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Robert Duval

 
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  • Warren Buffett Hates Bonds, Loves Cash [View article]
    Coot,

    One could do far, far worse than what you are doing.
    Aug 20 09:21 PM | 2 Likes Like |Link to Comment
  • Warren Buffett Hates Bonds, Loves Cash [View article]
    Wow. This kind of comment, and even Forbes questioning Buffett's performance, is a small clue on where we are.

    Exactly how much money have you made, sir?
    Aug 20 09:20 PM | 3 Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    I'd like to add to my thoughts regarding market sentiment.

    It's a common belief that prior to any major market correction, investor sentiment must achieve some form of euphoric state where every person is talking about stocks, everyone is all in on margin, etc.

    Josh Brown correctly alluded today, this state is not there today.

    However the belief that corrections only occur after, or that an euphoric condition is even important whatsoever, is simply not supported by historical intermediate tops.

    Looking backwards, certainly neither the 2011 or 2012 significant corrections were preceded by any euphoria, and if anything were preceded in 2011 by considerable anxiety.

    Looking back to the major 2007 highs, no euphoria existed back then, either, at least in the stock market. (housing would be another matter). One could say in 2007, a major degree of complacency existed, which I would submit exists in equal measure today, if not to an even greater degree.

    A businessinsider article I read this week is titled, "the easiest money ever" and profiles a fund manager who simply says, "every minor dip in the market, we (automatically) buy, because it's always worked". No analysis of conditions, required.

    2 prominent articles are calling for SPX 2300 -- 2500, one by Stiffel who just flipped bullish and is calling for 2300, with certainty, by years end. Quite a reversal, I'd say.

    I don't list euphoria on my list of 12 reasons to be cautious, because it simply is not a proven, time tested indicator, and even Josh, who I follow and is quite cautious in other writings, never says its absence, means anything at all.
    Aug 20 07:07 PM | 1 Like Like |Link to Comment
  • Is The Depreciation Across The Commodity ETF Space Surprising? [View article]
    Thanks Gary. Operating as a 2 directional trader, I have gone substantially short the market, focused on weaker social media, retail, and one commodity name.

    Largely, this group are in bearish consolidations, and refuse to rally in recent days and weeks.

    I'm not recommending this to others, as one requires the correct tolerance and risk to short.

    A 2011 scenario in my mind, is not out of the question, ESP with developments in Europe.
    Aug 20 04:39 PM | Likes Like |Link to Comment
  • Is The Depreciation Across The Commodity ETF Space Surprising? [View article]
    Thanks Gary. I'd like to repost my brief summary here of my reasons for defensiveness going into the fall. I'd be pleased if you would comment.
    Regards!


    They don't ring bells at tops, and one rarely hears the bullet coming....so they say.
     
    Here is a short list of why I am highly defensive, right now, and recommend others do so and raise cash before the fall arrives, and it's all about the internal indicators, the weak foundation of the current rally.
     
    1. Divergences. Although the Nasdaq and SPX have rallied back, small cap stocks (NYSEARCA:IWM) continue to substantially lag. The rally -- continues to narrow in breadth and in new 52 week highs.
     
    2. Treasury bonds continue to substantially outperform junk bonds. The curve continues to flatten.
     
    3. Commodities are starting to sell off, hard, both Oil and Copper in particular. Both this and the bonds put into question economic strength going forward.
     
    4. Poor retail, banking and housing stock sector performance. Strong utilities, a classic defensive indicator.
     
    5. Overwhelming belief -- market cannot be timed. Common at tops. Market timing becomes most popular -- prior to cyclical lows.
     
    6. Complete faith in Central bank's ability to sustain asset prices regardless of underlying economic trends..
     
    7. Record corporate profit margins, far above the mean, sustained by junk bond issuance, corporate Buybacks, special dividends. Lack of organic growth.
    Aug 14 09:46 PM|4 Likes|Report Abuse|Link to Comment Signs Of An Approaching Bear Market [View article]

    Robert Duval , Contributor
    Comments (2831)| Following | Send Message  
    8. Lack of consensus bearishness on SA and elsewhere, especially compared to pre 2013 levels. Bears have been converted to bulls, or simply have their hides laid out in the sun...if one read the commentary and feedback from 2009 - 2012...it was regularly forecasting the return of another 2008 crash. We don't see that much, anymore. Conversely.....
     
    9....The Billionaire club....is getting much more cautious, holding and raising substantial cash reserves. Warren Buffett (currently holding his largest cash allocation, ever), Seth Klarman, (50% cash) Wilbur Ross (selling 6x his buying ) and others....all legends very cautious, and largely dismissed or even ridiculed on this site.
     
    10. QE conclusion...to those who would call irrelevant -- would ignore historical precedent in 2011 and 2012 at the conclusion of QE programs, then. The Fed is determined, IMO, to get out of the QE business, at least for now. A valuation adjustment, is entirely rational. And like 2011.....
     
    11. Europe is having issues, once again, and threatening to return to recession. Stock markets in Germany, Spain, Portugal, France are correcting hard. To say the US will sail through without being affected...ignores history.
     
    12. Continued US contractionary fiscal, taxation and regulatory policy.
     
    Conclusion. I am highly defensive on US markets here. I recommend investors raise substantial -- I mean 30-50% cash and / or buy long dated option protection. I also believe investors would be well served examining out of favour emerging markets with secular growth stories, when the time comes.
     
    These are my thoughts alone from 16 years in this business, and I make my trading plan accordingly..
    14 Aug, 08:20 PMReply! Report AbuseLike0
    Aug 20 03:38 PM | 1 Like Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    Another theme to consider would be long US dollars, especially against the euro.

    One of my themes above relates to euro zone weakness, and it is my firm belief the euro is a flawed currency in its current form. It may be that another euro area crisis is on the way, and that would be a risk off catalyst.

    I believe, as many do the European union needs to split the euro, into south and north currencies, to allow each zone to adjust their currency to the vastly different economic policies and strengths in each region.
    Aug 20 02:12 PM | 1 Like Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    BSF,

    All good advice.
    Aug 20 01:57 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    SG,

    So true. I've been humbled so many times I cannot count. I do know how to lose money better than most people. Made every mistake in the book, but I keep discovering cousins of all the mistakes.


    IWM may very well churn. This is still unknown.

    My shorts for the most part are already entrenched solidly in bear markets of their own, commonly defined as more than 20% lower than their relative high prices. This is significant, in the context of the broader market making new record highs.

    Thanks for the wise comments.
    Aug 20 01:33 PM | 1 Like Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    Above is my summary on why I am cautious and recommend raising cash. The items above, none are a silver bullet, all are probably debatable, and many have been in place for some time.

    This fact alone, does not invalidate their existence. Added together, they add up to substantial weight of the evidence for me, and where I see opportunity.

    The above is a week old so obviously individual items change here and there, but the overall picture is what I am basing my plan on.

    None of the above is in any way calling a "top" intermediate or otherwise, in the large cap SPX, it is only a risk reward exercise.

    That being said, I do believe an intermediate IWM top is being formed, and junk bonds too.

    New all time highs in both of the above, may invalidate my caution at this time.

    This is my trading plan. I do not advocate anyone follow it, it's just shared as an outline. Use however you wish.
    Aug 20 11:59 AM | 1 Like Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    They don't ring bells at tops, and one rarely hears the bullet coming....so they say.
     
    Here is a short list of why I am highly defensive, right now, and recommend others do so and raise cash before the fall arrives, and it's all about the internal indicators, the weak foundation of the current rally.
     
    1. Divergences. Although the Nasdaq and SPX have rallied back, small cap stocks (NYSEARCA:IWM) continue to substantially lag. The rally -- continues to narrow in breadth and in new 52 week highs.
     
    2. Treasury bonds continue to substantially outperform junk bonds. The curve continues to flatten.
     
    3. Commodities are starting to sell off, hard, both Oil and Copper in particular. Both this and the bonds put into question economic strength going forward.
     
    4. Poor retail, banking and housing stock sector performance. Strong utilities, a classic defensive indicator.
     
    5. Overwhelming belief -- market cannot be timed. Common at tops. Market timing becomes most popular -- prior to cyclical lows.
     
    6. Complete faith in Central bank's ability to sustain asset prices regardless of underlying economic trends..
     
    7. Record corporate profit margins, far above the mean, sustained by junk bond issuance, corporate Buybacks, special dividends. Lack of organic growth.
    Aug 14 09:46 PM|4 Likes|Report Abuse|Link to Comment Signs Of An Approaching Bear Market [View article]

    Robert Duval , Contributor
    Comments (2831)| Following | Send Message  
    8. Lack of consensus bearishness on SA and elsewhere, especially compared to pre 2013 levels. Bears have been converted to bulls, or simply have their hides laid out in the sun...if one read the commentary and feedback from 2009 - 2012...it was regularly forecasting the return of another 2008 crash. We don't see that much, anymore. Conversely.....
     
    9....The Billionaire club....is getting much more cautious, holding and raising substantial cash reserves. Warren Buffett (currently holding his largest cash allocation, ever), Seth Klarman, (50% cash) Wilbur Ross (selling 6x his buying ) and others....all legends very cautious, and largely dismissed or even ridiculed on this site.
     
    10. QE conclusion...to those who would call irrelevant -- would ignore historical precedent in 2011 and 2012 at the conclusion of QE programs, then. The Fed is determined, IMO, to get out of the QE business, at least for now. A valuation adjustment, is entirely rational. And like 2011.....
     
    11. Europe is having issues, once again, and threatening to return to recession. Stock markets in Germany, Spain, Portugal, France are correcting hard. To say the US will sail through without being affected...ignores history.
     
    12. Continued US contractionary fiscal, taxation and regulatory policy.
     
    Conclusion. I am highly defensive on US markets here. I recommend investors raise substantial -- I mean 30-50% cash and / or buy long dated option protection. I also believe investors would be well served examining out of favour emerging markets with secular growth stories, when the time comes.
     
    These are my thoughts alone from 16 years in this business, and I make my trading plan accordingly..
    14 Aug, 08:20 PMReply! Report AbuseLike0
    Aug 20 11:54 AM | 1 Like Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    I am encouraged by the performance of my short portfolio in recent days. In spite of a 200+ rally in the Nasdaq and over 80 SPX points from the trough, I am down in that time less than 1% total, in spite of levering in to a broad stock short position across several sectors.

    The last 3 days, largely, simply my shorts will not rally. I did cut down (NASDAQ:Z) this morning as it does have too much life, and added a new short in (NYSE:P).

    Tells me 2 things -- first is I'm a great stock picker, which I doubt, or the rally is getting narrower. I also note, the IWM has resumed its underperformance.
    Aug 20 11:04 AM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #36 [View instapost]
    L,

    I don't know this sector that well, but think there is some connection to the health of the high yield debt market.

    If that is so, you don't want to know my thoughts on it, because there are few things I am more wary of than high yield, (junk) debt, going forward.

    Again, I don't know the industry or financial structure that well, so I could well be off base.
    Aug 19 11:38 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #36 [View instapost]
    Thanks for the links SG, I will review them.
    Aug 19 10:21 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #37 [View instapost]
    L,

    My comment in the last segment was solely about the industry itself.

    It was to do with someone I knew given spiffs to sell particular funds, who informed me this is a regular practice, to pay bonuses for selling underperforming funds.

    I'm not a great fan of the industry, in general, hearing about this and advisors not acting in the best interests, of their clients.

    It seems you may have assumed it was a "shot" relating to this blog. It was nothing of the sort.

    Sorry for any misunderstandings.
    Aug 19 09:58 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #36 [View instapost]
    SG,

    "no Data suggesting most investors invest wisely".

    So true. Also true is how badly most financial advisors stink at picking investments. For all the CFA's, ABC's Ect, it all adds up to a big fat zero. Most of this crew either is paid bonuses to stick clients in underperforming funds with high expenses, or do nothing but chase the fad of the day.

    When you dare to ask how much money they have personally made, they usually wave their CFA's in your face, and declare, " that's irrelevant -- I am a professional -- trust me with your money"

    The collective record of Financial advisors is atrocious compared to a simple benchmark like the SPX, which very very few even approach.


    Never have I met a more over educated group absolutely lacking in common sense, that not surprisely happens to be dead broke.
    Aug 19 07:21 PM | Likes Like |Link to Comment
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