Zachary Scheidt

Sell in May and Go Away: Good Advice?

Emerald: You bring up a good point with the velocity of money. Up to this point we have had very little velocity, but the problem is that once the velocity ticks up even just a little bit, the sheer AMOUNT of currency created could be a big problem. The Fed can't just pull money out of the system quickly and quietly. Inflation doesn't take long to breed in these conditions.

Alphameister: It's been interesting to see exactly WHICH issues have had the strongest gain. Bespoke had an interesting piece which showed that stocks with weaker relative strength over the last 12 months actually rallied the most. This could certainly indicate a dead cat bounce (we need quality stocks to keep us going). At the same time, performance anxiety continues to push us higher and could eventually lead the fundamentals to follow the market in recovering.

Capt Brian: If it gets that bad, I want a spot in YOUR compound :-) and if you're right, then there's probably very little that a strong investment approach would do for any of us. I certainly hope we're not facing an Armageddon type scenario.

Thanks guys for your comments - definitely keeping it lively!
Zach
zachstocks.com

Sell in May and Go Away: Good Advice?

MHFT - Thanks for the advice... while it sounds great and I certainly hope to get the 9 iron out at least a few times, your comment makes me consider buying LVS :-) Hope you have an awesome summer and get a great buy on some property.

LilBob - I've got some rental property and I think you're right for the long-term. I would caution to make sure you are adequately capitalized before making a rental purchase. Expect some time here and there with no tenants and make sure you can carry the property even if it doesn't rent for quite some time. Personally, my one tenant just lost his job which makes the situation a lot more interesting...

Freya - an interesting thesis for sure. I certainly expected this rally to last beyond the one or two weeks the talking heads had called for, but am getting a bit uncomfortable with extended long positions now. Maybe I'm not alone - if so then your argument makes a lot of sense. But it seems to me people are getting a bit too comfortable for my liking.

At any rate, there will be plenty of opportunity on an individual security basis. I disagree with Mad Hedge Fund Trader and think you can always find good risk-reward trades if you look hard enough.

Thanks for the comments guys!
Zach
zachstocks.com

Want Solar Panels? China Will Pick Up the Tab

Rob - thanks for the first-hand view! I must admit I have never traveled to China but would welcome the opportunity. I'm not completely qualified to comment on the social issues in China except to say that I'm firmly of the opinion that free market economics opens opportunities for individuals and eventually leads to stronger economic situations. As China makes strides towards more open markets and free trade, I believe their economy will become even more competitive. There will certainly be bumps along the way, but over time, personal ingenuity and work ethic will propel any free market.

Thanks for the insights!
Zach
zachstocks.com

Barron's Is Wrong: Solar Offers Good Value

Good comments guys - there is obviously a heated (no pun intended) debate in this are that can only be solved over time.

My opinion is that there is value in some stocks here and that many prices fully incorporate the weak market up to this point. The stock market is a forward discounting mechanism so we should expect to see solar stocks turn before the fundamentals fully justify the rebound.

FSLR has certainly been overpriced in the past. You can see my 2008 article urging caution in this name here: zachstocks.com/2008/02.../ But now the name is a leader, at a lower price, with a tide that appears to be turning.

I've been wrong before - and it will happen again too. Trading is all about adjusting to the environment, managing risk, and seeking out opportunities. I look forward to revisiting this debate over the coming months as the picture becomes clearer.

Thanks guys for the lively discussion!
Zach
zachstocks.com

Want Solar Panels? China Will Pick Up the Tab

Thanks for the comments guys... Just a few notes:

DanD - The reason I didn't cover many of the US solar manufacturers is because this deal was announced in China. For whatever it is worth, I have looked at ESLR and up to this point they have not turned a profit. But that may be changing and the stock could be worth looking at now that they have started to turn. You may want to take a look at posts on ZachStocks that mention solar - here is a link: zachstocks.com/?s=solar

Road Runner - The release did not give many details and we definitely need to look into this. It seems clear this is a large undertaking, but it will take some time for the full picture to unwind. As for the political benefits China enjoys, I understand your argument but also am thankful to live in a free society where my property cannot be taken without due course. China can certainly move its population around at the government's direction, but that isn't necessarily always a good thing.

PeteK - I wonder if this "burnt twice" issue could be the wall of worry that helps this market to climb. When people are the most skeptical and all the weak hands have been flushed out, that can lead to powerful rallies. This is often why you see markets "test" important low points (thereby burning investors a second time) before sustainable bull markets. Just an observations.

Alpha247 - I'm not much of a conspiracy theorist. I suppose you may be able to find some market manipulation but I haven't seen any actual proof. The bottom line is that I think these stocks are moving up - and manipulation or not, there is strong potential to make investment gains in the coming months.

Good luck to all this week!
Zach
zachstocks.com