TraderMark

The Reflation Trade Was Bludgeoned

Great comment - people are still going off the "inventory bloat" recession idea, when this is a structural change.


On Jul 07 08:12 AM CautiousInvestor wrote:

> This is a most informative article, highlighting the challenges of
> investing when the market gets ahead of itself in a very complex
> economic environment.
>
> This anticipated sector rotation corresponds with classical patterns
> of the past in which materials, industrials, consumer discretionary
> and financials start advancing at the trough of ISM surveys in anticipation
> of economic recovery. This is typical in V shaped recoveries.
>
> In today's market, though, we have a situation in which the ISM data
> has bottomed but the economic recovery is being questioned and reexamined
> in the light of much doubt. Unlike previous cycles in which the uptick
> comes immediately after the bottom ( the V ), we may crawl along
> the bottom until needed structural changes take place and consumer
> balance sheets are repaired. This could take several years and there
> will be other challenges along the way.
>
> Looking forward, we very well might see alternating rounds of deflation/reflation
> investment themes recur until the reflation side is proven lasting.

12 Stocks to Buy on a Pullback

And the title of the post is? :)

12 Stocks to Buy on a Pullback

ISRG = good stock, valuation that makes me dizzy

Adding to Position on National Oilwell Varco - Grant Prideco Merger

Thanks, made an error when typing too fast :)
Much like the RIG/GSF situation NOV could be a victim of shorting against company buying and long on the company being acquired. So not sure if it will run now - it most likely will be range bound until everything is approved and complete, but I (really) like the move long term. Thanks for the correction, sometimes fingers go faster than brain.

12 Stocks to Buy on a Pullback

As for coal, I think its turning from a North American commodity to global commodity. Coal and natural gas had not followed crude because they are traditionally more local commodities - so ebb and flow with US economy. Now as China sucks in more of the world's coal (and that will hold true if China GDP is 2% or 12%), with the high cost of shipping, and low dollar, the Europeans are really liking our coal off the east coast. Thats my thesis and until the price action dictates differently I am sticking with it. :)

12 Stocks to Buy on a Pullback

John, I write about the latter point of your comment almost daily :)
There is a huge bias to big boys and I love things like huge amount of calls being bought right before a stock gets bought out and the SEC never looks at this. SeekingAlpha has some of my comments on these shenanighans. The "invisible hand" is hard at work propping up the market - apparently they only care about equity markets because bond markets are signaling a lot of bad things that you'd never see if you looked at an equity market that as of early last week was 4% away from all time highs. Anyhow, I do write about these topics quite often.

Good call oN TSO - I like FTO more as a refiner, but TSO was more of a Kerkorian play that did not work out. No one is perfect, nor close to it - the key is to let your winners run, and cut your mistakes quickly. I am out of TSO as of yesterday in fact when it spiked to near $50 (sold the other half $55 the day before Kerkorian pulled the plug on the 20% tender). My whole thesis there was oil prices would fall (which they did) from $100 and refiners would benefit from crack spreads widening... so the latter part of the thesis did not work out. It happens. :)

12 Stocks to Buy on a Pullback

Lisa, here is a post I did about MA

www.fundmymutualfund.c...

They essentially are a play on the move away from a cash society to a plastic society, with huge growth avenues overseas. The banks they represent actually carry the credit risk, not MA itself.

Cutting Back on McDermott for Technical Reasons

Hi Duke
I love the fundamentals, but this is a short term call. And yes it is simplistic - personally I think 95% of Technical Analysis is hocus pocus and over complicates thing. Many times the most simplistic analysis is the one that works. Simply using moving averages catches the majority of moves... for example of if using 1 indicator gives you 90% of the story, but using 12 indicators would give you 95% of the story - I don't see the reason to fuss over the other 11 indicators. The value add degrades quickly.

I like the fundamentals of every stock I own or consider. The technicals help to tell us if the 'rest of the market' is willing to like it as much... when MDR is moving back above its 50 day I will consider that a sign the market is getting back behind (what we both agree to be) a good fundamental story. Capital preservation is always job #1