Posts Tagged ‘Investing’

The PhilStockWorld.com Money Talk Portfolio Review – Apr 24, 2019

I'll be on BNN's (Bloomberg Canada) Money Talk tonight at 7pm.

As usual, we will be reviewing our Money Talk Portfolio, which we initiated back on Sept 6th, 2017 to track the trade ideas we would introduce, live on the show, about once each quarter.  The idea of the portfolio was to select highly leveraged, high-probability trades that did not have to be adjusted very often (or at all) and, so far, it's been a tremendous success with our initial $50,000 turning into a lovely $127,663 (up 155.3%) at yesterday's close, about 18 months after we got started.

We recently reviewed the MTP back on Feb 15th and, at the time, the portfolio was at $88,922 with, of course, the exact same positions – as I hadn't been on the show since Jan.  We did send out an alert (our first ever) to dump GE shortly after that – those alerts go out free of charge on Twitter, Facebook, Seeking Alpha, etc to make sure they were available to all so make sure you follow those feeds.    Note that, for each position, we clearly define our expectations and, overall, we expected our positions to make another $76,638 at the time but we've already made another $38,741 (43%) – which is way too fast – so we have to be careful that some of our positions are overbought already.  

That's right as FUNDAMENTAL VALUE INVESTORS we believe that stocks – even the ones we like – can be too expensive, as well as too cheap.  When they are too cheap, we buy them – when they are too expensive, we sell them.  It sounds logical but how many traders actually do it when the time comes?  

Now, let's take a fresh look at what we have:

  • Alaska Airlines (ALK) – Just a short put that nets us in for $51.80.  We're not worried about it.  Expect to gain the full $4,100 so $2,650 left to gain.
  • Nasdaq Ultra-Short ETF (SQQQ) - A hedge we expect to lose on and so far, so good as we're down about $4,000 with just $450 in value left.  Still, we do need


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The PhilStockWorld.com Money Talk Portfolio – October 24, 2018

Speaking of trading, I am scheduled to be on BNN's Money Talk tonight at 7:30 which means it's time to adjust our Money Talk Portfolio.  We did a review last Thursday and the Portfolio was at $97,037 with the S&P at 2,802 and, as of yesterday's close, we had dropped $1,394 to $95,645 but that's still up $45,645 (91.3%) for the year so not terrible but it lets us know we need to do a bit more to lock in the gains (ie. more hedges).  

  • ALK – A short put we are confident in, should gain another $3,275 at maturity.  
  • SQQQ – A good hedge that's $6,760 in the money but only showing net $3,450 out of a $10,000 potential.  Hopefully we lose the $3,450 because the market does well as it's simply insurance and not a bet.  
  • ABX – A long-term bet on gold that pays up to $12,500 and is currently on track at net $2,225 so good for a new trade with another $10,275 (460%) left to gain at $15.  



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Just Another Manic Monday

All-time highs on the Dow

That's all that really seem to matter in the Global markets as we shake off terrible Japanese trade numbers, which was somewhat counterbalanced by China's plan to open up its capital markets – by 2020.  

It's never too early to start celebrating, I suppose but should we be celebrating at all when the Nasdaq and the Russell are DOWN more than 5% for the year?

cotd average stock bear marketThere are 2,000 stocks in the Russell and 3,000 stocks in the Nasdaq Compositie index vs. 30 stocks in the Dow and 500 in the S&P.  As pointed out by Business Insider, even on the Dow, the AVERAGE stock is down 5% and within the S&P, 8% the average stock id DOWN 8% while the Nasdaq and Russell (10 times more stocks!) are clearly in bear market territory – down over 20% from their highs.  

While investors may not have learned anything from the last crash, the Banksters have learned that you can manipulate just a few key, heavily-weighted stocks in order to make an entire index seem to be performing better than the sum of its parts.  This allows the IBanks to dump their shares into ETF suckers, who are forced to buy the crap they are selling (at the day's closing price) as long as they can game the overall index to LOOK like it is doing well.  

SPY 5 MINUTEThat's why we see thise constant "stick saves" into almost every close.  Half the day's volume is done after the bell at what they call "market on close" orders that are automatically generated by ETFs and IRA drips, which forces the retail suckers with IRAs and 401Ks to buy at Top Dollar – no matter how relentless the selling volume was during the actual trading session.  

Don't be shocked, that's why the Banksters designed IRAs and 401Ks and ETFs in the first place!  Really, did you think they were doing it for your benefit?  On the whole, the stock market is nothing more than a Three Card Monte Game, where pretty much everyone…
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The Dominique Strauss-Kahn Case and Your Investments

By Brett Arends

There are some simple lessons from all this. The Dominique Strauss-Kahn case hammers them home.

We should never assume the crowd, or "everyone else," or the market is right or even rational. Five hundred ill-informed opinions don’t amount to a hill of beans.

We should always listen to what contrarians have to say especially when they sound most ridiculous, and especially when they are being shouted down. We should never trust any judgments reached quickly.

In reaching our own conclusions, we should fight the urge to join the crowd. We should take our time, do our own homework and make up our own minds. There is no hurry.

We should always be willing to change our minds if need be. This is the hardest thing to do. We constantly have to remind ourselves that we could be wrong.

Full article here: The Dominique Strauss-Kahn Case and Your Investments – SmartMoney.com.


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RISK MANAGEMENT ISN’T GOING OUT OF STYLE

Courtesy of The Pragmatic Capitalist 

(Digital Composite) New York City, New York, USA

It’s interesting how risk appetite’s have changed so dramatically in the last two years.  Why is this interesting?  Because, when you look under the hood at the Global economy you’ll notice that the problems that caused the car to veer off the road are all still in place. Nothing has really changed. We still have the same global imbalances that caused the crisis.  The Chinese are still causing imbalances within their economy via a flawed currency peg.  The single currency system with the  Euro is still causing imbalances throughout much of Europe.  And the financialization of the US economy is continuing along its merry way.

But, from an investor’s perspective there has been a distinct “risk on” trade in place.  This is not surprising because asset prices are rising and the economy really is improving, however, you probably would have felt the same exact way in 2006 or in 1998 when everything appeared just fine.  The truth was, risk management was probably more important at these two points in history than ever.  John Hussman elaborated on this in his most recent letter:

“I recognize that investors are eager to move on to the thesis of sustained economic recovery, with no need for any risk management at all. However, it appears unwise for investors to rest their financial security on faith in a recovery that relies on the government running a deficit of 8.5% of GDP, simply to keep the existing 6.3% gap between actual and potential GDP from widening further. It appears equally unwise to rely on Fed purchases of Treasury bonds to sustain ever greater exposure of investors to risk, when the creation of financial bubbles does nothing to increase the underlying cash flows deliverable by the securities that are increasing in price.”

This sort of herd mentality might make the entire herd feel a bit more safe.  The only problem is, the issues that caused this crisis to begin with are still stalking the herd. They’ll catch up with it sooner or later.  It might happen in the next few weeks, months, years or even decade.  No one can be sure exactly when, but they will catch up with it.  And when they do the herd will disperse in panic and once again investors will have wished they’d been more aware of the potential…
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The Whites of Their Eyes

Strategies for Junior Mining Investors: The Whites of Their Eyes

Courtesy of Louis James, Senior Editor, Casey’s International Speculator

“Don’t fire until you see the whites of their eyes.”

Most Americans were taught in school that William Prescott, commander of the colonial forces on Bunker Hill, gave this order to his men on the morning of June 17, 1775, just before the British attacked them.

Some may even remember that while the British took the hills, they did so at such great cost, it wasn’t much of a victory. The American forces repelled the British twice and were finally overwhelmed when they ran out of ammunition – an outcome that obviously concerned Prescott and provoked his order to conserve ammunition. It was vital to use each shot as effectively as possible.

I think of this often when contemplating investing, because I sometimes feel an urge to get all of my investment cash deployed NOW. I might miss the next big uptick! And even if not, modest double-digit gains are still better than money sitting in the bank. This urge gets strong when the market gets hot, as it has been over the past months – look at all the gains I missed!

But the best speculations, as Doug Casey likes to remind us, are when the perfect pitch comes sailing across home plate, cheap and with great upside. There are no called strikes, so it only makes sense to wait and swing only when it’d be hard to miss, hard to get hurt, and there’s clear out-of-the-ballpark potential.

    Key Point: Missing out on a winning pick may wound pride, but it doesn’t cost any cash. Placing hasty bets can cost dearly on both accounts.

Or, as Doug also likes to say, you can’t kiss all the girls. Nor should you try; the consequences in real life of attempting to kiss every girl you meet would be… nasty, brutish, and short.

Returning to my original metaphor, I don’t want to pull the trigger on a deal until I see the whites of their eyes – i.e., until everything is lined up for maximum effectiveness.

Or, as I’ve put it before: “Buy Low, Sell High” is a much better strategy than “Buy High, Sell Higher.”

Strategy vs. Tactics for Speculators

Speaking of military metaphors, I frequently refer to strategy and tactics in my writing. Last June, I gave a talk on strategy…
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A Keynesian Theory of Mind

This is an interesting article but yet I have to disagree with at least part of the premise--that impairment of the "theory of mind" is very specific/sensitive measure for Autism. I also have serious doubts about Asperger’s being on a continuum with Classical Autism — I think these two conditions are quite distinct.  I haven’t reviewed the literature in a long time, so please let me know if you know studies disproving my admittedly subjective opinion. – Ilene 

A Keynesian Theory of Mind

Courtesy of Tim at The Psy-Fi Blog

The Mental Cell of Autism

Autism is one the crueller tricks that nature plays on human beings, leaving sufferers isolated, incapable of making social connections and effectively trapped within their own heads. Although the causes aren’t fully understood some of the consequences are, and chief among these is the inability of sufferers to take on the perspective of others. This failure to develop a so-called theory of mind means they simply can’t understand the needs and motivations of other people.

According to John Maynard Keynes a proper theory of mind is just what an investor needs to keep one step ahead of the crowd, although others feel that Keynes’ approach to investing is tantamount to chasing returns all the way to poverty. It raises the question, though, as to how much a person’s genetic makeup determines the type of investor they are. Are effective value investors really just socially inept wallflowers or simply extremely focused individuals?

A Theory of Mind

It’s become clear that autism isn’t a straightforward condition. Although extreme autism is utterly disabling and sufferers can’t live a normal life or even look after themselves there is a spectrum along which we’re all spread out. Improved diagnosis methods have shown that many people have mild forms of the problem, usually referenced as Asperger’s syndrome. Such people prefer to be solitary and are generally fairly rubbish socially. [I would say "different," without hints of negativity. - Ilene]

To explain this the concept of “theory of mind” has been developed by Simon Baron-Cohen who describes it as:

“… being able to infer the full range of mental states (beliefs, desires, intentions, imaginations, emotions, etc) that cause action. In brief, having a theory of mind is to be able to reflect on the contents of one’s own and other’s minds”.

In short, it’s the ability to…
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Lack Of Stock Dispersion Hits All Time Record

Lack Of Stock Dispersion Hits All Time Record As Most Stocks Now Trade As One

Courtesy of Tyler Durden

Fundamental analysis is no longer relevant as Alpha has just done one more revolution in its grave: today 1 Year Implied Correlation hit a new all time record, at 79.84 (out of 100 maximum possible), meaning the inverse of the metric, stock dispersion, or the measurement of the variation in individual stock prices, or broadly speaking alpha, is now completely irrelevant. As we have been saying for a year, "investing" is now all about a levered beta bet, using the maximum possible leverage, and sacrifices to Moloch, that the market does not turn before price targets are hit. At this rate we anticipate the next broad or acute selloff will take us to 100 in implied correlation, at which point there will be no benefit whatsoever to trading individual stocks: the entire market will be one big ETF.

As a clarification: the data comes from the CBOE S&P 500 Implied Correlation Index is a widely disseminated, market-based estimate of the average correlation of the stocks that comprise the S&P 500 Index. Using SPX options prices, together with the prices of options on the 50 largest stocks in the SPX. Tied to January 2011 Option Maturities.

h/t Credit Trader


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Jim Rogers Calls CNBC Bullsh*t On CNBC

Jim Rogers Calls CNBC Bullsh*t On CNBC

Courtesy of Jr. Deputy Accountant 

No seriously.

"It is PR, they got the stocks up, that’s the whole purpose of PR, make the stocks go higher. That’s what CNBC and many many PR agencies are all about."

[Daily Bail]


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Put on Your Party Hats – It’s Time to Party for Another Decade!

Mish is a picture of optimism compared to Robert Prechter (of Elliott Wave Fame).  Robert Prechter is wrong, instead of dropping to 1,000, the Dow may only drop to 5,000, and even that may be too pessimistic in Mish’s eyes. - Ilene 

Put on Your Party Hats – It’s Time to Party for Another Decade!

Courtesy of Mish 

I don’t know about you but I am psyched. The prospects of an ongoing party for another decade are extremely good as the following chart shows.

Dow Jones Industrial Average – 1999 to Present 

click on chart for sharper image

Market participants put on their party hats and started cheering in 1999 when the DOW crossed 10,000 for the first time. They have been cheering pretty much nonstop ever since.

Admittedly there was a bit of a party lag between early 2005 and late 2008 but the party hats have been working overtime since mid-2008 as shown below.

Dow Jones Industrial Average – October 2010 to Present 

click on chart for sharper image

Lost Decades Comparison

Please bear in mind that some pessimists liken the above behavior to a period of stunning underperformance of the Japanese Nikkei Index over the last two decades.

Japan’s Two Lost Decades

click on chart for sharper image

The Perpetually Optimistic Mish

Being the ever-optimist that I am, I want to quickly point out that while Japan essentially went straight down over two decades, the US by comparison has put in stunning outperformance by going nowhere.

Top hat and champagne glass held aloft for New Year's

Indeed, the Dow Jones Index is remarkably sitting exactly where it was in April of 1999, over 10 years ago while the Nikkei over the same timeframe fell by about 50%.

Optimists such as myself have only one thing to say: Hallelujah!

Meanwhile doom and gloomers like Robert Prechter think the Dow will fall to 1,000.

To that I say "Poppycock" (pretty harsh language indeed for those who know me well).

By my optimistic comparison, I think the Dow’s downside is 5,000. That is a stunning 400% more optimistic appraisal of the current state of affairs than Prechter.

Furthermore, I freely admit that the DOW, instead of dropping, just may meander around 10,000 for another decade.

Wow. Except for public pension plan assumptions, imagine the parties we can have over that!

Mike "Mish" Shedlock


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Zero Hedge

Minimum Wage, Maximum Discrimination

Courtesy of ZeroHedge View original post here.

Authored by Caleb Fuller via The Mises Institute,

Since the days of Adam Smith, economists hav...



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Phil's Favorites

Two by Two

 

Two by Two

Courtesy of Scott Galloway, No Mercy/No Malice@profgalloway

“The task is...not so much to see what no one has yet seen; but to think what nobody has yet thought, about that which everybody sees.” 

~ Erwin Schrödinger

Just as life is not about what happens to you, but about how you respond to what happens to you, insight is not a function of data, but of how you perceive the data. Plotting data in different ways is illuminating, even fun, and it can lead one t...



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Mapping The Market

Which Governments Ordered Johnson & Johnson's Vaccine?

 

Which Governments Ordered Johnson & Johnson's Vaccine?

Courtesy of Niall McCarthy, Statista

On Wednesday, U.S. regulators announced that Johnson & Johnson's Covid-19 vaccine being developed by its subsidiary Janssen Pharmaceuticals in Belgium is effective at preventing moderate to severe cases of the disease. The jab has been deemed safe with 66 percent efficacy and the FDA is likely to approve it for use in the U.S. within days.

The Ad26.COV2.S vaccine can be stored for up to three months in a refrigerator and requires a single shot, ...



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Biotech/COVID-19

Which Governments Ordered Johnson & Johnson's Vaccine?

 

Which Governments Ordered Johnson & Johnson's Vaccine?

Courtesy of Niall McCarthy, Statista

On Wednesday, U.S. regulators announced that Johnson & Johnson's Covid-19 vaccine being developed by its subsidiary Janssen Pharmaceuticals in Belgium is effective at preventing moderate to severe cases of the disease. The jab has been deemed safe with 66 percent efficacy and the FDA is likely to approve it for use in the U.S. within days.

The Ad26.COV2.S vaccine can be stored for up to three months in a refrigerator and requires a single shot, ...



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Digital Currencies

Crypto - It Is Different This Time

 

Crypto – It Is Different This Time

Courtesy of Howard Lindzon

?I have been astonished as you know by the growth of crypto.

I remember back in 2017 when I noticed that Stocktwits message volume on Bitcoin ($BTC.X) surpassed that of $SPY. I knew Bitcoin was here to stay and Bitcoin went on to $19,000 before heading into its bear market.

Today Bitcoin is near $50,000.

Back in November of 2020, something new started to happen on Stocktwits with respect to crypto.

After the close on Friday until the open of the futures on Sunday, all Stocktwits trending tickers turned crypto. The weekend messages on Stocktwits have increased 400 percent.

That has continued each weekend...



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ValueWalk

There's A "Chip" Shortage: And TSM Holds All The Cards

By Mauldin Economics. Originally published at ValueWalk.

“You drove 1,000 miles just for this game?” Christmas 1988 was a stressful time for many American parents. Nintendo’s Super Mario Bros. 2 was the must-have toy that year. But copies of the hit videogame were as scarce as hen’s teeth.

Q4 2020 hedge fund letters, conferences and more

ABC News ran a 20/20 special on the shortage called “Nuts for Nintendo.” They chatted to one dad who drove 1,000 miles from Indiana to NYC in the hopes of grabbing a copy.

“I’ve tried 7 stores a day for 3 weeks and sti...



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Politics

What is fascism?

 

What is fascism?

A Donald Trump supporter wears a gas mask and holds a bust of him after he and hundreds of others stormed the Capitol building on Jan. 6, 2021. Roberto Schmidt/AFP via Getty Images

Courtesy of John Broich, Case Western Reserve University

Since before Donald Trump took office, historians have debated whether he is a fascist.

As a teacher of World War II history...



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Chart School

The Fastest Money

Courtesy of Read the Ticker

The fast money happens near the end of the long trend.

Securities which attract a popular following by both the public and professionals investors tend to repeat the same sentiment over their bull phase. The chart below is the map of said sentiment.
 


 

Video on the subject.


 

Charts in the video



 



 



Changes in the world is the source of all market moves, to ...



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Kimble Charting Solutions

Is Rising Inflation About To Hit U.S. Economy In Big Way?

Courtesy of Chris Kimble

Inflation seems to be a thing of the past… but current trading in bond and commodity markets tell us that it could become a thing of the future!

Inflation hasn’t been an issue, or even on our radar, since the 1980s. Sure, the 2007 surge in oil prices offered some concern but the financial crisis killed any thoughts of inflation.

So what’s got us concerned about inflation in 2021?

Today we take a look at long-term charts of two potential inflation indicators: Crude Oil ...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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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. Contact Ilene to learn about our affiliate and content sharing programs.