice, so a good place to be potemtially kooking and building positions.
Nope...it's basically the same exact setup as HSOL and SOL but 3 months ago. Look at the weekly chart. Fundamentals are actually decent too in terms of growth potential + strong back half of the year coming up.
Couple of other things: (1) I've noticed that when a stock was under 50 RSI(14) on the weekly chart for a long time and moves to over 50 it typically signals a long term trend change. Look at MY: http://stockcharts.com/h-sc/ui?s=MY&p=W&b=5&g=0&id=p48752523327
(2) I use a similar thing called RSI_EMA on ThinkorSwim and I've noticed that when a stock is undergoing a longer term basing pattern like MY is you want to look for higher lows on the RSI_EMA readings over a long period along while the stock is trading sideways or flat. This typically tells you that there is increasing buying pressure. Obviously nothing is perfect but the patterns in HSOL, SOL, HIMX, BALT, etc were all the same before huge runs up. Another one that is showing the same pattern is JRCC. I like MY better because I think the fundamentals are better but we've all seen moves that defy logic.
Just found a little Schwab widget. It will basically update any stock you choose with out logging in. Kinda cool. Right now I have only one in the queue along with SPY.
Why miners? There's always at least one sector out of favor.
A week ago, it was India> EPI sold off to 13 in the early hours of August 28, probably over media-instilled panic re weakness in the rupee. Now traders can't get enough of India> EPI closed today at 14.92, a +15% gain in just six trading days. (I, of course, made the brilliant move of bailing out after +4%.)
Now it appears to be precious metals. Miners convincingly rallied above resistance in mid-August. For reasons unknown, gold/silver and miners have pulled back hard since the last week of August. It's pointless to try coming up with an explanation. Sellers have outnumbered buyers works for me. What I try to discern is whether buyers in the past 8 trading days have been outplayed by sellers. There's really no way to 'know,' but I doubt it.
The Rupee is in no man's land, (and so are other currencies) wonder if these governments are going to continue supporting their currencies by selling their US Debt or if since these currencies have broken out to the downside they still have further to go? They are never in the habit of selling, but will the Indian citizens puke their gold when the Rupee finally does hit bottom?
"The important thing is that when the dollar is in a strong downtrend the rupee is either flat of has a weak uptrend."
Looks like a double bottom in EEM (emeeging markets etf).
BSBR chart looks good too.
if these marketts have bottomed, definitely not too late to buy. Best to buy in stages as we may get more pullbacks. Going to keep doing more work on these.
I kept my 401K in bonds for the last 10 years (in PTTRX for the past few years), thinking that if I take extreme risks in my "disposable" capital, then I have to make sure that my retirement money is safe. But now I am thinking that maybe it is time to move that money into the Emerging Marked Fund that is available to me: LZEMX. According to Yahoo, it has a P/E of 9.79 and a 3-year earnings growth of 15%:
http://finance.yahoo.com/q/hl?s=LZEMX+Holdings
Since long-term returns are strongly inversely correlated with the starting P/E level, now may not be a bad time to buy this fund (with the intent of selling it when emerging markets become expensive on the P/E basis, which can take many years).
On the other hand, IWM did not have a large correction for a while and over the past year it had a totally unsustainable run-up. So maybe the right time to move from bonds into EM would be after a *real* correction in IWM? What do you think, folks?
David, I don't know your age, portfolio size, timeframe, risk tolerance, etc., but in general, I'd absolutely be getting out of bonds. These are probably the worst risk-reward asset class in the markets today.
For a retirement account like a 401K, I'd be looking at a diversified approach. It is probably a good time to start overweighting EM's, but I also think Europe is cheap, and you, as an American, would want to have some money in US stocks as that is where your retirement spending will be and you want to try and match your assets to your spending patterns to reduce currency risk.
If it was me, I'd sell all bonds now and move about 25% of the money into 3 or 4 fund (US, Europe, EM's). Then I'd either add on a pullback, or add gradually over time until the cash was fully deployed.
Maybe we get a pullback, maybe we don't - this way you are least in the market and can take advantage of one when it comes.
Just thinking this through a bit more and maybe I wouldn't sell all my bonds at once, but I'd probably sell half right away and look for bounces to sell the rest. If rates really start to move upwards faster than people expect, the capital losses could be large. But on the other hand, rates have moved up a lot this year, so a technical correction would be very possible.
Thanks, BB. This makes sense. I'll probably convert 1/2 of my bonds into LZEMX if the latter one rises above the double top it made in July-August. But then, if LZEMX breaks below the June lows, which also happens to be the support line that was tested 5 times since 2010 and held successfully every time, then I'll sell out and wait to start scaling it at much lower levels...
So Barry Ritholtz is having a Big Picture Conference in October. What do you guys think about his list is speakers?
Michael Mauboussin, Art Cashin, UBS, Jack Brennan, Chairman, Vanguard, Stephanie Pomboy, Macro Mavens, James O’Shaughnessy, OSAM, Josh Brown, Ritholtz Wealth Management, Art Hogan of Lazard Freres, Jeffrey Kleintop, LPL Financial and Dan Greenhaus, BTIG, Mike Santoli, Yahoo Finance
Yeah, I have a suspiscion that EM's were getting beat up b/c they were buying too much Us debt and now they're selling it to slow capital flight. This has pushed the mREITS down, in addition to the economic improvement and the mREITS are levered, so they moved big.
So maybe the US debt selling isn't quite done, it's hard to tell, but since I missed the EM rally then maybe I can still play the mREITS if there's a pullback once the news washes out and the hit to divs hits the wires it could provide a nice reentry.
I dunno which way it's gonna go from here considering the leverage is pretty big then higher rates will smack 'em down so just taking gains and waiting for the washout if it does come.
Retail has been on the rocks for the past month or so. Today is a good day for these stocks. I still like OSTK the most out of any retail stock because of its relative valuation to other internet retailers and offline retailers. If they can get one or two more quarters of solid top and bottom line growth I think the stock could go through a momentum phase and hit all time highs. We shall see.
While the stock is up big from lows last year, the stock was in the mid 20's in 2010 and the majority of the pullback in 2012 came from one time things (Google dropped their rankings because of a violation of their policy and they idiotically decided to switch their name to O.co from Overstock.com because they felt customers viewed the name Overstock negatively). Had these one time things not occurred I don't think the stock would have gone below $10 or $15. So viewed on that perspective the stock isn't up nearly as much as it looks.
The downside is their CEO has some whacked out ideas on market manipulation (some of which has been proving correct, though) which could always cause hedge funds to bully up on them. But the company is getting into international soon which should provide a nice top line bump and they're growing more than the 15% internet retailers are growing. Comparable buyouts of liquidators have been between 1.0 and 1.2X sales and another smaller liquidator (LQDT) and GRPN both trade at 2.0 to 3.0X sales. OSTK, comparatively, trades at about 0.6X sales and if you factor in overseas growth it could be as low as 0.3 to 0.4X. That's a huge disparity.
I also like NLS a lot. I think it's cheap and has taken a lot of risk out of the stock with the recent 30%+ fall. Plus, I like that it has based here around $6.2 to $6.6 and insiders have been buying right here so I think there is a tradeable floor here. I think it can get back up to $10 within the next 6 months.
Yeah, you might be onto something. Wonder if wall street wil smack it hard just to shake loose hands out just before the rip higher begins, or maybe they already did back in April?
I believe in economic cycles and trends and it seems that this cycle is not going to be good for retailers in general. It seems people are being more cautious with their money and are paying debts, upgrading vehicles, etc. Plus you've got the additional competition from EBAY and AMAZON sellers putting pricing pressure on everyone.
I believe Overstock sells stuff cheap, so may do well this cycle, but am personally not really spending much time looking into retail stocks (although I do still own WMT at $43).
10yr - Kinda looks like there's a wide divergence between how commercials and small traders are viewing the US 10yr, does it look like small traders might need to cover before they get their azz's handed to them and commercials are on the right side of the trade?
I know you always do good research on your stocks as well, but it goes to say that one of the big reasons I like buying stocks like BSBR instead of a Brazil ETF is you can dig into a stock and try to understand it's business and valuation and that gives you the confidence to hold it through pullbacks, whereas an ETF is too easy to just think the trade is going against you and sell.
Speaking of good calls, thanks for your call on NM last year. I bought it at $3.83 in Feb, 2012, and it has now pretty much doubled. Chart is going a bit parabolic, but I plan to hold for a while as it still has good valuation support, has made some good investments through the trough of the shipping cycle, smart money is getting into the sector and the cycle is finally turning.
Dry bulk index is in clear bull mode. I would just hold on to it. You could probably take some off the table given the parabolic move but it was so beaten down last year. I'm looking for an entry point in shippers to be honest. I was so preoccupied with YRCW earlier this year that I missed the entries on these.
Just to be clear, I would not support your decision to put half of your retirement money into an emerging market fund. To me, that is being far too risky with money you should be fairly conservative with. Emerging markets can go a lot lower than people think or that would make sense on many factors.
My recommendation would be:
1. Sell half your bonds now 2. Take half of that money and put it into 3 fund - US, Europe and EM 3. Look for opportunities to sell your other bonds into strength and to buy stocks on weakness 4. If we don't get stock pullbacks over the next 2 or 3 months, I would buy higher to get the money in the market for the Santa Claus Rally effect.
You might do very well on a big EM purchase here, but to me, it is taking far too high a risk. If we get another 1998 situation, many EM's could drop a long way from here. Reality is, no-one knows so you have to manage your risk.
"I believe in economic cycles and trends and it seems that this cycle is not going to be good for retailers in general. It seems people are being more cautious with their money and are paying debts, upgrading vehicles, etc. Plus you've got the additional competition from EBAY and AMAZON sellers putting pricing pressure on everyone.
I believe Overstock sells stuff cheap, so may do well this cycle, but am personally not really spending much time looking into retail stocks (although I do still own WMT at $43)."
Say what say what!?! XRT is almost double the highs from 2007.
XRT is an equal-weight ETF - it's biggest holding is Groupon which isn't a retailer. Probably not the best ETF for retail given how the big players are so much bigger than the little guys in that industry.
A better ETF for broad retail is probably RTH which has WMT, HD and AMZN as it's top 3 holdings.
RTH has basically performed in-line with the markets since the 2009, so I was wrong about retail doing poorly. Guess my opinion was based on placing too much emphasis on the big misses by the mall clothing retailers like Abercrombie and American Eagle. Seems like a lot of trouble in retail-land the last while, but I guess that's being offset by others.
BB - GRPN is the largest holding of XRT at 1%. Not exactly a huge position. But even then GRPN has been underperforming since its IPO and XRT is still doing well.
GRPN is absolutely a retailer by the way. Their groupon goods segment is in direct competition with AMZN and their coupon service is basically the same thing as retail.
To add insult to injury, Emerging Markets continues its ascent. Ditto the broad indexes. Even bonds are higher. In fact, everything other than the one sector I'm holding is taking off today.
Why sell today? After all, miners may lift off on Tuesday. They may well rally tomorrow. I'm used to it, and I consider it part of the game. More importantly, the odds are just as good miners gap down (partly due to today's failure to extend Friday's closing rally). With the exception of FCX (copper), miners felt 'heavy' today, and I'm more than happy to trade a missed opportunity for insurance against a major hit.
RYPMX closed down -0.19 (-0.48%). Total hit to the portfolio was -0.2%, which is a typical outcome when I follow a disciplined approach (ie, taking losses immediately).
"Just to be clear, I would not support your decision to put half of your retirement money into an emerging market fund. To me, that is being far too risky with money you should be fairly conservative with. Emerging markets can go a lot lower than people think or that would make sense on many factors."
Thank you for the warning, BB. Recall, however, that I intended to place a stop at the June lows, which was the support for my fund for the past 3 years...
FBN (Furniture Brands) declared bankrupcy today. Glad I got out of that mess with most of my money intact. You'd think with housing improving the furniture guys would do well, but maybe IKEA is taking them all down!
That's the running joke for the furniture business isn't it, declaring bankruptcy over and over again rinse and repeat so the doors always manage to reopen?
Unfortunately, the chart does not provide a detailed date axis, but seems to be a good indicator of when a downturn has bottomed for the few years, other than the early 2011 which was only good for a short bounce.
It’s mornings like this one that validate the importance of discipline. Gold off -20 to 1365, and miners bidding -2% lower premarket. In this case, the ‘heavy’ action in miners on Monday telegraphed further weakness in the metals. Note also that the steep drops occurred overnight, effectively preventing US traders from participation/ forcing traders to negotiate a gap down. I now have the option to reopen a position, or wait. With prices approaching support levels, the odds of dealers ‘running stops’ become significant. So waiting seems prudent. All opinions may change on a dime, of course.
Yes, shorting a weak market is the way to go. The S&P continues it's action as well, most likely on global economic news. Watching which way rates go, although rates arguably are still low even if they rise a bit.
Lots of good economic news today, but the market has been up every day but 1 in the last 8. Seems like we should get a pullback off today's happy opening, I would think?
JOY is tempting if you believe the economy is improving and this drives demand for commodities. Stock is pretty cheap.
Also thinking up buying some AA if we get a sharp pullback this morning on the getting kicked out of the Dow news - we'll see.
"Chinas hydraulic excavator sales grew 13.2%, higher than June and July. Caterpillars sales turned negative for the first time since February, but it still outperforming the market and global peers YTD"
Wow what a day. I pulled off my SPY hedge premarket. All of my positions are up 3 to 11% today. Nuts. YRCW is doing the best...and of course I have the smallest position in that one. That one just felt (and looked) right but I couldnt get myself to put more than 10% in.
This is probably a pipe dream but I think OSTK has a slim chance of going on a TZOO type run. It has all of the elements....just needs one or two more quarters of momentum in top and bottom line. They have top line and gross margins ramping up + international expansion + high short interest + big insider ownership + small float.
I'm cautiously long right now but quite frankly with the nasdaq breaking out and the RUT close to new highs it looks like this was just another pullback. Would love to see some stronger momentum readings for the S&P if it breaks to new highs. Longer term I think it comes down to what rates do. If they stay put then we have headway to move higher. Relative valuations though suggest that the US markets are not the place to be if you want to make $$.
When they couldn't break lower on the RUT and the S&P last week I used that as a stop out point for any longs and decided to start buying OSTK YRCW NLS MY etc because the stops in all of those were clearly defined.
DRYS - Loking at this chart, the classic pullback at resistance trend line then the breakout higher where everyone jumped on board once it was confirmed.
Yeah I think I posted this a week or so ago. I didn't realize he held the position for 7 years. No wonder he wanted out. Unfortunately, I think there's a chance he will miss out on a huge gain but we shall see. Baby steps first.
Umm, are those the same experts that worked for Cheney and helped him lead us based on completely false and erroneous information into a horrific snakes den?
On the bright side, chemical stocks seem to be holding their own..... see DD and PPG!
CECO - about as symmetrical an inverse head and shoulders as you can get on the weekly chart. RSI(14) and MACD are all showing positive divergences. This one looks awesome chart wise. Trades at 1/3 book and less than cash on hand. Obviously, it's still unprofitable so that's an issue. The largest shareholder (Blum) now only holds about 3.7 million shars after selling down a large chunk over time. The lid could be lifted off this sucker and it could explode, assuming the new CEO they brought in (worked at SUNY and Strayer before this so good pedigree) can right the ship. Has tons of upside potential and you can use $2.40 as a stop. I'm long at $2.66. Love the setup.
Advice From A Wise Man – Howard Marks of Oaktree Capital gave a presentation at a Barclay's conference yesterday. The title was "Managing Money in Uncertain Times". In it he had this slide (passed along by a friend): A Prescription for an Uncertain World Make sure your expectations are moderate Emphasize corporate investments Commit to active decision making – “even doing nothing is doing something” Remember that the reasons for caution aren’t imaginary – “the improbable disaster” isn’t impossible Balance the many pros and cons – “it’s not supposed to be easy” The outlook certainly isn’t so propitious (and assets aren’t so cheap) as to call for investing aggressively. But at the same time, conditions aren’t so bad and prices aren’t so high that it’s time for extreme risk aversion. My bottom line: move forward, but with caution
I like both IBKC (took over a ton of deposits in the FDIC bailouts in 2009-2010) and BKJ (much much smaller but it has great growth #s and pays a nice 4% div (they pay special div every year)).
By the way, BKJ is typically extremely illiquid but the past couple of days it has had less disparity between bid and ask. My guess is someone is trying to sell out of the stock. I have liked this one (mentioned it a couple of times here) for the past 2 years. kind of like the AMNF of banks. on no ones radar.
IBKC - Oh crap that thing is running on all eight! Okay, I still think Yellen is going to be appointed and that should prove great for these regional banks....
Silver's had a pretty good oversold bounce. It needs to either prove the bear is over and continue upwards or (more likely in my opinion) resumes it's downtrend.
Definitely seeing the first signs of a bottom on the chart but nothing yet that sticks out. I typically like to wait for a rally that fails. We all missed it or went in too early but look at the weekly chart for WLT.
Man I really like the technical setup in CECO. If they can somehow get back to breakeven then having $240 Million in cash (vs $170 Million mkt cap) makes this thing look like one helluva bargain.
I'm not feeling very smart at the moment. Had I held on to my Emerging Markets positions, I would have quadrupled my gains.
ReplyDeleteOn the other hand, I debated buying miners near Wednesday's close. Had I followed through on that idea, I would have been totally ----ed today.
DeleteAlright. I just finished rereading 'Doing the Right Thing,' and now I'm good.
DeleteYields are still low though. 10 year at 3% isn't hurting anyone who isn't overlevetaged to the extreme. This move can be absorbed pretty easily.
ReplyDeleteinsurer AEGON doing their longer term outlook based on a 4.75% long bond. Probably where it should be in the next ciuple years.
PMCS/SPW - What do you guys think of these two?
ReplyDeleteLots of stuff out there now about how EMs are as cheap as they've been in the last 15 years only twice, so a good place to be potemtially kooking and building positions.
ReplyDeleteWhat's an EM, emerging market?
DeleteThis comment has been removed by the author.
DeleteYeah.
Deletehttp://www.wallstreetrant.com/2013/08/emerging-markets-price-to-book-ratio.html
Thanks for filling in for me BB. Glad to know you got my back.
ReplyDeletehaha
DeleteBACML: "Banks - Latin America: Chilean banks poised for 2H13 rebound; now top sector pick"
ReplyDeleteI;ve never seen a ship turn around so fast! And they were so heavily loaded, too.....
ReplyDeleteBoy, that didn't take long.
ReplyDeleteI was first in line @ 27.19, but no joy.
ReplyDeleteI can't figure out what you're bidding on.....?
DeleteOSTK. Got filled the 2nd time down and just sold for 28.19. I'll take the $1k.
DeleteEMarkets - Okay, so now I see how it works... All one has to do is buy the bottom and everything works out great! :)
ReplyDeleteSpanking it also fun!
DeleteYep, just gently kiss it down low before spanking.
DeleteBALT - How do ya like those first bars?
ReplyDeleteOMG, now SPX is red for crying out loud, and by 10 points! WTF? That was definitely a setup, or someone said something.... :(
ReplyDeleteAGO - Getting smacked, looks like a good setup for a couple dimes.
ReplyDeleteAUMN - Get your lottery tickets(nearly free)!
ReplyDeleteLong MY at $1.73
ReplyDeleteGap fill?
DeleteNope...it's basically the same exact setup as HSOL and SOL but 3 months ago. Look at the weekly chart. Fundamentals are actually decent too in terms of growth potential + strong back half of the year coming up.
DeleteCouple of other things:
Delete(1) I've noticed that when a stock was under 50 RSI(14) on the weekly chart for a long time and moves to over 50 it typically signals a long term trend change. Look at MY: http://stockcharts.com/h-sc/ui?s=MY&p=W&b=5&g=0&id=p48752523327
(2) I use a similar thing called RSI_EMA on ThinkorSwim and I've noticed that when a stock is undergoing a longer term basing pattern like MY is you want to look for higher lows on the RSI_EMA readings over a long period along while the stock is trading sideways or flat. This typically tells you that there is increasing buying pressure. Obviously nothing is perfect but the patterns in HSOL, SOL, HIMX, BALT, etc were all the same before huge runs up. Another one that is showing the same pattern is JRCC. I like MY better because I think the fundamentals are better but we've all seen moves that defy logic.
TLM had quite a day yesterday.
ReplyDeleteWow what a reversal on OSTK. I'll admit it. I sold about 25% of my position at $27.6 only to buy it back at $27.9
ReplyDeleteThis is a red dog reversal day...or outside reversal day. Very impressive.
DeleteAdded to NLS at $6.49/6.50
ReplyDeleteI like the miners here. GDX @ 27.95. SLW @ 25.95. RYPMX at the close.
ReplyDeleteCopper - Collapsed one hour before the opening bell......
ReplyDelete$3.32 - Just spent $40 for 3/4 just 12gal, wonder where our cheap gasoline is?
Just found a little Schwab widget. It will basically update any stock you choose with out logging in. Kinda cool. Right now I have only one in the queue along with SPY.
ReplyDeleteGMO?
DeleteWhy miners? There's always at least one sector out of favor.
ReplyDeleteA week ago, it was India> EPI sold off to 13 in the early hours of August 28, probably over media-instilled panic re weakness in the rupee. Now traders can't get enough of India> EPI closed today at 14.92, a +15% gain in just six trading days. (I, of course, made the brilliant move of bailing out after +4%.)
Now it appears to be precious metals. Miners convincingly rallied above resistance in mid-August. For reasons unknown, gold/silver and miners have pulled back hard since the last week of August. It's pointless to try coming up with an explanation. Sellers have outnumbered buyers works for me. What I try to discern is whether buyers in the past 8 trading days have been outplayed by sellers. There's really no way to 'know,' but I doubt it.
David was right to remind me to give the India/EEM positions more time.
DeleteYeah, I'm hoping they crash again next week so I can get in but doesn't look like that's going to happen.
DeleteThe Rupee is in no man's land, (and so are other currencies) wonder if these governments are going to continue supporting their currencies by selling their US Debt or if since these currencies have broken out to the downside they still have further to go? They are never in the habit of selling, but will the Indian citizens puke their gold when the Rupee finally does hit bottom?
Delete"The important thing is that when the dollar is in a strong downtrend the rupee is either flat of has a weak uptrend."
http://www.firstpost.com/business/dead-cat-bounce-for-the-rupee-but-long-term-weakness-still-exists-1058027.html
Looks like a double bottom in EEM (emeeging markets etf).
DeleteBSBR chart looks good too.
if these marketts have bottomed, definitely not too late to buy. Best to buy in stages as we may get more pullbacks. Going to keep doing more work on these.
I kept my 401K in bonds for the last 10 years (in PTTRX for the past few years), thinking that if I take extreme risks in my "disposable" capital, then I have to make sure that my retirement money is safe. But now I am thinking that maybe it is time to move that money into the Emerging Marked Fund that is available to me: LZEMX. According to Yahoo, it has a P/E of 9.79 and a 3-year earnings growth of 15%:
ReplyDeletehttp://finance.yahoo.com/q/hl?s=LZEMX+Holdings
Since long-term returns are strongly inversely correlated with the starting P/E level, now may not be a bad time to buy this fund (with the intent of selling it when emerging markets become expensive on the P/E basis, which can take many years).
On the other hand, IWM did not have a large correction for a while and over the past year it had a totally unsustainable run-up. So maybe the right time to move from bonds into EM would be after a *real* correction in IWM? What do you think, folks?
David, I don't know your age, portfolio size, timeframe, risk tolerance, etc., but in general, I'd absolutely be getting out of bonds. These are probably the worst risk-reward asset class in the markets today.
DeleteFor a retirement account like a 401K, I'd be looking at a diversified approach. It is probably a good time to start overweighting EM's, but I also think Europe is cheap, and you, as an American, would want to have some money in US stocks as that is where your retirement spending will be and you want to try and match your assets to your spending patterns to reduce currency risk.
If it was me, I'd sell all bonds now and move about 25% of the money into 3 or 4 fund (US, Europe, EM's). Then I'd either add on a pullback, or add gradually over time until the cash was fully deployed.
Maybe we get a pullback, maybe we don't - this way you are least in the market and can take advantage of one when it comes.
Just thinking this through a bit more and maybe I wouldn't sell all my bonds at once, but I'd probably sell half right away and look for bounces to sell the rest. If rates really start to move upwards faster than people expect, the capital losses could be large. But on the other hand, rates have moved up a lot this year, so a technical correction would be very possible.
DeleteThanks, BB. This makes sense. I'll probably convert 1/2 of my bonds into LZEMX if the latter one rises above the double top it made in July-August. But then, if LZEMX breaks below the June lows, which also happens to be the support line that was tested 5 times since 2010 and held successfully every time, then I'll sell out and wait to start scaling it at much lower levels...
DeleteSo Barry Ritholtz is having a Big Picture Conference in October. What do you guys think about his list is speakers?
ReplyDeleteMichael Mauboussin, Art Cashin, UBS, Jack Brennan, Chairman, Vanguard, Stephanie Pomboy, Macro Mavens, James O’Shaughnessy, OSAM, Josh Brown, Ritholtz Wealth Management, Art Hogan of Lazard Freres, Jeffrey Kleintop, LPL Financial and Dan Greenhaus, BTIG, Mike Santoli, Yahoo Finance
Just watch TV instead.
DeleteINO - ??????
ReplyDeleteARR - Off @ $4.25
ReplyDeleteNice little trade.
DeleteYeah, I have a suspiscion that EM's were getting beat up b/c they were buying too much Us debt and now they're selling it to slow capital flight. This has pushed the mREITS down, in addition to the economic improvement and the mREITS are levered, so they moved big.
DeleteSo maybe the US debt selling isn't quite done, it's hard to tell, but since I missed the EM rally then maybe I can still play the mREITS if there's a pullback once the news washes out and the hit to divs hits the wires it could provide a nice reentry.
I dunno which way it's gonna go from here considering the leverage is pretty big then higher rates will smack 'em down so just taking gains and waiting for the washout if it does come.
I picked up KNDI at $5.47 on the rip higher. Small stake. Should have bought last week but was scared.
ReplyDeleteSold it at $5.53. Actually thinking maybe I can get a bit of a better entry.
Deletewhich means I'll miss it!
DeleteBy the way BB, awesome call on BSBR. The lack of support that I mentioned was a farce.
ReplyDeleteIDX - Nice, those EM's are the bomb! :)
ReplyDeleteKNDI long again $5.33
ReplyDeleteand sold at $5.41. i'm getting bored.
DeleteRetail has been on the rocks for the past month or so. Today is a good day for these stocks. I still like OSTK the most out of any retail stock because of its relative valuation to other internet retailers and offline retailers. If they can get one or two more quarters of solid top and bottom line growth I think the stock could go through a momentum phase and hit all time highs. We shall see.
ReplyDeleteWhile the stock is up big from lows last year, the stock was in the mid 20's in 2010 and the majority of the pullback in 2012 came from one time things (Google dropped their rankings because of a violation of their policy and they idiotically decided to switch their name to O.co from Overstock.com because they felt customers viewed the name Overstock negatively). Had these one time things not occurred I don't think the stock would have gone below $10 or $15. So viewed on that perspective the stock isn't up nearly as much as it looks.
DeleteThe downside is their CEO has some whacked out ideas on market manipulation (some of which has been proving correct, though) which could always cause hedge funds to bully up on them. But the company is getting into international soon which should provide a nice top line bump and they're growing more than the 15% internet retailers are growing. Comparable buyouts of liquidators have been between 1.0 and 1.2X sales and another smaller liquidator (LQDT) and GRPN both trade at 2.0 to 3.0X sales. OSTK, comparatively, trades at about 0.6X sales and if you factor in overseas growth it could be as low as 0.3 to 0.4X. That's a huge disparity.
I also like NLS a lot. I think it's cheap and has taken a lot of risk out of the stock with the recent 30%+ fall. Plus, I like that it has based here around $6.2 to $6.6 and insiders have been buying right here so I think there is a tradeable floor here. I think it can get back up to $10 within the next 6 months.
DeleteYeah, you might be onto something. Wonder if wall street wil smack it hard just to shake loose hands out just before the rip higher begins, or maybe they already did back in April?
DeleteI believe in economic cycles and trends and it seems that this cycle is not going to be good for retailers in general. It seems people are being more cautious with their money and are paying debts, upgrading vehicles, etc. Plus you've got the additional competition from EBAY and AMAZON sellers putting pricing pressure on everyone.
DeleteI believe Overstock sells stuff cheap, so may do well this cycle, but am personally not really spending much time looking into retail stocks (although I do still own WMT at $43).
10yr - Kinda looks like there's a wide divergence between how commercials and small traders are viewing the US 10yr, does it look like small traders might need to cover before they get their azz's handed to them and commercials are on the right side of the trade?
ReplyDeletehttp://www.finviz.com/futures_charts.ashx?t=ZN&p=d1
Wow, that was somw surge. Somebody must've had something bullish to say from their podium.
ReplyDeleteRe BSBR, thanks, it has worked well so far.
ReplyDeleteI know you always do good research on your stocks as well, but it goes to say that one of the big reasons I like buying stocks like BSBR instead of a Brazil ETF is you can dig into a stock and try to understand it's business and valuation and that gives you the confidence to hold it through pullbacks, whereas an ETF is too easy to just think the trade is going against you and sell.
Speaking of good calls, thanks for your call on NM last year. I bought it at $3.83 in Feb, 2012, and it has now pretty much doubled. Chart is going a bit parabolic, but I plan to hold for a while as it still has good valuation support, has made some good investments through the trough of the shipping cycle, smart money is getting into the sector and the cycle is finally turning.
Dry bulk index is in clear bull mode. I would just hold on to it. You could probably take some off the table given the parabolic move but it was so beaten down last year. I'm looking for an entry point in shippers to be honest. I was so preoccupied with YRCW earlier this year that I missed the entries on these.
DeleteDavid,
ReplyDeleteJust to be clear, I would not support your decision to put half of your retirement money into an emerging market fund. To me, that is being far too risky with money you should be fairly conservative with. Emerging markets can go a lot lower than people think or that would make sense on many factors.
My recommendation would be:
1. Sell half your bonds now
2. Take half of that money and put it into 3 fund - US, Europe and EM
3. Look for opportunities to sell your other bonds into strength and to buy stocks on weakness
4. If we don't get stock pullbacks over the next 2 or 3 months, I would buy higher to get the money in the market for the Santa Claus Rally effect.
You might do very well on a big EM purchase here, but to me, it is taking far too high a risk. If we get another 1998 situation, many EM's could drop a long way from here. Reality is, no-one knows so you have to manage your risk.
Delete"I believe in economic cycles and trends and it seems that this cycle is not going to be good for retailers in general. It seems people are being more cautious with their money and are paying debts, upgrading vehicles, etc. Plus you've got the additional competition from EBAY and AMAZON sellers putting pricing pressure on everyone.
ReplyDeleteI believe Overstock sells stuff cheap, so may do well this cycle, but am personally not really spending much time looking into retail stocks (although I do still own WMT at $43)."
Say what say what!?! XRT is almost double the highs from 2007.
XRT is an equal-weight ETF - it's biggest holding is Groupon which isn't a retailer. Probably not the best ETF for retail given how the big players are so much bigger than the little guys in that industry.
DeleteA better ETF for broad retail is probably RTH which has WMT, HD and AMZN as it's top 3 holdings.
RTH has basically performed in-line with the markets since the 2009, so I was wrong about retail doing poorly. Guess my opinion was based on placing too much emphasis on the big misses by the mall clothing retailers like Abercrombie and American Eagle. Seems like a lot of trouble in retail-land the last while, but I guess that's being offset by others.
BB - GRPN is the largest holding of XRT at 1%. Not exactly a huge position. But even then GRPN has been underperforming since its IPO and XRT is still doing well.
DeleteGRPN is absolutely a retailer by the way. Their groupon goods segment is in direct competition with AMZN and their coupon service is basically the same thing as retail.
People justify their valuation by saying its a tech company but it's 100% retail right now.
DeleteIf you look at RTH, WMT is 10%, HD 9%, AMZN 8%, so market cap based, but much more in line with their overall share of the retail market.
DeleteIn XRT, WMT is less than 1% and Home Depot is excluded.
I guess you could say RTH is representative of how the overall consumer retail market is doing and XRT is more influenced by up-and-comer retailers.
No follow through on miners. Closing GDX @ 27.85, SLW @ 25.80. RYPMX off at the close.
ReplyDeleteTo add insult to injury, Emerging Markets continues its ascent. Ditto the broad indexes. Even bonds are higher. In fact, everything other than the one sector I'm holding is taking off today.
Deletethere is nothing more frustrating than when this happens. especially if you're day trading.
DeleteWhy sell today? After all, miners may lift off on Tuesday. They may well rally tomorrow. I'm used to it, and I consider it part of the game. More importantly, the odds are just as good miners gap down (partly due to today's failure to extend Friday's closing rally). With the exception of FCX (copper), miners felt 'heavy' today, and I'm more than happy to trade a missed opportunity for insurance against a major hit.
DeleteRYPMX closed down -0.19 (-0.48%). Total hit to the portfolio was -0.2%, which is a typical outcome when I follow a disciplined approach (ie, taking losses immediately).
DeleteI noticed silver couldn't rise above $24.24 or so, probably some kind of resistance level in the chart at this price.
Delete"Just to be clear, I would not support your decision to put half of your retirement money into an emerging market fund. To me, that is being far too risky with money you should be fairly conservative with. Emerging markets can go a lot lower than people think or that would make sense on many factors."
ReplyDeleteThank you for the warning, BB. Recall, however, that I intended to place a stop at the June lows, which was the support for my fund for the past 3 years...
Good luck David. Hope it works.
DeleteAre there any minimum holding periods or penalties for quick sales on this fund if it does stop out?
Good question! I need to call Fidelity to find out!
DeleteFBN (Furniture Brands) declared bankrupcy today. Glad I got out of that mess with most of my money intact. You'd think with housing improving the furniture guys would do well, but maybe IKEA is taking them all down!
ReplyDeleteTheir brands are not popular anymore.
DeleteThat's the running joke for the furniture business isn't it, declaring bankruptcy over and over again rinse and repeat so the doors always manage to reopen?
DeleteGMO up +7.14%, if anyone is holding.
ReplyDelete...for dear life.
DeleteSold short SPY after hours at $167.76
ReplyDeleteRobot switched from short at 1669 to long today, at 1661
ReplyDeleteBank it. 9ers win and cover whatever the spread is in the Super Bowl this year.
ReplyDelete16-0. Sorry Fins.
DeleteJet's looking at Tebow again.
DeleteThey'll never beat the skins in the superbowl.
DeleteAnother law firm joined the fray today.
ReplyDeletehttp://money.cnn.com/data/fear-and-greed/?iid=H_INV_QL
ReplyDeleteUnfortunately, the chart does not provide a detailed date axis, but seems to be a good indicator of when a downturn has bottomed for the few years, other than the early 2011 which was only good for a short bounce.
It’s mornings like this one that validate the importance of discipline. Gold off -20 to 1365, and miners bidding -2% lower premarket. In this case, the ‘heavy’ action in miners on Monday telegraphed further weakness in the metals. Note also that the steep drops occurred overnight, effectively preventing US traders from participation/ forcing traders to negotiate a gap down. I now have the option to reopen a position, or wait. With prices approaching support levels, the odds of dealers ‘running stops’ become significant. So waiting seems prudent. All opinions may change on a dime, of course.
ReplyDeleteYes, shorting a weak market is the way to go. The S&P continues it's action as well, most likely on global economic news. Watching which way rates go, although rates arguably are still low even if they rise a bit.
DeleteThey even bought up JOY, wonder what they do today? Pd is still near $700
DeleteGaping up 11 points? I've been hearing EM's economies are improving, didn't China just report increases?
ReplyDeleteJO - Have you guys been watching this one? I'm giving it consideration.
ReplyDeleteCramer "The China turn is real and powerful"
ReplyDeleteIF it is, pretty much all stock markets should do well over the next year and longer.
DeleteYou have to stay long at least something in this market. Too much opportunity cost being out.
Lots of good economic news today, but the market has been up every day but 1 in the last 8. Seems like we should get a pullback off today's happy opening, I would think?
ReplyDeleteJOY is tempting if you believe the economy is improving and this drives demand for commodities. Stock is pretty cheap.
Also thinking up buying some AA if we get a sharp pullback this morning on the getting kicked out of the Dow news - we'll see.
1685 - Going by memory, isn't there a gap down from 1685?
ReplyDeleteThe SPX may be targeting the gap at 1680-1685. The strongest S/R is 1669, 1685 and 1691.
ReplyDeleteAA - Close yesterday's gap up? I would go for $7.87, the gap probably won't close?
ReplyDeleteI meant 7.97, sorry.
Delete"Chinas hydraulic excavator sales grew 13.2%, higher than June and July. Caterpillars sales turned negative for the first time since February, but it still outperforming the market and global peers YTD"
ReplyDeleteIDX - Another gap up! Sheesh!
ReplyDeleteSGEN - Cramer pumped this one yesterday. I saw the show at 03:00
ReplyDeleteARO - What do you guys think of an island reversal?
SLW @ 24.42...
ReplyDeleteSLW off @ 24.80...
DeleteBrandt "Nasdaq 100 with a target of 3476"
ReplyDeleteWow what a day. I pulled off my SPY hedge premarket. All of my positions are up 3 to 11% today. Nuts. YRCW is doing the best...and of course I have the smallest position in that one. That one just felt (and looked) right but I couldnt get myself to put more than 10% in.
ReplyDeleteActually MY isn't up that much. I have a 5% position in this one. I think it's the next HSOL/SOL. I think it's going to $5.
DeleteCan't get past 1683 - ????
ReplyDeleteCYD - Will they sell this thing back down now that all the good news is out of the bag?
ReplyDeleteThis gap down island reversal pattern is working like a charm...NLS TA YRCW. What others are out there?
ReplyDeleteHow about ARO?
DeleteThis is probably a pipe dream but I think OSTK has a slim chance of going on a TZOO type run. It has all of the elements....just needs one or two more quarters of momentum in top and bottom line. They have top line and gross margins ramping up + international expansion + high short interest + big insider ownership + small float.
ReplyDeleteAnd...of course...the market has to hold in there.
DeleteAre you still looking for the bearish market longer term?
DeleteI'm cautiously long right now but quite frankly with the nasdaq breaking out and the RUT close to new highs it looks like this was just another pullback. Would love to see some stronger momentum readings for the S&P if it breaks to new highs. Longer term I think it comes down to what rates do. If they stay put then we have headway to move higher. Relative valuations though suggest that the US markets are not the place to be if you want to make $$.
DeleteWhen they couldn't break lower on the RUT and the S&P last week I used that as a stop out point for any longs and decided to start buying OSTK YRCW NLS MY etc because the stops in all of those were clearly defined.
DeleteDRYS - Loking at this chart, the classic pullback at resistance trend line then the breakout higher where everyone jumped on board once it was confirmed.
ReplyDeleteDAMN!
OSTK - Chou Funds Report mid-2013 out with writeup on OSTK
ReplyDeletehttp://www.choufunds.com/pdf/Semi-AR13.pdf
Yeah I think I posted this a week or so ago. I didn't realize he held the position for 7 years. No wonder he wanted out. Unfortunately, I think there's a chance he will miss out on a huge gain but we shall see. Baby steps first.
DeleteKerry - "Our experts are working on this (Syria)"
ReplyDeleteUmm, are those the same experts that worked for Cheney and helped him lead us based on completely false and erroneous information into a horrific snakes den?
On the bright side, chemical stocks seem to be holding their own..... see DD and PPG!
CECO - about as symmetrical an inverse head and shoulders as you can get on the weekly chart. RSI(14) and MACD are all showing positive divergences. This one looks awesome chart wise. Trades at 1/3 book and less than cash on hand. Obviously, it's still unprofitable so that's an issue. The largest shareholder (Blum) now only holds about 3.7 million shars after selling down a large chunk over time. The lid could be lifted off this sucker and it could explode, assuming the new CEO they brought in (worked at SUNY and Strayer before this so good pedigree) can right the ship. Has tons of upside potential and you can use $2.40 as a stop. I'm long at $2.66. Love the setup.
ReplyDeleteAdvice From A Wise Man – Howard Marks of Oaktree Capital gave a presentation at a Barclay's conference yesterday.
ReplyDeleteThe title was "Managing Money in Uncertain Times". In it he had this slide (passed along by a friend):
A Prescription for an Uncertain World
Make sure your expectations are moderate
Emphasize corporate investments
Commit to active decision making – “even doing nothing is doing something”
Remember that the reasons for caution aren’t imaginary – “the improbable disaster” isn’t impossible
Balance the many pros and cons – “it’s not supposed to be easy”
The outlook certainly isn’t so propitious (and assets aren’t so cheap) as to call for investing
aggressively. But at the same time, conditions aren’t so bad and prices aren’t so high that it’s time
for extreme risk aversion.
My bottom line: move forward, but with caution
propitious - lol, nice word!
DeleteTOF, which Regional Bank was it you mentioned last week, I lost track and forgot to jot down the ticker?
ReplyDeleteI like both IBKC (took over a ton of deposits in the FDIC bailouts in 2009-2010) and BKJ (much much smaller but it has great growth #s and pays a nice 4% div (they pay special div every year)).
DeleteBy the way, BKJ is typically extremely illiquid but the past couple of days it has had less disparity between bid and ask. My guess is someone is trying to sell out of the stock. I have liked this one (mentioned it a couple of times here) for the past 2 years. kind of like the AMNF of banks. on no ones radar.
DeleteBKJ, haha, you were chatting that up in the 9's.
DeleteBSBR sold out has had a nice run here, I'm a short-timer not B&Her.
Anyone seen Bloomberg TV, "She's a ManEater."
IBKC - Oh crap that thing is running on all eight!
DeleteOkay, I still think Yellen is going to be appointed and that should prove great for these regional banks....
silver miners are stinking up the place again today, it must be time to buy again, I guess.
ReplyDeleteSilver's had a pretty good oversold bounce. It needs to either prove the bear is over and continue upwards or (more likely in my opinion) resumes it's downtrend.
DeleteJO - Could be higher low?
ReplyDeleteDefinitely seeing the first signs of a bottom on the chart but nothing yet that sticks out. I typically like to wait for a rally that fails. We all missed it or went in too early but look at the weekly chart for WLT.
Delete"Plastic microbead face wash, plastic microbead contamination is showing up in waterway quality testing."
ReplyDeleteWTF, plastic beads in face wash? How much more stupider can we get?
Man I really like the technical setup in CECO. If they can somehow get back to breakeven then having $240 Million in cash (vs $170 Million mkt cap) makes this thing look like one helluva bargain.
ReplyDelete