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Posts Tagged ‘Buffett’

Warren Buffett’s Secret to Making 100% a Year

I love the Berkshire Hathaway annual report!  

Especially Warren Buffett’s letter to shareholders.  The report gives us a great view of the overall economy from a man who has his finger in every pot and his letter to investors gives us a very good insight as to how things are going in the various sectors his operations cover.  Most importantly, what I have learned in my own 40 years or reading Mr. Buffett’s reports (my Grandfather was a shareholder) is what should shape any long-term investing strategy:  Patience and performance.  

I often preach to members the joys of letting gains compound and our $25,000-$100,000 Virtual Portfolio, which is currently at $27,531 (up 10%) after 4 weeks, is an exercise in how to quickly compound small gains over the course of a year.  Primarily, we try to follow Warren Buffett’s Number One Rule of Investing, which is: Don’t Lose Money.  Buffett’s Rule #2 is: See Rule #1 and like us, it’s not that nothing Warren Buffett ever buys loses money – it’s just that he doesn’t ever buy things he isn’t willing to stick with UNTIL they make money.  Sure we take a few losses along the road but, by being selective in our entries, we don’t discard stocks that we carefully selected just because the market temporarily disagrees with our valuations.  

In our $25,000 Virtual Portfolio, it’s only been a month so we’ve only closed our winners so far and they were SPWRA with a 100% gain (these are option trades), INTC with a 40% gain, NFLX with a 42% gain, EDZ with a 75% gain, XLF with a 15% gain, VIX with a 50% gain, USO with a 53% gain and XLE with a 5% gain.  In 19 trading day we have made 28 virtual portfolio moves (counting each leg) and, as I said, netted a 10% return to date.  Interestingly, we’ve been playing it very cautious as we still have over $18,000 of virtual cash on the sidelines, hoping for a sign to get a little more aggressive next week.  

How, you may wonder, are we going to get to $100,000 by December with just $27,531 in February?  THAT is the lesson Warren Buffett has to give us and that lesson is COMPOUNDING RETURNS!  Since 1965, Berkshire Hathaway has returned an overall gain of 490,409% to it’s shareholders.  $10,000 handed
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Thanks for the Gas Money, Mr. President!

What the HELL has happened to this country? 

Did we seriously just spend $830Bn to give tax cuts to the rich when we’re already $15Tn in debt?  When 20M Americans are officially out of work and another 30M have jobs where they can’t make ends meet?  Did Obama and the Democratic "leadership" just fold like an empty suit and sell what’s left of their supporters down the river and in exchange for what?  For the extension of jobless benefits for 2M people while another 450,000 people a week are laid off?   

How does it help people who have no jobs to have an extended tax cut?  If Obama suddenly found $830Bn to spend, how about spending it to employ 16.6 MILLION people with $50,000 jobs?  THAT’S HOW MUCH $830Bn is!  Would 16.6M people getting jobs boost the economy?  It would do a lot more for the economy than giving it to a few Billionaires so they can buy more BMWs which they can drive to the next foreclosure sale so they can take away the homes of the people they are supposed to be "trickling on." 

Aside from the obvious fact that the Bush Tax Cuts certainly didn’t leave us with a strong economy in their first 10 years and we all know that Albert Einstein’s definition of insanity is doing the same thing over and over again and expecting different results so we have to ask ourselves:  Has Barack Obama gone insane?  Have the Democrats lost their minds or only their souls (and their spines)?

As you can see from the chart on the left, our "leaders" have now endorsed a tax plan that gives families earning less than $75,000 an average tax break of $900.  That’s $17 a week!  I’m sorry, I titled this article "Thanks for the Gas Money, Mr. President" but good luck filling your tank for $17 a week.  In fact, before the Bush Tax Cuts, a gallon of gas was $1.50 but the $3.7Tn of debt we took on from the first 10 years of Bush Tax Cuts led to a rapid decline in the value of the dollar, which cased to price of commodities to fly up as the relative purchasing power of those dollars declined, pushing the price of gas up to a peak of $5 and what is once again $3 and climbing under Obama’s weak leadership.  

The average…
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America is 234 Years Old Today – Is It Finished?

"The average age of the world’s greatest civilizations has been two hundred years. These nations have progressed through this sequence. From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance, from abundance to complacency; from complacency to apathy, from apathy to dependence, from dependence back into bondage." – Professor Joseph Olson

Is America, then, living on borrowed time?  Are we so far past our prime and so into old age as a civilization that we are now senile and oblivious to our present surroundings, causing a danger to ourselves and others?  Do we find ourselves living in the past and repeating the same old tales of our former glories over and over again to anyone who will listen?  Are we barely kept alive by various medications that only stave off conditions that are getting worse every day while still imagining that, if there were a need, we could rise up and be strong again — but not today as there’s rice pudding for desert and we don’t want to miss that!

Well I have news for you – This country isn’t old and it isn’t sick but it has been drugged and it has been beaten down and robbed and I am going to tell you that I not only saw it happen, but I think I got a pretty good look at the 10,000 guys who did it.  It was the top 0.01%!  Who are the top 0,01%?  They are the top 10,000 income earners in the United States of America.  If you THINK you are in the top 0.01%, you are not.  People in the top 10,000 know only KNOW they are in the top 0.01% but they know where they rank as well.  The median ANNUAL income of a person in the top 0.01% is $50,000,0000.  They have $350,000,000 in assets and, since 1978, that is an increase of 550% – how have you done the past 30 years?

Now we are (or used to be) a pretty rich country and the median income of the 118M people who earn enough money to pay income taxes is about $50,000 but the cost of living in the same country as people who earn an average of 976 times more than that is pretty high as well (see "The Dooh Nibor Economy").  Even worse, The 10,000 paid just $112Bn in taxes last year – that’s just over 20% of their income, while the rest
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Monday Munificence – Greece “Fixed” for “Only” $146Bn, Who’s Next?

Yay, Greece is fixed….  again.

Now we only have to worry about Austria, Belgium, France, Germany, Greece, Hungary, Italy, Ireland, Japan, Netherlands, Portugal and, of course, the UK – who all have WORSE Sovereign Debt to GDP ratios than Spain (who are up next on the "wall of worry" the markets are climbing) while we pretend that the US is in "good" shape because we "only" have $15Tn in debt on a $14Tn economy, which is how we, through the IMF, were able to write Greece a $20Bn check this weekend. 

$146Bn given to Greece is almost 50% of Greece’s ENTIRE $339Bn GDP – now THAT’s a bailout!  Bailing out Spain’s $1.5Bn economy would force us all to dig just a little deeper, despite the lower ratio and bailing out Italy’s (same ratio as Greece) $2.1Tn economy might be a stretch so maybe we can help Belgium first ($470Bn) before we all get together and figure out what we’re going to do about Japan, who have a $5Tn economy that is $10Tn in debt yet somehow has had their bonds marked to fantasy for years.  

16.5% of Japan’s tax revenues currently go to debt service (10% on interest alone) as the government borrows money at an average 1.3% (10-year rate) and you won’t here it from the happy, happy CNBC crew this morning (because Greece is "fixed" and Buffett says GS are REALLY nice guys) but Fitch released a report this weekend warning: "Japan is increasingly vulnerable to an adverse interest rate shock, given the scale of government debt and hence the volume of refinancing.  The lack of a coherent and credible plan" for fiscal discipline is likely to put downwards pressure on creditworthiness in the medium term."  According to the non-Murdoch London Telegraph:

Tokyo has until now been able to borrow at ultra-low rates of around 1.30pc for 10-year bonds, drawing on a huge captive savings pool from its own citizens. While this reduces the risk of a "temporary liquidity problem" – or `sudden death’ in ratings parlance – as foreigners cut off funding, it does not protect Japan from deeper forces at work.

The Bailout"The slow but steady drop in the domestic savings rate could eventually undercut [Japan's] ability to fund itself locally at nominal yields and makes it more vulnerable to interest rate and refinancing risks," he said. Even at the current low rates – 0.16pc for two years, and


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Armstrong Economics: Entering Phase II of The Debt Crisis

Introduction by Ilene

martin armstrongYou may be wondering why Chopshop is referencing Martin Armstrong’s writings, given Marty’s extended stay in maximum security prison.  Chopshop contends that Martin’s cyclic modeling is genius and ought to supersede whatever opinion one has of Armstrong’s case.

Armstrong is a gold-to-$5,000 guy.  Chopshop agrees that one day gold will likely reach those dollar-denominated "values", but believes that gold will likely digest its 400% gain of the past decade over the next few years before ‘going for the gusto.’

Chopshop and Fibozachi have remained steadfast in calling for first targets of 81 and 84 on the US dollar since they nailed its bottom on December 3rd.  (See also this and this.) They believe we are at a juncture within the credit crisis where "gold is much more likely to take a $350 John Edwards-style haircut before reaching $1450 and beyond."

Back to Armstrong, whose proclivity for gold stems "not from an ill-conceived loathing of the dollar but from an impeccably nuanced study of history’s mosaic.  Chopshop thinks Armstrong’s work can be appreciated by all, "not only because of Marty’s historical breadth but also because his forecasts are predicated upon explicit methodology."

So I asked Chopshop why Martin was in prison, and, for the first time he paused, answering a few seconds later that the reason is because Martin didn’t "obey the rules of Fight Club" ~ you don’t talk about Fight Club and you don’t talk about the alleged collusion of broker/dealers, investment banks, hedge funds and nation-states publicly when "they" are who you consult / manage money for. Armstrong spoke to the manipulation of silver futures by JPM, named Warren Buffett as a mystery $2 billion futures participant of "the Club" and, ultimately, spoke to alleged cabals operating from within, yet behind, financial markets.  Marty spoke about the game being rigged by the Club, being anything but a random walk. Is such the reason for his incarceration with extreme prejudice; not his Pi cycles, public-private pendulum or other brilliant work within cyclic periodicity? So basically, he’s in the hole on trumped up charges.

The long and short of it, according to Chop’s opinion, is that Martin is a political prisoner and cyclic genius who speaks to the intermediate and long-term horizon with probabilistic prescience.  He’s not selling anything and not offering actionable advice. He’s focused solely on finding robust patterns within his models and across history.  Marty has a nearly…
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Weekly Wrap-Up – Buffett’s Daring Derivative Deal Does Well

I was going to talk about Buffett's annual letter to investors.

Fortunately, I procrastinated and other people did some detailed reporting like Ravi Nagarajan, Andy Fry, Scott Patterson and Joe Del Bruno – who does a great job of pointing out that Berkshire's 4th quarter results were propped up by Buffett's $1.05Bn gains in derivatives betting (something Buffett himself once called "weapons of mass financial destruction" but, as we well know – if you can't beat them…), which accounted for 1/3 of Berkshire's $3.06Bn profits

Buffett's biggest bet was selling a put against the S&P 500 back in March – a move I said at the time was BRILLIANT and Buffett himself now says about his own options trading:  "We are delighted that we hold the derivatives contracts that we do.  To date, we have significantly profited from the float they provide. We expect also to earn further investment income over the life of our contracts."  

What did Buffett do?  Exactly what we teach you to do here at PSW - he took advantage of an irrational move in the markets and SOLD INTO THE EXCITEMENT, getting a fat premium from some sucker that bet the S&P would not hold 666 5 years from now.  Buffett effectively sold $5Bn worth of puts that expires worthless at S&P 700 between 2019 and 2027, putting $5Bn in his pocket and holding aside $1Bn in margin, which is how much he's already ahead on the bet.  Like a good options trader, he has a plan and he's trading his plan, making sure his investment is on track and patiently letting time do it's work as it eats away at the put-holder's premium. 

What about the risk?  Well I can't speak for Buffett's stop-loss technique but we're talking about a company that has (had) $40Bn in cash using their excess margin to make a $5Bn bet that the S&P would not stay below 700 for 10 years.  Buffett and I both tell people – NEVER buy a stock (or sell a put against one) that you are not willing to own for 10 years.  The S&P was 5% below at the time and would have had to drop, perhaps, 20% more to cost him $1Bn so let's call the stop 550 on the S&P where Buffett risked 2.5% of his cash against a posible 400% gain on his $1Bn risk allocation over 10+ years.  While it is true that if the
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Doug Kass’s 20 Surprises for 2010: Goldman Private, Gold Tumbles…

By Paul Kedrosky

My friend Doug Kass of Seabreeze Partners has out his list of 20 market/political/economic surprises for 2010. These are always fun reading, and he did surprisingly well with his list of 2009 surprises, so let’s have a look at the latest list. The only one I think is completely outrageous is the Tiger Woods prediction — what the hell are you thinking, man? 

  1. There is a glaring upside to first-quarter 2010 corporate profits (up 100% year over year) and first-quarter 2010 GDP (up 4.5%). It grows clear that, owing to continued draconian cost cuts, coupled with a series of positive economic releases and a long list of company profit guidance increases in mid to late January and early February, there is a very large upside to first-quarter GDP (up 4.5%) and, even more important, to S&P profit growth (which doubles!). The upside on both counts is in sharp contrast to more muted growth expectations. While corporate managers, economists and strategists raise earnings per share, full-year growth and S&P target estimates, surprisingly, the U.S. equity market fails to respond positively to the much better growth dynamic, and the S&P 500 remains tightly range-bound (between 1,050 and 1,150) into spring 2010.
  2. Housing and jobs fail to revive. An outsized first-quarter 2010 GDP (up 4.5.%) print is achieved despite a still moribund housing market and without any meaningful improvement in the labor market (excluding the increase in census workers) as corporations continue to cut costs and show little commitment to adding permanent employees.
  3. The U.S. dollar explodes higher. After dropping by over 40% from 2001 to 2008, the U.S. dollar continued to spiral lower in the last nine months of 2009. Our currency’s recent strength will persist, however, surprising most market participants by continuing to rally into first quarter 2010. In fact, the U.S. dollar will be the strongest major world currency during the first three or four months of the new year.
  4. The price of gold topples. Gold’s price plummets to $900 an ounce by the beginning of second quarter 2010. Unhedged, publicly held gold companies report large losses, and the gold sector lies at the bottom of all major sector performers. Hedge fund manager John Paulson abandons his plan to bring a new dedicated gold hedge fund to market.
  5. Central banks tighten earlier than expected. China, facing reported inflation approaching 5%, tightens monetary and fiscal policy in March, a month ahead of a Fed tightening of 50 basis points, which, with the benefit of hindsight, is a policy mistake.
  6. A Middle East peace is upended due to an attack by Israel on Iran. Israel attacks Iran’s nuclear facilities before midyear. An already comatose U.S. consumer falls back on its heels, retail spending plummets, and the personal savings rate approaches 10%. The first-quarter spike in domestic growth is short-lived as GDP abruptly stalls.
  7. Stocks drop by 10% in the first half of next year. In the face of renewed geopolitical tensions and reduced worldwide growth expectations, stocks drop as the threat of an economic double-dip grows. Surprisingly, though, the drop in the major indices is contained, and the U.S. stock market retreats by less than 10% from year-end 2009 levels.
  8. Goldman Sachs goes private. Goldman Sachs (GS) stock drops back to $125 to $130 a share, within $15 of the warrant exercise price that Warren Buffett received in Berkshire Hathaway’s (BRK.A) late 2008 investment in Goldman Sachs. Sick of the unrelenting compensation outcry, government jawboning and associated populist pressures, Warren Buffett teams up with Goldman Sachs to take the investment firm private. The deal is completed by year-end.
  9. Second-half 2010 GDP growth turns flat. The Goldman Sachs transaction stabilizes the markets, which are stunned by an extended Mideast conflict that continues throughout the summer and into the early fall. While a diplomatic initiative led by the U.S. serves to calm Mideast tensions, flat second-half U.S. GDP growth and a still high 9.5% to 10.0% unemployment rate caps the U.S. stock market’s upside and leads to a very dull second half, during which share prices have virtually flatlined (with surprisingly limited rallies and corrections throughout the entire six-month period). For the full year, the S&P 500 exhibits a 10% decline vs. the general consensus of leading strategists for about a 10% rise in the major indices.
  10. Rate-sensitive stocks outperform; metals underperform. Utilities are the best performing sector in the U.S. stock market in 2010; gold stocks are the worst performing group, with consumer discretionary coming in as a close second.
  11. Treasury yields fall. The yield of the 10-year U.S. note drops from 4% at the end of the first quarter to under 3% by the summer and ends the year at approximately the same level (3%). Despite the current consensus that higher inflation and interest rates will weigh on the fixed-income markets, bonds surprisingly outperform stocks in 2010. A plethora of specialized domestic and non-U.S. fixed-income exchange-traded funds are introduced throughout the year, setting the stage for a vast speculative top in bond prices, but that is a late 2011 issue.
  12. Warren Buffett steps down. Warren Buffett announces that he is handing over the investment reins to a Berkshire outsider and that he plans to also announce his in-house successor as chief operating officer by Berkshire Hathaway annual meeting in 2011.
  13. Insider trading charges expand. The SEC alleges, in a broad-ranging sting, the existence of extensive exchange of information that goes well beyond Galleon’s Silicon Valley executive connections. Several well-known long-only mutual funds are implicated in the sting, which reveals that they have consistently received privileged information from some of the largest public companies over the past decade.
  14. The SEC launches an assault on mutual fund expenses. The SEC restricts 12b-1 mutual fund fees. In response to the proposal, asset management stocks crater.
  15. The SEC restricts short-selling. The SEC announces major short-selling bans after stocks sag in the second quarter.
  16. More hedge fund tumult emerges. Two of the most successful hedge fund managers extant announce their retirement and fund closures. One exits based on performance problems, the other based on legal problems.
  17. Pandit is out and Cohen is in at Citigroup. Citigroup’s Vikram Pandit is replaced by former Shearson Lehman Brothers Chairman Peter Cohen. Cohen replaces a number of senior Citigroup executives with Ramius Partners colleagues. Sandy Weill rejoins Citigroup as a senior consultant.
  18. A weakened Republican party is in disarray. Sarah Palin announces that she has separated from her husband, leaving the Republican party firmly in the hands of former Massachusetts Governor Mitt Romney. An improving economy in early 2010 elevates President Obama’s popularity back to pre-inauguration levels, and, despite the market’s second-quarter decline, the country comes together after the Middle East conflict, producing a tidal wave of populism that moves ever more dramatically in legislation and spirit. With the Democratic tsunami (part deux) revived, the party wins November midterm elections by a landslide.
  19. Tiger Woods makes a comeback. Tiger Woods and his wife reconcile in early 2010, and he returns earlier than expected to the PGA Tour. After announcing that his wife is pregnant with their third child, both the PGA Tour’s and Tiger Woods’ popularity rise to record levels, and the golfer signs a series of new commercial contracts that insure him a record $150 million of endorsement income in 2011.
  20. The New York Yankees are sold to a Jack Welch-led investor group. The Steinbrenner family decides, for estate purposes, to sell the New York Yankees to a group headed by former General Electric (GE) Chairman Jack Welch.

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Breaking: Buffett to Acquire the Rest of Burlington Northern Railroad

Breaking: Buffett to Acquire the Rest of Burlington Northern Railroad

Buffett Railroad

image from Panoramio

It’s not for me to tell you what Warren Buffett must see ahead for transportation, energy and economic activity, you must draw your own inferences.  What I will say is that this is Berkshire Hathaway’s largest-ever purchase so you may want to come up with some kind of thesis to encompass it.

From MarketWatch:

NEW YORK (MarketWatch) — Warren Buffett’s Berkshire Hathaway on Tuesday said it is paying $100 a share to acquire railroad firm Burlington Northern Santa Fe. It will also take on $10 billion of Burlington Northern debt, valuing the total deal at $44 billion. Berkshire said the deal is its biggest acquisition ever. “Our country’s future prosperity depends on its having an efficient and well-maintained rail system,” Warren Buffett said in a press release. “Conversely, America must grow and prosper for railroads to do well. He added, “Most important of all, however, it’s an all-in wager on the economic future of the United States. I love these bets.”

Source:

Buffett Buying BNI (MarketWatch)

 


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Testy Tuesday – Dow 9,650, Berkshire $60 Edition!

Wheee, this is fun!

Just two weeks ago, on October 17th, I warned in the Weekly Wrap-Up that it was "Dow 10,000 or Bust" for the next week and we failed that one and last Wednesday we were looking to hold NYSE 6,900 and THAT failed too.  Now we enter into the second phase of our limbo game where the deep-voiced guy asks the question "how low can you go?" and we’ll be setting our next bar at our long-standing 9,650 target for the Dow,  which we are already hitting in pre-market trading.  If that fails, we’ll have to look down to S&P 1,000.  As you can see from Jesse’s Chart, we took a nice bounce off serious resistance yesterday but we’re just not feeling it yet, even though the market is now as technically oversold as it was in March

Yesterday was like a roller coaster and my first Alert to Members of the morning targeted 9,775 as the on/off line for our bullish/bearish posture on our DIA covers.  We whipped past that line right about 10 am as we got good reports from ISM, Pending Home Sales and Construction Spending but by 12:45 we had broken back down so I sent out an Alert calling to refocus back to 55% bearish by adding the DIA Jan $100 ($5) and Jan $102 puts ($6.20), already covered by the Nov $99 puts ($2.50). 

The reason we mess around with our covers is we don’t want to flip in and out of our option positions, which are generally either straight bearish or well-hedged long positions, is because options carry a relatively large bid/ask spread and cost you money every time you get in and out.  So, on the whole, we’d rather let our over-riding cover plays, like our DIA spread, adjust our stance as conditions change, making a single adjustment that keeps us balanced as we ride out the market waves. 

It’s been a couple of weeks since we had a good, old-fashioned stick save but we got a mother of one yesterday (as seen in Dave Fry’s chart) which was right on schedule as Kustomz bought it up in Member Chat at 3:09 and I agreed at 3:19 that "It does feel like a pre-stick move" and we grabbed VIX $25 puts at .85 to protect ourselves from a sudden surge in complacency.

By 3:33, my next comment to Members was: "The stick lives!" but…
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David Einhorn: Short McGraw Hill (MHP) & Moody’s (MCO) – The Curse of the Triple A

David Einhorn: Short McGraw Hill (MHP) & Moody’s (MCO) – The Curse of the Triple A

Courtesy of Market Folly

While David Einhorn’s short position in Moody’s (MCO) is by no means new information, we did recently learn that his hedge fund Greenlight Capital is now also short McGraw Hill (MHP), the parent company of fellow ratings agency Standard & Poor’s. He initiated the position after a U.S. judge refused to dismiss a case against the ratings agencies. Those agencies were seeking refuge from such litigation under the notion that their opinions on ratings are protected by free-speech rights. This U.S. District Judge’s refusal to throw out the case could be a landmark ruling, Einhorn says. While this could potentially be a chink in the armor, it is also prudent to point out that 10 of the 11 claims were dismissed; a fact that Moody’s representatives have been quick to point out.

Einhorn presented his short position in Moody’s back at the Ira Sohn Conference where numerous hedge fund managers shared investment ideas. While we can’t track their short positions via SEC filings, we have covered Greenlight’s long portfolio here. Greenlight was up 16.3% for the second quarter and year to date for 2009 is up 21.5%. For more of Einhorn’s tirades shorting companies, we highly recommend reading his book Fooling Some of the People All of the Time: A Long Short Story. In it, you’ll learn how Greenlight constructs and researches investment theses. Not to mention, it’s just an interesting read and story in general.

Instead of summarizing Einhorn’s thoughts regarding why he is short the ratings agencies, we figured we’d just let him tell you himself. Embedded below is his presentation from the Ira Sohn investment conference entitled ‘The Curse of the Triple A.’ You can download the .pdf here or read on below:
 

David Einhorn’s Ira Sohn Presentation

So, while he presented that argument back in late May of this year, he appeared on television a few days ago to further elaborate on his argument. Below is the video where he presents his case to CNBC anchors:
 


And lastly, for posterity’s sake, we would also like to highlight Einhorn’s thoughts…
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Phil's Favorites

The First Casualty of a Bear Market

The First Casualty of a Bear Market

Courtesy of 

Nick Murray says “The ability to distinguish between volatility and loss is the first casualty of a bear market.”

I turned to one of my favorite passages of his masterpiece Simple Wealth, Inevitable Wealth this morning as turmoil from overseas and the commodity markets made its way through the headlines. Nick relays a great anecdote about how much money one investor personally “lost” during the last Russian Ruble crisis in the summer of 1998…

$6,200,000,000

Yes, that’s right, it’s six billion two hundred million dollars. A very large sum of money, woul...



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Zero Hedge

Janet Yellen's Last (Considerably Confused) FOMC Press Conference Of 2014 - Live Webcast

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Having added further confusion to the markets by keeping "considerable" and adding "patient", suffered 3 dissents (1 dove, 2 hawks), and explaining that the energy price drop is "transitory", we suspect Fed Chair Janet Yellen will have some 'splainin' to do during today's press conference. Is "patient" longer than "considerable time" and just what (Dow Jones Industrial Average) data is the Fed dependent on now?

Live Feed:



Broadcast live streaming video on Ustream

...

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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Digital Currencies

Chart o' the Day: Don't "Invest" in Stupid Sh*t

Joshua commented on the QZ article I posted a couple days ago and perfectly summarized the take-home message into an Investing Lesson. 

Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Courtesy of 

The chart above comes from Matt Phillips at Quartz and is a good reminder of why you shouldn’t invest in s...



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Insider Scoop

Pivotal Research Upgrades Twitter & Google, Finds Both Are Undervalued By 20%

Courtesy of Benzinga.

Analysts at Pivotal Research Group on Wednesday upgraded shares of Google Inc (NASDAQ: GOOGL) and Twitter Inc (NYSE: TWTR) from Hold to Buy.

Analyst Brian Wieser finds both companies are currently undervalued by 20 percent.

Shares of Google were recently up 1.5 percent at around $503.

Shares of Twitter were up 1.6 percent at $35.63.

...

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Chart School

Market Selling Intensifies

Courtesy of Declan.

It ended up a roller coaster ride with markets rallying, then suffering losses to return indices to their lows. Volume rose in confirmed distribution, and many indices now sit inside Fib retracement levels - a good place to launch a relief bounce.

The S&P finished just a few points above the 50% Fib level, with the 200-day MA near the 61.8% zone - and a more probable place for a bounce.


The Nasdaq closed at the 38.2% level, but just below its 50-day MA. The inverse hammer at oversold stochastics is a potential reversal play. Watch for an upside gap tomorrow.

...

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OpTrader

Swing trading portfolio - week of December 15th, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Sabrient

Sector Detector: Energy sector rains on bulls' parade, but skies may clear soon

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Scott Martindale of Sabrient Systems and Gradient Analytics

Stocks have needed a reason to take a breather and pull back in this long-standing ultra-bullish climate, with strong economic data and seasonality providing impressive tailwinds -- and plummeting oil prices certainly have given it to them. But this minor pullback was fully expected and indeed desirable for market health. The future remains bright for the U.S. economy and corporate profits despite the collapse in oil, and now the overbought technical condition has been relieved. While most sectors are gathering fundamental support and our sector rotation model remains bullish, the Energy sector looks fundamentally weak and continues to ran...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Market Shadows

Official Moves in the Market Shadows' Virtual Portfolio

By Ilene 

I officially bought 250 shares of EZCH at $18.76 and sold 300 shares of IGT at $17.09 in Market Shadows' Virtual Portfolio yesterday (Fri. 11-21).

Click here for Thursday's post where I was thinking about buying EZCH. After further reading, I decided to add it to the virtual portfolio and to sell IGT and several other stocks, which we'll be saying goodbye to next week.

Notes

1. th...



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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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