Yes. good qn. We need to look not only at rally and then performance 1 month later. But also have to see 1-2 months before the rally how was the price movement. I looked into that. It seems after a correction of 20% -25%, ( such as the recent one with low made on 4 Oct 2011) such rallies last longer n marks the bottom. i.e this time 1075 bottom seems to be set for this year 2011.
Wall Street Signals A Bull Market In U.S. Stocks [View article]
agree. This time not only the `chicken little`s` small fish such as retail investors were sitting on cash even professionals such as Hedge Fund Managers have been sitting on the fence by non participation. And now S&P 500 , Germany DAX, Hong Kong Hang Seng, Brazil Bovespa , Russia have already rallied +20% to +25%. They have no option but to chase performance now. my post here http://bit.ly/vdH1Fa
If Things Are So Bad, Why Is The Market Going Up? [View article]
Yes. Agree. Germany DAX, Brazil Bovespa , Hong Kong `s Hang Seng ,SPY S&P 500 , Russia have ALL already rallied +20% to +25% since 5 Oct 2011 or just 17 trading days !!. India seems to be set to play catch up and also rally +20 % http://bit.ly/vdH1Fa
Green Mountain Coffee Roasters: Why Many Investors Fear This Market [View article]
no offence but I`m waiting for bulls like you all to buy more GMCR so that I can keep going short more cheaply on rallies. LoL. On a serious note, some basic earnings quality check gives out a flashing red signal. ( hmm along the likes of Enron ). Investors should stay away. My detailed view in this comment here http://bit.ly/rJZksi Shorted GMCR again at market open. In the money in my dummy account ;-) http://bit.ly/qqPyDl Also please remember unlike in real life , in the stock market, Mr. Market treats companies as " guilty until not proven innocent ". not vice versa.
Green Mountain Coffee: Analyzing Einhorn's Thesis [View article]
I have been doing some basic earnings quality checks on companies that were eventually proven to have accounting fraud. A simple check is calculating a ratio over past years = dividing the Net Income / Cash flow from Operating Activities (CFO). This should be less than 1 and maintain a steady trend. GMCR looks quite troubling. Here is the past 4 years (Annual current year to past years). (7.54) 1.41 11.11 0.43 . See latest year is negative though it posted annual Net Income of 79.5 Mn but the Cash flow was negative of -10.5 Mn. Compare this with Starbucks 0.56 0.28 0.25 0.51 . Another way to interpret is that Starbucks reported P/E is 27x but on P/CFO the valuation ratio drops to 15x. No wonder Starbucks SBUX making new lifetime / all time highs. http://bit.ly/qqPyDl SBUX chart here http://bit.ly/qWdwAM Long story short - GMCR could go way down to even 0 ZERO. Disclosure - no positions in GMCR or SBUX
The European Sucker Play: Don't Get Caught [View article]
Dollar Carry trade - borrow in currency with low interest rates and invest in risky assets. Eventually the borrowed loan has to be repaid if the borrowed currency appreciates. Here is another perspective.S&P,DA... Seng- all rallied ~9% last week.So is this Bottom or just bear market rallies trap ?Tech. study http://bit.ly/npdDbk
These days, picking a market bottom is more like trying to catch a falling broadsword than a knife, but there are a few encouraging signs out there, observes market technician J.C. Parets. The combination of lower selling volumes, record bearish sentiment readings from Investors Intelligence - a contrarian buy signal - plus a bullish seasonality factor may be enough encouragement for the bulls to put on their rally caps, for a while at least. [View news story]
LoL. Yes plus the Bulls also have the Pied Piper ( Helicopter Ben). Some people never learn http://bit.ly/oNDtai
The European Sucker Play: Don't Get Caught [View article]
Well strangely enough, six country stock indices have recently closed above their 50 DMA `s. (US is still below 50 DMA).. Answer here: http://bit.ly/oNDtai IMO,Dollar carry trade reversal will continue to hurt stocks
The Upcoming Crash Of Apple And Amazon [View article]
oh I see. Your fav. short is Amazon !. Good luck. Keep tight trailing stops. Btw ,high Valuation is never a good reason to short. Amazon Bears got squeezed recently in Aug`11. 185 to 200 is 200 DMA and also very strong support area.
The Upcoming Crash Of Apple And Amazon [View article]
Exactly.That`s the core DNA of business model of Amazon. You pay first, Amazon will deliver later. Yes,agree recent quarters CFO has been negative. But what about its $8 Bn of Net Cash ? This net Cash position is more than Accenture - $5bn,SAP ~ 1.0Bn , IBM - Minus ( 13 Bn) and HP minus ( 20 Bn ) post Autonomy deal
The Upcoming Crash Of Apple And Amazon [View article]
I also see Margin correction potential in entire tablets sector. But you are dead wrong on Amazon share price of 0 and 70% correction of Apple. Ok, Tablets sector margins . Economics 101 in action here - Any abnormally high margin, high growth sector eventually attracts more entrants,more competition and eventually margins drop to normal levels and players exit. Amazon aggressive Kindle fire price will hurt all. ( Amazon is happy with Gross Margin and EBITDA margin of 22% and 6% vs APPLE `s 41% and 30% respectively) But dont get fooled just by Income Statement earnings of Amazon. Its earnings is $1.1 Bn but look at the cash flow statement. Cash flow from operations -CFO - is at $3.5 Bn. So on PE basis Amazon is at 95x but on Cash flow CFO basis it is trading at 28x. That too Amazon has ZERO /negligible debt and has net cash of over $ 8 Bn. One can check its financials here http://bit.ly/pQwX3i;fstype=ii Also even with the tax issue ( will start implementation from July 2012 only), Amazon will still be very competitive. Here is the proof http://econ.st/mVuHCf Both Apple and Amazon can correct 20% easily. But they will continue to post earnings growth even in a recession. How many stocks can boast of this ? My twitter handle http://bit.ly/qqPyDl
When Markets Get Bloody, Panic Is for Suckers [View article]
Nice. Yes.I relate to the 4th poison of the mind " Surprise". Do try to front run the market. Let the market tell you where it wants to go and then act accordingly. Similar to Livermore " A prudent speculator never argues with the tape. Markets are never wrong opinions often are."
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Wall Street Signals A Bull Market In U.S. Stocks [View article]
If Things Are So Bad, Why Is The Market Going Up? [View article]
Green Mountain Coffee Roasters: Why Many Investors Fear This Market [View article]
On a serious note, some basic earnings quality check gives out a flashing red signal. ( hmm along the likes of Enron ). Investors should stay away. My detailed view in this comment here http://bit.ly/rJZksi Shorted GMCR again at market open. In the money in my dummy account ;-) http://bit.ly/qqPyDl
Also please remember unlike in real life , in the stock market, Mr. Market treats companies as " guilty until not proven innocent ". not vice versa.
Green Mountain Coffee: Analyzing Einhorn's Thesis [View article]
Here is the past 4 years (Annual current year to past years). (7.54) 1.41 11.11 0.43 . See latest year is negative though it posted annual Net Income of 79.5 Mn but the Cash flow was negative of -10.5 Mn. Compare this with Starbucks 0.56 0.28 0.25 0.51 . Another way to interpret is that Starbucks reported P/E is 27x but on P/CFO the valuation ratio drops to 15x. No wonder Starbucks SBUX making new lifetime / all time highs. http://bit.ly/qqPyDl SBUX chart here http://bit.ly/qWdwAM
Long story short - GMCR could go way down to even 0 ZERO. Disclosure - no positions in GMCR or SBUX
The European Sucker Play: Don't Get Caught [View article]
These days, picking a market bottom is more like trying to catch a falling broadsword than a knife, but there are a few encouraging signs out there, observes market technician J.C. Parets. The combination of lower selling volumes, record bearish sentiment readings from Investors Intelligence - a contrarian buy signal - plus a bullish seasonality factor may be enough encouragement for the bulls to put on their rally caps, for a while at least. [View news story]
The European Sucker Play: Don't Get Caught [View article]
The Upcoming Crash Of Apple And Amazon [View article]
The Upcoming Crash Of Apple And Amazon [View article]
The Upcoming Crash Of Apple And Amazon [View article]
Ok, Tablets sector margins . Economics 101 in action here - Any abnormally high margin, high growth sector eventually attracts more entrants,more competition and eventually margins drop to normal levels and players exit.
Amazon aggressive Kindle fire price will hurt all. ( Amazon is happy with Gross Margin and EBITDA margin of 22% and 6% vs APPLE `s 41% and 30% respectively)
But dont get fooled just by Income Statement earnings of Amazon. Its earnings is $1.1 Bn but look at the cash flow statement. Cash flow from operations -CFO - is at $3.5 Bn.
So on PE basis Amazon is at 95x but on Cash flow CFO basis it is trading at 28x.
That too Amazon has ZERO /negligible debt and has net cash of over $ 8 Bn.
One can check its financials here http://bit.ly/pQwX3i;fstype=ii
Also even with the tax issue ( will start implementation from July 2012 only), Amazon will still be very competitive. Here is the proof http://econ.st/mVuHCf
Both Apple and Amazon can correct 20% easily. But they will continue to post earnings growth even in a recession. How many stocks can boast of this ? My twitter handle http://bit.ly/qqPyDl
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When Markets Get Bloody, Panic Is for Suckers [View article]