Wednesday, May 28, 2014
Silvio/ Silver and Gold
I've always thought Bob Dylan would have risen to the top on Wall Street. Trading might be 90% psychology, and his music displays a nuanced understanding of human nature.
Silver and gold have broken to the downside after trading in a narrow band for several weeks. No telling when the selling ends. GDX (majors), GDXJ (juniors), SLW (Silver Wheaton), and GG (Goldcorp) all down -6% in two trading days, on the heels of marked declines in March and April. I don't pretend to know when prices reverse, but I'm willing to open starter positions here. My best guess is prices bounce a bit (into which I would close) before beginning a new leg down. I would then reopen a longer term position when I sense 'Cinderella sweeping up on Desolation Row' (from another great Dylan song). The longer term position might even end up 'making your year.' A highly volatile sector, one with which I normally use negativity + position sizing (keep it small) as back stops.
Dylan nails every emotion involved in trading the metals with Silvio:
Stake my future on a hell of a past
Looks like tomorrow is coming on fast
Ain't complaining 'bout what I got
Seen better times, but who has not?
Silvio
Silver and gold
Won't buy back the beat of a heart grown cold
Silvio
I gotta go
Find out something only dead men know
Honest as the next jade rolling that stone
When I come knocking don't throw me no bone
I'm an old boll weevil looking for a home
If you don't like it you can leave me alone
I can snap my fingers and require the rain
From a clear blue sky and turn it off again
I can stroke your body and relieve your pain
And charm the whistle off an evening train
I give what I got until I got no more
I take what I get until I even the score
You know I love you and furthermore
When it's time to go you got an open door
I can tell you fancy, I can tell you plain
You give something up for everything you gain
Since every pleasure's got an edge of pain
Pay for your ticket and don't complain
One of these days and it won't be long
Going down in the valley and sing my song
I will sing it loud and sing it strong
Let the echo decide if I was right or wrong
Silvio
Silver and gold
Won't buy back the beat of a heart grown cold
Silvio
I gotta go
Find out something only dead men know
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ZGNX. Damn, I'm thinking about reopening a position.
ReplyDeleteWasn't there some news yesterday or today about a new time released pill?? Kinda takes the fun out of popping pills to me.
DeleteThat's exactly why addicts crush the tablets and mainline.
DeleteIs this a medication for addicts or is it for people who legitimately need it?
DeleteVG has come back to us and looks like it may have bottomed?
Just looking at the broad market charts and they sure do look positive to me.
ReplyDeleteSPY - breaking out from a 3 month consolidation to the upside
QQQ - approaching previous high from March, getting ready to exceed
IWM - you've now got a higher high in place and the lows from the last 6 months held
TNA - same as IWM
XIU.TO (Toronto Market) - in a solid uptrend, breaking above 2011 highs
I guess you can make the argument that things look best before they fall, but given that the markets have generally been consolidating for a few months, I think that this move upwards makes a lot more sense to be an initial move than a final move.
Agree or disagree? I'd be interested to hear.
I read this this morning.
DeleteGoldman Sachs Group Inc. (GS) President Gary Cohn said low volatility and interest rates that are holding in tight ranges have resulted in an “abnormal” trading market.
“The environment for all the firms is quite difficult right now,” Cohn, 53, said today at an investor conference in New York. “What drives activity in our business is volatility. If markets never move or don’t move, our clients really don’t need to transact.”
Citigroup Inc. (C) Chief Financial Officer John Gerspach, 60, said yesterday that second-quarter trading revenue could fall as much as 25 percent from year-earlier levels, and JPMorgan Chase & Co. (JPM) estimated a 20 percent drop earlier this month. Cohn stopped short of forecasting the decline for New York-based Goldman Sachs.
“We think, at the end of the day, it’s economic in nature,” Cohn said of the cause of lower client volume. “We don’t have clear vision of economic growth or lack of growth.”
"you can make the argument that things look best before they fall"
DeleteMy knee jerk reaction is b/c this always happens and prices don't grow to the sky..
But I look around me and I see no signs of recession, just continued recovery to growth. Some econ data showed today we contracted but in which areas?
“We don’t have clear vision of economic growth or lack of growth.”
DeleteHow misleading is this, So Citigroup is clueless despite the fact they write all kinds of loans to all types of customers?
Mark, I think low volatility and trading volumes are generally good for the market as it tend to grind higher in that environment. May be bad for GS, but good for us.
DeleteCP, if I look at charts, i don't see things growing to the sky, I see them just starting a move upwards out of a long basing period. I think the time to sell will be in a couple of months.
DeleteBB- I was more interested in the reason than the fact.
DeleteTrue what might be bad for GS is good for us (low volatility) but we likely lose if GS loses? I'm pretty confident GS will be on the right side of the trade and will make tons of money thus won't lose and they don't need any customers to accomplish that. So where's the problem?
DeleteBesides all that, is this telling us Mom and Pop have sworn off stocks since the 2008 shakeout? I have the impression about half did.
DeleteYELP - Sure is popping....... As if there's news, noticed strong bids in the AH yesterday.
ReplyDeleteAh yes, this must be it: "Piper Jaffray released a note stating Yelp's (NYSE: YELP ) reviews grew faster than reviews on Google (NASDAQ: GOOGL ) (NASDAQ: GOOG ) Plus."
Deletehttp://www.fool.com/investing/general/2014/05/27/can-yelp-inc-continue-to-fend-off-google.aspx
CP- That can't possibly be a surprise. Isn't GOG + dieing?
DeleteIf GOOG is dying, that's news to me. Seems like they're recycling revenue into buying lots of ideas and trying to roll them into the master plan?
DeleteReminds me of The BORG, or something, LOL.
I think he's saying Google Plus is dying which I would have to agree. It was supposedly their answer to Facebook. Google Local could be a viable competitor to Yelp but Yelp is just cool to use. Facebook is trying to come up with their own local business as well but both have not really been able to gain much traction vs YELP. Facebook should have spent the $20+ Billion on acquisitions to buy out YELP but they doing their best to partake in what Peter Lynch described as diworseification:
Deletehttp://www.investopedia.com/terms/d/diworsification.asp
There's a ton at stake with local business search / spending and Yelp is leading the way. Will take time for local businesses to embrace what's going on but its inevitable they will move their spending online.
Oh, I never heard of GOOG+, strikes me as sort of a dumb name void of imagination anyways.
DeleteYELP/OPEN - BACML: "OpenTable, Inc.: Free Yelp service unlikely to unseat OpenTable; Buy
ReplyDeleteMay 13, 2014
Yelp launches free restaurant reservation service in U.S., U.K. and Ireland. Unlikely to impact OpenTable's position in ecosystem, given very few consumers make reservations via Yelp. Expect OpenTable's recent investments to pay dividends and potentially help accelerate growth exiting 2014; Buy.
TSL - Beating the pants off YELP today.
ReplyDeleteTSL - The $2.50 bull flag continues fruiting.
ReplyDeleteEPAM - Looks like a big cup, don't it?
ReplyDeleteYELP- TOF, you neglected to advise us this one was already bottomed..........
ReplyDeleteI advised you at $55 :)
DeleteProlly a lot of short covering here. If I'm right this will look dirt cheap in a few years.
Everyone and their mother wanted nothing to do with momentum stocks 2 weeks ago. Now? They don't believe the move in some of them. You know what that means...
ReplyDeleteI mean look at the stream on YELP:
Deletehttp://stocktwits.com/symbol/YELP
It's pretty much any one of these comments:
"no reason for this move"
"sold, moved too fast"
"parabolic moves end badly"
"getting short right here"
OMG, maybe I ought to load the boat.
DeleteWho knows man but there's a whole lot of skeptics on this stock. after all, it's just a fluff bubble stock trading at 15X sales and unable to ever make a profit.
DeleteWow. Hell of a move. Good job bro.
DeleteI think it would be rather odd if we get rejected at the 200SMA, more like we could back-test it but even that's doubtful IMO.
ReplyDeleteAHP is ripping today..so there.
ReplyDeleteI like the chart, any good reason why we aren't in it yet?
DeleteTbt sure looks ready.
ReplyDeleteLooks better every day. :)
DeleteWow, I'd be surprised if today wasn't the day but it's hard to predict a bottom on stuff like this b/c bottoming should be a process and in this case that may not be the way it happens.
DeleteThink about it though, central banks seem to want low rates forever so maybe they must continue sweetening the pot (somehow).
(a) SLW off @ 20.50 (+1.5%)
ReplyDelete(b) RYPMX off end of day (based on current pricing for GDX, it will hopefully close around +1%).
(c) GG flat. I may hold onto this one, as I've noticed that traders often alternately bid prices up on SLW and GG every other session. Not sure why that is.
(d) I also had a minor day trade in JCP, opening @ 8.77 and closing @ 8.97 (currently 9.06).
No guts, basically + the fact that I expect a second leg down. When it comes to trading miners, having no guts pays off more often than not!
Poultry producers, eh?
ReplyDeleteClosed Goldcorp as well. Despite a great deal of negative sentiment in the mining sector, it's not sufficiently bearish. A violent sell-off, one that runs each and every 'stop,' lies around the corner. Once we turn that corner, and 'after the ambulances go,' I'll take another stab.
ReplyDeleteI sense a broad market sell-off as well.
ReplyDeleteTEN - Where's the persistent downtrend?
ReplyDeleteCP- AHP is a BB pick. I've been in it for what feels like 20 years, but it's probably only about 3 months. Down 5% on it.
ReplyDeleteYeah okay, now I remember. I dunno man, so far BB's done quite well with his picks and ability to size up the market so I think I'd be hanging onto that puppy unless dark clouds begin forming. Bears seem to be losing justification for their existence.
DeleteSold 10% of my holdings in CKI.TO - it's still my largest holding, but now up over 25% YTD, so just locking in some profits for risk management. It had really good results, bought back its debentures and now the stocks asset value is around $12 (price at $10.05), with a good yield and buyback and committed management. Wouldn't be surprised if it was $11 or higher in the next few weeks and up to $12 by July, but wake up every night thinking about it, so its time to sell some.
ReplyDeleteHow do guys like this keep their job?
ReplyDeletehttp://blogs.marketwatch.com/thetell/2014/05/29/stocks-could-fall-15-to-20-as-qe-fluff-comes-out-of-the-market/
This guy has been bearish for at least 4 years now.
The beatings will continue.....
DeleteDoesn't matter if you get things right or wrong - just how many page views you generate. Big problem with financial news these days (and always I guess)
DeleteMan look at the rising gross margins for AMZN over time:
ReplyDeletehttp://www.gurufocus.com/financials.php?symbol=amzn&Submit=Go
Sure looks to me like earnings are set to explode very soon.
One of the online retailers announced they accept bitcoin as payment, wonder if OSTK will too?
DeleteI would not extrapolate the increase in gross margins much further. They are now up around WMT levels and it is hard to see them going higher without affecting sales. Plus, they will have pressure on margins due to having to collect sales tax on most sales which hurts one of their pricing advantages.
DeleteThe key question for AMZN, I think, is how much of their sales is due to price and how much due to convenience.
They have a lot more than just retailing going on to imply they will peak at wmt margins. Amazon prime hosting and a variety of other things could improve margins a helluva lot more in my opinion.
DeleteMaybe. I really wonder if there prices go up 10% to support taxes and infrastructure, how much their sales would drop. i suspect a lot of people buy on Amazon because it is cheaper, but I could be wrong of this. You are right that they can generate much better margins from their Prime customers.
DeleteNBG interests me again. Run rate on earnings is about $1B vs $12B mkt cap. Loan losses are still huge but shrinking. If you envision a scenario where loan losses shrink by 50% then I believe it would be trading at 5x earnings. Greece should post its first pos GDP since 2007 which should help
ReplyDeleteConsumer spending disappoints?
ReplyDeleteWell that figures.
ReplyDeleteRe AHP, it has been frustrating. Not sure if it is still people dumping from the AHT spin off or the size of the company or the lowish yield or the results are lower than expected. The hotel / leisure market is doing well (http://www.calculatedriskblog.com/2014/05/hotels-occupancy-rate-up-46-revpar-up.html) and there does not seem to be a big rampup in development to build a lot of new supply, so it should continue.
ReplyDeleteI suspect it will be one of these stocks that languishes along and then all of a sudden will jump based on who knows what news. Might be a longer ride that you want to wait for Mark, but I find often with stocks they move up out of nowhere for no apparent reason.
"they move up out of nowhere for no apparent reason."
DeleteSo true.
Alright I have a bid in the upper $15's for a 1/2 position to see if I can snag some and then add the other 1/2 if it does retest lower $15's
DeleteFLWS - Back to $5.56, of course.
ReplyDeleteI think it is trending upwards, but it is moving so slowly it is hard to be sure! My cost was $5.02, so it easier to hold than if your cost is around the current price. Like I said before, probably not much happens till next quarter.
DeleteNBG- Damn, I wish you'd seen that one at the dbl bottom. Good volume there too.
ReplyDeleteShall we enter our stink bids around low $3?
DeleteIf it get's back down there I'd expect it to break that then and form a new base that might be worth watching.
DeleteYeah I was just looking at the valuation...this is the first time I think I can get a grip on the valuation and upside potential. It seems that their funding needs are covered. Famous last words.
DeleteYELP - Yep, I guess we can say it was rejected at the 200 SMA
ReplyDeleteWho knows. It's a hot potato at the moment. Lots of flippers and people rumoring about buyouts. Not a chance in hell this CEO sells the company. Listen to his interview with Cramer last fall:
Deletehttp://video.cnbc.com/gallery/?video=3000219426
I think he's pretty well aware of the potential.
True nobody knows exactly how the future unfolds b/c shit happens. I do have a high degree of faith the sky won't fall and crush me, a tree maybe but not the sky.
DeleteTSL is pulling the very same crap today, for whatever significance that has if any.
DeleteCap and Trade, will it become reality?
ReplyDelete"The Environmental Protection Agency is set to release new rules to address climate change and may be paving the way for cap and trade in the U.S. In its simplest form, cap and trade would allow renewable energy producers to sell credits to those using dirtier forms of energy, leading to more renewable development where it's already economical.
If cap and trade goes through, it would be a boon for a number of companies already heavily invested in renewable energy. First Solar (NASDAQ: FSLR ) and SunPower (NASDAQ: SPWR ) are not only two of the largest solar panel producers in the world, but they are also two of the largest power plant builders. With cap and trade, those power plants would be worth even more than they are today, meaning higher returns. "
http://www.fool.com/investing/general/2014/05/30/here-is-what-you-do-when-cap-and-trade-arrives.aspx
Constant drama, sigh.... 3 months in the hospital recovering from an auto accident (the vehicle was totaled by colliding into the rear of another) and one month owning a replacement rips half the passenger side off attempting to pass a truck (impatience?). The previous car had plenty of "whiskey dents" on the passenger side before it was totalled which were all denied as driver error, "someone else put them there in the parking lot".
ReplyDeletePerhaps this 75yr old woman really shouldn't be driving?
TCK - from TD. Can send you the whole report if interested, but this is a good summary:
ReplyDeleteShort-term Pain Expected; Long-term Prospects Look Better
Event
TD hosted Teck’s CEO for a series of investor meetings in Toronto on May
29.
Impact: NEUTRAL
More coking coal production cuts needed — We estimate that production
curtailments totalling ~14 million tonnes of annualized coking coal
production have been announced YTD, but the market is still oversupplied.
Teck management believes that a further 10 million–15 million tonnes of
production cuts are required to rebalance the market. The production cuts will
likely come from Australia and the U.S., but the timing is unclear. Once the
market does rebalance, Teck expects that the spot price could rebound
quickly to the US$140/t FOB level, or a level equivalent to the middle of the
Chinese production cost curve.
Copper market expected to be in deficit in 2014 — Teck recently revised
its forecast for the copper market for the next several years. The company
now believes that the market will experience a small deficit in 2014 (similar
to our view; see our report dated May 20 “Do Not Be Too Complacent About
Copper”) and that the market surplus for 2015/16 will be smaller than
previously forecast; Teck expects the copper market to be in deficit by 2017.
Dividend is a priority — There have been concerns that Teck may have to
reduce its dividend if copper and coal prices remain at current levels for the
next 12 months. Management is committed to the dividend (although
ultimately it is a Board decision) and with ~$4 billion in liquidity plus ready
access to debt markets, we expect that a combination of higher commodity
prices and sufficient liquidity should keep the dividend relatively safe.
Copper acquisition would be nice, but not necessary — Management
noted that while its copper business will not grow organically prior to
2019/20 (earliest that QB2 could enter production), it sees few opportunities
to add to the business and feels no pressure to act.
TD Investment Conclusion
We are maintaining our HOLD recommendation and $27.00 target price
— We see few company-specific catalysts that would serve to make the
shares outperform, apart from an improvement in the coking coal market. We
expect that Teck will be free cash flow negative in 2014 after all capex and
dividends and again in 2015. The company has little to no organic growth for
the next several years, while the only long-term growth project currently
underway is the Ft. Hills oil sands project.
I suspect China is obtaining greater quantities of natural resources from their Mongolian mining operations.
DeleteAnother theme we should probably just stick with is solar. SUNE filed for a IPO of one of its projects. These projects are basically going to be high yield utility spinoffs. Take a look at NYLD's performance since it IPO'd. They have a portion of their biz tied to solar. This is a theme that will be really popular later this year and in 2015. I''ll be keying in on this sector for sure.
ReplyDeleteObviously these stocks had huge runs in 2013 so they're going through a major consolidation period right now. But the tailwinds behind this sector is so incredibly strong that it's hard to keep it down for long. These longer term trends are so powerful that they can plow through consolidation periods in the market. Obviously, I think the trend toward moving Yellow Pages spending online is one that will play out for many years and should provide nice tailwinds for YELP, but this trend is equally strong.
DeleteGTS - Still trying to watch this one too.
ReplyDeleteNOK breaking out to new highs. I just don't see how its possible that SNE stays down here for much longer. I know they're not the same but the sum of parts is just too cheap.
ReplyDeleteTBT - $60.45 seems to be the entry for the time being.
ReplyDelete(a) Emerging Markets (EEM) down -1.4%.
ReplyDelete(b) Brazil (EWZ) down -2.2%.
(c) Brazilian companies VALE (mining) and PBR (oil) both off -3%.
(d) Twitter (TWTR) plunges -5%.
(e) Russia (RSX) off -1.8%.
(f) Miners (GDX) recovering off earlier lows to trade down just -0.4%.
(g) Whole Foods (WFM) also recovering from an early selloff, and now green.
But hey, the major US indexes don't appear too concerned. DJIA off just 8 points, and the SPX is in positive territory (whereas the Russell 2000 is off -0.5%.)
If you were a day trader, you would like this kind of action. I am a day trader, but I can't say I'm seeing many trades.
Keeping my HDGE. Other than that, 100% cash.
AHP... BOOM!!!!!!!
ReplyDelete...KAPOW!!!!
DeleteBLOX- What a pity.
ReplyDeleteHave a fantastic weekend guys, TOF too! :)
ReplyDeleteyou too man! hope you guys are doing well. i've been working on some really annoying coding errors all day.
DeleteAAPL- That wasn't pretty.
ReplyDeleteAHP - no idea why, but good stuff! You never know with stocks.
ReplyDeleteJust finished my May spreadsheets and am up over 13% YTD. Hard to pick a trend, but energy/commodity and transport companies have done well, plus losers from last 2013. Some good ones - AA up 31%, UNP up 22%, CNQ up 24%, JONE up 21%. Have 4 Canadian stock which were trashed in 2013 up over 50% already. CKI.TO (my largest postion, sold another 10%) up 32%.
Am really pleased with the way the year is going. Not gong to get the 100%+ years some guys get here, but think a 20%+ year is looking good.
That's pretty good, it's gonna be hard for me to figure out how much I'm up this year b/c I move money around too much and haven't kept track but my port keeps climbing to new highs as opposed to the sudden collapses that happened daily when I was drinking the PM kool-aid so I can say the trend is favorable. :)
DeleteYeah, I do too and consolidate it into Excel every month to get the full picture. A pain in the butt, but no way to avoid I think.
DeleteGood job BB. Beating the pants off me.
DeleteNice bb. I think I'm around +5% was 12% or so at one pt.
DeleteI sold 1/10 of my yelp yesterday. Been thinking more about google and it's impact on them long term which as much as I love yelp it's hard to ignore goog
If GOOG gets you in it's sights, it can be hard to fight off - they've got so much money and smart people. I used to use Mapquest all the time and tried to stick with it as I don't want a single vendor world, but Google Maps is just so good I use it all the time now.
DeleteThose are great numbers, BB. If I had those kinds of returns I'd have to pinch myself.
DeleteGolfing with my gold bug friends yesterday. The hardcore gold guy didn't mention gold seems to be going off the deep end. He's always loved these conspiracy theories and thinks the government blew up the 911 towers, are poisoning us with jet contrails, the fed is stealing all out money, etc.,but is almost becoming Howard Hughes like - guess that's the type of guy that is attracted by these types of things.
ReplyDeleteThe soft-core gold bug is waiting it out and plans to sell his gold in 5 years when gold comes back. When I pointed out it may not come back and to look at the early 1980's, he just got pissed off at the hard-core gold guy for getting him into this mess. He see the market doubling in the last 6 years and missing out and his retirement moving further into the future. I tried to convince him to just sell 10% of his gold and move it into stocks, but he can't "because he is down too much". You try and help people, but it is hard with money - people have a lot of emotional attachments which are not logical.
You need new friends my friend.
DeleteThat's ironic!
DeleteThink that was probably the last time with Howard Hughes - I can golf with pretty much anybody, but he really is going off the deep end and not fun anymore.
DeleteThe Seduction of Market http://dashofinsight.com/the-seduction-of-market-timing/
ReplyDeleteI agree with the basic idea that you can't time the overall market. I think there are times to reduce / add exposure based on sentiment and returns over 24 month and 10-15 year returns (for short term and longer term trading respectively); however, I think analyzing "guru" returns is equally difficult because they never disclose when they close out of trades so that correct ratio is probably also skewed
DeleteI think that's all you can do too. Increase exposure as risk/reward gets better and lower it when to goes the other way. I tend to do it more based on value and opportunity than sentiment, but sentiment seems to work well for many people.
DeleteLong tza 16.4 will use a move below recent consolidation as a stop out.
ReplyDeleteSold 25% more yelp at 66.26
Sold AHP @ 16.70.
ReplyDeleteYELP - Stopped out at $65.11
ReplyDeleteThe basis was $57.10, so that's a 14% gain. This thing is dropping too fast.
DeleteGood job bird man.
DeleteWow I got lucky. Sold all of yelp after the open at 66.4 and went all in tza at 16.42 for a trade
ReplyDeleteGood God, TZA! Who'd of guessed....
DeleteHoly crap, is there bad news out there?
ReplyDeleteYELP - Thursday's gap up obligation is closed but that's just an obligation.
ReplyDeleteStrictly technically speaking, you don't want to see something break out and then reverse the breakout immediately. That's kind of what it looks like happened with YELP.
DeleteThat's also what its starting to look like with PBR.
DeleteIf YELP can hold above $64 (on closes) then it's a good thing technically because that's around where it failed last time after earnings.
DeleteBTU - Does someone have a magic hat that can displace coal and still allow us to keep our lights on?
ReplyDeleteI saw that article on iBC which was interesting
Deletehttp://ibankcoin.com/mr_cain_thaler/2014/05/28/the-time-to-accumulate-coal-positions-is-now/
There probably is room for a trade here given the incredible drop recently in all of these:
Could be good for a bounce, but not sure the supply reduction has been enough to match the lower demand and to put in a firm bottom. I think we need to see some mine closings and probably bankruptcies before coal is good for a long term buy.
DeleteThat's a bad sign that the Russell 2000 failed at the 50 DMA, and is putting in lower highs still. Obviously, the overall market looks fine but for small caps I think there's still some more downside left. That's why I figured going long TZA was worth a shot.
ReplyDeleteNWLI - Damn, now this one gets sold off, there must be some bad econ news I haven't heard about yet.
ReplyDeleteNWLI isn't really affect by econ news. Could be concern on rates with the Europeans looking more certain to drop rates this week But also could just be someone taking profits or buying a house and needing cash. You never know.
DeleteSeems like we are moving back in to the large caps up / small caps down type of market that we've had a lot of this year.
ReplyDeleteMakes sense given the relative valuation differences and where we are in the economic cycle. I personally do not think it is a sign of the broad markets rolling over.
Yeah it's a wild market. Lots of intraday volatility today at least. For small caps, I still think a 100% move from October 2011 to the March 2014 highs is going to be an anchor on that space for a while. That's one of the sharpest rallies in history over a 2 year period.
Deletehttp://www.raymondjames.com/inv_strat.htm
ReplyDeleteMan I just looked at LNG. What is the justification for that market cap? Is it that they will have a monopoly on exporting nat gas? Crazy that we were trading that at 1/10th the current price
Coal stocks might be a good trade if we get a couple more big down days. RSI(7)'s around 5-6 almost always turn out to be really good trades. They have RSI(7)'s around 10.
ReplyDeleteBALT has been cratering the past few days.
ReplyDeleteLove this chart:
ReplyDeletehttp://ibankcoin.com/option_addict/files/2014/04/Sentiment-Chart.png
Its exactly what I've been thinking with regards to the momo names.
Stumbled on this old article from this same guy:
Deletehttp://ibankcoin.com/hattery/2013/08/22/shockingly-bullish-why-the-dow-could-go-to-40000-by-2020-or-sooner/
I think he could be right in that there is a chance we have a major move higher after a move lower sucks everyone into the bear vortex. That's exactly what happened in 1981/2. It could be something we have first before a major move up...who the hell knows? Always fun to look at prior markets primarily to gauge sentiment since sentiment is the thing that rules markets. How else could a stock like TRIP grow net income about 15% in the past couple of years yet the stock rose 250%?
Where do you think we are on his sentiment chart?
DeleteOh I don't really know as far as the market goes. I love the chart as far as stocks go. It's precisely what I had in my mind as far as the momentum stocks go...glad I found a chart that put my thoughts to mind. I think the YELPs etc are probably climbing a wall of worry. A big aversion type drop is coming soon. Not all of them are the same though. Some of them are dead...ie FEYE SPLK etc. Some are going to be big winners but need to grow into their valuation...ie LNKD YELP. But this chart is so perfect for showing the cycle of a sentiment sea change. I think FSLR is probably in the Anxiety > Denial phase...before it breaks out to above $100 again.
DeleteSold FLWS at $5.57 Made 11% on it in less than 5 months, so pretty good, but just getting rid of some stocks to build up cash for new ones. Wasn't that big a holding and I think it may take longer to play out than I'd like. Still think it will do well, but the whole retail type business world is unsteady these days.
ReplyDeleteI also think at this point in the market, industrial type stocks are a better place to be. So I'm happy to hang on to the energy stocks and stocks like AA, UNP, the automakers, etc. Plus I still like financial stocks as I still think the stocks are being punished (because of the financial crisis), even as their business gets better.
Sold out of TZA at $16.7X. Could have timed that better but I'm going out to a long lunch and don't want that bad boy hanging over my head.
ReplyDeleteBought back into YELP at $64.9. Apple to switch to Bing in its search. Bing uses Yelp.
ReplyDeleteSmaller position. Also bought some FSLR at $62.7
DeleteGoing to keep a bunch in cash for now. still would like to see lower prices in the momo names first.
DeleteWhat do you mean AAPL to use Bing.
ReplyDeleteTEDU @ 9 (Shark's pick).
ReplyDeleteEarlier, picked up SLW/ GG @ 20.32/ 22.85.
Who is thsi Shark guy? I heard the TEDU name earlier today somewhere...
Deletehttp://www.sharkinvesting.com
Deletethis is where i saw it:
Deletehttp://ibankcoin.com/flyblog/2014/06/02/its-chinese-lotto-time-3/
I added some SNE and FSLR today. Now sitting on about 80% cash. Not because of any real worry about the overall market but because I'm trying to pick spots in some things that look good for a longer longer term trade. The solar trade seems really appealing to me right now, especially with their recent pullbacks. I like the ones that have Yieldco IPOs coming as that is a major catalyst going forward.
ReplyDeleteI printed out this chart and have it in my office now:
ReplyDeletehttp://ibankcoin.com/option_addict/files/2014/04/Sentiment-Chart.png
So many charts remind me of this pattern on the weekly charts.
Look at the 10 year weekly chart for RAD. I mean is that not the perfect rendition of this chart? The "crash" from $2 to $1 in 2012 was the "Aversion" phase.
FSLR looks a lot like this one too. I wouldn't be surprised to see it back at $150 within a year or two. Especially with the trend toward solar. A friend of mine was telling me how he sees every house around him in Boston with solar panels and asked me if I think happens every new home would eventually be built with solar panels installed. I thought that was an interesting idea...
TOF- What did you mean by AAPL using Bing now?
ReplyDeleteSorry man they are using them for spotlight on their new OS. Spotlight lets u search for files on ur computer but also allows u to search the web. It's at the top right now and is kind of hidden but looks like it will be more prominent. Safari will still use google. My guess is eventually they go toward using bing on safari but who knows. Not sure if people will use spotlight more with it being more prominent. It's a trend in a good direction for yelp going up against goog
DeleteInteresting chart on the sources of energy in the U.S. over the past several years:
ReplyDeletehttp://www.eia.gov/totalenergy/data/monthly/pdf/sec7_5.pdf
Solar use is exploding but still miniscule. Its up over 100% in the 1st 2 months of 2014 vs 2013. Look at the #'s since 2009:
2009 - 891m kW
2010 - 1,212
2011 - 1,818
2012 - 4,327
2013 - 9,252
2014 - 1,632 (thru Feb) vs 798 (2013) and 231 (2012)
As a share of the total it has gone up 10 fold since 2009...from 0.023% to 0.233% (i.e., less than 1% still).
AMBT - NASD delist notice, will someone jump in to save this thing?
ReplyDeleteIf the ECB lowers rates then shouldn't we also expect US rates should fall in sympathy?
ReplyDeleteDepends how people are positioned - could very easily be a "sell the news" type event where rates have already gone down in anticipation of the ECB cut and rates actually go up when it is announced.
DeleteThink of how everyone thought the taper announcement by the fed would drive rates up and they actually went down.
Excellent point, that might explain the dip in NWLI (&US rates) too. Gotta think several steps ahead in this casino! :)
DeleteThat day last week when rates dropped (I think it was on the GDP day) and reversed was a major tell in my opinion. I mentioned that TBT was looking really good there..probably should have bit on it.
DeleteYELP - Where'd all the happy sellers disappear to?
ReplyDeleteTOF- I'm sure you will be able to change it in preferences like you can with Safari.
ReplyDeleteYou can but I'd bet like 95% of users don't know how to or that you can.
DeleteAdded some FSLR at $62.69
ReplyDeleteInfo on the EPA ruling yesterday:
ReplyDeletehttp://www.alphapitch.com/pitches/btu-epa-proposed-guidelines-to-reduce-of-co2-emission-by-power-plants-takeaways-for-investors#.U43WxS8njVR
Good writeup on NWLI - http://seekingalpha.com/article/2250143-national-western-life-insurance-life-is-good
ReplyDeleteHis target of 120% of Book Value is unrealistic unless management becomes more shareholder friendly, but it hits 100% of book each up cycle, so would imply 70% upside from here. Plus BV is growing by over 10% a year, so the longer it takes, the higher it should go.
Dang, since BV is growing 10% then for a long term hold from that perspective 70% upside could prove conservative.
DeleteAlright, so when I see an article on SA then my knee jerk reaction is the stock will probably get hammered as a result so I'm placing a stink bid in anticipation.
DeleteGEVO - These alternative fuel producers could fly if they are bestowed the honor of selling cap and trade carbon credits by governmental decree.
ReplyDeleteREGI - Say what, this one's actually profitable?
DeletePresidential election - So which party will win the next election and will they put their money where their mouths are (currently the inept party claims we cannot afford carbon cap and trade)?
ReplyDeleteNice sales numbers out of the automakers this morning. Think this trend of higher sales could last years, so they should be able to keep their margins for a long time. I own GM, FIATY, MRE.TO (parts) and SORL still, but I'm thinking of selling SORL because of the China issues.
ReplyDeleteMan, the current Chinese regime seems counterproductive for the country, if what I'm hearing is true what a disappointment.
DeleteYeah man I saw that too. Nice numbers.
DeleteSNE - Tempting, isn't it?
ReplyDeleteSeems like with a little discipline and a few less trips to the corporate ohnsen, SNE could turn a profit.
DeleteI have yet to purchase this thing and not have it go straight down on me within a day of purchasing it. This has gone on for 20 months now, even when I first bought at like $11. Granted I have 2% of my portfolio in it so not really a big deal but it's quite the frustrating stock.
DeleteSolar
ReplyDeletehttp://www.businessinsider.com/how-solar-will-destroy-the-power-companies-2014-6?google_editors_picks=true
Feeling a little better. Someone asked about Houston, I think TOF. I like it so far, the economy is very vibrate with a lot of young people and the energy that goes with it. Rents seem very high, perhaps as high as Hawaii. We rent across the street from Herman Park and the Museum district. I guess you pay for location. Herman Park has this outdoor theater that has shows for free. On July 2 Jefferson Starship is going to play, we hope to be able to see it.
Howard Hughes Corporation HHC, has the Woodlands and I think Bridgeland to North of Houston which are very nice master planned communities. When I'm well we are going to check it out. Phyllis still like AZ, but I think I would prefer green to brown.
Good trades to all, with some luck I should have my health back by mid August.
Mark how is your wife doing? Well I hope.
http://www.businessinsider.com/elon-musk-bet-on-the-gigafactory-2014-5
DeletePPO
Deleterelated to above article, possible on pull backs
Good to hear from you T3. I bet its getting hot down there in TX. Are you saying that it's not brown there? I hope you are feeling good enough to take a trip to Austin to catch some live music. They have a great music scene from what I hear.
DeleteFor solar, I think the partnership that FSLR has with GE will prove to be fruitful for them:
http://investor.firstsolar.com/releasedetail.cfm?ReleaseID=783197
I'm planning on adding some of this along the way and hoping to make it a longer term position. Tough to say because if it rips up 20% in a week or drops below my stop I will have to respect both. It's looking like the latter at this point. The prospects for solar do look pretty damn good though and it wouldn't shock me to see FSLR at new all time highs again in the not too distant future...if they get some traction with residential / rooftop installations.
Why is NRG so strong?
DeleteBB - Is the pension obligation for GM off balance sheet? How unfunded is it?
ReplyDeleteEstimates for 2015 are $4.75...if you use a 12 p/e on that that equates to 63% upside. Additionally, I'd have to imagine they would be able to boost their dividend to $1.60 a share which means a 4.5% yield on current prices. Not too shabby.
The pension is included in the balance sheet, so the book value includes this. Because of their bankrupcy, their long term debt is low - $22B versus $67B for F (who also has a pension deficit), so they might be able to look at borrowing the money to fund this and still have a good balance sheet - I haven't hear about this, but just seems to make sense to me.
Delete"Another important risk is GM's underfunded pension. The plan was underfunded by $19.9 billion as of Dec. 31, 2013. In late 2010, GM contributed $4 billion in cash to the pension and an additional $2.2 billion in GM common stock in January 2011. Management does not expect to be forced to make any contributions to the U.S. qualified plan for at least five years, but that assertion is only an estimate. "
The reasons I like GM are:
Delete1. Low market cap and EV relative to competitors
2. Seemingly good quality in their vehicles to drive demand
3. bankrupcy improved balance sheet
4. Oldest average age of vehicle on the road in history (more demad)
5. Where we are in the economic cycle - jobs improving will drive demand
6. Many good value investors are buying, so show underlying value
FIATY is more of turnaround story with a higher risk/reward basis. GM should have good return with less risk.
I agree. The hard part is getting myself to buy a "boring" stock. Having said that, 60% upside with a potential for 4-5% dividends isn't too boring.
DeleteSome of these boring stocks have been doing well lately. Look at MET up almost 60% last year.
DeleteThe other reason I like GM now is it isn't going down anymore on bad news, so if we can actually get some good news, it could move up quickly. It could also languish for a year before moving too, but I think the odds are pretty good it will be soon.
Not in your wheelhouse of a YELP type stock, but not out of line with a SNE either.
Yeah I agree...I was looking at AA today actually, which is down. The valuation is still a little difficult for me from an earnings perspective...relative to book value is an easier argument. The sum of the parts game can be harder than the earnings / momentum / catalyst game, though.
DeleteMost of the momentum stocks are good for trades at this point. I actually sold out of all of my YELP so I'm not playing that game right now. Still just watching a lot of stuff and trying to pick up a few things for the longer term.
RSI(7) on WLT = 8; ACI = 10. Getting there...target is 5-6
ReplyDeleteIF you are intersted in shipping WSJ has an interesting read -can't post the link but google "Funds Ship Out in Search of Returns" to see it.
ReplyDeleteCan't read it. Is the discussion centered around the ships they're buying because if it is that's a negative in my opinion. They just need to completely abandon buying new ships. If it's old ships that's better but I would still prefer to see more scrapping.
DeleteHedge funds seeking big returns are heading for the high seas.
DeleteOspraie Management LLC and Vermillion Asset Management LLC are among the funds that are betting freight rates for shipping are set to soar as global demand for everything from iron ore and coal to grains and sugar increases. Some investors argue that, in coming years, there won't be enough ships to accommodate the growing need for transport, a situation that is likely to push freight rates higher.
Managers such as Louis Dreyfus Group are even starting new funds dedicated to shipping rates.
"There's strong demand, and you don't have the ships," said John Kartsonas, a portfolio manager who oversees freight investments for Vermillion, a commodities hedge-fund firm with $1.1 billion under management. "For the next two years, there's not a lot of things you can do to bring this market back to balance."
Vermillion, which is majority owned by private-equity firm Carlyle Group,CG +2.57% recently boosted its exposure to freight rates on expectations they will rise this summer and through the second half of the year.
Money managers can bet on the direction of freight rates by buying and selling futures-like instruments known as forward freight agreements, which are largely traded over the counter. It is a murky market prone to some big swings, an attraction for funds seeking volatile markets to juice their returns.
Rising interest in the $15 billion freight market is yet another illustration of investors' willingness to dive into risky and volatile financial instruments as they seek bigger returns. Freight rates collapsed from record levels after the 2008 financial crisis as a drop in demand for commodities collided with the delivery of many new ships that were ordered during the boom times of the early 2000s.
Just this year, freight rates—tracked by the widely watched Baltic Dry Index—have plunged 59%. Rates as tracked by the index would have to rise 12-fold to regain their precrisis peak.
The market also is affected by more than the health of the world's economy. Rates tumbled this year in large part because of the cancellation of several soybean cargoes from the U.S. to China, as well as a ban by Indonesia of nickel exports.
But bullish investors say the latest setback to rates is temporary amid stable, albeit sluggish, global growth.
The Baltic Dry Index reflects freight rates for four different types of vessels plying 23 routes. Some of those rates are showing increasing gains, signaling that a bottom has been hit already, some analysts say.
Since the start of 2014, rates for the largest cargo ships, called "Capesize" because they must pass the Cape of Good Hope or Cape Horn to make their way between oceans, averaged $14,300 a day, according to Baltic Exchange Ltd., a London company that provides maritime-market information. That compares with an average per-day rate of $5,600 in the year-earlier period.
These daily "Capesize" rates have jumped to as high as $35,000 this year when China snapped up iron ore on the cheap, overwhelming the available capacity, traders said.
DeleteTrading volumes are up as well. In the first five months of the year, 495,213 forward-freight contracts changed hands, up 47% from last year and the most since the same period in 2008, according to Baltic Exchange.
"There's been a change of sentiment," said Jeremy Penn, chief executive of Baltic Exchange. "People started piling back into the market."
Global trading firm Louis Dreyfus started a freight-focused fund, Edesia Lighthouse Fund LP, in November with $120 million in internal and external capital, prospective investors have been told; a fund representative didn't return a phone call seeking comment. The fund was up 4% through March, according to investor documents. Ospraie Management recently has taken a bullish position on freight rates, according to people familiar with the fund manager.
To be sure, there is debate over how broad and sustained any rise in freight rates would be. And the market historically has been very volatile, putting any gains at risk. Lighthouse was up 8.1% in February but fell 5.8% in March.
"It doesn't look that rosy," said Philippe van den Abeele, chief investment officer of Consortium Maritime Trading Ltd., an investment firm that began taking positions in forward freight agreements in April with plans to raise $25 million in capital by year-end. "Any uplift in the market is to do with stresses in the logistics system when there's short-term demand."
Between 2010 and 2013, capacity rose 33% to 721 million deadweight tons, a measure of ships' maximum weight including cargo, fuel and provisions.
"There's still too many ships in the way, and it takes a while to clear out," said Urs Dür, an analyst with Clarkson CKN.LN -0.79% PLC, the world's biggest shipbroker by revenue.
Still, seaborne deliveries of dry commodities are forecast to jump 18% between 2013 and 2016, according to Clarkson's data. Global iron-ore shipments hit a record 1.2 billion tons last year, driven by exports to China from Brazil and Australia. Shipments of coking coal and raw materials for aluminum production saw double-digit increases last year, and soybean deliveries jumped more than 7%.
Meanwhile, Clarkson estimates that growth in shipping capacity will slow. The shipbroker projects growth of 5% this year, 4.6% in 2015 and 3.6% in 2016. If borne out, the growth forecast for 2016 would be the smallest increase since 2004
Luckily I bought more FSLR down around the lows today. Found an interesting chart on their historical p/b to give some perspective:
ReplyDeletehttp://static.cdn-seekingalpha.com/uploads/2014/3/19/saupload_b4f9246df4f06a88bb3959dae8f67109_thumb1.png
I think there's actually more value embedded on their books than the market is giving it credit for. The possibility of spinning off these yieldcos could really give the stock a major boost.
Added GDX on a little long side momentum in miners.
ReplyDeleteRe AA, "they" say you have to buy commodity stocks when the fundamentals look horrible and sell them when the fundamentals look great. IF you look at the 40 year chart for AA, it is a good one, so they've managed these commodity cycles before. PLus, if you look at their earnings for the last 10 years, you see they can generate good profits. If they can generate a $3.00 EPS like in 2006/2007 and get a 12 p/e like then, it is a $35 stock. May take a while, but overall, trends are good with aerospace doing well, aluminum going into vehicles like the Ford 150 for better mileage and excess capacity shutting down. AA going up the value chain as well.
ReplyDeleteI totally hear you and I look for those kinds of anomalies but my concern is they don't have the earnings power they once had at prior cyclical peaks.
DeleteComing into the final stretch in reference to the completion backwards principle if we can manage the time.
ReplyDeleteRegarding that WSJ article > makes me wonder if these guys are all playing the forward freight rates market then how skewed did rates get at the end of last year? I wonder if those reflected reality or just hedge fund money chasing it.
ReplyDeleteI do like BALT and have been looking a lot closer at it lately. India needs to take the place of China in terms of infrastructure build out. That will help soak up excess supply that is still on the market. BALT is the most levered in my opinion and it has the newest ships so it has an advantage over the others.
I know analogies don't really work well but the 1973 topping pattern is very similar to that in small caps. If it holds like it has been then we should see a rally to last weeks highs possible in back of the ECB meeting and then a plunge to new lows
ReplyDeleteRe AA - if you don't think pricing power returns, I would not buy either. Generally commodities are self correcting and prices approach the marginal cost of production, but you do have China who may be producing aluminum at less than optimal pricing for other reasons like employment and survival of the government which would through this out of whack.
ReplyDeleteRe shipping, NM is up over 20% in the last month, so making a good move. But figuring out all of the factors on shipping rates is definitely tough. I still like than NM can allocate capital across the shipping spectrum - dry bulk, energy, containers and the South America river business, so I am basically outsourcing this to them. Of these, I think the energy business is the most promising now, but could be wrong.
Yes NM is the most diversified no doubt. It was the reason I liked them a few years ago, but I think it had more to do with a logistics division. If rates got to say $5k they won't go nuts but they won't crash at low rates like now.
Deletehttp://maineventweddings.com/eighties/Im%20Too%20Sexy.mp3
ReplyDeleteYou guys see that ANR owns either 9 or 10 million shares of RICE?
ReplyDeleteYes.
DeleteShould delay their Chapter 11 filing for another quarter.
DeleteA Lotto ticket similar to PAL
DeleteTBT - Now broke to upside of channel(wedge).
ReplyDeleteIn my mind, there is no doubt that rates are higher in 5 years. I'd be tempted to play TBT, but I'm really not sure of the timing as I thought they would have been much higher by now, so it could still be farther down the road than I think. But, having said that, it seems like the time is right to play.
DeleteYes, the time is right, maybe we get a new low.
DeleteFNMA - "Icahn’s Purchase of Millions of Fannie, Freddie Shares Disclosedat Bloomberg(Tue, Jun 3)"
ReplyDeleteNWLI - Motivation - Why should this company bother becoming shareholder friendly considering the market refuses to value it fairly?
ReplyDeleteDoes anyone have a printable World Cup schedule?
ReplyDeleteFSLR - This puppy is jumpin'
ReplyDeleteAHP - BACML has a $19 price objective assigned to this one.
ReplyDelete