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Freedoms Truth

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  • Why Projections For Tesla To Sell 500,000 Cars In 2020 Are Absurd [View article]
    Not a bubble in that the long-term fundamental case for EVs is strong.

    Whether it's worth paying $30B now for that is whether it's a 'bubble' or not. Tesla could be Yahoo circa 1999, a truly valuable company, but one whose stock price has priced in more success that it will achieve. Or it could be like other growth stocks that look overpriced for a decade but keep levitating while they grow (think salesforce.com).

    I shorted a number of companies back in those days, made a killing shorting the internet bubble. Tried shorting Tesla briefly last year, and regretted it. It's not a POS company, it's got real product, real sales, and real growth. Not a good short.

    Since it's way overpriced in my book, it's not a good long either.
    Nov 16, 2014. 09:45 PM | 2 Likes Like |Link to Comment
  • Why Projections For Tesla To Sell 500,000 Cars In 2020 Are Absurd [View article]
    Actually hydrogen is usually made from methane.

    hydrogen is a bad fuel form, and fuel cells are inferior to ICEs for transport in cost, size, etc. we are much better off with gasoline, cng, or hybrid/EVs.
    Nov 16, 2014. 08:15 PM | 3 Likes Like |Link to Comment
  • Futures slip in Sunday evening action [View news story]
    Markets forget things.
    Oct 12, 2014. 10:53 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Can Earnings Season Reverse The Stock Market Decline? [View article]
    Jeff: "Fundamental market factors suggest that declines will be limited."
    This backstops the case that dips are indeed buying opptys - no recession, earnings are ok/good, etc.

    But what about short-term?
    Most of the technical indicators comparing it to previous selloffs suggest this is another mini-correction, like Aug, Feb, June '13 etc.
    Technical indicators that shows signs of an oversold bottom short-term: OEXA50R under 30, VIX spike above 20, hit the 200DMA, VIX/VXV at 1.05.

    Prior 7 times these signals happened since late 2011 the low was in or imminent within days (sometimes there is a double-spike). VIX spiked 40% in 2 days. Went back and checked when vix spiked that much in a week, since 1991, and it market the lows in selloffs in 1991, 1994, 1997, 2005, 2006, 2007, in addition to multiple selloffs since late 2011. (Sept 2008 the notorious counterexample where bad just got worse).

    " To support what bbro said, in most cases and certainly recent cases, a breach of the 200 DMA is not the end of the world and may present a buying opportunity after resolution of the breach"

    We havent breached 200DMA for more than a week since may/june 2012. Back then it took a few weeks to resolve. If we follow that pattern, we will hit the bottom in 3 weeks, and be at new highs 6 weeks after that (dec 15). So even a longer visit below the 200DMA is not a sign the end is nigh.

    It seems the bad September, volatile October are playing to type, but we get into seasonal favorability soon.
    Oct 12, 2014. 05:11 PM | 3 Likes Like |Link to Comment
  • Why Spain May Cause European Panic [View article]
    I just noticed that Spain's 10yr bonds are 2.05% (!!!) lower than the US. If there is sovereign credit risk, it's not in the market anymore. ECB policy is now weaker / more accomodative than the Fed, hence the rising dollar and lower Euro area interest rates, pulling treasuries down.

    This is not a bad thing for US.

    Also, note this: Berenberg Bank economist Christian Schulz says the recent dip in German data will fade and that Europe's largest economy will return to "full growth mode" in early 2015.

    So if Germany strengthens, it will give you a false signal (German strength) vs
    Spain weakness.
    Oct 12, 2014. 12:05 AM | Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    The last time we fell under the 200DMA was in April/May/June 2012.
    In fact we had the worst week on Wall st this week since ... May 2012.
    Back then it was Greece and France jitters making us sell off, now its
    Germany. We had a 7.5% pullback, bottomed and hit new highs within 2 months.

    If the same kind of script plays out, we either bottom here and now (5% drop), or pull back to the 1860-1880 range on S&P, put the bottom in by end of month and end the year above 2000.

    Given the tame oil pricing, oil companies have already sold off, so not much downside there, but there is economic upside to cheap oil/energy for the rest of us (airlines, trucking, retail, utilities, other materials, etc.).

    The fact is that QE has already been tapered to a trickle and the dovish Fed wont end ZIRP soon, no need to with pricing all tame (commodities, housing and wages all show no signs of inflation), so the QE factor is more psychology than money flow. Weds the market zoom 2% UP on Fed meeting minutes that were deemed marketfriendly. Then the market forgot that (over)reaction promptly.

    I think we get driven by earnings over the next weeks ahead. Market will play out in earnings and depending whether earnings hits the project 4.5% earnings growth target or not, we may recover.
    Oct 11, 2014. 04:46 PM | 7 Likes Like |Link to Comment
  • Stock Market Uptrend Is The Most Overbought In 40 Years [View article]
    "At present, we estimate that the S&P 500 will likely underperform Treasury bills (essentially achieving zero total returns) over the coming 5 year period, with a probable intervening loss in the range of 30-40% peak-to-trough. ...My impression is that the Kraken is about to break loose, as valuations are rich and dependent on permanently high profit margins, speculators appear "all in" based on depressed bearish sentiment,... " - Hussman, April 30, 2012
    http://bit.ly/1t1NMbk
    S&P was about 1400

    "our estimates of prospective market return/risk have been negative since April 2010 and have remained negative even as new data has arrived. Since early March, those estimates have plunged into the most negative 0.5% of historical instances."
    http://bit.ly/1t1NMbl
    September 2012, S&P was 1450

    "I want to share my view that the statistical risk of severe market outcomes, given present observable data, has almost never been worse."
    - Hussman, Nov 2012, S&P was 1400.

    So Hussman has been calling the top for a LONG TIME, about 30% lower on the S&P.

    Who knows, some day he may even be right.
    Oct 7, 2014. 07:57 PM | 1 Like Like |Link to Comment
  • It's Time To Get Short Volatility [View article]
    Everyone is trained to sell the spike. It works. Til it doesn't. "
    Yeah, the inverse of buy the dips.
    Oct 6, 2014. 02:03 AM | 1 Like Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    One of these days, they will be right. Probably exactly when nobody listens anymore.
    Oct 2, 2014. 12:04 AM | 7 Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    Yes, fracking for oil has a lot to do with oil being $90 and not $130 these days.

    USA has gained a lot from oil and gas boom this past few years, you can credit much of the growth we've had to that.

    It's not a coincidence that the spike in oil to $140 in the summer of 2008 came right before the financial crisis. Ever recession we've in 30 years was preceded by a rise in oil prices. Lower oil prices are NOT bad for the economy.
    Oct 2, 2014. 12:03 AM | 9 Likes Like |Link to Comment
  • Should P&C Insurers Be Afraid Of Climate Change? [View article]
    Climate Alarmism cancelled.

    http://bit.ly/1u7CWis
    Sep 30, 2014. 12:29 AM | Likes Like |Link to Comment
  • It's Time To Get Short Volatility [View article]
    1st paragraph: "minimizing risk"

    last paragraph: "To be clear, such a trade requires a relatively strong stomach for risk."

    VXX and VIX is all about risk. Shorting volatlility products is being paid to eat tail risk. It will triple if the market tanks.

    There is no way to trade VIX products without a large amount of risk.
    This kind of caveat should be in the headline, not buried in the last paragraph.
    Sep 28, 2014. 05:27 PM | 2 Likes Like |Link to Comment
  • Major Stock Market Selloff Looms As The Fed's QE3 Ends [View article]
    Never in the entire history of the stock market has there ever been a bull market that did not eventually peak and slide into a bear market. "

    The 1980-2000 bull market went from under 1,000 to over 10,000 on the dow. despite bear markets, we never went back to where we started.
    Sep 28, 2014. 05:10 PM | 2 Likes Like |Link to Comment
  • Major Stock Market Selloff Looms As The Fed's QE3 Ends [View article]
    Dollar is up because US Fed is moving away from QE just as Europe embraces it.
    Sep 28, 2014. 05:08 PM | 1 Like Like |Link to Comment
  • Major Stock Market Selloff Looms As The Fed's QE3 Ends [View article]
    Technology-based deflation is a GOOD thing.
    It means more units and more economic wealth at lower cost.

    It also mean the Fed can lean towards inflationary money policy (ie low rates) with less fear that with technology and globalization capping pricing, it wont restart inflation fires.
    Sep 28, 2014. 05:07 PM | 2 Likes Like |Link to Comment
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