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Robert Duval  

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  • Wall Street Breakfast: Stocks Slide As Bond Market Turmoil Continues [View article]
    I love it. Supply and inflation expectations coming home to roost.

    Short bonds TLT via options and futures, QQQ via long dated puts, long emerging markets and selected inflation stocks.
    May 12, 2015. 07:05 AM | 1 Like Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    Supply channel stuffing = supply of new bonds has been created to satisfy the demand.
    May 12, 2015. 06:53 AM | Likes Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    Tack,

    Rates can rise substantially, and enough to hurt yield chasing Mom and Pop investors, completely independent of, or very sensitive to, (more likely) -- economic acceleration and / or commodity inflation pressure reasons.

    Have you not noticed corporations and governments stuffing the supply channels like there is no tommorrow, which is what happens when an asset is irrationally priced over a period of time -- supply is created to fill the demand.

    No different than other periods where an asset is elevated to irrational prices -- there are many examples -- and negative real yields are not rational, nor sustainable, over an extended period of time, when supply is flooding the channels.

    Either deflation appears worldwide -- not disinflation, but real quarterly falling prices -- to validate the bond yields we have seen, or yields rise to adjust to supply and realization we are not falling into imminent deflation.

    I don't know what article you're referring to, but I'm certainly not predicting hyperbolic anything.

    Over a long historical period of time, 10 year real yields have been 2%.

    What are US 10 year yields now? And what is Core CPI?

    Look, The fact is most investors have become comfortable chasing small dips in yield based assets for some time, certainly that's been the popular and consensus trade --- so I understand the pushback, but consensus thinking doesn't tend to work out over the long haul.

    I wouldn't be so eager to chase dips in yield based assets here. The most overcrowded trade and lemming groupthink on the planet is rates will stay rock bottom forever.

    My positions are working to perfection in this environment -- and I'm glad my views aren't remotely near consensus yet.

    Cheers!
    May 11, 2015. 09:25 PM | 1 Like Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    Conrado,

    That changes frequently as I rotate the exposure on the portfolio based on my risk view, but as of today,

    About 20% cash, no short term bonds, Tips,

    --- I was selling to raise cash, and sold calls as well last week against winners. If markets take off, I'm only net maybe 50-60% long, factoring the short calls.

    Long PBR but sold $10.00 June calls against all of remainder. Neutral on Vale.
    May 11, 2015. 08:22 PM | 1 Like Like |Link to Comment
  • Talk Of A Stock Market Crash - How Concerned Should We Be? [View article]
    From sentimenttrader.....bu... talk is near a multi year low.....they measure it.


    "That leaves us with where we are now, which is not much bubble talk at all. In fact, last August the pace of bubble stores sunk to its lowest level since 2001"
    May 11, 2015. 07:28 PM | Likes Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    Martin ,

    Interesting comments. A few thoughts:

    1. Actual measured deflation, has been very rare -- and ex japan, I don't think has been even been recorded (close in Europe though). Hence, not only nominal yields but real have been negative.

    2. Inflation I expect to rise in coming US quarters, partly due to oil stabilizing, and more so due to wage growth. I think Walmart, target wage hikes may turn out to be a defining moment.

    3. Savings preference as you describe, with lower future demand and hunger for yield, may become overwhelmed by supply. When pets.com went public at a Billion dollar valuation, 20 more smart guys created 20 more (well hundreds) pets.com. Irrational pricing demand will be satisfied, and countries from Mexico with their 100 year bond issuance, to legions of corporate debt issuance, may pop the bubble.

    4. Even outright Deflation may not stop a bond bear, if buyers lose confidence in gov't fiscal responsibility. A buyers strike is possible, here.

    5. I have a considerably sized, long term deflation hedge as well -- because you may be correct in time! I own Fairfax financial (FFH.TO) which owns long dated CDS swaps on deflation, and on China, as well. Position is slightly (3-4% ) underwater right now, but is a great insurance policy on its own.

    6. Yield preference trades are extremely crowded, iMO, and markets have a nasty way of unwinding crowded, consensus positions.

    I'll take the situation as it evolves, with a hedged, flexible approach.

    Best, Robert
    May 11, 2015. 06:41 PM | Likes Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    Tack,

    There is no certain requirement for a large oil spike to precede a rate backup.

    Remember the 30 year only recrossed the 3% line today. For 30 years. Hardly panic territory, and still extremely low historically.
    May 11, 2015. 06:20 PM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]

    Man it was a awesome day if one was properly hedged. Bonds are sweet.

    Long Emerging markets, selected inflation type stocks, short Long Bond futures, Long TLT long dated puts, long dated QQQ puts, + lots of cash for the (hopeful?) dip..

    http://seekingalpha.co...
    May 11, 2015. 05:12 PM | 1 Like Like |Link to Comment
  • Dissociative Identity Disorder Is For Markets Too [View article]
    Man it was a awesome day if one was properly hedged. Bonds are sweet.

    http://seekingalpha.co...

    Long Emerging markets, selected inflation type stocks, short Long Bond futures, Long TLT long dated puts, long dated QQQ puts, + lots of cash for the (hopeful?) dip.
    May 11, 2015. 04:59 PM | Likes Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    Great Day if one was hedged. While stocks slipped modestly, including my long positions overall, my QQQ hedge helps offset, along with the heavy cash raising I did last week.

    The real story of course continues to be the blowout steepening happening in the bond market, which is is exploding my major TLT put position -- up over 20% today alone on the Jan 2016 line. Nice move on my futures short too. That happens when 30 years drop close to 3 1/2 full points, one of the bigger moves I've seen -- but this move is likely far from over, in my view.

    Also interesting is whats happening in the fracking oil plays and MLP's after David Einhorn's expose' on their heavy financing needs, something higher rates will likely affect.

    Check out these charts on (PBR) and (SDRL) -- I am long both, net flat on the day --

    --- compare them to MLP's like (MEMP) , used to be long, exited mid - 17's -5% (HCLP) -3% and near the december lows; and (PXD) -4% and dropping like a rock.

    PXD insiders if Einhorn is so off base, should be stepping up here in size.
    Why aren't they?

    Bonds do have an impact on these different sectors ------
    May 11, 2015. 04:42 PM | 1 Like Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    Another day, another PBOC rate cut, and Bonds resume their decline as money looks for inflation protection. After a nice bounce, which I sold, bonds are heading lower, and Oil headed back up, along with Soybeans, again testing that multi - month down channel.

    If I'm correct, AG commodities will follow Oil and Copper higher, soon.

    Long Soybeans, Short TLT via Options and futures.
    May 11, 2015. 08:47 AM | Likes Like |Link to Comment
  • My Trigger For Reducing Exposure - Its All About Bonds [View article]
    BABA - ALIBABA GROUP HOLDING LTD SPONSORED ADR Part filled
    08 May 2015 09:48 AM EST Sell Short 300 87.5 US Day CA

    ON Friday I put a very small short back on BABA after their earnings. I continue to dislike the company and its structure, and note it cannot rally even while its benchmark shanghai is very strong.
    May 11, 2015. 08:26 AM | Likes Like |Link to Comment
  • Dissociative Identity Disorder Is For Markets Too [View article]
    Not you George.....class act always!
    May 10, 2015. 09:06 PM | 1 Like Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    This is really funny. No opinion, but Votes based on "likes" seem to show Reel Ken kicking.

    Not that I doubt anyone's claims on SA -- but It would be sure nice to see "links" to some of the historic claims.

    It's academic here, and I really couldn't care less, but if I was to consider giving anyone any money, I wouldn't accept anything less but a rock solid verification.

    Just my 0.02.
    May 10, 2015. 07:04 PM | 2 Likes Like |Link to Comment
  • Dissociative Identity Disorder Is For Markets Too [View article]
    Of course some commenters on SA now serve that same purpose....
    May 10, 2015. 06:20 PM | 1 Like Like |Link to Comment
COMMENTS STATS
6,178 Comments
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