Saturday, December 7, 2013
12/7/13 Using The Right Benchmark
Bloomberg displays the following performance numbers for comparison purposes. Sure, all US indexes are up >20% YTD (the Russell 2000 index of US small-caps is up +35%!), but were any of you 'all-in' on US indexes this year? And the Russell 2000 pales in comparison to an investment in Bitcoins!
Most likely, you owned a diversified portfolio which included bonds, foreign stocks and commodities. The most reasonable 'benchmark' would be AOM, an ETF which tracks a 'moderate allocation' diversified portfolio, which is up about +9% YTD. So if you're not up +26% right now, your fund manager was simply doing his job.
http://ei.marketwatch.com/Multimedia/2013/12/04/Photos/ME/MW-BQ274_benchm_20131204114108_ME.jpg?uuid=e536b008-5d02-11e3-9165-00212803fad6
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I'm afraid to look at my YTD returns after the GMO/YRCW death spiral. Maybe after a few cocktails tonight.
ReplyDeleteYour fantastic gains 2012 should help with that as well. Remember, it's all mental. For some reason, we all take even minor losses harder than we should.
DeleteProbably not surprisingly given the market this year and how I invest, I'm up over 40% this year, kind of inline with the Russell-2000, which makes sense given I mainly buy smaller stocks. This will likely end up being my 2nd best year ever after 2009 since I started tracking in 2001.
ReplyDeleteWhen I look back at the year, it really was mainly due to stocks which got undervalued in the 2008 bear still being undervalued at the start of the year moving back towards more fair valuations as people felt more comfortable with the stock markets.
Plus I was pretty much fully invested in equities at the start of the year as I felt my stocks were all significantly undervalued. I've raised quite a bit of cash throughout the year through my sales, but am still about 85% in stocks. I'm not the type of person who would ever be 100% out of the market though. 50% is about the lowest allocation to equities I've ever had.
That's awesome! It also tells me that every strategy has its ups and downs.
DeleteI also recall you suggested I be at least partly invested at the beginning of the year.
DeleteGreat job BB. I was with you there for a while.
DeleteNice BB. I think your style of investing is going to work well in the long run no matter what because you keep risk lower through a large number of holdings and you have patience. I think you're spot on with being longer term because everyone is so focused on technical trading and they lose sight of the fact that investments play out over longer periods of time. Plus, people are just so damn impatient in general that if you manage your emotions your odds of success are much higher.
DeleteI typically only hold a max of 4 positions so my returns are always going to be crazy. I take way more risk than the average person, though, and it comes back to bite me in the ass from time to time. It already did this year with FMD. I think my returns went from like +170% (thanks to YRCW and a 50% gain in FMD at one point) to +75% or so because of the FMD crash. I've actually toned down the risk a bit because my portfolio has gotten a lot larger. Actually, I have a 60% or so stake in BALT so what the eff am I talking about?!?
But anyways, I still believe the only way to become really successful with investing is to have a concentrated portfolio. To go from a small player to a big player you either have to become a hedge fund manager like Buffett / Tepper etc or you have to take concentrated risks. I do think you can minimize your risk through thorough research and scaling into positions as opposed to going all in at one price. I'm still learning a ton along the way and having fun in the process. It's amazing how much better investors I think we all have become since 2007/8. Thanks for inviting me over here a few years ago!
Here's a question we fail to ask ourselves more often re our portfolio performance.
ReplyDeleteWhy am I where I am?
Try coming up with a serious response.
I wouldn't be surprised if NIHD pulls a LEAP. A triple from the $6 lows isn't impossible.
ReplyDeleteSorry a triple from the $2 lows to $6 is what I meant to say
DeleteJust don't let it happen again.
DeleteKendra was 3 for 3 on 3 pointers tonight. Might not seem like a big deal, but she's never tried one before and no one on her team has either.
ReplyDeleteNFLX recommendation: Exile. Another British miniseries. Here's the NFLX synopsis:
ReplyDelete'With his life in ruins after being fired from his London media job, Tom heads to his hometown for the first time in years. There he finds his father in his sister's care and battling Alzheimer's, and determines to solve the mystery of his leaving.'
Not exactly the kind of storyline that normally appeals to me. But it turned out to be a riveting thriller.
Not sure if you guys watch regular tv much but we started watching the show almost human. It's only 4 episodes in but so far it's pretty good.
DeleteYeah, my style of investing will never see the plus 100% kind of years some of you guys get here, but it will never really have the big losses either. Since 2001, when I started doing this, my only negative year was 2008 and I have outperformed the markets every year except 2008 and 2006 when I started shorting the financials too early and lost a lot on that.
ReplyDeletePart of that is because I usually go for that "margin of safety" a lot of the value guys talk about so you have fewer losses, but I also try and follow the market cycles as value stocks are great early in a business cycle, but stocks that grow with the economy tend to do better as the business cycle matures.
My average outperformance since 2001 is 10.7% per year. Over time this really adds up. $100,000 invested in the markets would be worth $167,770, whereas my stocks would be worth $581,340
Brent - I think you're right about the margin of safety concept. You do have to analyze what makes up book value of course because there could be a lot of overinflated asset values like intangible assets etc. Thanks for sharing the Melvin blog. I think he's right about community/regional banks being the trade of the decade.
DeleteWhat has worked for me is trying to identify sector catalysts and then find companies within those sectors that appear to be undervalued (either by book value or earnings potential). There's definitely a lot of judgement in this...trying to see if the catalyst is legitimate or sustainable etc and then making a judgement call on the upside potential.
It's easy to be right in the long term value of a biz but in the short term I don't have the ability to sit through the final 50%+ drop that you see in stocks like NOK/SUNE etc…even if it ultimately goes a lot higher. So for me its important to be buying on the right hand side of a bottoming pattern. So if it looks like its coming out of a big downturn then one thing I've definitely learned is that no matter how much you like it, it's best to just wait until after a meaningful higher high is put in place and buy on a pullback, preferably when it is oversold and around a prior resistance/support area. Sometimes you get those horrendous 70% pullbacks after the first higher high like with CSIQ/EGLE/GNK or sometimes you get a shallower pullback like with BALT. Usually the stronger ones in the sector have the shallower pullbacks but their upside is limited vs the riskier ones.
One of the hard things about investing mainly based on value is knowing if a cheap stock is really done going down of if it will go much lower. I had a number of stocks over the last few years which went from $8 to $2 making a good value, but then proceeded to crazy lows of $0.50 and now are back up over $10.00. A lot of that was the market, but it's happened other years as well. The one thing about focusing on fundamentals is it gives me the conviction to hold and even add through these downturns. I never stop less sell based on price action.
DeleteI do look at charts to try and help see if it is a good buying point, and I have gotten better at it over the years, but still miss sometimes and other times if I feel the value is so compelling, I just buy regardless. It is one of the reasons though I try to buy in pieces though instead of all at once.
I also try and find catalysts, because it is not unusual to see a stock sit at low valuation for several years, then double in a year, so trying to time it better helps with portfolio ROI. But I am often early and end up waiting a long time. But if a stock doubles in 3 years, it's still a 26% annual ROI, so big gains help offset not getting the timing exactly right.
$BDI - an Elliott wave view of Dry Bulk Shipping ...
ReplyDeletehttp://caldaro.wordpress.com/2013/12/08/dry-bulk-shipping-update/
I hope they're right about BDI rates doubling from here. Under this scenario, BALT would earn $0.69 per quarter and pay a quarterly dividend of $0.60 or so based on my estimates.
DeleteHe's calling for a US market top, too. I'm not sure how that is supported by fundamentals but I guess it isn't.
Delete$SPX - most of these guys I follow are looking at a potential HnS (which has trap potential like in 2009). Check out the 1st chart (20d-5m) at http://waveprinciple.blogspot.com/ Neckline ~1780
DeleteFor another view/count, Eckert ... http://stockcharts.com/public/1001240/tenpp/2 chart #137c
But there are several interesting projections higher ...
1074.77+1.618(1370.58-666.79)=2213.50
1074.77+1.414(703.79)=2070
1074.77+1.272(703.79)=1969.66
666.79+1.618(1370.58-666.79)=1805.52
1074.77+1.000(1370.58-666.79)=1778.56
If it's another similar to 2009 then perhaps we'll know when it comes as opposed to a slow grind to hell, LOL...
Deletepic.twitter.com/YYCCpoxxU8
ReplyDeleteWell, hopefully we'll again get that one final nudge down before lift off.
DeleteI have great respect for all of you and your trading decisions. I just want to pass on what amounts to a fleeting thought this morning. What if 2014 turns out to be a 'give back' year? Sure, there is evidence that the 2014 close will end up higher than the 2013 close:
ReplyDeletehttp://pragcap.com/what-can-we-learn-from-25-years
And in fact, I believe the SPX will be higher in December 2014. What's been missing, however, is volatility. QE (like all 'good things') has to end sometime. It could get pushed out to 2015. But too much of a good thing is never a good thing- not for homo sapiens in general, and not for the economy (which is simply the sum of productive activity by homo sapiens).
I think most of us are well-positioned to handle give-back markets- we all have rotation strategies. Even BB sells at 'full value' and rotates into another 'undervalued' position. Maybe it's just wishful thinking, but I'm hoping 2014 brings the kind of ups-and-downs traders thrive on.
It's hard to see that we don't get a decent pullback in 2014 after 2013, but anything is possible and I still think you don't want to make all or nothing bets. I think it is probably as risky to be fully out of the market going into 2014 as being 100% invested.
Deletehttp://stockcharts.com/freecharts/historical/djia19802000.html
When I look at this chart from 1980 - 2000, there is really only 5 big pullbacks in the entire 20 year period that would be worth avoiding (for me). It is very conceivable that we are at the start of a strong bull market like this and even pure buy and hold will start working again and we may go years without a major pullback.
That said, I have been selling as prices have appreciated this year and have another 5% coming to me via a buyout of one of my stocks and I'm waiting for better opportunities to deploy this. But if the markets do continue straight up, I am happy with my exposure and will continue to look for individual stocks to buy with or without broad market weakness.
And 'The Wire' award this year goes to last year's winner!
ReplyDeletehttp://www.youtube.com/watch?v=W0tGL-vhybg
John Hussman.
It's all well and good to pen a calm defense of one's strategy for investors. What I want to know is what he says to himself in the car on the way home when no one's listening.
DeleteLooks like DRYS has broken to the upside too, despite this chart reminds me of gold just prior to the numerous waterfalls that took place, LOL, it's not quite the same animal at all though, is it? One represents doom and gloom(on par with medieval) while the other represents economic vibrancy.
ReplyDeleteIDX may have bottomed? I for one, am sick of doom and gloom.
I think I'm going to need to fire up the Osburn wood stove.....
ReplyDeleteSPX - We do have a hammer on the weekly, hopefully it's not indicative of anything particularly dreadful.
ReplyDeleteRobot finally flipped long Friday, at 1803.... I feel like high-sixing someone, LOL
By 'Robot' are you referring to the LVN up-cross on ES_F at ~1803 to achieve balance @ 1805.75???? It was a JBE in Vad's lingo, with the jump above 1803, the basing above and the explosion to the Balanced Target of 1805.75. VPOC was 1801.
Deletehttps://twitter.com/verniman
verniman @verniman 6 Dec
Delete$ES_F Value 1801 Balanced Target 1805.75 pic.twitter.com/eViuFHopw1 // Done ! Market Balanced pic.twitter.com/L08capdL4o
Here's a nice chart of Value moving up from 1801 to ~1804ish
Deletehttp://charthub.com/charts/2013/12/08/es_mp_wrk_2
No, can't claim something quite elaborate as an cryptic neumonic or anything like that, robot is just a programed trade algo I monitor.
DeleteKyle- How are you trading these days?
ReplyDeleteMark -- TNA is basically all I trade these days. Every once and awhile I'll take a shot at one of Vad's 'Usual Candidates' (LVS, GDX, FCX, etc) but not very often. I don't watch any of this low-priced crap anymore either. I try to stay focused on the wave structure of the market and trade TNA using the Heikin Ashi and Renko approach described here:
Deletehttp://stocktwits.com/TradingFibz and http://stockcharts.com/public/1396335
Just chippin' away at it --- Trying to stay out of trouble
Offed JCP @ 8.24...
ReplyDeleteIt's 33 degrees this morning.
ReplyDeleteNIHD down 10% pre market while YRCW is up 25%. Looks like I picked the wrong POS. I may add a little to NIHD as I think this could be an attempted knockout blow. Only have 1.5% in it.
ReplyDeleteIt has to be short-covering in YRCW. It's really difficult to explain that kind of supply/demand imbalance otherwise.
DeleteAdded a whopping 2k shares to NIHD at $2.39
DeleteValue guy Tim Melvin going into some silver stocks - http://investorplace.com/2013/12/insider-buying-cheap-stocks/#.UqXP5PRDtdc
ReplyDeleteHe may be right, but the thing about value guys is that they are often very early and I think that this is the case here. Even though they could be good value, it really depends on the price of silver. I just think after such a long bull, the bear will be longer.
But he is probably the 4th value guy I read who is moving into metals, and you need the value guys to buy to start building a sustainable bottom in things, so maybe we are closer to the bottom than I think.
I know this is a generalization, but I'd like to see a waterfall decline at the end with utter panic. HL and CDE don't look like bottoms at all.
DeleteI've sat and watched ARTX climb higher and higher forever. Not sure why I didn't act...
ReplyDeleteHoly shit I just saw huge buys go through on NIHD. several 200k blocks.
ReplyDeleteI wonder how many times investors will give Welch's positive comments a pass.
ReplyDelete""This has been a long, two-year journey that started with shedding non-core assets which led to an intense focus back on our core business – North American LTL. Now, with improved results, renewed focus on our people and our processes, and support from our single largest partner, we are at the stage where we can finally address the bloated balance sheet that we inherited when we took over in July 2011.We have pursued a deliberate strategy to improve both our operations and our balance sheet, and we will constantly work to improve margins and returns for our investors. This agreement and our contemplated financings will be the final hurdle we need to clear to have a strong, stable business, which will provide great value for our stakeholders, job security for our employees and improved service for our customers," added Welch. "
Added a little more NIHD at $2.49/$2.50. Up to 2.5% position.
ReplyDeleteJCP. No faith.
ReplyDeleteits tough man. i think you just need to make a stand long or out and hold at this point.
DeleteAA looking good today. Still holding. Looks like the latest drop was to fill the gap up.
ReplyDeleteSpeaking of which...looks like they want to fill the gap in BALT. That would coincide with a retest of the downtrend line from the early Sept highs through the subsequent highs and would also make sense from a frustration standpoint.
DeleteLooks like someone's listening to BB's comments re silver stocks.
ReplyDeleteAlright. Scaling into BALT @ 5.15.
ReplyDeleteGood luck. I just sold 1/4 of my AA and moved it into BALT at $5.15 to $5.17
DeleteAs I expected, they sell off EEM around 1030 am est, just in time to screw RYWVX holders who wanted to get out. (No position myself.)
ReplyDeleteIts funny...when they let finally a stock go that has been held down for a long time it is just relentless. Take a look at the long term charts of the following:
ReplyDeleteADES
LNG
RAD
QIHU
NOK
CSIQ
JKS
so many of them.
Whoa. Check out the spread in SIL. With that kind of spread/volume, no way I would be playing it unless I intended to open a LT position.
ReplyDeleteENPH down from $9 to $5.8 in 6 weeks. Anyone taking a stab here?
ReplyDeleteI don't understand the business so I'm not going to buy it but just curious if you guys are thinking about it.
DeleteI don't understand the business either, but Dan Loeb purchased 1.2m worth of shares @ 6.83 on Nov 21, so I'll take a shot here @ 5.83...
DeleteOut @ 5.73. I don't like the action, and I don't like being trapped in a stock with little volume.
DeleteCleared out the NIHD position. Oh well...
ReplyDeleteThe decision to sell is what separates traders from ex-traders.
DeleteOut of BALT @ 5.27.
ReplyDeleteNGas??
ReplyDeleteAnother in a long line of ones that just won't give up now that they let it go. The smart move was to hold my position in ugaz at 14ish.
DeleteI noticed that last night, what a move for natty! Honestly, I wouldn't have believed it thus it happened.
DeleteGoldcorp @ 21.07...
ReplyDeleteCould have used a little more patience with ENPH.
ReplyDeleteGo BALT go, LOL!
ReplyDeleteIce storm knocked out the electric power, so I filled the generator fuel tank and strung out the cords, hooked everything up, the utility power came back on just as I pulled the starter cord. How's that for timing?
Pounding table, stomping feet, GO!!!!!!!!
Delete
ReplyDeleteGold: Eyes on $1650
By Jack Senett | Harp's Roadmap | Be the first to comment!
Gold is firming up from the painful, debilitating double bottoms and is setting up a move to switch its gear from sliding to climbing.
Over the next 9 months, gold will climb to the price target of $1650; such a move will give gold stock investors a plethora of happiness in the form of a likely double return.
Best Regards,
Harp
Bullshit!!!!!! :)
Deletesounds like a lot of hope to me...
DeleteWell, I have no idea whether gold might spike. But you're right. It's the perfect blog-saver for a gold blog.
DeleteAlso noteworthy is that the post is entirely one person's opinion, purely conjecture, and backed (presumably) by reputation only. Who is this guy?
Deletehttp://www.newyorker.com/online/blogs/currency/2013/12/zohydro-why-did-the-fda-approve-a-new-pain-drug.html
ReplyDeleteScaling back into ZGNX @ 3.04...
DeleteNote the insider buys in November @ 2.75 and 2.83.
Delete"Zohydro ER does not include acetaminophen or aspirin, which can cause liver damage if "ABUSED" over a long period."
Delete"Abuse" is forcing medical patients to consume a liver damaging compound just so they can find some relief. What does acetaminophen have to do with CHRONIC PAIN????
At least while they're at the hospital they can have their livers transplanted, that might help relieve their chronic pain.
DeleteCAAEF - What is this about a global shale revolution???????
ReplyDeleteRH- Any idea what's up here? Pretty much right back where i last sold it.
ReplyDeleteLess than $60 would be my hopeful entry, insiders have sold a lot so I'm not thrilled by that.
DeleteThat was my last entry. The insider selling doesn't bother me at all. I really love this name.
DeleteGoing long 20+ year Treasurys and emerging markets via Rydex funds at the close. TLT and EEM currently both trading slightly higher (+0.2%).
ReplyDeleteNote that RYWVX closed @ 14.01 at the 1030 am trading window.
ReplyDelete83.65 is your boggy in UTLA.
ReplyDeletePLUG - Pull the plug!
ReplyDeleteNFX
ReplyDeleteBALT - qualifies as a reason to sell but I'd rather add.
ReplyDeleteLittle insider buying in HK. These are the same cats from Petrohawk. Same ticker.
ReplyDeleteSGEN - Look at that sh*t.
ReplyDeleteOINK - Don't stink after all.
ReplyDeleteJust about every Chinese small cap looks like it is gradually inching its way higher on the 1-2 year charts, much to the chagrin of Muddy Waters et al. GURE, BORN, ONP, GPRC, OINK, LIWA, VISN, KGJI, SKBI, etc.
DeleteI don't know how much research you guys have done on the dry bulk shippers but the major issue with that industry is supply of ships. The demand part never dried up and it should continue to be robust as long as emerging markets grow and the world population grows as cause consumption of iron ore, steel and grains to rise.
ReplyDeleteFrom the research I did going into this trade, I noticed that a good chunk of the new private equity money coming in from people like Wilbur Ross were actually just taking over existing orders for new ships and not going to additional orders.
One thing to look for is any new initiatives by the Chinese govt to help the shipbuilding industry. This could have an impact on the entire industry and is something to keep an eye one. Here is an article about subsidies to replace old ships with new ones...which wouldn't have any impact on total supply from what I can tell:
http://online.wsj.com/news/articles/SB10001424052702304014504579247720786604200
Yes, it's hard to know what the real truth is unless you can see it with your own eyes.
DeleteFed officials James Bullard, Richard Fisher, and Jeff Lacker all made official comments this morning re the possibility of a taper next week. My take? The Fed will probably taper next week, and the markets won't care.
ReplyDeleteI really think the Fed did a great job making it a non-event. At this point, it's a highly-anticipated (ie, priced-in) taper.
Yep, how can the winding down of QE be interpreted as bad? PM bugs think it means higher rates and that puts the squeeze on the US budget deficit but I'm confident the remaining debt will vanish to parts unknown b/c it's unexpected.
DeleteXXII - If these guys could engineer the tobacco plant to include acetaminophen, they'd have a real hit on their hands.
ReplyDeleteCECO - Can she hold here? It did close higher than the open.
ReplyDeleteMore bullshit> EEM closed the day +0.14%. RYWVX closed the day +1.01% (@ 13.98).
ReplyDeleteJust saw this...don't have full access to it:
ReplyDelete"Two shipping companies have enlisted restructuring advisers after key creditors sold large blocks of debt to distressed investors amid balance sheet concerns. Battered by rough seas in the industry over the past couple of years, New York based dry-bulk shippers Eagle Bulk Shipping Inc. and Genco Shipping & Trading Ltd. are working with advisers"
Uh-oh for EGLE down big, GNK seems to have popped on this news?
DeleteTwo shipping companies have enlisted restructuring advisers after key creditors sold large blocks of debt to distressed investors amid balance sheet concerns.
DeleteBattered by rough seas in the industry over the past couple of years, New York based dry-bulk shippers Eagle Bulk Shipping Inc. EGLE -7.53% and Genco Shipping & Trading Ltd. GNK -4.63% are working with advisers to pare down their debts, according to people familiar with the matter.
Eagle Bulk, with a debt load of about $1.2 billion, tapped restructuring advisers at investment bank Moelis & Co. and law firm Milbank, Tweed, Hadley & McCloy LLP within the past few days.
The hirings come about a month after Royal Bank of Scotland Group RBS +0.73% PLC sold its roughly $800 million debt position in Eagle Bulk at close to 90 cents on the dollar, people familiar with the transaction said, adding that investment firms Oaktree Capital Management, Centerbridge Partners LP and Canyon Partners LLC bought the majority of the debt.
It is unusual for investment firms to buy debt of distressed companies at such high prices, these people added, but a lack of activity in the distressed market could be a catalyst. Distressed investors are known for buying debt at very discounted rates, sometimes as low as pennies on the dollar and up to around 75 cents on the dollar.
Many shipping companies borrowed to grow their fleets when shipping activity peaked in 2008. They are now struggling to make loan payments since the rates they charge to transport goods have fallen, though there has been some pickup more recently. The shares of both Eagle Bulk and Genco have fallen dramatically in recent years, and they currently have market values of about $60 million and $110 million, respectively.
Though it is still early days, people familiar with the matter say an Eagle Bulk bankruptcy protection filing in early 2014 is a possibility, in particular a so-called prepackaged plan.
DeleteGenco, another vessel owner with around $1.5 billion of debt, has enlisted restructuring lawyers at Kramer Levin Naftalis & Frankel LLP and interviewed restructuring bankers weeks ago, these people said. It faces an amortization period on its term loan in early 2014 and may not have enough cash to make the payment, they said.
Roughly three weeks ago, Norwegian bank DNB AS DNB.OS +0.58% A sold around $600 million of Genco debt, also close to 90 cents on the dollar, these people said. Centerbridge was one of several investment firms that purchased the debt, some of these people said.
A DNB spokesman confirmed the bank sold its full Genco exposure but declined to comment on price or buyers. "This was a very large commitment for DNB given the long term challenges within the dry bulk market," the spokesman wrote in an emailed statement. "When the offer was on the table we could not let this opportunity pass."
Eagle Bulk, which owns 45 vessels built between 1997 and 2011, mostly focuses on "Supramax" vessels, large dry bulkers that typically transport coal, steel or ingredients like grain, sand and gravel. Vessel names include Thrush (2011), Crowned Eagle (2008) and Condor (2001), according to Eagle Bulk's website.
Genco, meanwhile, has a mixed fleet of dry-bulk carriers, ranging from smaller "Handysize" to larger "Capesize" vessels.
The average daily charter rates of Supramax vessels to transport goods has grown to nearly $16,000 per day, a level many hadn't seen since 2011, according to data from shipping service provider Clarksons reviewed by The Wall Street Journal. It dropped as low as roughly $7,000 earlier this year and had been hovering between $7,500 and $10,000 up until the fall, according to the data. In 2007, the rate peaked at $70,000, according to the data.
"The market as of late has improved tremendously," said Svein Engh, a managing director at lender CIT Group Inc.'s maritime finance unit. "The one thing a lot of people aren't certain about is whether this is sustainable improvement or just a seasonable blip again."
Shipping companies have been struggling over the last couple of years.
In July, Excel Maritime Carriers Ltd. EXMCQ -2.56% filed for bankruptcy protection with a plan to hand itself over to a syndicate of top secured lenders led by Oaktree.
A month earlier, the bulk-transportation unit of STX Group, STX Pan Ocean Co., filed for court receivership in South Korea, similar to a U.S. Chapter 11 bankruptcy-protection filing. The June filing was due in part to STX Group's failure to sell the unit amid a prolonged slump in the industry.
Overseas Shipholding OSGIQ -2.49% Group Inc., one of the largest publicly traded tanker owners, filed for bankruptcy in November 2012, sinking from a massive debt load and a big tax hit.
In November 2011, oil-tanker operator General Maritime Corp. filed for Chapter 11 bankruptcy protection in efforts to slash its debt and boost its liquidity. It emerged in May 2012.
I guess the only real important part is...
Delete"The market as of late has improved tremendously," said Svein Engh, a managing director at lender CIT Group Inc.'s maritime finance unit. "The one thing a lot of people aren't certain about is whether this is sustainable improvement or just a seasonable blip again."
Those debt loads are considerably larger than sales and market cap as well, what's stopping these new debt owners from Scrooging common shareholders?
DeleteIDX - Pretty good day for a change, with some volume.
ReplyDeleteGURE, BORN, ONP, GPRC, OINK, LIWA, VISN, KGJI, SKBI
ReplyDelete> can't believe how low the p/e's are on these stocks - do you have any faith in these businesses?
I don't, for various reasons, this is but one:
Deletehttp://www.chinaaccountingblog.com/weblog/pcaob-deal-with-hong-kong.html
Considering these further(or not), aren't we in every case talking about VIE's? Gillis recently wrote yet another article essentially saying the same thing he's been saying for a few years now:
Deletehttp://www.chinaaccountingblog.com/weblog/accounting-for-vie-taxes.html
re: Chinese reverse mergers...http://www.cnbc.com/id/101041703
ReplyDeleteI'm not convinced the RM is the actual issue, perhaps focusing on this particular subject is merely an intentional distraction?
DeleteMy feeling just from reading through trader's comments on these bulk shipping stocks is that most think this latest rebound in the BDI is just a seasonal thing. Perfect.
ReplyDelete'Perfect'..OK, I can read that as good and bad.
DeleteIt kind of sounds like the sentiment surrounding the initial stages of the rebound of ___ that went on to have monster runs over the past 2 years. You can fill in the blank with any of them (FSLR, NOK, Nat Gas, etc etc)...you have the dumb money like us misfits and Jesse's crew of misfits wading in while the "experts" say it's probably nothing more than a seasonal thing. Surprisingly, dumb money has been smart money in a lot of these for a while now.
Delete"Skyrocketing rents hit 'crisis' levels"
ReplyDeletehttp://www.cnbc.com/id/101258649
Good ammunition for minimum wage increases.
DeleteBALT - Unbelievable, I was actually green on this position for an entire 30min today!
ReplyDeleteSeems like GNK/EGLE created uncertainty today, the initial reaction in BALT and NM created early selling then once that was exhausted prices recovered to a large degree, NM closed green even.
Delete"Those debt loads are considerably larger than sales and market cap as well, what's stopping these new debt owners from Scrooging common shareholders?" - CP, it all comes down to rates I think. Look at what GNK, e.g., can do when times are decent (i.e., 2009/2010):
ReplyDeletehttp://financials.morningstar.com/income-statement/is.html?t=GNK®ion=USA&culture=en-US
Shakeout news, perhaps...... Could be one possibility.
Deletewho knows. GNK has shown an ability to generate $140 Million in annual income when times are better. that's not including the stake they now have in BALT which could produce them another $15 Million+ in income if the BDI gets to 3,000 or $25 to $30 million in income if the BDI gets to 4,000 (vs 2,180 now)
DeleteGood point, and then there may be the possibility GNK is forced to liquidate their position in BALT, or maybe now it's actually owned by GNK's creditors and they won't be liquidating. Right, who knows, perhaps GNK shows us(me) a thing or two, proving fantastic comeback's are still possible.
DeleteBB had mentioned someone he follows reportedly raised several hundred million capital for the purpose of shipping investment? Could be part of the picture too. 2009/10 weren't really what I think of as good times either, as global economies were suffering from debt crisis woes.
I believe good times are just beyond the headlights and realize in order to participate I need to be positioned accordingly.
I actually read through the SEC filings for BALT and even contacted the company to discuss the GNK holding to make sure there was no threat they would be forced to sell should GNK go belly up. There's a good deal of info on it but basic gist is there's no risk. The creditor gets control of it.
DeleteWilbur Ross is the one BB was probably talking about. Lots of private equity money has come into the space and from what I've read lot of it took over existing contracts for new ships.
One thing I think people buy into too much is the theory that things take off 6 months before the results show it. Take a look at LNG and ADES, two solid examples of companies that started rallying long before any economic benefits were bestowed on their respective companies. Now read this comment:
"While “2013 will be another tough year in most segments, sometime in 2014 we’ll probably start seeing a gradual improvement in the broader market,” Hans Kjelsrud, the Oslo-based head of Nordea’s shipping unit, said in a Sept. 17 telephone interview. “Once we get through this year, deliveries of new ships will be a lot lower. We believe 2014 will be better than 2013 and that 2015 will be better than 2014.” "
(http://www.bloomberg.com/news/2013-09-19/worst-shipping-crisis-ever-near-end-as-nordea-sees-loan-growth.html)
AA - Does this chart look like it's setting up for another leg up? Will there be a knockout blow once the FED finally announces tapering this month or will it simply gap up?
ReplyDeleteI'm still holding a fairly large position in it...sold 1/4 of it today around $9.48.
DeleteI see it going to $20 or $30 over the next few years as the economy improves, so I plan to just hold onto it. You can try trading these things, and many of you here are much better at it than I am, but my experience is that I sell for a small profit, than never get back in and watch it move onto a big profit without me.
DeleteThink how crazy this is. We have two large banks that 'have an offer to good to pass up', ie., selling a loan at a loss, although for about .90 on the dollar, to two distressed equity firms more than happy to take on the loans right here and now. They both must have unlimited access to the books and management, both have expert financial accountants/lawyers/etc., and the deal gets done. MITK seems easy to figure out!
ReplyDeleteSometimes I think it's just easier to go all in on GOOG and forget about it.
DeleteWell, definitely not as rewarding in terms of returns but in terms of low stress...
DeleteRe shipping,LNG shipping company GASS announced a stock sale to raise money yesterday. As shipping rates improve and stock prices improve, I think you see actions like this to improve balance sheets.
ReplyDeleteThis is why I chose BALT because it didn't NEED to raise $$ for any other reason than to take advantage of opportunities.
DeleteI'm kind of tempted to buy back into GNK/EGLE. Anyone else?
ReplyDeletehttp://www.dryships.com/pages/report.asp
DeleteIndex now up to 2,237. Average for Q4 is 38% above Q3. I mean what happens if rates keep rising and GNK / EGLE get extensions from their new creditors? I believe Oaktree owns equity in this space as well as the debt now so it might be to their advantage to do extend. I'm definitely tempted at just tossing a few $$ in here and setting it and forgetting it.
(a) ZGNX off @ 3.27/3.30 (reopened yesterday @ 3.0x).
ReplyDelete(b) Goldcorp off @ 21.50 (opened yesterday @ 21.0x).
Actually the best strategy on this EGLE / GNK news, in terms of minimizing risk, would be to buy the best companies if they take a dip. You have weak players potentially getting weaker while the stronger players are getting stronger (b/c of the rising BDI)
ReplyDeleteLong EGLE and GNK at $2.99 and $1.8
ReplyDeleteSold GNK at $1.88.
DeleteSold EGLE at $3.09
DeleteBack in GNK at $1.84
ReplyDeleteKeeping positions really small...
DeleteWhat are the fear mongers saying today? Hyperinflation is why gold is up?
ReplyDeleteSold again at $1.89
DeleteAnnnnnnd back in at $1.86. My broker loves me.
DeleteGold - What does it say when millions worth are found in a Boeing toilet?
DeleteAnyone playing nat gas? I still think we see a crazy spike higher even after this run...
ReplyDeleteIf there is a pullback on the weekly report I bet it gets bought up really fast.
DeleteAA - Okay, the plan I've decided on is to enter on the tapering reaction if there's a pullback. Else there may not be a plan #2, dunno.
ReplyDeleteBALT - Looks like it's holding up pretty well, nice job on the evaluation TOF, thanks!
AGCO is running too.
TCK - Is it about time this one began to receive some love?
ReplyDeleteI honestly don't know why I did it but I bought UGAZ at $21.8X avg. I just know when I look at the map of temperatures for the entire country its cold as sh*t. Or maybe its cuz its the hard trade to make? Position is tiny just in case and I'm thinking of adding if there's a dip after the weekly report.
ReplyDeleteSold at $21.7. Maybe the dip comes today?
DeleteIDX - Stop sweep out of the gate?
ReplyDeleteSold GNK at $1.79. Went to the well too many times I guess.
ReplyDeleteI'm not sure why, but I placed an order to kill the RYWVX @ the 1030 am trading window. Emerging markets should continue to do well, but I'm also on alert for a global pullback. Will likely close RYGBX (the long bond) at the close.
ReplyDeleteANV - +11% today so far, some relief for the weary and a potential departure from the dreadful channel it's been stuck in.
ReplyDeleteWow EGLE. That was the one. Up 33% from pre market lows.
ReplyDeleteThe initial reaction last night seemed positive so maybe that was a clue, up on "bad news" is pretty positive.
DeleteI like boring.
GL boyz. Just wasted a few hours of my life trying to find something I liked. At the close!!
ReplyDeleteSo no luck? There's always AUMN! Is it cold your way?
DeleteI can't help myself. Long GNK again at $1.7499. I'm only playing 5k shares at a time so I don't even know why I'm bothering.
ReplyDeleteprobably because it's boring watching BALT and AA...
DeleteOut for good I think...$1.81
DeleteLeaves me with the sensation a pack of 20 or more wild Chihuahuas are humping my leg.
DeleteMake that hyenas.
DeleteINTC - Testing $25 resistance again.
ReplyDeleteThis is pretty remarkable:
ReplyDeletehttp://stocktwits.com/message/18047391
Re Gold - could just be a short squeeze:
ReplyDeleteHedge Fund Gold Wagers Slump to Lowest Since 2007: Commodities
Short bets rose 6.2 percent to 79,631, within 0.6 percent of the record reached in July
http://www.bloomberg.com/news/2013-12-08/hedge-fund-gold-wagers-slump-to-lowest-since-2007-commodities.html
BALT - I'd like to see $5.60 pretty soon.
ReplyDeleteI think this plays out over 2 years or so. Best to exercise patience and day trade the crap ones to let time pass by quicker I guess...
DeleteYeah, I admit patience isn't my strong suit, LOL......
DeleteAKS might be the next anointed one...not allowing any easy entries.
ReplyDeleteTWTR - Up a mere 20% this week.
ReplyDeleteshould have held GNK I guess...dammit!
ReplyDeleteVery cold. 22 to a high of about 50.
ReplyDeleteRYWVX closed the 1030 window at.....13.95. ie, down -0.03/share (-0.21%) versus I'm guessing -0.2% for EEM at the time.
ReplyDeleteFinally, Rydex prices one in my favor.
Alas, there's still hope! :)
DeleteSometimes impatience pays off. ENPH now about 5.7x, but traded as low as 5.38. Now that would have ticked me off.
ReplyDeleteLong UGAZ...$21.28
ReplyDeleteTook off at $21.32. I think I need a better entry
DeleteUVE - 52 week high
ReplyDeleteMarket action today more or less as expected.
ReplyDelete(a) EEM holding up despite weakness in US indexes. I closed RYWVX @ the 1030 am est trading window essentially flat.
(b) Bonds are outperforming, and I will be closing RYGBX (1.2x US long bond) end of day. TLT currently up +0.73%, so RYGBX should close up about +0.9%.
(c) GDX (miners) up +3.7%, and I wish I’d opted for miners over emerging markets at Monday’s close. The Goldcorp position was sized around 12% of the portfolio, so I’m happy to have participated in today’s rally.
Total 2-day performance for the portfolio will probably come in around +0.5%. Now up about +7% YTD and hopefully beating my (hedge fund) benchmark.
No surprise whatsoever that EEM now spiking into the close. I just wasn't willing to sit with that 'bet' this morning.
ReplyDeleteIt does seem to be a pretty boring stock market the last few months, but they say boring stock markets make for good stock markets. Shouldn't complain about slow and steady upwards trending markets though - could be at lot more exciting and a lot worse!
ReplyDeleteSPX -- I don't know Bubba .. seems like some pretty interesting structures to me ...
Deletehttp://stockcharts.com/c-sc/sc?s=%24SPX&p=30&yr=0&mn=4&dy=0&id=p03987096925&a=233040110&r=849
PAL - Wow, LOL! +24%
ReplyDeleteRWVYX closed up +1%.
ReplyDeletenew post
ReplyDelete