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Mark Bern, CFA  

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  • Quick Chat 282 July 28 2015 [View instapost]
    Yikes!

    "The final, private Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) dropped to 47.8 in July, the lowest since July 2013, from 49.4 in June.

    That was worse than a preliminary "flash" reading of 48.2 and marked the fifth straight month of contraction, as indicated by a reading below 50.

    New orders reversed into contraction last month after growing in June, while factory output shrank for the third consecutive month to hit a trough of 47.1, a level not seen in more than 3-1/2 years.

    The survey showed deteriorating business conditions forced companies to cut staffing levels for the 21st straight month. Factories also had to reduce selling prices to a six-month low due to increasing competition, squeezing profit margins."

    http://yhoo.it/1Sz2kfa

    And this leads to 6.8% growth how?
    Aug 3, 2015. 12:53 AM | 3 Likes Like |Link to Comment
  • The Case For A 300-500 Point Correction In The S&P 500 - And Still A 'Secular Bull' [View article]
    Robert - My point exactly.
    Aug 3, 2015. 12:32 AM | Likes Like |Link to Comment
  • The Case For A 300-500 Point Correction In The S&P 500 - And Still A 'Secular Bull' [View article]
    Robert - Well written and documented support! Enjoyed your point of view and agree whole-heartedly.

    One other thing that bothers me that seems to be missed too often is the health of market internals. The cumulative advance/decline line is trending lower; which is usually a sign of weakness. (You hinted at this in the article)

    Also, S&P 500 MACD momentum indicator has been declining since late 2014. This same divergence occurred near the peaks in both 2000 and 2007. MACD peaked around December 2014. It peaked about June 2007 and December 1999. It was a good indicator in those years. Will it be in the currently CB supported market? Again: who knows?
    Aug 2, 2015. 04:44 PM | Likes Like |Link to Comment
  • The Case For A 300-500 Point Correction In The S&P 500 - And Still A 'Secular Bull' [View article]
    Robert - I have read that the amount is closer to $600 billion in junk debt in the energy sector. If true it becomes a much bigger issue. I also agree that there is a lot of other corporate junk debt being issued at rate that do not reflect the associated risk. Advisers are pushing their clients into the junk for the yield via funds and telling them that the diversification will help mitigate the risk. That is only true until it doesn't. This is a whole class of securities that is ripe for an adjustment back to reality and an appropriate spread vs Treasuries. Such situations are always temporary and then the market self corrects with the smart money finding its way onto the right side of the trade. I suspect that the "smart" money will get into position first and then instigate the correction in junk...all in the name of profit. The smart guys will start sending out press releases to anyone who might print the message. When a lot of really rich, well-respected investors and financial institutions all send the same message consistently for long enough, the market will move accordingly. But, of course, they have to finish selling all that can be sold first to make as much profit from the selling before they use leveraged puts to make even more in the other direction.

    Am I cynical? Yes. But the motive is profit and the "smart" money has advantages. They all go to the same conferences and they all watch what the others are doing. They also watch what the rest of us are doing. Information is king and they have it all. That's what makes them so "smart."
    Aug 2, 2015. 03:38 PM | 2 Likes Like |Link to Comment
  • The Time To Hedge Is Now! June 2015 Update [View article]
    Robert - Well written and documented article! I also agree with the premise and expectations. While none of us knows when a substantial correction will come, it does seem like it is inevitable. There have always been potential catalysts but right now the junk bond market seems to be the one most to cause damage. How much? Who knows? But the evidence that this bull is wearing out continues to mount.
    Aug 2, 2015. 03:25 PM | Likes Like |Link to Comment
  • Stability Of The European Union June 1, 2015 To ??? [View instapost]
    My thought is that if the Greek banks are able to withstand a Greek default, the people of Greece would be better served if the gov't exited the Euro. The other major sticking point is if the Greek people would make a run on the banks in fear and panic. If that could be avoided I think the country needs to exit and default. It is a sovereign nation and the gov't is supposed to do what is best for its people.
    Aug 1, 2015. 09:35 PM | 2 Likes Like |Link to Comment
  • Stability Of The European Union June 1, 2015 To ??? [View instapost]
    Dent Research has been pretty negative for awhile now, but this short video explaining the Greek situation makes sense to me.

    http://bit.ly/1MCwjxS

    If it is true that Greece is currently running a small primary budget surplus, then it would seem that Greece defaulting on all its debt would not be such a bad thing. It may even be able to honor debt to Greek citizens and still make ends meet.

    It makes pulling out of the EZ more plausible at this point, imho. Anyway, it will all come to head in the not too distant future and only then will we know the final outcome and impact.
    Aug 1, 2015. 08:06 PM | 3 Likes Like |Link to Comment
  • The Time To Hedge Is Now! June 2015 Update [View article]
    Robert - Thanks for the recommendation. I will look into VRX.
    Aug 1, 2015. 03:00 PM | Likes Like |Link to Comment
  • The Time To Hedge Is Now! June 2015 Update [View article]
    DAMSF - I am getting ready to to another article for the series to add a couple more candidates. I will then do an update for August when it seems most advantageous to add positions. I did not do an update in July; instead did an article about selling MU July puts for a gain to offset cost.
    Aug 1, 2015. 01:45 PM | Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    True, but I don't expect MEMP to terminate the div any time soon. As it goes down more I'll just buy some more if I can get a better yield from the options next time.
    Jul 30, 2015. 04:20 PM | 3 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    Raymond James analyst Kevin Smith downgraded LINE/LNCO to “Market Perform” on Thursday. He had downgraded the companies to “Outperform” from “Strong Buy” as recently as July 21. He noted Thursday he was “very surprised by management’s decision to fully suspend the distribution.”

    So, is this how he expects the market to perform then? Rate a strong buy until July 21? I guess he didn't see this coming.
    Jul 30, 2015. 12:00 PM | 4 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    "Talking out both sides of their mouth comes to mind."

    Mouth?
    Jul 30, 2015. 12:53 AM | 3 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    I just love the reporting on Wall Street.

    Headline: "Facebook Q2 results top views on rapid mobile user growth"

    First line: "Facebook (FB) revealed stronger-than-expected second-quarter profits and sales after the close on Wednesday..."

    Next paragraph: "it earned adjusted profits of 50 cents a share, up 16% from a year ago and topping Wall Street analysts' average estimate by three cents."

    Bottom of 3rd paragraph: "net income measured according to generally accepted accounting principles declined 9%"

    Profits up 16% and net income declined 9%! The author seems perplexed as to why FB shares went down in AH trading.
    Jul 29, 2015. 05:45 PM | 5 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    I just sold MEMP September puts at $1.68/ share. 80% annualized if the stock rebounds and option expire worthless; 13.8% in 2 months. Cost basis if put the shares will be $10.82/sh. with a yield at current dividend of 20.3%.
    Jul 29, 2015. 04:41 PM | 4 Likes Like |Link to Comment
  • Quick Chat 282 July 28 2015 [View instapost]
    Well, the premium has dropped overnight and the returns are not as juicy as yesterday. Still over 14% for 3 months and over 57% annualized.
    Jul 29, 2015. 12:06 PM | 3 Likes Like |Link to Comment
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