Saturday, January 4, 2014
1/4/14 The Losing Year
(a) Every trader has one, something along the lines of every 5-7 years (which is in line with the rhythm of life).
(b) I've had five winning years. No surprise. It's been a 5-year bull market and I haven't been short.
(c) Is a losing year inevitable? Well, I think a losing year for a given strategy is inevitable. Changing strategies may allow us to avoid one.
(d) I recently came across a reference to Frank Sustersic of Turner Investments. Here's a June 2011 profile of the guy who runs the Turner Emerging Growth Investor Fund (TMCGX):
http://www.turnerinvestments.com/frank-sustersic-profile/
At the time of the article, he held an enviable track record as a stock-picker in the micro-cap sector. Naturally, he closed 2011 with a gain of just +0.81%, and followed up in 2012 with a sub-par +8.8%. What about 2013? +41%! (His best years were +49% in 2003 and +144% [no typo] in 1999).
Why would I highlight Sustersic? His performance has been consistent. Mark Hulbert recently cited TMCGX as 'the U.S. diversified equity mutual fund with the best 15-year return according to Lipper, with a 17.6% annualized return over the last 15 years.'
This tells me two things: (i) If I want outperformance, invest in small caps, and (ii) if I expect a stellar year for US equities, I want Frank Sustersic managing my money!
(e) At +17.6% annualized over 15 years, why not just put my money in TMCGX? The downdrafts don't work for me. Click on the following link and scroll down to Annual Total Return History:
http://finance.yahoo.com/q/pm?s=TMCGX+Performance
I don't like the performance in 2002 (-20%), and I definitely want to sidestep a drawdown like 2008 (-43%).
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Here's my thinking. 2014 is likely to be 'a losing year,' for many traders and for many strategies. Defensive strategies will excel.
ReplyDeleteIt's difficult playing the short side, one reason being the highly unpredictable (yet inevitable) occurrences of short-covering rallies (panic selling by longs is nothing compared to panic buying by shorts!). The smarter play may be to remain in cash. This allows me a break from the daily grind of following the markets (during a period of above-average risk), and leaves me with plenty of fuel when a correction arrives. (I'm confident saying 'when' and not 'if/when-' human nature was not designed to act in straight lines.)
I may or may not retain my core positions in Emerging Markets (at about 7% of the portfolio, I'm free to trade around them). Too many fund managers seem to have the same idea (rotating out of US equities into EM), which makes for a very crowded trade. Thailand may be the one exception.
I think you're taking a good strategy with respect to this year. I do think we should see some more volatility. Tapering isn't tightening I agree but it is a change in strategy and just the change alone will impact traders thoughts.
Deletehttp://www.businessinsider.com/arthur-laffer-interview-2014-1
ReplyDeleteI think the entire concept of how money printing would cause massive inflation failed to take into account the impact the recession had on people's and businesses' views around credit. When you go through a near death experience, unless you're a robot devoid of all human emotion, you're bound to take it easy afterward. So the money printing I don't think ended up showing up in places like bank loans and into the real economy the way a lot of people thought it would. I think on the fringe it helped confidence and confidence (or lack thereof) is what primarily drives the market. That's why tapering most likely will not really have an impact on the economy but it could have an impact on risk-taking/confidence. We'll have to see. I think there's always a chance we could see continued slow/moderate ECONOMIC growth (ie no change whatsoever) along with people being less willing to pay up for stocks (ie lower confidence). So it wouldn't surprise me to see a pullback in things that rose due to people just paying up for them (i.e., earnings didn't change much but the multiple did) while things that benefit from a gradually improving economy performing better.
DeleteThe normal progression of most traders that I’ve seen is that the older they get something happens. Sometimes they get more successful and therefore they take less risk. That’s something that as a company we literally sit and work with. That’s certainly something that I’ve had to come to grips with in particular over the past 12 to 18 months. You have to actively manage against your natural tendency to become more conservative. You do that because all of a sudden you become successful and don’t want to lose what you have and/or in my case you get married and have children and naturally, consciously or subconsciously, you become more conservative.
ReplyDeleteThis clearly doesn't apply to TOF.
DeleteMaybe I'm not old enough Mark.
DeleteAnyway, I agree that as you get older you should become more conservative. We are constantly evolving and mindful of painful experiences we've previously gone through and I think those experiences help shape our attitudes toward things like risk taking etc.
DeleteFor me, even though I've been actively investing for 15 years now I feel like I'm just starting to hit my stride because of the periods we've recently traded through. I feel like I've always had a good understanding of financials due to my background in accounting and small business, but I didn't fully understand the impact business cycles and technicals had on investing. I don't think I'm alone in this but going through 2007 to 2011 has profoundly changed my views on investing and made me focus more on things other than just valuing a business, which is still the most important thing but not the only thing. It has also made me become more flexible in my thinking.
For me the volatility of 2007 to 2011 actually made me more risk tolerant because I have seen just how much stocks can fluctuate while the underlying business remains intact. So even though a stock can move 20% against you in a heartbeat, the underlying business could be unchanged or actually improving. I don't think I really understood this until I went through it several times.
Also I think the past 6 years has made me more skeptical of analysts / gurus and that most people in the financial world with an opinion are talking their own book. I think the best part about investing is the behavioral aspect of it and how much of a reflection it is of your own thoughts / emotions.
Mark, TOF - I don't want to intrude on your conversation, but there were some comments that 'nemo' made to a new trader on Vad's blog that maybe shows a different view ...
Delete[15:04] {nemo} imo, write down your questions, don't ask them. Take a screen shot of the stock in question, then after the market closes take your screen shot along with longer time frame charts, and see if you can come up with an answer
[15:05] {nemo} You have to be fluent in the language and that comes from screen-time when the market closes
[15:06] {nemo} I cannot tell you how many hours I've spent outside of market hours looking at charts
[15:06] {nemo} Yes, you can't be given a fish, you have to fish
[15:07] {nemo} there's no substitute for it
[15:07] {nemo} You know who Branford Marsalis is?
[15:07] {drewj} musician right
[15:08] {nemo} yep...and he said "structure is art"
[15:08] {nemo} You have to learn the abc's and wrestle with them yourself to eventually become an artist, to find your edge
[15:08] {drewj} you're saying to learn the structure from reading charts after the market is over.
[15:08] {nemo} You have to learn the structures before your intuition starts speaking to you
[15:09] {nemo} charts, candles, structures, volume, whatever instruments speak to you
[15:09] {nemo} Frankly, the questions you ask confuse you.
[15:10] {nemo} Spend time with structure
My experience is that this market is more like a Football game ... with an opening kick-off (the Gap UP or DOWN or an OAIR(opening-auction-in-range)), a series of offensive plays and I always feel I'm in the role of the defense trying to anticipate the next pass route. The market makes moves. It is structured. And the more I learn about that structure, the more methodological trading becomes. It's more like a Defense 'reading' an Offence setup ... IMHO
There is no single method that works for everyone. We each have different talents, temperaments, backgrounds, perspectives. Find one that works for you.
ReplyDelete2nd,
ReplyDeleteThere are many studies which have proven that the best place to look for outperformance over the market is small-cap value stocks.
Take a look at IWN (Russeel 2000 value) versus SPY. You can also compare the IWN to the IWO (Russell 2000 growth).
The last 1990's were an exception when large cap growth outperformed, but in general, small cap value is almost certainly the best hunting ground for beating the market.
From a chart perspective, I find these are often the stocks which have had big downturns, followed by long bases.
Thanks for bringing up IWN and IWO as lower/higher risk alternatives to IWM. I learn something new every day.
DeleteOne of the big advantages we have as individual investors is the ability to tailor the risk profile of our investments to our individual situation.
ReplyDeleteSo, as you get older, if you want to reduce risk, you can easily. If you want to excessive risk on a good opportunity, you can, etc.
We have no investment committee, or mandate, or pension board, or fearful investors, or anyone telling us what risk we can take, so we can take advantage of the market.
But it certainly makes sense that the amount of risk you take on will go down as you get older, have kids, grow your portfolio, etc.
http://www.businessinsider.com/sp-500-inflection-points-2014-1
ReplyDeleteTwo 'bullish' articles re gold:
ReplyDeletehttp://www.marketwatch.com/story/gold-has-its-sos-moment-and-its-bullish-2014-01-03?link=MW_TD_latest
http://www.marketwatch.com/story/it-may-soon-be-time-to-go-for-the-gold-2014-01-02?link=MW_TD_latest
KyleJanuary 3, 2014 at 4:15 PM
DeleteGOLD - Caldaro posted an EW analysis comparing the 1980-1982 bear with this one. I've just skimmed it, but his conclusion is
Notice both Primary A waves are quite similar, in time and price. Our Primary A wave count suggests Gold may have recently bottomed in December. We have a completed Major A @ $1524, a completed Major B @ $1798, and potentially a completed Major C @ $1181 at the December low. Should this be correct we could now witness a 38.2% retracement of the entire first decline, ($1924-$1179), into the $1460 area over the next 3-8 months. This would represent a $280 rise. Which is also similar to the $220+ rises of Primary B and Primary X during the last bear market. “History often repeats, but is never exactly the same.”
It's at http://caldaro.wordpress.com/ ... 'GOLD: then and now' if you scroll down after the 'friday update'
THD -- very interesting ... http://www.screencast.com/t/7DLJUrYML
DeleteBb - I agree regarding small caps but part of me does wonder if that outperformance lasts. I think most periods of outperformance tend to revert eventually. The one key ingredient though that benefits small caps is their size inherently precludes
ReplyDeleteSorry got cut off my iPhone does this all the time. I was going to say it precludes larger institutions from owning them and from analysts covering them so you can often find gems before they become main stream. There is more risk though due to the lack of liquidity.
DeleteThe real takeaway is that undervalued companies eventually become "valuable". I actually was looking at AMNF by the way. That sucker is still going.
AMNF was a good one!
ReplyDeleteRe smallcaps, the outperformance is long term. There are many good articles, but here is one:
http://valuestockguide.com/stocks/smallcapvalue/
Reality is small caps is just a less competitive environment. Another good proof point is Warren Buffet saying he could make 50% a year with small money, but just match the S&P with the large amount of money he has now.
I agree but I do wonder if there eventually comes a time when even that outperformance goes away. Weren't a lot of banks using credit information from like 1940 to 2000 in modeling lending leading into 2007? That's a long window of time as well...granted, I'm saying this despite believing my own belief that investing in small caps is the best way to outperform...
DeleteThere are periods where large caps outperform like the late 1990's and the nifty-50 era. And we could be going into another of those with people saying small caps are relatively overvalued now.
DeleteBut in over long periods of time, small caps will almost certainly outperform due to their inherent advantages.
I have a technical question. Feel free to bypass it.
ReplyDeleteLet’s say Fund X is quoted to have gained +20% in 2013. The fund also paid out quarterly dividends. (a) Does the 20% include the dividend amounts? (b) Do the historical quotes reflect adjustments for the quarterly dividends? (c) If so, how are the adjustments made?
For instance, Fund X starts 2013 with a price quote of 10. Along the way, it paid quarterly dividends totaling $1. The underlying assets also gained $1/share. Would the year-end quote be:
(a) 11 (leaving you to add in the dividend contributions yourself)
(b) 12 (reflecting the actual percentage gain including dividends), or
(c) Would the beginning price on 1/1/13 be adjusted down to 9.17, which then multiplied by 1.2 would lead to a performance of +20%?
Dividends are subtracted from share price on the ex-div open.
DeleteIf you have some time and want some good macro info, some interesting charts from JP Morgan:
ReplyDeletehttps://www.jpmorganfunds.com/blobcontentheader/777/753/1158474868049_MI_GTM_1Q14.pdf
'The Losing Year' appears to be off to a good start.
ReplyDeleteAnd PM's seem to be gaining favor.
ReplyDeleteHighly volatile pricing this evening.
DeleteDip buyers surfacing in HK and Tokyo. I think they ultimately get swamped by another selling wave.
ReplyDeleteEWZ - Interesting this ETF actually went up despite the Yen falling.
ReplyDeleteMeant EWJ, not EWZ........
DeleteWhich suggests corporations do better during QE, right?
DeleteSo, based on this - http://www.businessinsider.com/strategists-2014-sp-500-targets-2014-1
ReplyDeletethe average target for the S&P next year is 1950, which is up 6%.
Doesn't seem overly optimistic
I agree. No one expects a big up year. But then again no one expects a significant down year. Most likely we get a +15% or -15% year.
DeleteYeah, but everyone's expecting more and the argument for more seems valid. Might happen if something doesn't go wrong somewhere? We could be at the beginning of a rotation?
DeleteBALT - All out here @ $6.35, will try to get back in on a further dip. Wondering if DRYS would be good here in the low $4's on this pullback.
ReplyDeleteBALT always pops up when I sell....... :(
Delete(a) Brazil, Russia, India, China. All sold off/are selling off. EEM bid as low as 39.77 in the first thirty minutes of trading. Taking remaining positions in EEM off the table now @ 39.83.
ReplyDelete(b) Scaling into TZA (-3x Russell 2000) @ 17.23.
(c) Taking the next flight out of Thailand (THD) @ 62.84.
Transitioning (cautiously) to a short posture.
Wow- What caused that wild move in GLD?
ReplyDeleteBidding MCP @ S2, 5.58.
ReplyDeleteTZA off @ 17.41 for a +1.04% gain. Sounds meager, but position sizing was 3x my position in Emerging Markets, and the gain was achieved in less than 30 minutes- it also pretty much offsets my entire loss on a 2-day play on Emerging Markets. Using a short time frame is the only way to play leveraged inverse funds, IMO.
ReplyDeleteNow back to a market neutral stance (biases are leaning long EEM or short the US indexes with any additional trades), and back to 100% cash.
Sorry for the late comment above. For some reason Blogger disallowed the post multiple times before finally accepting it.
DeleteNothing ever wrong with taking gains!
DeleteCXO - Entered a 1/2 position at $101.60, the lowest price I could negotiate given the circumstances.
ReplyDeleteI keep waiting for 100 even. probably stupid.
DeleteI added another 1/4 at 100.40
DeleteApparently CXO has sh^t-tons of mineral rights in the Permian, the entire place reeks of hydrocarbons and supposedly the ongoing boom will last an estimated 5yrs. Can CXO make money on these assets? I hope so.......
DeleteALDW's refinery sits right on top, so it seems natural since it's been there so long it should do really well assuming they don't blow it up too often.
BAS well servicing is there too, 5600 employees but I don't know where they're all are located, if in Midland or Ft Worth. The actual work should be around Midland area where wooden shacks now rent for $1k.
DeletePassing along a couple of interesting ideas based on my weekend reading:
ReplyDelete(a) North America. The US, Canada and Mexico. The vast pool of natural resources in Canada and parts of the US + political reform in Mexico may help create a North American global economic powerhouse. South of the border? Some analysts now view Mexico as the safest emerging market to invest in.
(b) At least two of the BRIC countries may continue to pull back. You've all seen the 60 Minutes story on ghost towns in China, as well as the stark slideshow re the country's pollution crisis. China needs to slow down! Russia? One US Ambassador describes the country as a 'Mafia state,' with deep structural problems and endemic corruption. How confident can we be investing in large reserves of oil and gas run by wise guys? The smart money may be moving on, to 'Beyond BRICs': Mexico, South Africa, Kenya, Turkey, Indonesia, Malaysia, Vietnam.
I like the Mexico, South Africa idea. Dunno about Kenya though is that a mineral resources play?
DeleteSide note: My mouse cursor is bouncing all over the screen, must be time to reboot MSFT WINDOWS again.......
Some days, I only need to watch the open and confidently predict it's going down. When the DJIA popped +60, my first thought was 'Yeah, right.' I should have shorted the open. Five years ago, I would have. Today, I waited for 'confirmation.' No balls.
ReplyDeleteDavid- You were right about EEM.
ReplyDeleteI missed David's EEM observation somehow.
DeleteIt was embedded in his lead post a couple of days ago.
DeleteOh yeah, now I remember. I like Korea though, especially b/c I think North Korea will get straightened out but maybe it doesn't actually happen till the situation worsens and the time-line could involve another decade?.
Deletehttp://www.marketwatch.com/story/gold-futures-hold-above-1240-after-flash-crash-2014-01-06?link=MW_home_latest_news
ReplyDeleteI definitely missed it.
Oh flash crash! So of course the flash crash I was longing/expecting did occur and I didn't connect the dots b/c I was looking in the wrong direction!!!!! Is it still a flash crash when the trend is down?
DeleteIf gold crashes and you weren't around to see it, did it in fact crash? Well, in this case I hardly think any price above 1200 qualifies as a crash. It's a crash when I'm finally prompted to shop for jewelry.
DeleteI watched it move under $1200, but just thought at the time it seemed like another day in paradise.
DeleteLOL, an Englishman sporting a British accent!
ReplyDeleteBALT - Crap, shaken out again! Looks like $7 may be coming soon.
ReplyDeleteKB - Speaking of Korea, KB could be an opportunity? I'd rather have some under $34, like ~$32, but you know how that goes....... PKX seems to be leading the way.
ReplyDeleteCP - Don't bother with DRYS is my take. Stick with best of breed.
ReplyDeleteGotcha, please come back to papa!!!!!!!
DeleteGot my bid in at $6.18, see what I get for being cute?????
DeleteI promise to hold you tight! (BALT of course, Not TOF)
DeleteOpened a position in HDGE @ 12.90.
ReplyDeleteOne advantage relative to leveraged inverse funds is that I'm able to let the position play out over time, whereas TZA requires constant vigilance.
DeleteIs there any decay with that one? My guess is no, like SH, but they fall into the derivatives category.
DeleteNo decay. And any 'edge' derived from active management by experienced short sellers. Obviously, that experience failed to prevent a -30% downdraft in 2013.
DeleteMight be subject to human error but at least it doesn't have a built-in decay feature! :)
DeleteWonder what happens if they're forced to cover?????????????????!!!!!!!!!!!!!!!!!! :O
DeleteI think that's what happened in 2013.
Deletehttp://blogs.marketwatch.com/thetell/2014/01/06/company-earnings-warnings-are-at-record-highs/
ReplyDeleteNVDA - Does this one look like it could break through the ceiling?
ReplyDeleteJoan Baez. In addition to being a talented vocalist and musician, a songwriter on a very personal level.
ReplyDelete(a) Diamonds and Rust. http://www.youtube.com/watch?v=GGMHSbcd_qI
(b) Myths. http://www.youtube.com/watch?v=gt-CEI-6oFg
(b) In The Quiet Morning. http://www.youtube.com/watch?v=xX5pKIFbUCI A composition by her younger sister Mimi Farina.
Happy new year! I haven't posted much but I did introduce myself late last year. That said, love the blog and read you guys everyday. Some sharp minds here.
ReplyDeleteAnyhow, I have small position in DATE, a stock that TOF pointed out some time ago. Big move today and for the first time in a while, it didn't give it back. Something to watch this year.
In the same vein, I think there might be some real potential in some of the lesser known China stocks this year and I have been on the lookout for candidates. They can be tough to hold though, prone to sharp sell-offs.
Speaking of BRICs, I recently found a website that lists the BRIC ADRs, sortable by performance and other measures.
http://bricadr.com/
Hope you all have a great 2014. The last quarter of 2013 was my best ever. Hope it continues.
Nice Brad! Today was probably the first day I didn't look at it and Bam!!
DeleteThanks. Lets see what it does tomorrow. It has a low float, so if the speculative juices get flowing....
DeleteNice link, Brad. Man, the BRICs sold off hard today. Any further gaps down and I may reopen a position.
DeleteYou know what, Mark? That happens all the time. This morning I did not once look at gold/miners. It was a Marketwatch article that alerted me to the 'flash crash.' And normally I ALWAYS check the miners.
DeleteIn fact, my first thought when reading the headline was that it referred to LAST week's opening drop in gold/miners.
DeleteBCOV- No one's probably interested in looking into this one hun?
ReplyDeleteF - Island reversal play?
ReplyDeleteAGCO - Back to the trend line.
ReplyDeleteSign of inflation. Wife and I stopped at the local TJs, and I went to pick up bottles of '2 buck Chuck.' Now it's '2 and 1/2 buck Chuck.' That's a 25% increase, bro.
ReplyDelete2 buck upchuck. Yuck.
DeleteYeah, I remember your reaction to your first glass of wine at 21st Amendment.
DeleteIt's amazing how many wedding receptions use the stuff.
Deletehttp://www.businessinsider.com/julian-marchese-global-macro-trader-2013-10
ReplyDeleteThose Canadians - going to make millions and help people at the same time!
DeleteBrad, saw a report on the weekend (can't find it now) showing the cheapest markets in the world on a relative to their historical values and an absolute basis are, in order, Russia, China, Brazil.
ReplyDeleteSo, that is a good backdrop for these stocks and should help provide a floor, but each country has it's issues, so you can see why they are cheap, but I think it's a pretty good idea to buy some stocks or ETF's in these countries, but trying to be selective and over doing it over time to reduce the risk.
I've got BSBR and MBC.TO in Brazil and SORL in China. Plus, my large life insurance holding, NWLI, in addition to being incredibly cheap, does a lot of business in Brazil and other South American countries.
Russia, I'd just stay away from as it seems like rule of law is only loosely followed. India has a lot of fiscal problems and the Rupee is weak, so even if you pick a good stock, you still might lose money. I do have a small position in UL as a dividend growth stock with good exposure to emerging markets including India, but that is as far as I'd take it now.
Pretty sure I told you guys I wanted to jump into MCP for a longer term hold right? Gap almost filled.
ReplyDeleteI've been watching that one closely. I like it here, chart-wise. Don't know anything about the company though and wouldn't ever have enough conviction in it.
DeleteHmmm...Kinda interesting. Who gets to 9 first? BALT or ENPH??
ReplyDeleteBALT was at 9 the last time 3 years ago...ENPH, 3 months.
I wonder if any sort of TA is available for this type of data.
Good question. ENPH seems to have more near term catalysts with earnings but I wouldn't be surprised to see a big run in baltic spot rates after this recent pullback.
DeleteThis is the idea that popped to mind, not sure if it's any valid:
Deletehttp://stockcharts.com/h-sc/ui?s=ENPH:BALT&p=W&b=5&g=0&id=p65011285830
CP- What do you think this might tell us?
DeleteI dunno man, I tend to think it doesn't tell us much of anything.
DeleteJust noticed this:
ReplyDeleteSamsung Electronics fourth quarter guidance widely misses street estimates.
And, the WON has been on a tear......
DeleteBrad - I still really like DATE longer term. I think it's an excellent secular growth play. I switched to BALT only because I see more upside but DATE is going to be a nice investment.
ReplyDeleteDECK - This sucker just keeps going. The Uggs are back boys!
http://www.thestranger.com/binary/96cf/1260567755-6a00e54f9a963388330120a54af491970b-500wi.jpg
No fair, puss in boots!!!!!!
DeleteMark likes his uggs:
Deletehttp://images.sodahead.com/polls/000800773/polls_ugg_boots_415x774_4943_185784_poll_xlarge.jpeg
ARII - This one still looks cheap to me, and supposedly there's a shortage of rail tanker cars for crude transport......
ReplyDelete2nd's earlier post is getting under my skin:
ReplyDelete"Company earnings warnings are at record-highs January 6, 2014, 2:16 PM"
http://blogs.marketwatch.com/thetell/2014/01/06/company-earnings-warnings-are-at-record-highs/
2nd - thanks for sharing the Joan Baez videos. I could only get the 1st one to play. I've never heard diamonds and rust before but it was great. My mom loved her music so it brings back memories
ReplyDelete"Capstone Turbine Corporation ($CPST) is forming a 13-year base" Peter Brandt
ReplyDeleteIf low-Beta stocks are overvalued - http://blogs.barrons.com/focusonfunds/2014/01/06/low-beta-bubble-is-on-the-verge-of-deflating-bofa/
ReplyDeleteThen, to me that implies the broad indexes may have a tough time this year as many of these stocks are in indexes, so we have a good chance of outperforming the market with the types of stocks we pick here.
"the types of stocks we pick here."
DeleteNo truer words have been spoken.
An acquaintance of mine put a large amount of money into PLUG at $0.30 to $0.40 and he's still holding from what I found out last night. Unbelievable.
ReplyDeleteIf you can get a good one, it's sometimes better just to hold on for the ride.
DeleteHe actually owns 3% of the company from what I have gathered. So a $1 Million or so investment turned into $10 Million in less than a year.
DeleteClarke Inc - CKI.TO - now the largest holding percentage wise I have ever had for an individual stock - almost 20% of my portfolio.
ReplyDeleteSeems like such a no-brainer - announced yesterday that they sold their trucking business and book value per share increased by $3.55, so around $12.00. http://finance.yahoo.com/news/clarke-inc-announces-close-sale-141500407.html
Insiders continue to buy - http://www.canadianinsider.com/node/7?menu_tickersearch=cki
Loads of cash on the balance sheet and an aggressive activist investor looking to either redeploy or dividend or restructure financing.
Plus a 5% dividend yield.
Been trading at 85% - 90% of book value the last few quarters and over book value when the last market cycle got good, so short term target is $10.00 and would not be surprised to see $12.00 this year, so 25% to 50% upside.
Did a lot of buying last year and 2012 around $4.00, but did a big add recently just under $8.00.
Really, really hope I am not missing something!!
interesting one. reminds me of ACAS
DeleteCLKFF - Looks like PE is just 5
DeleteIt trades on assets, not earnings as it is an investment company, so the value of the company is in the investments. Earnings fluctuate wildly as investments are sold and the asset values are realized.
DeleteDATE up big in pre-market. I decided to unload my shares from 6.90 to 7.25. I hope the spike gets sold off so I can buy some more. We'll see.
ReplyDeleteNice Brad. I envision it being a $15 to 20 stock within 3 to 5 years...and paying a 10% dividend on today's cost. Slow, steady grower with dividend growth to boot.
DeleteGood work, man!
DeleteAA - This one reports in a couple days Thursday AH, might be interesting.
ReplyDeleteShorted SPY at $183.29 as a hedge / short term trade
ReplyDeleteStop is move above $183.8
DeleteTook the hedge off at $183.4. I looked closer at the DJIA which is now the leading index in my opinion and it broke above the highs from the past few days. That's enough info for me.
DeleteVery observant, thanks for posting that thought process.
DeleteEight-skate-rotate, Baby needs a new pair of shoes!!!!!!!
ReplyDeleteMCP- Overslept and missed the perfect entry in MCP.
ReplyDeleteOld man syndrome! :) While we're sleeping, TOF's practicing, thinking, scheming!!!!! We have to get up earlier and work harder to retain any edge.
DeleteONP is another China stock I like. I have a small position in it. They went through the Muddy Waters nonsense and came out unscathed, complete with a SEC investigation that they passed. They pass a small dividend and are starting to grow again. The longer term chart is a classic bottoming formation. Trades at 2 times last quarter's annual earnings run rate.
ReplyDeleteGood luck with that one, MW has been disingenuously harping reasons that aren't the primary concern, IMO.
DeleteLooks interesting.
DeleteA lot of the paper stocks were beaten down relentlessly for several years to very cheap prices, but I've noticed a few of them have taken some good jumps over the last year, either through buyouts or other things. I think that they just got way too cheap as people see paper dying, but you can make money off a dying business if you get it cheap enough.
CXO - I bet I get stopped out at my basis and then it takes off leaving me in the dust.
ReplyDeleteOINK - Which way do you think this pig is going to go? I already know which way it SHOULD go, but that doesn't mean it's gonna happen.
ReplyDeleteGoing to try and get ONP.
ReplyDeleteTheir business has a good spread between packaging, consumer paper and tissues and management seems to know where to reinvest.
P/E of just 4 based on earnings guidance, way under book value (so assets should help protect downside), low debt, small dividend.
Still the China accounting questions, but TOF says they got through the investigation clean (I did not check) so a better chance than usual it is legit.
Not a big position for me, but worth a shot, especially considering how well packaging companies are doing and the renewed interest in cheap writing paper companies.
I do believe that ONP is legit, it's the open-ended legal foreign ownership issue that keeps me away.
DeleteIs money coming out of T's going into REIT's, or what?
ReplyDeleteI'd still be careful with REIT's. A lot of money funnelled into them the last few years chasing yield, so there's probably a lot which will come out.
DeleteThey've come down enough that there probably are some good ones, but you need to be selective still in my opinion.
I am wondering about what is going on with the Italy market? It is still less than half it's 2007 peak and almost half of its 1998 peak.
ReplyDeleteI know they have political issues and high debt, but seems way too cheap relative to how well most other markets have done for a mature economy.
PLUG - Holy crap up 34% today! Remind me why aren't we in this one?
ReplyDeleteOh I see, hydrogen fuel, while oil is struggling to remain in the 90's and oil companies are shooting themselves in the foot by overproducing.
DeleteWonder what it must've been like when the automobile came out, I guess all the horses were sold off. How the HEL are they planning on producing hydrogen for these vehicles and still making it cost effective? Ocean warming and suspended(frozen) sub-sea methane is the latest revelation concerning ocean temperature increases just as the oil boom gets rolling, nice picture, huh?
Anyway, where's the hydrogen coming from and who's producing it, what equipment are they using and who makes it, is it Mitt Romney's hydrogen company or what?
Pacific Ethanol - PEIX seems to be getting away from me. I missed buying it on Thursday under $5.00 as was too busy, but now at $5.47 today, so have to wait.
ReplyDeleteShould do well going forward as the price of corn has come down. Was a $100 stock less than 2 years ago (including reverse splits) and $4,000 back in 2006, so could get some interest from the momentum guys if they can take advantage of low corn prices and build margins.
Think it might reach $25? I think they also have announced other capabilities besides just crops, too?
DeleteCXO - Stopped out with about $1 gain, LOL......
ReplyDeleteMCP - They brought it back to ya, Mark!!!!!!!!
ReplyDeleteTHD - Showing signs of life, you guys still have this one?
ReplyDeleteVLO - We missed the refiner breakout, didn't we? As the brent spread widens b/c of all the trapped oil, these guys refine it and ship the product overseas.
ReplyDeleteMCP- Yeah, but that's not bullish to me. Must be some downside work still unfinished. Maybe 5.40?
ReplyDeleteScrew it. 2K @ 5.66.
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