Posts Tagged ‘BXP’

$25,000 Virtual Portfolio – Month 7 – Profiting from Chaos!

Wheeeeeeee, this is fun!  

There's nothing like an active virtual portfolio to get you through a rough market.  The last update to our very aggressive virtual porfolio was on the July 28th, when I said to Members "On the whole, we’re pretty short so we’ll be either adding longs or cashing in shorts tomorrow to get a little more even into the weekend but still bearish if there’s no debt deal."  There was, of course, no debt deal that week and the next morning I said in our Member Alert:  

Volume is not very high – this is a retail panic so far. If you have short positions, strongly consider put tight stops on them (this includes the $25KP and Income Virtual Portfolio) as they put plenty of cash in your pocket and we can always find another layer of shorts if the RUT can’t hold 775.

Needless to say, the RUT failed (10% ago!) and we stayed generally bearish.  At the time we "only" had $57,760 of virtual cash (after starting with just $25,000!) with $960 worth of unrealized losses in our remaining, mostly bearish positions.  How do you think that worked out?  That's right, possibly our biggest gains of the year!  In the last two weeks, we closed the following positions as the markets collapsed around us:

  • 10 USO 8/5 $36 calls at $1.35, out at $2.35 – up $1,000


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The $25,000 Virtual Portfolio – Halfway to $100K!

Here we go again!

After a very wild ride tracking our VERY aggressive virtual portfolio, we closed out the first half with $53,942 – up 115% for the first half of the year and, since we put $11,630 back in the bank above $25,000 from last year's $10,000 virtual portfolio, that brings us to a grand total of $65,722 – up 555% from the $10K we started with last year.  Our goal in this small, aggressive virtual portfolio is $100K but forget the extra $15,722 – as I said last week, that's our starting basis with a nice profit so we put that back into nice, safe, conservative investments (like our Income Virtual Portfolio) and that leaves us $50,000 to play with.  

Our first week of trades has already been very interesting.  Make sure you to read the original post and the update if you haven’t already to get an idea of what we are trying to learn by following this "hyper-aggressive" virtual portfolio model – especially last quarter's lesson on taking those profits off the table and working on those losers.  Our "biggest loser" of last quarter was, of course, FAS and those Aug $23 calls hit $5 last week (we are already out), which is $40,000!  Anytime you can roll and DD a position in a $25,000 virtual portfolio that eventually cashes out for $40,000 – you will probably come out well…

The problem is mainly in learning how to stick with a position like that and that requires a lot of conviction because there were dozens of opportunities to panic out with a loss and that's why we practice this kind of trading – you need to get the experience in playing these out over time so that you can learn to BELIEVE in the strategy and, even then, it should only be used in places where you REALLY have a very good reason to believe a stock or ETF will, eventually, come back sharply enough to make all the work pay off – because it's a LOT of work!

Of course, no one makes 100% every six months by taking it easy, right?  Practice, practice, practice with virtual trading until you get comfortable with the strategies and, even then, use them sparingly.  This aggressive virtual portfolio is meant to be a
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GDPhriday – Low Expectations Could Make for a Good Day

Everyone is down on the GDP all of a sudden

As I related Wednesday - the GDP, like the Beige Book report (which we expected to be poor) is made up of many factors like Trade Balance (same), Government Spending (up due to census), Personal Consumption (earnings reports indicate up), Residential Investment (HD and LOW indicate up), Corporate Earnings (way up),etc.  The biggest etcetera is Inventories and they are a major wildcard.  As near as I can tell, April was a very enthusiastic month and we began May with the "flash crash" but that was shaken off so I have no reason to think orders didn’t continue to outpace inventory through mid-may at least

We did, as we discussed, get the best Beige Book in 2 years in early June so I’ve gotta go with expecting two months of inventory builds that trail off sharply as merchandise went unsold in early June as the market collapsed and even the top 10% stopped shopping for a couple of days.  Still, it seems to me that that was too late in the month to knock GDP below 2.7% and I think we still have an excellent shot at 3%. 

We’ll find out shortly but Asia didn’t wait and had a pity party this morning with the Nikkei giving up all of the week’s gains, back at 9,537 so I’m still loving EWJ if we head higer but, if not, look for the Dow to begin filling that gap!  The Hang Seng was choppy but held 21,000 and the Shanghai can afford to take a break at 2,637.  India continues to be our top global concern as the Bombay Sensex continues to move to test the rising 50 dma as they fall to 17,868 and it looks like they’ll meet up next week in the 17,600s and that will be a very critical test. 

Samsung knocked the ball out of the park with an 83% jump to record profits on amazingly strong memory chip sales.  We can probably thank 64-Gig Smartphones and IPads for much of that gain but, holy cow!  Net income climbed to 4,280,000,000,000 – too bad that was Won ($3.6Bn) but not bad considering our own chip giant, INTC, only hit $2.4Bn last Q.  Despite lower chip prices, revenue was up 17% and I’ve already mentioned that Samsung has pledged $20Bn to become the World’s #1 solar power provider so you’ve gotta love these guys
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Weekly Wrap-Up, How to Make Money in a Down Market

Wow. what a fantastic week!

Well, not for the markets but for us as we totally nailed it.  It's hard to believe that it was just two weeks ago, on Monday, the 21st, after I posted the "Wrong Way Weekly Wrap-Up" as the Dow rose from 9,600 to 9,800, that I had to apologize to members, saying: "I’m sorry because I don’t like being bearish – I’m an optimistic guy usually but I can’t just sit here and tell people what they want to hear.  It’s just too irresponsible not to be cautious here.  We make plenty of bullish picks but I maintain a very wary outlook until we get some real fundamental improvements."

That's the funny thing about fundamentals, they don't matter until they do – and then they matter a lot.  It's funny how I get labeled a perma bear when I'm shorting the market at the top and a perma bull when I'm buying the maket at the bottom.  Gee, I always thought that's what you're supposed to do but it turns out that few people have the patience to work a market trading range and I don't blame them, I blame the mainstream media, who encourage this destructive herd mentality to investing that culminates in Jim Cramer and his sound-board, where all the complexities of the market are supposed to boil down to either BUYBUYBUY or SELLSELLSELL. 

It makes me seem downright wishy-washy when I said to members on the 21st: "I don’t have all the answers, but I do have a lot of questions – too many to get comfortable buying at these levels."  On the whole, as I explained in detail way back in late July, I am neither bullish nor bearish, I am Rangeish.  Yes, it's a made-up word and I have to make it up because no other analysts these days seem to believe the market can go up AND down, everyone seems compelled to stick to one or the other AND THEY DO IT TO THE DETRIMENT OF THEIR READERS – I WILL NOT DO IT!

There are strong stocks and there are weak stocks and I can't believe I even have to write this out but the best strategy is to short weak stocks and ETFs that have gone too high and buy strong stocks and ETFs that have gone too low.  As I explained in my LiveStock appearance back on March 6th (when I was called a "perma-bull" for…
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Friday – Is Anybody Working For the Weekend?

Rollercoaster monksWheeee, what a ride! 

Just like any good roller coaster, market plunges can be fun when you are strapped in safely and prepared for them.  Our members have been so prepared we’ll have to hand our Eagle Scout badges (we don’t need no stinkin’ badges) for riding out a toppy market for two tedious weeks, which I won’t rehash here but you can go back to my Sept 19th "Wrong Way Weekly Wrap-Up" to see how hard it was to stay bearish in the face of all that "great" news that the media kept throwing at us.  Nonetheless, had you followed our trading ideas in that post, you’d be a VERY happy camper right now!   

Now we are down 300 points from that Friday’s finish, about halfway to our 9,100 target, which is the top 5% of our original trading range around Dow 8,650.  We’d love to see 9,100 hold, especially on a nice volume sell-off so we can move our range up 5% and make 9,100 our new mid-point, putting the 33% (off the top) lines withing striking distance of a proper breakout but suddenly the news-flow has turned sharply negative.   This is something I warned members about way back on August 11th, the last time I thought we were getting toppy (and we were) at Dow 9,400 when I said: "Watch the newsflow in the MSM.  If it starts to get negative, look out below."  

Yesterday we talked about GS’s about-face on the REIT sector and, later that day, we noted during Member chat that JPM had decided to downgrade SKS, hitting the retail sector hard in the afternoon.  I called a slightly early top on Retail on 9/16, when I said to Members: "Right now all retail is being played like a huge winner, as if no segment will lose market share to another.  This is amazingly stupid in a declining wages and declining consumer credit environment." RTH was $88.76 that day after running up just about 20% from July 7th so we were looking for a pullback at least to $85, but I think worse as I see nothing in the data that makes me believe in Santa Clause this year or the rally he often brings. 

As you can see from David Fry’s chart of the XLY (another Retail tracker) we topped out at technical resistance and are now looking for a completion of a 5%
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Jobless Thursday – REITs Turn Rotten

Look out below!

I warned yesterday that the end of the quarter may well mark the end of Goldman and their Gang of 12's Global pump job and what better way to pull the rug out from under the markets then for Goldman Sachs themselves to issue a report that warns that REIT valuation seem "stretched" and they are projecting "flat to down 15% returns next year" with concerns that they are "just beginning what could be a multi-year down-cycle."

Other headlined charts (and Zero-Hedge has the full scoop) are:

  • Still a long road ahead for a recovery in credit.
  • Cap rates to rise substantially.
  • Deleveraging process just beginning for the REIT sector
  • Despite pipeline reductions, development remains a risk

In other words, all the stuff I've been saying for for the last couple of months as they IYR has climbed 50% since July 15th is now the subject of a GS report on Oct 1st.  I was fine with the sector rising 20% (IYR $36) but the move to $46 was completely without merit and, as I noted in a post last week, we shorted it there and went very long on SRS (ultra-short on the IYR).  In fact, just yesterday, in the morning post, I discussed Friday's multiple plays on SRS.  We also have short positions on BXP and, of course, we're still overall short on the whole market as a correction in the real estate sector is not going to be an isolated incident.

Fortunately, at PSW, we don't have to wait for Goldman Sachs to tell us a sector is overvalued because we understand valuations and we practice sound fundamentals – something that is sorely lacking in the larger investing community.  There's a reason REITs usually trade at 10x multiples and it's the same reason commodity producers usually trade at 10x multiples as well – because the underlying commodity, whether it is land or oil or gold or copper, can fluctuate in price over time and will sometimes spike earnings up and sometimes spike them down so, on the whole, they are WORSE long-term investments than say AAPL, MCD, KO or PG, who tend to steadily grow their business over time and deserve stronger multiples.   

When the REITs were trading at 5x earnings in March, we were loading…
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Weekly Wrap-Up – The Return of Fundamentals?

Fundamentals don't matter, until they do – then they matter a lot

We had a fantastic week because we stuck to the fundamentals and stayed short – even though it was a very painful path to follow.  In last week's wrap-up, facing the never-ending market climb on low volume I had said "I am trying to get bullish, really I am," and I was trying to find bullish plays for members - but we still ended up bearish for the week with a lot of bearish plays being added and thank goodness as it gave us a fantastic week this week!

Just following the plays I mentioned in last week's wrap-up would have been great as we had SKF bullish at $21 (now $26), DIA bearish at $98 (now $96.74), FAZ bullish at $16 (now $22.12), OIH bearish at $120 (now $114.75), SRS bullish at $8.50 (now $9.93) – and those were just from Thursday and Friday, last week was very active and very successful.  I had been quoting Samuel Jackson to highlight my difficulty joining the bullish analysts and I closed last week's comments by saying:  "It really is hard to be the shepherd in this market as I see wolves everywhere, waiting to pounce on the flock as the mainstream media leads them off to slaughter.  Or maybe (hopefully) I’m just being paranoid and everything’s fine…"   

Monday I led off the week with my concerns about the spread of the flu, as the season is upon us.  That gave us 4 bullish (but hedged) plays on SVA, BCRX and CAH (2), none of which are performing so far so all of which are still good entries, especially CAH who got whacked by a DB downgrade on Thursday yet paid back $1Bn in debt on Friday and still look very good long-term.  

I had an early look at the G20s "Framework for Sustainable and Balanced Growth," and our conclusion was that, although a good plan, it sure wasn't something the markets should be all pumped up about as stability was not going to grow us into the bullish valuations that our stocks had already risen to.  I warned members that the media was misinterpreting/misrepresenting this report saying: "You can bet though, that "THEY" are acting on this information and they will be SELLSELLSELLING, as they did on Friday
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Which Way Wednesday – Fed Edition

Financial RoadmapWe're just waiting on the Fed today, as are the rest of the markets.

Yesterday's volume was the lowest since Sept 11th but not as low as Monday, which was our lowest volume since the end of June, just before we had a 5% correction.  June 26th and 29th were our last two consecutive ultra-low volume days but June 30th was much bigger (a down 100 day), July 1st was up again on low volume and then July 2nd was another big down day and we bottomed out on July 10th.  That was the time that the media was telling us we were forming a "classic" head and shoulders pattern and were doomed to revisit the March lows.  It was also the last time we enthusiastically bought stocks

At the time of that weekly review (7/11), we had CAL at $10 (now $16.82), CBS at $5.97 (now $12.58), COST at $43.45 (now $58.58), CVX – who we just shorted – at $58.20 (now $72.60), DIS at $22.41 (now $28.38), EXM at $6.05 (now $7.32), RT at $7.12 (now $8.85), SNDK at $14.47 (now $22.91), SPY at $87.96 (now $107.27), SPWRA at $22.35 (now $32.63), SUN at $22.09 (now $27.75), V at $59.86 (now $74.41), VLO at $15.57 (now $20.50), WFR at $16.61 (now 19.09), X at $30.77 (now $50.45), XLF at $11.10 (now $15.35), XOM at $65.12 (now $69.85) and ZION at $11 (now $19).  Of course our members had much better entries as we had been targeting our entries on all of those but anyone reading our weekend review on July 11th could have played along at home from those prices (we even spiked down at Monday's open) and when I say we are now bearish – it is that we are bearishly protecting these ridiculous profits – the kind of profits you usually don't get after 3 years, not 3 months!

Overall, the broader market is up 20% over that time so it can be argued that a monkey with a dart board could have made good picks at that time but, if you read that week's notes – you'll notice that this monkey was screaming for people to buy and was going against what pretty much EVERY other analyst was saying and I was confident enough…
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Wrong Way Weekly Wrap-Up

I am trying to get bullish, really I am.

As I said to Members on Thursday morning in chat, like Sam Jackson in Pulp Fiction: "I'm trying hard to be the (bullish) shepherd" but the data makes it hard – so very hard!  Anyway, I'm not here to complain about the market forces moving against us but to review the carnage of our picks going all the way back to Sept 10th, when we decided the prior day's beige book was not going to be enough to break out over 9,600 on the Dow.  Now, with the Dow at 9,820 after testing 9,900 it's a good idea to look back and see what we missed in this last 2.5% leg up

On Thursday the 10th, we talked about patterns.  One pattern I recommended following right in the morning post was the famous "stick save" investment.  Simply buying high-delta DIA calls at about 2:30 each afternoon and selling into the pumped-up close.  That was a winning play on the 10th, 11th (Fri), 14th and 16th but not the last two days, when we turned a lot more bearish – but we'll get to that further down this review. 4 out of 5 days is pretty good for a patten and seeing it broken 3 of the past 5 days is also significant.  I did promise that Thursday that we will look for more bullish opportunities once we have a clear break over our last two levels (NYSE 6,959 and S&P 1,056) and we did make those this week.  If we hold it through Tuesday, it will be time and we're going to line up some trades this weekend.  True to my word on that Thursday, we chose a variety of bullish and bearish plays in Member Chat.  I'm posting the plays along with suggested adjustments if needed as it's a nice way to review our various strategies in progress – especially under "adverse" conditions.

Trade ideas of the day for Members were:

  • DIA $95 puts that ended up being rolled and doubled down for a net 20% gain (too much bother to detail).
  • SUN at $23.36, now $28.45 (up $5.09), short Oct $25 calls at $2.20, now 3.70 (down $1.50) and short the Jan $22.50 puts at $1.15, now .70 (up .45).

    • Another buy/write at net $23.01/22.76, already


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Zero Hedge

Explosion Hits Russia's Largest Virus Lab Which Houses Plague, Smallpox, Ebola And Other Deadly Viruses

Courtesy of ZeroHedge View original post here.

A sudden explosion at a Siberian virus research center on Monday reportedly left the facility engulfed in flames, according to several Russian news outlets. 

Firefighters and other emergency personnel were dispatched to the "Vector Institute" located several miles from Novosibirsk - an emergency which was upgraded "from an ordinary emergency to a major incident," a...



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Phil's Favorites

The future of work will still include plenty of jobs

 

The future of work will still include plenty of jobs

Even though the future is unknown, Canada’s employment rate has risen steadily from 53 per cent in 1946 to more than 61 per cent today. (Shutterstock)

Courtesy of Wayne Simpson, University of Manitoba

There is now widespread anxiety over the future of work, often accompanied by calls for a basic income to protect those displaced by automation and other technological changes.

As a labour economis...



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Lee's Free Thinking

Is The Drone Strike a Black Swan?

Courtesy of Lee Adler

Pundits are calling yesterday’s drone strke a “black swan.” Can a drone strike on a Saudi oil facility, be a “black swan.”

According to Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

I seriously doubt that no one expected or could have predicted a drone strike on a Saudi oil facility.

Call Me A B...

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Insider Scoop

New Relic Cuts 2020 Sales Guidance, Announces Changes In Management

Courtesy of Benzinga

New Relic (NYSE: NEWR) has reaffirmed its second-quarter guidance and cut its sales guidance for fiscal year 2020 from $600 million-$607 million to $586 million-$593 million.

The company’s chief technology officer, Jim Gochee, and chief revenue officer, Erica Schultz, have resigned. New Relic also named board member Michael Christenson as its chief operating officer. Christenson joins from his ...



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The Technical Traders

Metals are following downside sell off prediction before the next rally

Courtesy of Technical Traders

It is absolutely amazing how the precious metals markets have followed our October 2018 predictions almost like clockwork.  Our call for an April 21~24 momentum base below $1300 followed by an extensive rally to levels above $1550 has been playing out almost like we scripted these future price moves.

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1490~1500 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Kimble Charting Solutions

Bond Yields Due For Rally After Declining More Than 1987 Stock Crash

Courtesy of Chris Kimble

U.S. Treasury Bond Yields – 2, 5, 10, 30 Year Durations

The past year has seen treasury bond yields decline sharply, yet in an orderly fashion.

This has spurred recession concerns for much of 2019. Needless to say, it’s a confusing time for investors.

In today’s chart of the day, we look at a longer-term view of the 2, 5, 10, and 30-year treasury bond yields.

Short to long term bond yields are all testing 7 to 10-year support levels as momentum is at the lowest levels in a decade.

A yield rally is likely due across the board after a recent decline that was bigger than the stock crash in 1987!

If yields fail to ral...



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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

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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