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Monday, February 6, 2023

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Weekend Reading – Reviewing the Reviews

 I am still trying to get more bullish

I was thinking about writing something cute like I resolve to get more bullish but that would be wrong.  I try, in my own humble way, to "get" the market right.  That means I am not bullish or bearish but Truthish (to further botch Stephen Colbert's use of the word) and, as Buddah says: "There are only two mistakes one can make along the road to truth; not going all the way, and not starting."  Confucious reminds us that there are three methods by which we may learn wisdom:  "First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest."

In that spirit, we will spend the day in reflection so that we are better able to start on that long road to the truth so that we will be better able to imitate the things that will work in the year to come while trying to avoid making mistakes that will give us bitter experiences.  

This post is not about me – We had a fantastic year and I've already given some outlook for 2011 back on the 19th in that weekend's "It's Never too Early to Predict the Future" and our current position is short-term bearish in the Jan-April time-frame, looking for a pullback to at least 1,200 on the S&P and possibly back to 1,150.  

After that, we are expecting a return to steady gains but without the irrational exuberance we're currently experiencing.  So no, I am not bearish – I simply think we've gotten ahead of ourselves.  Since we don't know where the rally train will stop, we have our "Breakout Defense – 5,000% in 5 Trades or Less" from Dec 11th, which were a set of very bullish, highly levered plays where a little bet can pay off a lot if we simply hold our long-established breakout levels.   

How much is "a lot"?  Well my GE trade idea, for example, was to sell the 2013 $12.50 puts for $1.10 (net $1.15 in ordinary margin according to TOS) and to use that money to buy the 2012 $17.50/20 bull call spread for .95, which was a net .15 credit on a $2.50 spread that was on the money at the time.  GE has gained about .75 since the 11th and the short puts have dropped to $1 while the bull call spread has gone up to $1.10 so already net .10 is realized on that trade, up .25 in 3 weeks on a trade that PAID YOU .15 to take it!  This is the way to hedge the upside when we're unsure of the market – pick stocks that, even if they drop, we will be happy to buy them for the long-term at a discount and then lever that credit into upside plays that give us additional, significant returns.  In addition to the 5 original plays, I added 2 more in the comments under that post and PFE took off like GE but CAKE is still a great entry opportunity so it's worth going back to the post to take a look.  

These are not fast gainers because we are NOT bullish.  These are hedges that will slowly but surely grind out huge returns if we are WRONG and the market keeps going up and the beauty of them is that they are just as slow to lose us money if our short-term premise is correct and the market goes down.  What's the worst thing they can do to us on this trade?  Sell us GE for net $12.15, 33% off the current price – oh boo hoo, please Brother Fox – PLEASE don't throw us into that there briar patch!  I find it amusing when people point out the "flaw" in this strategy – that if the market crashes, we may be "forced" to buy GE for $12.50.

As I mentioned that weekend, the following is a list of stocks that you may force us to buy at 33% off: BA, GE, VLO, XOM, MO, WFR, UNG, PFE, MCD, KO, JPM, FDX, HPQ, GS, GOOG, AAPL, DIS, T, VZ and AA.  Anyone who has some now that they would like to unload for 2/3 of the current price – just give us a call and we'll be happy to accommodate you.  If not though, then we can always find someone who is willing to buy put contracts from us, which obligate us to buy those stocks for 33% off in 2013 in exchange for cash today.  I call this approach the Wimpy strategy, in honor of J. Wellington Wimpy, who very famously offered to eat now and pay later – technically inventing the first credit card in the 1930s.   

Notice that we are willing to buy mainly blue-chip stocks and, of course, our favorites change from time to time and we get the occasional great opportunities like BP and RIG this year as well as IMAX, MON and VLO – those are all ones we're done with at this point.  Timing is important too as we get a lot more cash when the market is down and the VIX is high but there's always individual stock stories we can jump on because we are VALUE, LONG-TERM investors at heart – our goal is to build solid virtual portfolios that will still pay us an income on Tuesdays along the way.  Let's keep that in mind as we contemplate the year that was and the year that is yet to come:

Looking backwards, there's one overriding FACT that we can hang our hats on – Since the March lows (S&P 1,050ish), the market cap of US stocks has gained $6Tn.  At a p/e of 20, we would expect to see at least $300Bn of additional earnings to justify that and I don't think I have to run the math to show you that didn't happen.  

As for where the hell did $6,000 Billion come from – TrimTabs points out that Corporate America has been SELLING stock, raising the overall float by $133Bn since April (new issues, conversion).  Retail funds and ETFs have had just net $17Bn of inflows while foreign investors have put in $109Bn while Pension Funds have moved less than $100Bn from bonds and cash to equities since the rally began.  That leaves only Hedge Funds, who showed a net outflow of $12Bn from April to November so are not a likely source, retail investors, who have lost 30% of their net worth since 2008 – even after the bounce and then there's the Fed and their pet IBanks (or is it the IBanks and their pet Fed?).

Of course you don't need $6Tn to move the markets up $6Tn – as a rule of thumb, net 10% is generally enough to push the markets around, the rest is taken on faith that, if one out of ten people is willing to buy a stock for some silly price today, then of course you can find 9 other suckers to pay that price down the road.  This model makes sense in a "regular" market but what if that 10% injection of $600Bn (exactly what Bernanke promised for QE2) requires those other $5,400Bn worth of suckers investors – isn't that a lot of money?  I don't know, maybe I'm out of touch with the "new normal" but back in my day, $5.4Tn was the entire GDP of China or Japan and almost double that of Germany – it just seems like a lot of free money that's expected to be floated around and that, of course, assumes the US is the only market that went up and demands to be fed fresh cash.  

That leaves us with a $36Tn US Market Cap and many of our top prognosticators are looking for another 20% run in the markets in 2011.  One of the annoying things about consecutive runs like this is that you now need $20% of $36Tn to move the markets up, as opposed to 20% of $30Tn which means, ignoring valuations concerns, that the market needs another $7.2Tn in 2011 to get us to S&P 1,450.  Even if we run the next $7,200Bn on the same exuberance that allowed us to jump the first $6,000Bn, we still need inflows of ANOTHER $720Bn in net cash.  

I'm a little hard pressed to find that at the moment but that's why we're hearing all this noise about QE3 and QE4 and EU stimulus and Japan stimulus and China stimulus – because there is no other logical, rational way for another $720Bn to come into the market in 2011, even if we assume values will be able to rise $13,200Bn on $1,320Bn over a two year period.  

The great problem with rapid market rises that inflate the price of the markets 10 times faster than the cash comes in is you can't count on only 1/10th of the people to turn around and trying to sell over the same length of time as the buying took place nor can you be certain that there will be $600Bn worth of buyers to relieve the pressure in a declining market.  Of course, nothing like that has ever happened in th stock markets since 2008 – as long as we don't count March of 2009 or last January or last April or that silly "flash crash" thing that will never happen again because they looked REALLY hard and it turns out it was nobody's fault.  Yep – I'm about as confident as I can be for 2011!  

Stock World Weekly has some nice forward-looking views on 2011 that make for nice reading today.  The Dow finished the year up 11.02%, up 1,149.46 since Jan first and has, in fact, been up 4 of the last 5 years.  Unfortunately, that one year was a doozy although, overall, we're up 5% (600 points) since Jan 3rd 2006, when the Dow opened at 10,959 and all of those gains thanks, of course, to our mighty post Thanksgiving run.  As SWW points out::

One important thing to keep in mind while looking at these charts is that in August the Fed decided to renew quantitative easing and began by buying $30Bn in 2-10 year Treasury notes per month. In September Bernanke expressed concerns about high unemployment rates in the U.S., and began dropping hints of a greatly expanded program of quantitative easing which would become known as “QE2”. On November 3rd, the Fed then officially announced the launching of the $600Bn+ program of Treasury purchases.

So we can pretty much chart the run from Aug (S&P 1,050) to Nov (S&P 1,175) as costing the Fed about $30Bn a month to engineer and, when that began running out of gas (don't forget that formula that requires more and more fresh cash to sustain the rally), The Bernank stepped it up a few notches with QE2, which is putting 3x more money in each month for 6 more months.  Already that has given us another 60 market points in 60 days but are we getting more bang for 333% more Federal Bucks or are we merely compressing the time-frame of the same effect?   

Briefing.com has a nice 2010 synopsis and sums up 2010 as a continuation of the recovery off 2008's 39% drop.  As Barry Ritholtz points out with the chart on the left, losing 40% means you NEED 66.7% just to recover.  It's also worth noting from this chart why 20% is our key inflection point in taking losses or adjusting – note how quickly things turn against you once you cross that line!  Anyway, let's focus on the positive as we made our 11% gain DESPITE the following little set-backs:

The European Debt Crisis, the Flash Crash, the BP Oil Spill, Foreclosuregate, FinReg, South Korea and Republicans taking over Congress.  That last one may be considered a positive by some but it was on their list too, along with the continued monetary stimulus from major Central Banks – even as many of our emerging markets began to slam on the brakes and tighten their own policies.  This was offset by a 19% rise in global M&A with $728Bn worth of activity going on in the US but not much compared to 2007's $4Tn global total that was led by the US at the time.  Briefing.com is optimistic and calculates the forward p/e of the S&P at 13.5x, assuming a 13% rise in earnings next year and we'll get our first indication of how well things are shaping up as companies report their Q4 earnings in January.  

Oddly enough, the Airline industry was our top performing sector in 2012 with a 41.9% gain for the year with Consumer Discretionary #2 at 27%, pretty much tied with Transports and Industrials and closely followed by Retail (25.7%).  Materials were "only" up 22.2% for the year despite the 81.2% rise in silver as gold was up "just" 28.8% as gold has gotten so expensive people are buying the 1/1,000th as rare and 1/50th as expensive silver instead because – well because people are kind of idiots – sorry, but there's no sugar-coating this one…

In the middle of the pack we had the Energy Sector, up 20.3% for the year, which is very interesting because Utilities performed poorly due to low demand by the same consumers with just a 5.5% increase.  What's the difference?  One sector uses meters to measure actual demand and one uses CNBC to make it up.  

Our beloved Financials only gained 11.9% for the year, 4th sector from the bottom, beating out Info Tech (10%), Utilities and poor Health Care, who went up just 2.9% on a 17% increase in costs again in 2010.  Just above Financials were Consumer Staples (14.1%) and Semiconductors (15.6%) to round out our sector list.  Top stocks were a more diverse mix, with CAT leading the Dow with a 64.7% gain followed by DD (47.6%), MCD (22.9%) and who cares about the rest when NFLX gained 224.7% on the Nas followed by FFIV (149.4%), CMI (140.2%) and the resurrected AIG (91.9%).  Honorable mention should go to CMG (146.1%), who were a letter short of making the Nasdaq and DECK (137.9%) who are still in the Midcaps.  

Why were HPQ (-18%), CSCO (-15.5%) and MSFT (-8.7%) 3 of the 4 worst Dow performers if the Nasdaq and Semis did so well?  MU (-25.2%) and WDC (-23.8%) were stinking up the S&P and NVDA (-19.8%), STX (-17.6%) and ADBE (-16,9%) were dragging the Nasdaq as 3 or it's 10 worst performers.  This is a real flashback to 1999 when people who actually made technology underperformed people who had cool-sounding ideas (PCLN, NFLX, BIDU) by miles.  That sure ended with a bang so I'm sure there's nothing to worry about here – even though it's kind of the exact same thing…

In 1999 it was venture capital money driving the markets through Silicone Valley but in 2010 it's Fed money driving the markets through Wall Street and Jr. Deputy Accountant does a great job of following the Billions, from Bernanke to Blankfein with a very nice run-down of the year's shenanigans.  It will take another year of shenanigans for funds indexed to the S&P to get back to even.  As Paul Price points out, index funds with $1M in January of 2007 gained 4% that year to $1,040,000 but then dove to $665,000 at the end of 2008, back to $825,344 in 2009 and clawing back to $932,639 as of December 29th – down "just" 6.74% after all that drama.  Of course, the fund managers still get their fees so all is well I suppose.  

All is supposed to be well in Retail Land but not, according to retail expert Howard Davidowitz, who says it's the top 30%'s spending that drove the season as they had a little relief rally (those that kept their jobs), especially the Financial sector professionals who were delivered a record round of bonuses from Uncles Ben and Lloyd this Christmas.  Davidowitz points out it cost us $2Tn in debt last year to buy these gains and we've already committed another $2Tn in 2011 and what has it bought us so far?

 

  • Walmart is 10% of US retail sales, has 150 million customers, and its stock it is down 6 consecutive quarters;
  • Sears is the largest department store in America: "their stock is terrible"
  • Best Buy had a huge earnings miss
  • Toys’R'Us loss increased last quarter
  • A&P filed bankruptcy
  • Loehmann’s filed bankruptcy
  • Charming Shoppes is going to close 100 stores
  • TJMaxx just liquidated AJ Right 

The biggest losers: commercial real estate landlords. Read REITs:

 

Landlords better start figuring it out pretty quick because they already have occupancy problems, rent problems and everything else right now. I don’t think the CRE problems are fixed by any means. That’s why we are going to close hundreds of community banks going forward, we are going to close hundreds more. Those CRE debts are coming due and they will not be able to be rolled over. We’ve got lots of problems still coming up in the banking system, and the problems in the real estate issue is here for a long time.

There's another major issue to watch in 2011 – if interest rates tick up, all kinds of crap is going to hit the fan!  Dave Moenning does a nice job of reviewing which market truisms worked out in 2010 and it would do us all very well this month to remember that anyone on TV who says "As January goes, so goes the year" doesn't even remember that last January we were down 3.8% on the S&P so we can take that one with a huge grain of salt.  We did set a new record for Bank Failures with 157 in 2010, ending the year with a bang on Friday with 6 final closings costing the FDIC another $600M and putting them $8Bn in the red for the year.  Fortunately, we have been trained never to question the fact that the American People's $4.5Tn of cash on deposit is backed by an insurance fund that is $8Bn in the hole.  I mean, what's the point of worrying about a potentially horrifying catastrophe you can't do anything about, right?  

Hale Stewart is downright cheery by comparison with his chart-fest entitled: "2010 – The Year we didn't Fall into the Abyss" while the Simple Accountant charts out some of the broader indexes and the intermarket relationships for a good rear-view look.  Zacks' Steve Reitmeister got my attention with his 3 great lessons of 2010, which were: 1) Don't Fight the Fed 2) A Bird in the Hand is Better than Two in the Bush and 3) Timing the Market is a Fool's Errand.  If Steve ever gets bored at Zacks, he can always come over and teach at PSW.  As Steve notes: "I’m not swearing off market timing forever. I just think that I will do a lot less of it going forward. As long as the economic conditions are favorable to stocks, then I will stay heavily long the market as not to miss out on any of the major bull runs that can truly arise at any time."

Despite my annoyance at the overall Rupertization of the paper, the Wall Street Journal still puts out a large quantity of damn good articles and Tom Lauricella wrote one this weekend reviewing the year in Government intervention saying:

As was the case in 2009, investors can thank continued, unprecedented efforts by governments and central banks around the globe to keep their economies and financial markets afloat for those good returns… The benefits to investors could be seen in 2010. When major stock or bond markets faltered and ostensibly signaled alarm, policy makers responded aggressively with measures that, at least in the short term, directly or indirectly drove prices higher across a wide variety of asset classes.

 COVERchart

 At some point, Lauricella says, Governments will look to reverse their stimulative strategies as their economies and markets can stand on their own. But for now the betting is that in the U.S., Europe and Japan, at least, that support will continue for months to come.  We can only hope that's the case – it is very possible that the massive stimulus of QE2, still in it's very early stages coupled with Obama's Trillion Dollar tax cut will be enough to keep the party flowing – all this despite many emerging markets trying their best to fight the Fed as well as the other loose Central Banks of the World – pretty much the same Keynes vs Hayek smackdown we've been tracking all year so I'll let the boys close it out for me:

 

 Good luck to all of us in 2011 – we're going to need it.  We already have our aggressive upside plays as well as last week's "Secret Santa Inflation Hedges for 2011" but there's a lot of cash on the side and, like Steve Reitmeister, we'd hate to miss out on the fun if this thing is going all the way to the moon before falling back to Earth.

 

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Phil,
 
I am so confused by this market.  Just about everyone I know and everything you hear or read is predicting the rally to continue. 
Isn’t there an old saying like "everyone is always wrong" and "the market loves to climb a wall of fear"
Just this morning I recieved this from a guy I know that works for BA.

 
Here it is: Trim Tabs reported that there were finally positive flows into stock mutual funds for the first time this year on December 2oth.   Prior to that, individual investors had been continuing to buy more bonds than stocks through the entire market climb from March ’09 until now.  There should still be plenty of kindling to add to the fire to take this higher.  
 
Plus it’s the 3rd year of the Presidential Cycle. Plus the conservatives can limit further damage by the communists, er, liberals.  Plus economic news has been better than expected (it always surprises the pessimists coming out of a recession).  Plus the average person is getting $2,000 back from the reduction of the social security tax.   Plus retail sales have been better than expected.  Plus auto sales are about to go to 13 million.  Plus, plus…
 
We go higher.  Not in a straight line, but we go higher.
 
That said, you know a correction will come soon enough.  Of course, all the shills are calling for one in mid/late January…which probably guarantees it won’t happen then.
 
Happy New Year to all.
 
I don’t know Phil…….all this optimism scars me.

Exec / bull — I have a similar view in that QE2 still seems to be driving the market higher (although not as efficiently) and QE3&QE4 might come and drive the markets even higher. Crazy? Yes, but so was QE2, the bailouts and the government getting into the auto business so plenty of precedent for crazy.  I think that’s exactly why a trade like the GE trade above is needed to remain in good standing either way the market heads. The other nice thing about that trade is that you also profit if the market goes nowhere. 

 Great article on the benefits and disadvantages of India.

DIS claims IMAX buyout rumors are "pure fiction" and a SNE purchase might create anti-trust issues.  We might see a lower prices again.

rainman: agreed.  Phil’s 20% discount plays are just as good at market tops as at bottoms.

Phil:
I know you say that you are "kind of " bearish, but what’s wrong with setting our sights on a group of stocks that we want to own and do the same kind of plays that you suggested with GE? This way we cover both sides. And if we are "put to", so what?  We end up owning the things we want and are ready for the next run up. Of course we can turn all of those stocks in to buy/writes and we would continue to be hedged with downside protections.
I know you have proposed some bullish trades,but you have, at the same time, recommend that we stay mostly in cash. Do you not think everything is overpriced? Or do you think there is broad risk to all stocks in which case you are a lot more bearish than you think?
Lastly, Do you look for specific stocks that you want to own or do you look for specific characteristics in any tradable stocks? What are you waiting for?  I get the feeling you would not put your money in anything (long term) until "it" happens.
This was written with the utmost respect for your talent.

 Phil: rolling
Could you give me an idea of the process you go through to estimate the future prices of the strikes you consider as the path to roll to if the stock moves and you would rather roll than than take assignment?  For example say I look at a selling a GE Feb18 P for .53, I want to have plan if GE drops to 16 at Feb expiration, how would I  estimate a likely month that I could roll down to 16 even?  It’s really your thought process I’m interested in not this specific trade. TIA

 Happy New Year all,
Phil very good strategy to sell puts of stocks which we love to own long term, just an advice for guys: first, make crush test of your portfolio, let say, if market make 20 % correction and volatility jump to 40 -50 range, will your portfolio have enough margin? you can do it in TOS Analyze tab


Along with your bearishiness, do you expect that the Dollar will continue to move inversely to the stock market? Will the coupling between the $ and other assets act as confirmation of your thesis?
Or to put it the other way, do you ever expect the relationship to de-couple?

 Need some tech advice- 
My old Dell PC is starting to act up and it is time to look at a replacement. I want a set up which is geared toward trading which means a lot of charts running simultaneously. Also want  the capability to run 4+ monitors. 
I ran across this website- Falcon- wondering if anyone has had experience with their equipment or can offer some suggestions. 
Thanks, 
http://www.tradingcomputers.com/index.html#

Thanks Phil,
 
Makes sense.

 pstas   We have the falcon systems and love them.  I have two of the 4 monitor systems for about a year
and a half and have had no problems.  I don’t have any techy advice for you though as i am a turn it on and go person. 

 Willsons- thanks for the input. What model? I have been reading some reviews and there was a complaint about fan noise- any issue with that on your end? 
Have you had any need for tech support? Wondering about their response time, etc. 
Finally- any problems with running other software or compatibility with printers, etc?
Thanks

Phil / Oil Unfortunately I cashed in my gains in my large position in the oil majors a couple of months ago. On your thesis that oil prices are too high and hurting demand, some thoughts. There is great inelasticity of demand in America as public transit sucks and Europeans have been happy(sic) buying $8/9 gas for years. Second hand clunkers, which is all the poor can afford, tend to be V8’s. The rich are consuming much more as they buy more private jet time and luxury boats (usage disproportionate to the their population, eg how many 30 mile commutes = gulf stream round trip LA /NY?). Meanwhile air travel and oil usage in developing countries is growing at maybe 15% per year? Plus, Opec and the oil majors will do whatever to maximize revenues, and don’t give a toss about hurting America’s working class.
Maybe we are being too resistant to the concept of increasingly higher oil prices. I agree, something else has to give for the American and European poor, like less restaurant meals, clothes, slower replacement of vehicles, rent vs. buy, smaller homes, less savings etc. Maybe we should be shorting some of these other sectors which will be hurt by rising oil, while continuing to own big oil? ie I’m concerned that we are underestimating the power and will of Lloyd and Big Oil to continue crushing the little people – and there is certainly no political interest in saving the working class peasants (Americans love to call them the ‘Middle Class’ LOL!) Should we get reinvested in oil and drink the $100 Kool-Aid since the p/e’s on some oil cos still look low.  I have to confess at a macro level I’m intuitively reluctant since I have a very negative view on the ability of the US and European economies to recover based on current fiscal and trade policies and looming RE 2nd downdraft effect on consumers, municipalities and banks.  Yep, I know the US accounts for about a fifth of global oil consumption, but that % is shrinking fast and we have tremendous inelasticity up to maybe $120.

 pstas    We have the FX25 model.  Needed tech support one time.  Response was immediate. i dont know what to tell you about fan noise, my cpu is under my desk.  When i stick my head under there i would say it is normal fan noise???  I have not had any issues with software or printers.  I would definitely recommend the falcons. From the trade side i run 3 chart programs on each system and have never had any issues.  Lots of speed and capability.  Hope this helps

 Fundamentals might not support +$100 oil but war in the middle east might…

 Phil
one of the best performer in my portfolio in 2010 is HOV even they don’t go anywhere, I plan to add some to  my portfolio and sell against it 5s Put and 2.5s Calls, unless HOV will go through bancropcy it is a safe and very profitable strategy, just would like you opinion what is possibility for them will be out of market

Phil – As always I love the way you write and your responses to questions put to you. Your way of explaining the facts has opened my mind to think differently!  
 The following questions are in response to the answer you gave ‘exec’ on Thursday the 30th: 
1) How much is competing related to education?
2) Do you think it is better to send kids to private schools vs. public schools?
3) What happens to people who have no skill set or are unwilling to develop them?

"..It’s not so easy for everyone to adapt to compete in this globally cut-throat environment but we all have to think long and hard about our skill sets, our position in life and our goals and make sure we are ready to compete in the 21st Century or, like Exec’s sister-in-law, we will find our businesses chewed away piece by piece as our work goes to the low bidder overseas."
 
 

I was in Singapore for vacation and it is one of the best country I ever seen, and I guess it is aim for China and they will be there in 20-50 years, I think it is a good strategy to push our grandchildren to lern some chinese 🙂

Phil:
Really good posts this weekend.  Very helpful for a newbie.

Phil:
I’m considering taking a position on a slight weakening of the Euro early in January.  I’m thinking of selling 20 JAN 137 calls, buying 20 JAN 132 puts and selling 40 JAN 127 puts.  Does the premise and the trade make sense to you?  Thanks!

Phil,
  This is the list of funds available to me in Deferred Comp. All the Internationals have restrictions. The others allow you to go in/out once a day.
 
ASSET ALLOCATION FUNDS

 
 

 
 
 
 
 

T Rowe Price Retire 2010

 

TRRAX

T Rowe Price Retire 2015

 

TRRGX

T Rowe Price Retire 2020

 

TRRBX

T Rowe Price Retire 2025

 

TRRHX

T Rowe Price Retire 2030

 

TRRCX

T Rowe Price Retire 2035

 

TRRJX

T Rowe Price Retire 2040

 

TRRDX

T Rowe Price Retire 2045

 

TRRKX

T Rowe Price Retire 2050

 

TRRMX

T Rowe Price Retire 2055

 

TRRMX

 
 
 
 
 

INTERNATIONAL STOCKS

 
 

Intl Equity Fund – Active

 

?

Intl Equity Fund – Index

 

?

MSIF Emerging Markets

 

MGEMX

 
 
 
 
 

SMALL CAP STOCKS

 
 
 

Columbia Acorn USA Z

 

ACRNX

Vanguard Small Cap Index

 

VSCIX

Wells Fargo Advantage Sm Cap Value 1

WFSVX

 
 
 
 
 

MID CAP STOCKS

 
 
 

Perkins Mid Cap Value T

 

JMCVX

Vanguard Cap Opp Fund

 

VHCAX

Vanguard Mid Cap Index

 

VMCIX

 
 
 
 
 

LARGE CAP STOCKS

 
 
 

Davis NY Venture A

 
 

NYVTX

Eaton Vance Large Cap Value

 

EILVX

Fidelity OTC

 
 

FOCPX

Hartford Capital Appreciation IA

HIACX

Janus Fd  T

 
 

JANSX

Principal Lrge Cap Gr Inst

 

PELIX

T Rowe Price Eq Inc Fd

 

PRFDX

Vanguard Institutional Index Fund

VINIX

Vanguard Primecap Fund Adm

 

VPMAX

 
 
 
 
 

BALANCED

 
 
 

Pax World Balanced – Inst

 

PAXWX

Vanguard Wellington Fund AD

 

VWENX

 
 
 
 
 

BONDS

 
 
 
 

Federated Total Return Govt IS

FTRGX

Vanguard Bond Index Fund

 

?

 
 
 
 
 

SHORT TERM INVESTMENTS

 
 

Stable Income Fund

 
 
 

 

CES This week something to keep a close eye on for possible trades, INTC AMD HPQ VZ MOT MSFT
http://www.pcmag.com/article2/0,2817,2374541,00.asp
http://www.pcmag.com/article2/0,2817,2374812,00.asp
 

Phil,
Regarding your comment: "This is a real flashback to 1999 when people who actually made technology underperformed people who had cool-sounding ideas (PCLN, NFLX, BIDU) by miles.  That sure ended with a bang so I’m sure there’s nothing to worry about here – even though it’s kind of the exact same thing…"
It’s not the same.  Today’s innovative companies have REAL earnings, and the market is paying up for their earnings growth trends.
Regarding market bullishness.  At P/E of 15, S&P 500 is properly valued at 1269.  If we get the expected 14% earnings growth and any P/E expansion, a +20% in 2011 is not unreasonable.  The 3rd year of a presidential term has averaged +22% since 1950, and has not been negative since 1939.
Best Regards!
Prof

Phil,
 
In your example above to DC, did you mean to write 1000 shares of GE rather than 10,000 shares?

Phil/Spread,
 
I’m confused on the math in your bull call spread example above.
 
14 XLF calls @ $2.90
17 XLF shorts @ $1.19
Spread $1.71
($17-$14) – $1.71 = Net $1.29
 
You are saying Net $82.5
How is my math wrong?

Phil good morning Just in case you still on this page you reported this morning oil at 82 I wish you were right it is 92 just for the once not watching the ticker.

I noticed the pic of the playing cards and drinking beers, they are drinking Arrogant Bastard Ale, which is brewed in Escondido, CA  my home town!!   

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