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Land of Milk an...'s  Instablog

Land of Milk and Honey
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Individual investor. Generally using index Mutual Funds or ETFs. Trying to diversify more (foreign in particular). Pick up tips & concepts, & learn more. I'm at alpha to keep a finger on the current moods & predictions... and so I notice up coming big financial news events before... More
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #26 139 comments
    May 18, 2014 9:09 PM

    I've set up this blog ...as a community place to share our investing ideas. Hopefully so we all gain more ALPHA!! It's a great way for my contacts to talk to each other at the same time, not just to me :).

    .

    All topics welcome. Investing, stocks, bonds, commodities, economy, politics about economy, and social (so we know who we're talking with). Please invite other investors! Stop by once in a while, or hang out all the time. Please post your questions, make a joke, or share your insights with us!!

    .

    My money has done well since I started this blog... so I'm hoping it adds value for everyone!

    .

    Only rules of the road are not to insult others, so state your view but don't call others names or put them down. Every view is valuable, if only to convince you, you are right!

    .

    This is Chapter #26. As the instablog gets long, I'll create a new blog & post a link at the end of the comments. Here's a link to the prior, #25: http://seekingalpha.com/instablog/11150861-land-of-milk-and-honey/2917833-best-ways-to-invest-whats-your-opinion-a-place-to-share-ideas-25?v=1400454173 (I've been putting in the right links, but sometimes this doesn't seem to work correctly. You can always go to my profile, then to my instablogs, and find the latest.)

    .

    Links

    Regular poster Fear & Greed has instablogs outlining his ideas which are great! -- also SA articles!:

    seekingalpha.com/user/706857/instablog

    Interesting Times has a fun Portfolio Challenge:
    seekingalpha.com/instablog/5038891-inter...-8

    Also his regular instablog: seekingalpha.com/instablog/5038891-inter...-50 It's more oriented to precious metals, & economic concerns (worries) than mine.

    As for the regular posters, you'll get to know us, if you hang around!!. Several have their own instablogs with their ideas.

    Disclosure: I am long SPY, IWM, DIA, QQQ, LINE, CVX.

    Additional disclosure: ...and more... ask me if you're curious!

Back To Land of Milk and Honey's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (139)
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  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » Hey!

     

    The blog has turned into a nice and relaxed place... yay. Thank you to everyone for helping make it so!

     

    ... I'll skip writing a starter question since there seems to be plenty to chat about. Inflation, rates, various stocks... and what's the state of smallcaps.

     

    I'm going to have a super busy week, so let me know if anything needs my attention (since I may miss it)... and enjoy!
    18 May, 10:26 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » - Welcome to newcomers! We've moved onto Chapter 27, so please join us there!
    http://seekingalpha.co...
    25 May, 11:53 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Opening lower this morning. I'm getting dizzy.

     

    To me the near term technical key is which way the Nasdaq breaks out of the big wedge it's formed, and next the RUT if it holds and rallies, or takes out 108 on IWM.

     

    Truly no mans land and will try to listen this week to the market's risk tolerance.
    19 May, 06:57 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    & relatively speaking it's a very "light" news week on the economic calendar--

     

    FOMC minutes - WED

     

    Homes sales -- THU & FRI
    19 May, 09:18 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Was a down opening. Never write too soon.
    19 May, 09:51 AM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    APPLE hit a new 52 week high this morning and is currently trading over $600 per share.
    19 May, 10:01 AM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    SG - I sold my shares of AAPL back at 598 a while back. I thought it was very undervalued previously but now that it's more fairly valued I'm not seeing as much upside. I was also very glad I did exit my position when I read this article:

     

    http://seekingalpha.co...

     

    If I'm not mistaken, wasn't channel stuffing part of the huge miscalculation leading to Apple's precipitous fall in 2012? Or is this more of a routine thing or something investors are looking past for other reasons?
    19 May, 10:24 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    BC,
    the only issue i have with Mr Blair and his articles on (AAPL) - he's been wrong on the performance of the shares since AAPL was about $450 --

     

    go back and look at the history of his articles on AAPL to get a feel for what I am referring to ..

     

    Best of luck ;)
    19 May, 10:32 AM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    FG - Hmm. Good point. The author seems to have been consistently bearish on Apple from the start which poses a credibility issue. I guess I need to do more due diligence here and get to the bottom of it.
    19 May, 10:40 AM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    BC: No would should pay any attention to my timing for Apple. I first bought 100 shares at $12 and sold at $16.

     

    Given the high price, I last bought only 5 shares at $524.4 in October 2012:
    2. Bought 5 AAPL at $524.4
    http://bit.ly/1qPidQT

     

    My goal is simply to harvest a $500 profit which I will use at some point to buy a new IPAD. I reluctantly bought the IPAD 2, thinking it was a toy, but I now find it indispensable.

     

    The guy who wrote that SA article has shorted the stock and is talking up his position. He lacks balance in his presentation. A balanced author would point out every material hole in his argument, but he has no interest in doing so. I read some of the comments that pointed out some issues. How reliable is the data that he cites for instance? Who is this "Kantar World Panel" source and why should I pay attention to their numbers? Why would Apple mislead its investors?
    19 May, 10:41 AM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    I'm still unsure on Apple's long-term outlook (e.g. 10 to 30 years down the road) and think a lot of the pro-Apple commenters are a bit too complacent about the bigger picture of market share, but at least in terms of the recent quarter and more micro perspective, "there's no there there" to the author's critique. The quarter was good and the author is doing a bit of spin doctoring to try to find anything wrong.

     

    I was also thinking about it and the 2012 issue was undoubtedly a bigger macro China issue and now that China has had a soft landing and the smartphone market has matured the same risks (of major inventory backup/drop off in demand) should not be present. In fact, the reverse may be true and a Chinese rebound should be a positive.

     

    I guess I fell victim to recency bias at the mere hint of a repeat of 2012 when it doesn't seem quite as likely now. Perhaps I could reconsider a long position (though I'm still shopping around for other ideas).
    19 May, 12:31 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Interesting first half hour -- many of the stocks in my portfolio that were crushed last week when the market was basically flat are rebounding & showing strength today in a flat start to the day .. go figure ....

     

    I sold the June 615 calls against my (AAPL) posiition , 2 weeks ago - i thought that was "gimme" , the shares may now just get there ..
    19 May, 10:20 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Mon, May 19, 2014 Tue, May 20, 2014 Outright Treasury Coupon Purchases 02/29/2020 - 05/15/2021 $1.50 - $2.00 billion
    Tue, May 20, 2014 Wed, May 21, 2014 Outright Treasury Coupon Purchases 08/15/2021 - 05/15/2024 $2.25 - $2.75 billion

     

    I know I'm going to get push back -- but big POMO days today and tomorrow. FWIW.
    19 May, 10:41 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Not a very nice day when you're net short. Nasdaq strength caught me off guard.

     

    What a difficult business, some days.

     

    Added shorts in (AMZN), $297 (TWTR) $32 and (DB) $41.15

     

    Reasons -- primarily poor technicals and refusal to rally -- on (DB) I'm getting a touch suspicious of Euro bank health. (DB) just raised capital -- risk is I'm late selling -- but I continue to dislike the bank headwinds here.

     

    I don't know how long the broader market can shake off bank weakness, and home builders as well. So far; no-one cares.

     

    Its been a tough trading game since QE -- because certain indicators that have worked for decades; like financials as important signs of leadership -- don't work as well as signposts.
    19 May, 12:01 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    M:

     

    I'm not a trader, but you do some strange stuff by my reasoning.

     

    (DB) is already off over 20% from its beginning-year high, and the charts show very robust support at $40-ish, but with nothing below that all the way down to $30. It's either going to ricochet off that support or plunge through it. Given it's already large retreat and nothing suggesting that European economies are about to collapse, I rather doubt we'll see the latter, so that makes an above-$40 short very vulnerable to a reversal.
    19 May, 12:11 PM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    Macro - I think the NASDAQ strength is Apple, right? Amazon is a smaller weighting by comparison and Twitter isn't even in NASDAQ technically, right? NYSE, right? So, I think it's just a case of Apple doing good screwing up any of your analysis of QQQ, no?
    19 May, 12:41 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    T;

     

    I don't see the robust support at 40, I see good support in the low 38's. DB today broke 2 month descending support at 42 area; and I fundamentally don't like the group. In addition there is a little European market weakness.

     

    The amount from the "high" is meaningless unless you are trying to pick the exact top, which is a sure method to go broke as a short - seller.

     

    I have found shorting already broken stocks or sectors, established in downtrends, is a much more reliable method.

     

    As far as "evidence Euro economies will retreat" -- The market moves first -- then the news in my experience. DB is raising capital. With interest rate spreads where they are; what is the bull case?

     

    BTW -- if its' down 20%, its in a bear market. Why buy it? And that argument goes for a lot of stocks.
    19 May, 01:31 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    M:

     

    First, the last major closing low for DB was April 17, 2013 at $39.50.

     

    Second, after something is already down over 20%, in an otherwise uptrending market, I would hardly be excited about shorting it, especially as it approached its support levels. I'd probably be interested to put in on my value-stock radar.

     

    It's not a case of picking any exact highs; it's a case of the big move already having occurred, coupled with approaching support. That's not exactly the propitious moment to initiate the short, in my opinion.

     

    Every other day you change your stance on the general direction that overall markets are moving. Why not just say that you don't really know, which leaves you with assessing individual names, rather than predicating such choices on some general market background

     

    Just as I never chase stocks upward, nor would I chase them downward, especially after an issue is already down 24%. Better to short or buy puts when they're real happy, not already sold.

     

    My $0.02.
    19 May, 02:06 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    T;

     

    My last few comments were we appear to be in no-mans land right now, so correct I do not know.

     

    The other thing I would add is examine a very long term chart of DB and no-one would call that a bull market.
    19 May, 02:14 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    Well, like I have said many times, as a value investor, I love charts with slopes down to the right and eschew all the reverse. I would have been ready to short Apple back when it first crossed $700. That's the kind of chart that's the reverse of a value-player's chart.

     

    I guess DB could go lower, but definitely not a sure bet.
    19 May, 02:18 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Odd thing about (DB) recently, Colin Fan scolded the bank's traders in an internal video that went viral.

     

    Makes you wonder what kind of problems they are having

     

    http://bit.ly/1sLS0hH
    19 May, 02:22 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » Macro

     

    On (DB)... reading your thoughts the other day made me think... have you ever ranked your trades by "level of conviction / confidence" before trading, then seen afterwards which ones did well and by how much?

     

    It's possible that if you trimmed off those trades that rank lower, you'd have a set of higher success trades?

     

    What made me think of this is that your words on (DB) seems less convinced than some of your prior trades. (It may be in the writing and I'm mis-reading.) But if you are less "certain", it makes me wonder if you'd ever played with this thought. (It'd be pointless for me to play with it on my own trades, since I don't have many trading skills yet -- so I'll ask about it relative to your trades.)

     

    It's similar to if you put 80% in stocks and 20% in bonds, your returns over time will be not much better if you put 100% in stocks, but will be less risky.
    25 May, 11:01 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (530) | Send Message
     
    Macro...
    When you talk about a stock can you explain what poor technical's mean?
    19 May, 12:19 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Yair ---- sure.

     

    Lets take (AMZN)....it has fallen from 380 to the 300 area, and paused. I was thinking -- it might build a base there to turn higher.

     

    However -- Since early may -- The nasdaq has been choppily going up, and (AMZN) simply can't rally. Last 2 days, can't rally; and I see big selling pressure even as the market today has a "mini melt-up". Its all a weight of evidence thing. The appetite for AMZN is simply not there, even at 300. So the odds favour at least a re-test of $285 and likely a break below.

     

    Technicals -- are a multitude of things. I like relative strength measured over a period -how a stock reacts vs the broader market. The associated sector is extremely important too as a measure of risk appetite.
    19 May, 01:22 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    (AMZN) has an extremely high PE ratio, even after falling almost 150 from it's 52 week high of 408...trading at 298 today, down 1.48.

     

    Forward PE is a little better, down from the TTM PE 472 to 190. For many years now, the EPS has been decreasing, meanwhile the stock price increased. That's why I've never bought it.

     

    There's a lot of competition for (AMZN) too. When I am looking for a product online, often I find a better price at the company's website. China has it's own websites to sell products - Alibaba etc, so no room for expansion there. Could be that investors are piling into Chinese online retailer (VIPS) instead. When Alibaba IPOs that could cause (AMZN) to get another reality check.

     

    For value investors, they have never been able to rationalize (AMZN) 's stock price.

     

    Looks like it has a ways to go down to me.
    19 May, 02:14 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    BSF;

     

    And none of that has mattered, until it matters. Now -- those valuations...appear to matter
    19 May, 02:18 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (530) | Send Message
     
    Have you tested this statistically? Can you find other cases of a drop from x to y of the same magnitude followed by a pause.

     

    Does that correlate in the future to a lower price in the next relevant time period?
    19 May, 02:25 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    M, (AMZN) has always mystified me. In fact, Amazon's entire business model has me stumped. The recent news that they are going into the food delivery business makes me wonder if they aren't desperate, because nothing is working at this point to post solid, increasing earnings.

     

    Whenever I buy stuff online, then have to return it, I get ashamed about the waste.

     

    Some things make sense to buy online. I get all my furnace filters that way, but buy 2 years worth at a time.

     

    Netflix is great too, so convenient. They took out Blockbuster.

     

    I've given up buying other things, that I need to try on, because it's too frustrating.

     

    Heck I hardly leave the house as it is....I need to get out & go shopping.
    19 May, 02:28 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Have you ever seen those huge warehouses Amazon has, filled to the ceiling with stuff???

     

    That's a huge amount of money just sitting in warehouses. Looks like when we consumers stopped buying all that stuff, Amazon started to have an even bigger problem.

     

    Retail, it's a tough biz. Consumers are so fickle!
    19 May, 02:33 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    For the record I am also in the camp that is stumped by the Amazon valuation -- :)
    19 May, 03:16 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    BSF:

     

    "Whenever I buy stuff online, then have to return it, I get ashamed about the waste."

     

    You don't worry about the waste of your time, gasoline, etc. when you go out to buy something, making one round trip, then the same again if you need to return it?
    19 May, 03:17 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    If you look at the following annual GAAP earnings, what value would you assign to the company?

     

    Annual E.P.S. Per Share
    2013: $.59
    2012: ($.09)
    2011: $1.37
    2010: $2.53
    2009: $2.04
    2008: $1.49
    2007: $1.12
    2006: $.45
    2005: $.84
    2004: $1.39

     

    Data Taken from Annual Reports Filed with the SEC:

     

    http://1.usa.gov/1qPTAU1
    19 May, 03:22 PM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    BSF - I hear you on some things being more suited for buying in person than over a website. However, you can't argue with the trend of more and more shopping online. There is probably a limit somewhere but who knows where. I have read that some people were even working on things to let you try on clothes remotely or to scan your body with an app which makes a 3D model and the clothes are made based on that. I think the tactile experience and brick and mortar shopping is probably a tradition that won't go away any time soon - studies have shown that touching merchandise creates an emotional connection that makes you more likely to make a purchase. There's a lot of science to brick and mortar retail in terms of how things are displayed and arranged. IKEA makes you go through a maze so you see more things (the 'Gruen transfer').

     

    As for Amazon's business model, it seems Bezos is ruthless and determined to take over the world, growing at all costs with no regard for profit. Also from what I hear about employee unhappiness and how they're treated as liabilities instead of human beings, I wouldn't be surprised at all if they eventually replace all their workers with robots. The Kiva robot system has already been implemented so they're halfway to that goal (http://bit.ly/1sM5av6).

     

    So, I don't think desperate. I think ruthless. I think they really do want to try to sell everything possible. There was some quote by someone at Amazon "if you ever wonder why there's something you can't buy at Amazon, that's something we're probably thinking about/working on" (paraphrasing) -- i.e. they really are open-minded to sell anything they can possible figure out how to. I'm not going to try to work out the valuation on that, but I'm pretty sure traditional PE metrics are no use for high growth stocks.

     

    I like to think in terms of a sanity check and think about the total possible market cap of a company. I see TSLA at $25 billion and ask, well, what's Toyota (TM)? Is it reasonable to be that fraction of Toyota's market cap? Could they conceivably grow to that size? Yes? OK, then it's not "insane". Optimistic, sure. Speculative, quite. But insane it is not. I think PE ratios are good for rule of thumb but there are limitations and high growth stocks are one where it breaks down some, right or wrong that's just how it is and you have to respect that if you're going to try to trade the names. My two cents.
    19 May, 03:27 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    I will answer my own question. Assuming I had nothing but those annual GAAP E.P.S. numbers to evaluate, I would not want to buy stock in the company. The GAAP numbers are way too erratic for me. Maybe, I would consider buying a few shares, as an LT, at less than $20 per share.
    19 May, 03:43 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Valuation, yeah. Never matters, till it matters.

     

    Timing for a trader is most difficult.
    19 May, 03:47 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    T, I'm one of the very very few women who just hates to shop. Where I live in NJ, I only go to Costco, Kohls, & a grocery store....all not far. Macy's maybe once a year, if that. I can even walk to several shopping centers, about 1.5 miles from my house. When I go shopping, I only buy stuff that I intend to keep. If everyone shopped like me, the economy would be in even worse shape! Plus I only buy things from Kohl's & Macy's when there's a sale. Like 70% off...it's just me. I like to buy stocks, not stuff : )

     

    What I hate about ordering from Amazon, etc. is the shipping, the boxes, the plastic, & the worst....styrofoam.
    All the paper, cardboard is recyclable. I've taken styrofoam to my closest UPS store, but last time they said they wouldn't take it.

     

    We waste a tremendous amount on packaging here. I've read that all our recycled cardboard is shipped to China! One way they knew the economy was stagnating a few years ago was when those huge tankers stopped taking cardboard back to China.

     

    I don't have a car anymore. I like walking. The train station to NYC is about 1.5 miles away. You might say we picked the location of our house pretty well. I can walk to the grocery store, bank, restaurants, etc. I've even walked 6 miles (round trip) to the post office & town library.

     

    The US is the largest consumer of the world's resources, compared to the rest of the world. We all need to stop needlessly driving around, but instead combine all shopping in one trip. Like my relatives in Europe do. When gas is expensive, people conserve it. Just hate seeing one person in every car here, people are extremely selfish.
    19 May, 05:37 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    so that's Amazon EPS data. When I look at their bar charts on CNBC.com for earnings, it looks even worse.

     

    http://cnb.cx/17dIE53
    19 May, 05:40 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3587) | Send Message
     
    I burn all the cardboard and styrofoam that stuff is shipped in. :) The plastic bubbles usually don't take up too much room in the garbage can. There is no recycling program where we live. I do recycle aluminum cans, though! :)
    19 May, 05:44 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    BC, I take a lot of info into consideration. Especially like reading how Chuck Carnevale here on SA evaluates a company.

     

    Sometime my aversion to a stock because I don't like the product causes me to lose out. As with Domino's Pizza (PZA). Now they are going international, their yucky pizza is what they think we eat....no way. Local pizzerias here are so much better - those Brooklyn Italians know how to make a pizza!

     

    It is hard to fathom that people all over the world are eating Kentucky Fried Chicken, McDonalds, Burger King, Dominos, & Krispy Kreme donuts. Wherever I've gone in the world, there it is, the golden arches, Colonel Sanders, etc. When my son was 7, that's all he ate in China. Fortunately, they were everywhere. Chinese food in China is totally different...much healthier than what we get here. No surprise there : )
    19 May, 10:19 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    yikes! don't breathe that styrofoam smoke.

     

    Someone told me once never to put styrofoam in the microwave....the heat releases cancer causing chemicals right into the food you are heating up.

     

    Is it Tennessee where Duke Energy is releasing that horrible looking sludge into the waterways?
    19 May, 10:22 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3587) | Send Message
     
    (DUK) is Florida and the Carolinas. Of course I don't breathe the smoke.... Same when I burn treated lumber, plywood, and laminates (I try to avoid burning heavy plastics (buckets, plexi, etc.) - stinks to high heaven). It's for disposal, not food prep. :)
    19 May, 10:31 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    BlueSky: That would be the TVA:

     

    http://bit.ly/RQoVpG

     

    Duke does not operate in Tennessee. We are either socialists or communists down here for power generation, transmission and distribution. My power is generated by TVA, transmitted from the TVA power stations to the Nashville Electric Service, a division of the Metro/Davidson county government and then sold to me. Within a few hundred feet of my HQ, my neighbors are served by the Middle Tennessee Electric Cooperative, owned by its member/customers.

     

    MTEMC Website
    http://www.mtemc.com
    19 May, 10:33 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3587) | Send Message
     
    Same (TVA) - our co-op is Southwest TN EMC. I sure don't feel like an owner, though. ;)
    19 May, 10:35 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    My mom has an old barrel in the back yard where she happily burns stuff. Leaves, twigs, paper, etc.

     

    It's against town regulations, but she pretends not to know. After all, she grew up in this town & ain't nobody stop her!

     

    When my son was younger, he loved helping her.
    19 May, 10:37 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Well I foolishly sold my Duke shares after seeing that on tv. Stock has gone straight up, of course.
    19 May, 10:38 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    SG, according to my brother I am a socialist : )

     

    He hoards gold, has mostly cash now, convinced we are all going straight to H*LL. Impossible to talk to him about anything bordering politics.

     

    I have a theory. When you are frustrated in life, with your business (he's in a dying small town so it's hard) and your investments, it's natural to blame someone other than yourself & your own choices.

     

    Usually I blame myself. I know what I did....made a wrong call on a stock, etc. No one's fault but my own.

     

    So I'm taking my older sister with me when I go back to visit my mom. There is strength in numbers. Couple of my female cousins will join us.

     

    We can handle him ; )
    19 May, 10:46 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    JB: Our northern friends here did not realize that private power companies are verboten in the Volunteer State. It is odd that even the republicans accept it.

     

    Way back when, I think Alcoa formed a private power company called Nantahala Power and Light which was sort of a front for it to develop hydroelectric facilities in western North Carolina to provide low cost power to one of its smelters in Alcoa, TN. So there was sort of a private power company once serving a Tennessee facility.

     

    To make it look sort of legit, they served a few retail customers too in the NC hills, and I heard, though never did verify, that one or two of those retail customers were residing in the Great Smokies on the TN side of the border.

     

    You have rights as a COOP owner, and I verified it for you. Your coop has an "Annual Member's Meeting will be held on Friday, August 8th, 2014, at the Jackson Fairgrounds Park in Jackson, TN. A very important part of the Annual Member's Meeting is the election of Directors."

     

    http://www.stemc.com

     

    There will probably be free food and entertainment.
    19 May, 11:01 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3587) | Send Message
     
    SG,

     

    Thanks. :) I know about the annual meetings (they send us a nice little magazine every month, which is great bathroom reading for a couple days). I don't vote (they send a ballot every year, too), as I do not hold shares in the company (hence why I said I don't FEEL like an owner).

     

    Happy with the service, although it gets pricey in July/August. They blink us more often than I'd like sometimes, but otherwise it's been solid, for semi-rural electric service.

     

    As a personal gripe (that they won't fix)... From the road to our house, the wires are strung along two poles. The sag from the last pole to the house is enough where I can stand in the bed of our truck and touch the wire (I haven't, but I could...) If a UPS driver tried to Y-turn out of our driveway, he may get an unpleasant surprise. :)
    19 May, 11:20 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » T

     

    I do my buys and returns when I'm already in the neighborhood. ... or in one trip to the strip mall with them all. I also do less returning if I can physically look before buying, on many types of items. Plus I get exercise. So I'd put it at a mixed bag. You have good points of individual's going out vs. trucks coming to us...
    25 May, 10:50 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Yair -- correction -- I should say "big RELATIVE selling pressure on AMZN" -- which i would hope would turn into "outright pressure" during the next market dip.
    19 May, 01:35 PM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    Macro - I have no idea if this is relevant but I was poking around comparing AMZN to the following tickers over the last year (52 weeks): WMT, TGT, EBAY, and SPY. AMZN edges out the other retailers and SPY comes out on top (and QQQ a bit ahead of SPY). I wonder if Amazon lags simply because of it's "retail" aspect dominating the "tech" aspect, especially in light of recent weakness in retail. Also, possibly of note, since the retail numbers came out, the stock performance ranking favors (in order): EBAY, AMZN, TGT, WMT. WMT taking the brunt of the pain makes sense based on its own numbers. This is completely unscientific and I'm just throwing it out there as food for thought.
    19 May, 02:15 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » BC

     

    That's a good point. While (AMZN) is considered tech, it's also solidly retail.
    25 May, 10:43 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    S&P Financial Sector 293.64, +0.37%- Markets Prepare for WFC Investor Day, UBS Financial Services Conference
    The S&P 500 Financial Index is trading at 293 as it attempts to bounce back from recent selling pressure. It has been a quiet couple of weeks on the news front with the primary focus being on the potential for Credit Suisse being the first bank in two decades to plead guilty to criminal charges. But there has been a growing list of concerns that has the financials as lagging every segment besides utilities over the last month. A growing concern that the decline in rates will prolong the weak earnings environment for the group, a continuation of a weak trading environment, and a softening of housing have all weighed on the industry. Participants will finally be given some information on how Q2 is progressing for the group in the next two days with a Wells Fargo (WFC) Investor Day and a UBS Financial Services conference taking center stage.

     

    Names of interest presenting in the coming days include:

     

    Tuesday, May 20- BK, AIG, ICE;
    Wednesday, May 21 ARCC, JPM.

     

    News of Note

     

    Deutsche Bank (DB) raises capital and reaffirms Strategy 2015+. Co announces a capital increase with proceeds expected to be approximately EUR8 billion. The capital increase will include an ex-rights issue of EUR 1.75 billion which has already been placed with an anchor investor and a fully underwritten rights issue. The rights issue is expected to raise EUR 6.3 billon of new equity. Additionally, Deutsche Bank today reaffirmed its commitment to Strategy 2015+ and is providing updated financial aspirations and further details of an accelerated growth strategy. Capital raise The capital measures will increase the Common Equity Tier 1 ratio by approximately 230 basis points from 9.5% at the end of the first quarter 2014 to 11.8% on a pro forma CRD4 fully-loaded basis. This increase follows significant strengthening of this ratio, which stood below 6% in mid 2012, under Strategy 2015+. These measures will substantially increase the Bank's capital ratio, provide a buffer for future regulatory requirements, and support targeted business growth.

     

    Read more: http://bit.ly/1qPKAhP
    19 May, 02:17 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    NYSE experiences second lowest volume day of the year, behind Jan 3. (briefing.com)

     

    I know there are those that would say these low volume up days are a raging bullish sign -- that it "proves" beyond a doubt that legions of investors are not "in" and that there is "oceans of cash" on the sidelines. Right; I don't buy it. Sorry.

     

    Too many contradictory stats -- say a lot of people "are" in. I'm not about to throw those out because of one low volume theory.

     

    So -- when some of the down days we have seen -- have extremely heavy volume -- this is spun as "bullish" as well? Can't have it both ways, friends.

     

    It's a strange, strange market after 5 years to have Christmas day volume. 28 Million shares on the QQQ's today. Pathetic. Most of the "down days" have been 60 - 90 million, some over 100 M shares.

     

    How do I give a day like this any weighting?
    19 May, 04:17 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    M:

     

    This market has been in a slow, steady, unloved rise for years, now, not days or months. The volume has been muted in both directions. There are no wild surges up nor down, and it has confounded those awaiting buying surges and upward market "breakouts" and, equally, those awaiting "breakdowns" and panicky runs for safety. As long as the economy muddles along and markets stay near the long-term trend lines, it's going to stay boring for those longing for upward or downward excitement.

     

    Frankly, this type of market is wonderful, especially for those who are yield-oriented value investors. Just keep boring me to death.
    19 May, 08:29 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Agree Tack, this market is allowing me to load up on more shares when we get a dip. Not going up is actually a true DGI delight, because the more shares you own, the more interest can be generated. It's weird - I like market dips : ) Total value isn't as important to me as how much income my portfolios are generating.

     

    Sounds crazy, but in reality it is the way to achieve wealth, like a turtle.

     

    Some day, if the market does go up in value then that will be great for my heir.
    19 May, 10:06 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    oops if the stocks go up in value.

     

    this is why DGI folks like solid companies that have been paying dividends for 25 years or more & increasing the dividend too.

     

    I like investments with higher dividends, to increase the income generation. Reits, BDCs, etc. all are good.

     

    I'm holding (PSEC) (MAIN) (TCRD) (TCAP) (KKR) (BX) (PTY) (OAK) (OHI) (HCP) (KMP) (BLK) (ARI)

     

    Some are at or near 52 week lows.
    19 May, 10:33 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Mac,

     

    I had a different take on today -- I saw a list of names that i'm holding or following that had been taken down in the last week or so - today they drew a line in the sand and reversed rather well

     

    whether it holds, is another story but for the moment they have stopped retreating ,

     

    Agreed, the contradictory info is there on all fronts - nothing is lining up just right - but then again it seldom does.. otherwise this would be EZ :)
    19 May, 05:01 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    In the end price does not lie -- for too long anyway.
    19 May, 05:18 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    This market action - may just be a perfect place to sit back pick a stock(s) u like and write the "at the money" call..

     

    its not glamorous - but at times it can be like printing money --

     

    2-3% a month on average is certainly doable..
    19 May, 06:08 PM Reply Like
  • astarr66
    , contributor
    Comments (189) | Send Message
     
    F&G,

     

    I would like to begin learning the "Call Writing Strategy for Income" you describe in your blog. Any suggestions, sites where a beginner can learn and maybe practice?

     

    Thanks
    19 May, 06:42 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Astarr

     

    some links to the basics..

     

    http://bit.ly/1qQklYs

     

    http://bit.ly/1qQklYt

     

    http://bit.ly/1qQkknm

     

    My first rule : -- u absolutely MUST be ok with owning the stock u are selling the call against-- In my call writing portfolio on the blog , u will see I'm "Stuck" with a position in (FCX) , because it has dropped since my purchase. However it pays a 3+% div and so i'll wait until the price rebounds before i can write another call against it..

     

    I have known many that wound up with a portfolio of "junk" when they got caught in a downturn . Just because the premiums on the stocks they chose were "good" at the time.
    and when the market went against them they were left with that "junk" ....

     

    Second - I call this my "rent a Stock" strategy, its unique because u don't mind owning the stock - BUT u really want it called away to keep the cash flow going allowing u to use the money over & over. Most can't grasp the concept - when i say pick a stock u want to own but don't be upset when its gone -- A range bound (flat) market is the best scenario for selling calls ...

     

    Learn the basics and then make "paper" trades for a while ..
    soon u will get a "feel' for what stocks fit this strategy better than others.

     

    good luck !!
    19 May, 07:05 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    My problem with the call options is I don't want to lose my good stocks. Especially stocks like (GILD). Long term, this is a great company to own. It's been one of my best performers in the past month. Bought 300 shares when it got hammered awhile back, and it just keeps going up.

     

    I guess with some of my other stocks, that are down in price, writing calls on them could help get some $ short term.

     

    However I employ a different strategy. After putting in some research on a stock, I've made the decision that this is a company that I want to own - because they have a good business model & potential to keep making $. So if the stock goes down then I buy more, lowering my cost.

     

    This strategy only works when you buy a quality company. It won't work if the company is on its way to bankruptcy. So I keep researching while owning the stock.

     

    I have bought some real speculative stocks too (very low percentage of my total portfolios). The action in (ICPT) is nuts. So when the stock had its big pull back, after reading about their drug pipeline, I did buy a few shares. Now there's big news - one of their drugs has a problem. The stock has been falling in the last few days. Strangely, as it has fallen in the pre-market, it is now rebounding. Investors must think there is more upside to this company, and are taking advantage? Who knows for sure. I will hold for now. Sure hope this isn't just short covering.

     

    http://bit.ly/1niRZ3c

     

    This information about the lipid issue has been out for months. There may be lawsuits. However, there is still potential for this drug if it saves your dying liver. This could be why all though The Street's story caused shares to drop, they are now going up as some investors see this dip as an opportunity.

     

    What concerns me is the "pump & dump" action going on in some stocks. (GALE) and (AMBA) memories. I made $ in these 2 stocks but wisely got out when the fighting here on SA in the comment section after articles came out got intense.

     

    Another good reason to stay out of stocks that don't have proven track records.

     

    YMMV - your mileage may vary.
    20 May, 09:02 AM Reply Like
  • astarr66
    , contributor
    Comments (189) | Send Message
     
    Much appreciated F&G!
    20 May, 03:41 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Blue,

     

    I can understand your issue with not wanting to lose a good stock..

     

    I guess it just depends on how an investor wants to approach his/her portfolio and what they are comfy with .. as td940 points out selling put options is another way to bring in some cash..

     

    I am most comfortable with selling calls.. In the case of (GILD), i sold the June 6th 83 strike weekly option series against that position when the stock hit 80 .

     

    i also employ other metrics that would indicate that a stock is overbought - In my view that was the case when i sold the call. Its still overbought here -

     

    You do have flexibility when u sell the call if u wish to keep the stock - rolling the option out another month or two at a higher strike, etc,,

     

    The reason I like this market for that strategy -- i don't see anything taking off here , its a sloppy market , you can keep the option strike price just a bit out of reach , and rake in the income.. and hold onto the asset....

     

    Another reason i use this strategy I like to have every position "working" for me ... -- in the case of GILD i turn it into a stock where i write myself a div. check by selling the calls.

     

    No doubt its more work -- but for me the effort is worthwhile.. 
    I also believe that (GILD) has a way to go on the upside before its all done ,but it might be 2 steps up one step back and so on ....

     

    ;)
    20 May, 04:05 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    F&G, you are an expert; meanwhile I'm just a rookie!

     

    Couple of your stock picks are doing very well (MU) and (AAP).
    21 May, 11:54 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Blue

     

    i have made my shares of mistakes - so its nice when things work out.. & u seem to be doing very well ...:)

     

    (AAP) is now a fav. of mine after their latest Q report on may 15.. another "beat" and they raised guidance...

     

    yet the stock is still going sideways -- eventually it will gain traction - time to accumulate..
    21 May, 12:01 PM Reply Like
  • td94306
    , contributor
    Comments (29) | Send Message
     
    Buying a stock and selling a call is equivalent to just selling a put on the stock. I find it easier to just sell the put. The put premium should include any dividend to be paid on the stock.

     

    Most people sell call about 1 month out. I try to sell put about 3 to 7 months out to get 5 to 10% premium. E.g., I sold GILD Nov 65 put for $6.58 on 4/11/14 when it was at ~$66. (Really wish I had bought the stock). The higher premium gives your more margin in case you are wrong and more profit in case you are right. I would buy back the put if it drops to about 10% of what I sold it for.

     

    I would suggest doing paper trades on 1-month and further out calls/puts, as Fear suggests.
    20 May, 03:33 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » Hi td94306! Welcome to the blog!

     

    I'd think buying a stock and selling a covered call, gives you a little different options down the road. For instance you can back out of the call (buy it back), while keeping the stock.

     

    Any other ideas you're playing at this time?

     

    What did you recently retire from? - is that beach picture a goal or a reality outside your window :)?
    24 May, 01:55 PM Reply Like
  • td94306
    , contributor
    Comments (29) | Send Message
     
    Thanks for the welcome, LOMAH.

     

    Covered call is equivalent to cash secure put. You can see this with an example. On 5/23/14, you can buy GILD for $80.94 and sell June 82.5 call for $1.75. This is equivalent to selling June 82.5 put for $3.27. If GILD closes above $82.50 at expiration, you gain $3.31 with covered call or $3.27 with put. If GILD closes below $82.50, your cost basis is $79.19 with covered call or $79.23 with put.

     

    My main point above was that you can go further out to get more premium.

     

    I am doing some investment strategies that are different and I will share these at the appropriate time.

     

    The beach picture just shows where I like to go for vacations.
    26 May, 02:10 AM Reply Like
  • User 7415181
    , contributor
    Comments (570) | Send Message
     
    Leaving any moral or political considerations out of it, did anyone here make opportunistic investments circa 2005-2007 based on natural gas disputes between Russia and Ukraine? Specifically based on how it affected the EU? What did you look for? Value? Increase in certain sectors or vis-versa?
    20 May, 09:36 AM Reply Like
  • User 7415181
    , contributor
    Comments (570) | Send Message
     
    Lonely are the brave...

     

    I found this nice page yesterday morning:

     

    http://bit.ly/RUBXT6

     

    and am still reading this one:

     

    http://bit.ly/1g3jdFN

     

    I tend to read international news. I cut off cable tv a few years ago, so I don't know what CNN or the other stations are covering or how much.

     

    Putting on my tin-foil hat, I don't think the events in Ukraine will be stabilized come November or whenever it starts to get cold in Europe.

     

    Libya essentially just had a coup. The difference there and in Egypt is that Egypt already had a strong and unified military. I don't see Libya stabilizing.

     

    Nigeria isn't exactly stable.

     

    I opened up WSB this morning and my usual intl news outlets and surprise! gazprom made a deal with China.

     

    My initial thoughts yesterday before that announcement ran along the lines of "US and Europe pissed off Russia and come this winter Russia will want some payback".

     

    Now, my thoughts are more like "Russia and China are pissed off at the US - Europe will try to take some neutral ground as they don't want Russia too pissed off at them because Russia has another customer for gas and they depend on Russia's gas - the US pissed off everybody but has it's own gas production".

     

    Question still stands - how to play it down the line? I happen to like cefs because I understand them better than other investments. Currently hold (TPZ). Briefly held (NPD) and (TTP) and sold both for profits.

     

    Anybody got any other ideas for down the road?
    21 May, 12:27 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    User, I own (COP) and (XOM).

     

    both are great companies....as a really really long term investor, I don't let politics confuse me : )

     

    as a short term investor, political events can be important. But only for a short time.

     

    Note how US markets, especially the price of gold, could care less about the Ukraine today. Which is sad....for the Ukrainians that don't want to be part of Putin's plans.

     

    However, (COP) is benefitting because it does have natural gas investments.
    21 May, 01:24 PM Reply Like
  • User 7415181
    , contributor
    Comments (570) | Send Message
     
    BSF,

     

    I suppose I'm more interested in news and momentum for an entry point or for thinking about it six months in advance what something good to invest in, not so much about what it will mean over the long haul. If I'm wrong, the yields on these funds make it easier to sleep. If I'm right and can realize a gain in short order, I'll take that instead.

     

    I suppose instead of all that mush-mouth I wrote above, I should have just stated that I'm interested in turning my hobbiest interest in geo-politcal news into decent investments. :)
    21 May, 04:58 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » User7

     

    I agree that Ukraine isn't over. The market was worried about a major war outbreak. That's off the table, and now the skirmishes and fussing doesn't matter. So it's down to effecting specific businesses and energy.

     

    I'd agree that Russia's annoyed at the US and will try to stick it to us. China's no more or less annoyed than it's been for a while IMHO. Europe's always trying to be neutral & not draw itself into anything. There are plenty of hot spots in the world that could heat up and trigger a short term market correction at an unknown time.

     

    On the cef's why did you pick those? What are you using to find them, CEF Connect? From there I'll see if I have any ideas.
    24 May, 01:51 PM Reply Like
  • User 7415181
    , contributor
    Comments (570) | Send Message
     
    LMH,

     

    Are you asking about those funds I mentioned in particular? If so, I figured early on in the year that I needed some type of energy exposure. I'd held before, TPZ, a couple of years ago and in retrospect shouldn't have sold. So, I was kind of familiar with the Tortoise funds.

     

    Whilst browsing, I noticed that the other two funds I mentioned at the time were at big discounts to nav and a couple of other funds weren't. Then I found out that Tortoise announced it was consolidating two funds and that explained why the discounts disappeared.

     

    Both NDP and TTP went up a bit and I traded them on something else that looked good to me at the time. TPZ I kept because it's got fixed income as well as mlps. And I like monthly pay. And if I'm remembering correctly, was the only fund in the last couple of years not to raise it's distribution. Last year the nav didn't do so great, probably because of holding fixed income.

     

    This year the nav has done nicely and so has the market price recently. The discount has also narrowed to where I probably wouldn't buy it, but am not planning on selling it yet.

     

    TTP has narrowed as well.

     

    NDP has the best fund name and still is at a 12% discount to nav. Looks like the nav has been outdoing the market price recently just at a quick glance. Might have to look into it again over the summer. Just went ex-div recently.

     

    But I don't think any of these would be a play on Ukraine so much.
    24 May, 04:51 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » U7, Everyone

     

    Thanks for all the details!!

     

    When you were browsing, what were you browsing? Looks like you spotted very well. I'll keep my eyes open, if I see anything.

     

    --

     

    Anyone have a play using CEFs for Ukraine, or energy as it plays out?

     

    U7- I'd think middle east is a bigger hotspot politically and flares will happen there, if you want to play on your interest in following politics. On energy, Israel's uncovered a big find off it's coast. It will be changing the game. How much and in what way... is the big guess.

     

    Defense hasn't come up much on here -- anyone have good defense CEFs that look like a reasonable time to get into them?
    25 May, 10:35 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Food for thought ..

     

    http://bit.ly/1nlBeo5

     

    after viewing that chart should the US trade pay more for its debt than all of these countries ---- interesting

     

    so does the US trade lower in the near term of do the other entities trade higher..
    20 May, 05:27 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    here's some more info....QE, debt, GDP, imports/exports, inflation, unemployment etc.

     

    http://on.wsj.com/RUNhPa

     

    Japan has the highest debt to GDP ratio, and the lowest 10 year bond yield.

     

    It is scary to compare the US to Japan. We sure don't want to end up needing Abe. Keep in mind Japan is a small island nation, with almost no natural resources. Their fuel costs are extraordinary. They do have an extremely hard working people. Very very few foreigners emigrate to Japan. IMO, the US has the greatest immigrants from all over the world that have created the best innovative society on the planet. Plus we have a lot of natural resources.

     

    IMO, we do not face the same future as Japan for many reasons. Just looking at the Nikkei graph is certainly scary. Back in the 1990's it was over 30,000. Today? Recently down from just over 16,000 on 12/26/2013 to a little over 14,000 today. Why? Because Japan is not expanding its population, its economy....etc. etc. & their companies are not creating wealth, judging from the Nikkei. This is why we need to keep expanding our population, in order to expand our economy, & keep selling our products world wide.

     

    Just exporting your way out of a sluggish economy doesn't work, as Japan so well illustrates. All the Abenomics in the universe is not going to fix Japan's #1 problem. Which is, an aging society, closed to foreigners with nobody wanting to move there. Plus that lack luster Nikkei is with all those Japanese companies trying to sell world wide, constructing factories all over the world, and it still ain't working.

     

    They do design & build great cars tho. Having owned many different cars over the years, the 12 year old Lexus hybrid defies logic. It put to shame the BMWs, Mercedes, etc. The new Honda accord is a gem. Let's see how long it lasts.

     

    I don't currently own a car, but will buy an American built Ford or GM if I ever get the chance. Meanwhile, walking is good & I have my husband & son to give me rides when needed : )
    21 May, 01:47 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    F & G: Some of the bond gurus have been saying for awhile the U.S. ten year at 2.5% looks good compared to other developed nations.

     

    France's ten year government note closed today at 1.83% which is just absurd in my opinion.

     

    http://bit.ly/1nlVVQS

     

    St. Louis FED Historical Chart for France's 10 Year Through 2013:
    http://bit.ly/1nlVXbx

     

    The German government 10 year is at 1.34%:
    http://bit.ly/1nlVVQU

     

    Long TERM Chart German 10 Year:
    http://bit.ly/1nlVXrN

     

    Long Term Chart U.K. 10 Year:
    http://bit.ly/1nlVXrP

     

    Long Term Chart Canada 10 Year:
    http://bit.ly/1nlVW7c

     

    Canada Close Today: 2.28%
    http://bit.ly/14rxic1

     

    I just view all of it as madness.

     

    N Y FED Chief William Dudley talked about inflation pressures building in the U.S. and expects inflation to increase over the balance of the year. Normally, he noted that the FF rate would be at 4.25% with 2% PCE price inflation:

     

    http://nyfed.org/1nlVW7k

     

    Even at the current abnormally low rates, the U.S. government paid $415.688+ Billion in interest payments for the F/Y ending in September 2013 and has hit $225B so far between October 2013 through April 2014:

     

    http://1.usa.gov/qvYMRZ

     

    When rates normalize, and those interest payment numbers go way up, forcing the government to sell more paper just to pay the additional interest costs (as the baby boomers call on SS and Medicare in droves), will those events put even more upward pressure on rates? What about the potential losses on the $2.25+ trillion (and growing) in intermediate and long term treasuries currently owned by the FED in that scenario? Do they sell or hold in that scenario?
    20 May, 07:05 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    s:

     

    "When rates normalize, and those interest payment numbers go way up, forcing the government to sell more paper just to pay the additional interest costs (as the baby boomers call on SS and Medicare in droves), will those events put even more upward pressure on rates? What about the potential losses on the $2.25+ trillion (and growing) in intermediate and long term treasuries currently owned by the FED in that scenario? Do they sell or hold in that scenario?"

     

    A couple of observations:

     

    1) The word "normalize" has been used frequently in relation to rate discussions, as if the rates will just seek some old level spontaneously or by some form of self determination. In fact, rates are only going to rise if there are economic circumstances and credit-formation rates that alter the supply-demand equation. Absent more robust global economies the thirst for "safe" sovereign debt currently appears enormous.

     

    2) It matters almost not at all whether the Fed's balance sheet shows paper losses or gains. The Fed will expand or contract its portfolio only as a mechanism to influence rates upward or downward, as they decide per monetary policy. Of course, the Fed can run off all its holdings to maturity, if it wishes.
    20 May, 07:22 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    Tack: This is a variant of the discussion that we have had previously on whether markets or central banks are setting rates now.

     

    Historically, in the absence of massive central bank intervention, there is a normal range for interest rates. Sometimes, it is stated for the 10 year as inflation expectations plus 2%. I referenced another benchmark in an earlier discussion of the 10 year equaling nominal GDP:

     

    http://bit.ly/1gddMKZ

     

    In the speech given by Dudley, he referenced the normal FF rate of 4.25% for a 2% increase in PCE prices. Yet, he does not want to say that the FED is going back to that norm, and possibly for a simple reason-the government will not be able to afford it. And that reluctance to raise short term rates, as inflation increases, risks letting problematic inflation loose again.

     

    "Putting all these factors together, I expect that the level of the federal funds rate consistent with 2 percent PCE inflation over the long run is likely to be well below the 4¼ percent average level that has applied historically when inflation was around 2 percent. Precisely how much lower is difficult to say at this point in time."
    http://nyfed.org/1nlVW7k

     

    There are a number of issues involved in how the FED can keep $2 trillion or so in excess money locked up when demand for credit increases and it is increasing now. Dudley and others talk about methods that may be used, and many question whether those will be adequate for the task without actually selling boatloads of treasuries potentially at significant losses.

     

    See, e.g. Brian Wesbury:

     

    http://bit.ly/1nm9HD1

     

    And this SA Article:
    http://bit.ly/1qrdfXy

     

    Excess Reserves of Depository Institutions
    http://bit.ly/198OGbE

     

    Most of those treasuries owned by the FED are maturing in 10 years or later.
    20 May, 08:15 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    S:

     

    I appreciate all the detail, but I still wonder what the fuss is all about.

     

    I have lived for a very long time in the camp that believes that QE's effects have been wildly exaggerated, both on the upside effects on the economy, accompanied by major downward dislocations in rates, and vice versa, when QE has been tapered. In fact, that the tapering effects have been the reverse of what's been the common "cw" is prima facie evidence that QE's impact has been more psychological than real.

     

    I would contend that it has been economic and credit conditions which have controlled rates, globally, not just in the U.S., not an all-powerful Fed.

     

    And, if inflation were to get meaningfully elevated, as a result of a heating economy, and the Fed decided to sell part of its Treasury portfolio at a book loss, what difference would it make? So, the Fed reports a book loss, so what?

     

    To me, the old argument that the Fed is in a box and cannot act because of its paper portfolio or costs to the Treasury of higher rates is without merit. The Fed can absorb losses, and if higher rates constrain Government spending or commercial borrowing, then the negative economic effects will quickly cool any inflationary pressures and solve the problem. In essence, the system still works.
    20 May, 08:39 PM Reply Like
  • sleek
    , contributor
    Comments (425) | Send Message
     
    Tack,

     

    Regarding QE, for consumers intent on deleveraging, the low rates provided by QE do very little to boost consumption. What they do do however, is allow consumers to deleverage at a faster rate than would otherwise be the case in the absence of QE. This means they can hit their target debt levels sooner and thus can return to spending. This would have the effect of shortening the recession.
    20 May, 11:15 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » - Hi Sleek. Welcome to the blog!

     

    Please feel free to post whatever interests you...!!

     

    Agreed, lower rates allow consumers to free up money for spending sooner. They also cause savers, especially retirees using interest from savings, so have less to spend. Not sure what the balance sheet between those two would be.
    24 May, 11:50 AM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    Tack: We have both stated out positions over and over and nothing further can be gained by rehashing my factual points.

     

    I would reference for anyone interested in this topic the current headline article at Marketwatch:

     

    The title is:
    "Charles Plosser thinks there’s a ticking time bomb at the Fed"

     

    http://bit.ly/1nmlCk6

     

    Plosser is the Philly FED President. He is talking about the $2.5 trillion in excess reserves created by the FED's QE and their potential inflationary impact.

     

    Just as an aside, I noticed that Disney raised its park attendance rates again.

     

    http://usat.ly/1nmlzVA

     

    Forsyth has an article about medical price inflation in Barron's:

     

    http://bit.ly/1nmlzVG

     

    He noted that medical costs make up 7.5% of CPI but 17% of the PCE price index. The next PCE number will be released on 5/30/14.

     

    Treasuries have been drifting down in yield and up in price during 2013 as inflation goes up.
    20 May, 09:15 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    The Atlanta FED keeps two inflation indexes that it calls "sticky" (slow to change) and "flexible" (fast to change):

     

    The Atlanta Fed's sticky CPI rose 3.0 percent (annualized) in April, following a 2.4 percent increase in March. The 12-month change in the index was 2.0 percent.

     

    The sticky price index increased 3.0 percent (annualized) on a core basis (excluding food and energy) in April, and the 12-month index was 2.0 percent.

     

    The flexible cut of the CPI rose 3.4 percent (annualized) in April. The flexible CPI is now 1.8 percent above year-ago levels.

     

    http://bit.ly/Tsi6vS

     

    That is a different way to measure inflation pressures. The median CPI reported by the Cleveland FED was up 2.2% Y-O-Y in April, but at a 3.2% annualized rate in April:

     

    http://bit.ly/16MEscP
    20 May, 09:57 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    In an interview at Yahoo Finance's Daily Ticker, which everyone may have already noticed, the chief equity strategist argues that the Shiller P/E is flawed because it normalizes earnings without normalizing interest rates.

     

    http://yhoo.it/1k5p57X

     

    If the Shiller P/E is adjusted for interest rates, the Shiller P/E, relied on heavily by those inclined to be bearish anyway, is below the average valuation, rather than above it, according to that strategist.

     

    Another critique of the Shiller P/E was made in this recent article appearing in Barron's authored by an Alliance Bernstein strategist:

     

    http://on.barrons.com/...

     

    One of his arguments is that the discounting of future earnings occurs at a much slower rate when inflation and interest rates are low as now which is basically the same argument being made by the Citigroup strategist for modifying the Shiller P/E by interest rates.
    21 May, 11:34 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    SPY Volume:
    Monday: 63M (UP day)
    Tuesday: 111M (down)
    Today (so far -- 48M -- UP)

     

    IWM volume:
    Monday: 35M (UP)
    Tuesday 89M (down -- thats almost 3X)
    Today: 32 M (UP)

     

    Why is all the volume -- on the down days?
    Just say'in.......
    21 May, 01:20 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    because on up days, fewer people sell; if you want to buy you have to pay more.

     

    on down days, lots of people get nervous & sell. fewer buyers....prices go lower in order to find a willing buyer.

     

    I have a rule....buy on down days, sell on up days : )
    21 May, 01:53 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    Yeah....OK. And my NYSE breadth today.....+ 800.

     

    Narrow breadth and light volume rallies. Hmmmmm.......
    21 May, 02:47 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    M:

     

    Been five years of that.
    21 May, 03:19 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    T;

     

    Why are down days 2-3X the ETF volumes?
    21 May, 03:28 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    M:

     

    Look at the SPX volume charts. They show no imbalance to down days. Volumes are consistently variable in a rather tight range.
    21 May, 03:36 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    13:19

     

    ECONX

     

    Headlines from typically dovish Kocherlakota crossing; says that it could take until 2018 for Fed to reach 2% inflation target.

     

    Anyone Honestly believe this nonsense? This a Fed Governor! We are at 2% NOW IMO.

     

    Anyone Notice Oil prices today? Of course Oil doesn't count....
    21 May, 01:22 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    M, if all investors were like me....the market would be really boring.

     

    Nobody knows what will happen when QE ends. The fear is sparking the selling, and preventing all that cash sitting on the sidelines to continue not to go into the US markets. Which actually, IMO is okay. The market needs more earnings growth before it can solidly go higher. So we are at slow go, sideways action for the time being. While we wait for the next earnings, the next GDP results...everyone is now cautious having been burnt so badly in 2008/2009. IMO, this is good...because I'm a DGI & love getting to buy more shares, increase the income in my portfolio....yes I am a broken record on that subject : )

     

    But what if the US economy is growing; what if we will finally move out of our sluggish ways? It's all in the confidence of the buyers...for homes, stocks, cars, etc. If you are confident about the future, you will take on risk (a mortgage, a car loan, etc.)

     

    I'm hearing from Diana Olnick on CNBC that at the lower end of the housing market, people aren't able to sell their homes because they are still underwater. Okay, maybe so....but then it's obvious that they don't have any savings - or want to risk their cash - to move into a bigger house. Which I think is a good way to be, don't over extend your finances by going into even more debt. One problem that I do see is with under water homes, people can't refinance because they need at least 20% equity in the home to qualify for refinancing. Imagine if the gov't would allow or help these folks refinance, so that they would have extra money every month? These are exactly the type of people that would spend that money....thus helping the economy. Or maybe they should just learn to stop spending so much (that's how they got into trouble in the first place!) & sit in their underwater homes? Sure don't know what's best to do, but these beer wallet people with champagne tastes are lethal in the long run. They're the ones that declare bankruptcy, go to foreclosure, etc. etc. While the rest of us pick up their unpaid tab.

     

    Perhaps there are many things that could be done to help the GDP, but we are gridlocked in DC. Fixing the crumbling bridges, roads would really be nice. Generate jobs....but no. Hasn't happened.

     

    However, seeing the glass half full, some day we will get past this.
    21 May, 02:13 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    M, (COP) & (XOM) are doing good, my 2 long term oil picks with nice dividends.

     

    Inflation? Wow every time I go to the store, those cereal packages just keep getting smaller. Costco doesn't sell all the products I need....darn.

     

    Healthcare, medicine - never go down.

     

    Even gas isn't cheap, IMO they keep raising the price as our cars consume less.

     

    They can't keep all the Fed governors from speaking their minds.
    21 May, 02:24 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2948) | Send Message
     
    BSF;

     

    I can't remotely see less than 2% until 2018. Boggles the mind.

     

    Regardless, no boasting from me this week. Very, very tough . IWM still weak, I'm short still, back and forth, but QQQ's took off, and that took me out of shorts in (AMZN) -- moderate loss -- and (NFLX) -- bigger loss. NFLX is running for $400 again!

     

    Currently short (TWTR), (YELP), (P) also still (MET) (DB) and (BAC). Long the energy.

     

    I look at today -- and I see banks and housing lagging, breadth weak, volume weak, and some retailers getting slammed.

     

    None of it seems to matter. I suppose I'm being a bit stubborn, but I cannot get convinced this is very healthy action under the surface. I don't like $104 oil; either, in May.

     

    Did anyone see they downgraded one of the largest shale oil fields (in california) by 96%?
    21 May, 03:12 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    M, I didn't even know they had shale oil in California : )

     

    today being Friday, sort of expecting the market to sell off before the close.
    23 May, 09:08 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » BSF, M

     

    (CVX) is coming down a few % off it's high, even on up days. Is energy consolidating. Or is it from oil prices changing. (Or specific to the stock, but looks like the subsector in general.)
    24 May, 10:16 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » M

     

    I don't get how inflation is counted either. There's inflation in the basics I buy, utilities, food, clothes...
    24 May, 10:18 AM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    LMH: The decline in the CVX price, adjusted for the $1.07 per share distribution which went ex dividend on 5/15, is inconsequential and meaningless. The recent closing high was $126.42 on the day prior to the ex dividend date. Adjusted for the dividend, the price would be $125.35 or just slightly higher than last Friday's close of $123.37 or just a 1.58% decline.

     

    You are going to have a lot of chop in any stock. The 200 SMA line is currently around $120.

     

    http://yhoo.it/S3BHRK;range=
    24 May, 11:54 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » SG

     

    Oh! Didn't realize it went ex-dividend. Good reminder too of what the 200 SMA is. Thanks!
    24 May, 01:22 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    L, oil stocks will likely fall a little this year. However, long term (XOM) (COP) and (KMP) - the 3 I own - should keep making money. The dividends are good, so I'm not selling.

     

    Really long term, I hope we all go solar or wind, so that we can stop tearing up the ground with fracking & polluting the air. (SCTY) is my bet for solar; there are other companies that will do better maybe. (FSLR) is good.

     

    When Musk & co. figure out how to store solar energy in a battery, that's the way to go. I'm planning on putting solar panels on the house at some point.

     

    Imagine if we all generate our own power....that would be so cool.

     

    Ever notice how we are getting more & more like the Jetsons? Or Star Trek? Imagine it, and it will be built one day.
    24 May, 03:35 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (530) | Send Message
     
    Macro I sold yesterday some $14 BAC puts!!
    21 May, 03:55 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (530) | Send Message
     
    (EZPW) !
    21 May, 03:56 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » Y

     

    So you're banking on an eventual (BAC) recovery... with puts?

     

    You've mentioned (EZPW) before. What has you so strong on it?

     

    A quick look, it's way off it's high. Negative earnings. No yield. Some saying way oversold. Others saying, poor management has run it down with poor reinvestments, with only one person's vote controlling things. Have you dug in further?
    24 May, 10:12 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Lomah, where are you? Haven't seen you for a couple of days!
    22 May, 11:35 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » Hey BSF!

     

    Super busy week, as I anticipated... I'll be back to normal on here in a few days more.

     

    ---

     

    Everyone - any good trades, investing buys, news thoughts happening?

     

    SnP hit new high... (IWM) is still trailing (QQQ) on up-moves.
    23 May, 11:26 PM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    LMH:

     

    Keep an eye on BDC's, now that the de-indexing sell-down is ending. It's quite possible that we commence a rebound rally.
    23 May, 11:39 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » Tack

     

    Thanks - good point...
    24 May, 09:26 AM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    Tack: I believe the rebalancing will occur after the close on June 27, 2014:

     

    http://bit.ly/1klwq2h

     

    Hard to say when the downdraft caused by that event will subside, but many BDCs started to bounce last week some.

     

    Barron's recently reprinted a WFC analysis of dividend coverage for BDCs.

     

    http://on.barrons.com/...

     

    One category consists of just the payouts coverage by just interest payments. Some BDCs depend on PIK interest which is of course not actually paid in cash but by more securities. My predilection would be to ignore PIK contributions to net income.

     

    Some may have "fees" supporting the payout such as origination or underwriting a loan. Others may depend more heavily on capital gains which are spotty, and many will ultimately have losses that may offset or more any realized gains supporting the payout.

     

    So far, I have just been nibbling on a few BDCs as prices hit 52 week lows and where the market price is significantly below net asset value per share. One recent buy was just 100 shares of AINV at $7.95 discussed in a 3/10/14 post.
    24 May, 12:09 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Today the market is all peachy, even the Russell is up.

     

    (PSEC) is up to 10.14

     

    (KKR) made a mistake in reporting, stock is down. SEC investigating. Could be an opportunity, but be sure to do your due diligence. Maybe wait a few more days as it could continue to fall.
    22 May, 11:39 AM Reply Like
  • User 7415181
    , contributor
    Comments (570) | Send Message
     
    BSF,

     

    I am not happy with psec going up today. Today's reinvestment day I believe for those who drip it.
    22 May, 01:09 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    User: I received PSEC's cash dividend payment today in my taxable account.

     

    Most brokers will aggregate their customers' dividends and then buy shares in the open market at different times. That practice will lead to disparate reinvestment prices as I noted in a 2012 post:

     

    http://bit.ly/13t5Rjr

     

    I am not aware of any broker than enrolls a customer directly in a DRIP plan.

     

    Fidelity will enroll its customers in a reinvestment plan administered by the Depository Trust Company, available for about 100 securities, that will allow the investor to secure any discounts available for reinvestment.

     

    22 May, 01:19 PM Reply Like
  • User 7415181
    , contributor
    Comments (570) | Send Message
     
    SG,

     

    You are correct. I should have mentioned it was a brokerage synthetic drip. Which in addition to the ex-date - 1, I suspect adds to the market price.

     

    One of these days, you will mention a topic that I am knowlegable of. And then I will blast you with more links and info than you can handle. :)
    22 May, 01:26 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    User, SG is one smart guy! I feel very humble next to him. No chance there will be a day when I can out do SG; every day I'm learning new stuff here, from all of you.
    22 May, 01:32 PM Reply Like
  • User 7415181
    , contributor
    Comments (570) | Send Message
     
    BSF,

     

    No disagreement there. But there is something, somewhere, that he doesn't know about. And I do. Right? Right? Right...
    22 May, 01:40 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    User: I was surprised in 2012 when Fidelity informed me that one of the securities enrolled in the DTC plan, the small regional bank BDGE, which gave me a 5% discount on the reinvestment price, actually created income to me according to a Fidelity representative, representing the difference between the discounted price and the reinvestment price-so there is apparently no free lunch in receiving a discount.

     

    I just let the broker figure it out, but I did notice that my dividend amount was artificially increased by 5% and my tax basis for the reinvested dividends was adjusted by that artificial increase in the dividend.

     

    I was somewhat taken back by the IRS going to such lengths to get its share of that "income."
    22 May, 02:03 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Blue,

     

    (RUT) is showing some life - next few sessions may tell us if we have seen the lows . or if this is just a 'bounce "

     

    Look at (GILD) today --:) , Ill let u know what I do regarding my June 7th 83 calls ..... for the moment , they are now "in the money" ..
    22 May, 03:50 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    We need the Russell 2000 to go up, to prove the economy is improving, but apparently the experts are still saying it's overvalued. So it may have some more pain. This is because investor's think that, as in the past, the small companies lead the comeback. So it's overbought at the moment.

     

    Interesting that the other index showing the most over exuberance is the Nasdaq. Well, that isn't surprising. It's been the Nasdaq in the past that got out of control - memories of 2000 linger.

     

    It's hard not to believe that with the election in November, and all the other turmoil, that the markets won't be affected in the next few months.

     

    We need PE ratios to stay low, earnings to go higher and then we can expect our stock values to go up. If we get ahead of the curve, then a correction is necessary....so will there be a correction? I'm waiting for the next round of earnings, due in August. The next few months will likely be more sideways then anything. Which is good for us, we can continue to buy our favorite stocks on the dips.

     

    Meanwhile, (FL) had blow out earnings reported today. That helps with our thesis that things are getting better.

     

    Some people say "it's a stock picker's market." I say it always is....but that's just me : )

     

    One more prediction....if the Republicans win in November, the markets will go up faster. Just like India, a change in regime for the party that is called pro-business will create more over exuberance.

     

    This has nothing to do with my own personal political feelings. Do not let the political circus blur your focus on analyzing what stocks to buy or sell.
    23 May, 08:43 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » SG, U7

     

    I didn't realize DRIPS sometimes offer discounted share prices. I'd gotten discount from an employer sharebuy plan, and thought that was it.

     

    That does seem like a lot of effort by the IRS to get it's piece! Guess it could add up for them. As long as someone else calculates it, and I don't have to.
    24 May, 09:33 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » -

     

    - Smallcaps have led comebacks in the past. So I doubt it's "different this time." Maybe more like it's entering a new phase of a bull, where dividend and solid stocks with earnings take the lead?
    24 May, 10:06 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    L, it's hard to tell. Value/dividend stocks with low PE ratios have become more popular, as people rotated out of the high growth but no profits stocks.

     

    (NVAX) went up nicely Friday. (PSEC) came back a bit too. Many are worried about the 10 year treasury that is hovering around 2.5%....they think it's a bad indicator for stocks.

     

    Time will tell....I'm staying invested but have cash ready for dips, or "the big dip" if it happens.

     

    Probably a good plan to continue to harvest some profits, when you have them.
    24 May, 03:41 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    BSF: It is always to a good idea to have both a sell and a buy discipline in my opinion.

     

    Regardless of market gyrations, I will buy stocks within my buy ranges and will continue to own stocks that are outside of my buy range but still within a hold range. I will considering eliminating or paring a stock that I view as excessively valued and have done so particularly last year.

     

    Several of my regional bank stocks hit 18 or higher TTM P/Es during the rate spike period last year. All of them are facing headwinds, which will negatively impact earnings growth, due to net interest margin compression and higher costs due to new regulations passed since the Near Depression. I did not hesitate to sell or pare those positions, nor have I hesitated to add some back recently that fell within my buy zones. That is something that occurs regardless of my opinions about valuations in the stock market, either for the main indexes or stock sectors.

     

    Sometimes, I may buy back some shares previously sold simply due to a serious problem being resolved successfully.

     

    Due to the 185% rise in the S & P 500 since March 2009, I am finding very few stocks that meet my buy criteria. Consequently, buying for me really slows down after these long bull runs, such as the ones experienced in August 1982-October 1987; 1991 to 2000; 2003 to October 2007; and March 2009 to date. At some point, I will take the stock allocation down significantly after these runs.

     

    I have not yet made a reduction in my stock allocation. Instead, I am reallocating in stocks now by selling some of my underperforming funds (mostly stock CEFs), while I still have profits, and using the proceeds elsewhere. That elsewhere may be a stock ETF or individual stocks. I have been buying a number of Canadian REITs lately for example.

     

    I will need a signal to downsize my overall stock allocation. The clearest signal in my lifetime was in 1999 when valuations clearly reached asinine and unjustifiable levels and that was at the tail end of a 18 year long term secular bull market.

     

    Now, valuations are stretched in my opinion, but not so far as to trigger a downshifting. Many have called tops in this bull move along the way, with a chorus of gurus calling tops back in 2011 or 2012. Now, the market would have to go down 30% or more to get back to those "top" levels.

     

    I will without hesitation pare my stock positions significantly when the valuation for the S & P 500 becomes excessive or my Vix Asset Allocation has what I call a Trigger Event, a warning given near the near the end of bull cycles and before the onset of a cyclical bear market or a secular bear market.

     

    The last Trigger Event was in August 2007 which was reinforced by multiple Confirmation Events-Get of Dodge signals:

     

    VIX Chart from 2007: Alerts and Triggers Major Disruption of Cyclical Stable Bull VIX Pattern

     

    http://bit.ly/12K50f1

     

    More time elapsed before the onset of the long term secular bear market in 2000, with the Trigger Event occurring in October 1997, later confirmed in 1998, and was not resolved by the formation of a Stable Vix Pattern until late 2003 (an investor could have sold the S & P 500 after the VIX returned to below 20 early in 1998 and bought the index back at a lower level in late 2003, missing the intervening roller coaster ride)

     

    There was also a warning given before the October 1987 crash.
    24 May, 04:19 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    SG, if you get that signal....please let us know! It feels like we are swimming in calm waters some days now, but then when there is a down day, I'm relieved that it doesn't accelerate in the days after.

     

    Seems like we are all in "wait & see" mode. I'm still optimistic about the future, but nothing is ever for sure.

     

    My mom talked to my uncle the other day about Berkshire. Turns out he has 1 share, bought back when it was around $1000. Well he's in his 80s now, doesn't worry at all about anything. So he's very happy about Berkshire because he thinks it's worth about $100,000! Looking forward to that day when I don't check my stocks much, if ever : )
    24 May, 08:54 PM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    Multi-year bull moves are made when the VIX is consistently moving below 20. The Citigroup equity strategist noted in a recent interview what I have been saying for 7 years. It is an obvious point based on simply comparing the movement of the VIX and the S & P 500.

     

    Second and Third Paragraph:

     

    http://yhoo.it/1k5p57X

     

    Those moves have in the past been multi-year. The longest one, since the VIX data series started in 1990, was continuous movement in the VIX below 20, starting in 1991 and lasting until the October 1997 Trigger Event with the S & P going from around 375 to about 975 or about 160%. The other one prior to the current move was shorter (2004 to the August 2007 Trigger Event).

     

    Trigger events will cause me to automatically reduce my stock allocation without equivocation. Those events do not occur very often and have ushered in a far more dangerous market which I call the Unstable Vix Pattern. The only question is how much will I sell and when. Historically, the VIX will return to below 20 after one of those events, which will be associated with an up move in the market, and that will allow for a better exit than prices prevailing during the Trigger Event when prices would be declining significantly. The VIX has just shot up from continuous readings below 20 to a multi-day reading in the high 20s or 30s (Trigger Event). Something really important has changed investor perceptions about stock risk.

     

    So after August 2007 Trigger Event, the VIX returned to below 20 in October 2007 which was a better opportunity to sell. The August 2007 Trigger Event was unusual in that there were subsequently two Confirmation Events on the signal's validity. Using the volatility data for the S & P 100 which goes back further than the VIX data, there was one Trigger Event during the Spring of 1987 before the October 1987 crash-one and done.

     

    The Stable Vix Pattern formed in September 2012, so it will be two years old in a few months.
    24 May, 09:14 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » SG

     

    Great stuff SG. On trigger events, so VIX in high 20s and into 30s is a trigger event. Are there other trigger events to your Unstable Vix Pattern process?

     

    One of the things I've been trying to learn, is to trust that a bounce will come (in all sorts of trades and moves); it almost always does. Also to bounce on that bounce and not wait for still another bounce.
    25 May, 11:06 AM Reply Like
  • southgent1951
    , contributor
    Comments (2546) | Send Message
     
    LMH: The Trigger Event is a sell signal that occurs when the VIX explodes to the high 20s or low 30s for several days after a long period of continuous movement below 20. We are now in a long term continuous movement below 20, a Stable Vix Pattern, so any multi-day rise in the VIX to the high 20s+ would be a Trigger Event. It also marks a transition from a Stable VIX Pattern (good for the buy & hold crowd) to an Unstable Vix Pattern (just bad).

     

    The Trigger Event terminates the Stable Vix Pattern. Something in the real world has caused investors to drastically change their perceptions about stock risk. With volatility at elevated levels, and quickly and violently moving up and down at elevated levels, investors compensate by reducing price.

     

    During the Unstable Vix Pattern, which has been a long term pattern, the market has been a dangerous and unproductive one for most individual investors who follow a buy and hold approach.

     

    The two prior Unstable Vix Patterns have also experienced one catastrophic event, meaning a relatively quick 45% decline in the S & P 500 (i.e. 2000-2002; 2008-March 2009).

     

    The Unstable Vix Pattern will be a trader's market, with a lot of violent up and down moves similar to a roller coaster ride that ends up going nowhere after several years. Once the Trigger Event occurs, I will reduce my overall stock allocation and move into a hyperactive trading mode with frequent and significant asset allocation shifts.

     

    In what I call phase 1 of the Unstable Vix Pattern, prior history has shown that this is a predictable and tradable pattern. The VIX will temporarily move below 20, and this is a sell signal rather than a buy signal during an Unstable Vix Pattern. The market would be moving up as the VIX declines below 20. That movement will not last long. Then, there will be a sudden move back up into the high 20s or low 30s, and the market would be going down again. That burst in the VIX would be bought and any hedges bought when the VIX was below 20 would then be sold. This works fine until the phase 2 pattern forms which marks a catastrophic stock market event, as demonstrated by the movement in the VIX skyward and the stock averages downward after Lehman's failure in September 2008. The movement in the VIX broke the Phase 1 pattern by accelerating into the 40s staring in late September before shooting much higher.
    25 May, 11:33 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Zillow keeps soaring. Another stock that has a high PE ratio, currently over 600.

     

    I like the website, sure they will make money (now Zillow is going over to Europe). You can even go back several years to see what houses closed for. Especially nice when the pictures of the inside remain on the web site.
    22 May, 11:44 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » BSF

     

    I know Zillow is popular, but I never figured out why. When I did house searching, it was difficult to use, rarely gave much detail, projected price estimates that were their special claim, were way off to the point of making zero sense.

     

    I did better with the site the realtor's gave me access too (listingbook) with a good bit of MLS listing info, in combo with another site (realtor.com I think) that listed all houses in a neighborhood and their last sale and price even if years ago.
    24 May, 10:03 AM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    Holy cow, Putin going on Squawk Box? That will be interesting to say the least.
    22 May, 03:00 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    BC, I slept thru most of it. From what I've seen, Putin is using this conference to profess his promises to stay out of Ukraine. And he seems to be crying over all his money & his buddy's money being affected by the sanctions. He's just so contrite, isn't he? The head spook in charge. Putin will never give up power, as the CNBC pundits put it, because he has no where to go. Except jail, for corruption charges. Have you seen the "Putin Palace" that he's building?

     

    http://bit.ly/1gWjWQk
    23 May, 08:51 AM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    BSF - You didn't miss anything. It was very underwhelming and uninformative actually. Putin is a very good actor in many ways and in other ways he's very candid about his self-interest and this can make him difficult to really challenge.

     

    I think some people were trying to read some meaning into things but I'm not enough of a geopolitical analyst to really see anything new here (the market hasn't really seemed to moved much either).

     

    Didn't know about the palace. Why am I not surprised it's on the Black Sea?
    23 May, 09:55 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    (HP) will fire 50,000 employees since Meg took over. My husband says these 50,000 people will easily find another job in California, SF area, San Diego, etc. Tech jobs are plentiful. But not so much in NJ.

     

    http://bit.ly/1gWluK3

     

    We have over $800 million budget shortfall, because companies are leaving. So are people. NJ is one of the worst places to live as a retiree, because of income taxes, property taxes & even how your estate gets taxed when you pass it on.

     

    No wonder we have so many vacant office buildings & McMansions.
    23 May, 09:01 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » -

     

    - (LINE) made a good deal with (XOM) to cover their DCF. It's up a little, tepidly. Most interesting comment I've seen is that "the shorts really have impact with that stock." Even on the chart, it'll climb, then slide down later in the day slowly, every time.
    23 May, 11:29 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4562) | Send Message
     
    Thoughts and ideas for this week

     

    http://seekingalpha.co...
    25 May, 10:49 AM Reply Like
  • Tack
    , contributor
    Comments (12771) | Send Message
     
    New thread?
    25 May, 11:13 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3555) | Send Message
     
    Author’s reply » - Good idea. Here's chapter 27:
    http://seekingalpha.co...
    25 May, 11:52 AM Reply Like
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