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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! #28 219 comments
    Jun 3, 2014 7:38 AM

    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 #28. 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, #27: seekingalpha.com/instablog/11150861-land... (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 outlined well!

    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 (219)
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  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » -

     

    As SnP & DOW hit knew highs, what are good buys at current prices for new money? Seems to be the running question...

     

    Do those new highs mean high valuations, or is it catch up from & supported by the last earnings?
    3 Jun 2014, 07:41 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    (LULU) is approximately 80% undervalued.
    (FCA) is an easy buy, I still also like (KOF), (AKO.A) after the recent rally.

     

    (EBIX) is 50% undervalued.
    (COH) is a buy at $40 at $35-38 its a screaming buy.
    3 Jun 2014, 09:14 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » - To Newbie's, Welcome! We're moved onto chapter #29, so please come join us with your ideas and questions!

     

    http://seekingalpha.co...
    10 Jun 2014, 03:00 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » Yair

     

    Thanks for posting these ideas!!!
    10 Jun 2014, 03:00 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » From Macro on the last chapter

     

    "No macro calls from me other than we are massively overdue for a correction to the 200 dma on the SPX. "

     

    Do others think we're strongly due for a correction on the SPX?
    3 Jun 2014, 07:57 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    Yes we are overdue for a correction, it's fairly likely we will have a 5-10% correction this year, but from what point?

     

    Shorting this market is dumb.

     

    I have 1 short (TUES) its like a 1% position.
    3 Jun 2014, 09:15 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » Yair

     

    Thanks! Interesting ideas!!
    4 Jun 2014, 04:05 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    L,

     

    one of my comments to Macro from the last chapter

     

    M,

     

    "we are stretched a bit here in the short term and i could see a 40-50 point drop in the S & P just to cool things off ..."

     

    however a note here ---i along with the rest of the investment world has been looking for that elusive correction for quite some time and have been wrong ......

     

    we could easily melt up to 1950 on the S & P as well -- who knows .. :)
    3 Jun 2014, 08:32 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: The possibility of a melt up is certainly present.

     

    I would pare my stock position some in that eventuality, and may start to do so sooner rather than later. I do not need to squeeze the last dollar out of these powerful bull cycles.

     

    I view most stocks, which I would buy in meaningful quantities, as being currently either fairly valued or overvalued for new purchases, with the major indexes like the S & P already at a worrisome TTM P/E last calculated by Birinyi Associates at 18.26:

     

    http://on.wsj.com/sXXWWp

     

    TTM/PE for Nasdaq as of 5/30/14: 22.35
    3 Jun 2014, 09:00 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    Well melt up isn't going to go too high 2200-2300 starts getting close to the P/S of 2007 anything above those numbers will take some time.

     

    But 2400-2500 by mid 2016 is certainly possible.
    3 Jun 2014, 09:17 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Yair: I would call 2200-2300 within the next 12 months a melt up in context. Some may even say without being far off the mark that such a move would be a continuation of a melt up that started in 2011 after the last correction ( S & P at 1100 in early October 2011).

     

    To avoid a significant paring of my stock allocation during such a move, I would need to see robust economic data later this year with inflation trends remaining subdued and interest rates remaining near where they are now (e.g. the ten year treasury in the range bound 2.5% to 2.9%)

     

    I will look at the P/S ratio, but I would not give that ratio the same level of importance as others. A lot of companies have low P/S ratios and no or minimal earnings. Eventually, you can go broke selling more and more product or services at a loss or a small profit during economic expansions, particularly while piling on debt to buy back shares or using debt to fund unproductive acquisitions or new business lines.
    3 Jun 2014, 09:41 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    P/S is one of the most stable indicators over time when looking at the entire market.
    3 Jun 2014, 09:48 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    While the SPX daily melts higher, I am now making progress on my shorts every day. Tells me a lot about the breadth and internals. In tech now Only AAPL is holding up the QQQ's.

     

    Today we opened weak and they are jacking it higher again. I think this is on ECB stimulus hopes and the market is ripe for disappointment there
    3 Jun 2014, 10:10 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » M

     

    What would make you think the ECB is not going to do stimulus? Seems to be a popular central bank move these days.
    3 Jun 2014, 10:24 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    ECB will eventually go to quantitative easing, and issue EURO bonds.

     

    That, break up, or have Germany leave the EURO, either way shorting the EURO is probably a good position.
    3 Jun 2014, 11:46 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Macro: I still own my 5 shares of Apple even though I now have enough profit in the shares to buy a really nice new IPAD, which was one reason that I gave for buying those shares.

     

    I noted this morning that Skyworks, a leading Apple supplier, raised guidance today:

     

    Press Release: "Skyworks Raises Revenue and Earnings Outlook":

     

    http://bit.ly/1pCEpfu

     

    The prior guidance, given on 4/22/14 was for $535M in revenues for the current quarter. The new estimate is $570M.

     

    I do not own that one, but I did manage to acquire a Lottery Ticket position in another Apple/Samsung supplier, RFMD, at $5.18

     

    12/31/13 Post:
    http://bit.ly/1pCEobs

     

    Since I really do not understand thingamajigs, and recognize how quickly the rug can be pulled out from the companies who make them, I will not invest much money in these component suppliers that probably never will pay a dividend before things turn south in a major way.

     

    I think that you are overstating your case with the comment that "Only AAPL is holding up the QQQ's."

     

    Nasdaq 100 Components:
    http://yhoo.it/1pCEorG

     

    Apple is certainly giving the QQQ's a lift.

     

    The First Trust NASDAQ Technology Dividend ETF (TDIV), which I own, has done well since I purchased it and is near an all time high. Apple currently has a 8.94% weighting:

     

    http://bit.ly/108KbHC

     

    I would certainly agree with you that a lot of names in the Nasdaq 100 are being valued at excessive levels and are susceptible at any time to a major downdraft.
    3 Jun 2014, 10:34 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    ....." think that you are overstating your case with the comment that "Only AAPL is holding up the QQQ's.""

     

    Perhaps. Today that is the case. Heavyweights like PCLN GOOG AMZN FB,, and others, not only weak but refuse to challenge prior highs. The day AAPL drops 20 points will be a blood bath in the QQQ's.
    3 Jun 2014, 02:35 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    MACRO: "Only AAPL is holding up the QQQ's."

     

    This is a link to the component members of the Nasdaq 100 showing a large number of stocks in that average up today.

     

    I did not realize that Baidu was in that list until I looked at it again:

     

    http://yhoo.it/1pDkooV

     

    There are certainly some Nasdaq 100 stocks, like Apple, that are more reasonably valued than the "Heavyweights like PCLN GOOG AMZN FB" that you mention. I would not draw any inference from daily or weekly action in a stock anyways.

     

    Did you sell Apple? If so, what was the price and why did you sell?

     

    Now, I am not being critical, since I sold Apple at $16 having bought 100 at $12 for all of the right reasons. Sometimes, short term thinking is not the best option for wealth creation.
    3 Jun 2014, 03:37 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    " Heavyweights like PCLN GOOG AMZN FB,, and others, not only weak but refuse to challenge prior highs."

     

    they are simply in trading ranges (GOOG) rallied from 500 to 560 (FB) from 57 to 62 (PCLN) 1115 to 1288 , all in less than a month . time to give a little back

     

    In my view, nothing is about to take off here nor are these names ready to crash -- perfect scenario for "buy and write" strategy..

     

    Only one that seems suspect to me would be AMZN - it looks like it may go & retest that 280 level..

     

    i would wonder what event would trigger an AAPL 20 point decline in one day -- I don't see it ..

     

    the nasdaq has come off of the bottom testing its 200 day MA several times & has now firmed up by retaking its 20 & 50 day MA..

     

    while its stretched in the short term - a simple trade back to the 4100 level or so is probably in the cards , if that is a blood bath (3%) from these levels so be it ....

     

    its more chop , churn or whatever term one wished to use -- but i would leave out takeoff , blood bath or crash when describing the indexes in the near term.
    3 Jun 2014, 03:42 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Yeah, I suppose, FG. As it has been all year my short focus has been on IWM and the Momo trade. It's very slow as the SPX bid is still there, but I think any kind of normal SPX profit taking, along with AAPL perhaps, will result in an outsized move lower in QQQ, IWM, and the momo stocks like AMZN.

     

    Patiently waiting.
    3 Jun 2014, 04:21 PM Reply Like
  • CWinn1970
    , contributor
    Comments (374) | Send Message
     
    M,

     

    Have you seen what (MBT) has been doing. I stayed put and I'm enjoying a nice 13%. Have you thought about going long on this? I only ask because your post here brought this stock to my attention.
    3 Jun 2014, 08:05 PM Reply Like
  • CWinn1970
    , contributor
    Comments (374) | Send Message
     
    Tack,

     

    Nice call on (SDRL) a few months ago. It too is one of my nicest gains since since I purchased in March, up just under 14%. It will throw off a $1 dividend here in the next few weeks.
    3 Jun 2014, 08:18 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    CWinn1970: I invested small amounts in RIG and ESV after their share prices were smashed based on the well known and prevalent bearish thesis on deepwater drillers.

     

    It was more of a gut call for me, based on a long history of seeing market participants pricing worst case scenarios before they come into fruition. Anything less than a series of calamities can result in the stock rising from a selloff. RIG's stock price decline after its excellent first quarter report was just one manifestation of that bearish thesis impact.

     

    The same general phenomenon occurs with stocks as an asset class, as present conditions (good or bad) are forecasted well into the future even though investors know that conditions change frequently. Stocks were being priced well into the future in 1999, with many issues priced into infinity and beyond into the netherworld, and were being discounted as if nothing good would ever happen again in March 2009.

     

    There are a lot of issues to watch with the drillers in the coming months to test the bearish thesis. The re-lease day rates and the number of employed rigs in the fleet are important. Eventually, conditions of surplus and the related pressure on day rates will wear off provided oil prices do not crater to levels that make deep sea drilling uneconomical for many projects, creating an even greater surplus of idle rigs and downward pressure on rates.
    3 Jun 2014, 08:50 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    South,

     

    I'll just add for those that may be interested --that the new (RIG) dividend is $3 - raised from $2.24 ..

     

    current yield 7%
    4 Jun 2014, 09:03 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: I am not sure how long that dividend rate will last. RIG and ESV have no long term dividend payment history. RIG started paying a $.03 quarterly dividend in late 2000 and apparently eliminated it in 2002; then had a $.79 annual dividend in 2011-2012 and started a quarterly payout at $.56 in May 2013 and has raised that rate to $.75 as you noted recently, going ex dividend a few days ago at that rate:

     

    RIG Dividend History:
    http://bit.ly/1iUDcst

     

    That dividend is being sourced out of out of "additional paid-in capital".

     

    Page 33 last 10-Q
    http://1.usa.gov/1iUDcsz

     

    The question that I have is whether the dividend will be sustained when that source is exhausted. I would not put the dividends of the drillers in the safe and reliable category and would not count on the dividends remaining high given their relatively short history as dividend payors (e.g. hardly a GIS with 115 years of dividend payments without a reduction)

     

    Also, some of this may be related to RIG's settlement with Icahn back in November 2013:

     

    http://bit.ly/1iUDcIX

     

    ESV Dividend History:
    http://bit.ly/1iUDa3I

     

    Seadrill Dividend History: http://bit.ly/1iUDcZk
    4 Jun 2014, 09:23 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    South,

     

    agreed it certainly isn't a div aristocrat :)

     

    but at these price levels --- In my view its worth the investment , collect the 7% and see what develops ..
    4 Jun 2014, 09:32 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: I just read this article that states the bearish case for RIG and SDRL by someone who owns SDRL and has a positive long term view on RIG:

     

    http://bit.ly/1iUWjCC

     

    Both have issues. The question over the next year or two is whether the market has gone too far in pricing the negatives which do exist.
    4 Jun 2014, 09:50 AM Reply Like
  • CWinn1970
    , contributor
    Comments (374) | Send Message
     
    FG -agree at this price (SDRL) is worth a small stake. I purchased in my employer Simple IRA. It was in the green a little near the end of the day to only fall back in the red. From what I read I'm of the opinion we will see high prices develop.
    4 Jun 2014, 07:16 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » -

     

    I've made my first Priceline purchase this week. They've added "express deals." Great idea. You can buy instantly, no risk of denial. You still can't pick your hotel but can pick your sub-location and star level. A discount off regular prices offered on all these sites. Their help pages need help. But overall seems like they're making good marketing moves.

     

    ...a little odd, I never use my facebook account on these sites... but I got a facebook notification from tripadvisor to book a hotel. Essentially an ad arrives as a facebook notification.
    3 Jun 2014, 10:12 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    (COH) is on sale, position doubled at $39
    4 Jun 2014, 11:05 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    (GM) going higher today; good to see the rebound in auto sales. Another indication that economy is doing better? Hope so.

     

    (MBT) has gone up & up since Macro talked about it.

     

    (KKR) (BX) (MAIN) all coming back; recent dip was a good opportunity.

     

    (FSLR) (SPWR) up today; US is increasing tariffs on Chinese imported solar panels.

     

    (GILD) (CELG) continue to go up; (NVAX) coming up more slowly. (ICPT) is volatile.

     

    When will (GOOG) & (GOOGL) start going up? IMO recent press announcements about what the company is doing has made investors disappointed in the company's maturity level & leadership. Doesn't help that (FB) & (AAPL) are trying to dump them. Competition may be ending Google's prominence.

     

    I'm relieved the Nasdaq is showing some life today.
    4 Jun 2014, 11:27 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    LMH: You asked me about the ISM PMI report for manufacturing last night.

     

    ISM reported a better than expected services PMI earlier today which gave stocks a lift. The PMI number was at 56.3, with the new orders component rising to 60.5 and the backlog of orders rising to 54 from 49 in April. Prices continue to increase. Business activity increased to 62.1 from 60.9.

     

    http://bit.ly/WPXlrM

     

    At this stage in the current economic cycle, services is more important than manufacturing in our economy due to its much larger size and impact.

     

    For job creation, you can see that big difference by looking at table B-1 in the Labor Department's jobs report which will be released later this week.

     

    This is a link to the last published table:

     

    http://1.usa.gov/zfg7ya

     

    Of the total private jobs (116.383M), services accounted for 97.377 million of that total non-farm private jobs total.
    4 Jun 2014, 11:49 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » - SG

     

    Thanks for all the info on ISM and PMI! Right now I'm still absorbing and don't have questions. But I'll be back :).
    4 Jun 2014, 03:58 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    I happened to notice that MDT spiked up in price late in the day. While I own the stock, I do not purport to fully understand why investors reacted so positively to a Bloomberg report that MDT was considering an offer for Smith & Nephew.

     

    http://bloom.bg/1hzHZEV

     

    MDT was one of the stocks that I discussed in an old post whose valuation was taken way too high in 1999 and then down way too low by 2009. Valuation compression is a normal phenomenon after the blowoff phase of a long term secular bull market. The first stage occurred in 2000-2002 when many blue chips suffered price cuts in the 40% to 60% range. Then over a decade or so, earnings continue to grow and the dividend is increased every year. Eventually, a point is reached when a company like MDT is selling near a 10 or even lower multiple; and you can not give it away while institutional investors would have fallen over themselves for the opportunity to buy at a 30 multiple a few years earlier.

     

    3. Multiple Compression for Many Large Cap Stocks

     

    http://bit.ly/UowheR

     

    I believe that my last purchase was in the low 30s.

     

    Even at today's close at $63.22, the forward P/E is less than 15:

     

    http://yhoo.it/1hzHWZG

     

    Several Vanguard funds are large holders including the Vanguard Health and Wellington funds, both of which I own.

     

    http://yhoo.it/1hzHWZH
    4 Jun 2014, 05:01 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    nice gain SG!
    5 Jun 2014, 08:28 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    BlueSky: Generally speaking, I will do one dumb thing now for every 4 smart things. That ratio has improved considerably over the past four decades as an investor, as my maturity has tamed some of my less productive "urges". My Left Brain's strong tendencies to harvest profits and to trade too much are almost impossible to overcome completely. It was Left Brain that sold 100 Apple at $16 bought at $12 and who had many cogent reasons for refusing to buy the Bid Daddy BRK shares at $16 during the 1974 crash.

     

    I sold about 300 shares of MDT when the price approached $41 (bought in small lots at $37.58, 38.99, 36.25, 35.73) That was the stupid thing. I now own fewer shares bought at a lower price.
    5 Jun 2014, 09:36 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    SG, I've done way too many dumb things over the years.

     

    Sad thing is, although it's happening less - I still do dumb things from time to time.

     

    Fortunately, the majority of the stocks I bought starting in 2013 were for the right reasons. Quality, dividend stocks that have increased their dividend for over 25 years. After learning from the "DGI guys" here on SA, my results have been much better.

     

    However, every once in awhile I do wander off the shining path to long term DGI heaven.

     

    Patiently waiting for (SCTY) (PSEC) & a few others to get back to green. (SCTY) had some good news today, so the stock is up. Long term (SCTY) should do ok. It's a good business model, but the jury is still out on whether or not it will be around in the future.

     

    Solar & wind make a lot of sense to me. We can't keep tearing up the earth looking for that black slime for ever.

     

    Even (KKD) is up today : )

     

    Another stock that makes absolutely no sense to me but wish I had bought it back when it was $30: (DPZ) is over $70 now. Have you ever tasted their pizza??
    5 Jun 2014, 12:39 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    BlueSky: I have never owned DPZ, nor eaten one of their pizzas. I am not inclined to do either.

     

    As to PSEC, I sold all of the shares owned by my father's testamentary trust within about a minute after reading the SEC news at close to $10.6. I am holding the shares in my personal accounts. I just had a memory lapse on how many shares I own but it is near 600 with 100 of those held in a Roth IRA bought at $10.2. When I discussed that trade, I highlighted as I always do the risks.

     

    3. Paired Trade: Sold 50 PRY at $25.51-Roth IRA and Bought 100 PSEC at $10.20-ROTH IRA
    http://bit.ly/T5uYTm

     

    The SEC problem and potential restatements are just a new risk and will keep me on the sidelines for open market purchases. I changed my dividend option to reinvestment for shares held in a taxable account, but so far Fidelity has ignored that change.
    5 Jun 2014, 02:22 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    ECB lowered rate to 0.15%; markets in Europe are higher. US futures higher too.

     

    Tomorrow we get the jobs data.

     

    Looks like market is expecting good data tomorrow.

     

    Slowly grinding higher.
    5 Jun 2014, 08:12 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Good news for (AMZN) and (EBAY). India is likely to allow them to operate there without restrictions. Unlike China.

     

    Both are up pre-market.
    5 Jun 2014, 08:14 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    (ICPT) up over $26 yesterday. This company's stock price is crazy.

     

    (GOOGL) up pre-market. Patiently holding the googs.

     

    (GILD) & (CELG) on the move up.

     

    (FSLR) looks like the best solar stock to me.

     

    (PSEC) SEC investigation continues. If (PSEC) has to restate their accounting, it will actually benefit shareholders. Management tried to account their numbers so as to pay themselves more....meanwhile, the class action suits multiply.

     

    So let me get this straight. If the SEC causes (PSEC) to change their accounting practices, shareholders benefit. Former shareholders could do more for themselves by just buying more stock. The stock price should go back up, once the SEC is done. Why would you want a bunch of sharks to make $ on this?

     

    Holding (PSEC) as it makes sense to me. Selling would cause a loss. The company is making $ - no reason to sell. Could be a buying op for those with nerves of steel.
    5 Jun 2014, 08:24 AM Reply Like
  • CWinn1970
    , contributor
    Comments (374) | Send Message
     
    BSF - I sold Aug $10 puts for $0.70 on (PSEC). I'm betting on what you said above that shareholders benefit. I'm already over a full position with a breakeven in the high $10's.
    5 Jun 2014, 12:53 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Dividends are keeping my profits up this year. This is the perfect year for those of us that practice DGI - dividend growth investing.

     

    Plenty of opportunity to buy the dips & accumulate more shares with dividends.

     

    Patiently waiting for the next good dip. Looks like it won't be today.
    5 Jun 2014, 08:27 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » - Thoughts on what the ECB's news means?
    5 Jun 2014, 11:21 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Here's what Ron Insana, CNBC says

     

    http://cnb.cx/1pa8uQU

     

    Basically, he says the ECB is fighting deflation.

     

    Markets in Europe & US are reacting positively
    5 Jun 2014, 12:31 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    LMH: The last reported annual inflation number for the Eurozone was just .5%. That is seriously too low and going in the wrong direction too.

     

    http://bit.ly/1pa9mFq

     

    Central banks are trying to create inflation with monetary policies. I would not regard the cut in the benchmark rate to .15% from .25% as meaningful. The most radical stop was to charge banks .1% for keeping "excess reserves" at the European Central Bank. Perhaps that rate needs to be even more punitive on banks. In effect, it will cost banks money unless they invest those excess reserves in loans, etc.

     

    The foregoing was widely expected.

     

    As a by-product of QE in the U.S., excess bank reserves has ballooned to over $2.58 trillion.

     

    http://bit.ly/198OGbE

     

    If the Federal Reserve adopted the policy, it would increase its already large "profits" that it can hand over to the treasury in one of the most ingenious money making schemes ever hatched in history by a central bank, sometimes referred to by the hoi polloi as QE, at least profitable so far.

     

    Fed Sent $77.7 Billion in Profits to Treasury Last Year
    http://on.wsj.com/1nJX70s

     

    That was down some from $88.4B in 2012
    5 Jun 2014, 12:35 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    This chart tells you all you need to know about the ECB move: http://yhoo.it/1aKpo1X;range=1y

     

    Far more than the U.S., Europe is driven by exports, and a higher and higher Euro isn't any good for that.
    5 Jun 2014, 12:37 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Blow - off move IMO with high volume.

     

    I've increased my shorts right here at 1940 SPX level, and am buying long treasuries.
    5 Jun 2014, 01:02 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    In my view ---

     

    This is the "chase " from the "I'm being left out crowd" -- and those that went net short during the "sell in May" chants..
    5 Jun 2014, 01:27 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Short Copper, Long 30 year treasuries, short MOMO / Social media.

     

    Think Long rates are about to make a big move down (Bonds up)

     

    Notice Junk bonds not participating today?
    5 Jun 2014, 01:08 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    I'm going on record that you're 100% on the wrong side of this trade.

     

    Interest rates declined back to their two-year trend line recently, then, quite predictably, started trending up, again. Notice too, that almost all yield issues have again been under pressure the last few days, and that money again flowing to energy, commodities and emerging markets.

     

    Market is now embarked on economic, inflationary and rate uptrend, and Treasuries are going to be slightly negative, if not downright unhappy, at best.

     

    We'll see who's right.
    5 Jun 2014, 01:29 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Yep; We'll see. We are at low yield of the day right now.

     

    Gotta love the (DB), eh? So much for that 42 - 40 support
    5 Jun 2014, 01:55 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M

     

    Rates only down due to ECB kneejerk.
    5 Jun 2014, 02:13 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    What? QE causes long rates to go UP.

     

    Anyway -- I'm calling for Lower long rates -- today forward.
    5 Jun 2014, 02:17 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    Rates are going to return to a gradual trend higher because the correction from tapering hysteria is over, and the old trend is going to resume, as the economy continues to expand. Today's momentary decline in rates is simply a a reaction to the ECB move, which attracts money away from euro-denominated issues and towards dollar-based issues. This will have no durable effect on the rate trends.
    5 Jun 2014, 04:13 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    This move by the ECB was telegraphed to the market and the Euro had already slid against the U.S.D. starting on 5/6/14. The Euro is gaining some today.

     

    USD/EUR
    http://yhoo.it/1fYwO0I;range=1y

     

    The exchange rate can also be followed by pulling up a chart of FXE, the currency ETF for the Euro priced in USDs:

     

    http://on.mktw.net/1nS...

     

    For my purposes, I used the strength of the Euro against the USD to transition from some stocks, whose ordinary shares are priced in Euros, to U.S. companies. An example would be selling RDS/A and buying COP which I wanted to do anyway irrespective of the currency movement. The decline in the USD simply gave the NYSE listed RDS/A shares a boost in price.

     

    NL:RDSA vs. RDS/A Chart:
    http://on.mktw.net/1nS...

     

    I doubt that the current ECB moves, by themselves, will have much more of an impact on exchange rates. The key will be improve the lackluster GDP number, which was up .9% Y-O-Y in the 2014 first quarter, through both exports and domestic demand.

     

    Germany, the leading exporter, is doing okay as it is, with GDP up .8%, which looks pretty good compared to the U.S. number recently revised down into negative territory:

     

    http://bit.ly/1nSEigb

     

    Some of the EU countries whose economies are not so dependent on exports are showing negative GDP number.

     

    5 Jun 2014, 01:13 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    SG;

     

    I truly believe we are at a blow -off extreme here in at least the short - to intermediate run. I even blew out most of my energy stocks today.

     

    I think the risk / reward today is simply not there.
    5 Jun 2014, 01:27 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    (ASOS) is looking interesting after this drop.
    5 Jun 2014, 02:27 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Macro: Sam Eisenstadt, the quant behind Value Line's rating system, recently predicted 2100 by November under his model which has proven to be pretty good over the years making those kind of forecasts.

     

    http://bit.ly/1nSQihN

     

    I have no short positions and only have cash accounts. I have no need to take big risks and preservation of capital is an important consideration when a person has moved out of the accumulation phase. So, I may be moving my stock allocation down some as the market moves up.

     

    So far, I have used the market rise last year and now to jettison underperforming CEFs and to lower my average cost in some positions by selling my highest cost shares at a profit.

     

    I made this comment today in response to a question posed by a reader of my blog, which I will just drag and drop here:

     

    " I will generally maintain a 20% cash allocation for a variety of reasons. Those reasons include providing a cushion in the event of major market declines; providing funds to buy opportunistically after major market declines without having to sell something down a lot to buy something else down a lot; my conservative nature which includes no psychological need to shoot the lights out/swing for the fences; my current emphasis on preservation of capital since I have enough now; my ability to do just fine in increasing my portfolios' values even when cash earns nothing; and the need to sleep well at night.

     

    My current allocation which is estimated and may be off a few percent is around 60% stocks (including an array of common stocks that are what I call bond substitutes); 20% bonds/equity preferred stocks lumped with bonds in my asset allocation and 20% cash. The bond and stock allocations include both individual securities and funds (mutual, CEFs, ETFs, ETNs)

     

    In several comments at SA recently, I discuss why I am uncomfortable keeping my stock allocation at 60% and my many concerns about bonds with that asset class possibly in the early first inning of a long term secular bear market. There are a number of reasons keeping me at that high stock allocation number even with those concerns, but I could downsize quickly by selling funds which was the main source of my cash raise in 2007.

     

    Those comments are concentrated in the Land of Milk and Honey's Instablog:"

     

    I then link this Instablog.
    5 Jun 2014, 02:10 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    My guess is this is the point where the EURO / DOLLAR trade reverses probably a good bet to start shorting the EURO.
    5 Jun 2014, 02:16 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    I'd take the other side of that bet too.
    5 Jun 2014, 02:34 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    http://seekingalpha.co...

     

    Check out Hussman's article. ( not a particular fan) but more check out the bashing he is taking in comments.

     

    And I thought everyone was a bear on SA. Interesting.
    5 Jun 2014, 03:06 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    South,

     

    "Sam Eisenstadt, the quant behind Value Line's rating system, recently predicted 2100 by November under his model which has proven to be pretty good over the years making those kind of forecasts."

     

    When one finds themselves in a bull market -- Most of the surprises are to the upside.. take today's action on the ECB announcement ...

     

    I do believe his forecast has a chance of playing out..
    as i indicated last week the movement into money market funds and bearish funds and chasing the bond rally - was a "tell" as to how many were positioned going into May..
    add in the huge short position in the (RUT) and as I commented ,, this rally is once again "not trusted" at all..
    Its not as far fetched as the article make it out to be if one considers these factors.. ..

     

    So, IF the market hangs in here , (as it did in MAY and trapped the geniuses that followed the sell in May theme)
    many will throw in the towel in the wait for a pullback and the big short positions will be forced to fold ... once again ....

     

    Sure the S & P is overbought in the short term -- but perhaps as we go forward its 2 steps up - one step down AS IT HAS BEEN as the S & p leaves many scratching their head..

     

    Personally,, i'm not chasing here - just looking at individual names that are beating estimates and raising guidance and or div's.....

     

    There are some names that have 15-20 % left in them and my search is on :)
    As I continue to say---- IF the earnings estimates come to fruition-- -- ( I have no reason to believe they won't)
    Well, anyone can do the math - and the number is higher than where we are today ...
    5 Jun 2014, 03:14 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: So far, I am not reacting, but may sell 116 of my highest cost ADX shares in a few minutes.
    5 Jun 2014, 03:34 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Just as a follow up, I did sell the highest cost 116 ADX shares that would generate long term capital gains, with most of those shares bought with reinvested dividends at a cost greater than $10. The realized gain was $319.38 and my cost basis in the remaining 610+ shares was reduced to $10.02. The highest cost shares now are the ones bought at $12.61 with the large capital gain distribution made in December 2013. I will sell those shares early next year if the S & P is at 2100+.

     

    I prefer to raise cash by eliminating or paring stock ETFs and CEFs. The paring will usually be the highest cost shares to lessen the tax liability. I will emphasize profitably selling shares bought with dividends since that adds to the value of the dividend.
    5 Jun 2014, 04:35 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    FG -- So bearish SPX targets are a "contrary indicator" -- but bullish ones aren't then?

     

    Just sayin'
    5 Jun 2014, 03:23 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    M,

     

    it appeared from the evidence i saw and posted that the recent focus was on moving money to money market funds and bearish equity funds , and of course running to take part in the bond trade.. that chart i posted from Stockcharts and the associated comments from Guggenheim Rydex suggest that as being indicative of the sentiment that is out there among investors..

     

    and if you recall - both u & i posted the huge all time high hedge fund SHORT positioning over a month ago regarding the (RUT) ..

     

    from these facts and others, i draw the conclusion that many are positioned for a correction and would add---- other than what was just reported by South - I haven't seen or heard of an article in the last 2 months suggesting S & P 2000 .. its all been about the overvaluation in the market and "we are overdue for a correction" talk..

     

    maybe so and maybe that will play out -- I just think when the crowd is positioned on one side of the boat - i don't want to be there -- ala the (RUT) hedge fund positioning.. & when that trade eventually unwinds ???

     

    Therefore---- It is my conclusion ,that once again nobody trusts this market or it's recent rally ....

     

    Anyone of course can disagree with sentiment and how they see the crowd--
    that is my take at the moment .. and MAY be an explanation as to why the market is indeed powering higher --
    5 Jun 2014, 03:47 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Sure. But today AAII bears were 22%! VIX is close to 10 handle. (or was) Doesn't seem like a ton of defensive hedging going on.
    5 Jun 2014, 03:54 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Never mind Gartman is full on bullish, thats reason enough to short
    5 Jun 2014, 04:08 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    ok,
    fair enough --

     

    AAII sentiment changes weekly so lets see what next week brings..

     

    Lets not brush the stats and money flow i posted last week
    under the carpet....

     

    it shows that many have set themselves up on the "safe" side of the markets.. and what do we make of the Hedgies with that large short position ....my guess ----they ALL wont be right.. we can't dismiss the largest short position since 2004 because it doesn't fit with "we are overdue for a correction" chant.. 
    and that fact may be showing up in the RUT numbers in the near term......

     

    the path of least resistance is decidedly UP -- and I wouldn't advise going against that--- and that has been my call for quite some time now..
    Please remember ---- i am not concerned if and when we do get that correction and so I don't need to "play " any corrective downside by going short.. So far that has proved to be the correct strategy since the pullbacks have been shallow --
    & I don't expect that to change in the near term..
    5 Jun 2014, 04:20 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    http://cnnmon.ie/QxDqZ3 = 78
    5 Jun 2014, 04:38 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Macro: I just bookmarked that page. I am not a greedy person.
    5 Jun 2014, 04:51 PM Reply Like
  • User 7415181
    , contributor
    Comments (825) | Send Message
     
    I would be curious to know how that gauge looked in mid 1999 or 2007 if that graphic existed at the time.
    5 Jun 2014, 04:57 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Also the Nat association of American investors reading is over 90, with high conviction.

     

    There is no fear out there remotely anywhere.
    5 Jun 2014, 05:16 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    User,

     

    We are 2007 right now.
    5 Jun 2014, 05:16 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    Yeah, sure we are:

     

    http://bit.ly/ScY7Qo
    5 Jun 2014, 05:30 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    User: This is a link to a WSJ article from February 2007 that has a fear and greed chart, compiled by Dresdner Kleinwort, which hit an all time "irrational exuberance" high that month.

     

    http://on.wsj.com/Sd8XFZ

     

    That is not the same index as the one used by CNN, but may be using many of the same indicators.

     

    The chart reproduced at the WSJ through February 2007 can also be found at

     

    http://bit.ly/Sd8XG1

     

    The VIX, sometimes referred to as a "fear index" or a "complacency index", gave what I call a Trigger Event signal in August 2007 and an Alert in February 2007:

     

    My Blog:
    VIX Chart from 2007: Alerts and Triggers Major Disruption of Cyclical Stable Bull VIX Pattern
    http://bit.ly/12K50f1

     

    A Trigger Event is a sell signal. That August 2007 sell signal was confirmed in November 2007, January 2008 and March 2008, the clearest and most emphatic Get Out of Dodge signal ever given by that model.

     

    The movement in the market in 1999 was never confirmed by the VIX which stayed at elevated levels throughout that time. A Trigger Event had occurred in October 1997 which was not resolved by the formation of a Stable Vix Pattern until late in 2003.

     

    I would be confident that any fear and greed index would have been highly elevated toward greed or irrational exuberance in 1999, whatever label an investor wants to put on it.
    5 Jun 2014, 06:35 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    Some things for all to consider..

     

    August '07 vix hit a high of 37- and 37 again in JAn '08 ----- today its 11.

     

    so was the vix a useful tool to warn us then @37 or is it now warning us @ 11 ...... therefore , its doesn't compute.....

     

    For me I'll go with Southgents stable vix pattern as my guideline ..

     

    the entire investment world is highlighting the low VIX , as a troubling indicator.. enuff said ..

     

    In '07 Dow 30 posted a new high in Oct - yet the transports were on their way down and never confirmed the Dow 30 high...

     

    Not the case today as both the dow transports and Dow 30 just put forth their 15th dow theory buy signal since the inception of this bull market as they both hit fresh new highs this week.

     

    I don't see the similarities technically and wont even begin to go into the fundamental differences between 2007 & now..

     

    & so I would have to respectfully disagree with a comparison to 2007 ...
    5 Jun 2014, 06:42 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: That model of mine is keeping me invested at what I would call an uncomfortable level under the current circumstances. When there is a Trigger Event, I will not need any further convincing to downsize my stock portfolio. The Sell signal has been really good over the years.

     

    So far, I am basically just moving money from here to there in stock land, without making a material change in my allocation percentage. Selling 116 shares of ADX today was just a sop to the Old Geezer, an alternative to chewing a couple of Maalox. I may take some more precautionary steps provided this up move continues unabated.

     

    I wonder how those bears are feeling who have been calling tops for a few years now. It has to be aggravating, but it will never cause them to question their beliefs which would be more stressful to them.
    5 Jun 2014, 06:49 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    I read all the "this guy said this" or "that guy said that" and mostly chuckle. Everybody on both sides of this issue, forget the punditry. Pay attention to what's actually going on and think about it logically.

     

    Lower euro rates are going to boost Europe. The U.S. is going to consume more of their goods, which contrary to the trade-deficit fanatics, is going to be good for the global economy. All the emerging markets are going to perk up, too.

     

    The pressure on rates is going to be decidedly to the upside, as this unfolds. The recent downdraft in rates wasn't some harbinger of doom, as the gloomers in SA (both authors and commenters) were quick to trumpet. It was merely a reversion to the old trend line in place prior to the hysteria that engulfed the credit markets following last may's tapering announcement. Now, that tapering is 47% done, and absolutely nothing happened, the market woke up and sent rates back to more normalized levels. That part of the action is over, and now the rates will follow the economy, and that may not be a rocket upward, but it isn't going to be downward..
    5 Jun 2014, 04:20 PM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    "Pay attention to what's actually going on"

     

    Whoa, hey, let's not get crazy.
    5 Jun 2014, 05:35 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    T,

     

    thanks for keeping the conversation "grounded"

     

    :)
    5 Jun 2014, 06:11 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    I always look at night, using my IPAD2 while lounging on the sofa, the WSJ Dividend Page:

     

    http://on.wsj.com/SdlgCk

     

    Apple is shown going ex dividend for its 7 for 1 stock on Monday 6/9/14.

     

    I don't know whether it would be stupid or smart to sell my 5 shares now that I have enough profit to buy a new IPAD, the primary purpose for my last entry.

     

    Certainly, there is nothing in my Apple stock ownership history that indicates competency on the sell side.
    5 Jun 2014, 07:51 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Well, at least the copper short is working this morning, onside 6 cents so far. Rates are a bit lower too.

     

    Honestly I have no idea when the general market turns, so am again focused on the "broken momentum" stocks for my short positions as the indexes continue to melt higher. We are obviously overdue on many metrics for a real correction --but a catalyst will be needed.
    6 Jun 2014, 07:51 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    On what metrics do we need a correction, I can't find any other that they tend to happen with great frequency then they have in the past 2 years.
    6 Jun 2014, 08:41 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    So Far today. Long rates lower, Euro higher, As I thought.

     

    Long rates Down from here. Long TLT

     

    Nothing, absolutely nothing, has had more doubters, shorters and haters than the long Treasury trade. Those shorting gov't bonds have been carried out on stretchers.

     

    Note I am referring only to long (30 year rates). Short (2 Year) rates could spike higher IF the market feels the Fed is behind the curve.

     

    BTW Bought a Gold ETF yesterday. First time in a long, long time.

     

    I predict we have a Long way to go as absolutely No-one is calling for lower rates I can see. A crowded short trade in the extreme. You will see ALL-TIME low yields in the 30 yr in due course.
    6 Jun 2014, 09:01 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    You better keep your finger close to the sell button on that TLT trade. This reaction to ECB will be very short-lived.

     

    The Euro was down versus the dollar at 8AM. If it is in fact higher already, that tells me the flow to dollars is reversing already, and the Treasury yield dip will evaporate very quickly, maybe even today.
    6 Jun 2014, 09:11 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    T;

     

    This is little to do with the ECB. This is grab for yield all over the place, that when any risk aversion takes place, will end up precisely one place.

     

    Just to outline the tone out there so contrary to the fear of risk you claim, I am audibly hearing people claim "I might as well buy junk bonds / MREITS / BDC's at any yield -- the risk is the same as buying treasuries" -- IE guaranteed."
    6 Jun 2014, 09:23 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    I'm shaking my head and wondering what logic you're trying to manufacture to justify your short.

     

    People who are not risk averse don't buy Treasuries at near record-low yields. If they were doing exactly what you claim, hungering for yield at any risk, then, they'd be dumping Treasuries and buying the higher-yield stuff and equities, not forcing Treasury yields lower.

     

    The Treasury move is 100% a reaction of sovereign funds moving into dollars, as a kneejerk to the ECB cut. But, it's happening against a backdrop of a strengthening equity market, so it's not going to have any legs at all. The fact that the Euro may rise only 24 hours after the cut says it all.

     

    Rates are not headed down in any sustained manner unless we get a whole bunch of bad economic news. That doesn't seem to be the trend of the latest reports.
    6 Jun 2014, 09:31 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    T;

     

    BTW -- (DB) new lows; I covered 1/4 of my short here at 38.25 for about +4
    6 Jun 2014, 09:49 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    How does one get "new lows" when shares up over 2%?

     

    Good time to cover, though.
    6 Jun 2014, 09:50 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Up 2%???? Pull up a chart. That quote % is an error, I have it too.
    6 Jun 2014, 09:58 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    No error. Closed at $37.54, opened at $38.49, now $38.40.
    6 Jun 2014, 10:00 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    It did'nt close at 37.54; closed low 39's. Thats an error.
    6 Jun 2014, 10:23 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    No idea where you're getting your data, but Etrade, Yahoo and Google all show $37.54 and that shares are up 2.4%. I don't think they're all wrong, as you claim. In fact, to tend this silly claim altogether, here's the NYSE's own data: http://bit.ly/1lbgLDB

     

    By the way, note that the 10-year yield has quickly reversed, as predicted, and is now green. Going long Treasuries here is to wish to lose money.
    6 Jun 2014, 10:45 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    All of those are wrong quotes for DB. Pull up a chart on a pro service like I use, perhaps It'll be clear to you. Whatever I don't see the point of debating last nights closing price. You stated DB was at a bottom at 42 and I was dumb to short it. I can find the post If you'ed like

     

    On the bonds; you are incorrectly quoting my trade.

     

    "Note I am referring only to long (30 year rates). Short (2 Year) rates could spike higher IF the market feels the Fed is behind the curve."

     

    From my post above. Where exactly do I even discuss the 10 year?

     

    I am LONG the 30 Year. Thats the only one I care about. And the yield is Still lower even with this SPX Melt-up.
    6 Jun 2014, 11:04 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    Sure. I see, even the NYSE's own data -- the listing exchange for DB -- is in error, along with all the other brokerages and financial sites. heaven knows, only "pros" can get the correct data.

     

    By the way, you said you bought TLT. That's not 30 years, but 20 years, just in case you need to know what you're holding.

     

    Lastly, here's my exact quote on DB:

     

    "(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."

     

    That seems like an accurate assessment, too, although you made a couple bucks before the bounce. Note, I never said anything about "dumb." Maybe, you have a self image problem.
    6 Jun 2014, 11:19 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    TLT is not a 20 or 30 year treasury ETF.

     

    The name for the security is "IShares 20+ Year Treasury Bond ETF"

     

    Note the + sign after 20 years.

     

    The weighted average maturity is 27.15 years.

     

    http://bit.ly/1okEJNW

     

    It will mimic the 30 year more than the 20 year as to duration, but there is not much daylight in those yields now anyway.

     

    As of 6/5/14:
    http://1.usa.gov/1okEJO0

     

    20 Year at 3.17%

     

    30 Year at 3.44%

     

    The break-even spreads are as follows based on yesterday's closing prices:

     

    20 Year: 2.28%

     

    30 Year: 2.28%

     

    Computed by subtracting current real yields:

     

    http://1.usa.gov/yFD89A

     

    The only interesting point to me in this dispute is that the market is predicting an average annual rate of inflation at 2.28% over both the next 20 and 30 years.
    6 Jun 2014, 12:44 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    S:

     

    Thanks for the correction.

     

    In any case, I'll be dumbfounded if rates fall, as long as the market and global economy ramp higher.
    6 Jun 2014, 12:50 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    As I stated, from SA's own site. Down on the day yesterday.

     

    You really seem to think none of us know what we are doing.

     

    http://bit.ly/1kHTwBB
    7 Jun 2014, 02:49 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M

     

    Let me guess. You still think DB was down yesterday.

     

    Is that the "pro" feed you referenced?
    7 Jun 2014, 04:30 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M

     

    I'll withdraw my assertion and admit confusion.

     

    Yesterday, five different quote servives showed DB as closing up 3.2% from a prior close of $37.54. Now, all different. No idea what's going on with that.

     

    So, you're still 3/4 short?
    7 Jun 2014, 04:47 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    Yesterday, all of Etrade, Yahoo, Google, CNBC and even the NYSE's own site all showed DB up and climbing all day, ending at +3.20% for the day. Now, only CNBC and Yahoo show that data, while the other three sites shows -1.77%.

     

    I checked to see if there were any ex-dividend events that could explain the discrepancies, but there don't seem to be any, so the entire affair remains a mystery.
    7 Jun 2014, 06:19 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    One of my three major at Tulane was philosophy. I remember reading about a debate among medieval scholars about how many angels could dance on a pin.

     

    http://bit.ly/17YN1RF

     

    The preceding long discussion back and forth about DB's price reminded me of that debate.

     

    What difference does it make? If Macro made a profit covering part of his DB short, or whatever he was doing with that stock, then why would it matter whether DB was up or down, which would not impact his profit anyway?

     

    It is interesting that so many services could not agree on whether the stock was up or down.

     

    Please note that Yahoo Finance shows a close at $38.74, up $1.2. But, if you go to the historical prices, the prior day's close was $39.44, but YF adjusts that number to $37.63.

     

    http://yhoo.it/UlsKVP

     

    Now, if I was interested in the answer of how many angels could dance on a pin, I would try to find out why that June 5th price was adjusted from 39.44 to 37.63. Since I have no interest, I will let anyone interested in such subjects to find out.
    7 Jun 2014, 07:20 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    s:

     

    But, the issue isn't trivial if an ex-dividend issue had been in play.

     

    Also, for a trader, playing a short-term trend, -1.77% is a lot different than +3.20%.
    7 Jun 2014, 08:18 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Tack: What difference would it make to Macro's profit if he covered at a particular price, say 39 after selling short at 42 unless he was liable for a cash dividend payment on the date the short was covered?

     

    As to the possibility of a cash dividend, the adjustment would be made prior to the open, not after the close which is what YF did, and YF would have already noted any such payment in its historical dividend information.

     

    Besides, the historical information shows a cash ex dividend date at 5/23/14 for $.9771. Did they pay another one on 6/5/14. I seriously doubt it since one had just went ex dividend and no one notes now another cash dividend payment. No one shows a cash ex dividend date other than 5/23/14.

     

    I said that I have no interest in this matter, but I did note with a few minutes of research that a subscription right was distributed on 6/5 that can be traded that allows the owner to buy 5 shares for every 18 shares owned at €22.5.

     

    http://bit.ly/1q8Df8V
    7 Jun 2014, 08:35 PM Reply Like
  • freed0m
    , contributor
    Comments (972) | Send Message
     
    @Tack,

     

    DB could be ex-right. It is offering the right to subscribe 5 shares for 18 existing shares at EUR22.5, correct me if I am wrong.

     

    By the way, DB is not exactly an European recovery story. Its asset in Europe is pretty small and concentrated in Germany. DB is largely an investment bank, rather than an European bank.
    7 Jun 2014, 09:08 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    I sold some calls against the TLT 121 strike in a few months, if I recall correctly.
    6 Jun 2014, 10:58 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Wow what a day....let's see if this rally falters before the close.
    6 Jun 2014, 11:15 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    This is the Stampede the Sheeple phase, right here. I don't know when it begins, but man the next number of months is going to be fun. Don't say no-one preached great caution here.

     

    Just to be crystal Clear -- I have exactly ONE long position left (BIR-TO). Everything else except the bonds are shorts. I just added (ISRG) as another short at 369.7. Now I'm patiently waiting.

     

    BTW I'm actually long 30 year treasury futures, not TLT --

     

    Call that the Stupid Phase to add to the above. Quote me on that. And during this melt - up my shorts all are down or are ready to break. So am losing no money, while waiting.
    6 Jun 2014, 11:37 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    If you genuinely believe we are entering a "melt-up" stage, why on Earth would you lack long positions and/or go short (individual names notwithstanding). If you think this phase is going to last a week or two, followed by months of slaughter, you are off schedule by many months? The euphoria phase hasn't even gotten started, much less tapped out. An overall short position (or long on bonds) is going to get trampled in the interim.

     

    You seem to have a short-side mania, regardless of market and economic signals. Sorry, but you, personally, are not going to tank the market.
    6 Jun 2014, 11:49 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    (ISRG) as a short? It is one of the most undervalued companies in the market. Can you imagine what this thing can do, the company is a monopoly, in a secular growth sector, this thing will eventually do open heart surgeries.

     

    Have you ever seen the Da Vinci in practice?
    6 Jun 2014, 11:56 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    M,

     

    "Don't say no-one preached great caution here."

     

    with all due respect -- i have been listening to those exact words from many naysayers since S & P 1700 -

     

    I can go back and pull up article after article here on SA -- warning and preaching caution ---- that has been the mantra all along ... and why I continued to say no one believes..
    My reply -- is simply this

     

    don't say no one said we aren't in a secular bull market --

     

    I can't count how many times i said the market will be higher down the road than it is today.. and the push back was phenomenal ......

     

    We can debate the timing of corrections and such -----many stated the market was formng a TOP at the 1800 -1850 level, and anyone in the market was about to be crushed ----- so I guess they will conveniently move that up to the 1900 - 1950 level..
    So now i will say it again -- the market will be higher down the road than it is today .. the secular bull is not finished just yet .. the market can surely "correct" and it will , but This Is NOT the TOP .....

     

    BTW the banks have firmed up and are now in this rally (GS) from 154 to 165 , JPM from 52 to 57 ,
    I mentioned my timing was wrong on the financials at the beginning of the year.. - three weeks ago I stated that instead of throwing them away they were to be bought ....... the year isn't over just yet.. :)
    The stupid phase began when many went into money market and bearish funds recently and I'll add to that all of the geniuses at the hedge funds that were short the (RUT) at record levels in April .(the bodies are being carried out as we speak )
    The sheepies are the ones that followed them into that trade along with the folks that went into bonds recently ..

     

    and when that starts to unwind .........
    Stay tuned ....
    6 Jun 2014, 12:27 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    http://cnnmon.ie/QxDqZ3

     

    86 today. Don't think I've ever seen 90.
    6 Jun 2014, 12:00 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    http://bit.ly/mTnOjV

     

    Note that numbers only at "long-term average." Not even close to any end game.
    6 Jun 2014, 12:04 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    Does that index hitting any specific number have a correlation with stock market movements in any forward date?
    6 Jun 2014, 12:07 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    M,

     

    1 month ago FG index was at 34
    and it has been in the 20's this year--- what did that tell us ? -- nothing we don't already know ....

     

    market simply was oversold - when the pundits were touting the TOP and cautioned all to sell in May ....

     

    now simply overbought with S & P up 90 points since then..

     

    with a pullback from an overbought situation now in the cards it will be interesting to see how many will claim victory..
    6 Jun 2014, 01:22 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Who cares. By being out / short I have an awesome risk / reward based on history. I'll take that bet and not worry if the SPX runs another 50 points. Could'nt care less.

     

    Keep Buying.
    6 Jun 2014, 12:06 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    You're just kidding yourself, but it's fun to watch.

     

    You are acting as if the SPX can only go 50 points, then we'll have hundreds of points in some huge blowoff, a la 2008. While you're smugly sitting there, as if you'll hold onto all these shorts, the market can go a lot higher and will squeeze you to death, your bravado today notwithstanding. And, even if you hung in there, if the market rises another 5-10%, you'll be praying for a 10% correction just to break even.

     

    I thought you claim to be a nimble short-term trader, but no quick-moving trader would stake out short positions now, then tell everybody they're just going to sit and wait. Nothing nimble or clever about that. That's the kind of statement that permabears have made, over and over, and been hung on the wall.
    6 Jun 2014, 12:15 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Interesting the characterizations. I don't believe I've mentioned "2008" "hundreds of points" never mind being a "permabear".

     

    Social Media; if you haven't noticed, is already rolling over. My point is, I'm not shorting the SPX, so if it wants to run straight to 2000, what's it to me. The risk reward from right now through the fall -- is unbalanced to the downside in the extreme.

     

    Just because Someone Else was bearish at 1500, 1600 or 1700, in no way invalidates my reasons today. Actually, my reasons have nothing to do with the SPX price level, whatsoever.
    6 Jun 2014, 07:04 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    FG,

     

    You are correct on the trend, and top callers have been wrong. It would seem foolish the approach I am taking.

     

    As I've posted before, I am focused on certain catalysts -- as opposed to a random call at a certain price.

     

    Those would be: Fed tapering, with a possible acceleration due to rising inflation expectations.

     

    Mid-term elections,

     

    Long term sentiment and complacency,

     

    Lower participation ( at this point) in many tech and Nasdaq stocks in the rally (divergences).

     

    We have rallied so long and so hard, we are well ahead of the economy due to the Fed's policies. We could easily see a scenario with better but inflationary economic data and weakening stock prices as the Fed pulls back.

     

    Social media still looks weak and there is my focus. Even the blue chip, FB looks tired here -- I am short the weaker names.

     

    As repeated I am a long term bull but hate the valuations here, the lack of fear and anxiety about anything. I find this environment extremely difficult to buy into. Perhaps that is my bias, and I have said before I will underperform in a runaway bull without pullbacks.

     

    I simply can't chase higher 5 years into a powerful bull market. It does seem that has become the thing to do, even on SA the usual bears have been rendered extinct as I read both the articles and comments.

     

    Hussman is the only bear left it would seem and he is getting largely crucified in the comment stream. Check
    it out.

     

    It's interesting FG how market timing goes in phases. In 2009/2010 Everybody espouses market timing (when you should buy and hold). Now no one wants to market time (as I think the time draws closer).
    7 Jun 2014, 09:03 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    "...even on SA the usual bears have been rendered extinct as I read both the articles and comments...."

     

    You must have some pretty narrow blinders on, while perusing the SA reading list. Just a handful of current titles, found without even looking hard, and, for even more fun, you should just read the commentary that follows each:

     

    "The Calm Before The Storm"

     

    "Watch For Falling Skies"

     

    "The World Debt Bubble Is About To Burst"

     

    " The Worst Bear Market Is Yet To Come"

     

    " Why The Bust Is Inevitable According To Austrian Business Cycles"

     

    " Correction 2014: Are You Prepared?"

     

    " More Evidence Suggests The Housing Market Is Caving In"

     

    " The U.S. Economy: Deep Recession Coming"

     

    Now, go find and post the titles of even six bullish articles on the general outlook (not individual issues).

     

    P.S. Hussman gets ridiculed because he's widely followed and been so bad that even his followers have now started to realize that he's destroyed their net worth.
    7 Jun 2014, 11:13 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    Sure -- and in at least half of those articles , the op's stated they are fully long and remaining so.

     

    Not one article I have read lately, the op is actually short anything or recommending short anything.

     

    The correction 2014 article is not even recommending anyone sell anything. Only to hedge with cheap options. And the comment stream essentially says, why bother? -- it's going higher --- or you're an idiot for even recommending hedging, market timing can't be done.

     

    There are Loads of bullish articles published here. Loads and loads. Take off your blinders on your view the whole world is short, in cash, quaking in fear.

     

    Preaching future caution but fully long. Watch what they do, not what they say.
    7 Jun 2014, 12:27 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    "Not one article I have read lately, the op is actually short anything or recommending short anything."

     

    Maybe, some vestige of sanity remains, despite their populist rhetoric.

     

    But, you're free to take up the cudgel, go long Treasuries and short the market. But, you're not short the market, either, right? What's that say, Mr. "Watch What They Do?"
    7 Jun 2014, 12:36 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    M,

     

    no author here is going to put their neck on the line anymore and DECLARE he/she is "short".

     

    whatever credibility they have left would be trashed -- again..

     

    reading the words and data presented in these articles they cannot -- repeat cannot be long ..

     

    agree , the whole world isn't short - except the hedge funds in the (RUT) -- :)

     

    but many do indeed , once again , distrust this latest leg up..
    7 Jun 2014, 08:08 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    Based on what history?

     

    I don't see any point in history where we had similar economic factors and it was profitable to short, 1987 looks a little similar and it was profitable to short if of course you timed the top but bonds were at about twice their value as today.
    6 Jun 2014, 12:16 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    YG:

     

    In fact, the U.S. Prime Rate was 9.0% in October 1987, versus 3.25%, now.

     

    So, rates were not "twice" but three times as high.
    6 Jun 2014, 12:24 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    Why not wait until the trend turns to go net short? there will be plenty of time and money to be made if , when that happens .. and it doesn't require a crystal ball or guess work , or trying to "will" the market in your favor..

     

    trying to pick THE opportune time to go short in a rising market is sheer guessing .. all who have said this is the TOP , went short.. have been whipsawed to death, from S & P 1700 until today ..

     

    and by the time they have finally gotten it right -- they may break even .. if they haven't been wiped out..
    6 Jun 2014, 01:28 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    FG,

     

    Very true. All true. I am not short the indexes.

     

    I don't think I'm early on social media type shorts,& some momo though, or long treasury long bonds.

     

    You were correct on the banks, dip was bought. My only bank short is (DB)

     

    Certainly looking at the action I would seem very foolish. Difficult to disagree. I suppose I'm looking at risk vs reward, sentiment; volatility, and expecting some mean reversion.

     

    I do think; its possible any reversal could be dramatic due to a complete lack of shorts. I have no idea when or why this could occur; though.

     

    Bottom line is I refuse to follow the crowd and chase here just because that has become the thing to do.
    6 Jun 2014, 02:15 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    Haha :)
    6 Jun 2014, 12:38 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    The "world markets are overbought in the near term according to Bespoke.

     

    My takeaway - the world markets are in sync to the global economic data that has been presented..

     

    when we get a pullback and these markets go into "oversold" territory -- it will once again be stated that the party will be over -- as has been the case on any pullback..

     

    http://bit.ly/Sgrtxh
    6 Jun 2014, 12:43 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Recently, one of the sharks on CNBC's "Shark Tank" said it's better to rent than buy a home.

     

    Using my own real life situation, I decided to run the numbers to see if he's correct. NJ real estate has had 2 booms & 2 dips since we moved here in 1985. Currently we are not back to the highs of 2007, but by 2017 we should be.

     

    Renting is very expensive here. Today, an average family would pay about $2,000 for a 3 bedroom town home. That could be less in a town with low ranking schools, or more in a town with high ranking schools. So it's about the average.

     

    A home in a nice town, nice area would be more than double that. Let's say $4500 a month. Could be more if it's a McMansion, but $4500 would be about the average in a town with excellent schools.

     

    So that's $24,000 a year for the town house; a whopping $54,000 for the house.

     

    The average price for a town home in my town right now today (if you can even find one for sale!) is $425,000. For a home that would get about $4500 a month in rent, to own it would be about $700,000. Property taxes? The town home would be about $7000 and the home, $18,000. Remember, this is NJ! Property taxes are ridiculous here.

     

    If your mortgage is at 4% with 20% down, 30 year fixed....

     

    townhouse payment = $1624 + 583.33 (property taxes) + 40 (homeowner insurance) = $2,247.33

     

    house payment = $2673 + 1500 + 85 = $4,258

     

    The renter cannot deduct anything on their tax return. The home owner can....so let's say you stay in the home for 10 years. That's $240,000 gone for the town home renter, and $540,000 gone for the house renter. Out the window gone.

     

    Ok, I already have decided I'd rather buy than rent, even considering the mortgage will cost at least 4% (maybe more if you have bad credit)....

     

    Because the owner can write off the mortgage interest & property taxes. Another bonus...making buying a home even better than renting.

     

    Write off for town home: $7,000 prop. tax + over $13,000 interest = over $20,000 the first year.

     

    write off for home: $18,000 prop. tax + over $22,260 interest = $40,260

     

    ****estimated yearly interest payments

     

    Those tax write offs are the key to deciding whether to rent or buy!

     

    If you pay your mortgage off faster, you still get to deduct the property taxes. When you sell, you get money back & hopefully break even or make money when you sell. The one negative is maintenance. New roof, furnace, remodeling kitchen/baths can add up. You should get some of that back when you sell, as long as your improvements are not too over the top. Add 5% a year for maintenance, unless the house/town home is brand new.

     

    Over all, it's better to buy if you are going to stay in the home for 10 years or more. The longer you stay & the faster you pay off the mortgage, the better it gets.

     

    YMMV - your mileage may vary.
    6 Jun 2014, 01:10 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    BSF:

     

    Here's why I'm sure glad I didn't rent, and another reason why it's important for every dweller to think about the retirement years, not just short-term ROI arithmetic:

     

    In 1981, I bought a home in Silicon Valley for just over $200K. By, 2000, I had paid the mortgage in full, and I sold the home that year for $850K and reinvested the proceeds in a $670K home ($180K added to my investment accounts). Now, my replacement home was recently appraised at just under $2MM.

     

    So, in 33 years, I turned $200K into ten times that amount, plus an another $180K, plus fourteen years of compounded investment returns. Owning that original home effectively allowed my life to be what it is today.

     

    Or, I could have rented.

     

    And, regardless of the specific performance of your own home(s) (as you say, mileage may vary), there's another huge reason to own. I can't tell you how many other friends/ acquaintances I know, who eschewed ownership, or if they owned, constantly maxxed out their home-equity lines, effectively turning their home into a rental. But, now, they have discovered that retirement is a whole new ballgame than those fat years having the big salaries and raises, and now they have to make it 100% on their own. And, that huge mortgage or big, always-increasing rent payment is suddenly sucking all the life out of their lifestyle, and there's no way to have "mommie, make it stop."

     

    They only wish they'd adopted another plan years ago, but it's too late now. Owning a home and paying it down, regardless of exact appreciation, enforces a discipline that will, pay off in spades come retirement years.
    6 Jun 2014, 01:34 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    T, lucky you moving to Silicon Valley in 1981. This is why your generation is the wealthiest ever, real estate + investment returns since the 1980s (even better if you go back more decades).

     

    I keep thinking about moving, but it really doesn't make sense. As your example shows, the longer you live in your home, the better.

     

    My property taxes, even at $18,000 a year, are far less than the $54,000 per year it would take to rent my house. Plus I get to write those property taxes off every year.

     

    If I had your kind of appreciation, I'd sell in a heartbeat!

     

    I'll neve understand using your home equity like a bank account. Very risky, especially if you have to sell the house when the market is down.

     

    Sometimes I think your credit score reflects your financial IQ. Savers always do the best, I would wager to say even at investing.
    6 Jun 2014, 03:20 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    BlueSky: I lost my breath for a second, and took a hard swallow, after seeing that $18,000 per year in property tax number. And you have the privilege of paying a state income tax too.
    6 Jun 2014, 03:28 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    T, "your generation" could be "my generation" : ) I'm part of the baby boom too.
    6 Jun 2014, 03:35 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    SG, the cost of living in NJ is dear : )

     

    Because of the inheritance laws, I think we will have to establish residency somewhere else. Imagine, just for estate planning. Perhaps a small condo in NH or VT. I'm also looking at the Carolinas & Delaware. Even PA.

     

    That day will come sooner sooner than later.
    6 Jun 2014, 03:39 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    Blue ,
    that is one reason why I left NJ a few years ago,,and when i left my prop taxes were 12K,, I have a larger home here in SC, with a pool, 1/2 block from beach ... taxes 3K ....
    6 Jun 2014, 03:54 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    F&G, pretty soon nobody will be left in NJ!
    6 Jun 2014, 04:02 PM Reply Like
  • extremebanker
    , contributor
    Comments (1733) | Send Message
     
    People have to decide how to leverage money, plant or equipment and people to accumulate their wealth. We bought our first timber tract of 650 acres in 1989 and financed it until we thinned our timber after a severe ice storm. We cleared enough to finish the debt and remodel the home on the property.

     

    I like leveraged bond funds especially munis because every morning I wake up the interest clock has rolled over and I am wealthier for it. The munis I hold have people paying taxes or for services of which I receive a portion of every payment.

     

    Every day people go to work at plants all around the country to produce a product and a profit of which I will receive a portion either through higher stock prices or dividends.

     

    The four point plan I like to talk about is get a good education, start a good business or get a good job, save aggressively when you are young and invest well. Young people have more opportunities today than ever before to become millionaires.
    6 Jun 2014, 04:08 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    You are forgetting one thing which makes it much more profitable to buy homes.

     

    Prices are at fairly depressed levels, over very long periods of time prices tend to go up.

     

    Plus taking out a mortgage is like shorting the TLT which is of course a good long term bet :)
    6 Jun 2014, 01:18 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Yair: If I was your age, I would not hesitate taking out a 30 year mortgage at the current rates rather than using cash to buy a home.

     

    The situation was much different in 1982 when I built the house that I currently occupy, free and clear of any debt.

     

    The average 30 year mortgage rate in 1982 was 16.04% with 2.2 points:

     

    http://bit.ly/14Vx92B

     

    I really had no choice but to pay for everything in cash.

     

    For the month of May 2014, the average 30 year rate was 4.19% and .7 points.

     

    Since 1982, the average annualized increase in my home's value is close to 4% which would be decent when I look at it as sort of tax deferred annuity.

     

    If I choose to sell, and not to buy another home, a significant part of the gain would be tax free under current U.S. tax laws.

     

    http://bit.ly/SgNrA7

     

    Being a detail kind of person, I still have both my cancelled checks and invoices to establish my tax cost basis.

     

    Or I could just elect to remain here, since my property taxes are just slightly more than $2,000 per year now, until my heirs can step up my tax basis to fair market value, hopefully in the distant future.

     

    Until I actually have to replace something expensive, like the central air/heating unit (maybe around $5,000 now), it costs me very little to remain in this home, and certainly several thousand per year less than the rent for a 1 bedroom apartment now.
    6 Jun 2014, 02:35 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    I currently live in Israel, you wouldn't believe the housing prices here.
    6 Jun 2014, 03:11 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Yair, it's true home prices are down. However it is relative. We bought our current house in 2001 & could sell it now for more than we paid then. But it was worth more in 2007 than today.

     

    We started with a condo; this our 3rd home. As the years passed we were able to afford more, and also paid off our current mortgage in 2008. It's nice not to have a mortgag. At my age (later 50s) we are debt free and intend to stay that way.

     

    The only thing I would have done differently is to have bought a one level home, so that we could stay in it "forever." I'm thinking those stairs are getting harder every year.
    6 Jun 2014, 03:26 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Yair: I see what you mean:

     

    JP: May 2013 article
    http://bit.ly/1olgNtN

     

    I suspect prices have gone up since that article was published a year ago.

     

    I would modify my statement to say buying a house that is affordable given one's income and financial resources, a caveat that was implied only in my prior comment.
    6 Jun 2014, 03:34 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Yair, that's true of Europe too. Most people rent because it is impossible to buy. Plus they usually live in smaller condos, apartments. All things considered, I would like to live in Switzerland. I have cousins in Geneva.

     

    Where I live, I love going for walks. It's very hilly, homes are on 2 + acres and heavily forested. Like being in a park, we have the deer too.

     

    My property taxes are high because 1) it's NJ 2) amount of land.

     

    I don't think we will ever sell this house. It will pass to our son.
    6 Jun 2014, 03:34 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    When I moved to Israel in 2008 I bought an investment rental in Haifa, it has outperformed my stock portfolio so much that I feel useless.

     

    Its quite scarey now, prices are so high my yield on the rental is probably 4% of the selling price, maybe I should sell...

     

    I'd probably be tempted to put the funds in the market, and I don't feel comfortable having my entire net worth in stocks.
    6 Jun 2014, 04:58 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    It's better to have your portfolio diversified with real estate, stocks, and bonds. During retirement, a pension/social security paymen is like a bond. So I'm planning to keep the stocks, but keeping them diversified, and maintaining quality.

     

    (PTY) has done really well this year. Overall, the quality DGI stocks have performed the best for me since last year. Those crazy tech stocks are indeed, crazy. Worst performer has been (SCTY) and (PSEC). (PSEC) has a better chance of recovering.

     

    I take more risks with my retirement portfolio; my husband's is doing the best. I guess I manage other people's money better than mine.
    6 Jun 2014, 05:12 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (832) | Send Message
     
    Buying some TVIX at $3.42, to be sold sunday or monday.

     

    No real reason seems like a good point to roll the dice.
    6 Jun 2014, 01:33 PM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    Tack,

     

    I have learned quite a bit from reading your comments. I greatly appreciate you sharing your investment strategy and thoughts on the economy.

     

    Question - if you believe interest rates will trend up with an improving economy, how are you adjusting/positioning your preferred and debt portions of your portfolio? Wouldn’t rising rates cause big loss to preferred and debt, just like the last half of 2013?
    7 Jun 2014, 02:51 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    td:

     

    Thanks for your comment. It's nice to think that one's commentary is beneficial.

     

    Regarding rates and portfolio management, I haven't and won't make radical changes unless I would detect something that indicated that the acceleration in rates would pick up substantially. I don't anticipate a repeat of last May's hysteria, but a more measured rise. I always like to keep a reasonably balanced allocation in my portfolio, spread among equities, preferreds and debt, so my tuning would likely be to each, rather than scrambling away from a general class.

     

    Some of my alterations, given the above have been and are:

     

    Equities - adding more energy, commodities and emerging-market issues and CEF's. Like banks, especially foreign banks. Selected BDC's, equity REITs.

     

    Preferreds - stick to below-par high-yield issues only. Selling those issues whose prices have climbed to any significant premiums over par, especially if subject to call now or in next couple years.

     

    Debt - Avoid straight debt unless high yield with short duration. Prefer convertible and floating-rate debt CEF's. Have sold most muni funds after strong bounce in 2014.

     

    My current overall balance between above three classes remains approximately 50%, 25% and 25%, respectively. I have just adjusted the underlying issues to those that I think will perform better in a gradually rising-rate economy.
    7 Jun 2014, 05:20 AM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    Tack,

     

    Thank you for your detailed reply.

     

    I understand your adjustments within the equity and debt portions of your portfolio.

     

    Regarding preferreds, “below-par high-yield issues” tend to be concentrated in mREITs and energy. That’s not much diversification for a good chunk (e.g., 25%) of one’s portfolio. Do you have some recommendations for preferreds (individual issues and/or CEFs)?
    8 Jun 2014, 01:53 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    td:

     

    Yes, you are correct that at the present time most of the preferreds presently the best yield-to-price relationships fall into energy issues and REITs of varying types.

     

    However, preferreds are much more like subordinated debt than they are like equities. Therefore, it's more important to assess the balance-sheet and cash-flow issues surrounding each choices than it is to seek broad diversification. With preferreds, I am less concerned with whether a sector is in favor than I am with whether the issue at hand can and will make the scheduled dividend payment. Barring a huge financial panic, like 2008, the risk with preferreds is mostly interest-rate risk. That's why I avoid any selling at significant premiums or whose yields present too low of a spread.

     

    Regarding risk, I can say that off all the preferreds I follow (scores of them), during 2008's meltdown, only one failed outright and three other series suspended payments temporarily. Prices, of course, got pounded, but the payments kept flowing. For those with funds to investment 2009 presented yields we'll likely never see again, at least during my lifetime.

     

    In terms of individual names, of course, it's always a case of perceived risk versus reward. Those currently offering the highest yields often belong to small energy companies and drillers, where balance sheets are more at risk. Some of the financial companies I consider very solid and battle tested.

     

    Here's a few of the issues that might merit attention, considering current yields and prices, as well as my own assessment of risk (ranked by highest yield):

     

    MILL-D
    ESCRP
    LTS-A
    NRF-E
    RAS-C
    RSO-B
    GST-A
    STAR-D
    OXLCO

     

    For preferred CEF's you might consider:

     

    JPS
    JPC
    PGF

     

    Finally, keep in mind that I am an aggressive high-yield investor with lengthy experience in that focus, so I may be comfortable with issues and risks that would deter others. However, I guess I would sum up my overall experience by saying that, over time, I have discovered that there's not much safety in "safety," and that people tend to overpay for perceived safety, lowering their compounded returns significantly in the process.
    8 Jun 2014, 08:55 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    I would add that the use of the word "preferred" generally fails to convey what a fund owns. I have always used that term to mean "equity" preferred stocks, or what is generally known as traditional preferred stocks that have been in existence for decades. Those securities are a form of equity and are superior only to common stock and inferior to all bonds in the capital structure.

     

    When looking at the securities owned by a "preferred" fund, the fund will generally own a variety of securities properly classified as bonds, including trust preferred securities (in effect junior bonds) and senior bonds, both exchange traded (mostly $25 par values) or bought in the bond market with $1,000 par values.

     

    Another category would be european hybrids that are technically junior bonds in the capital structure but classified as equity for regulatory purposes. That would include Aegon and ING hybrids frequently found in those types of funds. The dividends paid by those hybrids are currently classified as "qualified" dividends under U.S. tax law, even though they are interest payments made by junior bonds.

     

    In my weekly blog published on Saturday, I discussed buying 100 shares of the CEF JPI in two separate ROTH IRA accounts.

     

    Items # 7 and # 9
    http://bit.ly/1idqCo0

     

    The main discussion is in Item # 7

     

    JPI liquidates in about 10 years and closed at 8.91% discount to net asset value last Friday, with a 8.12% yield based on the closing market price. Dividends are paid monthly, and the fund is weighted in investment grade securities with some junk:

     

    http://bit.ly/1hDIF6v
    8 Jun 2014, 10:43 AM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    Tack,

     

    Thank you for your thoughtful reply.

     

    Back around last May 2013, I bought lots of preferreds with spare cash, deciding to let the cash do some work. Unfortunately, it just happened to be very bad timing, and I learned that preferreds are sensitive to interest rates. Hence, I am reluctant to invest too much in preferreds, with many people thinking that rates will rise in the future. I currently have about 15% of my portfolio in preferreds, and will buy 2 issues and 1 CEF from your list of recommendations. Thanks again.
    8 Jun 2014, 05:40 PM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    South,

     

    Thank you for the additional information on preferreds. I bought some JPI last week based on your post on 5/29 and after doing some due diligence.
    8 Jun 2014, 05:43 PM Reply Like
  • User 7415181
    , contributor
    Comments (825) | Send Message
     
    Question for South or anyone else who'd like to chime in:

     

    How big of a pain is a K-1 form? I got one a couple of years ago After I had already filed my taxes and have avoided anything that might involve one since.

     

    I have almost zero knowelge about them other 4-1 equities/securities are better for a taxable account and may defer fed taxes until you sell and depending on how complicated may involve you owing taxes to states you don't reside in.

     

    And if I have any misconceptions about them, please feel free to correct me.
    7 Jun 2014, 07:57 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    User: I just avoid them in my personal accounts after dealing with the hassles several years ago. It just was not worth the effort, time and aggravation for me. Others may like dealing with those issues or view it as worth the effort. I do not. I have always completed my own tax returns.

     

    Instead, I will buy and sell ETNs that own MLPs. I avoid the K-1 hassle but I am exposed to the credit risk of the issuer since those instruments are senior unsecured notes.

     

    Now, I have occasionally bought very small amounts of a MLP in a retirement account, being very careful to avoid the UBTI issue:

     

    http://bit.ly/sqR4tD

     

    For accounts that I manage where there is a CPA who has to deal with that issue, I do not mind giving him more work to do. The testamentary trust that I manage had a 100 page 1099 last year and that was from one broker. I would note that those K-1s usually arrive in my mother's mailbox and mine for my late father's testamentary trust a few days after March 31st, which requires a trip to the accountant just before the return is due.
    7 Jun 2014, 08:18 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    User:

     

    Here's the rub. Only "partnerships" issue K-1's, not corporations. As a "partner" in a firm one can be subject to all kinds of phantom income or losses that don't pass through in a corporation. These can work to one's advantage or disadvantage, depending on circumstances and if in a taxable account.

     

    For the foregoing, I have limited any exposure to K-1's to my IRA accounts.
    7 Jun 2014, 08:23 PM Reply Like
  • User 7415181
    , contributor
    Comments (825) | Send Message
     
    South, thanks. I wasn't even thinking of etns regarding mlps - I've focused on cefs for those, but was wondering about preferreds which was my reason for bringing up the issue.

     

    Tack, thanks. Now you bring up something that's kind of the opposite of maybe misinformed advice I've read in the past - that K1's are ungood for retirement accounts.

     

    Like I said, I know next to nothing about partnerships other than my brief unpleasant experience a while ago. And thanks again to both of you - sometimes it's a lot faster to get an answer to a question here than to google it and risk becoming entwined in strange dating sites or reading hours of crap advice. Which still seems to link up to mail-order bride sites. :)
    7 Jun 2014, 08:40 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » - User7

     

    I'm pretty sure K-1's apply (have to file in all other relevant states) only if your gains on the K-1 are over an amount, that my holding will go nowhere near.
    10 Jun 2014, 11:05 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    User: I have bought a MLP preferred issue in an IRA which delivered a K-1 to me, KFN/P. In that case I was careful to avoid the UBTI issue and have subsequently sold that 100 share position for a profit.

     

    The accountant received and dealt with the K-1 for KFN/P owned by the testamentary trust.

     

    I bought that one in two 50 share lots, with one purchase at $23 (discussed in a 12/17/13 post focusing on how the acquisition of KFN would improve the credit rating of KFN/P).

     

    I discuss the K-1 issue when I bought 50 shares in the Roth at $24:

     

    Wednesday, November 27, 2013

     

    Roth IRA: Bought 50 KFNP at $24 and Sold 100 SDA at $14.13/Added 100 Cominar REIT at C$18.15, 50 SAN at $8.62/Sold 202+ TICC at $10.5 (102+ Roth IRA & 100 in a Taxable Account)/Added 50 of the Bond CEF NBB at $17.76

     

    http://bit.ly/1q8HfX1

     

    Scroll to
    1. Bought 50 KFN PR at $24-Roth IRA

     

    Risk Section:
    (2) K-1:
    7 Jun 2014, 08:52 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    http://seekingalpha.co...

     

    Top 3 (out of many bullish articles on SA)

     

    Equity rally is just getting started.

     

    Bulls winning the battle

     

    Don't expect a crash anytime soon.

     

    Many more. Full of comments that corrections can't be timed and one needs to be "fully in the market" at all times.
    8 Jun 2014, 05:53 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    Yep, almost entirely agree with that last sentiment. The answer is not running to cash and making speculative shorts, but adjusting portfolios gradually, as conditions change and the repositories of value shift.

     

    Many people, as they will discover too late in some cases, were so traumatized by 2008 that they fully expect that sudden, massive collapses in markets is normative behavior and that they must attempt to outguess the markets to survive. It's this very exercise that ensures that they won't perform well, if they attempt it.
    8 Jun 2014, 06:51 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    M,

     

    a link from Jeff millers blog

     

    http://on.wsj.com/1qdSa1u
    8 Jun 2014, 07:52 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    T,

     

    I mention just that in my thoughts for the week..
    Time to 'navigate" not 'leave"

     

    http://seekingalpha.co...
    8 Jun 2014, 07:24 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    In reply to an assertion made by Tack, I estimated a few days ago that I had reduced my stock allocation since February 2014, taking the $24,000 or so off the table that I had added between October 2013 and late February.

     

    I discovered this evening that this was not the case. I had increased my stock allocation by another $31,000 or so since February 2014 when I last performed this kind of analysis.

     

    Stock and Stock Fund Update 6/6/14
    http://bit.ly/1qe54wu

     

    I will now make an effort to reduce that $55,000 addition since October 2013.
    8 Jun 2014, 08:50 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    S:

     

    What assertion did I make about your stock portfolio? I don't really follow your specific stock allocations and don't have particular interest in your individual selections. I'd be interested as to what post of mine that has provoked this comment.

     

    Is this related to our discussions about inflation and the Fed?
    8 Jun 2014, 09:55 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Tack: Yes, I was referring to the discussion about the assertions that you made in that context that caused me to explain what I was doing with my portfolio and portfolio allocations. You know that it is my position that you do not accurately summarize my positions and nothing that you will say with alter that opinion.

     

    The specific comments of yours that I was referencing in a most innocuous way in the preceding comment include the following:

     

    "1) Given your rather lengthy and rather bullish postings on various long positions in various securities, I find your seeming alarm at Fed policy and, in particular failure to raise rates, rather surprising. If you genuinely think the economy (inflation) needs to be tamped down right now, I'd hardly be offering an expanding selection of stock buys, especially any that would be adversely affected by rates. Are you suggesting you're buying, but holding your nose?"

     

    3 Jun, 09:57 AM

     

    That comment speaks for itself.

     

    I then replied with a comment discussing my stock and other allocations.

     

    3 Jun, 11:20 AM

     

    Your then gave me this lecture:

     

    "As I read your posts on rates, you appear somewhat alarmed about the Fed's rate policy and worry that inflation will run amok. If so, I try to reconcile that with many of your equity recommendations, etc. Certainly, if I thought inflation were going to run silly, I would not be buying bond CEF's or any equities with sizable rate exposure."

     

    3 Jun, 12:11 PM

     

    Without repeating what was said thereafter, I tried to remain matter of fact in my discussions with you.

     

    I am not a dogmatic and arrogant individual. When an investor collects an array of factual information, and has been humbled over the years by the unpredictability of the future, most issues relating to asset allocations including inflation and rates and specific issues relating to individual selections are no longer black and white, and certainty goes out the window.
    8 Jun 2014, 10:30 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    S:

     

    I was just attempting to highlight what I considered a possible inconsistency between many listed buy recommendations and your expressed significant concern about inflation and the Fed's being "behind the curve." I didn't consider this interrogatory "misrepresenting" anything, as you have offered lots of detailed buys and, I believe, anyone reading your collective postings would have considered you on the bullish side of the equation, rather than bearish, overall. I just wanted you to elaborate on your general outlook.

     

    And, I don't know why this was an "assertion" either. I was just trying to illuminate what I saw as a possible discrepancy in your outlook versus your recommendations. And, it certainly wasn't my intention to turn this into something personal, although I seem to be getting "personal" inferences in the language of your replies.

     

    It's quite acceptable for us to hold different views, with varying degrees of confidence, as the case may be, respectively. I like to discuss issues at the strategic level, not stock by stock. I'd hope we could have open dialogue on any topic. Certainly, there's nothing personal intended in these discussions.
    8 Jun 2014, 10:49 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    T,

     

    You seem to both enjoy mis- representing what other posters say as a consistent pattern, and also feel compelled to give advice to save us from our own self destruction.

     

    The fact you feel the need to consistently negatively characterize my trading decisions with derogatory commentary at times, does not endear respect.

     

    I've been doing this a long, long time. I'd like to think although I make plenty of mistakes, I know what I'm doing, although a central bank controlled market makes it a challenge at times.

     

    My calling for a long overdue correction does not mean I am calling for a "collapse" "crash" "repeat of 2008" " I am permanently bearish" "economic armogeddon" or anything else.

     

    I say what I mean to say. Nothing more or less. I'd appreciate if you don't add to it, speculate on what I mean, Ect.

     

    I can speak quite well for myself -- thank you.

     

    This time I'm asking nicely.
    8 Jun 2014, 11:20 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Again Tack, I do not think you correctly summarize my opinions, and never will. Your comments that I quoted speak for themselves.

     

    I have grown weary in explaining my positions to you, and I am certain that I am wasting my time in doing so.

     

    Just as an example, I have repeatedly mentioned in my remarks here and in my blog that the anticipated low inflation rates were a key ingredient supporting my long term secular bull market thesis. Everyone who reads my comments, other than you, understands what I am saying.

     

    When I note that bond prices are not reflecting that low inflation expectation in pricing, I am not saying that inflation is about to move skyward or run silly or whatever your current straw man phrase may be.

     

    A return to normal real rates of return can potentially result in serious losses to owners of vintage bonds when the ten year treasury yield is barely above the average anticipated inflation rate which is the case now. And, the FED's failure to respond to rising inflation moving toward 3% could have even more serious implications for bond investors when rates normalize. A harbinger of what may come to pass was demonstrated with the rate rise starting last May. This is one of many potential future scenarios.

     

    8 Jun 2014, 11:32 PM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    "straw man " comments. Exactly.

     

    I'll be crystal clear what I am saying ( and perhaps SG is saying). I am saying assets are overvalued based on economic growth and normal profit margins.

     

    SG if. I read you correctly, if inflation expectations rise much further this becomes an issue both for the fed and markets. ( and to me aggravates the over- valuation).

     

    When I see "organic " value -- I'll get appropriately bullish. When the market "freaks out in an anxiety fit " -- whatever the reason -- you can bet I'll be a buyer.

     

    There is no anxiety about anything, anywhere in the world, except Russia perhaps. So no deals! So I wait.

     

    Another way of putting it -- I buy on sale. I don't pay retail most of the time. I don't chase. And I don't ever feel pressure to buy out of fear of missing out, as I suspect many buying now are doing. I also don't need any dividend, or other income --so I don't care.
    8 Jun 2014, 11:43 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    S:

     

    I'm going to solve this stalemate in a manner guaranteed to ensure that you don't feel your positions are unfairly challenged, misrepresented or otherwise have your feather ruffled by having someone raise a question or two. I'm going to refrain entirely from replying to your commentary. I can do fine without the condescension.

     

    We'll both be much happier.
    9 Jun 2014, 01:44 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    You're simply a trader, not an investor, period. And, that's fine. You want slam-dunk quick hits, but they don't show up very often in nonvolatile markets. And, the bad news is that markets aren't volatile most of the time.

     

    Investor don't hold or buy only when there's some panic in the streets, but sit around in cash awaiting the next calamity when prices rise. They manage portfolios and re-balance them, so as to create returns, while managing risks. It doesn't have the slightest thing to do with "chasing" or being scared of missing out. It's the folks sitting around in cash that have those anxieties, not investors.
    9 Jun 2014, 01:51 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Macro: I have stated throughout my comments here at SA for the past two years that low inflation expectations was a predicate underlying my thesis that the market was currently in a long term secular bull market. Anyone reading my comments, and even commenting on them, could not have missed that fact.

     

    I have referred to the liftoff since March 2009 as a likely first phase of a long term secular bull market similar to what happened between August 1982 and October 1987. When making those comments I highlighted the importance of low inflation expectations and have frequently drew an analogy to the long term bull market between 1949 and 1966 when inflation expectations remained low. This has been a repeated theme in my comments and can not be fairly understood by anyone as meaning "runaway inflation" or inflation "going to run silly".

     

    Some of those comments can be found in recent articles:

     

    http://bit.ly/1l06O7C

     

    http://bit.ly/1l06R3c

     

    I could cite similar innumerable comments over the past two years.

     

    The problem now is that a continued jaunt upward, given current valuations, could make it more likely that we will experience a nasty market event, similar to October 1987, which would cause a lengthy pause in the long term secular bull move that is an understandable human reaction to those kind of events. Please note the nuance here: "could" not "will".

     

    As to inflation, bond investors know the potential losses associated with moving from a 1.66% ten year treasury yield (May 1, 2013) to 3.5% to 4%. A 1.66% rate was predicted to provide a negative real rate of return. A bond investor would know that moving from a negative real rate of return to a normal real rate of return would cause losses, even with NO CHANGE IN INFLATION.

     

    A normal 10 year treasury real yield would be 2 percent over the inflation rate which is currently estimated to be over 2% in the break-even spread of the ten year TIP.

     

    One of the potential scenarios for the upcoming year or two is that the FED will not respond as inflation accelerates. A 2.5% inflation rate would be benign for stocks long term, as I have repeatedly stated, but will produce substantial losses to bond investors when rates return to normal real yields. A bond investor can easily calculate the potential losses in a move from a vintage 2.5% ten year bought today and a new one issued at 4% or worse 5% (3% inflation + 2% real yield)

     

    In a potential worst case scenario (please note the word scenario), the FED allows inflation to accelerate over 3% without making any meaningful moves, or even continuing abnormal monetary policies designed to encourage inflation. This could set up a scenario when the FED ultimately clamps down hard, with substantial and relatively quick increases in the FF rate that could cause a recession. The reason for the quick and large raises in this scenario would be due to it being at or near an abnormally low zero FF rate for too long. Hopefully, inflation will simmer down and remain around 2% as the FED continues ZIRP into 2015. My concern is that the FED will continue ZIRP even if (note the word "if") the inflation numbers accelerate over 2% toward 3%.
    9 Jun 2014, 09:06 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    All of this is an exercise in probabilities, including my shorting what I see is a blow-off move in risk after a long advance.
    9 Jun 2014, 09:14 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Macro: I never have certainty. As an investor, I have to come to terms with a world that has various shades of gray and other colors rather than one that is conveniently black or white. I formulate possibilities and probabilities and assign percentages to various possible scenarios. One scenario may be prolonged low inflation/deflation which I simply call the Japan scenario. I do not view that as likely and assign a low probability factor to it.

     

    When addressing the future, I will not play short term trends since I believe that the market is ultimately unpredictable over the short term. In other words, I would not have enough confidence in a short term move (daily, weekly or monthly) to even assign a probability factor. The market may hit 2100 before November or the end of this summer, or it may start a 10% correction this week, later in the summer or in the fall. I can have more confidence in long term secular trends and movements based in yearly time frames rather than in days, weeks or months.

     

    One reason for staying at a high stock allocation relates to the difficulty in timing a significant correction as well as the re-entry point.

     

    However, there comes a point for someone like myself, who is no longer in an accumulation phase and does not need to squeeze every dollar out of a bull cycle, to simply say that is enough. I will take some chips off the table. Oddly, I thought that I had done so since February and found out yesterday that I had added over $30,000 in stocks.
    9 Jun 2014, 09:24 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    SG;

     

    Make no mistake, I have shifted from a more balanced approach to an overt and aggressive bet against the market, particularly the high PE issues.

     

    IMO -- and I've seen it before -- we have moved into the capitulation, I must buy at any price regardless of news, hysterical chasing phase.

     

    And I'll short that in any asset whenever I see it.

     

    I hold NO longs at all.

     

    I mean look at the atmosphere, today in Biotech. They are dumping (GILD), which I like, to buy the unprofitable biotech names!
    9 Jun 2014, 09:51 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    GILD not down, so money can move to speculative issues. It's down because of the IDIX news:

     

    8:01 EDT - Merck (MRK) has agreed to pay big premium to buy Idenix (IDIX) for $3.85B to get hold of IDIX's "nuke" treatment for hepatitis C virus. MRK's plan is to combine IDIX's experimental nucleotide drug with two MRK drugs to make a triple-drug regimen with potential to treat all subtypes of HepC, for a treatment duration of less than 2 months, says Roger Perlmutter, head of MRK's R&D. Current treatments including Gilead's (GILD) blockbuster Sovaldi typically require at 3 months of treatment for a cure. Perlmutter says MRK could have proceeded with an internal triple regimen, but the IDIX deal "is a much shorter path than what we would have taken otherwise."
    9 Jun 2014, 10:00 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    http://bit.ly/1l0hB1q

     

    DB analyst agrees with me:

     

    CNN fear / greed this morning 91. High as I've ever seen.

     

    CNBC discussing right now do we hit 2000 SPX this week!
    9 Jun 2014, 10:03 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    to anyone that missed the stock @ 70

     

    (GILD) is a BUY on weakness

     

    :)
    9 Jun 2014, 10:09 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    M,

     

    perhaps u are "warning " us all to save us from our own self destruction by staying in the market ?

     

    I think most here are well aware of the new market highs recently and are due for a pullback ..

     

    and in my view any weakness in solid names will present opportunity on the long side ....

     

    similar to what happened with the financials when they were thrown away --- JPM @ 52 and GS @ 151 and they were in fact opportunities , . on the long side..

     

    please note they along with other financials have just "broken out" and may challenge their old highs ..

     

    In my view , its more of the same - rotation between sectors -
    9 Jun 2014, 10:17 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    So -- David Bianco's a straw man too?

     

    Just saying its not a bad place to raise some cash -- even for the long term investor.
    9 Jun 2014, 10:22 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: I mentioned that I was with you on GILD in spirit.

     

    My Comment to Your Instablog Referring to Possibly Buying GILD at $69:

     

    http://seekingalpha.co...

     

    I will stick with NVS. I may go back into PFE for a trade if it continues to sink.

     

    I am having another problem today. I just went through my portfolio, trying to pick a few names to sell in order to reduce the $31,000+ added in stocks since February when I thought that I was going down, not up.

     

    As I scroll through the list, I would say, "no not that one" and so on. Before long I was at the end of a very long list and I had not made a selection. So I did it again.

     

    Ultimately, I decided to place an above market sell order for CSX which I bought at $26.33 last November, primarily due it being one of my lowest yielding common stocks at the current price.
    9 Jun 2014, 10:25 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    LT investors have already harvested gains all along the way ...

     

    Its played exactly how i said it might - the sell in May chant didnt work the many got out and others were short -

     

    they are now chasing - and are running the shorts in the RUT into coffins ....

     

    and this is the stampede that comes with that scenario , nothing more..

     

    I DOUBT IT IS THE START OF A NEW LEG HIGHER IN THE AVERAGES < IN FACT IT MAY BE TIME TO PAUSE AND PERHAPS TRADE BACK TO 1850 OR SO.---

     

    if one wants to try & play that move - have at it -- some that already did that at 1850 or so will then be even .. --- maybe .... remember we did hear the same tune also @ 1750 & 1800 everyone wants to be the guy that calls the intermediate top --
    its a guess

     

    in my view its best to wait for these selloffs in select names and then add them to the long side for an intermediate trade..

     

    as far as listening to the bianco's, teppers , et al , ask the crowd how they feel when they sold off after teppers "nervousness" a month ago .. only to watch him recant ..

     

    these guys all have agendas ...
    9 Jun 2014, 10:38 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    BTW, note that interest rates are moving higher, not lower. Absolutely nothing surprising about this. The regression back to the pre-May-2013 trend line is over.
    9 Jun 2014, 10:49 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    T,

     

    and I suspect it's why the banks are getting a nice lift
    9 Jun 2014, 10:52 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    South,,

     

    yes i do remember you were in the (GILD) camp...

     

    mid to low 70's and i will add to that position ..

     

    funny how things play out - i had sold the June 6th 83 strike - weekly options against the GILD position

     

    they expired on friday --- worthless ---as the stock closed @ 82.40 ....

     

    if executed i could have bought the same shares back this AM ---- $3 cheaper.. oh well..

     

    I do have a small position in NVS which i purchased in '12 -- I like the story there and the div. a great company

     

    I was looking to add to that when the (GILD) story came into play and decided to go in that direction..

     

    my other "drug" name is (MRK) which i have owned since the Vioxx fiasco.. many years ago...

     

    i was also looking to cull some names as i reviewed my holdings this weekend , ironically ran into the same mindset as you --- so i wrote 1 month calls today against
    (CAM) & (PXD) in the oil sector

     

    9 Jun 2014, 11:34 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: I would have bought GILD when I was younger at $69. Since I am no longer in an accumulation phase, I am interested primarily in cash flow from dividends and interest, capital preservation and capital appreciation bringing up a distant third. Capital appreciation would have been behind income generation and in front of capital preservation ten or so years ago.

     

    It is interesting to me that my IRAs, where I own no stocks other than a few BDCs and REITs, and which are managed far more conservatively than the taxable accounts, have actually significantly outperformed the S & P 500 over the past five years as shown in my snapshots. I do not anticipate that will happen over the next five years unless stocks collapse which I do not anticipate.

     

    I am now about 1/8th of the way in removing that unintentional $31,000+ stock allocation increase between February and June by selling 100 CSX at $30.4 and 100 FULL at $8.3 earlier today. This is a difficult process for me.
    9 Jun 2014, 11:52 AM Reply Like
  • Robert Duval
    , contributor
    Comments (5788) | Send Message
     
    T / FG,

     

    I still believe we will see (likely this year), all time low yields for the 30 year treasury, and this dip is a buying opportunity.
    9 Jun 2014, 10:33 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    That would take a whole percent chopped off the yield. Even a market correction won't scare rates that low, and a recession is most unlikely within six months.
    9 Jun 2014, 10:58 PM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    South,

     

    What was the drawdown (loss) in your IRAs in 2008?

     

    I ask because capital preservation is the most important for me. I have saved up enough so that my retirement would not change much with a large appreciation but might be adversely impacted with a large loss.

     

    If you can outperform SP500 over the past five years and have a mild loss (or possibly gain) in 2008, then I’d like to copy your recipe!!
    10 Jun 2014, 01:59 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Td94306: I took a snapshot of Fidelity's computation of my 3 year cumulative return as of October 31, 2011 and I was up 100% in the regular IRA:

     

    12/13/11 Post:
    http://bit.ly/U1amOe

     

    I updated the cumulative numbers recently in this post and the regular IRA was then up 224.27% over a five year period:

     

    4/18/14 Post
    http://bit.ly/1tjvWhn

     

    I do not own individual common stocks in the IRAs, other than a few REITs and BDCs which I trade. I will have small positions in a few high yielding stock CEFs.

     

    Initially, during the last downdraft, I took a hit but I used the downdraft to pick up securities that fortunately rapidly accelerated in price and had huge yields based on my cost. Those securities quickly brought me back to even and beyond.

     

    The reason for the performance in the IRA has to with a variety of securities that rose 100% to 200% in price fairly quickly after I bought small lots and paid dividends/interest. Those included ING and Aegon hybrids bought in the single digits, equity preferred preferred stocks bought at greater than 50% discounts to par value, trust preferred securities bought at large discounts to par, "principal protected" notes, baby exchange traded bonds, and trust certificates which are a form of exchange traded bond.

     

    Of all of those securities bought in that period, all but one has been sold or redeemed, except for KTN, a trust certificate, that was bought at less than $14 ($25 par value) that has a 8.2% coupon and an investment grade bond as the underlying security.

     

    I do not recall now how much I went down in 2008, but the number would probably be less than 20%. I do recall that I was back to even in the IRAs by the 2009 summer by not panicking, which includes unnecessary selling at temporarily depressed prices and using the opportunities given to me by the market.

     

    I had raised cash in 2007 for the reasons discussed in my blog, including the Trigger Event warning in my Vix Asset Allocation Model and other factors that cushioned the downside.

     

    Those opportunities to make a lot relatively quickly do not come around often. Oddly, my IRAs are still doing fine with the same preservation of capital and income generation emphasis. In my last YTD snapshot of Fidelity's calculations, the two IRAs held at that firm were up 6.94% and 6.52% through April 30, 2014:

     

    May 17, 2014 Post: http://bit.ly/1gAJaU0

     

    Given my concerns about stocks and bonds now, and having no financial need to push the envelope, I have sold a number of securities into the bond rally over the past several weeks and have raised my cash level to over $20,000 which earns .01% in MM funds. This is part of what I call turtle investing, just pulling the soft tissue back into the shell from time to time.

     

    As I note in my blog, I most likely will never need to draw those funds. If I do, something really bad has happened and the money better be there rather than in money heaven.
    10 Jun 2014, 07:45 AM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    I would add another important detail to the preceding discussion. During 2008-2009, all of my income generating securities held in IRAs continued to make their required distributions. I had no deferrals of cumulative preferred dividends, eliminations of non-cumulative preferred dividends, or BK's for senior bonds.

     

    Consequently, I had a constant stream of cash flow coming into those accounts.

     

    Regardless of my opinions about the market, I will aggregate that cash flow and use it to buy whatever I view as the best income generating security. In early October 2008, I thought that the world's economic system was on the verge of collapse. Yet, when I received that cash, I continued to invest it in both taxable and non-taxable accounts.

     

    The other point is that I was not selling income generating securities that were current on their payments, notwithstanding what proved to be a significant and temporary decline in prices. Those securities quickly returned to pre-October 2007 prices.

     

    And, it helped that I had raised cash which then could be opportunistically deployed in late 2008 without selling something that was down a lot to buy something else down a lot.
    10 Jun 2014, 09:19 AM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    M:

     

    "U.S. wholesale inventories increased 1.1% in April after advancing by the same rate in March. The rise was more than predicted by economists for April, expecting only a 0.5% gain. Sales at wholesalers increased 1.3% for the month, although down from 1.6% in March.Growth for this quarter is expected to go over a 3% pace, although sturdy gains in wholesale inventories for April could initiate a rise to GDP estimates. Inventories are a crucial component for gross domestic product changes.The U.S. Bureau of Labor Statistics reported jobs rising in April - showing 4.5M openings, compared to 4.2M in March."

     

    Good luck with that bet on lower interest rates.
    10 Jun 2014, 11:13 AM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    South,

     

    Thank you for the detailed account of how you handled the last market crash in 2008. I had been too busy working up until 2012 and did not have time to manage my portfolio. Hence, I mostly bought mutual funds prior to 2012. I have learned much from other good investors these last 2 years. When the next crash come, I will know to look at opportunities in preferreds, notes, bonds, and other issues that are beaten down. When that time comes, it will be reassuring to read other astute investors, such as yourself and Tack, are doing at the time.
    11 Jun 2014, 02:37 AM Reply Like
  • extremebanker
    , contributor
    Comments (1733) | Send Message
     
    SG: I prefer to manage to a number. I track 40 funds and several individual issues. I check price performance on a monthly basis. I rank each of 45 positions based on price performance. I multiply the balance of each position by the ranking it holds. I then calculate the weighted average ranking of the portfolio. I want a ranking of 30 or higher. My weighted average ranking at the moment is 34.
    8 Jun 2014, 09:43 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    Extreme: Given the size of my portfolio and its many moving parts, I can not be that precise, nor am I inclined to be. I am more of a generalist in my security selections. I also place a lot of emphasis on my big picture analysis which drives my asset allocations. It is important for me now that my Vix Asset Allocation model is flashing green. Another important consideration is my opinion that the weight of the evidence supports a labeling of the market as being in a long term secular bull move. Those considerations and many others will keep me at a relatively high stock allocation. After performing this recent analysis, I did not mean to be this high.

     

    You have commented previously that your management could be duplicated by one of your children or heirs, and that you left instructions to follow. You commented then that what I do could not be easily duplicated, which is correct. I am practicing a dynamic and tactical allocation that is subject to change and alteration based on my analysis and judgment about current data, and the relative values, risks and opportunities in varies asset classes and categories and sectors within in each asset class.

     

    Both methods can be productive. I publish my results in the blog, taking snapshots of all trades and returns calculated by the broker, which I view as satisfactory particularly given my large cash allocation earning nothing.
    8 Jun 2014, 10:41 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (2103) | Send Message
     
    Today I heard a comment from one of my favorite people, Art Cashin. He said "Even a blind squirrel finds a nut once in awhile." I'm still laughing....because sometimes that's exactly how I feel.

     

    You guys all write posts that are appreciated. Each has his/her own way of investing. Isn't it amazing that they all make money, over the long term? There is no one way to invest.

     

    Since I am often prone to being "overly exuberant" especially when my portfolios are doing well, I like to read about others taking profits, less risk, etc. It's always prudent to take some gains & rebalance your portfolio.

     

    We are in the midst of something very hard to accept. It appears the economy is getting better. Even when a company like (MCD) is not doing well in the US, its overseas locations are making money.

     

    There will always be stocks that are crazy, totally over valued & in need of a correction. Some of them have been hit hard, like (WFM). Others might fall a bit more. So the shorts have plenty to munch on.

     

    Then there are the stocks that in my humble opinion are just getting started.

     

    While I don't think we have gone off the deep end with over exuberance just yet, sooner or later it will happen.

     

    Meanwhile, I am enjoying my little market of stocks. And the dividends are nice too : )
    9 Jun 2014, 11:19 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    anybody still bullish on (SAN) ,

     

    its broken out on the charts ..

     

    thoughts, ideas
    9 Jun 2014, 04:54 PM Reply Like
  • Tack
    , contributor
    Comments (14128) | Send Message
     
    FG

     

    My largest individual holding. Long way to go.
    9 Jun 2014, 05:32 PM Reply Like
  • South Gent
    , contributor
    Comments (4026) | Send Message
     
    F & G: I own SAN shares and will continue to hold. The loan losses are coming down. They are still high compared to the U.S. regional banks that I own.

     

    Page 4 Transcript: "With respect to the group credit quality, the total non-performing loan ratio was 5.52%, 9 basis points lower than in the previous quarter."

     

    http://seekingalpha.co...

     

    I will generally own anywhere from 25 to 50 U.S. regional banks, and most of their NPL ratios are less than 1%. One that I mentioned briefly here, MBVT, has an NPL of .09%:

     

    http://1.usa.gov/1pdOxez

     

    That one closed today at $31.71.

     

    SAN still has issues, particularly with non-performing loans.

     

    St Louis FED: Nonperforming Loans (past due 90+ days plus nonaccrual) to Total Loans for all U.S. Banks:
    http://bit.ly/1oQfhP2

     

    I will reinvest the SAN dividend to buy more shares which avoids Spain's withholding tax.

     

    I also own BSBR which has an outstanding offer from SAN to acquire the shares it does not own for SAN stock (.7 SAN for 1 BSBR).

     

    My last SAN adds were at $5.55 in July 2012; $6.8 in April 2013 and at $8.62 last November (snapshots in blogs) The last reinvestment by Fidelity was on May 12, 2014 at $9.68.

     

    I also still own some SANPRB shares with an average cost per share of about $14.7.

     

    Rather than trading SAN shares, I have elected to trade that floating rate equity preferred stock with my last sell of the preferred discussed in an April post:

     

    http://bit.ly/1tjvWhn

     

    I did notice today that Spain's ten year note fell to a 2.58% yield today:

     

    http://on.mktw.net/1pd...

     

    The U.S. ten year was reported at 2.62%:

     

    http://1.usa.gov/oLC2C9
    9 Jun 2014, 07:05 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    One mans take on (GILD)

     

    http://seekingalpha.co...

     

    FWIW , i have read similar "takes" on the hep C drug market this morning .........
    9 Jun 2014, 05:01 PM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    F&G,

     

    Thanks for the link to a good article. I sold PUTs on GILD at $65 and again at $78. I will just buy the shares this time.

     

    I’m been tracking IDIX because it is 7% of Seth Klarman’s US portfolio. BTW, MU is a whopping 29% of his US portfolio.
    10 Jun 2014, 02:39 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (6271) | Send Message
     
    TD,

     

    i haven't followed (IDIX) but im sure those that are in the shares are smiling now..

     

    I was aware that Klarman had a big stake in (MU) . I believe he recognized the situation when it was in the single digits. So he is sitting on a huge gain..
    10 Jun 2014, 08:53 AM Reply Like
  • td94306
    , contributor
    Comments (43) | Send Message
     
    F&G,

     

    I started buying MU in May 2013 when I first learned about the company and the changing memory business. It was my largest position, so I felt much more comfortable when I later learned that Seth Klarman initiated his large position in MU in Q2 2013. I also bought IMOS, and it was nice to later learn that he bought 10% of the company. Klarman runs a concentrated portfolio. I think it may not be a bad idea to invest in his top picks.
    11 Jun 2014, 02:50 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (5217) | Send Message
     
    Author’s reply » td

     

    Do you know what Klarman's top picks are?
    11 Jun 2014, 08:45 AM Reply Like