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Todd Johnson
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Invest. Manage risk. Communicate. Educate yourself. Make profits. It's DividendLab. Visit http://dividendlab.com for details. Hello, My name is Todd Johnson. I’m a family man, sports fiend, health nut, technology buff, long-time stock investor, and a very lucky mountain climber, all of which has... More
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  • bigazul
    , contributor
    Comments (1001) | Send Message
     
    Trusts are driving me nuts right now. Not because they are dropping so fast...because I want to pounce on them right now. Same with mREITs and some MLPs. If I can enter these things the right way over the next few months, I can walk away from the daily market grind for the next decade. For income, this an opportunity.
    3 Oct 2011, 09:48 PM Reply Like
  • Todd Johnson
    , contributor
    Comments (6953) | Send Message
     
    Author’s reply » True. Very true. I have to admit usdebtclock.org is always on my mind. A zero interest rate. Jobs being lost. Very difficult environment.
    3 Oct 2011, 09:49 PM Reply Like
  • bigazul
    , contributor
    Comments (1001) | Send Message
     
    Todd,

     

    Call me Tim...Is UAN's plunge just a result of the sell-off compounded with the surprise corn corp? The action was extreme, to say the least.
    3 Oct 2011, 09:54 PM Reply Like
  • Todd Johnson
    , contributor
    Comments (6953) | Send Message
     
    Author’s reply » Tim,

     

    If I were to presume to know: I would say because of the ECRI "recession call" which states a 'vicious cycle' even worse than current environments.

     

    Many commodities were thrown out the window today.

     

    The same can be said about PER, SDT - although those prices are already have hedges fixed.

     

    My view is China, U.S., everywhere are in total confusion. Inexpensive OTM puts were (are) available even on the most innoculous names.

     

    I may be wrong - and I'll stand corrected if wrong - but in 2008 or 2009 I bought BUD for $30/per share. It's all about counter party risk; the Euro.

     

    Not much info in this reply, but the markets are wicked...so I am long SPY puts; company OTM puts; and trying to avoid the worst case situation.

     

    Jean-Marie and Francois (last week) really talk about the deflationary pressures: http://wealthtrack.com/

     

    It's messed up. Knowing it's messed up, buy what's going up...forced liquidations. Imagine all the mutual funds that are 100% long only positions. They need to sell.

     

    Just my 2-cents.

     

    Todd
    3 Oct 2011, 10:06 PM Reply Like
  • bigazul
    , contributor
    Comments (1001) | Send Message
     
    Including hedges, I'm net short in my brokerage account for the time being. Most of my positions in my IRA's are so old its the house's money now, so I don't fuss with them.

     

    The upside to me is that the crazier things get, the quicker the time-line in this mess. You know, "The flame that burns twice as bright..." I think we'll have a good idea of the end-point by the end of this quarter. Not saying we'll be there by then....but recession, depression, rebound... there will be less guessing required.
    3 Oct 2011, 10:20 PM Reply Like
  • Todd Johnson
    , contributor
    Comments (6953) | Send Message
     
    Author’s reply » Tim,

     

    Let's hope so. I lack such conviction.
    3 Oct 2011, 10:24 PM Reply Like
  • User 341510
    , contributor
    Comments (5019) | Send Message
     
    If we are now in recession, this is the most bizarre one in history. It is a recession where the first thing people do is rush out and buy a new car. That is what the sales figures for General Motors showed this morning, up an impressive 19.8% in September. The results were even better for Volkswagen (+36%) and Chrysler (+27%).

     

    The data suggest that corporate managers start loading up on new inventories in this recession. That is what the Institute of Supply Management (ISM) suggests, with their index up from 50.6 to 51.5 last month. Managers also hire new people in this Frankenstein of a recession. Adding up the nonfarm payrolls for the past three months, there is a substantial gain in the newly hired by the private sector. This was further confirmed by the weekly jobless figures, which delivered a blockbuster decline of 37,000 to 391,000 in their latest report, a multi month low. Only the government is still taking the ax to employment, both at the federal and the local level.

     

    Want to know what else our new recessionary consumers do? They buy diamonds. I was doing some early Christmas shopping at Tiffany’s (TIF) over the weekend, and the sales person told me that they were running out of diamonds, especially the high end kind over two carats especially favored by the wealthy. Also, When I flew into the Netjets Center in San Francisco on the way back from Las Vegas, I had never seen it so crowded. I’m talking packed with Gulfstream V’s, not Cessna 152’s. Not only are the rich getting richer, they are doing so at an accelerating rate.

     

    Let me give you an alternative explanation here. A modest 2% GDP growth rate is forcing a permanent downshifting of price earnings multiples from its historic 10-22 range to a more subdued 8-16 range. Investors are happy to pay premiums for an outsized future, not the more subdued and austere one we are now facing.

     

    That means we could see more downside before the bloodletting is over. If your assumption is that the S&P 500 delivers $100 a share in earnings in 2011, then an eight multiple takes us as low as 800 in the index on a spike down. Granted, this is an extreme view, but given the recent dismal price action, one that cannot be dismissed. Looking at the dire close today, 1,050 in the (SPX) seems to be a done deal, and perhaps $55 for the (IWM). Until then, I’ll be shopping for more diamonds.
    4 Oct 2011, 10:23 PM Reply Like
  • Todd Johnson
    , contributor
    Comments (6953) | Send Message
     
    Author’s reply » Mad Hedge Fund Trader,

     

    I think we have to define the recession in terms of "reality" and "textbook".

     

    A recession has a high level of unemployment. I don't know what the true number is, but it is quite high. Is it accurate to say 1-out-of-6 Americans are on food stamps?

     

    Tiffany's and Apple (I am a big fan of yours, so I know you know Apple) are doing extremely well.

     

    In my mind, a significant number of U.S. adults can not find jobs; are under-employed in their skillset vs current job; many have lost home value (your SF buy/sell classic); and the country is in a fiscal mess.

     

    By no means am I suggesting that all U.S. citizens, families are homeless and without discretionary funds. But the numbers are climbing.

     

    Best, Todd

     

    5 Oct 2011, 07:28 AM Reply Like
  • Todd Johnson
    , contributor
    Comments (6953) | Send Message
     
    Author’s reply » "Give us a year and tell us if we are right or wrong - on Bloomberg"

     

    ECRI Bloomberg Interview
    Dec 2011
    http://bit.ly/uryZZl
    9 Dec 2011, 09:38 PM Reply Like
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