Robert Weinstein

Why I Am Shorting Treasury 30 Year Bonds via Treasury Futures

Hello outtafavr,

Thanks for your comment and your not alone in your feelings about the market in this or others too.

I also believe that the US markets are not free from being manipulated but I also think that relative to other countries the US operates in either the fairest or as fair as any other country. Also while 'big money' does have advantages there are also advantages to being smaller.

Best to you

Robert



On Aug 19 04:56 PM outtafavr wrote:

> The market for this product is not free. Auctions of this product
> are manipulated and the manipulators readily acknowledge their wrongdoing,
> carrying out their crime on a grand scale. How can you justify any
> positions, long or short, in such a lawless environment?

Why I Am Shorting Treasury 30 Year Bonds via Treasury Futures

Hello Bruno,

Thanks for your comment and its a good question as there are many ways to gain exposure to Treasury bonds

I can just as easily trade futures as I can equities with my 'universal trading account' so while I generally(90/10) stick with equities I am short the Treasury 30 year bonds via the ECBOT treasury futures/ futures options (as I write this I am currently short naked future call options).

I will often take a position that I want to be in for more than a few days via naked options as it offers lower risk than taking an outright position and I am able to gain the time premium if I am going to be in the underlining anyway. This of course is offset somewhat by not being able to get the full profit potential and is not a strategy that is appropriate for those without a full understanding of the details of options and their pricing.

I have also looked at the ETFs and again if I was to gain exposure via ETFs I would do so writing naked options as I am risk averse and willing to give up home runs and take singles and doubles. (not that I am suggesting anyone else trade options)

Respectfully,

Robert


On Aug 19 02:55 PM Bruno Brasil wrote:

> Hi Robert,
>
> I am heavily shorting treasury using TBT, which is not a perfect
> instrument. Can you be more specific on the other instruments you
> use?

Why I Am Shorting Treasury 30 Year Bonds via Treasury Futures

Hello Steve,

Thank you for your comments.

Not any more or less 'nervous' than I am with any of my other longer term trades (non day trade). I could go on much further in my reasoning but it literally could have turned into a short book.

I have been short via writing calls against the futures contracts since early July and have already booked some gains. I was asked in the chat room I spend my days why I was short the bonds and that's what motivated me to write the post.

I think you bring up some interesting points about the stock market and I also for the most part not bullish in equities. The relatively inverse relationship in my opinion could decouple or minimally loosen up greatly upon the Chinese (or others) not coming to the table to buy.

It will be an interesting week coming up

Best to you

Robert


On Aug 18 05:34 PM Steve Pasq wrote:

> You must be nervous with all the explaining about the obvious reasons
> the treasury is issuing more and more debt. I'm long because your
> side is pretty crowded right now. Also 4% interest is better than
> the negative numbers associated with equities over the past few years.
>
>
> Frankly I believe stocks could be headed to new lows and long term
> treasuries are headed to new highs. It might seem hard to believe
> but look at the charts. All the reasoning and fundamental analysis
> doesn't change the fact that stocks are in a long-term down trend
> and the long bond is in a long-term up trend. And even having a
> liberal nut in the white house doesn't change that.

Why I Love Synaptics at This Price

Yes, HURN is Huron Consulting and the change of company name is a result of editorial changes from my original submission by SeekingAlpha staff.

HURN was actually brought to my attention by another trader of Friday afternoon asking my thoughts on it. My advise at the time was to take a pass on it (it was trading about 19.10 in AH trading at the time I looked at it)

I would agree that it was oversold IF (and its a big if) more shoes don't fall. It has been my experience when seeing this kind of fallout that more bad news often happens which knocks the wind right out of any chance of recovery.

I also expect that lawsuits will keep executives very busy in the next year or so as well as add a legal costs to the bottom line for at least the next year regardless if they don't have more bad news. Not to mention payments for possible settlements. I would not be surprised to hear about a press release saying that money is being set aside to pay for a settlement.

That adds up to a stock that I do not find the risk vs reward ratio to be good enough for me to invest it at this time. I do think it will be interesting to follow it and see what happens.

Best to you

Synaptics F4Q09 Earnings Transcript

Synaptics (SYNA) went on big time sale Friday.

Wow, SYNA was just hammered Friday in ways that you don’t often see in a stock. The only stock that I know of that had what I consider to be bigger action was HURN and HURN is restating earnings and booted some of the top brass (without pay packages).

What did SYNA do that was so bad as to cause the stock to fall more than 30% in one single day?? Did they miss earnings? (no beat earnings) Did revenue fall (nope) How about some accounting problems (nope), ok I know what it must be. Perhaps they are having trouble getting financing to keep cash flow from drying up? Not at all, they actually retired much of their debt in the last year and have plenty of cash (interest earned relatively went down with interest rates but went UP as a result of more cash on the books).
The crime that SYNA did was they guided lower than expected in terms of revenue. They also committed what the market on Friday called a felony by stating that earnings may be flat due to headwinds in the overall economy. This is a company that is adding staff to grow the R&D and is still able to say that earnings will not be going down.

These are crimes that I feel the jury of the marketplace will soon forgive. SYNA is a company that has growing sales and a non sky high PE that is not only very reasonable to me but cheap for a growing tech company in great financial shape.

The CEO is stepping down as was announced during the conference call and while that never gives me a warm feeling inside its an insider that is taking the helm and appears that it should be a smooth and planned change in leadership.

SYNA generates a lot of income from the touch screens that are on mobile devises including phones and that is what I consider a very good market to be in right now. SYNA makes touch screens for laptop computers as well but at this very moment in time is not the main driver of profits. I for one happen to think that touch screens for laptops is going to continue to become more and more prevalent as prices come down and awareness of the usefulness of them becomes more common.

Those that follow me know me as a “short” and its well earned. I short more than 95% of my trades and when SYNA first went on my radar that’s what I had in mind to do here. As I started looking at it more and more I realized that for me it would be too risky to short this stock. The selling on Friday appeared to me to be more panic and less about the value of the company being less. Basically in a nutshell this stock was on sale because people where selling for the reason that they were scared that the price would keep going down. This of course turns into a snowball effect and can get crazy at times as it did with SYNA on Friday.

While it doesn’t “feel” natural to go against the crowd that’s were the biggest gains can be had. The “trick” is to be selective and not be in a hurry to get in as the market can go much further and stay there for longer than most people understand. I feel that SYNA did go much further than is warranted and that value investors will start to see a bargain here.

The other part of SYNA and its a very important part in getting me to invest in it is that the short interest on this stock is nothing less than HUGE. With over 40% short interest by the latest numbers this stock is already shorted heavily by my standards. When stocks have this large of a short interest they have the ability to shoot off like bottle rockets when buying does come in. As value investors pick up shares on the cheap sending prices higher the shorts start to cover knowing that the first ones to do so are the ones that get to buy back to cover cheap. This buying causes the prices to move higher which brings in the short term trend followers (traders) which causes more shorts to cover. Rinse and repeat this process and a stock that is down 30% one day can move higher 20% the very next day as well as move higher over time beyond the price of the day before the fall.

I of course do not predict the future just the odds. I feel that the odds are that unless something negative happens that the price of SYNA is currently on sale and that this sale will be ending soon.

Cash for Clunkers: What Can the Government Buy You Next?

Does anyone give any thought to what this does to our economy???

Look, I understand some in DC would say don’t worry about taking away all the cheap affordable cars off the market for people who may not be able to afford a more expensive car. After all we will give the poor people money and handouts and they will be fine.

I for one am not fine with this and not only is it a total waste of money but its filled with unintended consequences like distorting the used car market. How many jobs (think mechanics, used car lots, auto parts shops and salvage yards) will be LOST as a result of this giveaway. A a very minimum lost wages and lower income for people that service used cars will happen. While no numbers yet exist and maybe hard to calculate I have to wonder what the net result is for AMERICAN jobs/income. After all some of the cars being bought are foreign made cars and most of the jobs/income being lost are American jobs.

As I understand it many of the new ‘purchases’ would have happened anyway with our without the government handout(Duh).

Whats gonna be the next great idea? How about we start burning down houses that were built before 1975 with less than 10 inches of insulation if you buy a new energy star house. That would give firefighters plenty to practice on (first controlling the burning and then putting the fires out in a controlled method) as well as take a lot of houses out of the marketplace that dont have as high of conservation levels.

You could give the new home buyer a $25K credit and that would make buying a new home more afforable. That would put a lot of people to work building new homes and get rid of a lot of excess homes on the market.

You just need to ignore the facts that it would raise the deficit (wont it be great to tell the children how their future was mortgaged away so we could destroy cars and homes) and lower the total assets that America owns but lets not get facts in the way of change.

The real scarry thing as I write this is wondering how many people will read the home burning concept and actually think it might be a solution to the housing problem......

DC should rename itself to UC (Unintended Consequences)

Want to see what they are doing with the cars to make sure no one drives a “Clunker” again. take a look at the youtube video. If your a taxpayer and this doesn't make you mad than I don’t think your paying attention.

youtube.com/watch?...

'Clunkers' Needs More Cash

Does anyone give any thought to what this does to our economy???

Look, I understand some in DC would say don’t worry about taking away all the cheap affordable cars off the market for people who may not be able to afford a more expensive car. After all we will give the poor people money and handouts and they will be fine.

I for one am not fine with this and not only is it a total waste of money but its filled with unintended consequences like distorting the used car market. How many jobs (think mechanics, used car lots, auto parts shops and salvage yards) will be LOST as a result of this giveaway. A a very minimum lost wages and lower income for people that service used cars will happen. While no numbers yet exist and maybe hard to calculate I have to wonder what the net result is for AMERICAN jobs/income. After all some of the cars being bought are foreign made cars and most of the jobs/income being lost are American jobs.

As I understand it many of the new ‘purchases’ would have happened anyway with our without the government handout(Duh).

Whats gonna be the next great idea? How about we start burning down houses that were built before 1975 with less than 10 inches of insulation if you buy a new energy star house. That would give firefighters plenty to practice on (first controlling the burning and then putting the fires out in a controlled method) as well as take a lot of houses out of the marketplace that dont have as high of conservation levels.

You could give the new home buyer a $25K credit and that would make buying a new home more afforable. That would put a lot of people to work building new homes and get rid of a lot of excess homes on the market.

You just need to ignore the facts that it would raise the deficit (wont it be great to tell the children how their future was mortgaged away so we could destroy cars and homes) and lower the total assets that America owns but lets not get facts in the way of change.

The real scarry thing as I write this is wondering how many people will read the home burning concept and actually think it might be a solution to the housing problem......

DC should rename itself to UC (Unintended Consequences)

Want to see what they are doing with the cars to make sure no one drives a “Clunker” again. take a look at the youtube video. If your a taxpayer and this doesn't make you mad than I don’t think your paying attention.

youtube.com/watch?...

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

Does anyone give any thought to what this does to our economy???

Look, I understand some in DC would say don’t worry about taking away all the cheap affordable cars off the market for people who may not be able to afford a more expensive car. After all we will give the poor people money and handouts and they will be fine.

I for one am not fine with this and not only is it a total waste of money but its filled with unintended consequences like distorting the used car market. How many jobs (think mechanics, used car lots, auto parts shops and salvage yards) will be LOST as a result of this giveaway. A a very minimum lost wages and lower income for people that service used cars will happen. While no numbers yet exist and maybe hard to calculate I have to wonder what the net result is for AMERICAN jobs/income. After all some of the cars being bought are foreign made cars and most of the jobs/income being lost are American jobs.

As I understand it many of the new ‘purchases’ would have happened anyway with our without the government handout(Duh).

Whats gonna be the next great idea? How about we start burning down houses that were built before 1975 with less than 10 inches of insulation if you buy a new energy star house. That would give firefighters plenty to practice on (first controlling the burning and then putting the fires out in a controlled method) as well as take a lot of houses out of the marketplace that dont have as high of conservation levels.

You could give the new home buyer a $25K credit and that would make buying a new home more afforable. That would put a lot of people to work building new homes and get rid of a lot of excess homes on the market.

You just need to ignore the facts that it would raise the deficit (wont it be great to tell the children how their future was mortgaged away so we could destroy cars and homes) and lower the total assets that America owns but lets not get facts in the way of change.

The real scarry thing as I write this is wondering how many people will read the home burning concept and actually think it might be a solution to the housing problem......

DC should rename itself to UC (Unintended Consequences)

Want to see what they are doing with the cars to make sure no one drives a “Clunker” again. take a look at the youtube video. If your a taxpayer and this doesn't make you mad than I don’t think your paying attention.

www.youtube.com/watch?...

Earnings Preview: Synaptics

Wow Did SYNA get crushed on Friday. If you own the stock I am not telling you something you dont already know but as a trader (and not yet trading SYNA) I thought it was pretty interesting. It fell off the bridge like they were stinking up the joint. The real question with the sell off is that they are NOT stinking up the place and in fact doing well. The market and shareholders totally fixated on guidance being lower than expected and someone thought it was a good idea to hit the panic button.

I bought SYNA into the close and may buy more into dips next week as I think when the panic fades and people see the value in the stock at "sales prices" the price will move higher

The Search for Safe Assets for Mad Times

I have to agree with the guns and ammo comment.

Rare guns seem to continue to go up in value year after year. I am not so sure you can 'invest' in ammo as it loses the portability aspect pretty fast but to have a rare $5000+ handgun is a way to store value and in very evil times can have other uses as well.

While I am not a hunter I have been adding a few guns per year to a collection (I haven't shot most of them) and while many investments have gone down all the guns that I have bought can be sold for more than I paid and in some cases like some
WWII M1s that I bought three years ago they have more than doubled.

I understand some people simply don't like guns and that's fine but it doesn't change the fact that as an investment they are rock solid and during times of crisis they may have more value than their weight in gold.

More Good News: Record High Credit Card Defaults

I think the article is well written and makes some valid points. I also believe that bankruptcy does raise the cost for the rest of us. I have carried credit card debt at times over more than one month and that rates pretty high on my stupid scale of things that I have done.

One should never buy something that one needs to borrow at high interest rates to do so. It may be argued that once in a while in an emergency its understandable but even then that's usually a result of poor planning before the event happened. So many people live their lives like their car will never break down and/or unexpected expenses will not happen to them.

Swine Flu: Don't Hit the Bunkers Just Yet

At this stage the author is right no target. Way overdone. I don't know this but I would guess that more people in Mexico City died last week in car crashes than the flu.

If it continues at some point we have to adjust and get ready for battening down the hatches but we are not IMHO at that point yet. With about 100 deaths so far its not even a data point out of a population of over 10 million.

Wynn Resorts Shows Surprising Strength in Offering

Good article by the author.

I have been following LVS, and BYD for over a year and they are both slow along with the rest of Vegas.

I am long LVS and short BYD put options so I do not believe that either will file for BK. I also agree with the author that WYNN appears to be the strongest or at least one of the strongest casino stocks you will find out there.

Protectionism by Any Other Name

James Kwak is right on point.

As the largest manufacturer in the world and a country that depends in a large part on exports the talk of trade barriers scares me.

We pay for our life style in part by borrowing money which will someday have to be paid back regardless of what the Washington leaders think.

Taking away low cost goods and at the same time lowering our exports due to a trade war is about as dumb as it gets while trying to keep the masses happy with what the government doesn't take away from them.

Unusual Options Activity Review: Thursday

Not a big surprise with GE earnings about to come out in about 12 mins from the time I write this.

I been writting puts for Feb and Mar as I feel it doesnt matter what they report the stock will go up. There just isnt any other AAA stocks with such a wonderful PE and dividend even if it both get cut in half.

GE is a great company and in the next few months there will be a lot of people wishing they didn't panic out of their stock.

This says a lot that I am bullish with GE as I am NOT a value investor and short over 95% of my trades / investments.