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Pendulum

 
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  • BlackBerry Rallies On Upgrade But 'Niche Midrange' Thesis Questionable [View article]
    Thanks for the support. I don't really have an opinion about Apple's cash. They will do something, but over time these companies have bigger challenges/opportunities than the capital structure. Again, I don't think of Apple/Blackberry in terms of either/or. Also, there is a difference between a good stock and a good company. I don't have an opinion about which company's stock will do better. Do you?
    Mar 20 06:00 PM | 2 Likes Like |Link to Comment
  • BlackBerry Rallies On Upgrade But 'Niche Midrange' Thesis Questionable [View article]
    Thanks for the comment. There was probably a lot of pent-up demand for the new device from loyal Blackberry users, especially because of the long time to market. The real test will be over time and when the next Apple and Samsung devices come out. Still, even if the new device is successful, Blackberry will need to continue to keep up with innovation. As I said in the article, Blackberry has the cash and time to fight on, but they are in a tough position.
    Mar 20 04:46 PM | 2 Likes Like |Link to Comment
  • Market Update: S&P 500 And Bonds At Cusp Of Bullish Moves, But Which Is Headed Higher? [View article]
    Dancing Diva - Thanks for your comments. Good points.
    The potential for QE3 when the market is close to its high has been bothering us. Market highs do not help the Fed make the case for QE3. However, we think that the lack of progress on the unemployment rate is really what the Fed cares about now (assuming inflation stays low). Considering all the action the Fed has taken so far (record low interest rates, QE1, QE2 and Operation Twist), it seems odd that the Fed would give up the fight at this point. So, we think that QE3 could be on the way (though we are not sure it is necessary or will have a big impact).
    But, we think that many commentators may be aggressive about the timing. Operation Twist is scheduled to run through the end of the year, but many are expecting QE3 at the August or September Fed meetings. Could be that they just make comments about QE3 at those meeting and then do action later in the year, if things are still weak. The Fed may also want to appear accommodative considering the Fiscal Cliff is coming.
    Finally, if the market rallies over the next few weeks/months based on the assumption of QE3 there could be a "buy the rumor/sell the news" effect since, as you said, QE3, if it comes, will likely be less effective.
    Jul 22 04:28 PM | 2 Likes Like |Link to Comment
  • Market Update: S&P 500 And Bonds At Cusp Of Bullish Moves, But Which Is Headed Higher? [View article]
    Richard93 - Thanks for your comment. The point about QE3 not coming soon enough and catching investors off guard is a good one. However, even if QE3 is delayed, Operation Twist is ongoing and should have an impact on bond prices, pushing up the long bonds. Agreed, that poor investing and margin calls could lead to losses, but we think that demand for bonds is going to remain strong as bonds are a safe haven asset (especially with the falling Euro). This may be too obvious a trade and may be overcrowded, so if bonds fall there could be loses and margin calls, as you point out, and more selling.
    Jul 22 03:08 PM | 2 Likes Like |Link to Comment
  • Market Update: S&P 500 And Bonds At Cusp Of Bullish Moves, But Which Is Headed Higher? [View article]
    Chad - Thanks for your comment. You are right that it is possible for both stocks and bonds to move lower, but we are not sure what scenario gets us there. If the normal inverse correlation between stocks and bonds resumes than one of them should go up. If the macro environment improves, then stocks may go up, but bonds could go up as well because of the Fed's action. If the macro environment gets worse, then stocks may decline, but bonds could go up as a safe haven play. Under what scenario do you see stocks and bonds declining.
    Jul 22 10:23 AM | 2 Likes Like |Link to Comment
  • Market Update: S&P 500 Trading Ranges In The Context Of The Fed, Euro Baby Steps, Oil And Macro Events [View article]
    There was an interesting post in Zerohedge about reduced guidance for Q2 earnings and how investors are missing the news. This is a good addition to some of the points in the article above: http://bit.ly/LryIfR
    Jun 24 11:23 AM | 2 Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    Gapwedge - Thanks. We think that having a large cash position in times of market turbulence is a great strategy that more investors should adopt. Large institutions, mutual funds, etc., can't have large cash positions, but small investors can and it is a great tool. We had a lot of cash going into Friday, which served us well. Good luck over the summer.
    Jun 3 10:28 AM | 2 Likes Like |Link to Comment
  • Market Update: Indicators Flashing 'Risk Off' But The Real Test Is Next Week [View article]
    CautiousInvestor - Thank you for your comment. We agree that the biggest risk on the short side is the potential for action by the EU or the Fed, which can turn around the market very quickly. But, we don't expect any action from the EU or Fed, if they decide to act, until later in June, so it will be interesting to see the market action until then.
    Jun 3 10:18 AM | 2 Likes Like |Link to Comment
  • Ply Gem: Fallen Angel IPO With Upside Potential As Housing Market Recovers [View article]
    Hi june1234,

    There are positives and negatives for the housing market. You mentioned a few negatives, but lower unemployment and rising housing prices are positives.
    Dec 26 08:38 AM | 1 Like Like |Link to Comment
  • Alcoa: Awaiting An Answer To 'Bounce Or Breakdown?' [View article]
    Hi haleiwahu,

    Thanks for the comments.

    I don't blame Alcoa for what is going in. I agree "They have done nothing wrong. "

    They are in a cyclical business and this is the downside of the cycle because of too much supply.
    Sep 3 07:54 AM | 1 Like Like |Link to Comment
  • Century Aluminum: Positive Actions Amid Industry Headwinds [View article]
    Hi Q10 investigator,

    Yes, more aluminum seems to be going into cars. I discussed this a bit in the article. However, demand isn't the issue for the industry. Alcoa thinks aluminum demand is growing at 7% annually and Rusal thinks it is growing at 6%. Both indicate good demand. The real issue is supply.
    Sep 2 02:09 PM | 1 Like Like |Link to Comment
  • Bill Gross's Perspective On The 10-Year Treasury [View article]
    Hi Marek,

    Thanks for the comments.

    I don't think that he is using the 10-year "as an indicator on when to buy shorter maturities and when to sell them and wait for another trade opportunity or just put them into the longer maturies for holding."

    My take is that he thinks about the yield curve in the opposite way. He is pretty confident that the Fed will keep the Fed Funds Rate low for a while, which should keep shorter term maturities (1-5 or 1-10 years) at low levels. The intermediate and long term maturities are more of an issue.

    He may not be trading the 10-year much now, but he seemed to be earlier in the summer, based on the data above.

    By the way, it is interesting to note that Gross' last two outlooks were about a boat sinking and one of the worst battles in history. These metaphors are very telling. I wonder what is up next.
    Aug 31 04:40 PM | 1 Like Like |Link to Comment
  • Update On Bullish Case For American Apparel [View article]
    Hi AdamDivy,

    Thanks for the comments. I don't know about the Tesla relationship, but it makes sense. Good decision on their part to go with Made In America manufacturing.
    Aug 26 03:11 PM | 1 Like Like |Link to Comment
  • The Fed Minutes And Treasury Bonds: Focus On Forward Guidance, Not Tapering [View article]
    Hi,

    Are you on the list that got the early release of the minutes from the next meeting?

    On a more serious note, I think keeping the Fed Funds Rate low is a good move. At this point, it seems that QE is not doing much either way. But, the overhang from the tapering discussion is causing a lot of problems for the market.
    Aug 23 11:45 AM | 1 Like Like |Link to Comment
  • The Concentrated Portfolio Of Great Companies [View article]
    Hi The-Mick,

    Thanks for the comments. Nice approach.
    Aug 21 09:50 AM | 1 Like Like |Link to Comment
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