More on jobless claims: At 335K, it's the lowest read since January 2008. The 4-week moving average declines 6.75K to 359.2K. A Marketwatch report say seasonal quirks could be behind the big decline, without giving any detail. The news combines with the big housing starts print to send S&P futures +0.6%, 10-year Treasury yields to 1.87%, gold -0.6%, and the dollar higher across the board. [View news story]
Even if you don't agree with the number today, look at the longer term trend. It doesn't matter which way you slice the pie, initial jobless claims are not increasing over a period of time. Perhaps w/w on occasion but not m/m and its not even close y/y.
And if the trend continues, as it will, then we will get an improving economy. More people will have money to spend from slow test-the-water hirings, more products will be purchased, and businesses will hire even faster to capitalize on the demand. And that basic cycle will continue until the next inevitable recession. The business cycle runs the world, not the Fed or the President of the United States. It doesn't matter what they do.
California is in dire fiscal straits, but tapping its Saudi Arabia-scale oil resources could wipe out the state's debt and deficits, Mark Mills writes. The Monterey shale field alone may hold 15.4B barrels of oil, rivaling America's total conventional reserves, and the overall economic benefits of opening up Monterey could reach $1T. [View news story]
Drilling for that oil is inevitable. Might as well start now. They will find a way to preserve tourist hot spots. But I am not sure fracking is as advanced as the writer makes it seem at its current stage... I guess that is where the idea of Silicon Valley getting back to its roots to develop something amazing comes in.
The Price May Be Increasing For An Amarin Buyout [View article]
I am interested in seeing a Vascepa launch. I think that Amarin will do a very good job. They may not have any experience in marketing, but management is taking their sweet time and I think this is a good sign. At least it is better than rushing the product to market without a business/marketing plan.
I have seen small companies go at it alone in the past and the stock prices soar after the results are released. On the flip side, I have seen complete flops. I think Amarin will follow the pattern of the former.
Will GlaxoSmithKline Purchase Amarin? [View article]
The best point is the Lovaza patent expiration in September. Vascepa could easily fill that hole and then some. At this point I don't see a buyout over $20 a share anytime soon.
And since some tin foil hat wearing nut case likes people to disclose their AMRN holdings, I'm holding a small stake with a cost basis of 10.51. So I don't need to say things that pump the stock up. I'm just being greedy with the rest.
Fidelity slashes its Facebook (FB -3.6%) stake - 21 of its funds selling over 1.9M shares in June. The sales are quick ones for Fidelity, which likes to "kick the tires and ask questions," says John Bonnanzio of Fidelity Insight. "It seems they ultimately decided that they didn't like what they see." [View news story]
Took Fidelity long enough.
I met somebody who bought FB shares on the IPO day. I was so shocked I actually didn't know what to say.
What we need is bond yields to elevate so older folks can retire and jobs can open up. Nobody can retire on 1% yields... All this bond manipulation is killing retirement portfolios. The Fed and the politicians need to step away from the economy and let the business cycle and free market run its course. Keep in mind, this doesn't mean every day will be glorious...
30% real unemployment? I didn't read anything after that because that's just ridiculous. Just think about it for a second. Do you really see 1/3 of the populace not working? Sure, maybe not everyone works every day, but keep in mind the average work week is in the low 30 hours. So the majority of the work force is getting 2-3 days off a week.
If you said 15% real unemployment I wouldn't question that. I wouldn't believe it, but it's at least reasonable. I live in a city in California with a population over 310,000 with an official unemployment rate of 11.9%. I see unemployed every day but it is nowhere near 30%.
And I'm sure the President is 100% responsible for deciding whether businesses hire. He must have a busy schedule being the hiring director for every business in the United States.
Syria's civil war escalates in the wake of today's bombing deaths of three top military and security officials including Pres. Assad's brother-in-law, and analysts say the fighting could spill into the oil market. The fall of Assad could increase ally Iran's sense of isolation and encirclement, prompting it to test a nuclear device and lead to skyrocketing oil prices. [View news story]
Good point, but even if they are capable of testing what makes these people think they will use it? It's not like Iran's leaders are any less stable than America's leaders (America's leaders = the war hawks at the Pentagon that control the President).
June Housing Starts:760K vs. 745K expected and 711K (revised) in May. Permits 755K vs. 775K expected and 784K (revised) in May. [View news story]
I think one of the key points here is that people are beginning to feel confident enough (i.e. not totally confident) to begin building new homes in anticipation of new buyers. That's all. There's no magic to these numbers.
Another note to make is that housing prices are stabilizing. Are they making a turn? That is to be seen, but, contrary to popular belief, home prices will NOT keep decreasing like pessimists hope for. I live in the middle of SoCal where the real estate bubble was one of the worst (i.e. way too many McMansions owned by $40-$50k earners). And housing prices have indeed stabilized (albeit 60-75% lower than 5 years ago).
China's Q2 GDP grows 7.6%, inline with expectations and down from 8.1% in Q1. June industrial output +9.5% Y/Y vs. 9.8% expected. June retail sales +13.7% Y/Y vs. 13.5% expected. [View news story]
If I recall it was 4.1%. That's not surprising for a country with essentially no minimum wage laws. There's a reason everything is made in China. If America dropped minimum wage and disbanded Unions the unemployment rate would be the same or lower than 4%. Unions ruined America.
Why Averaging Down Is A Bad Investment Strategy [View article]
In my mind averaging down is best if you aren't buying in a systematic manner. For instance, perhaps you bought F a while back on its way down at 15. At the time it was a nice retracement from the upper 18 level. Then perhaps you saw October's 9.30 as the low. So you buy another round of shares. Now the stock is even lower. But instead of buying now, wait until there's some confirmation that the stock is at the bottom.
Unless your strategy is DCA, then you shouldn't be purchasing shares in a systematic manner as a stock goes down or up for that manner. Look for temporary bottoms. To be honest these temporary bottoms are just that, temporary. You don't know if there's more downside or if a turn is around the corner. That's investing in stocks for you. They aren't called risky assets for nothing. But if you buy a round of shares at a substantially lower price you can make major profits as the stock returns to previous levels. It may take several years for this to happen (especially with F as I just wrote a note about) but it will be worth the wait.
To be honest I am not a fan of averaging up. The simple fact is, just like on the way down, you just don't know if the stock is going to continue higher or drop lower. And I for one feel it is irresponsible to take a position or increase a current position in a stock on the way up. That can easily lead to massive losses. That is why the average investor that does not seek help fails to make any money. They always buy at the top thinking it can only go higher. Then of course it doesn't go higher. If you average up then each new transaction increases your chances of losing your principal. Keep in mind that this same problem exists in averaging down as well. The difference is you are buying at technical bottoms. Therefore the odds of further losses are substantially less than buying a high flying stock at a near term high.
San Bernardino has voted to become the third California city to file for bankruptcy in the last month, after officials reported the city faced an imminent financial crisis. San Bernardino hopes to restructure its finances while in Ch. 9 protection, but a concerned muni bond market may have other plans. (also: Stockton and Mammoth Lakes) [View news story]
It's California. The rich cities get richer and the poor cities get poorer. It's becoming more difficult to move up the ladder in today's society regardless of intelligence or work ethic. It is almost as if a class system is developing. Of course this has a whole lot to do with the unemployment rate in California and the U.S. as a whole.
What CA city is next to file? One of the many small cities in East LA such as Compton is my guess. Stockton and San Bern are definitely two of the more scummy cities in the country and I am expecting this pattern to continue. Mammoth was a fluke due to a lawsuit.
U.S. Stock Market Complacency On Verge Of Collapse [View article]
I don't know what frustrates me more. Ridiculously bullish articles that tout a big rally is on the way or ridiculously bearish articles that tout a market collapse. Both have no real base. The market will stagnate from here until the tonnage of problems are either understood or go away. JK outlines a number of these above. Expect to see fluctuations between 1400 and 1280 (S&P 500) and 13,000 and 12,200 (DJIA). With that said it is pretty clear when to buy and sell equities.
More on jobless claims: At 335K, it's the lowest read since January 2008. The 4-week moving average declines 6.75K to 359.2K. A Marketwatch report say seasonal quirks could be behind the big decline, without giving any detail. The news combines with the big housing starts print to send S&P futures +0.6%, 10-year Treasury yields to 1.87%, gold -0.6%, and the dollar higher across the board. [View news story]
And if the trend continues, as it will, then we will get an improving economy. More people will have money to spend from slow test-the-water hirings, more products will be purchased, and businesses will hire even faster to capitalize on the demand. And that basic cycle will continue until the next inevitable recession. The business cycle runs the world, not the Fed or the President of the United States. It doesn't matter what they do.
California is in dire fiscal straits, but tapping its Saudi Arabia-scale oil resources could wipe out the state's debt and deficits, Mark Mills writes. The Monterey shale field alone may hold 15.4B barrels of oil, rivaling America's total conventional reserves, and the overall economic benefits of opening up Monterey could reach $1T. [View news story]
The Price May Be Increasing For An Amarin Buyout [View article]
I have seen small companies go at it alone in the past and the stock prices soar after the results are released. On the flip side, I have seen complete flops. I think Amarin will follow the pattern of the former.
Maxim Group Highlights 3 Stem Cell Stocks To Consider And 1 To Avoid [View article]
Will GlaxoSmithKline Purchase Amarin? [View article]
And since some tin foil hat wearing nut case likes people to disclose their AMRN holdings, I'm holding a small stake with a cost basis of 10.51. So I don't need to say things that pump the stock up. I'm just being greedy with the rest.
Fidelity slashes its Facebook (FB -3.6%) stake - 21 of its funds selling over 1.9M shares in June. The sales are quick ones for Fidelity, which likes to "kick the tires and ask questions," says John Bonnanzio of Fidelity Insight. "It seems they ultimately decided that they didn't like what they see." [View news story]
I met somebody who bought FB shares on the IPO day. I was so shocked I actually didn't know what to say.
July ADP Jobs Report: +163K vs. +176K prior and expectations of 120K. [View news story]
Initial Jobless Claims: 353K vs. 380K consensus (prior week revised to 388K from 386K). [View news story]
If you said 15% real unemployment I wouldn't question that. I wouldn't believe it, but it's at least reasonable. I live in a city in California with a population over 310,000 with an official unemployment rate of 11.9%. I see unemployed every day but it is nowhere near 30%.
Initial Jobless Claims: 353K vs. 380K consensus (prior week revised to 388K from 386K). [View news story]
Syria's civil war escalates in the wake of today's bombing deaths of three top military and security officials including Pres. Assad's brother-in-law, and analysts say the fighting could spill into the oil market. The fall of Assad could increase ally Iran's sense of isolation and encirclement, prompting it to test a nuclear device and lead to skyrocketing oil prices. [View news story]
June Housing Starts: 760K vs. 745K expected and 711K (revised) in May. Permits 755K vs. 775K expected and 784K (revised) in May. [View news story]
Another note to make is that housing prices are stabilizing. Are they making a turn? That is to be seen, but, contrary to popular belief, home prices will NOT keep decreasing like pessimists hope for. I live in the middle of SoCal where the real estate bubble was one of the worst (i.e. way too many McMansions owned by $40-$50k earners). And housing prices have indeed stabilized (albeit 60-75% lower than 5 years ago).
China's Q2 GDP grows 7.6%, inline with expectations and down from 8.1% in Q1. June industrial output +9.5% Y/Y vs. 9.8% expected. June retail sales +13.7% Y/Y vs. 13.5% expected. [View news story]
Why Averaging Down Is A Bad Investment Strategy [View article]
Unless your strategy is DCA, then you shouldn't be purchasing shares in a systematic manner as a stock goes down or up for that manner. Look for temporary bottoms. To be honest these temporary bottoms are just that, temporary. You don't know if there's more downside or if a turn is around the corner. That's investing in stocks for you. They aren't called risky assets for nothing. But if you buy a round of shares at a substantially lower price you can make major profits as the stock returns to previous levels. It may take several years for this to happen (especially with F as I just wrote a note about) but it will be worth the wait.
To be honest I am not a fan of averaging up. The simple fact is, just like on the way down, you just don't know if the stock is going to continue higher or drop lower. And I for one feel it is irresponsible to take a position or increase a current position in a stock on the way up. That can easily lead to massive losses. That is why the average investor that does not seek help fails to make any money. They always buy at the top thinking it can only go higher. Then of course it doesn't go higher. If you average up then each new transaction increases your chances of losing your principal. Keep in mind that this same problem exists in averaging down as well. The difference is you are buying at technical bottoms. Therefore the odds of further losses are substantially less than buying a high flying stock at a near term high.
San Bernardino has voted to become the third California city to file for bankruptcy in the last month, after officials reported the city faced an imminent financial crisis. San Bernardino hopes to restructure its finances while in Ch. 9 protection, but a concerned muni bond market may have other plans. (also: Stockton and Mammoth Lakes) [View news story]
What CA city is next to file? One of the many small cities in East LA such as Compton is my guess. Stockton and San Bern are definitely two of the more scummy cities in the country and I am expecting this pattern to continue. Mammoth was a fluke due to a lawsuit.
U.S. Stock Market Complacency On Verge Of Collapse [View article]