I can’t do it.
(a)
I believe the
markets are in dire need of a serious correction, and it’s a stretch to think
that Emerging Markets will be spared. EM may ‘outperform’ in the form of
a smaller percentage decline, but that’s little comfort to me.
(b)
ATACX doesn’t
believe in holding cash, which is partly why they gave up a decent gain in
bonds.
(c)
ATACX is slow to
react. I would have taken last week’s gains in EEM and parked in cash to
await further ‘guidance’ from the only source that matters: market action.
(d)
Taking EWZ off the
table @ 40.2x (basis was 39.1x).
(e)
Taking BSBR off the
table @ 4.9x (basis was 4.8x).
(f)
Taking PBR off the
table @ 11.0x (combined basis in positions opened @ 11.50 + 11.20, or about
11.35).
(g)
Taking EEM off the
table @ 39 (combined basis in positions opened @ 39.73 + 39.20, or about
39.47).
(h)
Taking ATACX off at
the close, with a -2% early withdrawal penalty. Total hit on the position
will come to -5.9%! Had I managed the same funds on my own, I would be
ahead at least +2%. That’s a substantial gap in performance.
What have I learned? I’m
OK with being right, or being wrong- as long as I’m in control. Handing
off to an active fund manager drives me nuts!
With about a third of the portfolio in ATACX, I’m taking a -2% hit overall. That’s the upper limit of what I consider to be acceptable. There’s no excuse for me to stand by and watch while my portfolio gets trashed. That’s what it comes down to. If I’m fatigued, I should be parked in cash.
ReplyDelete2nd - I think you should definitely not go with closed funds if you're going to go that route.
Delete2nd, I think you only buy funds if you are not going to watch them.
DeleteSince you know how you want your money invested, much better off to either do what you want or, as you say, just being in cash. Tailor your portfolio for you instead of some quant computer program.
Wow my "model" predicted almost EXACTLY the same numbers for BALT. I had:
ReplyDelete$14.44 Million Revenues
$12.511 Million Expenses
$1.93 Million Operating Income
$0.52 Million Net Income
$0.01 EPS
$0.11 Pre-Depr Income (used for dividend distribution purposes).
I'm a little disappointed they didn't boost the dividend more. Was expecting with these numbers that they would go up to at least $0.04 if not all the way up to $0.08. I guess its smart, though. They can use that extra $$ to pay off the new ships.
All in all exactly what I was expecting. That's nice to know that my spreadsheet is spot on because it seems to accurately reflect what would happen in rising spot rates. The tricky part is getting the expanding fleet down correctly. There are more moving parts in that but basically at last quarter's average spot rates I am estimating they would have done $0.16 EPS and $0.30 pre-Depreciation income. That's why there's a lot of money going into this stock. The leverage is impressive: for example, a doubling of rates from last quarter's average produces some gaudy numbers: $0.72 EPS / $0.86 Pre-Depr Income.
Good work. Looks like it is up 4%after hours.
DeleteYeah I wouldn't read into the after hours trading much. Very low volume. That FB parallel I mentioned the other week (in relation to the Baltic Dry Index) is still holding very well. I was thinking about this some more how the rally off the lows wouldn't be all that great...maybe to like 1,500 or so. And then there would be some kind of spike higher after trending sideways for a while...anyway I was trying to think of what would cause a spike like that and my best guess is that China and / or India comes up with some big stimulus or incentive plan that directly impacts the shipping industry. I don't know what that might be but maybe they incentivize the industry to scrap old ships quickly? Who knows. Either way, I still see much higher rates over time as the industry inches forward much more conservatively with respect to supply.
DeletePEIX crushed earnings and the stock is up 18% after hours - guess that was one that was worth paying up for after its initial move.
ReplyDeleteyeah when it crashed then rallied back quickly it was pretty apparent it was going to go higher - reminded me a lot of the SLW move back in 2008/9. I was tempted but didn't want to get out of my other holdings.
DeleteLike I've said many times before, I can't believe these things happen. Yet they do, time and time again...
DeleteMGIC has had a big run after the initial pullback on earnings and is now looking to take out the early 2011 highs. I still have half of my position and am thinking of just selling and moving on as the valuation is getting stretched, but the growth is good and people will pay up for good tech growth.
ReplyDeleteHonestly I wouldn't sell that one yet. I'm sure its tempting but I think you could get a really big spike higher one day on massive volume which would be a good time to bail.
DeleteWould be nice - has done it before and tech is attracting some big multiples these days.
DeleteFrom what I can see, it is a good time to be in the traditional cyclical type stocks which are levered to the economy.
ReplyDeleteThings like shipping for sure, but also quite impressive how stocks like AA are recovering and getting up to new highs. Energy companies like CNQ are in also solid uptrends.
I own a steel fabricator in Canada (CAM.TO) and their stock got hammered in the recession, but they were smart, cut the dividend, managed debt, did acquisitions on the cheap (3 times EBITDA) and now the economy is turning and their profits are growing strongly. As business picks up, their multiple is also improving. You want to sell a stock like this before the next peak (like all of these types of stocks), but I think we have a very long recovery and can hold this for several more years still.
I completely agree and its the reason I've been investing in stocks like BALT/AA/ACI
DeleteDo you guys know of any program / account that allows you to put in just $50 or $100 a month into index funds / ETFs without big commissions? I have a few buddies that are looking to invest for their kids and I recommended looking into this but didn't know of anything specifically.
ReplyDeleteBALT - Wow, this must be the first time ever I've experienced two positive earnings experiences in the same week, let alone year. Unreal, hard to believe.
ReplyDeleteTSLA's going to 300 easy.
ReplyDeleteProbably. My brother-in law, who is a poor, end-of-trend investor wants to start putting some money into these Elon Musk projects, so we are probably close to the end, but there could be a lot of money made on the ride still.
DeleteHere's the thing. My short term sense is (usually) so acutely tuned in to the next immediate move that watching a fund with a longer trigger is not unlike foreseeing an imminent auto collision that then unfolds in 'slow mo' the following day. An entirely 'avoidable' (from my perspective) -4% dent? It's almost impossible to watch from the sidelines, when my instincts would have been to veer off the road in hopes of stemming the loss at a fraction of a percent, and perhaps even to change tactics and take the other side of the trade.
ReplyDeleteYou could even say the sixth sense is a major handicap.
DeleteIf your edge is recognizing short term market swings, doesn't really make sense to own an always fully invested fund. Gotta match your trading style to your temperament.
DeleteI'm sure you couldn't trade like me living through 50% or more downdrafts as long as the long term looks good. But I can't trade successfully like you either - I have tried and while I am pretty good most of the time, when I get them wrong, my losses wipe out my gains and then some.
You're correct about the 50% downdrafts. There's just no way I could do it.
Delete2nd, honestly, I question your confidence in your sixth sense in this particular application.
DeleteGood numbers again out of AGO tonight with a strong beat - still lots of upside in this as the economy improves and the municipalities get their revenue streams and employee pensions in order. Plus really cheap on a valuation basis.
ReplyDeleteRisk is that there is another Puerto Rico or Detroit in the wings, but I can't imagine that one of these is hiding out there given all the scrutiny governments have been under.
ZH - Wonder if not being able to be outwardly pro-Kremlin eats at them from inside?
ReplyDeleteSB - This one beat too.
ReplyDeleteJapan is restarting reactors, eh?
http://www.dailymail.co.uk/news/article-2568430/Three-years-Fukushima-disaster-prompted-Japanese-vow-abandon-nuclear-energy-country-plans-reopen-power-plants-possibly-build-MORE.html
I think this the drug 2nd mention which is up big. If FDA pulls plug bye bye gains.
ReplyDeletehttp://abclocal.go.com/wpvi/story?section=news/health&id=9446480
http://www.philly.com/philly/health/topics/HealthDay685259_20140226_Groups_Push_FDA_to_Revoke_Approval_of_Highly_Potent_Painkiller.html
I think this is another total BS press release and any weakness should be bought. Is this fear campaign, er, I mean concern, over the well-being and long term health of chronic pain suffers, or recreational drug users? My fear would be that larger manufacturers formulate the same product.
DeleteFNMA - You see this one? What do you think is gonna happen to sentiment (I'm not talking about BS synthesized sentiment indicators) when this one gets the okey-dokey finger of approval that simply can't be denied?
ReplyDeleteI think we were proven something again today that confirms again, and explains the reason for why PM's are out of favor.
The profits these guys are producing are eye popping. We should have been putting some into this back when we saw it pull back to $1...oh well.
DeleteI think that's where Ackman did a lot of his buying.
DeleteBaltic Dry Index (BDI) +28 1250
ReplyDeleteBLMT - Here's a bank I just happened to find, strong uptrend.
ReplyDeleteIMH - This one reports today AH
ReplyDeletehttp://www.cnss.com.cn/html/2014/weeklyarticle_0227/144611.html
ReplyDelete" Sentiment in the dry bulk market has been very strong recently. Of the 24 dry bulk vessels that were chartered for period deals last week, 16 were for durations of one year or more. This marked the largest amount of long-term period deals (durations of one year or more) to have surfaced in almost four years. The last time that at least 16 long-term period deals were chartered in the dry bulk market was during the Week Ending March 5, 2010. During that week, sentiment was very strong in the capesize market, and rightfully so as capesize rates began the week averaging $28,281/day but during the next fifteen days would increase by 51% to $42,83/day. The market was wise to have such strong sentiment that week before the jump in capesize rates. Turning the focus now to the present: the dry bulk market could be about to see rates in the capesize market increase again soon by a similar amount. Period chartering activity has remained firm this week."
I still think it's odd that spot rates are significantly lower than 1 year charter rates. In listening to earnings calls 1 year charter rates are almost double spot rates. Why would you want to lock in rates 2X spot rates unless you think spot rates are going to rise significantly?
Delete"Why would you want to lock in rates 2X spot rates unless you think spot rates are going to rise significantly?"
DeleteGood point, seems logical. I keep wondering why SOROS dumped BALT for SB, I guess balance sheet strength.
ENPH - Lifted above the Oct. trend line.
ReplyDeleteF*cking PEIX and YRCW
ReplyDeleteI can relate!
DeleteBALT - Earnings call @10am today
ReplyDeleteCORN - I dunno.Ukraine - Maybe this issue causes corn to spike?
CARMAX has 1200 job openings.
I still have 1 share of UKK from near the bottom. It's up 778%
ReplyDeleteLunch at Panda Express!
DeleteYes!
DeleteMy profit on it is $94 so that's one big lunch!
DeleteTake the wife with you on a date, to the PE! :)
DeleteBALT- I guess the market was looking for more.
ReplyDeleteAnyone else get the feeling 5.16ish is in the cards?
DeleteLooks like range trading to me so far, I'm going to see if high $5 comes.
DeleteWho knows with this one. Operating strictly on spot rates in one of the most volatile markets in the world. there's a rising channel since March last year with a lower end range of $5.3 up to $7.10 right now.
DeleteBrazil Economic Watch: Upside surprise in activity: GDP growth at 2.3% in 2013
ReplyDeleteFSLR- Man, look at that move off the 'miss'.
ReplyDeleteUp on bad news is uber bullish even for unibrows.
Delete1st comment on BALT call: 1 year spot rates are being locked in at 26,500 on Capesize vs 12k spot rate. They said there's clearly an indication that they expect higher rates.
ReplyDeleteThink about that guys: you can either ship at current rates of $12k per day or you can lock in 1 year contracts at over 100% higher. Which would you do and why? I think this is incredibly bullish.
DeleteI sold the ACI at $4.3 and picked up more BALT at $6.22.
DeleteGood catch and that conclusion seems logical, so I added another 1/3 position @ $6.22 Still have plenty of dry powder where that came from in case they want to keep playing mind games.
Delete$6.80 by end of day, $7.15 close tomorrow.
DeleteFNMA - Will SPX reach 2000 before or after FNMA reaches $20?
ReplyDeleteFLWS - I'm still sniffing flowers....
ReplyDeleteBSBR - Tentatively of course, but my painstakingly comprehensive research leads me to believe we've seen the bottom.
ReplyDeleteBALT - Opening the Madera plant. They must have shit-tons of free sugar.
ReplyDeletePEIX, not BALT....
DeleteFNMA - Now solidly through $4.80, last chance for romance!
ReplyDeleteParanoia is a disease onto itself, and may I add, the person standing next to you may not be who they appear to be. The problem with youth today is, due to their inexperience with the world they cannot attempt to grasp the ideals set forth my myself and those who preceded me.
ReplyDeleteLady bugs!
ReplyDeleteDude seriously...PEIX? Up 4X from my purchase price. I couldn't endure more than a 7% hit though. Although it did go down about 35% initially which I definitely couldn't endure.
ReplyDeleteAlready down a full $1 from the high, a brief pullback on it's way to $25
DeleteMaybe Mark will swing by and pick us up a gallon of moonshine each?
DeleteCrazy man, crazy.
DeleteSB - "Safe Bulkers, Inc.: 4Q aided by prepayments; Bulk outlook improving; Buy, 12mo PO $12"
ReplyDeleteI have to admit this is the first time in a while I've gotten a little seller's remorse with CECO, PEIX. I chickened out on both. Oh well can't win em all
ReplyDeleteEmbrace it. You know, one thing trading has taught (and continues to teach) us is the immutability of our actions. There's no going back, no redraft, no do over.
DeleteWe tend to remember the ones that got away. But we often forget the times we sold correctly and saved losing 75% of our money.
DeleteIt's all about playing the odds, but sometimes the longshot wins.
One of the best feelings in investing is when a ticker flashes by at $2 and you remember selling it out near the highs at $10!
DeleteInteresting analysis on shipping rates TOF. I'm pretty confident the low short term rates move towards the one year ones over time.
ReplyDeleteReminds me of in 2009 when oil got to $45. Really, it was just a cash squeeze that pushed the front month contract to $45 and out a year or so, oil was still trading in the 80's, which is where the price actually went.
MGIC - I don't know if these guys are smart or stupid.
ReplyDeleteThey pay pretty high dividends and even did a special dividend a few years ago of $0.50 when the stock was around $3.00, but now they are selling shares to raise cash with the stock at $9.50. They don't need the cash - they've got over $35 million and no debt.
Either they are trying to market time the stock or have a big acquisition in the wings I guess.
Houston has expansion plans:
ReplyDelete"Export growth appears near certain, a byproduct of the boom in U.S. shale-gas production. During the last few years, companies have announced some $35 billion in capital investments in new or expanded facilities along the Houston Ship Channel.
When those plants come on stream by 2016 and 2017, much of their production of plastic resins and other commodities will be aimed for export markets. “There are manufacturers who have hinted that their volumes, which are already large volumes, are going to triple,” Guenther said.
The port CEO is new to the job, which Len Waterworth resigned Jan. 31 after two years, but Guenther is a lifer at the port. He joined the port 26 years ago and oversaw its container terminals before being named deputy director for operations.
Waterworth, retired chief engineer of the Corps of Engineers’ Galveston district, worked to clear the way for Houston to begin deepening and widening channels to its Bayport and Barbours Cut container terminals. The terminals’ channels, now 40 feet, will be dredged to match the 45-foot depth of the port’s main channel.
Guenther said the port expects to receive the dredging permits soon, and then will solicit bids, with dredging expected to be completed by late this year or early 2015."
I would like to point out, folks, that the amount of physical gold held by GLD has not changed in 2 months: http://www.spdrgoldshares.com/usa/historical-data/. This is in a stark contrast to a steadily decline in GLD holdings that took place since December 2012. The physical holdings decline when people want to get out of GLD and sell their holdings at a faster rate than the one at which the price of gold is going down. At that moment, the GLD fund has to absorb the extra shares, and they do it by selling some of their physical and using the proceeds to buy the unwanted shares. So this could be a good indicator that the bottom for gold is IN for many months ahead.
ReplyDeleteThe next question is: will GLD price just stay flat or will there be an INCREASE in the interest of holding GLD? I think the answer to this question lies in the weekly chart of the TSX Venture Index:
http://stockcharts.com/freecharts/gallery.html?$CDNX
A perfect double bottom between June and December 2013, and a nice series of higher lows since then, which has already taken the index above the highest point between the bottoms.
You may be right about gold. Good luck if you decide to play it.
DeleteLooking ahead, I'm pretty sure we will have another major bear market in the next 1-2 years. You can use the opportunity to load up at the bottom. Better yet, with the usual lag between recoveries in the stock market and the housing market, I would take all of my winnings and buy a house. Just take the ----ing plunge and buy a home. You won't regret it.
"“It’s still a very functional and efficient terminal,” Guenther said. “The only problem is the cranes are 30 years old and too small for the sizes of ships we know are coming over the next decade.”
ReplyDeleteIntermodal is transporting containers by rail, but there seems to be a container chassis traffic jam, who makes these chassis?:
ReplyDelete"But in a classic knock-on effect, carriers’ inability to earn profitable freight rates for ocean transits led them to focus on costs in their search for elusive profits. One cost that stood out as having no offsetting revenue was chassis — at least in the U.S., the only market in the world where, thanks to Malcom McLean being a trucker, carriers were obligated by customer expectation to provide chassis.
Beginning about three years ago, following the multibillion-dollar losses racked up by carriers in the aftermath of the Great Recession, carriers’ bottom lines took precedent over concerns about market share. One by one, they began selling their chassis fleets and announcing, one carrier and one market at a time, that chassis would no longer be available. In one such announcement from 2012, OOCL said, “Effective Sept. 1, 2012, OOCL will no longer provide chassis for import and export shipments to/from Atlanta, Ga. All motor carriers, either working as suppliers for OOCL or OOCL customers, must provide chassis for these shipments. Chassis usage fees for Merchant (CY) moves should be billed by the motor carrier directly to their customer.”
Buffett is Mr. Intermodal, BNSF recently constructed a huge hub in Kansas
http://www.bizjournals.com/kansascity/print-edition/2013/11/08/lifting-prospects-edgerton-intermodal.html?page=all
I would encourage all of you to explore the option of a self-directed IRA, one that permits ownership of real estate. Why?
ReplyDeleteI worry about the 'demand' for stocks in twenty years. I don't think Gen X/Y have the interest. We may see a multi-generational contraction in P/E multiples due to lack of bids. Overall population growth and/or increased demand from the 90% of the world that don't currently own stocks may make up the difference, but then again, maybe the 90% that don't own are smarter than we are! In the very long term, paper assets are nebulous. Whereas real estate will always have value.
Mortgage rates are so friggin low it's nuts not to take advantage of the opportunity.
DeleteThe port of houston offers a free boat tour. Come on down, take a boat ride, then I'll take you to pappasitos for tex-mex
ReplyDeletehttp://www.portofhouston.com/community-outreach/sam-houston-boat-tour/
Named for the legendary military commander who led the fight for Texas independence from Mexico and later statehood, the M/V Sam Houston offers free leisurely 90-minute round-trip cruises along the Houston Ship Channel. Individuals and groups are invited to learn about the port through this enjoyable tour.
Embarking from the port's Sam Houston Pavilion, visiting sightseers aboard the M/V Sam Houston can enjoy passing views of international cargo vessels, and operations at the port's Turning Basin Terminal. The 95-ft. vessel holds up to 90 passengers and features air-conditioned lounge seating as well as standing room outside on the boat's deck. Here is a preview of some of the things you might see on your tour.
The M/V Sam Houston has been operating as the Port of Houston's public tour vessel since its first voyage on July 30, 1958. In 2010, the vessel received new low-emission fuel engines and a new generator. The environmental upgrades were made possible through grants from the Texas Emissions Reduction Plan and American Recovery and Reinvestment Act funding through EPA's National Clean Diesel Funding Assistance Program.
Make your reservations now for this rich and unique educational experience.
COST
The tour is free. Reservations on a first-come, first-serve basis are required at least 24 hours in advance.
First, I need to make some money!
DeleteLooks like fun!
DeleteOGEN - Taking off?
ReplyDelete"Interesting analysis on shipping rates TOF. I'm pretty confident the low short term rates move towards the one year ones over time.
ReplyDeleteReminds me of in 2009 when oil got to $45. Really, it was just a cash squeeze that pushed the front month contract to $45 and out a year or so, oil was still trading in the 80's, which is where the price actually went."
The thing that gets me is why wouldn't you go with spot rates even if they get to the year contracted rate in 9 or 12 months? the average would certainly be less than the year rates. even if they got to them in 6 months then you could pay up to 3X current rates over the remaining 6 months just to be even steven with the year rates.
Maybe if you have some other sort of hedge going or an interest in keeping your shipper employed?
DeleteOr, perhaps the contract(s) allows for renegotiation if rates fall below some level?
DeleteI'm probably an idiot, but I don't 'buy' this rally at all. I think we go down. I have no idea how, why, or when it will happen.
ReplyDeleteI'd have to imagine you start seeing a decline in this first:
Deletehttp://stockcharts.com/h-sc/ui?s=!ADRLINYA&p=W&b=5&g=0&id=p65090075934
BALT - Offed those shares bought yesterday @ $6.43, will try picking them up again lower. Just b/c I think these bozos are in no hurry to rally this thing and they'de rather try shaking the tree a bit more.
ReplyDeleteBaltic Dry Index (BDI) +8 1258
Whoops, maybe that wasn't a good idea.
DeleteI was thinking they would suppress it one more day before spring loading it. I think that happened already though. I suspect we will get a big run in spot rates fairly soon. Would love to see 3,000 BDI over the spring/summer time.
DeleteNIHD DECK
ReplyDeleteEeeeuuuuuwwww.....
DeleteTOF,
ReplyDeleteThink of shipping rates like mortgage rates. People go variable when rates are very low or declining to get the lowest cost. But if people get the impression interest rates will rise, they will lock in for the long term at the higher rate as they think the variable rates will get higher than the long term rate over time.
Same with shipping rates. People must be locking in for the higher one-year rate now as they think the spot rates will be over this for much of the year.
Of course, there could be other factors here like people wanting to lock in fixed rates in order to receive financing from the banks or perhaps they are in a cost-plus regulated environment where it doesn't matter what they pay. But overall, it is a strong signal that people do not expect the low spot rates to last.
I'd bet most have a blend of the two if not more we we're not discussing.
DeleteConsidering all the proposed investment in global shipping ports, I have to think the belief is rates will increase as trade takes off. Containerized shipping companies used to foot the bill for truck chassis fleet but no longer will, due to cost cutting measures they were forced to implement. So, no more Mr. Nice Guy free shit coming from shipping companies?
DeleteEBAY - Dang, this one's been kickin' ass....?
ReplyDeleteFLWS - Sheesh, quite a contrast from yesterday's close.
ReplyDeleteNo time for stopping to smell roses today, LOL....
DeleteThe valentines mess is becoming a distant memory (same thing used to happen with my wife when we were younger and I hadn't yet convinced her that Valentines was a scam).
DeleteI think the company is well-positioned going forward as more of these types of sales move to the web.
BALT vs SB - Apparently, Soros must've changed his mind about which one he prefers.
ReplyDeleteKRE - I guess this is another iH&S..... There are lots of them, including the SPX
ReplyDeleteNRG - Apparently headed to $31, this guy is deep in cahoots with the likes of TSLA
ReplyDeleteNot only are energy companies becoming utility companies, but the inverse is true as well, LOL!
ReplyDelete"Liquefaction Facilities
Dominion is proposing to construct liquefaction facilities for exporting liquefied natural gas (LNG), at its existing Dominion Cove Point LNG Terminal located on the Chesapeake Bay in Lusby, Md. Dominion filed a request on June 1, 2012, with FERC asking to initiate the Pre-filing Process.
Dominion Cove Point received authorization on October 7, 2011, from the Department of Energy to enter into contracts to export liquefied natural gas to countries that have free trade agreements with the United States."
SCCO - My $25 play bounced off $33, wonder if it returns to $25, LOL.... Doubt it!
ReplyDeleteAnyway, it's a good example of an iH&S setup, with the head in Dec.
DeletePEIX - Holy shit, LOL, rough bronco ride with full arsenal of serial killers and the whole enchilada, fellas!
ReplyDeleteUHS - Wow baby, sweep them stops clean...
ReplyDeleteThat's weird -- $USD is down a lot today to a new low for the year, and GLD/SLV are also down today...
ReplyDelete2nd_ave -- I am already playing the GLD/SLV theme, as I have call options on both of them now, in addition to positions in PNPFF and AUMN.
CORN is popping!
ReplyDeleteMan, I'm beat..... TGIBF! :)
ReplyDeleteI agree that it does seem like there are some signs of excessive bullishness (PEIX, YRCW, CECO, MY, ZU, etc) but I still see lots of sectors that are pretty beaten down relative to where they used to be 6 years ago, including financials, steel, housing, coal, shipping, emerging markets. My guess is we get a big up month in March, maybe we go to 1,950, then we come back down to 1,750ish for a 10% correction...and then we rally into the end of the year. I think we see a big stimulus push out of China fairly soon maybe after a few more weak reports and that catapults the Baltic Dry Index.
ReplyDeleteI think we will eventually see the shipping industry trade at 3X book. It peaked in 2007/8 at 4.8X book. Right now it trades at 0.95X Book. It seems that in these cyclical upturns the "leader" in the sector can trade at 8 to 10X book. If I'm right and this happens to shippers then I wonder who that would be. Probably SB or BALT since those are the only two shippers that were profitable last quarter. Right now SB is at 1.56X book and BALT is at 0.88X book.
DeleteI don't necessarily agree YRCW, and especially PEIX are too bullish. PEIX could conceivably have access to an unimaginable quantity of surplus sugar as a feedstock, possibly loaded up on cheap corn(still below farm production cost), and YRCW is a turnaround story consistent with increasing economic activity.
DeleteThe market is simply projecting the future, although YRCW's August gap down obligation has yet to close, perhaps the coming event will conveniently coincide with important economic news (China)?
I would add AMZN, the travel stocks like TRIP, the whole social media space (FB, LNKD, TWTR) as being overvalued and frothy, but it really is normal for a market to have some stocks like these and not a worry in my opinion.
DeletePlus, you have many other stocks like banks and life insurers trading at less than book value where in a strong market trade at permiums, so you've got the undervalued ones too.
SO, overall, I'd say a fairly normal market and one that should grow as the economy grows and also probably gets a bit of a revaluation higher as more people get into the market.
FLWS - Wonder how badly the new year's rose parade depleted supply this year?
ReplyDeleteDo the televised broadcasts from the Kremlin look sorta like a preliminary hearing in advance of the murder trial?
ReplyDelete