Tuesday, October 22, 2013
10/22/13 Days Like This
http://www.youtube.com/watch?v=BteIwbKU_iQ
(a) Alcoa (AA) is a clear example of institutional accumulation underway> up +11% on high volume. The company has been in the doghouse for over 2 years, and has plenty of room to run. No interest in chasing today.
(b) TLT up +1%, and running away from me. Had I not been on the road yesterday, I may well have reopened a position in RYGBX- but that’s water under the bridge.
(c) Reopening a short-term position in VXX @ 12.80.
(d) Lots of irrational exuberance on display. Patience is required for good entries on days like this. If the indexes are headed for new highs, there’s plenty of time to get on board. How do I know? Thirty years of watching the market.
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I'm curious, have you ever seen anything like we've been witnessing the past several years during your 30 yrs of watching the market? It looks to me like emerging market growth is being priced........
ReplyDeleteIt's somewhat reminiscent of 1999. We don't have the high valuations (although Hussman might disagree), but we're running close to euphoria in some of the tech names.
DeleteVXX off @ 13. That was fast, Anytime an ETF moves +1.5% in 20 minutes, I’ll take the gain.
ReplyDeleteI wonder if AGO is starting it's next leg upwards. It has valuation support, improving economy helps municipalities which helps AGO, and the outliers of Detroit and Puerto Rico seemed to be factored into the price over the last 6 months.
ReplyDeleteUnless we get another municipality getting into trouble, which is getting more and more unlikely, I think we are set up for some good upside.
VMW went long just now
ReplyDeleteGDX and AEM builds close out for small loss, mostly flay now.
ECA, still long since JUN seems to have underlying strength here.
I decided to take AA off at $9.4. I figured I am most likely missing out on further gains but I don't care.
ReplyDeleteAlways nice to lock in a profit. Plus, it is very reasonable to expect a pullback of some sort after such a good run. Who knows? But there will always be another stock to buy.
DeleteI'm still holding as I do believe in the long term story and if it does triple over the next 2 or 3 years, that will be a great ROI for me.
PNRA reported decent earnings and weaker guidance...certainly not good enough to warrant a 25 p/e. should sell off further.
ReplyDeletei like the brand a lot, though, and will look to buy around $135 to 140ish if it comes.
DeleteI bought CREE after hours at $63.85. probably dumb but I think it runs back up. Using the lows of the afternoon session to stop out. I just think this stock is a huge long term winner eventually but I am playing a shorter term rebound.
ReplyDelete05:49 PM EDT, 10/22/2013 (MT Newswires) -- Cree, Inc. (CREE) dropped in Tuesday's night trade after missing Q1 revenue estimates and setting its Q4 earnings view below the Street.
DeleteCREE tumbled to an early after-hours low of 61.72 before steadying in a negative range of 66.15 to 63.00. A pre-market open Wednesday may have potential in the 64 to 63 area. Over the last nine years, CREE is favoring widening in its trade, posting 18 wider post-earnings share moves and 15 reversal moves. Looking deeper into the data, CREE has declined in the after-hours after earnings 17 times, but it has built on that downside move less than 50% of the time, doing so in seven quarters. With limited widening events in place we would be cautious on the short side of CREE Wednesday. Nonetheless, with significant sell pressure recorded in the shares Tuesday night at 66.25 to 64, shorts may want to target this range as a potential ceiling level through the early going on Wednesday.
Does the Oct 1 gap bother you? Or is that too easy?
DeleteWhat happened in August and October to cause the two month pothole?
Delete---- it. 500 shares @ 63.20.
Delete50/50 odds are traditionally the best the market offers. I don't know why that is.
DeleteWatch Canaccord downgrade CREE from Buy to Hold with a target of 60 after recently upgrading from Hold to Buy with a target of 80.
Deletehttp://www.thestreet.com/story/12078387/4/5-hated-earnings-stocks-you-should-love.html
If Canaccord instead reiterates Buy + target 80 remind me to send the rep a thank you email tomorrow.
DeleteI figure there has to be a smackdown coming our way, how else can the recent action be justified? More than likely the head of SEC gets a hangnail or something and the whole market sells off........
ReplyDeleteCP- Were you following CREE? Is it a buy at -15% after hours?
ReplyDeleteNot if it's down on good news, it doesn't get any worse than that. The reason we never bought it was b/c we figured foreign competition (Asia) would skunk CREE.
DeleteIt's down on a revenue miss. But I get your point.
DeleteI don't think it missed revenues or earnings...guidance was somewhat timid. remarks on the call were positive though...and the bigger picture is LEDs are a tiny fraction of the total overall market. I think it's 1%. It gets bid up again...whether or not it's tomorrow is a different story. We'll see.
Deletehttp://blogs.barrons.com/techtraderdaily/2013/10/22/cree-drops-13-fyq1-rev-misses-q2-view-misses-capacity-the-issue/?mod=yahoobarrons&ru=yahoo
Delete"Canaccord Genuity analyst Jonathan Dorsheimer, who has a Buy rating on the stock, and an $80 price target, this afternoon writes In regard to the outlook, “What may be occurring are capacity limitations in the company’s bulb business, but we will need answers on the call to determine.”"
Capacity limitations aren't necessarily a bad thing. They grew top line 24% and are projecting 4.6% sequential growth (equates to 20% annual growth). Both were 0.3% below estimates. In my opinion, though, the market sees the large untapped market + one of the faster growing large cap stocks + 10%+ short interest and it ultimately goes up.
Up on bad news is what we should be looking for.
DeleteCP, we may get a smackdown this quarter still, but maybe not.
ReplyDeleteWe seem to be moving fully out of the disbelief stage into the acceptance stage of the market cycle and I think there is a lot of money that wants in. Not sure if you saw David Rosenberg on CNBC today, but he has been quite bearish on equities for a few years now and is turning bullish on stocks and negative on bonds. I bet there are a ton of people who are still in bonds (look at the inflows the last few years) who need to sell and move into stocks as well. I could see every small pullback being bought because of this, unless something unexpected happens, probably with some government doing something stupid.
BB - if earnings really are $115ish like you said then when you combine interest rates with inflation rates you could get a scenario where the multiple is 17-18 times (vs 15ish right now on those earnings). Typically I think with this type of inflation and interest rates we would see 20x but this is not a normal environment with all time highs in profit margins and massive stimulus. On the other hand, the total market cap to GDP ratio that Buffett likes to use says we're overvalued...
DeleteWell, I keep thinking/expecting that if/when emerging market growth kicks into high gear these corporate internationals are going to be there participating front and center, along with their suppliers. We could go way higher than we might imagine, and the 2008 crash was the advanced knockout blow that made disbelievers of the vast majority.
DeleteMark- Starting next month, you won't need to drive as far to win/lose money!
ReplyDeletehttp://www.bizjournals.com/sanfrancisco/blog/2013/07/800m-sonoma-casino-hits-restaurant.html
The story behind Sergey Aleynikov.
ReplyDeletehttp://www.vanityfair.com/business/2013/09/michael-lewis-goldman-sachs-programmer
APOL - Up on bad news, right?
ReplyDeletethose educ stocks are en fuego. I still can't quite figure out why i sold CECO when I did for a marginal gain.
DeleteTRQ - What the heck is this?
ReplyDelete"The company's principal mineral resource property, the Oyu Tolgoi project, is a copper-gold project located in the South Gobi region of Mongolia."
TCK - Don't tell me this one's going to break up thru resistance.........
ReplyDeleteCUBA - Huge volume in this ETF........ Wonder what it means?
ReplyDeleteCADC - Holy crap.....
ReplyDeleteCECO- The tell was when it went up the day LRN reported and crashed. I did nothing of course.
ReplyDeleteWhat was that miner you were looking at a couple weeks ago, was it ANV?
DeleteYep. ANV.
DeleteYRCW - Right on the lower trend line here.
ReplyDeleteTook the hit on CREE at $61.6
ReplyDeleteProbably the smart move. I plan to give my position more time.
DeleteScaling into AA @ 9.11.
ReplyDeleteRe price movements in AA/CREE> it never fails to amaze me how easily investors flip between greed one day and fear the next.
ReplyDelete2nd- I've been to that casino. A buddy of mine is working there. It really is amazing. They better get a TON of people there. It's huge.
ReplyDeleteFBP - "Reported 3Q results of $0.10, in-line with BofAMLe and the Street, with higher NII and lower expenses offsetting lower fees. Expect the stock to react favorably to results given continued credit improvement and slowing attrition of loan balances. Investor focus on 11AM call will be on management's outlook on credit picture and potential impact from PR debt restructuring."
ReplyDeleteAdded to AA @ 9.01.
ReplyDeleteMiners are getting tempting to at least take a flier on. PM and PM miner charts look good and Copper (JJC) seems to be making a head and shoulders bottom.
ReplyDeleteI've got a couple Canadian smallcap miners that have good risk/reward, but of course, it is all dependent on the price of the metal. If it can stay in current levels, they should do well.
The thing that holds me back is that after such a huge bull run, I would think this bear would last much longer than it has so far.
Kind of hard to be bearish today with XHB doing this well...
ReplyDeleteMarkets seems like profit taking. People have a lot of profits to protect from the last couple of weeks.
DeleteBack in CREE $61.09
ReplyDeleteand $60.98
Deletesold it for $61.35. What a wuss.
DeleteI've always preferred being a healthy wuss to being the guy with a long history of concussions and fractures.
Deleteha. true. and with that i just bought back at $61.3. i'm thinking it moves back to $62.3 (high of day)
Deletealright i think i'm done with this sucker. sold it at $60.9x. not sure why i'm bothering actually.
DeleteTo be honest, I'm almost wondering why I would sell. The only reason would be the expectation that it declines from here. What if the company performs according to guidance? Maybe it's a buy, and not a sell. It's not like we bought yesterday> those would be the guys throwing in the towel today.
DeleteYeah I hear ya 2nd. I was mainly playing for a reversal and that's not happening. However, I do think the market miraculously closes flat to up today and if that happens CREE will definitely reverse higher. I already have enough long money (bought SPY at $174.19 just now as well) so I'm ok with my exposure to the market.
Deleteman look at oil. Jeez.
ReplyDeleteXHB and IYT both performing well.
ReplyDeleteHPQ to enter 3D printing...
ReplyDeleteFrom Ryan Detrick, on average for last 60 years, next few days are weak, but after that market solidly to the upside with almost no pullbacks into year end:
ReplyDeletehttp://schaefferstradingfloor.com/chartist-corner-this-chart-says-get-ready-to-sell/id=6797
ECA, reacted well to earnings will most likely cut by the end of day as this has a hard time holdings gains.
ReplyDeleteBB, gold equities, still like these here LT, decent risk reward especially with LT mind-set, too much money printing trough-out the world with no real way out of it.
CREE, enjoy the ride gals, 2 humongous gaps of last two earnings.
SLB looking to get back in around 90 ish, goes to 100 by yearend.
PHM, looks interesting as does VMW
SOX wack a behind, smack it good.
Sold SPY at $174.6. I bought a few shares of BIDU at $151.99
ReplyDeletesold BIDU at $153.04
DeleteSo I'm wondering if the next flurry of negative PR's has begun, as always happens once index's hit their upper Bollenger bands...
ReplyDeleteMy best guess is that "breakout" above highs for CREE was a fakeout.
ReplyDeleteWuss'd out myself, CREE off @ 62.50.
ReplyDeleteWell played. I would have done exactly the same if I was still in it.
DeleteCECO really makes me feel like a sucker. I bought and sold that at $2.7. I actually had a 25% position in that. Jeez man.
ReplyDeleteCREE per UBS, in case you get guys get re-interested.
ReplyDeleteExpectations still ahead of reality
􀂄 Reports in-line Sep-13 but Dec-13 EPS guidance 12% below consensus Cree reported Sep-13 sales and EPS of $391M and $0.39 with non-
GAAP gross margin up 100bps to 39.2%. LED products (upstream) segment sales were flat q/q while segment gross margin was up 90bps mainly due
to higher licensing revenue. Lighting products (downstream) sales were up 11% q/q with majority of the revenue growth coming from fixture sales.
Lighting segment gross margin increase of 180bps was driven by 1 full quarter of Cree’s lower cost Gen-2 bulb technology.
ô€‚„ Improvement in bulb margins a positive but components likely plateauing We estimate Cree’s Sep-13 LED bulb sales were up 48% q/q to $22M
(6% of sales) at a gross margin of 5% compared to breakeven in Jun-13. We believe Cree’s lower cost Gen-2 bulb technology also allowed it to
achieve EnergyStar certification faster than expected which we believe is driving the majority of the higher opex spend of $5.5M in Dec-13. On the
other hand, we estimate Cree’s LED component (upstream) gross margin was flat q/q excluding licensing revenue.
􀂄 Lower estimates as Dec-13 GM guided down 70bps with sales up +5% q/q We lower our FY14 and FY15 EPS estimates by 11% each to $1.65
and $2.10 from $1.85 and $2.35 previously on higher than expected impact of the product mix and lower than expected operating leverage near term.
We estimate LED products gross margin to stabilize at 45% and Lighting products margin in low 30s.
􀂄 Valuation: Maintain Neutral with a 12-month price target of $65 Our PT is 25x our CY15 EPS estimate of $2.25 plus net cash of $8.90. We look for
conviction on its bulb business before reconsidering our investment stance.
There was an Home Depot add for CREE house bulbs this morning, so there's an ad campaign out there.
DeleteThere are several large cap domestic internet companies that look attractive when you look at cash flows. EBAY EXPE IACI are just a few.
ReplyDeleteeBay trailing twelve months free cash flow stands at $3.4 Billion, up 50% in the past 2 years. The company trades at 19.9 times that. Given the moat around the marketplace and the Paypal division, both of which would be nearly impossible to replicate, I think the company should trade at around 20X forward FCF estimates. Let's assume that is around $4 Billion, I think the company should be in the $70's. If I had to choose a portfolio of longer term holdings I would definitely consider eBay.
DeleteIBKC 52 week high today.
ReplyDeleteBack in BIDU at $152.5. Mental stop at $151.9
ReplyDeleteaaaand off again. $152.7. back to even on day trades after the CREE loss
Deletebidding 154.2...bummer
DeleteRalphie speaks up:
ReplyDeletehttp://nyif.com/ralph.html?WT.mc_id=201310231028,Ralph-Twitter,TechAnal
http://nyif.com/ralph.html?WT.mc_id=201310231028,Ralph-Twitter,TechAnal
Deletecheck out bond/equity flows, mid page.
ah same link, bing took me to twitter first. go bing
DeleteECA, when I sell them they go up and when I keep them they go down; sure wish I could figure that one out. Ah the joy of it all.
ReplyDeleteRalphie, Alphie
Isn't that the truth!
DeleteTell me about it. RH
DeleteI decided to take a long position in DECK today at $58. My thinking is the stock will rebound a bit heading into earnings tomorrow after close. Could be way off on this call but 3 weeks ago it was at $68 so even if earnings are weak I think some of the 30% short interest will be covering after already being up a lot heading into the report.
ReplyDeleteTraded out my CNI back into UNP. I think they are the top 2 railways and I am indifferent to which one I hold, but think rails are a really good long term hold.
ReplyDeleteMade about 8% on my initial flip from CNI into UNP and then about 15% on the flip from CNI back to UNP this time, so has worked well and reduced my cost by 23%.
Perhaps this is a strategy I should look into for other stocks. Seems to be a good way to take advantage of stock volatility (or maybe I just got lucky!)
The reason I made the trade now is UNP is cheaper than CNI and CNI ramping up today on good earnings from CNI and CP.
DeleteI just ordered something from MSFT over the phone. The dude wouldn't shut up about his life and said 'fuck' about 10 times. It was so strange and took so long I wondered if I was on some bogus website.
ReplyDeletePoor guy, doesn't get it.
DeleteVery strange. Maybe the "dude" is estranged from life as we know it and pissed too. Not a good sign for MSFT in any event. I had a much more polite but maybe too over eager fellow from Dell a couple - three years ago.
Delete(a) Patience paid off, and an additional limit order for AA (Alcoa) filled @ 9.02. How did I come up with 9.02? Following a breakout like yesterday’s, the stock price will typically retrace up to 61.5% (the so-called Fibonacci level) of its move (Tuesday’s range was 8.64 to 9.63, or about a buck), so I simply subtracted 0.62 from 9.63, and added 0.01 to increase odds of a fill. The position represents the first allotment of a long-term position. Once institutions start buying, I expect a downside ‘floor’ + plenty of upside over the long term. AA currently bidding 9.21 (+2% from the 61.5% ‘fib,’, not unusual when fund managers not wishing to be caught empty-handed start crowding the trade.
ReplyDelete(b) TLT continues to fly! Not much I can do about that.
(c) Miners, on the other hand, are now selling off -3%, after 4 days of gains (totaling about +10%). I actually think it’s a buy here- I just don’t have the guts!
(d) VXX spiked as high as 13.48, now bidding 13.17 with cooler heads prevailing.
Trying to find a small-cap miner that can be profitable with low gold prices. Been going through a few stocks that people I respect like and they all do well at higher prices, but are having tough times with $1,350 gold.
ReplyDeleteHow about FCX?
DeleteI dunno how ANV would do if gold collapses, you probably have a better mechanism for finding lowest coast than I.
DeleteHow about one of the streamers, like SLW?
JCP +7%. I know better than to ask WTF. Just another day in the capital markets.
ReplyDelete(a) VXX closed @ 13.08, and bidding 13 after hours. Starter position @ 13.
ReplyDelete(b) AA bid as high as 9.29 after hours> Took 1/2 of my position off the table, as I'm sensing a little too much exuberance. This will give me a shot at lowering my basis to <9.
(c) Emerging markets gapped down at the open and stayed down all day, closing at the low on above-average volume (EEM -2.3%, RYWVX -4.3%). That raises a red flag, and strengthens the case for taking partial profits.
(d) Miners closed at the lows (GDX -3.23%).
(e) TLT pulled back in the last hour to close up just +0.39%, then declined further after hours to 108, which is essentially unchanged for the day. If offered an opportunity to open another position in RYGBX tomorrow, I'll probably take it.
Overall, I'm a bear at current valuations + sentiment readings. But it's hard to short with indexes near all-time highs.
Reopened CREE @ 61.71. Just kidding.
http://finance.yahoo.com/blogs/breakout/weak-economy-driving-stocks-record-highs-harrison-112049472.html
ReplyDeleteI love the skepticism STILL. it's really unbelievable. these guys and the commenters below this can't be serious can they? this has been going on for 5 years now, this negativity. WTF.
This is the first I've heard $120 consensus estimates for 2014. If that's the case then the odds of us hitting 2,000 are actually decent.
Is this guy for real:
ReplyDeletehttp://www.marketwatch.com/story/2014-year-of-the-boom-bet-on-the-bulls-now-2013-10-23?link=MW_story_popular
This is a joke right? He's the same dude that has been hiding under his desk the past four years. And now he's proclaiming that he recommended buying 4 years ago?
You know, I glimpsed that headline/byline several times today and immediately assumed it was a Farrell joke. Since you brought it up, I read through the article. No joke, unless he plans to announce 'Gotcha' down the road. So I don't know what to make of it.
DeleteUnfreaking-believeable!! He has been mr. end of the world for the last 4 years.
DeleteDoesn't bother me to see smart guys like Reosenberg becoming bullish, because these guys look at facts and the economy and company performance, and you want them to gradually come to the bull side and bring more money into stocks. But when a shrill like Farrell jumps on the bull side, makes me wonder if we are closer to the end of this run than I thought.
I do believe that we are close to the end of the run. Do not see a better economy. Amen.
Deletei don't know why i bother looking at this because it's so hard to figure out but look at this chart of the DJIA from the 1940's to 1960:
ReplyDeletehttp://stockcharts.com/freecharts/historical/djia19401960.html
notice that from 1951 to 1953 while the market trended slightly higher, it basically traded sideways for 2 years. this was after the bull market started in 1949 but was also after the market was up 3-fold. then the market went up another 100% over the next 2.5 years. so when people say the market is up too much too quickly a chart like this says that's not necessarily true. didn't the market basically trade up marginally from may 2010 to november 2012? from 1,220 to 1,340 over a 30 month period?
if we think about the market since 2009, we haven't had a period where europe, japan, china, and the US are all experiencing growth at the same time. if that happens then maybe it is possible for earnings to go up 7 to 10% for the next couple of years from a $110 base. thats $135 to $146 earnings by 2016. if you get an expanding multiple to say 18 then the S&P trades up to 2,600 or double what it was in November 2012. coincidence?
then of course the other way to look at this is...we traded sideways for 13 years from 2000 to 2013. we are just now breaking above this and could potentially have a long way to go higher.
DeleteUS companies experienced a booming growth period providing the world with American products following WWII
DeleteYou could read from this charts of the Wilshire 5000 that we had a 10 year bear into 2010, and are now starting another bull similar to the one that started in 1975.
Deletehttp://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=WILL5000PRFC&log_scales=Left
And regarding earnings, people like Hulbert (http://www.marketwatch.com/story/simple-math-does-not-support-the-bulls-2013-10-23?dist=beforebell) are missing the fact that companies revenues are based on Nominal GDP including inflation, not real GDP. So, if we get weak 3% economic growth plus 4% inflation, so revenues go up for companies by 7%, so no reason earnings could not could up 7% as well. People might be willing to pay up for the inflation protection provided by stocks in a moderate inflation environment at the 18 times you suggest, and now we've got S&P 2600.
DeleteVAR - $73 in AH, lost some ground due to earnings report.
ReplyDeleteI don't know, TLT looks like an excellent short to me...
ReplyDelete10yr rate seemed awfully low yesterday.
DeleteIf you think about it, rates are pretty much guaranteed to be higher in the future, the question is more the timing.
DeleteBig miners, AEM and GG have both beat estimates in the last couple of days. Makes me think analysts have become too negative on the outlook for the miners.
ReplyDeleteper ubs
DeleteAll that glisters…
ô€‚„ Q1. How’s investor sentiment on gold? A1. On our trip across the US Midwest and West Coast last week, investors had one of two views on gold
and silver - either profoundly bearish, or profoundly indifferent. In this piece we highlight why in commodity strategy we see upside risks to the house
view & consensus on gold and silver in the year ahead. Key to this is our expectation that new regulation will put substantial pressure on banks to
deleverage – raising the onus on the Fed to reflate much harder in 2014 than markets are pricing in. In this view we are more cautious on US macro
than the house view.
􀂄 Q2. Is there a simple way to think about regulation & deleveraging? A2. We use a pawnshop analogy to show how collateralised borrowing boosts
growth, raises asset values & misallocates capital – and we show how regulation can cause this process to unwind – all without affecting traditional
measures of money supply.
􀂄 Q3 Which stocks do you recommend? A3. Our most preferred precious metals stocks boast strong returns and good cost control; Fresnillo, Silver
Wheaton, Franco-Nevada & Goldcorp. Within the industrial miners, we have a strong preference for low cost miners with the potential to raise cashflow
sharply; Rios & BHP over high cost, high capex names like Kazakhmys.
TCK beat, riding coal.
Delete"Strong coal operations lead to 3Q
EPS beat. Cost savings continue Objective $33"
That move down in the baltic dry index sure seems like a knockout blow. Lots of stops getting taken out in dry bulk shippers. I think this is probably an ideal time to be looking to get long for longer term holdings.
ReplyDeleteHow about BALT, reports in a few days and right at the end of a triangle that the initial breakout (up or down) might be false?
DeleteBeat by cruise line RCL has stock up 5% pre-market, pulling up CCL over 2%.
ReplyDeleteI could've been a little more greedy on this one by adding on that dip below $32, remind me next time.....
DeleteIn general, the earnings I've seen so far (for the stock I follow) have been broadly quite good:
ReplyDeleteCNI - railway - big beat
CAM.TO - Steel manufacturer - big beat
ORI - truck insurer - big beat
Even Unilever is up on somewhat weak earnings (in line with warning) and the 2 golds I mentioned above also.
The misses seem to be mainly in legacy tech with many misses, and now Symantec (SYMC) today.
LAD - Neut -> Buy
ReplyDeleteI'm leaning toward holding my DECK through earnings today. It's a small 5% position so I'm comfortable with the risk. Of course if it goes crazy to $65 today then I'll change my mind. I will look to double down if they drop after the report. I still think Uggs are a very long term popular brand. My 13 year old niece asked for one item for Xmas this year: a pair of Uggs
ReplyDeleteFBP or BSBR ----- Which one?
ReplyDeleteBonds continue to rally. Miners rally. That leaves me with just NGas + AA for ideas. Maybe TZA.
ReplyDeleteany of you guys follow SLCA and HCLP? they're in the fracking business. Really impressive growth and growing dividends.
ReplyDeleteI don't but will look into them.
Deletecool let me know what you find.
DeleteURG - News to sell into, no doubt.
ReplyDeleteNat Gas fireworks in 8 minutes. Who's playing DGAZ? UGAZ?
ReplyDeleteI mean we've clearly shown that no matter how shitty the prospects of an industry or company are, the market is continually looking forward and seeing brighter times. It was pretty universally known that for profit colleges are worthless...or so the media would have you believe. The student loan bubble was about to burst...etc etc. However, look at EDMC. After bottoming at around $3 last year its now trading around $13. CECO is ralling hard lately. APOL? Almost a double from the lows. Obviously timing is everything but it never fails to show you that when something is hated universally, it typically means that a longer term bottom is very near as the pool of sellers dries up. I really think it pays to wait for a clear sign of a bottom in the charts. Not all bottoming patterns are perfect though because you do get bottoms like SID / BSBR / etc that don't really offer you an opportunity to get back in. But a good chunk of them do and if you pare down your list to the ones that you can make a case for fundamentally that are also offering a fairly low risk entry then the odds are in your favor.
ReplyDeleteCould JCP be the next one? I remember emailing with I think Jesse or Mark last year about how JCP would eventually have an excellent opportunity for longer term investors at some point. That was back in Nov 2012 when the stock was crashing and it was all over CNBC. Well if you can get comfortable with the fundamentals of the business and with it staying in business permanently, then it's definitely a candidate. The fact is it's a well known brand in an industry that isn't dying off or offering up a product that is obsolete (a la BBRY). So if they can navigate these hard times then there's a chance there. I think it's very risky right now with the amount of debt they have on hand but I don't know the maturities of it nor do I know the business well enough to have conviction. On the chart in my opinion at least, it needs to start showing some positive divergences on the weekly charts (i.e., MACD / RSI / etc rising while price is falling or flattening)...that's usually a starting point.
Let me know if you decide to jump in.
DeleteOnly in the capital markets will you find investors dumping a company like CREE for a minor adjustment in guidance, and move the money into JCP instead despite rumors of bankruptcy.
DeleteNeed to do a lot of research on it first to make sure they stay in biz. My gut instinct in just looking at the chart is that it needs to really flush people out...maybe a final drop of 25 to 50% in a 1 to 4 week window. Then a double bottom. all while showing positive divergences. And all assuming the company's fundies and capitalization structure are good enough
Delete----! Kass is opening a short on TLT via TBT. Do I fade Kass? Or do I respect his move and back away from thinking about the long bond?
ReplyDeleteI think he's right.
DeleteDon't you think bonds will catch a bid if the indexes sell off?
DeleteI don't think the index sells off until 1,800 at least. I think Bonds are expecting a selloff...when the market rallies farther then I think bonds will "collapse" back to recent lows.
DeleteAny of you guys still follow SYNC? I see they recently won DirecTV as a customer. They have $38 Million in cash on hand vs a market cap of $69 Million. The stock looks like its putting a bottom in.
ReplyDeleteI sold BIDU yesterday near the lows of the day after a small gain. Sharp stick in the eye.
ReplyDeleteanyone else still following PACB? took a nose dive on earnings but isn't the deal with Roche still a major catalyst for the future?
ReplyDeleteHere is the fool's perspective, followed by a plug.
Deletehttp://www.fool.com/investing/general/2013/10/23/why-pacific-biosciences-of-california-shares-sank.aspx
We're caught in the Bernanke Grip, which is the financial derivation of the Bernoulli Grip:
ReplyDeletehttp://upload.wikimedia.org/wikipedia/commons/9/9b/Bernoulli_Gripper.png
Sold my full position (was one of my largest) in insurer Assurant (AIZ) today.
ReplyDeleteStock is up 65% YTD, at book value, so increases will grow with earnings unless they can get a higher valuation. Their ROE is around 10%, so stock should increase 10% a year. I don't think the market will give a higher valuation to a 10% grower in financial services these days.
I'm sure I can find something better going forward.
wow. helluva run for that stock.
DeleteDecided to take an opener short again in TLT at $108.18.
ReplyDeleteAre you directly shorting TLT?
Deleteor are you using TLT as a short on the indices?
Deleteshorting TLT directly
DeleteYRCW, what a trip, the ying yang of all this never ceases to amaze.
ReplyDeletehttp://blogs.wsj.com/moneybeat/2013/10/24/muddy-waters-targets-mobile-firm/?mod=yahoo_hs
ReplyDeleteWe need to get on Muddy Water's twitter feed.....and catch these before they drop 60%.
DeleteSold my DATE flat. No interest in getting NQ'd even if it was only 2K shares.
DeleteNQ> That was RevShark's stock of the week. Holy ----.! A -50% haircut has to hurt regardless of position size.
ReplyDelete(a) Replaced the AA taken off last night @ 9.29 (half position) at 9.06. Basis for current allotment=8.87.
ReplyDelete(b) If I’d had the guts yesterday, I would be up +4% on miners.
(c) Emerging markets (-0.14%) failing to confirm the US rally.
(d) TLT reverses, now down -0.28%. Not enough of a pullback for me.
(e) VXX closed at the open around 13.08, reopening now @ 12.85.
(f) JCP off -5% @ 6.69. What happened? Traders likely reflexively responding to worrisome news re a 300 basis point spike in JCP credit default swaps (a type of insurance against the risk of default). Is that really ‘news,’ though?
DECK crushed earnings wow.
ReplyDeleteSold at $65.6
Deleteprobably will leave $$ on the table but screw it. Up 13% in one day. worst part is i doubled down today to a 12% position at $57.4 and sold half the half i doubled down on at $58.1.
Deletejesus CECO at $5 after hours. Un friggin believable.
ReplyDeleteman i am shocked at this one. it's now up 110% from when i bought it just 3 weeks ago. i sold it for flat when i saw it go to $2.9 then back to where i bought it at and got scared out. funny how that stuff works. another example of having too much in one stock. i had a 33% position in it.
DeleteSo shouldn't it double from the close?
Delete" Career Education sells European business for more than total market cap"
Lots of good earnings reports today. I'd be shocked if you don't see bonds retrace the majority of their upmove recently. Stocks lead bonds, contrary to what people believe. At least it has been that way for almost 5 years now.
ReplyDeleteThe move up in REIT's must be a trap. Europe supposedly has been a beneficiary of low US rates.
DeleteMark - I am actually going to be looking for some opportunities to buy China stocks on that NQ selloff. I think Muddy Waters' record has not been as good lately and it could offer up a chance or two.
ReplyDeleteNQ - Is that shark guy authoring for MW?
ReplyDeleteDECK - Talk about bad luck! :(
You know the Shark. James DePorre.
DeleteNUAN/MM - Man, these two turds have died.....
ReplyDeleteNQ: http://www.muddywatersresearch.com/research/nq/initiating-coverage-nq/?link=mktw
ReplyDeleteI expect more volatility in this stock tomorrow.
DeleteVXX @ 12.81. 1000 shares. s&g.
ReplyDeletehttp://finance.yahoo.com/echarts?s=HSGFX+Interactive#symbol=hsgfx;range=5y;compare=^gspc;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
ReplyDeleteDude.
NQ - I'm just getting into researching this. So far I think there's a decent chance this is going to be a good buying opp if it comes close to the lows of the day. Here is a response from Toro Investment Partners on Seeking Alpha:
ReplyDelete"Today was one of the best buying opportunities we've seen in the stock market in a long time.
Regarding the MW report, there are three types of allegations:
1. Those that are quantifiably verifiable through facts
2. Those that are qualitative in nature and therefore not quantifiably verifiable
3. Those that are immaterial to the business even if true
An example of type 1 is the cash the company allegedly does not have. Having verified the cash balances ourselves, we are highly confident that the foundation of MW's research is wrong. Otherwise, the cash could not be there, but it is. We expect the company to refute these type 1 allegations immediately tomorrow and put them to bed.
An example of type 2 is the notion that NQ's code is unsafe, that it leads to security leaks. This is an opinion, like calling Microsoft Windows an unsafe operating system or Android as an OS an unsafe OS. No matter what the company does to refute these allegations, I'm sure MW will issue an opinion that they disagree. However, there are numerous ways in which to use facts to establish credibility among truly unbiased people, and we will share our views on these types of allegations when we have an opportunity to write them up.
An example of type 3 is what the attach rate at some Target stores was on the day of their visit. Frankly, even if that were all true, it is such a small portion of their business that, in the grand scheme of things, who cares? However, we fundamentally disagree with those type 3 observations because we have done work that indicates otherwise.
Largely, this was a hit job issued to scare people like the various folks on this comment thread into selling to profit from a short-term move in the price. Here is the track record of companies that Muddy Waters cautioned against since Sino-Forest, their only notable call:
6/28/2011: Open letter to SPRD. Went from $12.95 to $8.59 that day. SPRD is now at $30.44 as it waits to be acquired by the investment fund of one of China's top universities.
11/21/2011: Publishes FMCN hit job. Went from $25.50 to $8.79 that day. FMCN was acquired by leading global PE firm Carlyle for $27.42.
7/18/2012: Publishes EDU hit job. Went from $14.62 to $9.41. EDU is now $28.08 and climbing quickly.
11/26/2012: Publishes hit job on Olam International Limited. Went from SGD1.66 to SGD$1.395. Currently it is SGD1.565. This is the only one that is lower, though not by much, since MW initiated.
5/10/2013: Tweets that VIPS may be fraudulent. Went from $32.70 to $31.26. Today, closed at $73.30
7/7/2013: Publishes hit job on AMT. Went from $74.71 to $68.36. Today, $80.38.
We strongly believe NQ is going to $45 and this is an outstanding gift from Muddy Waters to NQ shareholders. "
http://y.ahoo.it/E3tQWJJk
ReplyDeleteNQ- I don't know guys. Remember when HEK bought China Water and Drink? No matter what you think of HEK, those guys aren't idiots and had what they thought was full acccess to the books.
ReplyDeleteyeah its tough man. i feel like you can run across that with any company in any country, though. need i say FMD again? i've read enough to have doubts but i do believe as a short seller muddy waters is clearly biased and motivated to stretch the truth without lying. i don't believe they operate with integrity.
DeleteVXX off @ 12.88. Good for early am s&g.
ReplyDelete