Contrarian, event-driven, currencies, macro
Contrarian, event-driven, currencies, macro
Contributor since: 2011
Company: HiddenLevers
Tenaris's macro profile (bit.ly/jd8b6X) shows a Copper Impact of 3.29 with an Rsquared of .90 (even stronger positive correlation than LB Foster). For your guide, HiddenLevers has done regression analysis for every single equity and ETF, and runs over 2 million regressions each night to keep the correlation data fresh. Check us out in the SeekingAlpha app store.
At HiddenLevers, we look at macro. We've mapped the 10y and 2y correlation between 100 economic indicators and the whole universe of stocks + ETFs + MutualFunds + ClosedEndFunds + ADRshares + 15 major currencies. Using these regressions, which are refreshed daily, we can tell you what a company's economic underpinnings are, and sometimes uncover HIDDEN ECONOMIC LEVERS that are pushing on your investments. We can also help manage risk in your portfolio, by letting you model big picture scenarios, based on these correlations.
Good morning Mr. Pupppy. No attack. Just insight.
At HiddenLevers, we look at macro. We've mapped the 10y and 2y correlation between 100 economic indicators and the whole universe of stocks + ETFs + MutualFunds + ClosedEndFunds + ADRshares + 15 major currencies. Using these regressions, which are refreshed daily, we can tell you what a company's economic underpinnings are, and sometimes uncover HIDDEN ECONOMIC LEVERS that are pushing on your investments. We can also help manage risk in your portfolio, by letting you model big picture scenarios, based on these correlations.
LB Foster's macro profile (bit.ly/lHzOsR) shows a Copper Impact of 2.49 with an Rsquared of .81 (strong positive correlation). For your guide, HiddenLevers has done this for every single equity and ETF. Check us out in the SeekingAlpha app store.
Well looks like I wasn't alone in my opinion. George Soros is out of China folks. bloom.bg/kSSw3w
i didn't realize you were such a Thespian Ed.. Kudos on your article getting lifted!
Try these sources on for size:
If i wanted to sensationalize, I would go to Business Insider or HuffPo. We are just truth-tellers amigo. Take a look at all our previous work. We diss USO regularly. We said take profits on Oil at 102usd. We said play the Japanese recovery and Uranium before it was cool. We make pretty good calls, but the HiddenLevers machine helps us a lot. Easy and cheap access to macro-economic data and analysis tools make it pretty easy.
You ain't gonna get this on Yahoo Finance, and you surely can't afford a Bloomberg terminal. Enter HiddenLevers.
That's just it Zenstar. I am concentrating on the macro basis... These picks were chosen due to their high high correlation with Uranium prices. How did I find the Uranium impact coefficient? Well HiddenLevers of course! We have calculated the Uranium beta for every US stock and ETF. That's exactly what we used to do on the trading floor. It's called a shortcut. And I think I did alright with my picks, and I took a full lunch instead of digging through a hundred ideas. I started with macro, and got to the best of breed way faster.
That $33 call was worst case scenario, if the Japanese reactors actually melted down, and their was a nuclear gas cloud that floats over Tokyo, like something out of a Hollywood Thriller. I wrote the article as bullish as I could, but acknowledging that a Black Swan event (possible but improbable) could make us all bow down. That doesn't seem to be the case, and my picks have done quite well. Thanks for your comments! I appreciate the feedback amigo!
i love your convictions. Oil prices have been going south because 1. the middle east business floated them up to frothy, and because call option activity suggests everyone is already long (so look out next week during options expiry). The smart money got our of Oil at 102ish... Oh and not all commodities were down... nat gas was up a good bit.
the bounce-back today in Japan is amazing, and seems like way more than a dead cat bounce. you could have predicted it this afternoon when the US markets came back north after gapping down. Nikkei took that button and kept going.
the markets that past few weeks though tell us one thing - macro is still overwhelming fundamentals. it's been happening since 2008, and hasn't stopped. that's why we created HiddenLevers.
Hope you are well amigo. I really like your work here.
I think the Nikkei took a 10% hit after the Kobe earthquake in 1995, and took about a year to recover. Hopefully by the time markets close, things will even out, notwithstanding the nuclear fall out (no pun intended)
Just look at the chart against copper in both macro profiles. Nuff said.
our correlations go back 10years. But a simple look at the charts since 2009, when things picked up for commodities is the time frame I mean. And that is plenty of time to see that Copper is less volatile than Oil these days. The visual says it all my people.
If you believe Oil is trending up, forget about USO. www.hiddenlevers.com/?...
The intent of the article was actually not to imply that shorting the dollar is a good (or bad) idea at this point - but to note that if you do think it's a good idea, this is how to play it using certain large cap stocks. If you believe strongly that the dollar will rally moving forward, HiddenLevers can show you picks for that trend as well.
Convoluted, thanks for the comments on options strategies. You can certainly make use of options spreads, iron condors, and other similar strategies to generate income from currency ETFs, and from other stocks for that matter. I frequently do the same (though as disclosed, no positions in companies mentioned here).
To be fair to the currency ETFs, their tracking errors are much lower than certain commodities ETFs, particularly the oil and gas ETFs. My point here was to mention that it's possible to invest in companies that have an inherent currency play embedded in them. Companies like ORCL are actually leveraged currency plays to an extent, as they tend to move faster than the currency ETFs when the dollar makes large moves, according to HiddenLevers historical regression analysis.
And yet despite the fuel surcharges, oil has helped crush the trucking industry! Rising oil prices have helped shift freight from the roads to the rails wherever possible, as can be seen in the performance of both trucking and railroad stocks. Even if a fuel surcharge helps YRCW offset the immediate cost of diesel, it doesn't help with the fact that it's losing business because its fleet simply isn't as cost effective in a high oil price environment. You are correct that YRCW has many other issues that it's confronting - but make no mistake, oil prices are inversely correlated with the trucking industry, and falling oil prices would be huge boon for YRCW.
That's the great thing about HiddenLevers. It sifts winners and losers in different industries, by measuring the impact of the economic indicators on your investments. All your delving deep and due diligence into the fundamentals of a company is only part of the puzzle, and honestly the least important when playing commodities. I have one question for the commodities players - how well did your stock/etf/mutual fund do against the underlying economic trend (i.e. commodity price)? Okay, what if I gave you a way to find the plays that kept pace with the commodity best, or even better because they were so impacted by that economic indicator? That is HiddenLevers.
And remember, you are long CCJ, a stock we are suggesting. So we are on the same side really. We needed 5 seconds to get there. How long would a fundamentals digger take?
I must say though, you are a perfect candidate for HiddenLevers. You have global political views yet haven't dug into the industry. Put those views to use amigo!
We are not comparing CCJ to URZ. We are comparing them to their economic underpinnings. This is what HiddenLevers does. Tell me, are all uranium plays created equally? The one that has the closest beta to Uranium prices is preferable, and the ones that are even more levered to that economic trend, like URZ and CCJ, are way easier to find using our screener than anywhere else.
How did you find them? What if you had a way easier route to generating those ideas? That is HiddenLevers.
Mr. Roche is right on the money to be talking about correlations. That is what HiddenLevers engine is built on. Playing macro trends, now made easy for novice investors. The currencies that are highly correlated with oil prices is one way. But how about stocks that are highly correlated with oil, not even the 1:1 beta... but how about stocks that are so levered to oil, that its 2:1? Now that is alpha! HiddenLevers screener lets you find those, for Oil, currencies, and dozens of other economic indicators.
Well said mate. In investing, check your emotions at the door.
Hey amigo. I'm glad you are a fan of the shopping experience. But the charts don't lie. Lowe's moves with housing prices. Home Depot does not. Even if you and your friends and family all spend tons of money at Home Depot, it won't change the correlation with the underlying economics.
To those who knock the analysis we've provided here: using empirical statistical analysis, HiddenLevers has simply proven that Lowe's has more relationship with the housing market than Home Depot. For further fundamental data on this point, note that Home Depot is the #2 retailer in the US behind Wal-Mart, while Lowe's is much smaller than either.
As the largest retailers in the country, Wal-Mart and Home Depot are both somewhat insulated from macro swings - but while this helped HD during the housing downturn, it won't help during the upswing either. Lowe's, on the other hand, rode the boom up, and the bust down. And it may eventually ride a housing recovery back up again.
this is by far the best comment we've ever gotten. thank you. gold down 2% on the day today. enjoy!
Come on dude. your name is yellow hoard and you are talking about 9000usd/oz gold. you're cute, but you've just lost all credibility.
i like what you are saying... and i believe in a gold backed currency. but if the chinese cared about making their currency a hard currency, they wouldn't be bordering on runaway inflation. baby steps.
Wow. I hadn't even thought of that trend. I guess it will be the boomers' parting gifts to us. I will check out your site and learn more.
10% below where we are on the Case Schiller housing index is the trendline. When the pendulum swings, it doesn't swing right to the middle. It goes past it an comes back to equilibrium. So it could be a lot more pain than 10%.
You are right. If you think wireless sales are headed north, some better telecom plays might be China Mobile (CHL), America Movil (AMX) or NTT DoCoMo (DCM). I found these all using the HiddenLevers Screener. You should try it. We launched our app in the Seeking Alpha app store just this week.
Things are baked in largely, I agree. But the macro trend in my opinion is for more people getting smartphones, and Verizon is more correlated to wireless sales. HiddenLevers lets you see these correlations, and gives you trading ideas based on where you see wireless sales headed, or a ton of other economic indicators.
Gold does rise in crisis, and surely would against the Euro in a PIIGS contagion, but not against the dollar. We estimate a 40% rise in USD, and only a 20% drop in gold. It wouldn’t be a 1 to 1 change—all dollar denominated assets would fall, but for gold this effect has to be discounted because of its value as a safety play in a crisis. Also, gold is at the top of its historical range here, so probably it won’t push up in absolute terms unless there is a run on both USD and EUR.
cool ill check it out.. maybe do a follow up and chart it against the oil lever. thanks a lot.
Hey guys. Thanks for your comments.. defense and offense. listen, we're in beta, so forgive me on the CAL. i chose to include it because they are not one company yet. But i hear you.
As for the direction of the piece - short oil and long airlines - HiddenLevers has represented well today. We are tweaking the data feeds, but the analytics is spot on. Please believe.
by produce, we mean manufacture.