DJIA + SPX at or near new highs, while the Russell 2000 drops below its 200-day moving average. For the past two months large caps have climbed against the backdrop of declining small caps- an historic first.
Used car dealers work the same way. Body work, paint, and new tires. Most buyers will kick the tires and extrapolate from a spotless exterior. Only a few informed buyers will know what to look for under the hood. Caveat emptor.
It's deceptively simple. I know traders like jesse are looking for another push higher prior to a decline in the broad indexes, which may well be correct. On the other hand, Gayed reports a common theme among financial advisors appears to be (i) expectation of a correction, coupled with (ii) no change in investment stance. In other words, sophisticated investors are bracing for a decline, yet clients insist on being invested to the hilt until the decline actually arrives. Personally, I'm not relying on myself to be quick enough to dodge a decline.
While it would be normal for the large cap markets to follow the small caps down, I think it will actually be different this time. Recall that last year, the Russell 2000 was at all-time valuation highs, whereas the S&P 5000 was around average/slightly above average highs. This type of a situation cannot last long term, so it is is in the process of being resolved, with the Russell 2000 stocks valuations coming down.
It appears that overall money is not leaving the market, but instead just migrating from expensive areas of the market to cheaper ones and to parts of the market that will do well as the economy accelerates (eg. energy).
If you are concerned about the US market, there are many other good markets to look at. Mature country markets like Austria and Italy are trading at sub-10 P/E's - hard to see much downside in these:
I loaded up on a good chunk of FIG at 6.7-6.8 this morning. The way I see it is if the economy improves gradually but the high fliers stay volatile and probably subdued things like FIG should do well. It's dependent upon an improving economy and I like that they're targeting their funds toward emerging markets. I also like the 4%+ dividend.
JONE - There may be an obligation to revisit $16 to cover a bar 50%, not sure if I will attempt to take "advantage" if this occurs but just calling out the possibility.
Wage inflation makes sense. We want to figure out which companies benefit and hurt from this. Given that personal balance sheets are supposedly in pretty good shape, I think consumer discretionary will win - hey, I got a raise, let's celebrate by going out for dinner / taking a vacation / buying a new car / redoing the kitchen. The companies that hurt are those without pricing power and can't raise prices to offset higher wages.
Again I couldn't access Jesse's "Bizzaro Market" report for some reason and it was late so I gave up to try later but any takes, sounds like 2nd made a boolish reference?
10:16 EDT - Seeing things bottoming or about to in both the thermal- and met-coal markets, Morgan Stanley gets less bearish on the space in raising stock-price targets on some miners and upgrading Peabody (BTU) to overweight. "We think BTU is the best way to play this modest recovery" for reasons including its exposure to coal in the Illinois and Wyoming plays and industry-leading dividend yield. Morgan Stanley hikes its price target 50% to $30 on BTU while raising Arch (ACI), Cloud Peak (CLD) and Consol (CNX). BTU rises 4.5% while ACI climbs 5% and CLD and CNX gain not quite 2%. (kevin.kingsbury@wsj.com; @kevinkingsbury)
BTU has already blown their cap-ex wad and that's a big part of their getting smacked but now their cap-ex is gonna be a sweet tailwind for those who bought when MS and the GANG of thieves were busily downgrading it.
I remember what happened last time they upgraded the sector......
Picked up more DATE at $5.7. Live and die by the sword. I think that's the cheapest internet stock out there. $3 a share in cash, has around 20% top line growth. EPS is around $0.40 annualized right now. User growth has been subdued due to them cracking down on registered users that are spamming their site but this will improve their site in the long run. They're also expanding into offline dating / matchmaking which has been growing around 100% recently. They also pay 60% of EBITDA in dividends which is around 4.5% right now. I think the dividend grows to $0.50 in 3 years.
I keep looking at the very long term chart of the SOX and cant help but think that SOXL will do really well. Look at how much room there is up to old highs for the SOX:
Jeff Saut positive on the market and thinks we are ready to break to the upside:
http://www.raymondjames.com/inv_strat.htm
Since mid-April the S&P 500 (SPX/1878.48) has been “boxed” in a 1.5% range and within spitting distance of a new all-time high (see chart on page 3). However, the carnage beneath the guise of the SPX near its highs has been intense with many of the high-beta stocks off 30%+. As stated last week, the average stock in the Russell 3000 is down about 15% from its recent high, while the average stock in the S&P 600 is lower by almost 19%. The average stock in the larger capitalization S&P 500 is off more than 9% and the stocks that make up the S&P 1500 are down nearly 14% on average from their 52-week highs. This internal correction could either be the prelude to the 10% to 12% pullback that historically the odds suggest will occur sometime this year, or it could be the set-up for a breakout to new all-time highs. I continue to think it will be an upside breakout. As the astute Jason Goepfert (SentimenTrader) writes:
Despite all of the volatility underlying "the market," the S&P has held within a 1.5% range from its highest to lowest close over the past three weeks, and it hasn't dropped any more than 1.5% from its previous 52-week high, even though it hasn't made a fresh 52-week high during this three-week stretch. While rare, this kind of setup has proved to be positive more often than not. The table on the next page shows the returns in the S&P 500 after the 11 precedents since 1928. It was rare for the S&P to fail from this kind of pattern. In fact, it never really happened (see page 3). On average, the index closed at a fresh 52-week high within a week. The longest it took was 37 trading days, and even then the maximum loss to get there was smaller than -4%.
Looks like he's right. It's been a tough market for a lot of people, me included. I think there are a lot of good stocks that were dragged down with overpriced ones though and picking through them can result in some outsized gains. Stocks like BX, FIG, KKR kind of intrigue me in that I think they're grouped in with the financials and even the momentum names and if the economy continues to improve then I think those stocks will outperform as they are dependent upon an improving world economy. Obviously part of their improvement will come from targeting their investments toward the correct sectors that outperform like overseas / emerging etc.
I also think it will be frustrating for the momentum names for a little while longer in general. Two of those stocks that I really like longer term are LNKD and YELP but even if you extrapolate out their growth it will take several years to justify a lot of upside. Obviously anything can happen in the market in the short term. I was tempted to grab some YELP and probably will regret it because I think it has the potential to grow into the size of a TRIP but I suspect you will continue to see some shakeouts and buying on up days is probably a recipe for frustration. Just look at FSLR today.
I still think there will be a large rally in the dollar and the implications of that shouldn't be ignored if it does happen. This should happen if the US economy continues to improve, the Fed continues tapering, and Europe / Asia continue with QE. As far as investing goes Im thinking that it is best to focus on international investments over US internationals that sell a lot of products overseas. I also think we could see some wage inflation. Both should keep profit margins in check for the US markets. But that doesn't mean earnings will decline. Margins collapsed for a large part of the 1950s bull market.
It is tricky when you have big currency swings. You almost have to look at it on a company by company basis. The higher US$ is helping Canadian energy and manufacturing for example, but hurts retail as a lot of good are imported and the costs go up on these. I also look at ING, which I still own and trades in New York, but is primarily valued in Europe in Euros. If the Euro drops 15%, the value of ING in Europe has to go up 15% just to break even - could be tough.
For companies like GM and FIATY, I'm not really sure - I should go look and see how much of their production is in the US as these types of companies are global now.
But I also agree with your last part. If we get rising wages and declining margins, that would not necessarily be bad for the markets as one person's wages is another company's demand, so it depends on the magnitude of each. Overall though, I'd be very happy to see that as it would make things better for people in general and not hurt the companies too much.
Nope. I think they are in a bit of a bad spot. They aren't the low price leader like WMT and AMZN, and they don't have proprietary products like GPS and they don't have the high-end cache of M and they aren't as cheap as BBBY (which I'm still thinking about).
It seems in the world today in most industries, you either have to be the biggest and most efficient or have a really strong niche. Being in the middle sucks as you get attacked from all sides.
My wife and all of the women in her side of the family only shop there vs WMT etc. i'm thinking there's more long term viability to them than you suggest. kind of like DECK :) also their free cash flow looks really strong.
having said that maybe there's more downside first?
Not saying that they are in financial trouble or anything of course. But I just think of what happened to JCP and SHLD, the other middle market stores and the pressure they are under. Companies like TJX and friends also put a lot of pressure on clothing prices.
I don't know TGT that well, but I think WMT is more grocery and staples and TGT more fashion. I know when we were in Miami, the prices for beer and food were much better at WMT.
It was only 2 weeks ago that Alibaba took a 18% stake in them for about 50% higher prices: http://online.wsj.com/news/articles/SB10001424052702304163604579529341085756368
Think of them as Youtube in China. I've read that Youtube as a standalone investment would probably be worth around $30-$40 Billion today based on $4 Billion in revenue and $700 Million in operating profit. I've read estimates of $15 Billion in revenues and $4 Billion in profits by 2020 which means it would be a $80 Billion to $120 Billion business depending on market conditions. YOKU has had some crazy topline growth the past few years and has a leading share in online video in China. Government controls are a bit of an issue but there is still a massive audience there. If they could become 1/5th the size of Youtube you could argue that the company (now around a $4.5 Billion valuation) could be worth 5X today's value within 5 years.
18% stake. Man for some reason I'm having a deja-vu experience with this one, it sounds very familiar from about a year ago, just prior to the '13 rally.
"I got a raise, let's celebrate by going out for dinner / taking a vacation / buying a new car / redoing the kitchen. The companies that hurt are those without pricing power and can't raise prices to offset higher wages."
Good thinking, like restaurants and the new car thing too. New appliances, and goods coming from overseas maybe.
URG - Up 6% today, and GEVO was up 11%, the race is on. AGCO looks like a bear flag, currently. ENPH - And, look at this one! What happened to Mark, ya snooze ya lose, bro!
"Piper Jaffray warned their clients yesterday, to prepare for a large correction."
Craig Johnson (I believe is his name) has been spot on for a while now. He's been calling for I think a 15% or so correction in the middle of the year followed by a close up around 2,000. Makes sense to remain focused on the valuation of your holdings at this point I think. That should provide support in a sharp drop. If this happens I don't think we get one until the Russell 2000 gets to around 1,170. Just a guess...
My European stocks on my watch list are all sluggish today. I only reallocated 4% to one of them (FIATY) which is down 3% today. VE, AEG, IRE are also down.
ha. I like FIATY but when I bought back in I had a pretty strong feeling it was going to go lower first which is why I started off small. I think it has downside to $8.50ish or so to fill in that gap from the beginning of the year. I'll be looking to add under $9.
FYI - SNE reports earnings tomorrow. They already pre-announced with a higher than expected loss due to one time items being shifted into this past year (probably to create easier comparisons going forward) as well as a slightly higher top line. The stock has been in a holding pattern for a long time. You could make the argument that its putting in an IHS pattern on the daily, weekly and monthly charts, which is supposedly bullish. Who knows? I still think the valuation is really low and have a position in it. The way I think of it is this:
(1) Nintendo (NTDOY) trades at a market valuation of $13 Billion with about $6.5 Billion in revenues (2) Lions Gate (LGF) has a market cap of $3.7 Billion with an average market share of around 7% the past few years: http://boxofficemojo.com/studio/?debug=0&view=parent&p=.htm
Sony Gaming had a little higher revenues than Nintendo last year and they averaged around a 13% market share in the studio business the past few years (almost double LGF). But for simplicity's sake let's just assume both divisions are the same values as their rivals. Combined that equals $16.5 Billion or so. SNE's market cap is $18.3 Billion. So the rest of SNE is worth $1.8 Billion to the market. That includes their financil division, all devices they make (TVs, household goods, etc), the virtual reality division (remember Oculus was purchased by FB for $2 Billion and SNE's Morpheus is a direct competitor), all intellectual property, etc.
I haven't been here for a while because there were no opportunities that were clear to me. I did re-load my full SCON position at $2.30, as it seemed to me that its pullback is over.
Today I see that the drop in VIX is over, and it is close to 12. It won't stay that low for long. Just bought 1K shares of TVIX as a play on that, and as a hedge on my ORCL call options that will vest on June 1 (don't want to have a market collapse in the next 3 weeks, as I want to sell my options at a good price).
"Chrysler Group LLC on Monday reported a $690 million loss for the first quarter as a result of one-time expenses related to debt repayment and a charge taken in connection with an acquisition deal struck in January. The Auburn Hills, Mich. , auto maker posted a profit of $166 million in the same year-ago period. Quarterly revenue rose 23% to $19 billion , and world-wide sales were up 10% to 621,000 units. Chrysler's results come less than a week after parent Fiat Chrysler Automobiles revealed an ambitious new five-year plan that aims to vastly expand the U.S. auto maker's lineup and transform its iconic Jeep brand into a truly global player. Chrysler's first-quarter performance was largely dragged down by $1.2 billion in charges, including a $504 million noncash loss on the early repayment of a note belonging a United Auto Workers' health-care trust. The company refinanced the note in February with new debt at a lower cost. Chrysler also took a $672 million charge to fulfill commitments made to the UAW as part of a $4.35 billion deal Fiat SpA struck in January with the union's health-care trust to buy the 41.5% part of Chrysler it didn't already own. The payment, the first of four equal installments to be made each year to the UAW, will support manufacturing programs at Chrysler plants. Excluding the charges, Chrysler would have earned $486 million in the quarter."
I think shorting small caps is still in play. I'm thinking of reloading TZA around the 50 DMA for the Russell 2000 (just under it actually). Right now that's around 1,155 but its downward sloping so probably 1,140 or so. In fact yesterday could have very well been the day to short.
(a) Opened small positions in RYWYX (Rydex Inverse 2x Emerging Markets) + RYIRX (Rydex Inverse 2x Russell 2000) at Monday's close. Closed both positions flat at the 1030 window. Had I waited until the close, RYIRX would have returned 2%. That's how difficult it is psychologically to short right now. (b) 3 round-trips on TWTR. Small positions, but made more than I'll take home from my job today.
"Mar 11, 2014 - OECD warns that emerging markets pose risk to global growth for the time being" The bearish drum beat continues. "Tweedy Browne Increases Holdings of 3 Stocks in First Quarter" Sparingly, it added more shares to only three holdings: Banco Santander Brasil SA (BSBR), National Oilwell Varco Inc. (NOV) and Philip Morris International Inc. (PM).
Four companies that don't encrypt your online password, one of then is FLWS! http://www.fool.com/investing/general/2014/05/13/disasters-waiting-to-happen-with-your-personal-dat.aspx
China - When does China stimulate, if at all? I think they should consider stimulating the US and Eurozone, their largest customers. This is sure to create demand for their "overcapacity"?
NWLI - Okay, so this one can't hang onto gains just like FLWRS and many other stocks. Looks like market is fully priced today but maybe tomorrow the gains will be fully digested and we take off again. At that point these two will follow for a one day rally only to fall back to previous levels. Rinse and repeat, stuck in the slippery river mud.
NWLI - Lookie at the gap up from late Feb, you don't suppose the market has enough lack of good judgment to take this one back down there and fill the obligation, do ya?
We decided to bolt out when the dry index fell back through 1300, the shippers seemed to be following and TOF's figures indicated they needed 1300 to remain in the black.
LAS VEGAS--A series of bullish bets helped David Tepper build a $20 billion hedge-fund firm. But on Wednesday he struck a cautious note, worried about slow U.S. growth and the risk of a global economy that will worsen unless the European Central Bank takes aggressive action.
Speaking at the annual SALT conference at the Bellagio resort in Las Vegas, a gathering of wealthy hedge-fund managers and investors, Mr. Tepper said the investment environment has become more difficult.
"The market is kind of dangerous right now," he said. "It's a tough market."
A number of hedge funds in recent months have argued that European markets are attractive, but only if the ECB takes more steps to ease monetary policy to help the European economy.
Mr. Tepper took a more bearish and blunt stance, describing the ECB as being "really, really behind the curve."
"They're waiting, waiting, waiting," he said. "The ECB better ease in June, I'm nervous."
Behind Mr. Tepper's anxiety: U.S. economic growth in recent months has been slower than he and others had expected.
"If the U.S. was at 4% (growth) I'd be a lot more comfortable, I thought the U. S.would grow faster, "he said.
The U.S. cannot lift up Europe and China on its own, he added.
Mr. Tepper's warnings are especially notable because he built his firm, and fortune, with concentrated wagers on certain assets appreciating. Though at times he's made bearish investments, he's best known for scoring huge paydays owning bank investments in 2009 and going big on U.S. equities, including airlines, in 2013.
But after a day that saw many fund managers trying to convince investors on why they should put money into their corners of market, Mr. Tepper had a different take: Hold some cash in case the market heads lower.
"You're supposed to have some cash here," he said.
Mr. Tepper, who runs Appaloosa Management in Short Hills, N.J., had other blunt advice for those currently investing in equities.
"Don't be too fricking long right now," he said, referring to bullish positions. "There's times to make money and there's times not to lose money."
Mr. Tepper said his staff has adopted a motto to describe the world's central banks: "coordinated complacently."
He said policy makers, and investors, aren't adequately concerned with the possibility of falling prices.
"I am more worried about deflation than I am about inflation," he said.
Write to Rob Copeland at rob.copeland@wsj.com and Gregory Zuckerman at gregory.zuckerman@wsj.com
So many are saying deflation risk has abated, I have doubts the crowd is correct. PMs might be a proxy. Around here, there seems to be a good deal of high-end building.
Tepper is one of the exceptions for sure. He is a smart guy and I'd bet a lot the selloff this morning is based more on his "don't be friken long" comment than anything else.
I think he's saying " stay long, but be reasonable and smaller than you probably have been and have some cash in case things go lower". But he's not saying sell everything or short the market. Even smart billionaires like Tepper don't really know what will happen in the market. It's all about playing the odds and now the odds aren't as good as they were last year, but they're not bad either.
Ah yes, that makes sense as well. I'm not smart enough to weigh the individual pieces. WMT's web site seems awkward, if these guys could just revamp their web presence somehow, such as offer payment by paypal or something, and there's the tax preference issue as well, I suppose but economies of scale might compensate.
Didn't WMT say they were being squeezed by pressure on consumer buying power, so wage increases should ease the metric but higher produce costs might eat into that.
Hey Rocky! "Rough shape of our bridges" Doesn't necessarily correlate with demand for infrastructure equipment made by MTW and crew, such as GLDD, does it, more like a chance to sell into the news?
Or, Bullwinkle..... You pay your taxes and it goes straight into some special interest groups pockets?
PKX - Maybe this one flips here at resistance to drop back into the $60's again? TDW - Wham! There goes your breakout, but is it a knockout test of support days ahead of earnings?
Okay, time for the sell off turdwatch(r) report..... GEVO - Honest response, be glad you don't own this one. NIHD - Ditto URG - Oh boy, admire the temporary strength while taking your ton of profits on the strength.
Those tires there on your used clunker look new but the mfg date is 6 years ago, unsafe!
Good interview on CNBC with Leon Cooperman on Fast Money lunch today.
Basically, the stock is fairly valued and could go down to 1700 or up to 2000, but think most likely base for next few months, then strong Q4 finish. Worth watching if you have some time.
Can't watch it but good info. I guess if we do get smacked I can add at support levels otherwise based on where I think my positions should be, I'll be happy. Hopefully management doesn't do something greater-foolish.
IWM fell today below the early May lows. That might mean that more weakness is ahead for it. So I decided to take some profits in my SCON position (while they still exist) and just sold at $2.60 the 1K shares I purchased at $2.30 last week, when the SCON chart made it seem as if it had bottomed.
Also, just placed a sell limit order at $5.75 for the 1K shares of TVIX I purchased a couple of days ago at $5.22 (so as to have approximately a 10% gain). TVIX moves really fast and might very well hit my sell limit on an intraday spike and then drop back by the close.
Still holding my January 2015 IWM puts that I picked up in March, when IWM broke below the "line in the sand" I drew at $117.
The big question for IWM is: will the February lows, which were tested this morning, actually hold? Judging by the high volatility in IWM starting mid-March, my intuition tells me that a regime change has occurred, the good old days are over, and IWM will break below the February lows.
Gotta love the press playing up the Tepper comments: "Appaloosa’s Tepper Says Hold Cash as Markets ‘Dangerous’"
Never mind the part where he said stay long and that markets could go higher.
I'm sure my bad investor golfing buddy will tell me Saturday about how the markets are going to crash because Tepper said so. The thing about all this that makes me feel good is there are no signs at all that we are close to sucking in the really dumb investors or "last man in" to these markets.
Looks like some really good numbers out of SORL. Revenues up 21% and earnings of $0.14 up from $0.06 from last Q1.
Should be good for a pretty good move in the stock tomorrow. Last quarter earnings were poor and the stock has been going down almost every day since from the $4.50 range. Now at $2.93, if they can do $0.14 per quarters, implies a P/E of 5.2.
I think their problems are the China risk and also not knowing how to manage Wall Street effectiverly (or maybe they don't care).
My Canadian Auto Parts company MRE.TO also had a beat on numbers and I think a raise in guidance, but this is harder to figure out for Canadian companies.
I think the auto sector in general has a tail wind for several more years - hope it comes through into GM and FIATY as well.
No, but I've been trying to figure this one out since I saw recently that GE is working on and making metal parts by sintering metallic powders using lasers.
Was busy most of the past 2 days - we were evacuated out of our home in Carlsbad (San Diego) because of the fires and spent the night at a hotel. Back home now and looks like there's another fire just east of us but we should be in the clear.
I agree somewhat about the Tepper comments - none of the positive comments came out in the media. I think a lot of people sold on the headlines about his presentation and that's the sole reason for today's action. I do agree with his take, though, and mentioned a couple of months ago that his take would change given what he said last year and the subsequent change in Fed actions. I do have some things showing up to me at least to be good values. Right now I'm holding small stakes in FIATY and SNE and a larger stake in DATE and FIG.
I think investors are much more prepared for a slowdown than they were heading into 2008 and as a result the odds of this being a big drop is very low...at least in the near term. Having said that, it wouldn't surprise me to see more sideways trading that eventually sucks people in and then it drops some time over the latter part of the year after people are sucked in. I think we will get our QE from Europe and China which will boost things.
I did notice that the Russell 2000 bottomed today right around where it bottomed back in February. I also noticed that TNX bottomed right around the lows from Oct 2013 and these 2 reasons got me more bullish today for a short term rally. I added a little FIG today at $6.72 and DATE at $5.64 today. I think there's a decent chance we get a bounce for the RUT back to 1,140ish...and possibly as high as 1,170. I think the rally on Monday with the subsequent drop has left a lot of people on the sidelines right now which means we rally.
They said on CNBC tonight that they talked to Tepper and he's reduced his position from being over 100% long to about 60% long, and his 13F came out and he had 22% of holdings in the SPY and 14% in the QQQ, so broad exposure. Not sure what he sold to get his position down, but 60% long is not a "danger, get out of the market" signal.
Over 100% long eh, maybe this guy single handedly caused the margin reports to be skewed and his selling has been causing every pop to new highs to be sold?
TBT - Was just noticing what looks like a bottoming hammer on the TBT, maybe? Volume too.
Investopedia explains 'Hammer' A hammer occurs after a security has been declining, possibly suggesting the market is attempting to determine a bottom. The signal does not mean bullish investors have taken full control of a security, it simply indicates that the bulls are strengthening.
MKSI - If you use this stock as a proxy, you might conclude the semiconductor capital equipment sales cycle has ended but I'm not convinced they've even been built, delivered or even qualified? Heck, aren't the new buildings still under construction?
What about new positions? I guess he held onto HIG quite a while, to dump at those p/e's seems like he doesn't have much confidence in holding the risk.
Okay, so I'm reading all these comments about Tepper (I don't pay ANY attention to the news) so I read it here.
So what drove markets into defensive issues and drove the Rusty 2000 down before he said anything? I mean, the markets have been flat for several months now and the russell has been in a downtrend with the DOW and SPY held up by literally a handful of defensive issues....what happens when those correct? T's have been higher, the TBT is in a serious downtrend and yields are in the dumps. Today everything but T's (and the vix) sold off. I don't think one hedge fund guy had anything to do with it. I think this is a process.
Any of you guys follow FCX? I didn't realize how much they're getting into oil and gas plays. Huge increase in debt scares me a bit but not if it generates significant cash flow down the road:
Looks like the India bubble is clearly forming and may have popped today. Up almost 25% now since February. The Sensex is probably toast going forward. Unless of course they can continue the bubble for a while longer.
JPMorgan believes the additional five product safety recalls announced Thursday by General Motors are "very proactive in nature." The firm thinks the recalls could help GM sales and market share and it views the stock as "very inexpensive." JPMorgan keeps an Overweight rating on GM with a $50 price target.
I don't think anyone really knows if we go up or down from here. You can make a good case both ways and probably parts of the market go up and down.
Many of the commodity oriented markets like Canada and Australia are having good years (up 8.1% and 9.7%). This tells me people are positioning their portfolios for economic growth or inflation or both. If we get this, it should help the broader markets, but I still think much of the big winning stocks from last year like TRIP,etc. need to come down to more reasonable valuations.
At some point, interest rates should go up. If they do, it will help revalue all life insurers upwards. If rates do not go up, NWLI is so cheap and well run that something good will happen to the stock price.
NWLI - Okay, I was thinking of shedding some b/c it's not going up but maybe I'll hang onto it. FLWS - This one doesn't seem such a bargain anymore, temporary situation? We're into the season so maybe?
Seems to simple though doesn't it?
ReplyDeleteIt's deceptively simple. I know traders like jesse are looking for another push higher prior to a decline in the broad indexes, which may well be correct. On the other hand, Gayed reports a common theme among financial advisors appears to be (i) expectation of a correction, coupled with (ii) no change in investment stance. In other words, sophisticated investors are bracing for a decline, yet clients insist on being invested to the hilt until the decline actually arrives. Personally, I'm not relying on myself to be quick enough to dodge a decline.
DeleteThe rally straight from hell, now the cycle seems predictable!?!?!?
ReplyDeleteWhile it would be normal for the large cap markets to follow the small caps down, I think it will actually be different this time. Recall that last year, the Russell 2000 was at all-time valuation highs, whereas the S&P 5000 was around average/slightly above average highs. This type of a situation cannot last long term, so it is is in the process of being resolved, with the Russell 2000 stocks valuations coming down.
ReplyDeleteIt appears that overall money is not leaving the market, but instead just migrating from expensive areas of the market to cheaper ones and to parts of the market that will do well as the economy accelerates (eg. energy).
If you are concerned about the US market, there are many other good markets to look at. Mature country markets like Austria and Italy are trading at sub-10 P/E's - hard to see much downside in these:
http://www.valuewalk.com/2014/03/global-value-meb-faber/
(a) JCP off pre-market @ 9.04 (+5%).
ReplyDelete(b) TWTR off pre-market @ 32.92 (+3%).
ENPH- Delayed reaction to Friday's news? Kinda surprising as I bet it's rev. neutral.
ReplyDeleteOh man, that figures. If you think about it, LED lighting and solar are a perfect match.
DeleteI loaded up on a good chunk of FIG at 6.7-6.8 this morning. The way I see it is if the economy improves gradually but the high fliers stay volatile and probably subdued things like FIG should do well. It's dependent upon an improving economy and I like that they're targeting their funds toward emerging markets. I also like the 4%+ dividend.
ReplyDeleteThat sure is tempting.
DeleteJONE - There may be an obligation to revisit $16 to cover a bar 50%, not sure if I will attempt to take "advantage" if this occurs but just calling out the possibility.
ReplyDeleteFLWS - Smellin' sweeeeetttttt, fellas.......
ReplyDeleteMother's day bounce?
DeleteMaybe, but shouldn't Mothers day be priced in? Memorial day coming, FLWS for the ceremonies too.
DeleteWage inflation? Should we consider the potential impact on the bottom line or is it too early?
ReplyDeleteWage inflation makes sense. We want to figure out which companies benefit and hurt from this. Given that personal balance sheets are supposedly in pretty good shape, I think consumer discretionary will win - hey, I got a raise, let's celebrate by going out for dinner / taking a vacation / buying a new car / redoing the kitchen. The companies that hurt are those without pricing power and can't raise prices to offset higher wages.
DeleteAgain I couldn't access Jesse's "Bizzaro Market" report for some reason and it was late so I gave up to try later but any takes, sounds like 2nd made a boolish reference?
ReplyDeleteIf anyone is interested in coal:
ReplyDeleteBest YoY % increase in coal car loadings since 2011. http://lnkd.in/bV9pS2Z
10:16 EDT - Seeing things bottoming or about to in both the thermal- and met-coal markets, Morgan Stanley gets less bearish on the space in raising stock-price targets on some miners and upgrading Peabody (BTU) to overweight. "We think BTU is the best way to play this modest recovery" for reasons including its exposure to coal in the Illinois and Wyoming plays and industry-leading dividend yield. Morgan Stanley hikes its price target 50% to $30 on BTU while raising Arch (ACI), Cloud Peak (CLD) and Consol (CNX). BTU rises 4.5% while ACI climbs 5% and CLD and CNX gain not quite 2%. (kevin.kingsbury@wsj.com; @kevinkingsbury)
DeleteBTU has already blown their cap-ex wad and that's a big part of their getting smacked but now their cap-ex is gonna be a sweet tailwind for those who bought when MS and the GANG of thieves were busily downgrading it.
DeleteI remember what happened last time they upgraded the sector......
See the C&H, and now the cute bull flag, maybe some strength for MS and GANG to sell into?
DeleteAs long as Obama is in office I think that trade will be difficult. Kind of like biotechs / cloning / etc during the Bush years.
DeletePicked up FIATY again at $10.3.
ReplyDeletePicked up more DATE at $5.7. Live and die by the sword. I think that's the cheapest internet stock out there. $3 a share in cash, has around 20% top line growth. EPS is around $0.40 annualized right now. User growth has been subdued due to them cracking down on registered users that are spamming their site but this will improve their site in the long run. They're also expanding into offline dating / matchmaking which has been growing around 100% recently. They also pay 60% of EBITDA in dividends which is around 4.5% right now. I think the dividend grows to $0.50 in 3 years.
ReplyDeleteSpeaking of which, whatever happened to STD, wasn't the a ticker we were following?
DeleteSAN
DeleteCREE - Will MS conveniently upgrade this one too, AFTER it runs 30% ?????
ReplyDeleteI keep looking at the very long term chart of the SOX and cant help but think that SOXL will do really well. Look at how much room there is up to old highs for the SOX:
Deletehttp://finance.yahoo.com/echarts?s=^SOX+Interactive#symbol=^SOX;range=my
CREE is one of the components:
http://finance.yahoo.com/q/cp?s=^SOX+Components
I think the cheapest growth companies in that index would do very well.
Jeff Saut positive on the market and thinks we are ready to break to the upside:
ReplyDeletehttp://www.raymondjames.com/inv_strat.htm
Since mid-April the S&P 500 (SPX/1878.48) has been “boxed” in a 1.5% range and within spitting distance of a new all-time high (see chart on page 3). However, the carnage beneath the guise of the SPX near its highs has been intense with many of the high-beta stocks off 30%+. As stated last week, the average stock in the Russell 3000 is down about 15% from its recent high, while the average stock in the S&P 600 is lower by almost 19%. The average stock in the larger capitalization S&P 500 is off more than 9% and the stocks that make up the S&P 1500 are down nearly 14% on average from their 52-week highs. This internal correction could either be the prelude to the 10% to 12% pullback that historically the odds suggest will occur sometime this year, or it could be the set-up for a breakout to new all-time highs. I continue to think it will be an upside breakout. As the astute Jason Goepfert (SentimenTrader) writes:
Despite all of the volatility underlying "the market," the S&P has held within a 1.5% range from its highest to lowest close over the past three weeks, and it hasn't dropped any more than 1.5% from its previous 52-week high, even though it hasn't made a fresh 52-week high during this three-week stretch. While rare, this kind of setup has proved to be positive more often than not. The table on the next page shows the returns in the S&P 500 after the 11 precedents since 1928. It was rare for the S&P to fail from this kind of pattern. In fact, it never really happened (see page 3). On average, the index closed at a fresh 52-week high within a week. The longest it took was 37 trading days, and even then the maximum loss to get there was smaller than -4%.
Looks like he's right. It's been a tough market for a lot of people, me included. I think there are a lot of good stocks that were dragged down with overpriced ones though and picking through them can result in some outsized gains. Stocks like BX, FIG, KKR kind of intrigue me in that I think they're grouped in with the financials and even the momentum names and if the economy continues to improve then I think those stocks will outperform as they are dependent upon an improving world economy. Obviously part of their improvement will come from targeting their investments toward the correct sectors that outperform like overseas / emerging etc.
DeleteI also think it will be frustrating for the momentum names for a little while longer in general. Two of those stocks that I really like longer term are LNKD and YELP but even if you extrapolate out their growth it will take several years to justify a lot of upside. Obviously anything can happen in the market in the short term. I was tempted to grab some YELP and probably will regret it because I think it has the potential to grow into the size of a TRIP but I suspect you will continue to see some shakeouts and buying on up days is probably a recipe for frustration. Just look at FSLR today.
I still think there will be a large rally in the dollar and the implications of that shouldn't be ignored if it does happen. This should happen if the US economy continues to improve, the Fed continues tapering, and Europe / Asia continue with QE. As far as investing goes Im thinking that it is best to focus on international investments over US internationals that sell a lot of products overseas. I also think we could see some wage inflation. Both should keep profit margins in check for the US markets. But that doesn't mean earnings will decline. Margins collapsed for a large part of the 1950s bull market.
DeleteIt is tricky when you have big currency swings. You almost have to look at it on a company by company basis. The higher US$ is helping Canadian energy and manufacturing for example, but hurts retail as a lot of good are imported and the costs go up on these. I also look at ING, which I still own and trades in New York, but is primarily valued in Europe in Euros. If the Euro drops 15%, the value of ING in Europe has to go up 15% just to break even - could be tough.
DeleteFor companies like GM and FIATY, I'm not really sure - I should go look and see how much of their production is in the US as these types of companies are global now.
But I also agree with your last part. If we get rising wages and declining margins, that would not necessarily be bad for the markets as one person's wages is another company's demand, so it depends on the magnitude of each. Overall though, I'd be very happy to see that as it would make things better for people in general and not hurt the companies too much.
CP,
ReplyDeleteGTS now up almost 15% from when we talked about it - maybe we get a pullback, but I tend to think we missed it.
Looks that way, still keeping it on the radar just in case! :)
DeleteFLWS trying hard to hit $6.00 today.
DeleteSheesh, another gap up off the bottom congestion that's unlikely to close anytime soon, if ever. Next move from here should be upper $17's
DeleteAnyone look at TGT lately?
ReplyDeleteNope. I think they are in a bit of a bad spot. They aren't the low price leader like WMT and AMZN, and they don't have proprietary products like GPS and they don't have the high-end cache of M and they aren't as cheap as BBBY (which I'm still thinking about).
DeleteIt seems in the world today in most industries, you either have to be the biggest and most efficient or have a really strong niche. Being in the middle sucks as you get attacked from all sides.
My wife and all of the women in her side of the family only shop there vs WMT etc. i'm thinking there's more long term viability to them than you suggest. kind of like DECK :) also their free cash flow looks really strong.
Deletehaving said that maybe there's more downside first?
I kinda think there will be buyers down here, but volume may spike first? Does new management has a better track record than previous management?
DeleteNot saying that they are in financial trouble or anything of course. But I just think of what happened to JCP and SHLD, the other middle market stores and the pressure they are under. Companies like TJX and friends also put a lot of pressure on clothing prices.
DeleteI don't know TGT that well, but I think WMT is more grocery and staples and TGT more fashion. I know when we were in Miami, the prices for beer and food were much better at WMT.
Life is more than beer Brent.
DeleteNot really.
DeleteFLWS - $6.20 coming soon?
ReplyDeleteYOKU is very interesting to me down here.
ReplyDeleteIt was only 2 weeks ago that Alibaba took a 18% stake in them for about 50% higher prices:
http://online.wsj.com/news/articles/SB10001424052702304163604579529341085756368
Think of them as Youtube in China. I've read that Youtube as a standalone investment would probably be worth around $30-$40 Billion today based on $4 Billion in revenue and $700 Million in operating profit. I've read estimates of $15 Billion in revenues and $4 Billion in profits by 2020 which means it would be a $80 Billion to $120 Billion business depending on market conditions. YOKU has had some crazy topline growth the past few years and has a leading share in online video in China. Government controls are a bit of an issue but there is still a massive audience there. If they could become 1/5th the size of Youtube you could argue that the company (now around a $4.5 Billion valuation) could be worth 5X today's value within 5 years.
18% stake. Man for some reason I'm having a deja-vu experience with this one, it sounds very familiar from about a year ago, just prior to the '13 rally.
Delete"I got a raise, let's celebrate by going out for dinner / taking a vacation / buying a new car / redoing the kitchen. The companies that hurt are those without pricing power and can't raise prices to offset higher wages."
ReplyDeleteGood thinking, like restaurants and the new car thing too. New appliances, and goods coming from overseas maybe.
Ruth and pir revisited
DeleteGM is going to break out, first target is $39
ReplyDeleteURG - Up 6% today, and GEVO was up 11%, the race is on.
ReplyDeleteAGCO looks like a bear flag, currently.
ENPH - And, look at this one! What happened to Mark, ya snooze ya lose, bro!
Piper Jaffray warned their clients yesterday, to prepare for a large correction.
ReplyDelete13 May 2014 Baltic Dry Index (BDI) -5 982
ReplyDeleteYOKU - I think long term this one could be really big as China catches onto the internet. Meanwhile, might get bought out?
ReplyDelete$22.45 seems to be the bull level currently.
DeleteFLWS - Would like to see this one hang onto $5.80..........
ReplyDeleteTBT - Whoops, lower than yesterday. Some bad news out there?
ReplyDeleteNLS - Why not buy this one under $20 ?
ReplyDeleteNo reason to not buy it because it's going there. Just think...we had it at $2.40.
DeleteShorting is the only trade I like right now.
ReplyDelete"Piper Jaffray warned their clients yesterday, to prepare for a large correction."
DeleteCraig Johnson (I believe is his name) has been spot on for a while now. He's been calling for I think a 15% or so correction in the middle of the year followed by a close up around 2,000. Makes sense to remain focused on the valuation of your holdings at this point I think. That should provide support in a sharp drop. If this happens I don't think we get one until the Russell 2000 gets to around 1,170. Just a guess...
Whatcha gonna short, treasuries?
DeleteMy European stocks on my watch list are all sluggish today. I only reallocated 4% to one of them (FIATY) which is down 3% today. VE, AEG, IRE are also down.
ReplyDeleteRetail numbers were lighter than expected, wonder what's up in Europe...........
DeleteThe dogs peed on FLWS
Do you want me to buy FIATY here? I promise it will go down another 3% immediately and give you a good spot to add?
Deleteha. I like FIATY but when I bought back in I had a pretty strong feeling it was going to go lower first which is why I started off small. I think it has downside to $8.50ish or so to fill in that gap from the beginning of the year. I'll be looking to add under $9.
DeleteMaybe if Mark would pick up some, you could get past the obligatory sub $9 knockout?
DeleteFYI - SNE reports earnings tomorrow. They already pre-announced with a higher than expected loss due to one time items being shifted into this past year (probably to create easier comparisons going forward) as well as a slightly higher top line. The stock has been in a holding pattern for a long time. You could make the argument that its putting in an IHS pattern on the daily, weekly and monthly charts, which is supposedly bullish. Who knows? I still think the valuation is really low and have a position in it. The way I think of it is this:
ReplyDelete(1) Nintendo (NTDOY) trades at a market valuation of $13 Billion with about $6.5 Billion in revenues
(2) Lions Gate (LGF) has a market cap of $3.7 Billion with an average market share of around 7% the past few years:
http://boxofficemojo.com/studio/?debug=0&view=parent&p=.htm
Sony Gaming had a little higher revenues than Nintendo last year and they averaged around a 13% market share in the studio business the past few years (almost double LGF). But for simplicity's sake let's just assume both divisions are the same values as their rivals. Combined that equals $16.5 Billion or so. SNE's market cap is $18.3 Billion. So the rest of SNE is worth $1.8 Billion to the market. That includes their financil division, all devices they make (TVs, household goods, etc), the virtual reality division (remember Oculus was purchased by FB for $2 Billion and SNE's Morpheus is a direct competitor), all intellectual property, etc.
You're probably right, it rips higher on "bad news".
DeleteNLS - Looks like a $3 bull flag forming, to me
ReplyDeleteFLWS - $5.56 was yesterday's entry price, so it probably closes near there today.
ReplyDeleteALDW - Coming off, as planned. Why is it so hard to believe this s**t?
ReplyDeleteI haven't been here for a while because there were no opportunities that were clear to me. I did re-load my full SCON position at $2.30, as it seemed to me that its pullback is over.
ReplyDeleteToday I see that the drop in VIX is over, and it is close to 12. It won't stay that low for long. Just bought 1K shares of TVIX as a play on that, and as a hedge on my ORCL call options that will vest on June 1 (don't want to have a market collapse in the next 3 weeks, as I want to sell my options at a good price).
"Chrysler Group LLC on Monday reported a $690 million loss for the first quarter as a result of one-time expenses related to debt repayment and a charge taken in connection with an acquisition deal struck in January.
ReplyDeleteThe Auburn Hills, Mich. , auto maker posted a profit of $166 million in the same year-ago period. Quarterly revenue rose 23% to $19 billion , and world-wide sales were up 10% to 621,000 units.
Chrysler's results come less than a week after parent Fiat Chrysler Automobiles revealed an ambitious new five-year plan that aims to vastly expand the U.S. auto maker's lineup and transform its iconic Jeep brand into a truly global player.
Chrysler's first-quarter performance was largely dragged down by $1.2 billion in charges, including a $504 million noncash loss on the early repayment of a note belonging a United Auto Workers' health-care trust. The company refinanced the note in February with new debt at a lower cost.
Chrysler also took a $672 million charge to fulfill commitments made to the UAW as part of a $4.35 billion deal Fiat SpA struck in January with the union's health-care trust to buy the 41.5% part of Chrysler it didn't already own.
The payment, the first of four equal installments to be made each year to the UAW, will support manufacturing programs at Chrysler plants.
Excluding the charges, Chrysler would have earned $486 million in the quarter."
Yes, saw that yesterday, I'm not sure of the time originally reported.
DeleteI think shorting small caps is still in play. I'm thinking of reloading TZA around the 50 DMA for the Russell 2000 (just under it actually). Right now that's around 1,155 but its downward sloping so probably 1,140 or so. In fact yesterday could have very well been the day to short.
ReplyDeleteCatch up post.
ReplyDelete(a) Opened small positions in RYWYX (Rydex Inverse 2x Emerging Markets) + RYIRX (Rydex Inverse 2x Russell 2000) at Monday's close. Closed both positions flat at the 1030 window. Had I waited until the close, RYIRX would have returned 2%. That's how difficult it is psychologically to short right now.
(b) 3 round-trips on TWTR. Small positions, but made more than I'll take home from my job today.
DNMA - "Not going away" - I hear it's official?
ReplyDeleteFNMA,, rather.
DeleteFLWS - Just noticed insiders unloaded 30%, hadn't noticed this for some reason. No wonder it's struggling, if insiders won't eat their own cooking.
ReplyDeleteSRS - Have cash buyers run out of cash yet? An all-clear on the FNMA western front may spur a housing blow off top?
ReplyDelete"Mar 11, 2014 - OECD warns that emerging markets pose risk to global growth for the time being" The bearish drum beat continues.
ReplyDelete"Tweedy Browne Increases Holdings of 3 Stocks in First Quarter"
Sparingly, it added more shares to only three holdings: Banco Santander Brasil SA (BSBR), National Oilwell Varco Inc. (NOV) and Philip Morris International Inc. (PM).
Four companies that don't encrypt your online password, one of then is FLWS!
ReplyDeletehttp://www.fool.com/investing/general/2014/05/13/disasters-waiting-to-happen-with-your-personal-dat.aspx
Redbox:
ReplyDeletehttp://ycharts.com/analysis/story/cheap_stocks_always_have_a_story_outerwall
I agree with them completely. I think this stock deserves a higher multiple.
I'd feel better if I was in at $50, OUTR will sink with everything else, maybe?
DeleteTSL - This one could double?
DeleteSORL - Going...up
ReplyDeleteMy browser is beginning to hang, due to too many scripts running in the background. This often coincides with market tops.
ReplyDeleteBOIL - Should we get some exposure to the natty contract? Seems decay consumes a big chunk..
ReplyDeleteFNMA - Ackman invited us in under $4
YOKU - $21.40 is a resistance price, shorts should cover at least.
ReplyDeleteI'm tempted but have to follow my self imposed rule of not buying any "momo" stocks on up days if I'm gonna buy it.
DeleteAHP upgrade to buy. $19 p/t
ReplyDeleteAdded SNE at $16.699. I figure the breakup value alone is worth about $25. Plus, sentiment is quite low on them and Japan in general.
ReplyDeleteAll right. In @ 16.57. Small. Like me.
DeleteMini IHS going on here.
DeleteSlight exposure is still illegal exposure! :O
DeleteSlip 'em the pickle.... BACML has $22 on it right now, so they must be distributing? The upper $17 level does look doable.
DeleteAdded some more at $16.38. Now up to 12% position.
DeleteChina - When does China stimulate, if at all? I think they should consider stimulating the US and Eurozone, their largest customers. This is sure to create demand for their "overcapacity"?
ReplyDeleteNWLI - Okay, so this one can't hang onto gains just like FLWRS and many other stocks. Looks like market is fully priced today but maybe tomorrow the gains will be fully digested and we take off again. At that point these two will follow for a one day rally only to fall back to previous levels.
ReplyDeleteRinse and repeat, stuck in the slippery river mud.
TVIX - This puppy shoulda been popping today, WTF isup, over?
ReplyDeleteGOGO - Hearing this one mentioned plenty lately.
ReplyDeleteSeems like on days like this there's always a turd somewhere that rises to the surface, NIHD/GEVO/URG all qualify.
ReplyDeleteNWLI - I doubt you can actually buy this one at the current price, I'm gonna say it jumps a few bucks before close (wishful thinking?).
ReplyDeleteAnyone buying DXPE? Huge drop yesterday. I've watched that thing for 10 years...solid company.
ReplyDeleteOkay, I can accept that challenge if it forms a bull flag over the next few days.
DeletePlease try convincing me to sell next time I have a gain or my port reaches a new high, so the gains aren't instantly vaporized.
ReplyDeleteWhat do you have now?
DeleteI still have some of the same stuff, NLY/FLWS/NWLI, traded off the BSBR and picked the NWLI back up right after earnings.
DeleteSPY - Oh duh, I just now realized there's a gap up from Monday that needs to close.......
ReplyDeleteNWLI - Lookie at the gap up from late Feb, you don't suppose the market has enough lack of good judgment to take this one back down there and fill the obligation, do ya?
ReplyDeleteYou guys should see this painting I picked up on auction last night, a Barnett Newman piece, it's just fabulous!
ReplyDeleteVietnamese protesting/rioting, okay so what's that ETF......
ReplyDeleteVNM - Ah, here it is. Something ale for consideration that maybe the nervous nellies have given up on?
DeleteCP- When/why did you sell BALT? I missed that and would have thought you would have held it longer.
ReplyDeleteWe decided to bolt out when the dry index fell back through 1300, the shippers seemed to be following and TOF's figures indicated they needed 1300 to remain in the black.
DeleteSVM- That's one hell of a 5 year round trip.
ReplyDeleteDXPE - Here it is, I see what happened!
ReplyDeletehttp://img.photobucket.com/albums/v334/Jack44/bunny-1.jpg
LAS VEGAS--A series of bullish bets helped David Tepper build a $20 billion hedge-fund firm. But on Wednesday he struck a cautious note, worried about slow U.S. growth and the risk of a global economy that will worsen unless the European Central Bank takes aggressive action.
ReplyDeleteSpeaking at the annual SALT conference at the Bellagio resort in Las Vegas, a gathering of wealthy hedge-fund managers and investors, Mr. Tepper said the investment environment has become more difficult.
"The market is kind of dangerous right now," he said. "It's a tough market."
A number of hedge funds in recent months have argued that European markets are attractive, but only if the ECB takes more steps to ease monetary policy to help the European economy.
Mr. Tepper took a more bearish and blunt stance, describing the ECB as being "really, really behind the curve."
"They're waiting, waiting, waiting," he said. "The ECB better ease in June, I'm nervous."
Behind Mr. Tepper's anxiety: U.S. economic growth in recent months has been slower than he and others had expected.
"If the U.S. was at 4% (growth) I'd be a lot more comfortable, I thought the U. S.would grow faster, "he said.
The U.S. cannot lift up Europe and China on its own, he added.
Mr. Tepper's warnings are especially notable because he built his firm, and fortune, with concentrated wagers on certain assets appreciating. Though at times he's made bearish investments, he's best known for scoring huge paydays owning bank investments in 2009 and going big on U.S. equities, including airlines, in 2013.
But after a day that saw many fund managers trying to convince investors on why they should put money into their corners of market, Mr. Tepper had a different take: Hold some cash in case the market heads lower.
"You're supposed to have some cash here," he said.
Mr. Tepper, who runs Appaloosa Management in Short Hills, N.J., had other blunt advice for those currently investing in equities.
"Don't be too fricking long right now," he said, referring to bullish positions. "There's times to make money and there's times not to lose money."
Mr. Tepper said his staff has adopted a motto to describe the world's central banks: "coordinated complacently."
He said policy makers, and investors, aren't adequately concerned with the possibility of falling prices.
"I am more worried about deflation than I am about inflation," he said.
Write to Rob Copeland at rob.copeland@wsj.com and Gregory Zuckerman at gregory.zuckerman@wsj.com
Smart, very successful guy. Makes you think. Probably the markets will be down today.
DeleteSo many are saying deflation risk has abated, I have doubts the crowd is correct. PMs might be a proxy.
DeleteAround here, there seems to be a good deal of high-end building.
Perhaps wage inflation will be the reason for a sell off correction?
ReplyDelete"Turn Around Don't Drown" - Always short a new high.
ReplyDeleteAverage hedge fund just up 0.73% YTD and 5.27% over 1 year.
ReplyDeleteS&P up 2.56% YTD and 13.4% for the year.
Just another reason not to pay too much attention to the "smart hedge fund guys" you see on CNBC.
I think tepper is not in that crowd though. He averages 30%+ I believe
DeleteTepper is one of the exceptions for sure. He is a smart guy and I'd bet a lot the selloff this morning is based more on his "don't be friken long" comment than anything else.
DeleteLOL, facts are truth. I think the smart guys must know more than I do.
DeleteDon't be long, or you're supposed to have some cash, it's unclear but we just reached another new high.
DeleteI think he's saying " stay long, but be reasonable and smaller than you probably have been and have some cash in case things go lower". But he's not saying sell everything or short the market. Even smart billionaires like Tepper don't really know what will happen in the market. It's all about playing the odds and now the odds aren't as good as they were last year, but they're not bad either.
DeleteOkay, that makes more sense and where I was anyway, the easy money has already been made.
DeleteTVIX - Ah, this one's finally showing signs of life.
ReplyDeleteWMT - I don't guess wage inflation should be a tailwind for this one.
ReplyDeleteBut food and general price inflation would help them.
DeleteI think they are having the same retail pains from internet buying as everyone else.
Ah yes, that makes sense as well. I'm not smart enough to weigh the individual pieces. WMT's web site seems awkward, if these guys could just revamp their web presence somehow, such as offer payment by paypal or something, and there's the tax preference issue as well, I suppose but economies of scale might compensate.
DeleteDidn't WMT say they were being squeezed by pressure on consumer buying power, so wage increases should ease the metric but higher produce costs might eat into that.
Also, I guess TGT's wows should be helping WMT.
Hey Rocky!
ReplyDelete"Rough shape of our bridges" Doesn't necessarily correlate with demand for infrastructure equipment made by MTW and crew, such as GLDD, does it, more like a chance to sell into the news?
Or, Bullwinkle.....
You pay your taxes and it goes straight into some special interest groups pockets?
Add FLR to this list?
DeletePKX - Maybe this one flips here at resistance to drop back into the $60's again?
ReplyDeleteTDW - Wham! There goes your breakout, but is it a knockout test of support days ahead of earnings?
NWLI - Alright then dammit, let's retest the 200SMA again, fellas.
ReplyDeleteOkay, time for the sell off turdwatch(r) report.....
ReplyDeleteGEVO - Honest response, be glad you don't own this one.
NIHD - Ditto
URG - Oh boy, admire the temporary strength while taking your ton of profits on the strength.
Those tires there on your used clunker look new but the mfg date is 6 years ago, unsafe!
YOKU - Adding this one just b/c it's taken such a huge beating.
DeleteDXPE - So far, it's a bull flag.
ReplyDeleteGood interview on CNBC with Leon Cooperman on Fast Money lunch today.
ReplyDeleteBasically, the stock is fairly valued and could go down to 1700 or up to 2000, but think most likely base for next few months, then strong Q4 finish. Worth watching if you have some time.
Can't watch it but good info. I guess if we do get smacked I can add at support levels otherwise based on where I think my positions should be, I'll be happy. Hopefully management doesn't do something greater-foolish.
DeleteOINK - This one is immune to market winds, makes me nervous.
ReplyDeleteIWM fell today below the early May lows. That might mean that more weakness is ahead for it. So I decided to take some profits in my SCON position (while they still exist) and just sold at $2.60 the 1K shares I purchased at $2.30 last week, when the SCON chart made it seem as if it had bottomed.
ReplyDeleteAlso, just placed a sell limit order at $5.75 for the 1K shares of TVIX I purchased a couple of days ago at $5.22 (so as to have approximately a 10% gain). TVIX moves really fast and might very well hit my sell limit on an intraday spike and then drop back by the close.
Still holding my January 2015 IWM puts that I picked up in March, when IWM broke below the "line in the sand" I drew at $117.
Those are good trades David.
DeleteThe big question for IWM is: will the February lows, which were tested this morning, actually hold? Judging by the high volatility in IWM starting mid-March, my intuition tells me that a regime change has occurred, the good old days are over, and IWM will break below the February lows.
ReplyDeleteI'm sure you guys have seen this... http://www.kensho.com/
ReplyDeleteAXAS- An example of a crowded exit?
ReplyDeleteStraight to the 50SMA! Seems like these tests of support have been pretty strong.
DeleteFLWS my first U.S. stock to the green and now JONE. Stocks that hold up well on weak days tend to do better than the market when it turns back up.
ReplyDeleteGotta love the press playing up the Tepper comments: "Appaloosa’s Tepper Says Hold Cash as Markets ‘Dangerous’"
ReplyDeleteNever mind the part where he said stay long and that markets could go higher.
I'm sure my bad investor golfing buddy will tell me Saturday about how the markets are going to crash because Tepper said so. The thing about all this that makes me feel good is there are no signs at all that we are close to sucking in the really dumb investors or "last man in" to these markets.
I agree with the 'last man' part.
DeleteTBT - Some pretty healthy volume, looks like a hammer even.
ReplyDeleteWhat does a hammer mean?
DeleteLooks like some really good numbers out of SORL. Revenues up 21% and earnings of $0.14 up from $0.06 from last Q1.
ReplyDeleteShould be good for a pretty good move in the stock tomorrow. Last quarter earnings were poor and the stock has been going down almost every day since from the $4.50 range. Now at $2.93, if they can do $0.14 per quarters, implies a P/E of 5.2.
I think their problems are the China risk and also not knowing how to manage Wall Street effectiverly (or maybe they don't care).
My Canadian Auto Parts company MRE.TO also had a beat on numbers and I think a raise in guidance, but this is harder to figure out for Canadian companies.
DeleteI think the auto sector in general has a tail wind for several more years - hope it comes through into GM and FIATY as well.
VJET- OMG, have you guys been watching this!!
ReplyDeleteNo, but I've been trying to figure this one out since I saw recently that GE is working on and making metal parts by sintering metallic powders using lasers.
Deletehttp://www.eos.info/about_eos/history
They're also using lasers to make casting molds from silicates like sand, for instance.
DeleteWas busy most of the past 2 days - we were evacuated out of our home in Carlsbad (San Diego) because of the fires and spent the night at a hotel. Back home now and looks like there's another fire just east of us but we should be in the clear.
ReplyDeleteI agree somewhat about the Tepper comments - none of the positive comments came out in the media. I think a lot of people sold on the headlines about his presentation and that's the sole reason for today's action. I do agree with his take, though, and mentioned a couple of months ago that his take would change given what he said last year and the subsequent change in Fed actions. I do have some things showing up to me at least to be good values. Right now I'm holding small stakes in FIATY and SNE and a larger stake in DATE and FIG.
I think investors are much more prepared for a slowdown than they were heading into 2008 and as a result the odds of this being a big drop is very low...at least in the near term. Having said that, it wouldn't surprise me to see more sideways trading that eventually sucks people in and then it drops some time over the latter part of the year after people are sucked in. I think we will get our QE from Europe and China which will boost things.
I did notice that the Russell 2000 bottomed today right around where it bottomed back in February. I also noticed that TNX bottomed right around the lows from Oct 2013 and these 2 reasons got me more bullish today for a short term rally. I added a little FIG today at $6.72 and DATE at $5.64 today. I think there's a decent chance we get a bounce for the RUT back to 1,140ish...and possibly as high as 1,170. I think the rally on Monday with the subsequent drop has left a lot of people on the sidelines right now which means we rally.
They said on CNBC tonight that they talked to Tepper and he's reduced his position from being over 100% long to about 60% long, and his 13F came out and he had 22% of holdings in the SPY and 14% in the QQQ, so broad exposure. Not sure what he sold to get his position down, but 60% long is not a "danger, get out of the market" signal.
DeleteOver 100% long eh, maybe this guy single handedly caused the margin reports to be skewed and his selling has been causing every pop to new highs to be sold?
DeleteI bet he's the one who loaded up on NLS, too.
"Tepper Hedge Fund Trade: Long Apple, Short Russell 2000"
ReplyDeleteJCP - Whoochi mama!
So who were the winners picked during today's FCC meetings?
ReplyDeleteELNK - "EarthLink upgraded to Outperform from Perform at Oppenheimerat theflyonthewall.com(Thu 6:11AM EDT)"
ReplyDeleteI think this came out today.....
TBT - Was just noticing what looks like a bottoming hammer on the TBT, maybe? Volume too.
ReplyDeleteInvestopedia explains 'Hammer'
A hammer occurs after a security has been declining, possibly suggesting the market is attempting to determine a bottom.
The signal does not mean bullish investors have taken full control of a security, it simply indicates that the bulls are strengthening.
URG - Quite the pop, huh?
ReplyDeleteBID - Dropped handsomely.
ReplyDeleteTITN - Sheesh, what a crazy chart.
ReplyDelete"10-Apr-14 01:02PM Deere Shares Rise On Upgrade Amid Expansion In China at Investor's Business Daily +14.81%"
Looks like lots of hosings occurred this day.
VNM - Yep, coming back to us a little.
ReplyDeleteMKSI - If you use this stock as a proxy, you might conclude the semiconductor capital equipment sales cycle has ended but I'm not convinced they've even been built, delivered or even qualified? Heck, aren't the new buildings still under construction?
ReplyDeleteTepper- These we're the main ones.
ReplyDeleteReduced- AIG, AER, MGM, UAL, MET, BZN
Closed- EMC, FWLT, FCX, HIG, RIG.
What about new positions? I guess he held onto HIG quite a while, to dump at those p/e's seems like he doesn't have much confidence in holding the risk.
DeleteIf he's reducing those insurance positions, then he probably isn't counting on higher rates, makes me nervous about NWLI
DeleteTOF- Where will your bride want to move now?
ReplyDeleteA yacht?
DeleteOnce everything's burned and gone, it'll be paradise again.
DeleteWont it be desert again?
DeleteHave her check out Petaluma on line. The only real drawback is we live here..but I don't think that's all over the internet yet.
DeleteI'd love to move up to San Fran but no chance it happens.
DeleteOkay, so I'm reading all these comments about Tepper (I don't pay ANY attention to the news) so I read it here.
ReplyDeleteSo what drove markets into defensive issues and drove the Rusty 2000 down before he said anything? I mean, the markets have been flat for several months now and the russell has been in a downtrend with the DOW and SPY held up by literally a handful of defensive issues....what happens when those correct? T's have been higher, the TBT is in a serious downtrend and yields are in the dumps.
Today everything but T's (and the vix) sold off. I don't think one hedge fund guy had anything to do with it. I think this is a process.
Treasury short covering?
DeleteAny of you guys follow FCX? I didn't realize how much they're getting into oil and gas plays. Huge increase in debt scares me a bit but not if it generates significant cash flow down the road:
ReplyDeletehttp://www.fool.com/investing/general/2014/05/12/freeport-mcmoran-copper-gold-inc-is-making-a-big-b.aspx
Looks like the India bubble is clearly forming and may have popped today. Up almost 25% now since February. The Sensex is probably toast going forward. Unless of course they can continue the bubble for a while longer.
ReplyDeleteNickel too - up 34% since the end of January and now down 13% in the last 2 days.
DeleteQuestion is whether these are just healthy, scary pullbacks or the end of the run.
Someone just upgraded nickle, BACML, right? I guess they were selling.
DeleteJPMorgan believes the additional five product safety recalls announced Thursday by General Motors are "very proactive in nature." The firm thinks the recalls could help GM sales and market share and it views the stock as "very inexpensive." JPMorgan keeps an Overweight rating on GM with a $50 price target.
ReplyDeleteI agree about GM being proactive, but JPM isn't interested in giving me anything, especially stock tips.
DeleteIf we're going down, shouldn't the up days have more volume than the down days?
ReplyDeleteI don't think anyone really knows if we go up or down from here. You can make a good case both ways and probably parts of the market go up and down.
DeleteMany of the commodity oriented markets like Canada and Australia are having good years (up 8.1% and 9.7%). This tells me people are positioning their portfolios for economic growth or inflation or both. If we get this, it should help the broader markets, but I still think much of the big winning stocks from last year like TRIP,etc. need to come down to more reasonable valuations.
CP,
ReplyDeleteAt some point, interest rates should go up. If they do, it will help revalue all life insurers upwards. If rates do not go up, NWLI is so cheap and well run that something good will happen to the stock price.
NWLI - Okay, I was thinking of shedding some b/c it's not going up but maybe I'll hang onto it.
DeleteFLWS - This one doesn't seem such a bargain anymore, temporary situation? We're into the season so maybe?
Found this report summarizing 13F filings from 100 funds - could be a source of good ideas:
ReplyDeletehttp://www.specsituations.com/files/13F-Ideas-Report/13F-Ideas-Q1-2014-05152014-FINAL.pdf
You can also register on their site to get it sent to you.
BMY - Whacked pretty hard, might be an island reversal or off the cliff? I see a gap up in the chart from last Sept, in the lower $40's
ReplyDeleteMallard ducks swimming in Union street, they had 4 inches of rain in the area yesterday.
ReplyDeleteTWTR @ 32.45.
ReplyDeleteOff 32.75.
Delete