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dancing diva

dancing diva
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  • Railroads Grow Faster Than The Economy [View article]
    I just started selling some out of the money call options against rail longs. While I can see no reason for a large imminent decline they have become a bit expensive and too popular for my liking. Unp has more than doubled since my initial purchase in Feb 2012 and CSX has almost doubled since buying in November 2012.

    The stocks were so undervalued in the past that I didn't have to worry about things like a drought reduced crop or the possibility of oil production declines if prices go much lower; now I do.

    Given their pricing power and the probability of further productivity enhancements I still like them for the long haul (no pun intended), but would not be a buyer at current levels.
    Nov 12, 2014. 10:39 AM | 1 Like Like |Link to Comment
  • Coca-Cola Has Growth, Margin And Capital Deployment Problems [View article]
    Great article, Tom. You made an excellent case for avoiding this expensive stock with little near term growth potential.
    Nov 11, 2014. 09:03 AM | 3 Likes Like |Link to Comment
  • Is Consumer Income Improving Or Declining? [View article]
    Unfortunately that data is only available from the Census Bureau with a big lag. In September the CB issued the 2013 figure which showed a small increase from 2012. It appears real median income has finally bottomed and is now trending higher.
    http://bit.ly/JqxJPC

    Note that Doug Short periodically reports real median income based on info from Sentier Research which also shows a positive trend.
    http://bit.ly/10ExOqC
    Nov 8, 2014. 06:44 PM | 1 Like Like |Link to Comment
  • Why This Johnson & Johnson Investor Is Concerned [View article]
    No doubt if you analyze JNJ in a vacuum and only look at the short term you'll come to the conclusion it's a bit overpriced. But if you compare conservative long term returns of JNJ vs the alternatives, it compares very favorably.

    If you feel uncomfortable trim a bit or sell some upside calls, but realize that volatility is so low it's hardly worth it unless you go out more than a year.
    Nov 7, 2014. 10:33 AM | 2 Likes Like |Link to Comment
  • No One Wants To Hear Anything Good About Amazon, But... [View article]
    All I know is the last several times I compared the price of a specific item on Amazon vs other sites over the past six months, I always found it cheaper elsewhere - and bought it elsewhere. Has Amazon lost its retail advantage now that there are so many others competing in the retail space?
    Oct 24, 2014. 12:49 PM | 2 Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #45 [View instapost]
    RD - I have to think about most of those issues more carefully. I haven't been ignoring this blog, but completely lost internet service for more than a day after a brief power outage Thursday night. And I needed to reconfigure my computer yesterday - what a chore! To be honest, my brain is still fuzzy as I'm trying to catch up on everything.
    Oct 19, 2014. 04:39 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    LMH - That's too hard for me. I have a slight preference for the spy over equal rated (because the top 10 holdings in the spy have a slightly defensive bias), but with aapl the largest holding in the spy and earnings next week, I guess the major question in the near term is how do you feel about aapl earnings?
    Oct 16, 2014. 05:46 AM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    RD - Reversal in IWM could have been due to unwinding or long spy/short iwm trades and oversold bounces in some really beaten down small caps. The IWM has yet to trade to levels that say it's all over.

    While the bond market did sell over for most of the session, it still closed higher - yields lower - than yesterday. I'm not convinced it's all over yet.

    Good point about the buybacks but unless mgmt feels comfortable forecasting their earnings going forward they may hold back.
    Oct 15, 2014. 05:03 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    RD - The important thing to note about those dates (stock/bond extreme) is that the market didn't have a v-shaped bottom but traded sideways for awhile before eventually trading higher.

    That is also likely this time as the trade digests the economic data and reads the tea leaves. IF the US economic data is OK and the world isn't falling apart the market will trade higher from today's levels because the trade will feel more comfortable about earnings growth.

    I can't emphasize enough how the morning economic reports changed thinking about next years earnings prospects. Perhaps those reports were an anomaly, but until we know for sure nobody will pay up much for the cyclical area until uncertainty is resolved.

    If Europe gets its act together, ebola is out of the news or something major occurs we can go back up and test the 200 day moving average, but until the uncertainty over the US economy and earnings are resolved I think it's better to stick to safety/quality or secular growth that isn't very expensive - think jnj and goog. However, if the lousy economic data is confirmed, expect new lows - maybe not this week but soon.
    Oct 15, 2014. 04:36 PM | 1 Like Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    I stopped myself out of exxi around $12 and felt like an ass doing so, but I had to keep disciplined. Never in a million years would I have thought it would trade below $7.

    Thanks for the info.
    Oct 15, 2014. 03:15 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    I don't disagree that the xle has at least found a short term bottom, but that sector is extremely oversold. But jnk, lqd, pff - while they are relatively better, considering what bonds are doing today they are weak.

    Look at the banks, Berkshire Hathaway - those stocks had been holding up well on the ideas the US was fine. But this mornings data puts a big dent in those ideas - and those stocks are now giving up the ghost. Watch BRKB - that's your "tell".
    Oct 15, 2014. 12:24 PM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    LMH - What economics? The great US data seen a few weeks ago or the crappy economic data we saw today?

    Complicating matters is that interest rates are very low again which should relatively support dividend payers and stocks - but at what point does the market lose confidence in the Fed that they might be able to support asset prices? It's obvious our feckless leaders in Washington have abdicated all responsibility for the economy. While I'm thinking 1800 +/- should provide near term support, we cannot rule out a repeat of the summer of 2011 occurs when the market lost complete faith in our government if the economic data doesn't improve.
    Oct 15, 2014. 11:49 AM | 2 Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    I was a buyer of a few things - jnj, ups, fb, goog and have sold out of some puts and half of my long Macy's when it bounced near unchanged. But I'm just nibbling. The charts look like crap, but much more importantly, this mornings data sucked. That suggests to me we'll see lower levels still - I'm looking at the 1780-1820 area as a level we could bounce from. But unless the economic data improves, only defensive sectors and reasonably priced growth stand a chance of going higher.
    Oct 15, 2014. 11:43 AM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    When it rains, it pours! If a second case of a health care worker contracting ebola wasn't enough, the really lousy September retail sales and empire state reports took the wind out of the US economic bulls. It's only one month, but it's obvious the market is taking it very seriously. Check out the 10 year trading at 2.05% - a level not seen in about 1 1/2 years.

    The only positive I see is how oversold the market is on a short term basis - but we've seen in the past in really lousy environments that doesn't mean much.
    Oct 15, 2014. 09:15 AM | Likes Like |Link to Comment
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #44 [View instapost]
    The way I look at it we have to close above the daily closing trend line, roughly at 1930 today to reverse the downtrend. The next few US economic reports Wed/Thurs - retail sales, empire state, industrial production, philly fed - will be very important.

    http://bit.ly/1u1hCrd

    Note we've bounced the last several times when the market has gotten to this rsi level so if the reports are good it should take us back to that uptrend line, but I doubt - at least during the next few days - the market can get above it as there should be selling against that level.
    Oct 14, 2014. 02:50 PM | Likes Like |Link to Comment
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