Invest Chief

Long-term horizon, value, growth, long/short equity
Invest Chief
Long-term horizon, value, growth, long/short equity
Contributor since: 2010
I agree. The problem I have with this article is the fact that there is a lack of information on the oil side of Linn Energy, rather than just the dividend. Even looking from dividend standpoint, I fail to see the appeal. Income stocks, bonds, etc have been taking a hit over the past few months and the Fed is really starting to get anxious about raising rates. Therefore, I fail to see the appeal in moving into income investments.
Next, the oil picture is still very messy and oil prices are still a ways off from some projected breakeven of around $70 barrel. Overall, I think author is focusing on wrong aspects by looking at technical indicators rather than underlying market conditions and fundamentals. Not to mention, LINE is down nearly -30% from the $9 call in the article.
Thanks for the comments. I agree, the low interest rate environment may have had its merits a few years ago with getting growth back into the economy, help entice employers to hire, etc. However, it has been definitely negative for retirement investing and passive income strategies.
As far hearing about market tops throughout the bull market, I am right there with you. Tired of seeing the articles "Dow predicted to crash 40%" or "Dow going to 20,000". Ultimately, these articles are fluff in my opinion. That being said, there is overwhelming factors that suggest the stock market is overvalued and could begin to cave in on itself moving forward.
I just personally disagree with you. These are geared towards the more actively managed fund side of ETFs and while there are some other options out there for cheaper expense ratios such as SCHD, it is not high yield. High income takes active management and active management is going to cost you more than passive approaches. Ultimately, neither side is wrong, it is purely a difference of risk tolerance.
I agree. Ultimately, I do not see these four expense ratios as particularly burdensome. At the end of the day, you get what you pay for and good, high yielding ETFs are not going to cost the same .05% as a passive index fund. If you are uncomfortable with these fees, then I would suggest low cost index funds only.
I disagree. While the production reduction is minor, it represents the fact that oil drillers are finally realizing that they need to cut production in order to help get prices back up to where they were. While the reduction is small it is the beginning of a "changing attitude" that will ultimately lead prices higher. Also, you must consider demand increases from China and higher demand period for US. I am not saying oil's recovery is straight up, but I think the worst is behind us and ultimately, the energy sector is working its way through recovery.
Absolutely, I think the airline industry in general will perform very well in 2015, regardless. I would agree AAL has made huge strides since its bankruptcy and certainly looks to be making a huge reemergence. I certainly am not bearish or against AAL by any means. However, I just want to be a little more on cautious side due to the airline industry's reputation of struggling when coming out of bankruptcies, mergers, acquisitions, etc. That is not to say AAL will have difficulties in particular, but I just would like to see a successful reemergence and back to sustainable profitability. However, that is just more of my investing style, error on side of caution. But you definitely bring up some good points and I definitely see AAL having a great 2015, along with the rest of the industry.
I personally just see some more time needed to AAL to reemerge from bankruptcy and getting back on track. The company is still getting hubs together and cutting older hubs to be more efficient. While I do think AAL could be a good buy in the next year or so, I think there are better plays out there right now. United Continental is a prime example of struggling to consolidate and growing pains. Fast forward few year to today, United Continental has seemed to fix its bugs and relatively on track.
That being said, I think LUV and SAVE are customer favorites that continue to gain on good customer service and various corporate policies to attract more customers. Additionally, these two strive for lower fares, which is huge for the value seeker trying to fly. I still think LUV will be the best performing airliner of the bunch in 2015.
Small Pharma,
Yes, VDIGX would be another great way to play the bull market. There are endless number of funds that would be suitable candidates. However, for the purposes of this article, I chose to take a look at low volatility ETFs, which would allow a smaller capitalized investor to have a lower cost, properly allocated, and more control over diversification. Low volatility ETFs are a new concept and I think it is important to cover considering that this bull market continues to look sluggish and the Vix looks prime for a rip to the upside.
I haven't read the article from Barrons yet, but DDD along with other names in the space have gotten too far ahead of themselves over the past year. Investors are now weighing fact and reality and that is why the price has fallen almost $30 from its peak. However, the long term is certainly bright and I think this is a great long term hold as 3D printers will see increasing demand as prices come down and its functionality extends.
Yes, you are correct. As I highlighted in my article, volatility has been nonexistent over the past 5 years, really since 2008. Most of these ETFs started up in past 2 years or so and since the markets had no real volatile movements, they underperformed slightly. However, as we have seen in recent weeks, volatility is coming back and I think as easing is taken off the table and this bull market grows older, these ETFs will start to outperform. It is my belief that these ETFs will help long term investors better withstand the future markets, while still remaining invested.
Those are good holdings you have. Contains solid exposure to US and world markets, while helping take the edge off during time of uncertainty. I would agree with you that holding these ETFs makes sense in any market, due to the fact that at some point, the markets will face uncertainty and recession. Good picks! Stay tuned for my second part due out by monday hopefully.
Yes there are fears that further easing would hit dividend stocks. However, that would hit "high yielders" more hard such as utility stocks, preferred stocks, in addition to bonds and fixed income. Solid large cap dividend equities are for long term stability in the portfolio. And while they would be hit from loss of easing, everything in the market gets hit without easing because stimulus money is taken out of the market. This ETF finds the most conservative names out of that list of large cap dividend stocks and creating a portfolio of stocks that are suitable for protection during downtrends or periods of uncertainty.
Certainly these investments could be held regardless of the state of the Vix, however as I stated in the article, if volatility is very low such as how it has been in the past 5 years, I would say your standard index funds would do the job. The low volatility ETFs really become a solid play and more advantageous than regular index funds during periods of increased Vix.
Technicals on the futures charts certainly say there is more upside potential and it appears that the continuing weakening of the yen is a major support to the bull's thesis. However, as you said, mixed data could be a problem if there is a larger slowdown beginning. Until more data proves otherwise, long USD.
A stronger dollar is bad news for gold bulls. With the USD at multiyear highs, stock markets rallying to all time highs in the US and Japan, there is less appeal for "safety" plays. Gold's long term stance still remains bullish as central banks continue to print money.
Just found an interview with Jim Rogers on Russia that came out today, check it out:
Fundamental data is available through numerous sites on the web like Google Finance and Yahoo Finance, to name a few basic ones.
Sorry about the typo, I have submitted the correction.
Yes, they are in the EU but they do not use the Euro. Therefore, since they have their own central bank and can set their own interest rates, monetary policy, etc, they have been able to relatively independent from the ECB and the bond program.
jefsut: As of right now, I am waiting to make a trade on UA until I get a confirmation of a breakout or breakdown. UA broke resistance but seems to be retesting it as support. If UA is able to form a base with the resistance turned support, we may continue to see higher prices. However, with the principles described in this article and an overall weakening of the overall trend in the market, my guess is UA will have a hard time continuing to fly at high valuations.
I like this article. UA is overvalued and certainly is worth a look to short. Thank you for bringing this idea to light.
You forgot to mention the massive short float against OfficeMax. However, the stock is breaking out today which makes me believe that this could be a big short squeeze opportunity if the breakout holds, nice article.
Nice article. I am short Comcast right now but that is certainly a short term position. I am only catching the correction that is happening right now but certainly it could be a longer term buy.
I meant conservative when you compare it to other stocks as alternative to Apple. But if you mean as a overall strategy, then I would agree with you, buy Apple.
The first line of the article says it jumped to $80.08 in May...LULU first quarter ended on April 29th and they reported on June 7th. I mistakenly mixed the two dates, it happens and I apologize.
Yes, I recently read a report that he sold his stake to build a nice mansion. Insider transactions should not be the sole factor in making a investment decision but some people commenting on here seem to believe that it is not worth looking at entirely. What about Einhorn's short position?
You can continue to focus on all the insignificant details if you choose but you are missing the bigger picture...LULU has numerous bearish elements that make it a short candidate.
Sandman- its interesting you say that the stock did not climb to $80 after it reported earnings at the end of April because if you saw the chart I provided, you would be able to understand.
Secondly, I never said LULU had stores in Europe, maybe you should just read the article before commenting.
The founder sold $50 million in stock at the beginning of the does not matter if he has been selling the last couple of years...the bottom line is insiders are selling and that is a significant chunk of stock sold.
If you are going to place critical comments, at least read the article, that way you won't look ridiculous.
i completely agree. I have a recent article on CAT describing how the market has unfairly punished the stock and that now is a great time to get on board.
Check it out:
Thank you for the kind words. CAT is definitely worth going long for sure. I added to my position yesterday.
Yes, they have been paying off debt over time but it is not good to have a lot of debt no matter how great your company is. I also mentioned in the article that it is not a huge source of concern if they continue doing business the way they have for years.
Sligoo: Yes, RDS.A is a good company and a good stock. However, I believe CVX is a better fit for the integrated oil slot because CVX has overall better fundamentals. RDS.A does have a lower P/E and a slightly bigger dividend but CVX's profit margins, ROE, ROI are better than Shell. Plus, CVX has a ton less total debt than Shell does. Making Chevron a more desirable stock than Shell.
This a great article. I liked how you thought outside the box and really thought of a way to go against USPS. Good work!