Seeking Alpha

paratus2

paratus2
Send Message
View as an RSS Feed
Latest  |  Highest rated
  • Market recap: Stocks posted back-to-back rallies, with the Dow pushing past 13,000, after reports that ECB chief Mario Draghi would hold talks with the Bundesbank's Jens Weidmann. Earnings have been mixed at best, but bullishness on European progress has overwhelmed them. Crude oil climbed again; 10-year Treasury yields bounced to 1.55%. NYSE winners led losers three to one.  [View news story]
    Tack: A follow on question, pls: I've been averaging into a position in HDGE, which is actively managed bear fund that shorts specific stocks that meet their criteria. My thinking has been this: if the overall market is likely headed down, then a short position in a basket of weak stocks would help protect, even grow the value of my account. Could you take a look and comment on this concept, in the context of the macro imbalance of buyers and sellers in your original post? Thanks.
    Jul 28 07:55 AM | Likes Like |Link to Comment
  • Market recap: Stocks posted back-to-back rallies, with the Dow pushing past 13,000, after reports that ECB chief Mario Draghi would hold talks with the Bundesbank's Jens Weidmann. Earnings have been mixed at best, but bullishness on European progress has overwhelmed them. Crude oil climbed again; 10-year Treasury yields bounced to 1.55%. NYSE winners led losers three to one.  [View news story]
    Tack:
    Thank you. I'm glad you mentioned paradox, because the more comments I read, the more anxious I get. First a bit of background: I'm looking for medium to longer term investments (months or years), not to trade every day or every few days. At age 57, I can't afford to lose principal again, and I also do not want to lose purchasing power of the modest but above average amount I have saved due to erosion from (real, underreported) inflation.
    Before I started reading this string of comments (which are still much appreciated), in 30 years, I had never felt more sure that I understood where stocks are generally headed. And, that seemed to me to be down.
    Regarding my previous question (a), I'll ask a different way, at a micro level on a dividend paying stock example.
    At any given time, if there are more buyers for a stock than sellers, that would naturally seem to cause the price to rise. However, if those buyers also paid attention to dividend rate (whose % return -- other factors kept equal - would go down as the share price went up), wouldn't this soon lower the number of buyers for that stock until the price went down? If not, doesn't this lead to yet another bubble?
    Now, another big picture question about paradox: Overall stock prices have returned to near record highs, but even with superficial improvements in Europe the last few days, the fundamentals (govt. debt, artificially low dividend yields on savings, lack of growth, underfunded liabilities, municipal bankruptcies, commodities brokerage houses going broke, etc. etc.) to me look and feel like a perfect storm approaching. Do you believe the resolution of these problems are already priced into the market, and the fundamentals are going to get better?
    Jul 28 07:44 AM | Likes Like |Link to Comment
  • Market recap: Stocks posted back-to-back rallies, with the Dow pushing past 13,000, after reports that ECB chief Mario Draghi would hold talks with the Bundesbank's Jens Weidmann. Earnings have been mixed at best, but bullishness on European progress has overwhelmed them. Crude oil climbed again; 10-year Treasury yields bounced to 1.55%. NYSE winners led losers three to one.  [View news story]
    Thanks for the ongoing explanations. I need to work my retirement account more actively and wiser, and am keen to understand this. At its essence, the imbalance you are describing sounds to me like too much capital bidding for a relatively lower number of shares, at any given time. A few follow on questions about macro influences, please:

    a- Wouldn't more precise metrics such as PE ratios or % dividend yields help keep the effects of supply and demand fluctuations in share price in check?
    b- In the next 6 months, what macro influences do you see that could cause the sentiment to shift away from buying and toward selling?
    c- Don't record low (artificially low...) interest rates qualify as a type of ongoing stimulus to stock prices? If so, what happens if or when market forces cause interest rates to get "real" and start rising?
    Jul 27 10:39 PM | 1 Like Like |Link to Comment
  • Market recap: Stocks posted back-to-back rallies, with the Dow pushing past 13,000, after reports that ECB chief Mario Draghi would hold talks with the Bundesbank's Jens Weidmann. Earnings have been mixed at best, but bullishness on European progress has overwhelmed them. Crude oil climbed again; 10-year Treasury yields bounced to 1.55%. NYSE winners led losers three to one.  [View news story]
    Question RE: the above comment from Tack: It stated that capital is overallocated away from Stocks. If this is actually the case, wouldn't the lack of buyers of stocks before the last two days -- have lead to lower stock prices -- rather than the current prices that are approaching all-time highs (in spite of the weak underlying global fundamentals ever)? And what about the effect of "artificial" stimulus in the past 4 years?
    Jul 27 08:26 PM | Likes Like |Link to Comment
  • Shorting A Stock? 6 Useful Tips [View article]
    Thanks Tradevestor. I'll add a bit more about my thinking and request. I agree with the overall advice of caution on shorting, especially for unsophisticated investors and individual stocks. However, when the overall pressure on stock prices is downward, I would like to take advantage of that trend by being shorting a "basket" of weak stocks or companies rather than on an index that contains both good and weak companies. The challenge seems to be finding a fund that meets the criteria in my original post.
    Jun 8 05:42 PM | Likes Like |Link to Comment
  • Shorting A Stock? 6 Useful Tips [View article]
    Rather than a comment, this is a related question for the group: I've been searching this website for an investment vehicle -- such as an ETF or fund -- that shorts a group of stocks with certain characteristics. Examples of attributes of the vehicle I'm seeking: overvalued, overbought, high PE, no dividend or declining dividend, bad management, questionable accounting, declining technologies, etc. As a relatively new investor, to me, this seems wiser than shorting a whole index or even an industry. However, so far, I have only found funds that short specific industries or indices. Does anyone know of a category of list of funds that short a group of stocks based on the type of criteria I'm describing? Thanks.
    Jun 8 04:38 PM | Likes Like |Link to Comment
COMMENTS STATS
6 Comments
1 Like