Seeking Alpha

Dr. Duru

View as an RSS Feed
View Dr. Duru's Comments BY TICKER:
Latest  |  Highest rated
  • How Companies Should Take Advantage Of Markets [View article]
    Great post. You make excellent points. FB really got handed a gift by getting added to the S&P 500 and the company is taking full advantage of it just as it took full advantage of the liquidity from the IPO last year. Anyone worried about dilution should look at all those shares outstanding and understand that massive share issuance is part of the deal here....
    Dec 20 03:38 PM | 3 Likes Like |Link to Comment
  • Housing Starts Surge To The Highest Level Since 2008 [View article]
    In reading the article my first thought was similar to what you said toward the end and what John points out - the construction activity is very consistent with the fresh surge in the HMI and builder confidence. And all of this is consistent with what I continue to see as a consolidative phase for housing that looks most likely now to break to the upside next year (absent any economic shocks of course).

    The stock market's reaction to the start of taper surprised me but it is consistent with a Fed that yet again reassured markets it will be accomodative for as far as the eye can see.... Again, bodes pretty well for 2014. And on top of this, somehow, our DC politicians are cooperating just a tad bit more. If fiscal policy stops being a drag....look out above!
    Dec 20 02:05 AM | Likes Like |Link to Comment
  • Swiss National Bank Decreases Inflation Forecast, Sees Increased Real Estate Risks [View article]
    Anecdotally, it seems there is some lingering belief that the Fed might actually start tapering this month. It doesn't make sense to me, but it provides fodder for generating jitters. I think the Fed knows that dragging this thing out actually gets markets used to the idea that tapering must happen just by sheer logic (it can't be infinite) and, hopefully, by the time it happens, no mega-collapse will ensue.

    The forex markets are being a bit coy here, and I am just bracing for anything. I will never forget how surprised I was at the dollar's resilience after QE3....

    Fundamentally though, I think USD/CHF is extremely oversold. The franc "should" be much weaker than it is. Interesting question I have yet to read on is whether the SNB is still intervening in the markets to hold the franc above 1.20. I have assumed no...
    Dec 16 09:26 PM | Likes Like |Link to Comment
  • Swiss National Bank Decreases Inflation Forecast, Sees Increased Real Estate Risks [View article]
    I have been extremely tempted to go long USD/CHF since I am overall still bullish on the US dollar. Yet, I have not pulled the trigger. If the dollar shows renewed strength after this week's Fed meeting, I am definitely going to go to USD/CHF first.
    Dec 16 03:31 AM | Likes Like |Link to Comment
  • A Potentially Low Risk Pairs Trade Opportunity Using The S&P 500 [View article]
    Note. One December 11, 2013, the linear combo I described above sank to the -1% mark, triggering a position. I initiated with the SPLV/SPHB ratio described above. Instead of shorting SPY, I got "close" with March $90 puts on SSO with a delta of 0.25 at the time of writing. The March expiration gives plenty of time for the trade to work - I estimated 2 month cycles.

    I consider this first position a test and will update on how things are going by February or so.
    Dec 12 10:06 AM | Likes Like |Link to Comment
  • A Potentially Low Risk Pairs Trade Opportunity Using The S&P 500 [View article]
    No reason not to try that. I didn't run any numbers to test that strategy out. This strategy is not low risk, however. It is certainly possible that one of the ETFs suddenly greatly outperforms the other and the trade you happen to put on is long/short the wrong side.
    Dec 10 10:01 AM | Likes Like |Link to Comment
  • Canadian Dollar Extends Weakness As The Bank Of Canada Sounds Fresh Alarms [View article]
    I have actually avoided connecting the two because of the large difference in export markets. Since the Bank of Canada has not (yet?) talked up an over-valued currency, I am inclined to think the Aussie will be weaker than the loonie in the near-term. But certainly it seems traders are increasingly giving up on the hope that the Bank will increase rates again anytime soon.
    Dec 5 10:33 PM | Likes Like |Link to Comment
  • Australian Dollar Left Hanging For The Year, But What About Foreign Debt? [View article]
    I have yet to follow the NZ dollar. I think I am at capacity!
    Dec 3 11:02 AM | Likes Like |Link to Comment
  • Australian Dollar Left Hanging For The Year, But What About Foreign Debt? [View article]
    Thanks for the additional background. The overall resilience of the Australian dollar speaks volumes about the other factors you mentioned being more important to the exchange rate.
    Dec 3 11:01 AM | Likes Like |Link to Comment
  • A Potentially Low Risk Pairs Trade Opportunity Using The S&P 500 [View article]
    Interesting developments. Just note that my intention was more at finding an arbitrage between SPY and the combination of SPLV and SPHB. The trade I am discussing always has SPLV and SPHB traded in the same direction and SPY opposite that.
    Dec 2 02:49 PM | Likes Like |Link to Comment
  • A Potentially Low Risk Pairs Trade Opportunity Using The S&P 500 [View article]
    Yes, I should have noted that the limited history is another risk factor, but I still wrote this one up because it I found it so intriguing. If this approach makes sense, it could certainly be applied elsewhere. I did mention that i these patterns prove stable enough, leveraging up a bit could make sense and leveraged ETFs could play a part - they have their own risks for "decay" over time though.

    I like even better the idea of customizing a basket of stocks for these purposes. Do you weight your "index" at all?
    Dec 1 12:00 PM | Likes Like |Link to Comment
  • Black Friday 2013: A Likely Last Stand For Bears For The Year [View article]
    I use 1950 for convenience and figure trading in the World War 2 era has little relevance to today. I also look at time series to confirm overall consistency. So far, the 1950 cut-off has worked fine.
    Nov 29 11:22 AM | Likes Like |Link to Comment
  • Black Friday 2013: A Likely Last Stand For Bears For The Year [View article]
    Be careful on assuming the momentum in the speculative, expensive stocks has ended. Keep an eye on a few of them as good tells. For example, TSLA was stuck in a steep downtrend until the current consolidation over the past week. This stabilization may be all it takes to get the buyers ripping again on these stocks.
    Nov 29 11:20 AM | Likes Like |Link to Comment
  • Black Friday 2013: A Likely Last Stand For Bears For The Year [View article]
    The trick, as always, is the timing. Of course a correction will come at some point, but if it is 10%, 20% from now, it doesn't do much good to know that the correction is coming.

    Also note that before the S&P 500 was *down* three years in a row on Black Friday before 2012 (2011 was marginal). So, QE and low volume have nothing to do with the performance on that day. Also note that volume has had very little importance on price direction for the past several years. I stopped using it as a strong indicator in 2011 or so.
    Nov 29 11:16 AM | Likes Like |Link to Comment
  • The Coming Upward Pressure On Mortgage Rates In 2014 [View article]
    I don't think they are bold assertions for all the reasons I have provided in previous posts and this one.

    Just a quick rundown. The pent-up demand already exists in several housing markets. If the economy doesn't experience any shocks in 2014, that pent-up demand will continue to expand. Note I am NOT predicting there will be no shocks.

    Homebuilders have pointed to the potential for easing credit conditions. As Yun points out, banks that are losing refi business will be scrambling to make up those revenues. Mortgages will be a natural outlet. The trend on defaults makes it an easier proposition. Note I am NOT predicting that banks WILL go there, just the odds seem high now.

    I was not ready to accept higher rates next year until I looked at that rent data. If I were forced to guess odds, I would still say it is 50/50. I imagine the Fed will do what it can to fight higher rates even if it tapers.

    Uncertainties have hung over the world's economies for at least 5 years now. They are not reasons for inaction.
    Nov 27 11:30 AM | Likes Like |Link to Comment
COMMENTS STATS
1,300 Comments
361 Likes