Tough call today.
The Dollar bounced off 79.75 this morning, nothing to crow about for Dollar bulls as the Euro remains just over the critical $1.30 mark and the Pound is solidly over $1.55 for the moment.
You could say it's a bearish sign that the Dow and the NYSE stopped dead at our breakout levels but that's to be expected on a first attempt at breaking out – even if they have already attempted the same move back in late October, when the Dow was 5% lower in it's test and the NYSE was testing the same line (7,866).
Our broadest market index is the one that's holding everyone back as what little volume there has been in this rally has been fairly narrowly focused on certain leaders. Now a pessimist might say that this is a reflection of the blatant manipulation of the indexes in which certain Banksters place buys on stocks that have disproportionate positive effects on the junior indexes in order to fool retail traders into believing there is a rally while the Banksters drive the VIX down to multi-year lows, dump all their stocks on the bagholders and prepare to cash in by crashing the markets on a major event like tomorrow's FOMC Rate Decision which is, in fact, very unlikely to have any language specific to the QE3 that has been promised by the MSM since Thanksgiving.
An optimist would say – well, you can read almost any MSM site for that. It's lonely at the top of the range when you are bearish, one by one the other bears capitulate and soon you are there all by yourself with your shorts – your lovely, lovely, cheap shorts! The Dow shot up yesterday to just over the 12,749 breakout line we have as the tippy top of the range on our Big Chart so of course I called for DIA puts in Member Chat. The DIA Feb $123 puts, which came in around .75 and finished the day not much higher at .78 after topping out at .95. Ranges usually hold – if you're not going to have conviction at the very top of a range to short – when will you? For one thing – you have a very good stop line to watch!
As noted by Dave Fry in his SPY chart, the bulls have engineered their golden cross and have spent a hell of a lot of money and time doing it – now they are counting on machines and retailers to respond like Pavlov's dogs to the sign of the cross and take all those expensive shares off their hands.
Or maybe CAT should be at $106. The p/e is a reasonable-looking 16 and they are projected to grow next year despite the Global outlook for a mild recession in the first half. Looking at other major Dow components: CVX at $107 is only 10% higher than it was in 2008, when oil was $140 a barrel (with projections of $200) and Natural Gas was $8 – makes sense to you, doesn't it? BA I do think is worth $75 for many reasons and IBM at $189 is more than I'd pay but I wouldn't kick them out of bed either.
JNJ is $5 off it's 2008 highs, KO is 5% over, MCD is 50% higher than it was in 2008, MMM is back to $90, PG is $10 shy of their $75 high, UTX is back to $80 (but down from $90 in July), XOM is a bit shy of their $95 high (also with oil 40% lower and nat gas 70% lower) and TRV wasn't in the Dow in 2008 but is over their highs by 10%. Those are the Dow components over $50 – the ones that count in this price-weighted index.
MCD Just reported nice revenues of $6.8Bn in Q4 along with $1.33 in earnings and that was indeed quite a bit better than 2008, where we had 0.87 EPS on $5.6Bn in earnings so nice – but is it up 50% nice? Maybe the problem is that there are so few good stocks these days, that the really good ones are now fetching a hefty premium, which helps explain the Dow's relative outperformance since November.
Without risk (see above diagram), you can make a case for pricing MCD at $100 but are we accounting for the current risk in these prices? Are we accounting for the risk that sent MCD from $66 in Aug 2008 to $46 in October?
Of course they were a screaming buy at $46 but the fact that they CAN fall that far needs to be taken into account when determining the VALUE (not PRICE) of a stock as a part of your portfolio. We could go over the components one by one (maybe on a weekend) but the bottom line is we are priced to perfection at the moment and that perfection includes ONE TRILLION additional dollars being poured into our $15Tn economy (6.66%) by the Fed pretty much TOMORROW.
Anything less than that may lead to a bit of disappointment.
Not to be nitpicky – but the Dollar was at 88 in Q4 2008 so the Dollars MCD was collecting then were 10% more valuable than they are now. While the growth of MCD is still impressive – they are a bit of a "Recession Stock" that benefits from the decaying buying power of the Global Middle Class, who have traded down to Happy Meals and the Dollar Menu to the benefit of MCD – other Dow components and other companies in general are far less impressive when viewed in the light of the earnings power provided them by the worth(10%)less Dollars they are now reporting earnings in.
Of course, if you are an American, you have to buy your MCD in Dollars too so it's right that they should charge you an additional 10% for their very valuable stock, isn't it? Priced in Euros, in fact, MCD dropped 2% this week but it's not about the day to day picture – it's about the Global Macros. In 2008, we didn't think the entire system would collapse in a single quarter, we didn't know the housing market would collapse or that over 100M people World-wide would lose their jobs in the next two years or that entire nations would face bankruptcy. So maybe, just maybe, we can be excused for ignoring the risks.
But now? REALLY??? Are we back to completely ignoring risk as if everything is all better in Europe and Japan and China and the good old USA despite the fact that pretty much NONE of those 100M people got their jobs back and another 100M people were born and they don't have jobs either!
STAGnant Global economy, rampant inFLATION and we are pricing things BETTER than they were in 2008 – before we were made aware of how many problems lay just below that bullish surface?
I suppose it's the lack of a sense of risk that is really bothering me. As you can see from the chart – we've been this complacent before (and paid the price) but, as I said to Members yesterday – if we break our levels we'll just have to switch off our brains and stop reading the news so we can invest properly along with the crowd.
But we're not there yet. Where's my Trillion Dollars Dr. Bernanke? Where's the deal on Greece? Where are the jobs? Where are my breakout levels? It's hard to be patient but I believe the risk is real and I'd rather be relieved to find out I'm wrong and my biggest problem is how to deploy my pile of cash than to be fully invested and falling off a cliff – at least I learned that in 2008.
PHARM – where do you think IMGN goes from here? Are bullish long term, and what about short term? And BTW, kudos to all AAPL players, including myself!
Appl
thnks lflan, Phil and lvmoda.
been sitting on my ars since Christmas waiting for this friggen pullback and couldn't take the wait any longer.
when lflan said he was staying pat today, then Phil threw in a last minute trade and lvmoda's 3:33 trade suggestion, I pulled the trigger on
2 long Feb. 385 C @ $39.3
and 3 short Feb. 390 P @ $4.4
and also have a s/l of TQNT Feb 4 C @.93 now trading @ $6.15
3# lobsters at the Capital Grill this w/e!
thanks guys
Apple typically fizzles the day after earnings. The best time to sell near term calls is right at the open. My only concern is where will it be on Friday, and if the answer is 440 or better, I may as well leave my friday 435/440 spread alone.
Gotta hand it to you Phil, time after time you know how to call those plays! Sure your last name's not Brady? Oh, forgot, you're probably a Manning…
Way to go Phil! Have I said how much I appreciate your site lately! Your ability to teach and your willingless to give others a forum to demonstrate their own skill sets makes your site remarkable. I got great help from you, jmm1951, and Iflantheman (special thanks!) today. Hell, if I have many more days like this I may even be able to sign up for a full year rather than doing it just quarterly. Tomorrow is another day but, fabulous job today!
zipla, et al…..Give me overnight to contemplate where to go with AAPL next and I'll post my thoughts in the morning. I'm sure my plan will be some form of 'selling into the excitement', but I will certainly look to squeeze as much as possible out of these trades we have in the AAPL portfolio. And, yes, more plays are coming. If I can get more of you guys to just trade AAPL you will lose interest in most everything else. 🙂 Well, I don't mean your girlfriend'; I'm just talking about stocks here.
Congrats Iflan well done!
Phil, Peter D and all. Has anyone studied the difference in SPY verses SPX in relation to cost / profitability of trading? SPX is 10 x SPY. Spreads on ATM SPX is $2 – $2.50 ish. Spreads on ATM SPY are .03 – .10 so equivalent to .30 – $1.00. SPY commissions are 10x SPX. So given you have a portfolio large enough to handle SPX trading, which is better to trade. I don't care if i pay more commissions with SPY as long as the math works out in my favor. I guess the big factor for me, is you get guaranteed execution on the SPY at bid and asks but on SPX you are trying to get through a Mark price. So if the market is moving i would guess it would be harder to get SPX traded. Any thoughts are appreciated.
Iflan, I agree with drcraig above, AAPL typically sells off after the opening tomorrow morning, tho with such a strong pop tonite maybe they'll hold til Friday this week. In fact it typically sells off for the next several weeks, so perhaps after this week some kind of short-term bearish play is appropriate?
Value ideas – While waiting for the Fed, breakouts, breakdowns, etc. I have been researching value ideas. In reading “What Works on Wall Street” O’Shaughnessy identifies the top strategy as “trending value.” The basic idea is to come up with a composite value indicator based on PE, P/S, EV/Ebitda and other value indicators and then by stocks that are from the top decile of all stocks. Next he also adds the criteria that the stocks must be in the top half of all stocks in relative price strength. He backtests the top 50 stocks that fit the criteria for a one year hold back to 1929 and shows over a 20% per year growth rate. I’m greatly condensing his work, but you get the idea – pick value stocks that have some relative price strength.
Since we all have access to the gold level at Sabrient, I decided to test their Stockfinder since they have a composite Value criteria and a composite Momentum criteria. I tried to pick stocks with an over 90 Value rating and over 50 momentum rating (midcap and above) and came up with the following list:
WDC, AGO, STLD, XRX, MUR, KRO, BPI
All but WDC and BPI also have a dividend greater than 1 percent. Any thoughts on the shopping list?
And congrats to Iflan and all the APPL players. I enjoyed a few gains a couple weeks ago but have backed off from short-term trading. Well played!
jerconn…yes, that's correct. AAPL tends to slide in the weeks after earnings. I'm looking to set up plays that might work for that pattern. And, if the overall market trends downward, it will tend to pull AAPL with it. Yes, one of the things I hope the younger traders can glean from watching us trade AAPL is that we don't really care which way it goes…..up, down or sideways. All we want to know is when it's going to do what so we can set up the trades to catch the movement (or lack of movement). And this trading principle applies to all stocks. Who cares which way CMG or NFLX or any other stock goes. All I'm interested in is figuring out direction, so it can be traded for profit.
Iflan – absolutely, it's just that AAPL tends to have a more clearcut pattern and cycle – for example, you can expect it to sell off for five to eight weeks or so – this is not my research but from some other pundits who have done very good research, perhaps like yourself. Anyway, relying on you for some more great trades…looking forward!
Congrats lflan… I am looking forward to the portfolio update tomorrow morning! Should be good…
One caveat to consider on the post-aapl earnings fade is that this time there will be dramatic price target upgrades coming from the analysts, likely in the 600-700 range. I would expect the fade this week for the earnings traders to close out and then a strong trend upwards through feb expiration as institutional players skew for growth by reallocating more of their portfolios to aapl. The first few upgrades may well push the stock over 500 by feb expiration. The Q2 revision up 5% by aapl is a strong tell, and there may not be a chance to buy a dip after this week (ignoring the fed, iran, europe and obama, of course..lol).
Interesting that great AAPL earnings seemed to be bad for the Dollar – now 79.93.
Phil-
I would like to echo the sentiments of dclark41. Joining this site was the best thing I have ever done to aid my growth as a trader/investor. There are so many smart and experienced people here sharing their ideas that regardless what your investing style is you will learn something daily. Thank you and all the regular contributors for your generosity.
Congrats, lflan and the AAPL longs! I don't have any AAPL accept an iphone, so fairly neutral reaction from me. In one of the links that you guys posted, AAPL counts $600-$650 per iphone as revenue. That's good business as my two years old iphone is dying and I will be happy to get a new one. At a cost of nearly $1/day, Steve Jobs and crew did a good job in selling expensive products to the general public. Competition may bring down the $600 revenue per iphone soon and to me it's one of the reason why AAPL is not at $700. Not a negative thought, just thinking of the possibilities.
lvmoda / AAPL…..I believe that's right. This time, with such strong earnings and guidance, the pullback could be delayed. We have to take all possibilities into consideration as we look for the highest probability trades over the next few weeks.
Joining the chorus, thanks IFlan!!! On completely sidebar note check out "Chimes of Freedom: The songs of Dylan" 75 songs covered by an array of stars for an Amnesty International benefit. Only 20 songs in but so far very impressed by the depth of the talent.
robert/SPX versus SPY,
You know I'm a SPX guy, so I may be a little bias. You should try both and see what you like.
Here's my tidbits. SPX usually fill close to the mid price. The market maker will grab it very fast if you offer 50c over the mid price. If you trade iron condors, 50 SPX spreads is easier to manage than 500 SPY spreads. The larger SPX option value allows you to go further OTM, e.g. you can sell SPX Feb 1150 puts for $1.4 (Mark price), while the 14c on SPY means you have less profit after commission (percentage wise). I do like the liquidity of SPY though. When VIX spikes, I would sell long dated puts on SPY as they have much higher premium. If you do covered calls for income, then SPY is a must as it pays dividend.
Then there is tax. SPX is automatically qualified under Section 1256, with 60% as long term gain and 40% as short term gain. Since option sells are usually counted as short term gain, this is a big advantage. SPY may not qualified automatically as it is not cash settled. Of course, you can argue to have SPY under Section 1256, but I'm not a tax lawyer to tell the answer for sure.
Lflan-TheMan! / AAPL
We need to organize a dinner or something for you from all the PSW'ers who are massively profiting from your ideas! I'm dying to know what the Apr 425/450 will be priced at tomorrow!
I'm guessing that we are all going to be getting out of the weekly 425/430 spread for around $5 as soon as we can, right?
AAPL & Max Pain Theory
I trade AAPL options full time and I use Max Pain (see note) to help me select my strike prices. It does not work quite as well for an opex that is near a big event or earnings (like today), but on normal expirations, it is quite accurate and time tested. I don't feel so comfortable with the Jan4 cycle (because of earning), but the Feb cycle I will use. I just wanted to pass on that the max OI on the Feb calls is Feb 430 and for the puts it is 400. I usually give myself some cushion by using the next strike for safety. There are allot of great things you can do with options if you set up trades outside this range. The generally high IV makes for great option writing.
Nobody knows where a stock is going to go, but it is very useful to have a tool that help you know where it will not be.
note: for those who do not know, in quick terms, it is the theory that the close will be at a price that inflicts the most pain on the long option contracts. The BOTS will push the price below the highest Call open interest, and above the highest Put open interest – at opex.
????? — http://www.realclearpolitics.com/video/2012/01/24/pelosi_on_a_gingrich_presidency_that_will_never_happen.html
lflan – Thanks here as well. I stayed without covers on my 415 calls based on your bullishness, also short puts and covered calls played out as well. enthusiasm. Thanks to Phil for putting me in a position with his recent calls to permit me to play this a bit more agressively than normal.
I would speculate [and have] that, given the well-known effects of advertising, the SOTU speech should boost the dollar overnight no matte what is actually said. One of those nice predictions that has a definite sell-by date. Whether that is bullish or bearish for stocks is a trickier call, on which I am positioned neutrally. Could be an up day for the VIX, however.
ccsincsd thanks for info, that's interesting. In your experience, do the max OI strikes usually remain fairly intact, say from 3 to 4 weeks out?
Help, I'm looking for the chart someone posted in the last couple of days comparing 2008 to 2011.
Seemed like we were better off.
ccsincsd – I have been looking at that on and off, it seems to work when I look, though I haven't actively used it yet. Do you use a free maxpain calculator or do you pay for something like the current pain data at optionpain.com? How long do you wait? optionpain.com is showing $400 for February now, which seems unlikely at this point. I'd love to hear more details.
Just read the Phil's post. After all of that all I can say is, hey CMG is worth 360? and all the pink ponies fall out of the air and splat like blood.
Please god kill off that PIG. Can I cash in my "one time" or what?
kurt, 2nifty / MaxPain
No, the max OI strikes do move at 3-4 weeks out, but then settle in pretty solid the last 2 or so. Can see an easy 1-2 strike move as it firms up. I use TA to time my option writing, and it is usually with 3 weeks remaining in the cycle. Want to capture as much premium as possible, but with the best feel for where it will not close. Again, I usually give myself at least 1 strike of margin for error.
No, no calculator needed. TOS goes a great job of displaying all the strikes with OI and all the greeks in an easy to see format.
You can get the pretty color display at optionpain.com
My Pal Travis has put his entire focus on just AAPL option pain at aaplpain.com You can learn allot at his site.
(note, as the weeklies volume and OI is growing, I am seeing that the MaxPain is starting to work with them as well as the monthly opex. Sad, its a big manipulated game by the big fellas. I'm just trying to figure out how to play on their field.)
Madame Botox// is NPelosi thought of seriously by serious thinkers? she's a third rate mind in a with a 'death becomes her visage'..and the President made a vast error giving her the reins..he must feel like the fellow who sold Elphaba that bicycle..i thought the sotu address was quite good..luckily he is running against a juggarnaut of arrogant mediocrites
Roro: http://www.bloomberg.com/news/2012-01-25/europe-can-beat-this-crisis-but-maybe-not-the-next-clive-crook.html
I dunno, that dollar's looking better and better. Timing unknown, as pointed out.
Mr. Davis,
Let's say you had a $100,000 virtual portfolio and you wanted to invest 50% in stocks and leave the rest in cash, margin, hedges and aggressive short term (25KP like). So therefore you bought $62,500 in equities and sold both calls and puts for $12,500…net $50,000. The puts you sold had strikes on average 15% bellow the current price so if put to you, you would have to come up with $50,000 or 100% of porfolio.
If I wanted to hedge away 100% of the risk in case of a 20% drop in equities for 3 months. By buying 2x inverse (like SSO) bear put call spreads and funding the spreads with short put sales on things I want to own 3 months out..could it be done? Could it be rolled reasonably need be?
You mentioned you like your portfolio to to be about 60/40 maybe 70/30 if you are feeling really good about your investments. Could you please explain how you can be 60/40 if you are only 50% invested like you suggest when building a Long Term Portfolio. Is there somewhere on your site I can view an example of a portfolio like that?
If you was beginning to build a new portfolio today, would you start buy selling 2013 puts on companies you really want to own now or would you wait for a pull back when the VIX is higher?
Also, what do you think about selling 2013 puts on sectors you would like to own in the future…seems less risky to me.
Thanks!
Refreshing academe – seems appropriate what with SOTU speaches and all..
The Moral Illusion of Governmental Authority
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
10:00 FHFA Housing Price Index
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories
12:30 PM FOMC Announcement
1:00 PM Results of $35B, 5-Year Note Auction
2:15 PM Bernanke Press Conference
Notable earnings before Wednesday's open: ABT, ADP,ATI, BA, BPOP, COP, DAL, DOV, ERIC, EXC, GD, GLW,
GWW,HCBK, HES, IGTE, LCC, MSI, MWV, NVS, NYB, OXY, PII, PX, RES,
ROK, SAP, SO, STJ, TEL, TXT, UTX, WLP, XRX
Notable earnings after Wednesday's close: AMLN, CCI,CTXS, DRE, ETFC, JEC, LRCX, LSI, MUR, NE, NFLX, OI,
PMTC,SNDK, SUSQ, SWK, SYMC, TER, URI, ZNGA
At the close: Dow -0.27% to 12675. S&P -0.1% to 1315. Nasdaq +0.09% to 2787.
Treasurys: 30-year -0.03%. 10-yr +0.07%. 5-yr +0.04%.
Commodities: Crude -0.43% to $99.15. Gold -0.74% to $1665.95.
Currencies: Euro +0.09% vs. dollar. Yen +0.91%. Pound -0.3%.
Market recap: Stocks closed mixed in lackluster trading within a tight range, weighed by Greece's failed debt restructuring talks and a mixed bag of earnings reports. The market continued its rotation out of defensive sectors like utilities and into tech and financials. The euro pared losses, hovering near $1.30; oil posted its fourth loss in five sessions. NYSE gainers led losers three to two.
Sorry but still bearish on balance of news.
Very nice Ban!
Thanks Jerconn, I always liked Tarkenton – that guy knew how to scramble! Of course, I aspire to be Lombardi…
Thanks DC – We're a few years into this project and I'm very proud of the way things are going. Essentially we're just following our mission statement of building a top-notch trading COMMUNITY – we have a diverse group of trading and business talent here that is superior to all but the largest of hedge funds or IBanks, with hundreds of people collaborating on trade ideas – without all the ego and competition and layers of management BS that Funds have to deal with. If you read the bios people have put into the Build A Berkshire Workshop post – you'll see how much sense it makes to take this to another level – what start-up VC firm ever had this much brainpower and experience?
SPX/Robert – There are arb funds that do nothing but exploit little variations between the two, dull but profitable. Bottom line is it varies from time to time which is better. SPX will give you a better correlation over time but sometimes you don't want perfect correlation – you can buy one and sell the other if you get your ratios right but the spreads on SPX, which is more thinly traded, can kill you if you are not a very patient bidder. The April $1,350s are the most popular contract, with 10,429 open and a $24.50/26.80 spread, SPY April $135s are $2.57/2.65 with 24,014 open so SPY being more liquid means you get better spreads and faster executions. Of course, if you can buy one $1,350 call for $2,450 and sell 10 $135s for $2,600 – you have a pretty good chance of making $150.
I think, if I were going to play this, I'd try to buy SPX on the dip and sell SPYs on the bounce but it's tedious and you have to be good at momentum trading – maybe following JRW and doing it on the RUT/IWM would be a good experiment. Keep in mind you don't have to do all or nothing fills so you buy 1 SPX at 1,310 (good support) and if it bounces, you sell and sell and sell until you fill 10, if it drops, you sell to cover but buy another SPX at the next inflection point to hopefully lower the basis and then try to cover at a higher point so you effectively work on lowering the basis of your long SPX and raise the basis of the short SPYs until you have a comfortable spread. This does, of course, take a huge amount of margin.
Value plays/Rev – A good list, let's discuss on weekend, when there's time to look them over.
Competion/Peter – I agree that these price points are not likely to be sustained. A guy sitting next to me on the plane had a Galaxy phone and I got a feeling of inadequacy due to the size of his screen. Fortunately, I was able to whip out my IPad to compensate. Anyway, the phone looked very good to me and I'm sure there will be plenty of competition and prices will fall but that's what happened with IPods until everyone else just gave up because you can't beat AAPL on price – they simply don't play that game as a first move – and why should they? They sold 37M IPhones this quarter and there are about 2Bn people in the World who could buy one so another 27 quarters like that before they give half the possible consumers an IPhone – drop the price to $200 and I bet they sell 50M per Q and drop it to $100 and 100M per Q and, if they maintain their margins – what do they care if they sell 100M for $100 vs 25M for $400 – especially when the real goal is to sell ITunes and Apps and indoctrinate people into the AAPL culture.
Speaking of AAPL – ERIC down 14% as AAPL kicks their asses. There's $4Bn worth of market cap trashed.
Interesting West Wing look at preparations for Obama's speech:
Oh dear, can't they teach this guy to hold his head straight up?
What a crap response – is this the best the Reps have? That's very sad for them.
"Since EPA regulations… unemployment is up 33%" – actually I think it was since HBO took the Sopranos off the air – something must be done to fix this! Thank goodness we found EPA regulations to be the cause of unemployment – otherwise we might have concluded it had to do with who was in power at the time.
Thank goodness we have the Tea Party to give us a proper rebuttal:
What is this, do you have to talk like Sarah Palin to be in the Tea Party? "Political elites, media elites" – Really Mr. Cain? Weren't you just running to be one of the Political Elites?
Cain says we have 18% unemployment and that our less than 2% growth should be 5% but that's still half of China and that gas prices are double what they were when Obama took office.
Was gas $1.75 in the crash? I don't know if it got that low. Anyway, the market is up 100% despite all these "attacks on business" – imagine where we'd be if Obama LIKED Business!
Markets turning a little sour now. Haven't seen UK GDP yet but maybe whispers are negative.
Max Pain/CCS – I think it would be more useful if it measured the PRICE people paid for those options as people tend to move towards the strike as we get closer to expiration so of course it "ends up" in the right place. In this case, AAPL was at $420 pre-earnings and the strikes were around $420 but that doesn't mean much with earnings ahead other than explaining why AAPL was drifting around that level. Now we have new facts and I'd be more interested in seeing where the June and January bets go tomorrow.
Pelosi/ZZ – I very much doubt she's the only person who knows for a fact that Newt's unelectable. The guy left the party in disgrace 15 years ago and whored himself out to the private sector. The man was the first Speaker to actually be fined for an ethics violation in American History. In fact, it was Boehner who led the attack on Gingrich by his own party in Congress – that would be awkward if he becomes President…
You're welcome Stu – Congrats!
$100K/BBates – Fortunately, we have articles for that. I guess you couldn't find the Education Archives so here's "Setting Up a Hedged Portfolio" and there are many others under the Education tab. Fortunately, the model we used in April 2009 applies today if we're getting QE3, it's a big ramp-up, led by Financials, based on stimulus. Nat gas was low at the time, FAS was low, C was beaten down, JPM was cheap, IYF was cheap… Also we have "mart Portfolio Management in $10,000, $100,000 and $1,000,000 flavors and, of course, our $25,000 portfolio, which was actually traded from originally $10,000 to $135,000 so reading all those reviews and comments can give you an excellent idea of how we set it up and manage it over time. All those are under the very useful Portfolio Review section. As to today – as I believe I said earlier, things are expensive now, I don't like to buy things when they are expensive. If something goes on sale, then I might want to buy it.
Moral Illusion/Scott – Good thought.
FOMC meeting – Obviously it wil depend on the outcome and the way the statement is worded, but hypothetically speaking if there is no intention of QE3 in the short term, do you think the probability of drop in commodities/ metals (oil and gold) may be higher than stocks?
Also the inventories today could be another factor to watch out on oil?
Good morning!
Oil/Checho – QE3 can save it but, otherwise, oil is pretty much consolidating for the next leg down – from $98.50 to $92.50. Last week, we had such massive builds in gasoline and distillates that it's very likely they cut back production (also smartly waiting for lower input prices) so this week we can expect a good build in crude but less so on refined products. Also, Obama's speech hinted at more alt energy spending and, even worse for oil a move towards more nat gas. As I have said over and over again – who cares if China is going to add 25% more consumption by 2015 (2mb) if the US is going to cut 10% of it's consumption (2mb) over the same period? Oil trading is 100% based on expectations of a supply constraint driving up the price of an otherwise plentiful liquid. Without some constant input of fear to drive fresh speculative money into it, even the $90s are unrealistic. Unfortunately, QE3 is the ultimate fix for oil as it weakens the dollar (fear of inflation) and drives up expectations of a demand boost down the line.
Oh no – Euro back below $1.30 and Dollar back at 80.40! Pound at $1.556 and don't forget – failure at $1.55 is very, very bad. Yen got themselves up (weaker) to 78 so a little Yentervention driving the Buck, I think and EUR/CHF fell from 1.2107 to 1.208 – the Swiss are really losing it since the lost their boy. I love the logic there – Oh, so both you and your wife are expert currency traders? You're fired!
AAPL's market cap of $425Bn puts them right behind Argentina, with a GDP of 435Bn and tied with Austria at #29 in the World. Norway ($479Bn) at 26 should be in reach but Taiwan is 25 at $505Bn and that's going to be a tough hump to cross at $500Bn (ask Norway).
shouldn't it be AAPL's revenues that we compare with various countries' GDP, rather than AAPL's market cap?
Phil
I agree and it certainly is a wonderful group. You should be very proud.