Tuesday, July 31, 2007
No Trades
It looks like all my indicators say oversold so lets stay pat. This system is steady not aggressive. So we'll stay pat for today.
Close WBMD, UA, BEC, NVT
I want to be long but we made good percentage profit and want to lock in gains.
SII is only long we have. Oil at all time highs!
SII is only long we have. Oil at all time highs!
Speculation
I follow the futures market and follow the commitment of traders report which show just about what everyone is doing: the commercials who actually deal in the commodity, the speculators who are the hedge funds, and us, the small traders. The COT commercial interest for Natural Gas is the highest since the hurricane Katrina happened; yet NG is trading at a low price. While Crude Oil which has the worst COT commercial interest reading (meaning OPEC or XOM have been big sellers into this price move) that I have seen, touching all time highs. Something has got to give.
Buy UNG (natural gas etf) 39.42/ Short USO (crude etf)58.62=0.67
Also there has been a historical relationship to crude and ng that hasn't occurred for the past 2 years.
Buy UNG (natural gas etf) 39.42/ Short USO (crude etf)58.62=0.67
Also there has been a historical relationship to crude and ng that hasn't occurred for the past 2 years.
Will the market stay positive?
1) The market is not bullish. The market is having a profit taking day.
2) But look at UA. There are pockets of strength.
3) Oil has its all time high today which should have follow through but the stocks are skeptical.
2) But look at UA. There are pockets of strength.
3) Oil has its all time high today which should have follow through but the stocks are skeptical.
Monday, July 30, 2007
Buy WBMD, UA, NVT playing momentum.
These are working stops. Might tighten them. But we'll know tomorrow if the market wants to be broad based or selective in its rally attempt.
1) WBMD 46.43 (42.72) 22 shares 1021.46
2) UA 55.37 (50.94) 19 shares 1052.03
3) NVT 55.49 (51.05) 19 shares 1054.31
1) WBMD 46.43 (42.72) 22 shares 1021.46
2) UA 55.37 (50.94) 19 shares 1052.03
3) NVT 55.49 (51.05) 19 shares 1054.31
Market Conviction
Today there is some relief and unless trading on a short term basis, one need do nothing. I read from some sharp market observers that August September might be the time to get back in the market.
Everything is suspect after a week we had. So unless you like the stock and will stick with it, don't bother buying.
Everything is suspect after a week we had. So unless you like the stock and will stick with it, don't bother buying.
Sunday, July 29, 2007
Pharaoh's Dream. Another Look.
Haven't you ever noticed that when successful people recount the reason behind their success it was something quite simple, but just overlooked?
Take the Biblical story of Pharaoh's dream. If Pharaoh was recounting his success in cornering the market in grain, he would say that he came up with the novel idea to save, because he dreamt that bad times might occur, though he remained skeptical of that until it turned out to be true. I'm sure one of these centuries that hieroglyphic will be found-the first autobiography of a prince becoming a ruler!
Pharaoh would recount:
The land of Egypt was the eternal nation: when famines occurred throughout the world, Egypt could be relied upon to provide sustenance-it has always been. If there ever was drought or recession in Egypt, no one could recall the last one that occurred. Everything was eternal: from the monarchy to the flooding of the Nile to the land of the dead. With all this, Pharaoh still kept having bad dreams.
His advisers had no idea how to answer, only hypothesizing that it might mean his daughters were going to meet the wrong type of husbands. Going on a tip, Pharaoh calls Joseph from prison, to hear this so called interpreter of dreams point of view. Joseph was unique in Pharaoh's eyes since he had actually seen several reversals of fortune.
Joseph told Pharaoh, simply, that there will be good years where the monarchy should save for the 7 bad years. Here Joseph stated simply what he learnt at an early age: the market truth of saving during the good years, in order to weather the bad years WHICH ALWAYS WILL COME just as the night follows the day.
Pharaoh then delights his readers with this nugget: But what Joseph mentioned between the lines was that the Egyptian monarchy could grab the power and respect that had always eluded them. Pharaoh would then describe the political structure of Egypt and probably say: 1) The titans' of industry wealth rivaled the crown's and that the wealth was taken, no stolen, from society and not given back 2) the provinces were almost self ruled and barely recognized the central government 3) the army was small during the booming economy - there was no great cause to fight for.
Pharaoh, recounts, that he decided on the spot to invest in the future. He has Joseph assigned to accumulate all the surpluses of Egypt for Pharaoh, but not telling the citizens to save. In fact, being so bold as to hire more advisers, promoters, and priests to help spread and reinforce the gospel of eternal prosperity through such things as: telling them that the Gods are pleased, the perpetuity of the Nile, increased entertainment such as magic and a very liberal moral code.
Pharoah concludes his book with the chapter heading: "Revolutions end with a whimper." He recalls the final nail in the coffin when nations and citizens had nothing to sell Pharaoh but themselves: indentured servitude. There were no arrows flung nor loss of life, but the gradual diminishing of hope by the people where only 7 years earlier there was nothing but eternal optimism.
So my thoughts are: The Egyptians had the ultimate reusable energy source -the Nile while the US has the universally accepted currency which can be printed at anytime-can that change? What about a country where the state and the citizens DONT save? Whose interests is the FED really concerned about?
My conclusions are: 1)all government seeks absolute power (thinking FED here)-which would mean a shake out of the excess to show whose boss. 2)Nothing is eternal; especially when everyone thinks it such-the dollar is being challenged as there are more countries vying for worldwide influence. 3)And if you don't save, one eventually becomes indentured-the US trade deficit is horrendous and foreigners in theory could buy out the US.
Take the Biblical story of Pharaoh's dream. If Pharaoh was recounting his success in cornering the market in grain, he would say that he came up with the novel idea to save, because he dreamt that bad times might occur, though he remained skeptical of that until it turned out to be true. I'm sure one of these centuries that hieroglyphic will be found-the first autobiography of a prince becoming a ruler!
Pharaoh would recount:
The land of Egypt was the eternal nation: when famines occurred throughout the world, Egypt could be relied upon to provide sustenance-it has always been. If there ever was drought or recession in Egypt, no one could recall the last one that occurred. Everything was eternal: from the monarchy to the flooding of the Nile to the land of the dead. With all this, Pharaoh still kept having bad dreams.
His advisers had no idea how to answer, only hypothesizing that it might mean his daughters were going to meet the wrong type of husbands. Going on a tip, Pharaoh calls Joseph from prison, to hear this so called interpreter of dreams point of view. Joseph was unique in Pharaoh's eyes since he had actually seen several reversals of fortune.
Joseph told Pharaoh, simply, that there will be good years where the monarchy should save for the 7 bad years. Here Joseph stated simply what he learnt at an early age: the market truth of saving during the good years, in order to weather the bad years WHICH ALWAYS WILL COME just as the night follows the day.
Pharaoh then delights his readers with this nugget: But what Joseph mentioned between the lines was that the Egyptian monarchy could grab the power and respect that had always eluded them. Pharaoh would then describe the political structure of Egypt and probably say: 1) The titans' of industry wealth rivaled the crown's and that the wealth was taken, no stolen, from society and not given back 2) the provinces were almost self ruled and barely recognized the central government 3) the army was small during the booming economy - there was no great cause to fight for.
Pharaoh, recounts, that he decided on the spot to invest in the future. He has Joseph assigned to accumulate all the surpluses of Egypt for Pharaoh, but not telling the citizens to save. In fact, being so bold as to hire more advisers, promoters, and priests to help spread and reinforce the gospel of eternal prosperity through such things as: telling them that the Gods are pleased, the perpetuity of the Nile, increased entertainment such as magic and a very liberal moral code.
Pharoah concludes his book with the chapter heading: "Revolutions end with a whimper." He recalls the final nail in the coffin when nations and citizens had nothing to sell Pharaoh but themselves: indentured servitude. There were no arrows flung nor loss of life, but the gradual diminishing of hope by the people where only 7 years earlier there was nothing but eternal optimism.
So my thoughts are: The Egyptians had the ultimate reusable energy source -the Nile while the US has the universally accepted currency which can be printed at anytime-can that change? What about a country where the state and the citizens DONT save? Whose interests is the FED really concerned about?
My conclusions are: 1)all government seeks absolute power (thinking FED here)-which would mean a shake out of the excess to show whose boss. 2)Nothing is eternal; especially when everyone thinks it such-the dollar is being challenged as there are more countries vying for worldwide influence. 3)And if you don't save, one eventually becomes indentured-the US trade deficit is horrendous and foreigners in theory could buy out the US.
Speculative and Long Term Portfolio Update
My speculative play is to short oil. If my theory holds, then oil and gold will go down with the stock market. And just look at natural gas as an energy market that can't find an uptick. It seems to me that on Friday, people were out of the stock market and into oil; instead of going into cash. Like the stock market, oil may be having last spurts of new highs before selling off in kind. It is speculative, since I'm shorting the strongest commodity.
Long term portfolio. These investment should show profit, like water boiling in a pot - not when you are looking at it, but when you least expect it.
1) FXY - Japanese yen to play the end of the carry trend, decreased global liquidity, and market turmoil
2) FXS - Swiss Franc. Was also used in the carry trade. And has the reputation as the highest quality paper, but is not back by gold anymore.
2) GLD - Currency upheaval signaled by the Fed lowering rates to avert deflationary spiral.
Asia is the place to invest. Not Europe nor Britain. They have similar problems that the US has concerning real estate and leverage. And the carry trade was used to buy European currency, not the other way around. So forget Euros and Pounds.
Long term portfolio. These investment should show profit, like water boiling in a pot - not when you are looking at it, but when you least expect it.
1) FXY - Japanese yen to play the end of the carry trend, decreased global liquidity, and market turmoil
2) FXS - Swiss Franc. Was also used in the carry trade. And has the reputation as the highest quality paper, but is not back by gold anymore.
2) GLD - Currency upheaval signaled by the Fed lowering rates to avert deflationary spiral.
Asia is the place to invest. Not Europe nor Britain. They have similar problems that the US has concerning real estate and leverage. And the carry trade was used to buy European currency, not the other way around. So forget Euros and Pounds.
Notes on positions
The market suffered largest drop in years this week. I only want to be short stocks that haven't had the extended downside movement yet. Those stocks are going to be volatile and hard to trade since it's now in the trader's hands.
All positions have 8% stop losses. If stocks are profitable by more than 1%, then stops are moved to break even. I'm working on a mechanical profit taking device as well, but don't have one that I'm satisfied with.
SSP and EEFT are our biggest winners and I will be looking to close positions this week on any signs of a market rally.
The two longs are in very strong sectors and very strong stocks as well. Oil was up huge Friday. Health Care Industry has nothing to do with credit. People will need healthcare in inflationary and deflationary times. Plus it is subsidized by so many programs in and out of government.
All positions have 8% stop losses. If stocks are profitable by more than 1%, then stops are moved to break even. I'm working on a mechanical profit taking device as well, but don't have one that I'm satisfied with.
SSP and EEFT are our biggest winners and I will be looking to close positions this week on any signs of a market rally.
The two longs are in very strong sectors and very strong stocks as well. Oil was up huge Friday. Health Care Industry has nothing to do with credit. People will need healthcare in inflationary and deflationary times. Plus it is subsidized by so many programs in and out of government.
Paper Trade Tally for the week of July 23-27
This is the first week we started a tally so please let me know of any suggestions you might have.
I am calling this system the rolling index. You will see why at the end of this update. The index started at 10,000.
Rules:
We started this week with $10,000.
We can have at most 10 positions, each having close to a $1000 dollar investment. At first, I was going to buy exactly $1000 worth of stock but you can't buy fractions of stocks, so I have rounded all fractions of stock upward in trying to keep this paper trading system as realistic as possible.
All transactions have $10 commissions.
Stopped Out
1) AMR 28.30. Out at 26.04. Loss of 1.90 x 35.33shares = -67.13
2) GLW 26.87. Out at 24.72. Loss of 2.15 x 37.22shares= -80.03
TOTAL REALIZED LOSS FOR WEEK IS 147.16+20 commissions=167.16
Current Positions
Long
1) SII 64.71 (59.30), 15.45shares = 1000 closed at 60.40, -66.59
2) BEC 73.87 (67.96), 14shares = 1034.18 closed at 72.89, -13.72
TOTAL LOSS FOR WEEK 80.31
Short
3) EEFT 28.03 (30.27), 15.45 shares=1000, closed at 25.50, +39.09
4) SSP 43.84 (47.34), 22.8 shares=1000, closed at 41.03, +64.07
5) ASF 33.76 (36.46), 30 shares=1012.80, closed at 33.13, +18.9
6) NNDS 44.15 (47.68), 23 shares=1016, closed at 44.03, +2.76
7) JTX 27.64 (29.85), 37 shares=1023, closed at 27.30, +12.58
TOTAL PROFIT FOR WEEK 137.40
UNREALIZED GAINS OF 57.09 - REALIZED LOSS OF 167.16 = -110.07
Portfolio is down 1.1% so ROLLING INDEX IS AT 9889.93
SP 500 is down 4.9% INDEX AT 1458.59
I am calling this system the rolling index. You will see why at the end of this update. The index started at 10,000.
Rules:
We started this week with $10,000.
We can have at most 10 positions, each having close to a $1000 dollar investment. At first, I was going to buy exactly $1000 worth of stock but you can't buy fractions of stocks, so I have rounded all fractions of stock upward in trying to keep this paper trading system as realistic as possible.
All transactions have $10 commissions.
Stopped Out
1) AMR 28.30. Out at 26.04. Loss of 1.90 x 35.33shares = -67.13
2) GLW 26.87. Out at 24.72. Loss of 2.15 x 37.22shares= -80.03
TOTAL REALIZED LOSS FOR WEEK IS 147.16+20 commissions=167.16
Current Positions
Long
1) SII 64.71 (59.30), 15.45shares = 1000 closed at 60.40, -66.59
2) BEC 73.87 (67.96), 14shares = 1034.18 closed at 72.89, -13.72
TOTAL LOSS FOR WEEK 80.31
Short
3) EEFT 28.03 (30.27), 15.45 shares=1000, closed at 25.50, +39.09
4) SSP 43.84 (47.34), 22.8 shares=1000, closed at 41.03, +64.07
5) ASF 33.76 (36.46), 30 shares=1012.80, closed at 33.13, +18.9
6) NNDS 44.15 (47.68), 23 shares=1016, closed at 44.03, +2.76
7) JTX 27.64 (29.85), 37 shares=1023, closed at 27.30, +12.58
TOTAL PROFIT FOR WEEK 137.40
UNREALIZED GAINS OF 57.09 - REALIZED LOSS OF 167.16 = -110.07
Portfolio is down 1.1% so ROLLING INDEX IS AT 9889.93
SP 500 is down 4.9% INDEX AT 1458.59
Friday, July 27, 2007
Update! And how my blog will be presented.
First, thank you for the interest in my blog. Please let me know what you think so I can keep it entertaining and informative.
Second, The market is oversold and should rally. But the market is now in no man's land so one should wait before committing capital.
Third, since I noticed that my blogging frequency is very high, I am going to map out a clear format to make things easier for everyone.
My format is my 1) paper trade buy and sells 2) insight on market 3) thoughts on my current trades in order to enlighten on my winning trades as well as my bad ones.
I think I will have two postings a day. One on the buy and sell ideas around 3:00PM and the time frame I expect to be involved in the trade; as well as the closed positions. The other one would be on my current trades. On the weekend, I will provide my insight on the market. On Monday, I will show the results for the past week.
Second, The market is oversold and should rally. But the market is now in no man's land so one should wait before committing capital.
Third, since I noticed that my blogging frequency is very high, I am going to map out a clear format to make things easier for everyone.
My format is my 1) paper trade buy and sells 2) insight on market 3) thoughts on my current trades in order to enlighten on my winning trades as well as my bad ones.
I think I will have two postings a day. One on the buy and sell ideas around 3:00PM and the time frame I expect to be involved in the trade; as well as the closed positions. The other one would be on my current trades. On the weekend, I will provide my insight on the market. On Monday, I will show the results for the past week.
Thursday, July 26, 2007
Lady Luck?
I was going to cover my long SP, but instead bought more of the index. Tomorrow will point out if that was Lady Luck, or not.
But what is interesting is how the day felt when I thought that Iclosed out my losing trade. I felt relieved and forgot about the market and looked at it impartially. That is how one must feel when actually having a trade on.
I am short Crude Oil as well. My indicator said to short and my stop will be the previous high.
But what is interesting is how the day felt when I thought that Iclosed out my losing trade. I felt relieved and forgot about the market and looked at it impartially. That is how one must feel when actually having a trade on.
I am short Crude Oil as well. My indicator said to short and my stop will be the previous high.
Defense-2 things-FXY
The market is down huge. We are not heavily long. The market is shooting first and asking questions later. We have lots of cash on hand to attack. So we will have to sit back and put our money to work in the next move of this market.
For defensive measures,
Buy GLD, GDX (hedge against inflation)
We are seeing deflationary fears. There is no where to hide but by buying FXY- the Japanese currency and GLD for inflationary pressures.
These holds for me are until the market finishes selling of so I am not sure of a time frame as of yet.
USUALLY THE MARKET WILL HAVE A VICIOUS REBOUND FROM THIS UGLINESS AND MAY SIGNAL THE BOTTOM. IT HAPPENED IN MARCH.
For defensive measures,
Buy GLD, GDX (hedge against inflation)
We are seeing deflationary fears. There is no where to hide but by buying FXY- the Japanese currency and GLD for inflationary pressures.
These holds for me are until the market finishes selling of so I am not sure of a time frame as of yet.
USUALLY THE MARKET WILL HAVE A VICIOUS REBOUND FROM THIS UGLINESS AND MAY SIGNAL THE BOTTOM. IT HAPPENED IN MARCH.
Master of Horror
I thought I would do a double negative and watch a horror film to help balance my nerves. What is horror? I think the modern Japanese filmmakers really know how touch on that raw nerve that causes people to jump and be skittish.
I just saw Dream Cruise, a segment from Master's of Horror a show that was on Showtime. It has a young man who is afraid of swimming after seeing his brother drown as kids. He keeps on being haunted of the past. A client of his wants to take him sailing on his yacht for business, but really wants to confront him about his affair with his wife. But there is a ghost lurking. And that ghost causes the client to die and his wife to see what really happened to his first wife. She was killed exactly where the yacht is now. The first wife want vengeance and she will take the second wife and the young man with her. Very scary. The ending is even better as they are dangling in the sea, only having a flotation device to stay aloft, and the ghost is dragging the second wife down. The young man is holding onto her just like he was with his brother. The ghost of the brother now appears to...drag the ghost of the first wife away. He forgives his older brother!
The dead come for what's rightfully theirs. Very much like the stock market. We all have bad memories of bad decisions earlier in life. But the heroes of these horror films are the ones trying to survive at all cost against anything that lurks in the night.
I just saw Dream Cruise, a segment from Master's of Horror a show that was on Showtime. It has a young man who is afraid of swimming after seeing his brother drown as kids. He keeps on being haunted of the past. A client of his wants to take him sailing on his yacht for business, but really wants to confront him about his affair with his wife. But there is a ghost lurking. And that ghost causes the client to die and his wife to see what really happened to his first wife. She was killed exactly where the yacht is now. The first wife want vengeance and she will take the second wife and the young man with her. Very scary. The ending is even better as they are dangling in the sea, only having a flotation device to stay aloft, and the ghost is dragging the second wife down. The young man is holding onto her just like he was with his brother. The ghost of the brother now appears to...drag the ghost of the first wife away. He forgives his older brother!
The dead come for what's rightfully theirs. Very much like the stock market. We all have bad memories of bad decisions earlier in life. But the heroes of these horror films are the ones trying to survive at all cost against anything that lurks in the night.
Speaking out of both sides of my mouth
A reader mentioned that I basically said opposing investment decisions which on the surface appears to be the case. So I will try in the future to explain the time frame I am thinking of and the situation that would cause me to react to a given situation.
Of course, I will be wrong sometimes, and will make an effort to point those times out.
Of course, I will be wrong sometimes, and will make an effort to point those times out.
Compulsiveness
I bought the Yen yesterday but it closed bad so I closed my position. And it opened big today. Once again I was "talked" out of a position. I am going to try to analyze this behavior this weekend.
But my mechanical system that we are paper trading has done quite well. This system I developed takes hours to fine tune, but I think that I work better on a system that there is no thought involved once the buy or sell is generated. When buying in the futures market there is so much gyrations, at the moment, I can't seem to grasp the underlying theme.
I bought an SP index because of the exposure to oil companies and that it seems to have resistance in the 1510 area. It is down big this morning. I am shocked. I expected, maybe, a little sell off but not like that. Is that the end of the near term correction and a possible rally? Or will the market drop another 10-20 points today.
I speculated on APA CNX LCC . Things don't look good for me. I went on a gambling buying spree yesterday but strangely I slept well. Usually, I get nervous when I feel uncomfortable with a position that I placed. That is why I hate gambling. It's too immediate and my mind blocks out the more pleasant things in life.
I am sticking with my decision to own the SP500 index. I think there might be another sell-off, but very short term a rally is imminent. It's still a bull market.
But my mechanical system that we are paper trading has done quite well. This system I developed takes hours to fine tune, but I think that I work better on a system that there is no thought involved once the buy or sell is generated. When buying in the futures market there is so much gyrations, at the moment, I can't seem to grasp the underlying theme.
I bought an SP index because of the exposure to oil companies and that it seems to have resistance in the 1510 area. It is down big this morning. I am shocked. I expected, maybe, a little sell off but not like that. Is that the end of the near term correction and a possible rally? Or will the market drop another 10-20 points today.
I speculated on APA CNX LCC . Things don't look good for me. I went on a gambling buying spree yesterday but strangely I slept well. Usually, I get nervous when I feel uncomfortable with a position that I placed. That is why I hate gambling. It's too immediate and my mind blocks out the more pleasant things in life.
I am sticking with my decision to own the SP500 index. I think there might be another sell-off, but very short term a rally is imminent. It's still a bull market.
Ford shows profit, but market down, huh?
I think that Ford showing a profit is great news. Cerebrus who the news has described as having problems selling their bonds now has good reason to show how valid their issuance is.
I thought that an auto maker turn around would give a boost to the market, but it hasn't huh?
I thought that an auto maker turn around would give a boost to the market, but it hasn't huh?
Wednesday, July 25, 2007
Gold Down, Market Down
As mentioned yesterday, if gold and oil, especially gold, goes down then the market will follow. The market has been fueled by liquidity, which I don't think we have seen the end yet, but currently the market is assessing that possibility and DEFLATION.
Everyone has a favorite market to trade when fear abounds. I like the Yen and the Dollar.
The Yen because of the enormous carry trade against it. You can buy it through your broker as an ETF - FXY is the symbol. If there truly is a global sell off, this has the potential of staying strong. And owning dollars, because in deflationary times or the belief of one will cause the dollar to go up.
We see deflation in the products we buy as well as in the cost of labor, by the exporting of our industrial base.
The market told us that all is not well when the indexes were hitting all time highs but the brokerage firms stocks were remaining weak. And gold hasn't, nor oil, hit their all time highs. But they are close.
The market seems to want to go down today, but I can't hold any promises for 3 down days in row!!! And APPLE is reporting tonight.
Everyone has a favorite market to trade when fear abounds. I like the Yen and the Dollar.
The Yen because of the enormous carry trade against it. You can buy it through your broker as an ETF - FXY is the symbol. If there truly is a global sell off, this has the potential of staying strong. And owning dollars, because in deflationary times or the belief of one will cause the dollar to go up.
We see deflation in the products we buy as well as in the cost of labor, by the exporting of our industrial base.
The market told us that all is not well when the indexes were hitting all time highs but the brokerage firms stocks were remaining weak. And gold hasn't, nor oil, hit their all time highs. But they are close.
The market seems to want to go down today, but I can't hold any promises for 3 down days in row!!! And APPLE is reporting tonight.
Swirling Tornado
My mind seems have a hundred things flying around and each idea wants to express itself. The ultimate ambition of each one is to succeed, but like the energy of the sun, it is widely disbursed. One needs to focus it, like a laser, to get the energy one needs to succeed.
I read several disparate items on the market and have a few ideas myself, but what I can sense is that there is no order but a sense of one. It can last a day, a moment, 200 yrs, but something always pushes through to change the dynamic of things. And where the speculator can catch a windfall. But only if one is focused.
So the secret for the human race is discipline, which is the animal side of us, but we can shape that discipline with belief - working towards a goal; something unique to mankind.
Bernard Malamud is one of my favorite authors but his stories, at least the ones I read, are very sad. They are about very lonely characters that let life pass them buy. They were content to just survive, but in doing so their survival was put into jeopardy by life progressing while they are standing firm.
Everyday one has to question his motivation in the market and be firm about value: who is buying and who is selling. You can't lose sight of the overall picture. And you have to believe. Have to fight for something.
My goal is to make high yielding decisions that should compound over time. How? By being involved on what's people's minds. And that is the markets. It holds an allure on people's imaginations like Hollywood (the life everyone wants to have) and gambling (lady luck), but unlike those two industries this one has the appeal of understanding how the world works.
Admittedly I don't think anyone has figured that one out and I don't expect to be the first (in fact will probably fall short of that), but I believe it is a goal pursuing.
I read several disparate items on the market and have a few ideas myself, but what I can sense is that there is no order but a sense of one. It can last a day, a moment, 200 yrs, but something always pushes through to change the dynamic of things. And where the speculator can catch a windfall. But only if one is focused.
So the secret for the human race is discipline, which is the animal side of us, but we can shape that discipline with belief - working towards a goal; something unique to mankind.
Bernard Malamud is one of my favorite authors but his stories, at least the ones I read, are very sad. They are about very lonely characters that let life pass them buy. They were content to just survive, but in doing so their survival was put into jeopardy by life progressing while they are standing firm.
Everyday one has to question his motivation in the market and be firm about value: who is buying and who is selling. You can't lose sight of the overall picture. And you have to believe. Have to fight for something.
My goal is to make high yielding decisions that should compound over time. How? By being involved on what's people's minds. And that is the markets. It holds an allure on people's imaginations like Hollywood (the life everyone wants to have) and gambling (lady luck), but unlike those two industries this one has the appeal of understanding how the world works.
Admittedly I don't think anyone has figured that one out and I don't expect to be the first (in fact will probably fall short of that), but I believe it is a goal pursuing.
Tuesday, July 24, 2007
The reason to sell (from market highs)
Barrons several months ago featured an investment guy who said that a bearish omen for the market is the raising of the minimum wage. Today, that was enacted and the market sold off.
Everywhere else on the globe wages are deflationary but not in this country. Are we that special? The market may sense that lay offs might occur or hiring delayed as labor costs rise. But not the ability to pass on higher costs to the tapped out consumer.
I must remind people the market is at record highs. So maybe now profit taking is (finally) occurring.
One, clue that I have that the market is weak as opposed to last week is that gold and oil are down along with the market. That for me is bearish.
Gold and Oil rallied on an imminent dollar correction, but I believe the market has rallied as well over those same concerns. So if the market corrects, liquidity will as well. Which will cause ALL markets to go down together. And the dollar to, well, hang out and have an espresso. I don't know if it will go up but I don't think it will collapse either.
Currencies are a stack of card all hanging onto one another. They have no fundamental underpinning and are all relative. Currencies now are just based on the yield they are bringing from their treasuries. But what if Britain's housing bubble bursts? Then their currency is going to drop as well as the yield from the central bank. And the DOW 14,000 won't be half off. And there will be more than soccer players from Britain grabbing for the greenback.
I say this only if gold and oil maintain a lower price as the markets sells off, which could have been only a one day wonder. Let's see what Cramer has to say tonight on Mad Money. By the way I think he is the only man one should watch on TV. You always have to respect people who call it like they see 'em.
Everywhere else on the globe wages are deflationary but not in this country. Are we that special? The market may sense that lay offs might occur or hiring delayed as labor costs rise. But not the ability to pass on higher costs to the tapped out consumer.
I must remind people the market is at record highs. So maybe now profit taking is (finally) occurring.
One, clue that I have that the market is weak as opposed to last week is that gold and oil are down along with the market. That for me is bearish.
Gold and Oil rallied on an imminent dollar correction, but I believe the market has rallied as well over those same concerns. So if the market corrects, liquidity will as well. Which will cause ALL markets to go down together. And the dollar to, well, hang out and have an espresso. I don't know if it will go up but I don't think it will collapse either.
Currencies are a stack of card all hanging onto one another. They have no fundamental underpinning and are all relative. Currencies now are just based on the yield they are bringing from their treasuries. But what if Britain's housing bubble bursts? Then their currency is going to drop as well as the yield from the central bank. And the DOW 14,000 won't be half off. And there will be more than soccer players from Britain grabbing for the greenback.
I say this only if gold and oil maintain a lower price as the markets sells off, which could have been only a one day wonder. Let's see what Cramer has to say tonight on Mad Money. By the way I think he is the only man one should watch on TV. You always have to respect people who call it like they see 'em.
Heretical Action and a thought
Will the market open down tomorrow? That is my heretical thought.
It never does after a pessimistic day like the one we had today.
I think it will open down, but the telling feature of tomorrow is will it stay down.
My boldness leads me to say for at least one more day it will be down.
My thought of the day is that yesterday I was disturbed about Oil+Gas Machinery/Eqpmnt sector. RIG and GSF announced a buy out and the stocks rallied, then declined, then went into positive territory. I recommended SII because it was strong on Friday, managed to rally into the close yesterday, and these are record highs for the sector. But should have realized the market weakness, the phenomenal run the stock has had, and that it did sell off yesterday which I believe shouldn't have happened. So my thought is "if there is a doubt, wait for a better opportunity."
I'm sticking with it unless it sells off 8% . If the dollar does collapse there will be more demand for these type of companies that are heavily involved in oil.
And I believe my other selections will compensate for the momentary relapse.
It never does after a pessimistic day like the one we had today.
I think it will open down, but the telling feature of tomorrow is will it stay down.
My boldness leads me to say for at least one more day it will be down.
My thought of the day is that yesterday I was disturbed about Oil+Gas Machinery/Eqpmnt sector. RIG and GSF announced a buy out and the stocks rallied, then declined, then went into positive territory. I recommended SII because it was strong on Friday, managed to rally into the close yesterday, and these are record highs for the sector. But should have realized the market weakness, the phenomenal run the stock has had, and that it did sell off yesterday which I believe shouldn't have happened. So my thought is "if there is a doubt, wait for a better opportunity."
I'm sticking with it unless it sells off 8% . If the dollar does collapse there will be more demand for these type of companies that are heavily involved in oil.
And I believe my other selections will compensate for the momentary relapse.
Market Weakness (from all time highs)
The market looks to want to sell off today. Take a breather. Last year at this time, I would expect a rally, but now I think this market will rally a little bit then sell off into the close.
What I'm toying with is the big purchase scenario. Where we hear the big investors gobbling up huge stakes in companies and is considered accumulation. Then I think there will be distribution, but this I mean, no one wants to buy any more shares, so the value of the stock is lower.
Sometime, maybe later this year, retail investors will see the market "cheap" and will start to nibble which like with wealthy (look at art market) people will spiral into record record highs for the Dow.
What I'm toying with is the big purchase scenario. Where we hear the big investors gobbling up huge stakes in companies and is considered accumulation. Then I think there will be distribution, but this I mean, no one wants to buy any more shares, so the value of the stock is lower.
Sometime, maybe later this year, retail investors will see the market "cheap" and will start to nibble which like with wealthy (look at art market) people will spiral into record record highs for the Dow.
Monday, July 23, 2007
Buy and sell
Buy GLW 26.87 (24.72), 37.22 share=1000
Buy SII 64.71 (59.3), 15.45=1000
Short EEFT 28.03(30.27),35.68=1000
Buy SII 64.71 (59.3), 15.45=1000
Short EEFT 28.03(30.27),35.68=1000
My friend can sleep better owning China, Turkey, Russia, and E.Europe
My friend responded that he wants to buy a condo in a few years and doesn't want to see his portfolio get rocked by volatile stocks so this is what I perceive as 10 conservative investments.
And how I responded to him.
Dear ____ (I actually didn't use dear but since I'm not using his name, I felt obligated to make it look more letter-like)
"You know in another era saying safe investment and Russia, China, E Europe in the same breadth would be heresy.
2) Precious minerals (weak dollar, inflation)
3) Energy (emerging mrkt demand outpacing supply)
4) Health Care (aging of population)
5) India ETF (strong democratic tradition)
6)
7) Growth oriented fund that is not related to housing or financials
8) Defense (growing cold war rhetoric between US and
9) Defensive stocks-ie. Consumer durables ie you always need even in recessions
10) the Dines Newsletter (he recommends conservative stocks as well), or Dow Theory Letter (recommends more diversified stocks but is bent on owning gold stocks. Was quoted in Barrons this week)--two non partial market observers."
Why one should own nuclear related stocks. Especially the miners that provide the uranium.
My friend emailed me, "I've been reading some stuff about uranium prices today and I'm confused as to how people are now saying supply is outstripping demand. Check out this article regarding the Department of Energy's sale of uranium and low demand for it. http://www.uxc.com/ And also the "In the Market" comment on this website http://www.uranium.info/ Uranium prices could be heading father downward...speculators (ed: hedge funds) dumping huge amounts of uranium into the market. Everything I have read the past few years says demand will hugely outstrip supply for years to come...now consensus seems to be building that current supply is outstripping current demand???"
My response would be:
First, we are not speculating on the price of uranium. But investing our money in a growing industry. Remember that nuclear power has only been with us for 50yrs. Solar power has always been a dream to harness the sun, but it has never come to fruition. Nuclear is a practical solution to large energy demands and provides countries with a practical political solution in dealing with unstable energy regimes and more control over their own energy independence.
2)Natural gas and coal stocks are weak as well compared to the oil market. So the energy sector that uranium is related to is not doing well either.
3)What is not being factored in is all the new plant construction. Since they are all subject to change. But look at companies that build nuclear plants (GE, SGR, Areva) In addition, current plants are adding additional reactors. They haven't factored in the less public governents of China, India, and Russia which want to build up their industry in a BIG way!
4) As to the government selling, when a commodity goes up 1000% someone is going to sell.That is what the government is doing. And is supplying temporary relief to the market. Notice the DEMAND! The uranium hexafluoride is going on the market, but not at a 20% discount,but at current market prices. People are willing to pay up for this commodity. To show how jumpy investors are, look at Uranium One which will be selling uranium at $100/lb
As I said before, long term hold. It's only a matter of time before people realize the significance of these factors.
CCJ is acting crappily for other reasons. But the one thing it should do if uranium prices go down, is up! Remember they sold production at 18/lb. Are well diversified. And now can buy these miners they missed when they were trading at pennies to the dollar, at a lower cost. They have very little debt. Ploughing their cash flow into their monster mine which will eventually be operational. So they can assume debt or issue more shares to purchase a Paladin or Uranium One.
My Buying and Selling Recommendations
I look at stock market activity in 3 ways. Intermediate TRADING (holding a stock more than 2 days and less than six months). Long term INVESTING (greater than 6 months at which time we revisit the company). And SPECULATIVE action (options, penny stocks, less than 2 day holds)
We will start off with $30,000 ($10,000 for each trading vehicle).
I do not have the time to update everyday, but will post results each Monday.
So...
1) Every week, on Monday, I will focus on 10 stocks. They can be carried over from the previous week, be new additions or changed through the week. All stocks are chosen from my picks on stockcharts.com--I would ideally like to perfect this system in order to consistantly generate cash! So thank you for joining me on this journey.
So some weeks there will be more activity and some none at all (the preferable choice). This portfolio is for more active traders or speculators.
2) I will have another 10 stock list for investors that will be updated every week and may or may not have 10 stocks in it. I will not try to change it often so starting out I will have no recommendations. Each stock will be analyzed here at my blog, so you will have my justification to own it. Nothing like buying something and see it keep on appreciating. Your savings at work!
3) At most, 5 speculative plays, but since they happen randomly, they will be posted accordingly. Who doesn't like seeing some fireworks now and then?
We will start off with $30,000 ($10,000 for each trading vehicle).
I do not have the time to update everyday, but will post results each Monday.
So...
1) Every week, on Monday, I will focus on 10 stocks. They can be carried over from the previous week, be new additions or changed through the week. All stocks are chosen from my picks on stockcharts.com--I would ideally like to perfect this system in order to consistantly generate cash! So thank you for joining me on this journey.
So some weeks there will be more activity and some none at all (the preferable choice). This portfolio is for more active traders or speculators.
2) I will have another 10 stock list for investors that will be updated every week and may or may not have 10 stocks in it. I will not try to change it often so starting out I will have no recommendations. Each stock will be analyzed here at my blog, so you will have my justification to own it. Nothing like buying something and see it keep on appreciating. Your savings at work!
3) At most, 5 speculative plays, but since they happen randomly, they will be posted accordingly. Who doesn't like seeing some fireworks now and then?
MarketUp or Down
This market is up today. But the stocks I'm watching aren't so hot today.
Telecom and Oil Services should stay strong, but are in fact backing off from highs of the day. Profit taking, of course. But why???? These companies should be hitting even higher highs after news like this; especially in a bullish environment. So I'm cautious.
DD and ADM should be higher. NBR should be strong and it isn't. These are all large cap companies with strong cash flow. These are chemicals, agriculture, and oil plays of undervalued cos. - unfortunately these are just not hedge fund plays.
Real Estate related companies are horrendous today. Will they maintain there weakness?
MTCT was up .48 cents in after hours on Friday and is struggling to be positive today.
UAUA is the only monster in my book. Always up on unexpected days.
Today, I believe we can have a market reversal later in the day. If the market does stay positive I think one should short into tomorrow.
So I am thinking that every week I will post a playbook with stocks entry points. And possible scenarios to watch for. And then tally up profit and losses on the following Monday.
Telecom and Oil Services should stay strong, but are in fact backing off from highs of the day. Profit taking, of course. But why???? These companies should be hitting even higher highs after news like this; especially in a bullish environment. So I'm cautious.
DD and ADM should be higher. NBR should be strong and it isn't. These are all large cap companies with strong cash flow. These are chemicals, agriculture, and oil plays of undervalued cos. - unfortunately these are just not hedge fund plays.
Real Estate related companies are horrendous today. Will they maintain there weakness?
MTCT was up .48 cents in after hours on Friday and is struggling to be positive today.
UAUA is the only monster in my book. Always up on unexpected days.
Today, I believe we can have a market reversal later in the day. If the market does stay positive I think one should short into tomorrow.
So I am thinking that every week I will post a playbook with stocks entry points. And possible scenarios to watch for. And then tally up profit and losses on the following Monday.
Explanation of my blog
Saturday and Sunday I like to step back and think about the market in a philosophical way. Sometimes there may not be an ending to that blog, but rest assured I will update it. It is my expectation to write a book with those notes, so if anyone has any feedback please let me know.
For the market, my stock picks on stockcharts.com are the stocks I will be buying and shorting given market conditions. The picks are primarily of a technical nature but are filtered by analyzing fundamental characters of the stock with a macroeconomic perspective. Sometimes I will write in my blog stocks that aren't in my selections because they are primarily hedging vehicles and very liquid-like when gold was rallying, I want to get into AEM or they have come past my desk before I could decide to put it on stockcharts.
Monday morning: TLAB, even after buyout news, isn't at 52 wk high which I maintain it should be at. But the wind is out of this stock so I am going into ECIL and CN from profit of TLAB
SII ran away Friday afternoon which someone had expected some buy out rumors with. It didn't. I hate buying stocks with runs like that. But I would buy it and realize you have to hold onto it.
GG need a gold stock right now.
So 4 longs GG, SII, ECIL, CN
A reader mentioned that he would like me to place entry prices. I will work on that. I want my blog to work efficiently so please be patient as I figure out the appropriate way of doing that.
As for shorts--FED is the short that I have the most conviction about and will weather the viscissitudes with this one.
I want to wait till the close to see what's going on. Something I have been toying with but not confident in yet is buying puts on all buy out rumors. Because I don't think they will all close which would really hammer the stock.
I'm working on a list now, but nothing to share.
For the market, my stock picks on stockcharts.com are the stocks I will be buying and shorting given market conditions. The picks are primarily of a technical nature but are filtered by analyzing fundamental characters of the stock with a macroeconomic perspective. Sometimes I will write in my blog stocks that aren't in my selections because they are primarily hedging vehicles and very liquid-like when gold was rallying, I want to get into AEM or they have come past my desk before I could decide to put it on stockcharts.
Monday morning: TLAB, even after buyout news, isn't at 52 wk high which I maintain it should be at. But the wind is out of this stock so I am going into ECIL and CN from profit of TLAB
SII ran away Friday afternoon which someone had expected some buy out rumors with. It didn't. I hate buying stocks with runs like that. But I would buy it and realize you have to hold onto it.
GG need a gold stock right now.
So 4 longs GG, SII, ECIL, CN
A reader mentioned that he would like me to place entry prices. I will work on that. I want my blog to work efficiently so please be patient as I figure out the appropriate way of doing that.
As for shorts--FED is the short that I have the most conviction about and will weather the viscissitudes with this one.
I want to wait till the close to see what's going on. Something I have been toying with but not confident in yet is buying puts on all buy out rumors. Because I don't think they will all close which would really hammer the stock.
I'm working on a list now, but nothing to share.
Sunday, July 22, 2007
Buying and Selling
How can one trade actively in the stock market and come out ahead?
How can one pick a stock and say it will appreciate by x amount in a given time.
The converse is true with "betting" a stock will depreciate in value.
How can one pick a stock and say it will appreciate by x amount in a given time.
The converse is true with "betting" a stock will depreciate in value.
The Stock Market vs. Poker vs. Casino
I think this is an age old debate whether the market is gambling or not. Ultimately, one is not in control of the outcome so it's gambling. But are the odds stacked against you as they are in a casino house? Depends on ones experience. Are the odds better in poker? I see enough WSOP to know that when all things are equal they are a toss up. The experts win against lesser foes. And one jackpot covers lots of "little losses."
Here is my take:
1) For a value investor, he doesn't even worry about market direction, but whether you're getting the company below book value whether or not people will value it accordingly isn't the issue.
2) Growth investors have to rely on the continued compounding of a stocks returns.
3) Technical analysts play the odds. But they are from the houses perspective as opposed to the players where the games don't favor them.
Another big issue is what to do with the earnings.
Here is my take:
1) For a value investor, he doesn't even worry about market direction, but whether you're getting the company below book value whether or not people will value it accordingly isn't the issue.
2) Growth investors have to rely on the continued compounding of a stocks returns.
3) Technical analysts play the odds. But they are from the houses perspective as opposed to the players where the games don't favor them.
Another big issue is what to do with the earnings.
Friday, July 20, 2007
StayTuned
Twice this week the market DIDNT close at the low for the day which resulted in a bullish aftermath. Should one buy here? I would err on the side of caution. Should one short here? Only stocks related to the domestic economy. But even there I would go light. Just because we are still in a very strong uptrend and possibly "a rising tide lifts all boats" will ring true.
Plus, the subprimes should have ripped a continual bearish path today even on options expiration if this was truly a bearish day. And it didn't so I would say that there could very well be another leg up which could actually bring in retail investors.
And they would be buying the oil and gold sectors. Energy and Gold actually eked out into positive territory today.
So what will next week have in store for us?
Plus, the subprimes should have ripped a continual bearish path today even on options expiration if this was truly a bearish day. And it didn't so I would say that there could very well be another leg up which could actually bring in retail investors.
And they would be buying the oil and gold sectors. Energy and Gold actually eked out into positive territory today.
So what will next week have in store for us?
Market Down 150 pnts (from all time hights)
People are guilty or hesitant when things are on uncharted territories. There are good reasons to be out of this market, yet there are good reasons to be in the market.
The one reason I would say to stay out of the market is if you have no conviction.
Everyday there is a sell off like this, everyone thinks this is the end to the party. But is that an honest rationalization?
Here is my playbook on the market. First, there has been record low volatility so the market can still go up but in a more choppy way. So volatility is possibly back. But even today, how can one call straight down, volatile? It's a one direction market. Which I guess goes back to the strong convictions category-there are super bulls and super bears but the weak-kneed are just treading water.
Everything this year is tied to the dollar and it's weakness. 1) The FED can lower rates and if they do, BUY commodities and foreign currency in a big way. The dollar WILL collapse and possibly 30yr bonds as well. 2) If the FED keeps rates the same, the companies with primarily domestic business will suffer from consumer weakness and one should hold off from any purchases or BUY puts on the market.
The question to my mind is "what is the FED's role in the global marketplace?" Is it primarily to keep unemployment at low levels at which point they will need to lower rates. Or is it to maintain the dollar as the reserve currency? If that is the case rates will stay the same and they will let the market revalue asset markets.
My money is on keeping rates the same. I really can't see the US sticking the world with an unstable MidEast and a wobbly US dollar that could result in sky high inflation.
Remember can the US really export more with a collapsing dollar? The majority of its production is outside the country and our production capacity is the same as it was in in the 1920s!!!! And is the Fed benevolent? Dwight Eisenhower, before we knew him as IKE, was sent in to squash a peaceful protest of disenfranchised individuals outside the White House in the 30s.
But it is an exciting time to see what we have read in our history books turns out to repeat itself, or not.
The one reason I would say to stay out of the market is if you have no conviction.
Everyday there is a sell off like this, everyone thinks this is the end to the party. But is that an honest rationalization?
Here is my playbook on the market. First, there has been record low volatility so the market can still go up but in a more choppy way. So volatility is possibly back. But even today, how can one call straight down, volatile? It's a one direction market. Which I guess goes back to the strong convictions category-there are super bulls and super bears but the weak-kneed are just treading water.
Everything this year is tied to the dollar and it's weakness. 1) The FED can lower rates and if they do, BUY commodities and foreign currency in a big way. The dollar WILL collapse and possibly 30yr bonds as well. 2) If the FED keeps rates the same, the companies with primarily domestic business will suffer from consumer weakness and one should hold off from any purchases or BUY puts on the market.
The question to my mind is "what is the FED's role in the global marketplace?" Is it primarily to keep unemployment at low levels at which point they will need to lower rates. Or is it to maintain the dollar as the reserve currency? If that is the case rates will stay the same and they will let the market revalue asset markets.
My money is on keeping rates the same. I really can't see the US sticking the world with an unstable MidEast and a wobbly US dollar that could result in sky high inflation.
Remember can the US really export more with a collapsing dollar? The majority of its production is outside the country and our production capacity is the same as it was in in the 1920s!!!! And is the Fed benevolent? Dwight Eisenhower, before we knew him as IKE, was sent in to squash a peaceful protest of disenfranchised individuals outside the White House in the 30s.
But it is an exciting time to see what we have read in our history books turns out to repeat itself, or not.
Thursday, July 19, 2007
Uganda and Gold and Uranium for only 5 cents!!!
I am not a geologist so I am looking at this from an investor standpoint.
IBI (ibiinvest.com) was featured in Northern Miner several weeks ago and has an interesting story to tell, and is developing, in Uganda.
Apparently, mining is very undeveloped in Uganda due to misrule. So it comes as no shock that IBI has claim to a gold mine that is currently operational but small.
But the most unbelievable aspect is their claims to potential uranium in the country. Many uranium miners in Africa have values largely exceeding IBI with possibly the same type of assets.
Do you just go on what IBI has to say? Please read this:
http://allafrica.com/stories/200707190003.html The government is sensing something big in the woodworks.
Unfortunately, the article is not positive on private landrights, but I'm willing to stick with IBI's assertions until proven otherwise.
The stock is trading at a nickel. It's a better bet than playing Texas Hold 'Em.
IBI (ibiinvest.com) was featured in Northern Miner several weeks ago and has an interesting story to tell, and is developing, in Uganda.
Apparently, mining is very undeveloped in Uganda due to misrule. So it comes as no shock that IBI has claim to a gold mine that is currently operational but small.
But the most unbelievable aspect is their claims to potential uranium in the country. Many uranium miners in Africa have values largely exceeding IBI with possibly the same type of assets.
Do you just go on what IBI has to say? Please read this:
http://allafrica.com/stories/200707190003.html The government is sensing something big in the woodworks.
Unfortunately, the article is not positive on private landrights, but I'm willing to stick with IBI's assertions until proven otherwise.
The stock is trading at a nickel. It's a better bet than playing Texas Hold 'Em.
Hip Hip Jorge!
That is what they say when Jorge Posada has a hit. He has been very consistent this year as has the market. Can it keep it going?
All I know is that when the markets get excitable, one should wait when it's not, like yesterday.
What disturbs me is that on Bloomberg we had Marc Faber, Jim Rodgers, and Ken Fisher on debating and disagreeing about where the market is going, but they were all right. Mr. Fisher had the nicest layout, sitting on a leather chair esconsed in his library, but his reasons to be long were short - he said, "the SP500 companies are yielding more than bonds." Mr. Rogers gave his bow-tie answer, which seemed more logical, that the US financial institutions are in heap of trouble which will cause the dollar to crash at which point the Asians will step in and save us like we did for them in the 90s. While Mr. Faber gave his gloomy predicament for the US market assessing that it is not at new highs if adjusted for the Euros.
All I can say is...
First, the beauty of America is that two people can have differing opinions and still be right!
Second, Americans are by default cheery people and are consummate optimists, but Wo! the person that rains on their parade!
We want to cheer, not jeer.
It's kind of like the Yankees the past few years. They keep hiring and resigning veterans which keeps the team playing well and we cheer, but we know they're going to blow it later on during the playoffs or world series. But that's too far in the future...in the meantime...
Hip Hip Jorge!!
All I know is that when the markets get excitable, one should wait when it's not, like yesterday.
What disturbs me is that on Bloomberg we had Marc Faber, Jim Rodgers, and Ken Fisher on debating and disagreeing about where the market is going, but they were all right. Mr. Fisher had the nicest layout, sitting on a leather chair esconsed in his library, but his reasons to be long were short - he said, "the SP500 companies are yielding more than bonds." Mr. Rogers gave his bow-tie answer, which seemed more logical, that the US financial institutions are in heap of trouble which will cause the dollar to crash at which point the Asians will step in and save us like we did for them in the 90s. While Mr. Faber gave his gloomy predicament for the US market assessing that it is not at new highs if adjusted for the Euros.
All I can say is...
First, the beauty of America is that two people can have differing opinions and still be right!
Second, Americans are by default cheery people and are consummate optimists, but Wo! the person that rains on their parade!
We want to cheer, not jeer.
It's kind of like the Yankees the past few years. They keep hiring and resigning veterans which keeps the team playing well and we cheer, but we know they're going to blow it later on during the playoffs or world series. But that's too far in the future...in the meantime...
Hip Hip Jorge!!
Market Brew
Today, not yesterday, is how the big traders have been making fortunes. Buying on desolate days, only to see their profits steam roll ahead the next.
The problem in essence is you want to predict the future but no one can do that so you do the next best thing and play the odds which traders do. The odds dictate being long. Unfortunately, or fortunately, people don't like to buy on down days in keeping with the 'keeping it safe' mentality. But that doesn't pay the bills in the stock market.
Fundamentally, you stick to your position and ride it out until you can't anymore.
Once again I deplore Bloomberg for scaring people. They should be enlightening them with appropriate investment advice.
Those bears on TV have several ways to make money, but an individual usually only has one.
My PREDICTION today is for either 2 things to occur.
The DOW is up over 100 pnts today or it is going to fight to stay in positive territory but won't be down today. Tomorrow is option expiration, so trading will be convoluted.
presently.
The problem in essence is you want to predict the future but no one can do that so you do the next best thing and play the odds which traders do. The odds dictate being long. Unfortunately, or fortunately, people don't like to buy on down days in keeping with the 'keeping it safe' mentality. But that doesn't pay the bills in the stock market.
Fundamentally, you stick to your position and ride it out until you can't anymore.
Once again I deplore Bloomberg for scaring people. They should be enlightening them with appropriate investment advice.
Those bears on TV have several ways to make money, but an individual usually only has one.
My PREDICTION today is for either 2 things to occur.
The DOW is up over 100 pnts today or it is going to fight to stay in positive territory but won't be down today. Tomorrow is option expiration, so trading will be convoluted.
presently.
Wednesday, July 18, 2007
The silent airlines and real government-backed companies.
UAUA can't find a down tick. Why would airlines go up if there is a looming recession, 2007? And go down and file bankruptcy when the market was strong, 2003-2006?
My only rationalizaion is monopolistic practices by keeping fares high and cutting back air flights to keep them full.
Look at MTCT stay up in a down market. The government which always pays their bills, albeit with depreciating currency, is always a safe bet with a company that is undervalued.
My only rationalizaion is monopolistic practices by keeping fares high and cutting back air flights to keep them full.
Look at MTCT stay up in a down market. The government which always pays their bills, albeit with depreciating currency, is always a safe bet with a company that is undervalued.
Gold and the plunging market (from all time highs that is)
The market is selling off. Will it rally? Probably not, since the recent path would dictate it heightening its downtrend motion towards the close then rallying again the next day.
The difference today is that gold is up sharply as is commodities. I think traders are hedging for possible currency crisis in the dollar since the Fed will have to lower rates or risk putting the economy in a recession.
I remain slightly sceptical of gold going up as the market goes down because gold went up along with the market, due to liquidity issues. So if gold keeps going up, I would say so will the market.
If gold goes caput, well then forget inflation, and appreciate 3% interest rates.
In any even gold is universal and the miners have leverage to it so in the pursuit of safety--
Buy GLD-gold etf, GDX-gold miner index, AEM, ABX, NEM all large gold cos.
GSS, CDE, PAAS, HL as spec gold and silver plays.
The difference today is that gold is up sharply as is commodities. I think traders are hedging for possible currency crisis in the dollar since the Fed will have to lower rates or risk putting the economy in a recession.
I remain slightly sceptical of gold going up as the market goes down because gold went up along with the market, due to liquidity issues. So if gold keeps going up, I would say so will the market.
If gold goes caput, well then forget inflation, and appreciate 3% interest rates.
In any even gold is universal and the miners have leverage to it so in the pursuit of safety--
Buy GLD-gold etf, GDX-gold miner index, AEM, ABX, NEM all large gold cos.
GSS, CDE, PAAS, HL as spec gold and silver plays.
What to do when confusion abounds
I would say that there are strong and logical arguments to stay as far back from this market as one can. But the gains in some of these stocks have been unfathomable.
Thankfully in this day and age we can buy options. The way I look at it is, if it is as bad as they say, then out-of-the -money puts on the worst companies should turn out to be profitable because of the likelihood of bankruptcies. So you play the looming market crash that way.
VOLATILTY-buy calls and puts on the indexes. You are betting on the revaluation of risk due to an increase in volatility.
And deep-in-the-money calls on your favorite stock. So that way if the market indeed goes down, you are only out of your call premium. But eventually should be covered by the puts and volatility.
Look at golds!
AEM is my favorite big dog.
Thankfully in this day and age we can buy options. The way I look at it is, if it is as bad as they say, then out-of-the -money puts on the worst companies should turn out to be profitable because of the likelihood of bankruptcies. So you play the looming market crash that way.
VOLATILTY-buy calls and puts on the indexes. You are betting on the revaluation of risk due to an increase in volatility.
And deep-in-the-money calls on your favorite stock. So that way if the market indeed goes down, you are only out of your call premium. But eventually should be covered by the puts and volatility.
Look at golds!
AEM is my favorite big dog.
The dollar is falling--Half Off for the English
The dollar is trading at historic lows. And inflation as well. Call that a paradox. But not if you are doing business overseas or just across the border. Things are expensive.
The market as whole has record short interest which by a look at the economy makes sense. If the market is adjusted to relate for commodity inflation, it has crashed.
But the US stock market should have strength because of the cheapness of the assets to the falling dollar. The DOW is close to 14000 but to a Brit it's at 7000! since the Pound/Dollar is 2:1.
I would rather own a co. that makes its money overseas, quoted in dollars, and hasn't had the currency valuation yet. I read today that tech co. make a bunch of their money overseas which is why we are seeing revaluation of that sector.
Im concerned with my dollar savings account which has horribly depreciated. One should own Swiss Franc, Indian Rupee, Canadian Dollar, Gold, Silver. Short term paper.
Mining companies are the pure play for dollar revaluation since what they have to sell is in demand throughout the world. I like the more speculative plays because of the greater percentage increase of profits, possible buyout, possible bonanza find, and you can buy shares of them. Golden Star, Samex, IBI.
The market as whole has record short interest which by a look at the economy makes sense. If the market is adjusted to relate for commodity inflation, it has crashed.
But the US stock market should have strength because of the cheapness of the assets to the falling dollar. The DOW is close to 14000 but to a Brit it's at 7000! since the Pound/Dollar is 2:1.
I would rather own a co. that makes its money overseas, quoted in dollars, and hasn't had the currency valuation yet. I read today that tech co. make a bunch of their money overseas which is why we are seeing revaluation of that sector.
Im concerned with my dollar savings account which has horribly depreciated. One should own Swiss Franc, Indian Rupee, Canadian Dollar, Gold, Silver. Short term paper.
Mining companies are the pure play for dollar revaluation since what they have to sell is in demand throughout the world. I like the more speculative plays because of the greater percentage increase of profits, possible buyout, possible bonanza find, and you can buy shares of them. Golden Star, Samex, IBI.
Tuesday, July 17, 2007
Why am I invested in uranium mining????
By all rights there should have been a rally in the uranium complex. If subprime and homebuilders could rally with VERY REAL problems and negative growth then surely a growing industry has a right to rally.
BUT
1) Energy as a sector was weak yeasterday as it is today.
2) Japan earthquake with nuclear power very visible in the news. Who wants to own anything related to it, if this nuclear plant has some radioactive fallout? but I do.
3) And look at CCJ nose dive. It has some serious issues.
Like I said before long any uranium miner, short ccj
4) And ultimately Bloomberg mentioned this weekend how oil is going to $100, a clear sign to short the hell out of the commodity. BUT not natural gas which has languished for over a year. XTO is that largest and safest in natural gas.
5) The price of uranium went down $5 since June. But uranium mining companies dont move in lockstep with the price so it is a fallacy of short term traders. Plus long term orders are the same.
The good news
0) Infrastructure companies speciallizing in nuclear power are strong: SGR, GE, MDR, USU
1) CCJ is looking to buy a miner of uranium to cover the short fall it will face with their mine in Canada. Bloomberg covered it earlier in the day but hasn't mentioned it since, because Paladin is down today. It's a rumor but very reasonable. LOOK AT ALCOA!!!! after the ALCAN rumor the stocks went down!!!!! Only to rally 15% (or there abouts)
2) Discount. These companies have very real assets. And very real cash!
3) Areva the largest nuclear co stock is at record highs. ? would that be if this industry is lousy.
4) WARRANTS and OPTIONS if you can buy them. These represent leveraged buying power on these companies. This is more akin to buying a stock at .20 to the dollar.
URZ uranerz got hammered because they are buying assets in Texas. Shareholders seems displeased at a company trying to grow their assets, which to a mining company is all they really can control. A few months ago, no one would believe that URZ would fall below $5. So now you can buy $5 options on URZ at 5cents--1000%buying power.
As the Shadow says "who know what fear lurks in the shadow of men.."
So I'm taking out a flashlight and shining it on the problem.
And as Rothschild was reputed as saying "buy when there's blood on the street."
Monday, July 16, 2007
I don't like business media
Uranium went from,at least when I was following it - $11-$150
Can you remember any articles about it? And the co. t have been buying I was calculating their value at $50 a pound. So actually these company's will stay strong as their competitors weaken.
Bloomberg has scared me out of more money than I care to admit. But wanted to share this with you for devil's advocate sake.
But you can see from the article and the commentary that everyone is focused on price. I'm focuse on value!
They are assuming that you are buying it to flip in a month or two. But if you are willing to hold onto these co. at least 3-5 yrs, one should see a significant increase on investment.
The nuclear industry is small and growing. The value of the companies is in proving their reseources and creating a feasibility study in order to borrow money to begin mining or be bought out.
Remember the dollar is tanking and countries that are going nuclear would rather have the resource that will provide for their citizens than dollars that act as a noose around their neck
And here's the kicker most of the companies mentioned already know what they have because the properties were once owned by the big oil co. Now they are proving, this spring, how larger their resource base is.
Bloomberg's article are the reasons not to invest in mining co. in general.
And these article's problems were with these mining co. as uranium has gone up 1000% . Where were they all they way up? Now they are going to dance on its grave?
Mr. Dines said that people short uranium mining "may truly have a different religious experience."
CCJ is not a great co in the fact that they didnt buy up mining resources throughout the world but instead focused on diversifying. The article should have mentioned buy uranium miners, short CCJ. Also the article didnt mention, the mining problems; only CCJ's problems.
Mr. Mitchell, the hedge fund manager, wants to buy more mining co. and he is trying to do it cheaper. I think it is totally unprofessional, CCJ is too liquid, so if he was short he could have admitted it. He never mentioned any of his positions which a more 'frank' person would. That other hedge fund manager was more open since he just opened up shop. And those clever resource managers bought and sold their uraniums. And I bet they are going to buy more XOM with that.
The article fails to mention that prices of uranium mining co. has gone down while the price of the mineral went up several times throughout this bull market. So as the mineral is going down, uranium up?
This is why if a newspapers really rips a company or sector apart for no reason other than pricing reasons. It's probably a good time to get in to the stock.
So in conclusion, don't write to bloomberg and express your discomfort or he'll be president of US. GO out and buy more mining co. They are cheap as opposed to one of his terminals that are 15,000 a yr. That investment in mining shares may truly turn to be a bonanza!
Hope your week goes well
Eric
WakingUp
I dont think waking up to see how the markets are is the healthiest activity because when the interenet is down, I get nervous. I think for a trader his decision should be more certain as to avoid those type of feelings.
But then why to wak up. What's the motivation?
But then why to wak up. What's the motivation?
Sunday, July 15, 2007
Courage or cowardice.
When trading, one has to be a lighthouse being the beacon of the night, impervious to the storm. Instead of the ship that is tossed mightily by the water.
A coward dies many deaths, but a courageous one, once. He makes his decision and sticks with it.
It is dawning on me that one must do research, think about the conclusions, then make a decision. Forget the pundits, the newspapers, your friends but look to yourself. If it is too late then another opportunity will arise. If one doesnt think that way he is fatalistic, which always starts buying panics, and you sure as hell can't be that way in life nor avaricious in the markets.
A coward dies many deaths, but a courageous one, once. He makes his decision and sticks with it.
It is dawning on me that one must do research, think about the conclusions, then make a decision. Forget the pundits, the newspapers, your friends but look to yourself. If it is too late then another opportunity will arise. If one doesnt think that way he is fatalistic, which always starts buying panics, and you sure as hell can't be that way in life nor avaricious in the markets.
Bourne Identity and Trading
Was consumed by this book all of Friday, Saturday, and now Sunday. The book was about a man searching for a past that others claim is evil, but a beautiful red hair told him that he is good and to believe it; look at what you have done the past six months.
The stock market wants to confuse you. There are so many influences and money floating around that 'things' are bound to happen. But you have to believe you're good, ie making the right decisions for right reason - is it for an acceptable gain, speculative windfall, or greed. It it is greed, then you are the assassin everyone thinks you are.
And Bourne gets it rough, but he succeeds and gets the girl - with a caveat that is reveald in the book. But the point is that you need to stay determined.
Especially, in the areas of the market that are hot and very cyclical-mfg, energy, commodities.
Things can last longer than people expect. In the meantime find that beautiful girl.
The stock market wants to confuse you. There are so many influences and money floating around that 'things' are bound to happen. But you have to believe you're good, ie making the right decisions for right reason - is it for an acceptable gain, speculative windfall, or greed. It it is greed, then you are the assassin everyone thinks you are.
And Bourne gets it rough, but he succeeds and gets the girl - with a caveat that is reveald in the book. But the point is that you need to stay determined.
Especially, in the areas of the market that are hot and very cyclical-mfg, energy, commodities.
Things can last longer than people expect. In the meantime find that beautiful girl.
Thursday, July 12, 2007
Addiction
When stock prices rip like they are doing this morning it makes one break his concentration. Because he has gold on his mind. The day to have made the trade was yesterday. Not today. So it's better just not to look at the stock market today. Very much like when it gets hit hard like 2 days ago when it was down 148 point.
Wednesday, July 11, 2007
7/11/07
Today, the market rallied from yesterday's selloff.
I think one should pause, if one doesn't have a position currently, and see what the market wants to do.
I would buy this stock URANIUM ONE since the co. it will merge with just acquired more assets in the US. This time from Anadarko. And chances are Anadarko is selling the assets for a stake in production or in exchange for stock. They are not fools and see some big time action in the nuclear industry.
Like URANIUM ONE which should finally see some upside action.
I think one should pause, if one doesn't have a position currently, and see what the market wants to do.
I would buy this stock URANIUM ONE since the co. it will merge with just acquired more assets in the US. This time from Anadarko. And chances are Anadarko is selling the assets for a stake in production or in exchange for stock. They are not fools and see some big time action in the nuclear industry.
Like URANIUM ONE which should finally see some upside action.
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