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OldWarrior

OldWarrior
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  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    I'm not totally sure of the significance as regards the current price of silver; but I need to point out that the major industrial use for silver (that being Film Emulsion) has virtually completely dried up since 1980. Back then we were using multi-level reclamation methods for reclaiming silver out of "Fixer" as we were able to harvest thousands of dollars worth each year, both from old X-Rays and similar which were microfilmed after 7 years, as well as what we got from the fixer. We used first an electrolytic reclaimer which plated silver onto the anode, then a catalytic converter type filter to get the rest.
    When the Hunts were trying to corner the market, there was real fear that production of new silver could not meet the medical demand and that alone was enough to trigger the governments to raise the margin requirement in order to stop the Hunts. There was no other actual valid reason to raise the margin requirement, as silver was not like Tulip Bulbs-only worth what someone would pay you. By that I mean that, unlike the very volatile stocks that have special Margin Requirements, Silver at that time had a very real industrial consumption rate, and thus there was no danger that there was undue risk in lending against it like with Penny Stocks.
    Medical Imaging has largely gone digital since then, as the image quality of digital now equals the best film, the price of film is prohibitive (compared to Digital Storage), and that digital imaging requires less radiation exposure to the patient than film. Even if the radiation exposure per shot was equal, the cumulative exposure to patients would be less as digital methods have virtually totally eliminated the need for "Re-Takes".
    Even after the price had settled down post the Hunt Brother's affair, each X-Ray room used as much as $100k of film alone each year.
    My point is that it is my opinion that silver's value as an industrial metal is almost gone compared to even the 90's. If it were still in use in any quantity, Kodak would still be in business. So now silver, like gold, is an "Ornamental" metal with the value of it largely influenced by the Jewelry trade, (Quite large here in New Mexico for Indian Jewelry), but nowhere near what it was just 20 years ago. If anyone has comparative statistics, please post them. I would like to know.
    Apr 28, 2015. 09:09 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    Were they Stop Limit or Stop Market orders? A stop Limit will not trigger at a price below the "Limit", while a stop Market triggers at the offer. If his stop Limit orders cost him too much money, then he had his limits set too low. I occasionally use Trailing Stops when a stock hits it's Price Target early and I think it will run further, but I set my limit at a profitable level.
    Apr 28, 2015. 05:14 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    OAG
    You wrote "OW, So if I do feel a big market correction is on the horizon, I might be best to stay out and time a bottom?"
    Did you think that was what I was saying? What I was trying to say was that is almost any market, there are stocks that are buyable, thus no reason to bail out entirely. I used JAZZ as only one example because they had a sharp drop over Friday and Monday, which should reverse.

    Regardless of whether you feel there is a correction coming, or if you are bullish; you will be unlikely to time either a top or a bottom. Either way you will leave money on the table. Crashes like we saw in 1987 and 1999 are only about once per decade. Major Meltdowns like 2008 are like 1 per 80 years. The rest of the time, companies make money, money flows upwards and must be invested in something that makes more money. It took well over 3 years after the 2009 bottom before Retail investors got back into the Market, so we are really only 4 years into the Retail Bull market. Certainly there will be corrections, but each one has a higher low and until we can find no stocks that Market Makers will buy, I will stay invested. Perhaps not fully like today, but at least 50% like I was 2 weeks ago (many stocks hit their PT's at once).

    What I use for a strategy is, as I have said elsewhere, is to use Peter F Way's Blockdesk.com's strategy of analyzing Market Maker's opinions on stock movements in the near term. They look at the stocks hedging activity and from that, discern what Market Makers are paying to hedge their positions when they have to put their own capital to work to provide liquidity for their clients.
    Their clients are the very large insurance companies and retirement funds whose purchases and sells move the markets. They employ the Market Makers to trade these large blocks without causing the market prices to move far against their strategies. For this reason, the MMs often have to own large blocks of stocks, which they purchase hedges against from other MMs.

    The resultant retail investor strategy is to invest for up to 3 months per stock unless it hits it's Price Target. If you look at my Challenge portfolio, I have been following this disciplined strategy for virtually every trade since August and have doubled the DJIA. I use the same strategy in RL and have never had better years since adopting this. This strategy is not for the investor that thinks they can beat the market, nor for the Buy and Hold forever types. It is for the active investor who can stick to a disciplined strategy and not play with penny stocks, nor bail out before the Time Target just because a stock has fallen a few $. This strategy requires a certain amount of unlearning what worked 20-30 years ago, and accepting that technology has a place in investment strategies.

    Using 1-1-09 as a price point for any stock is going to show an unreasonable gain. Furthermore, having your IPO going into the worst crash since the depression would be tough on any company. Their very survival through the first 18 months of their life on the Market is a testimonial to the strength of their management. JAZZ is estimated to have a >90% chance of breaking $200 in the next 3 months. It is certainly no longer a Penny stock by any stretch. They are making a profit and have drugs in the pipeline coming on. They also are considering an offer from a Chinese company for the purchase of one segment of their enterprise.

    THAT SAID- None of this is relevant to my investment style except that the stock is >$10.Share, has at least a 3 year history and has sufficient hedging activity for Blockdesk.com to get an idea of what the Market Makers think the stock will do. Those are the only 3 requirements that Blockdesk needs. They sift through some 2500+ stocks each day and you can buy a list of the top 20 of each day's stocks after 5 Eastern. There are many tools within Blockdesk's site with which you can follow MMs Opinions on whatever stocks meet those 3. Further, stocks with only a 2-3 year's history are also evaluated, and usually a reasonable inference can be made on them. There might be too few previous similar circumstances on those though to have a high credibility ratio.

    I have never had a problem finding undervalued stocks. My problems have been centered around setting sell targets. With the data I get, I know when I should or must sell (2 different situations).
    Apr 28, 2015. 05:03 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    I would suggest that the investment club be set up on a Pass-worded site by invitation, and once money becomes a possibility, a far more secure site than SA. I would be interested, but of course much needs to be discussed.
    Apr 28, 2015. 03:31 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    Think about it. There is always a certain amount of stress building up at fault lines. Fracking is bound to trigger some but that is not a bad thing. I would far rather see 10k of 3.5 strength earthquakes than 1 6.0. Think of it as relieving the stress near New Madrid before we see 4 more big ones there.
    Apr 27, 2015. 08:35 PM | 2 Likes Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    Deercreek
    Stop Limits would have been ok in a flash Crash, while Stop Market orders would be the ones that killed you. A stop Limit means that if the price drops too fast and goes below your limit, you don't sell. In that Flash Crash, for a while no one was buying at any price, so limits were passed, and people using them had time to re-think their positions before they got filled.
    Apr 27, 2015. 08:30 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    OAG
    While not a "Perma-Bull, I feel that there are almost always some stocks that can make you money being Long on. Look at FTNT last week, and after today, watch what happens to JAZZ this week.
    Apr 27, 2015. 08:26 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    I just this week watched a story about the 16 Sherpas that died last year on Everest. While the government of Nepal was collecting >4 Million in licenses to climb Everest, they offered to pay the families of the Sherpas only $400 each. The rest of the Sherpas went home, and no one climbed Everest last year. This year they had 318 people buy licenses, now right at the start of climbing season (April-May only), the Base camp got wiped out. As of tonight they are reporting 4 Americans killed in the avalanche. At least 17 died in the camp and over 4k killed around Nepal with many more missing or yet too rural to know of.
    Apr 27, 2015. 08:21 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    When you sell because a stock dropped, all you did was lock in a loss. I prefer to lock in Gains.
    Apr 27, 2015. 08:15 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    I think you are likely not far off OAG
    Apr 27, 2015. 08:12 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    I've been both sick and busy. So much so that my latest bookmarked chapter was 111. It took me 20 min to catch up to this Blog.
    Well I was back on top in the Challenge for like 48 hours, then a dip and I'm first Loser again <sigh>
    Apr 27, 2015. 08:09 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments !! Chapter 117 [View instapost]
    Crade
    The US Median income is around 50k. Saving 25k means living on the remaining 10k that you get after taxes.
    This is a typical B&H strategy that so many people love, and 6/19 of us in the Challenge have shown we can beat the DJIA and we are not investment professionals. This is the same strategy that, as Peter Way says, causes people to look into their inherited portfolio and find a stack of Kodak, old GM, Sears Etc.
    All this is assuming that you have 30 more years before you retire. I turn 65 in August, but retired at 46 because I refuse to B&H.
    Apr 27, 2015. 08:05 PM | 1 Like Like |Link to Comment
  • They Lie! Pros Make Successful Stock Price Forecasts, Every Day, With Double-Digit Simple-Percentage Payoffs [View article]
    @kimboslice
    Your observation that the market is an auction is exactly the reason that knowing the Market Maker sentiment works. At auction, something is only worth what another person is willing to pay for it.

    By analyzing the MM sentiment of what they are willing to pay to hedge a position, Peter can determine what the MMs are willing to pay for that position.

    Had similar paintings by that same artist sold in the immediate time frame around that auction, would not Sotheby's have had a better idea of the reserve to put on it? Peter shows you what people are willing to pay, and what they are likely to pay in the near future based upon similar past experiences.
    What you see above in figure 1 is Hard Data that can be tracked and the results tabulated.

    I reiterate what I said elsewhere. Why would one think that "Because we have always done it that way" is an acceptable answer ?
    Apr 24, 2015. 11:44 PM | Likes Like |Link to Comment
  • Forum On The Tools And Philosophy Of Blockdesk.com, Peter F. Way And His Usage Of Market Maker's Hedging Strategies [View instapost]
    @Lbiasotto
    After re-reading my reply to you, I thought that I should spend a little more time talking about situations. When you talk about adding to a position and what to do surrounding that, I think it's important to make decisions based upon the size of the additional position, as well as the data revealed by the newest BTF. I based my answer upon an addition approaching equal sizes. Let's assume you have a position worth 5k and buy another ~5k, that should probably be viewed as a new position, and treated as such. That not only includes a new BTF, but also a new Time Target and likely a new Price Target. If however, you only add a couple k of stocks, then bookkeeping ease dictates that you maintain the original PT and TT.
    In any event, a new BTF is needed to help you decide the size and risk of the new capital. Even assuming a purchase of smaller size to the first position, one needs to look at the Price Target of the new position. If it is significantly different from the original, then again, it is probably best viewed as a new, separate position. Then too, you must consider your "Risk Tolerance". The new BTF will also tell you Risk-Reward information, which may well influence the size of the new position, as well as the PT and TT. I hope I did not confuse you more than I clarified; but very little in investing applies to all people and all conditions. Everyone's Risk Tolerance, Goals, and, of course, Portfolio is different, and must be taken on a case-by-case basis.
    Apr 24, 2015. 09:51 PM | Likes Like |Link to Comment
  • Forum On The Tools And Philosophy Of Blockdesk.com, Peter F. Way And His Usage Of Market Maker's Hedging Strategies [View instapost]
    @Lbiasotto
    The 63 days start from the BTF. and I always run BTFs before a buy. Even if it's 2 months later, I often look at the stocks from the list of stocks in the other tools, and if some look good I'll run it's BTF. If I like it, it starts from the last BTF as a new position. I keep each buy as independent. Others may work it differently, but I view each position as new, even if it's the same stock.
    Apr 23, 2015. 12:18 PM | Likes Like |Link to Comment
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