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Brendan O'Boyle  

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  • A Bear Market Has 2 Phases [View article]
    The interesting note about your observation is that high flying stocks in this bull market have still been greatly outpacing everything else.

    The NASDAQ is still barely negative for the year and outperforming the S&P.

    IBB still has a positive return YTD also. In fact the gains of the S&P have been increasingly concentrated in stocks whose valuations have become harder and harder to justify (NFLX, TSLA, AMZN, FB, maybe even GOOGL).

    I expect phase 1 would start with >50% corrections in many of these names. The current market action still looks like a garden variety correction to me, particularly with the lack of any discernible catalyst.
    Aug 22, 2015. 05:52 PM | 3 Likes Like |Link to Comment
  • The Second Wave [View article]
    I think what you are saying is you want to buy long-dated futures contracts. I don't trade futures, but this is about as simple as it gets you just buy the contract.
    Aug 22, 2015. 05:33 PM | Likes Like |Link to Comment
  • Think A Correction Is Imminent? You're Still Better Off In Stocks [View article]
    I don't understand why a recession would reduce equity returns from over 90% to 23% by 2025?

    Recessions are simply a part of the business cycle, there is a very low probability that we will run from here until 2025 without a recession.

    Stocks average returns (8-9%) already have recessions baked into them. A better reason to assume returns by 2025 will be lower would be valuation.
    Aug 8, 2015. 02:12 PM | Likes Like |Link to Comment
  • Reports: Qualcomm planning layoffs, could cut over 10% of workers [View news story]
    I feel like announcing layoffs right before a quarterly report bodes poorly for the quarterly report...

    I guess we'll see tomorrow.
    Jul 20, 2015. 04:59 PM | 6 Likes Like |Link to Comment
  • Weighing The Week Ahead: Will Falling Earnings Sink The Stock Market? [View article]
    Saying bonds are going down and investors should move from funds to individual bonds is like saying a bear market is on the horizon and you should sell your mutual funds and buy individual stocks.

    There is a chance you will do better if you pick bonds (stocks) well, but I wouldn't count on it.

    Think about it, if individual bonds could be chosen that automatically outperformed funds it would be the arbitrage opportunity of the century.
    Jul 12, 2015. 02:18 PM | Likes Like |Link to Comment
  • Will Greece be in or out? [View news story]
    If Europe stops funding the Greek banks Greece will be forced to issue its own currency. No bailout means Greece will be forced to abandon the Euro. So I would say your statement is incorrect.
    Jul 8, 2015. 06:50 AM | 1 Like Like |Link to Comment
  • The REIT Bloodbath: Game Plan For 2nd Half [View article]
    At that time the phrase 'bloodbath' might become appropriate.

    But that is what might happen, not what has happened.
    Jul 7, 2015. 10:49 AM | Likes Like |Link to Comment
  • The REIT Bloodbath: Game Plan For 2nd Half [View article]
    It depends on the REIT. Down 25% is pretty bad, but the overall index isn't a bloodbath IMHO.

    10% is a correction, not a bloodbath.
    Jul 6, 2015. 04:38 PM | 4 Likes Like |Link to Comment
  • One Photo That Will Convince You To Sell China [View article]
    Long BABA and BABA?

    Maybe it's a typo and he's long ABBA? Mamma Mia here we go again...
    Jul 6, 2015. 03:59 PM | 55 Likes Like |Link to Comment
  • The REIT Bloodbath: Game Plan For 2nd Half [View article]
    A couple points:

    First, I think using 'bloodbath' or 'carnage' to describe a 5.7% YTD decline is a bit much.

    Second, you should use total return not price return for your REIT vs. SPY chart. On a total return basis REITs were neck and neck with the S&P 500 before this pullback and are now slightly behind. You can't expect REITs to payout 4% a year and keep pace with the S&P 500 in price.
    Jul 6, 2015. 03:37 PM | 11 Likes Like |Link to Comment
  • It Is Not Priced-In, Stupid! [View article]
    How do you price in something that hasn't happened yet?
    Jul 6, 2015. 03:21 PM | 1 Like Like |Link to Comment
  • Why Beating The S&P 500 Is So Hard, And Why Even Protecting Against A 10-15% Correction Matters [View article]
    I just wonder how much of RSP's outperformance relative to SPY is simply due to the fact that it is more concentrated in mid-cap stocks. These have overall outperformed large-caps.

    RSP has a weighted average market cap of $40B vs. $137B for SPY.

    You might get the same result mixing in VO (Vanguard's mid-cap ETF) with SPY.
    Jul 5, 2015. 01:14 PM | 5 Likes Like |Link to Comment
  • Is Realty Income Cheap Enough Yet? [View article]
    8-10% is total return, about half and half from the dividend and probable price appreciation.

    I wrote an article a while back to this effect. I'm probably lowballing a bit at 8-10%. The numbers say 11% over 5 Yrs at $45/share.

    http://bit.ly/1HzKlQD
    Jul 2, 2015. 12:37 PM | Likes Like |Link to Comment
  • Is Realty Income Cheap Enough Yet? [View article]
    Both short and long-term rates generally move in the same direction.

    Another misconception that investors have is expecting historically normal Treasury rates any time in the near future. It's going to be a long time before the ten year yields 4-5%.

    Furthermore, since 1995 the average yield of O has been 5.6%, while the average yield of a 10-Year has been 4.3%. The spread is so much wider than the historical average it would lead one to believe that O is massively underpriced.

    Being bearish on O because of rates simply makes no sense.
    Jul 2, 2015. 11:57 AM | 3 Likes Like |Link to Comment
  • Is Realty Income Cheap Enough Yet? [View article]
    The idea that REITs go down as short-term rates go up is a misnomer that has been repeated so many times that everyone is convinced that its true.

    The WSJ did an article on exactly this and found that REITs perform better during periods of rising rates than falling rates.

    Add to that we will never see short-term rates that are competitive with O's present yield (and that neglects growth anyway). The whole game surrounding a rate hike never ceases to amaze, REITs have been preposterously volatile for the last 2 years. It makes very little sense as the Fed has stayed consistent in its timeline, yet investors feel the need to bid O up to 55 and back to 40 again and again.

    $44-45 is fairly valued and a 5 Yr investment will probably garner an 8-10% CAGR.
    Jul 2, 2015. 09:50 AM | 7 Likes Like |Link to Comment
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