Abraxas

Why Airline ETFs May Be Ready for Takeoff

FAA is about to match (perhaps break) its September all time high of 29.96 (but remember, it only started trading this year) in the incoming days. I am selling half of my shares, which I picked up earlier this year, with an average price of around 17. So, I will exit with a healthy gain of over 60%.

Although one should be pleased with such a gain, and I am, it is worth remembering that FAA is still underperforming broader indices if measured from March's bottom. So, my relative return in most other ETFs bought around the same time is actually higher.

A worth of caution, though: at this point, one is more likely to obtain a good return by shorting FAA when the overall market turns back down (but wait until the market actually does turn), as FAA will most likely fall farther and quackier than the overall market.

You can then pick it up again around 22... yes, believe it or not, FAA has already shown that it can fall almost 30% in a month, even during overall rising conditions! (check last October).

As a parallel pairs trade, you can also go long Southwest LUV (the strongest) and short Boeing BA (the weakest).

Tata Motors: License to Dive

Sorry Paul, I love shorting, but your trade is truly a bad trade and worse advice.

You seem to have forgotten the cardinal rule of short trading: you short a stock (not a company) when the stock is at its weakest and breaking down. You should absolutely avoid shorting a stock when it could potentially break a new high.

One could hardly pick a worst moment to short Tata than the one you have advised. Whoever shorted it is losing 15% in just a few days!

You appear to think like an economist. Although you might find it hard to believe, economic analysis and trading are not the same. Trading is neither efficient, nor rational; in fact, good traders take advantage of these two factors.

Remember, the market (and your stock) can remain irrational a lot longer than you can remain solvent. With trades like this, you won't remain solvent for too long!


On Nov 23 06:52 PM Paul Price wrote:

> Perhaps the three previous commentors need to read income statements
> and balance sheets instead of just painting in broad brush comments
> about India.
>
> TTM is losing big money with no signs of a near-term improvement.
>
> Debt is excessive.
>
> At $3 it was a good speculation. At $14 it's a good short.

Why the Stock Market Should Crash

Actually, it was John Maynard Keynes who said "markets can remain irrational longer than you can remain SOLVENT," which is a much more powerful quote.

That's why one trades on perception of reality and not reality itself. Nevertheless, one should be aware of such reality and be ready to pounce once the crowd finally uncovers it. So get ready to put your short positions...


On Nov 17 08:32 AM jmann83 wrote:

> Its the old saying ''markets can remain irrational longer than you
> can remain rational'' and price often goes further for longer than
> we think, it's the classic carry trade on again with Ben's helicopter
> money, the US government has no choice but to inflate away it's issues,
> deflation would be the worse of the two evils, buying anything priced
> in USD is the trade right now and could be for several or more years,
> the yen carry trade lasted almost a decade before imploding last
> year. Risk assets could go a lot higher before coming back, as it
> would take a major pyschlogical market shift for a USD rally and
> selloff in everything else.

Investors Looking for KB Homes Shares to Short

Good call David. So you bought it today, didn't you?... KB Home is down 10% today alone!

"I am bullish long term on this housing market..."

The housing market can remain bearish longer than you can remain solvent. But, hey, good luck trying!


On Jun 26 12:27 PM David Ristau wrote:

> I think KB Homes had really positive earnings. They did miss the
> EPS, but they had 75% increase in profits from last year. They had
> 59% increase in new home orders. They are optimistic. The home companies
> have done the right things to reduce costs, push up profits, and
> the market appears to be flattening.
>
> I am bullish long term on this housing market...
>
> David Ristau
>
> President, The Oxen Group
> theoxengroup.com

Pullback on Monday?

well, I certainly looks like you will be the one flushing all you learned!

The authors were spot one!


On Apr 19 03:17 PM ZAIDANE wrote:

> If the market goes up Monday,will you flush all you learned so far
> in the toilet?

The U.S. Banking System's Terrifying Balance Sheet

You need to read the original post by Tyler, which is very detailed and far from shallow, to understand the comments by Felix.

Then, if you still feel like it, you can post your own shallow and useless commentary as you have done.


On Apr 08 09:51 AM Steve W from Ford wrote:

> What a shallow and useless exercise. Does no one exercise any editorial
> judgement on what gets posted?
> The analysis is so shallow as to be laughable and the assumptions
> are rediculous. The US banking system will NEVER get to 75% losses
> as way before we reach this point there will be total societal collapse
> as to reach this point of loss posits that NOTHING any longer has
> any value is the US. Not house, not commercial buildings, not securites,
> nada zilch!
> So why not just put on a sign saying "The End Is Near" it's about
> as good an argument.

USL, USO and the Contango Collapse

Matthew,

No apology necessary. Your suggestion to buy USL instead of USO was NOT wrong. It was, and it is still the correct call. It is just that you are now looking at your advise a few weeks out, an exceedingly short time frame to come to your conclusion.

Tactically, it was the wrong short term trading advise; simple bad timing. Strategically, though, it was good investment advise.

Clearly, most people wanting to have exposure to oil would still be better off with USL, which spreads out the risk, than with USO. USO is a good short-term trading tool but a dangerous long-term investment one. The only possibility for USO to outperform in the long run would be to have long term sustainable backwardation and that is not likely to happen.

Wouldn’t you agree that, in the long run, oil contango is still the most likely scenario and, thus, USO will likely continue to suffer from this systemic drag and underperform? Stick to USL.

Explaining the Berkshire Share Price

Fortunately for Buffet you happen to be wrong. This is one of the reasons why Buffet is such a good investor and most others are not.

The options he has are European style ones so they can NOT, in fact, be exercised at any time, only at the expiry date of the option, which in most cases is decades away.

Wouldn’t you love to be the one in Buffet’s position; decades to invest the premiums, which for him is just like the beloved “float,” while the market place goes back up.

Quite a safe and smart investment, in my opinion. Wouldn’t you agree?



On Mar 08 07:14 AM paultaut wrote:

> Buffet made a Bet on the future BNI's stock price by selling the
> $72 put. Stock is below $50. That was in addition to the millions
> of shares bought at even higher prices. He owns about 20% of the
> company.
>
> He made an even bigger Bet on the stockmarket in general by selling
> long term puts, this put cash into his coffers to the tune of $6
> Billion, I believe.
>
> Given that the leverage is 10 to 1, if the stockmarket goes down
> as much as much as some predict, he will have to come up with a big
> part of $60 Billion to cover.
>
> The last I heard, his position is already $10 Billion underwater
> based on the price of the Puts sold.
>
> BRK.A has Billions in cash and apparently can't find companies to
> invest in, yet Buffet sold Billions worth of puts. Since Options
> can be exercised at any time, BRK.A has the Potential of suffering
> big time from this one act, at any time.
>
> This isn't the first time he has strayed. He invested Billions in
> the Futures markets Betting on the USD's decline a few years back.
> After Losing Billions he covered.
>
> As far as I'm concerned, those stockmarket Puts are a timebomb waiting
> to explode. IMHO

Will China Continue to Buy U.S. Debt?

Agreed, but there is a difference between understanding the political context in which the markets develop and bringing your own political views, which are totally irrelevant to the market, and hence, useless to the reader.

Unless the author is a investor and political heavyweight, say Soros, who can influence markets with reasoned views, such political opinions are worthless.



On Feb 26 01:53 PM PainfullyAware wrote:

> Those who do not include "Politics" in their understanding of markets
> will not understand the nuances that drive the heard.

Will China Continue to Buy U.S. Debt?

Your angry outburst clearly demonstrate that your language, as your thinking, are indeed plain.

Evidently you do care what I think, otherwise you would not have written the rant.

Oh, but wait, I forgot: “nobody cares” …so you are nobody!



On Feb 26 12:05 PM boats.j wrote:

> Oh really? The thought police are here!!!!!! There is this little
> tiny thing called 1st Amendment. I know you corporate/financial types
> don't care about the 1st Amendment except when you try to apply it
> to juristic persons having the right to speech.
>
> In plain language: nobody cares what you think!

Will China Continue to Buy U.S. Debt?

Mr. Liebcap, your political positions are of no interest to the reader. Seeking Alpha is a trading and investing forum and not the forum for political venting.

5 Indicators the Economy Is Recovering

This is not the forum for these types of comments!


On Feb 25 08:53 AM ecliptix543 wrote:

> Either way it goes, I've got a plan! For every 100 shares I buy while
> fishing for the bottom, I also buy 100 rounds of ammo in case it
> all goes down the toilet. One of the two will prove to be the smart
> investment... I'm already seeing +200% paper returns on the ammo,
> by the way...