Saturday, December 21, 2013
12/21/14 2014 Predictions
(a) DJIA. No clue.
(b) Bond yields. No clue.
(c) Emerging Markets. I can't say whether they end up or down for 2014, but I'm pretty sure they'll outperform the DJIA on a relative basis.
(d) Hedge funds. No clue. It's tempting to say they'll outperform the broader averages, but we all know losing streaks (relative to indexes) can last far longer than anyone thinks possible.
(e) Gold. Speaking of which. I have no idea where gold prices end up next December, but I think we'll see a drop below 1000 before we see prices above 1500.
(f) The odds that at least one unexpected trading opportunity occurs each day. 100%.
All of the above is just another way of saying that it's difficult to predict outcomes based on highly emotional decisions made simultaneously by hundreds of millions of homo sapiens. But spotting at least one trading opportunity each day due to panic or greed is a certainty.
YTD performance remains around +8%. Seven trading days remain in the year. Any and all outcomes are still possible!
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$SPX - Speaking of predictions, I notice Caldaro has reworked some of the more recent wave-counts based on this past weeks large moves. Some excerpts:
ReplyDelete"Should the market follow this QE/SPX relationship, as we expect, we should now be looking for a potential bull market top between September and December of 2014."
"Should the FED continue on the path suggested we can now project a bull market top between SPX 1965 and SPX 1992 by Q3-Q4 2014. However, keep in mind it will not unfold in a straight line. There should be a large correction at some point along the way before the top is achieved."
"Since Intermediate wave one was quite long in the SPX, three months and 187 points (11%), we can now make some preliminary projections for the rest of Major wave 5."
http://caldaro.wordpress.com/
We could simply wait for the 'large correction,' get long, and ride our way into a +20% year with one trade.
DeleteWhat if I had placed the portfolio on auto-pilot January 2, 2013?
ReplyDelete(a) VTSMX (Vanguard Total Stock Market)> +25.5%
(b) VGTSX (Vanguard Total International Stock Market)> +7.1%
(c) VIPSX (Vanguard Inflation-Protected Securities)> -9.1%
Total YTD performance: +7.83%
Hey, I'm still slightly ahead of the La-Z-Boy!
On a risk-adjusted basis, that's one mofo year, yo!
DeleteGimme a shot of Bailey's in my morning coffee.
DeleteWe're all curious, Mark. What happened to the bankroll you carried with you into the local casino?
ReplyDeleteI guess there won't be any tradeable pullbacks for some time to come, just more of the same bear traps and shakeouts. IMO, we are on the doorstep of the greatest global growth period in human history
ReplyDeleteBe There, Or Be Square! We should be examining how one might position his capital with this expectation?
The 6 and the 8.
DeleteWhat kind of engines are used in container ships?
ReplyDeleteWartsila-Sulzer RTA96-C turbocharged two-stroke diesel engine (see Figure 3).
Available in 6 through 14 cylinder inline versions, these engines are designed primarily to propel very large container ships using a single engine/single propeller design.
The cylinder bore is just under 38? and the stroke is just over 98?. Each cylinder displaces 111,143 cubic inches (1,820 liters) and produces 7,780 horsepower. Total displacement comes out to 1,556,002 cubic inches (25,480 liters) for the fourteen cylinder version.
Some facts about the 14 cylinder version:
• Total engine weight: 2300 tons (The crankshaft alone weighs 300 tons)
•Length: 89 feet
•Height: 44 feet
•Maximum power: 108,920 hp at 102 rpm
•Maximum torque: 5,608,312 ft.lbs. at 102 rpm
Even at its most efficient power setting, the big 14 consumes 1,660 gallons of heavy fuel oil per hour.
I'll bet the above is an example of what you call 'a relaxing read,' cp.
DeleteYup, the thing is incredibly huge, and very thirsty!
DeleteSo what is that, like $100,000 of fuel burned in 24hours.
DeleteNWLI - 5x volume, wonder what it means?
ReplyDeleteAGO - Don't you wish you'd pounced on this one in October at $18?
ReplyDeleteGraton Casiono...
ReplyDeleteMan, I knew it was nice, but was still surprised at by it. No free drinks served at the tables/sots...which is fine by me. They weren't outrageously expensive. Didn't have food.
Place was packed but since it's so big it was actually kinda fun. Mostly nicely dressed patrons.
Only played blackjack at the $10, $15, and $25 tables. Lost maybe $200. It was really more a night to hang around friends. Dealers were a little sketchy with the cards but always got it right.
One big drawback was the smoke. I'm used to 'casino' smoke but was really bothered by it this time. Got a little headache even. Could have been too much booze, but don't think so.
Will be back.
Jessie bought a few miners Friday.
ReplyDeleteBesides miners and PM-related stuff, what else has he been interested in? I used to get his newsletter but not in over a month now.
DeleteYou can follow him on Twiter.
Deletehttps://twitter.com/InsiderBuySS
Delete"Japanese stocks should surge another 35% in the next 12 to 18 months, USD/JPY next leg up rally has begun" P. Brandt
ReplyDeleteI recall when the USD bought 128Y, and maybe 142Y, it;s been a long time and had to recall exactly the exchange rate but I'm pretty sure it was 142Y.
CP. I've tried looking at Japanese stocks, but it seems most of the good ones are in Japan and not the US markets, so hard to buy. TD in Canada does not provide direct access to the Japan market. Plus their financial reports are often only in Japanese.
DeleteIt does make sense that there is money to be made there, but for me, it's not worth the effort to go into that market.
Yes, it might even be a wash at best, once currency exchange rates are factored. I guess the approach might be short Yen but then again at what opportunity cost?.
DeleteMy prediction for 2014 is the +20% that David Tepper talked about (10% increasing in earnings, plus P/E multiple going up 1 point). Seems logical as the economy is improving and there is nothing on the horizon (overheating economy, inflation, reckless banks) to cause a recession and drive earnings and multiples down. Plus, after a huge year like 2014, probably the 2 most likely options are (1) continuing growth in the market, but at a lower rate (like 20%) or (2) a spike rally followed by a crash like 1987. I think #1.
ReplyDeleteThe best trade for 2013, in hindsight, was to just put all of your money in a US smallcaps - IWM was up almost 40% or, more aggressively, TNA was up 150%.
I think for 2014, the best trade will be to buy European small-caps. I think Europe is turning and their markets will be near the top, and I think for leverage, small caps will do better. Euro-small caps are hard to research and buy though, so I may consider an ETF, but probably I will try and find stocks.
Perhaps a pigs ETF........
DeleteGenko worth $0, must sell it's BALT stake?
ReplyDeletehttp://seekingalpha.com/article/1910181-genco-will-dock-into-a-restructuring-leaving-shareholders-with-close-to-0?source=feed
http://www.google.com/finance?q=INDEXBOM%3ASENSEX&ei=fMG3UojNHen8igLUCw
ReplyDeleteThe Sensex is on the verge of a major breakout. I know I've mentioned this for several months now but it's setting up EXACTLY like the Transportation index last year. IYT has had a monster year, up 35%. I think the Sensex could see similar returns in 2014.
Look at the all time chart. I mean that's a 6-7 year triple top on the verge of breaking out. I would be buying that hand over fist if I didn't like BALT so much.
DeleteI guess the other factor is, it's had a huge run over the past 11 years AND there's no real easy way to play it.
DeleteI have to wonder how this figures in with the Rupee vs dollar, will US listed Indian companies rally independently of currency or do we need to hedge against currency revaluations?
DeleteEPI has already lifted 30% off the 52 week low?
that's a good point. Currency fluctuations should always be taken into consideration with foreign investments.
DeleteI've been thinking about the whole supply / demand equilibrium debate regarding the shipping industry and I guess part of my issue with the argument about supply being too high right now to support a big move up is supply didn't really change THAT much when rates went from 11k down to 600 after the 08 collapse. And likewise it didn't change that much when they went from 1500 to 11k before 07 bubble. So when people say that the supply of ships right now isn't low enough to support really high prices, I think that's completely arbitrary.
ReplyDeleteAdditionally, trying to assign a reason for a move in BDI rates from 600 to 2200 recently is a bit of a fools errand. Is it really all because iron ore stockpiles (i.e., building up supplies before winter sets in) exaggerated it? How do we know that for sure? And why do we care to know it exactly? Maybe the bigger picture is that supply is getting more in line with demand than it has been in many years and lots of shippers and banks offering financing are going to be hesitant to expand supply for many years, both of which could support higher, stabler prices???
Just thinking out loud. I've seen a lot of smarter people than me try (and fail) to rationalize movements in markets for many years.
Maybe we can count on insider foresight?
Deletethat didn't work too well when insiders at WLT were going nuts buying on the August 2011 drop.
DeleteFiguring out why prices move shorter term really is just guessing. No-one really know and the guys who try and tell you they do are probably trying to sell you something.
DeleteThe hard part with shipping supply /demand fundamentals is the supply response is very slow. People ordered a lot of new ships back when the BDI rates increased a few years ago, but couldn't get delivery of these for 2 or 3 years as the shipyards were backlogged and it takes a long time to build a ship, so they actually got the ships when the market was down and increased the supply /demand imbalance further and made things worse. We have had a big increase in ship scrappage of older, less fuel efficient ships which is helping decrease supply and people are being more cautious about ordering new ships, so that has helped. But we could see the situation if demand increases quickly, that there are not enough ships around and rates go up a lot. It seems like quite a few ships are being ordered these days, but it still takes along time to build them, so supple shouldn't increase too quickly.
BALT - I guess we see $7.15 before $5.30 again, not sure what happens from there simply b/c I have no idea if the glut of ships is done or if there's another wave coming and the BDI is just bouncing.
Delete"The greatest quote in Buffett's 1994 letter to shareholder was, "Investors should remember that their scorecard is not computed using Olympic-diving methods: degree-of-difficulty doesn't count." Berkshire Hathaway had just 10 major stock holdings in 1994. All of which had competitive advantage, strong management, and cash flows that Buffett could easily understand.
ReplyDeleteA lot can be learned from Warren Buffett; however, perhaps the greatest advice he gave us in 1994 is this: Stick to what you know, love a few companies instead of liking dozens, and time is always the friend of a well-run business."
Some good insight here...
People love to point out Buffett's mistakes - he missed the tech boom, he missed the gold boom, he bought IBM too high, etc - but reality he gets the large trends right and is pretty much always right in the long run, which is what really matters. His 4 market call from Tilson is a great read http://www.tilsonfunds.com/4BuffettMarketCalls.pdf
DeleteInterestingly, Bershire made a huge buy of XOM recently - I wouldn't buy XOM as we can buy smaller, cheaper stocks, but I'm taking this as an indicator that I should be looking at putting more money into energy stocks.
That's a great point. They have a lot of exposure to nat gas as well right?
DeleteThey did buy that nat gas company a few years ago and XOM is a long term investor. But I'm not sure what percentage of their revenues are gas vs. oil.
Delete"CNBC's Michelle Caruso-Cabrera reports Portugal, Ireland and Greece plan to return to credit markets in 2014
ReplyDeleteGreek PM expect imminent recovery of Greek economy"
ReplyDeleteCIE - This one came back up to close the gap down.
ReplyDeleteSold CIE @ 15.80.
ReplyDeleteStill haven't heard back from MOG. But it's basically moved 25% off it's lows in 3 days. It's gotta come in some.
DeleteBALT off at 6.27. This one has a history of fits and starts. Let's see if it repeats.
ReplyDeleteYrcw dude
DeleteNM breaking above $10 today. Still at 88% of book value. Got well above book value last cycle.
DeleteHa, maybe book value actually outperforms share price this cycle?
DeleteRemember, if you are over 70 ½ and have a Traditional IRA, you must take your required minimum distribution (RMD) by 3:30 p.m. ET on Dec. 31.
ReplyDeleteVultures are awaiting their last minute meal.
BALT - Allow me to remind you guys, the TT secret weapon is never to be ignored.
ReplyDeleteBCH - I like this ticker, Go BCH, go!
ReplyDeleteCIE - Umm, now higher than before the well was plugged......
ReplyDeleteIDX - Looks like maybe a bottoming hammer is forming?
ReplyDeleteSTAY - "Extended Stay America: In the middle of an extended turnaround: Initiating at Buy"
ReplyDeleteI tend to agree with both jesse and Geoff here> ie, we're close to a tradeable low in miners. The lack of a serious whoosh down still nags at me, but given the relentless nature of the decline + the serious percentage losses already in place, we may not see one.
ReplyDeleteHowever, isn't that exactly when we would expect capitulation to occur> when traders no longer expect one?
DeleteDon't know if you saw this, but an interesting chart on gold bear markets:
Deletehttp://www.gold-eagle.com/article/epic-opportunity-gold-stocks
The decline in price is in line with other bears, but in time is in the middle.
Very informative article.
Delete(a) Timely reminder that miners tend to lead, which suggests gold prices have yet to bottom.
(b) This guy did correctly time the June bottom. We're now of course -10% below that, but could have captured a +36% gain in the interim.
(c) I don't know how I would define 'major support' for GDX at this point. High teens?
GDX - $19.17, maybe?
DeleteFreakin'-A, SVM's at $2.24
DeleteMDW - eeeeekkkkkkk!!!!! Talk about a trend.......
DeleteIf GNK can resolve their debt issues Balt will skyrocket
ReplyDeleteThis has to be the most dangerous time of year to be gaming the markets.
ReplyDeleteWhy do you think that? Statistically, this period is generally one of the best of the year and I can't recall ever getting a big woosh down at the end of December - January, yes, but end of December is generally very good.
DeleteBetween tax-loss selling and window-dressing, it becomes more difficult to read 'sentiment' (eg, are bears throwing in the towel, or are fund managers dumping to raise cash; are shorts covering, or are fundies plowing cash into a winner). JMO, of course.
DeleteI've watched ARTX go from $1.90 straight up to $3.70 without acting.
ReplyDelete'Greek PM expects imminent recovery of Greek economy.'
ReplyDeleteBeauty of a quote!
And I expect an imminent recovery in miners.
DeleteWho knows, it's a mad world!
DeleteUnbiased research from the country's own prime minister. Who would've thunk it?
DeleteDamn, I knew something was 'off' with GDX.
ReplyDelete(a) On Yahoo Finance, GDX is trading -1%. That would bring up the possibility of a one-day trade, which I was considering.
(b) However, Fidelity is showing GDX trading just -0.1%, with a 'previous close' of 20.33. That tells me GDX is trading ex-dividend today. And miners are no longer under consideration for a one-day trade.
RevShark's stock of the week: OESX.
ReplyDeleteI bit the bullet again on GNK. Chapter 11 is in the cards per everyone so if it doesn't happen it's making a YRCW like move. 3% position and I should have bought earlier today but oh well. I see it hitting $5 at least again if they can get a deal done
ReplyDeleteI figure if they get a deal the stock goes up at least 50% if not more. Since their debt is trading at 0.90 it's not even close to bankruptcy status. I think Centerbridge is up to something. I like the risk reward but I don't want a big position
DeleteI think the spot rates are too high for the creditors of GNK to ignore. I think the upside is good enough that they may be able to convince them to do a deal.
DeleteAdded ENPH @ 5.61.
ReplyDeleteOpening a position in the long bond (RYGBX, Rydex 1.2x Government Long Bond) at the close. TLT off -0.5% following Friday's high-volume spike.
ReplyDeleteI tried to short TWTR @ 64.90. Price ran just above that and I wasn't filled. Hmm.
ReplyDeleteMerry Christmas, guys!
ReplyDeleteyou too! don't forget, there's a 1/2 day of faking out...errrr, trading, tomorrow.
DeleteMerry Christmas, CP! It's funny how as traders we tend to view holidays as minor (sometimes major!) inconveniences.
DeleteWho would've believed the Cyprus crisis was cause for concern? That was a really weak excuse, wasn't it?
ReplyDeleteHere's some scenarios for BALT:
ReplyDelete*Rates held constant at current levels (2250) translates into earnings of $0.17 per quarter when the new ships come on board. Earnings before Depr = $0.30/qtr. Assuming 80% payout rate, you get a dividend yield of 15%.
*Rates at 3,000 translates into earnings of $0.35 per quarter when the new ships come on board. Earnings before Depr = $0.49/qtr. Assuming 80% payout rate, you get a dividend yield of 25%.
*Rates at 4,000 translates into earnings of $0.60 per quarter when the new ships come on board. Earnings before Depr = $0.74/qtr. Assuming 80% payout rate, you get a dividend yield of 37%.
The leverage is clearly there. However, the issue is can it get to 4,000 and stay up at that level? Tough call. Here's a longer term chart through midway 2012:
http://2.bp.blogspot.com/-cAvCTQMU_U8/UBgEZ-gZDdI/AAAAAAAACQA/EalN7XKbE90/s640/Baltic+Dry+Index.jpg
Rates prior to China entering the WTO were consistently sub 2,000. I think China's addition and India/Brazil have permanently altered this industry so it's probably reasonable to expect higher rates going forward than the pre 2004 levels. Plus, I really think the sentiment in the industry has changed where there won't be excess supply for years because so many got burnt.
CH - You guys don't like this one, any particular reason?
ReplyDeleteWhat's the thinking with Chile? What's the catalyst?
DeleteChile is an emerging market. So I automatically 'like' that one.
DeleteGood country I think. Biggest copper producer and good mining country.
DeleteHave no idea what the valuations are like there or their accounting standards.
In addition to natural resources, I guess my question is if Chile's geographic location is such that their seaports will be an important trade route/gateway to China for Uruguay and Argentina?
DeleteWhen is was in 7th grade I dated a chick named Chile. She was hot.
DeleteBCH - Today was quite a round-trip.......
ReplyDeleteBSBR - Tweedy Browne and Charles Brandes are both holders and they are both strong value shops, providing another data point that BSBR is good value:
ReplyDeletehttp://www.nasdaq.com/article/top-guruheld-south-american-stocks-as-of-the-third-quarter-cm312436
1/2 day tomorrow? Ah, no rest for the weary!
ReplyDeleteTLT sucker punched by better than expected Durable Goods report. Let's see what the Long Bond is made of.
ReplyDeleteOnly 5 rounds today to find out.
DeleteBottom about to drop out in gold?
ReplyDeleteI hope so. I'd love to give the miners one last shot on a wipe out.
DeleteGood 'ol BALT, wishing I had more...... Of course!
ReplyDeleteBSBR - We should know soon........ Or not! :)
ReplyDeleteNever dreamed it'd be possible for BALT to close green for four consecutive days, a rare event. Something's definitely amiss!
ReplyDeleteNow red, there's some proof of concept for ya! :)
Delete(a) It looks like I'm headed for a wipe out on the long bond. TLT currently -0.7%, following a 'better than expected' Durable Goods report. Well, I'm not blaming the durable goods report- I made the decision to open the position, and I'll take the hit with no complaints. RYGBX is slightly leveraged @ 1.2x, so with 40% of the port invested I'm expecting a -0.4% hit.
ReplyDelete(b) The People's Bank of China came through last night (as expected) by injecting liquidity into the money market. Emerging Markets responding positively (EEM +0.65%).
(c) GDX (miners) +2%.
(d) I'll wait until New Year's Eve to concede. but unless the markets take a dive the La-Z-Boy is on track to win 2013.
Hold on. GDX +3%!. Now that's depressing. As in, the trade not taken.
ReplyDeleteFound a photo of Mark's hoopty at the auto show:
ReplyDeletehttp://www.turbobuick.com/forums/attachments/imageuploadedbyturbobuick-mobile1373347035-712385-jpg.194526/