What happened to Google in the last minutes of trading today? What does it mean "erroneous trades"? Were they erroneous because of computer errors? Or because of ask/bid imbalance? This lack of information just makes me jumpy, if I can't trust one of the most liquid stocks on Nasdaq, what the sense in investing?
I wonder if SEC is going to investigate?
Full disclosure: long Google.
Tuesday, September 30, 2008
Monday, September 29, 2008
Morons
I mean legislators. President woke up, at last. Legislators are dozing. It's such a good time for politicking! Who cares about economy! Republicans approach: tax cuts cure everything! Dems approach: tax the rich, nationalize healthcare, it'll cure everything! Blame the other guy! Why is this package called "Wall Street Bailout" is beyond me. It has nothing to do with Wall Street anymore. It's about hundreds of thousands of people who will try to refinance their ARM mortgages in the nearest four months and I wish them all luck in the world. I doubt that without this bill even half of them can get refinancing. The other half is going into foreclosure, at least the most of them.
Go to cash, young man. There is no sense in equity right now. Not until this bill passed, if ever. If not, stock market is dead for couple of years.
Go to cash, young man. There is no sense in equity right now. Not until this bill passed, if ever. If not, stock market is dead for couple of years.
Saturday, September 27, 2008
The End Of The Road
That's it, guys and girls. We are officially sliding into a Great Depression II. Yes, there will be some kind of a deal next week. No matter who says what, there will be a deal, just to keep US banking system more or less alive. But it's too little, too late. Credit is not running anymore, economy's blood stream is clogged.
Republican party deserves Hoover Prize. I propose small silver apple cart.
What to do? I don't know. I'm definitely selling into rallies next week. I'm keeping Phillip Morris International (PM), keeping and increasing at dips Altria (MO), keeping UUP: dollar is going up, depression = deflation. In case I'm wrong and we're getting big inflation instead, it's loss worth taking. Just gimme inflation, I'll take it. Positions to close: Red Hat (RHT), probably Ebay (EBAY). Positions to reduce: everything else. My goal: increase cash position to at least 40%, better yet 50%, by the end of the year. Raytheon (RTN) is still on my radar, but I think the best time to buy would be after election. Obama's victory is almost ensured by last economic events, and these elections will be about economy. Common misconception is that he is going to decrease military expenses, but he wouldn't have such luxury. So there should be a dip in November.
I hope for a deal over weekend and some rallies next week. If no deal, I will sell some anyway, there is no sense in holding a lot of equity.
Full disclosure: at the time of publication author had long positions in MO, PM, RHT, EBAY and UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Republican party deserves Hoover Prize. I propose small silver apple cart.
What to do? I don't know. I'm definitely selling into rallies next week. I'm keeping Phillip Morris International (PM), keeping and increasing at dips Altria (MO), keeping UUP: dollar is going up, depression = deflation. In case I'm wrong and we're getting big inflation instead, it's loss worth taking. Just gimme inflation, I'll take it. Positions to close: Red Hat (RHT), probably Ebay (EBAY). Positions to reduce: everything else. My goal: increase cash position to at least 40%, better yet 50%, by the end of the year. Raytheon (RTN) is still on my radar, but I think the best time to buy would be after election. Obama's victory is almost ensured by last economic events, and these elections will be about economy. Common misconception is that he is going to decrease military expenses, but he wouldn't have such luxury. So there should be a dip in November.
I hope for a deal over weekend and some rallies next week. If no deal, I will sell some anyway, there is no sense in holding a lot of equity.
Full disclosure: at the time of publication author had long positions in MO, PM, RHT, EBAY and UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Wednesday, September 24, 2008
Waiting For Solution
I didn't know that our Congress is so economically illiterate. And that they are so economically irresponsible. This is a question of going or maybe not going into Great Depression II. I mean, if some decision is made this week, we might, I repeat, might, avoid going into depression. If no decision from Congress, we are in it. Great Depression II, which might be lighter than original. I wouldn't bet on it though.
The bad thing though, is that we might not avoid depression even if Bernanke/Paulson plan is accepted in some form. The situation is way too bad. And this plan only solves a part of a problem: bad house loans. There are several other elephants in the room: credit default swaps, insurance, commodities. I don't know what would blow, but something will.
I'm holding my position in UUP, which is a play on a strong dollar. Whatever decision is (if) made, it isn't going to inject enough liquidity into the system to start things moving again fast enough. Deflation, or at least increase of dollar value, is in the cards.
Buffett invested in Goldman Sachs. Makes sense with his time horizon. I don't know, GS still holds huge long commodity positions. There was only one worldwide recession when commodity prices went up, during stagflation of 1970s. Not gonna happen now. Companies don't have pricing power. Workers, at least in US, don't have negotiating power. Never mind workers in China. So I'm staying away from all financials now. At least until Bernanke cuts rates again. My forecast of interest rate below 1% in the first quarter of 2009 stays.
Still thinking about increasing Altria position and buying Raytheon.
Full disclosure: at the time of publication author had long positions in MO and UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
The bad thing though, is that we might not avoid depression even if Bernanke/Paulson plan is accepted in some form. The situation is way too bad. And this plan only solves a part of a problem: bad house loans. There are several other elephants in the room: credit default swaps, insurance, commodities. I don't know what would blow, but something will.
I'm holding my position in UUP, which is a play on a strong dollar. Whatever decision is (if) made, it isn't going to inject enough liquidity into the system to start things moving again fast enough. Deflation, or at least increase of dollar value, is in the cards.
Buffett invested in Goldman Sachs. Makes sense with his time horizon. I don't know, GS still holds huge long commodity positions. There was only one worldwide recession when commodity prices went up, during stagflation of 1970s. Not gonna happen now. Companies don't have pricing power. Workers, at least in US, don't have negotiating power. Never mind workers in China. So I'm staying away from all financials now. At least until Bernanke cuts rates again. My forecast of interest rate below 1% in the first quarter of 2009 stays.
Still thinking about increasing Altria position and buying Raytheon.
Full disclosure: at the time of publication author had long positions in MO and UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Tuesday, September 23, 2008
Would They Wake Up at Last?
It's just amazing. Paulson, Bernanke (scholar of Great Depression) at last saw it coming. Way too late to my taste, for me this was obvious in January (link). But, anyway, they are not asleep anymore. Now, who can wake up Congress, if these two can't? We can't spend 700 billion, it's too much? Come on, if not this bailout right now, then we are gonna spend couple of trillions saving FDIC later. Maybe Congress can get Jim Cramer to give testimony?
Missed Friday opportunity to unload something. Well, don't want to sell now, but do want to sell something into strength. We'll see.
Couple of possible buys at current price levels:
Altria (MO): it's becoming better than bonds. When most bond ETFs are nosediving right now, Altria holds. Dividend is over 6% already! And people don't smoke less in recession. I think of adding to my position.
Raytheon (RTN): from my point of view, the best defense company out there. Great play on Cold War II, I wrote about it already. Now it's at the price level at which I want to buy.
Full disclosure: at the time of publication author had a long position in MO and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Missed Friday opportunity to unload something. Well, don't want to sell now, but do want to sell something into strength. We'll see.
Couple of possible buys at current price levels:
Altria (MO): it's becoming better than bonds. When most bond ETFs are nosediving right now, Altria holds. Dividend is over 6% already! And people don't smoke less in recession. I think of adding to my position.
Raytheon (RTN): from my point of view, the best defense company out there. Great play on Cold War II, I wrote about it already. Now it's at the price level at which I want to buy.
Full disclosure: at the time of publication author had a long position in MO and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Thursday, September 18, 2008
Crazy Day, Crazy Market
Unbelievable. That's all I can say about today.
Not much activity for me. Added to my UUP position. I'm sure that dollar will grow, whether it's good or bad.
Two themes today.
First. Jim Cramer needs to see a specialist. This article might be enough for diagnosis, but I'm not a professional shrink. There is no financial force in the world to manipulate US market. Even part of the market, financials. You need to have huge money to do that, nobody has that much. Simple truth: people are afraid of financials, especially investment banks, and sell them with abandon. It's not necessary to sell short to kill stock. You can just sell what you have. If big guys sell a lot, it's enough.
Hot money is looking for home. Since crash of commodities, a lot of money wants to find something, anything, to invest to. Attempts were made in financials, tech, yesterday and today in gold, silver and other commodities. Even oil, although that one can't keep a gain no matter what. This problem is going to get worse until the end of this month. Funds of different kind are doing window dressing right now, and the only good thing they can show on accounts right now is cash. I'm afraid that sell-off will continue because of this, despite all government efforts. By the way, window dressing might explain sell-off of financials. Unless foreigners come and rescue market. Like in Russian joke in the end of 1980s: there are two ways to save country: fantastic, we will do it ourselves. Or realistic, aliens will come in flying saucers and rescue us.
What to do? I still want to buy more at current prices. Work interferes with investments again, but tomorrow, again, is another day. Probably need to buy something before month end, maybe even Goldman. Price below book value is too tempting. The only problem is that I don't know how much commodities Goldman had on books in the end of August, now they all worth less.
Full disclosure: at the time of publication author had a long position in UUP, and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Not much activity for me. Added to my UUP position. I'm sure that dollar will grow, whether it's good or bad.
Two themes today.
First. Jim Cramer needs to see a specialist. This article might be enough for diagnosis, but I'm not a professional shrink. There is no financial force in the world to manipulate US market. Even part of the market, financials. You need to have huge money to do that, nobody has that much. Simple truth: people are afraid of financials, especially investment banks, and sell them with abandon. It's not necessary to sell short to kill stock. You can just sell what you have. If big guys sell a lot, it's enough.
Hot money is looking for home. Since crash of commodities, a lot of money wants to find something, anything, to invest to. Attempts were made in financials, tech, yesterday and today in gold, silver and other commodities. Even oil, although that one can't keep a gain no matter what. This problem is going to get worse until the end of this month. Funds of different kind are doing window dressing right now, and the only good thing they can show on accounts right now is cash. I'm afraid that sell-off will continue because of this, despite all government efforts. By the way, window dressing might explain sell-off of financials. Unless foreigners come and rescue market. Like in Russian joke in the end of 1980s: there are two ways to save country: fantastic, we will do it ourselves. Or realistic, aliens will come in flying saucers and rescue us.
What to do? I still want to buy more at current prices. Work interferes with investments again, but tomorrow, again, is another day. Probably need to buy something before month end, maybe even Goldman. Price below book value is too tempting. The only problem is that I don't know how much commodities Goldman had on books in the end of August, now they all worth less.
Full disclosure: at the time of publication author had a long position in UUP, and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Wednesday, September 17, 2008
Have To Buy Something
It's bad. It's so bad out there that I just have to buy something tomorrow. Yes, market can go down 1000 points more. Sure. But you never know. The only thing I know for sure is that when market is down huge, you have to buy something. And if it's up huge, something has to be sold. That's how you make money in sideways market we are since March 2000.
What is on my radar: Raytheon (RTN), I wrote about it before (here). UUP: I have a small position and if it stays not much over 24, I'm adding to it. Brookfield Asset Management (BAM), I own a significant position, but price is way too low for a company which is profitable for the last 20+ years and pays good dividend. Banco Bradesco (BBD): own it too, Brazil isn't going anywhere. Indian Fund (IFN), own that one and India is still on the map, and Indian market is going to open up tomorrow. Last, but not least, is Altria (MO). What the hell, company is paying 6+% dividend and it increased dividend for the last 10 years!
Was way too busy with my job today. Again! Well, tomorrow is another day.
The fact that I'm buying tomorrow doesn't mean you have to. I always might be wrong.
I will not buy any Russian related equities. Russian government suspended market operations today and gave order to exchanges to take measures for market recovery. That's KGB thinking about market operations. I was wrong, just a little bit, about Russia here. You could get out until yesterday. Now time's up. Write down your investments in Russia. KGB owns the country and everything inside. Maybe Russian exchanges will open. Maybe. Good luck with it.
Full disclosure: at the time of publication author had long positions in BAM, BBD, IFN, MO and UUP, and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
What is on my radar: Raytheon (RTN), I wrote about it before (here). UUP: I have a small position and if it stays not much over 24, I'm adding to it. Brookfield Asset Management (BAM), I own a significant position, but price is way too low for a company which is profitable for the last 20+ years and pays good dividend. Banco Bradesco (BBD): own it too, Brazil isn't going anywhere. Indian Fund (IFN), own that one and India is still on the map, and Indian market is going to open up tomorrow. Last, but not least, is Altria (MO). What the hell, company is paying 6+% dividend and it increased dividend for the last 10 years!
Was way too busy with my job today. Again! Well, tomorrow is another day.
The fact that I'm buying tomorrow doesn't mean you have to. I always might be wrong.
I will not buy any Russian related equities. Russian government suspended market operations today and gave order to exchanges to take measures for market recovery. That's KGB thinking about market operations. I was wrong, just a little bit, about Russia here. You could get out until yesterday. Now time's up. Write down your investments in Russia. KGB owns the country and everything inside. Maybe Russian exchanges will open. Maybe. Good luck with it.
Full disclosure: at the time of publication author had long positions in BAM, BBD, IFN, MO and UUP, and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Tuesday, September 16, 2008
It's Worse Than You Thought
Hell, it's even worse than I thought. And if somebody can mistake me for an optimist, it's only in a sense of an old joke: pessimist thinks it can't get any worse when optimist is sure that it can. Thanks government for saving (in a sense) AIG. No thanks to Uncle Ben: Rates are too high at 2%. Hell, in half a year you would dream of negative rates, but such thing doesn't exist. It's time to start helicopters!
Seriously, we are quickly running into deflation. And it will get us, like tar pit: slowly but surely. Maybe emergency cuts would come. Afraid that would be too late, too little. Some time ago I wrote "Why So Much Gloom". Now I know.
Looks like my call on Google and Intuitive Surgical was right. Didn't have any time yesterday, it was time to buy something. Didn't have time to analyze Goldman Sachs earnings today. Cramer says it was good. Dunno. Anyways, my job stayed in the way of stock trading last two days. I'll try to do better later.
But. The cash is the king. The dollar is the king of cash (and yen is a queen). Some tech with very deep pockets and very high growth rate might be good despite of everything. Anything else is scary. I'm thinking of selling every rally instead of buying dips.
Long forgotten, but necessary addition to the list of basket case countries:
Haiti: Type 1 (was type 2 under Docs, but nobody knows how to fix it). I think only North Korea is worse, but I might be wrong.
Full disclosure: at the time of publication author had long positions in Google, Intuitive Surgical and US dollar via UUP, and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Seriously, we are quickly running into deflation. And it will get us, like tar pit: slowly but surely. Maybe emergency cuts would come. Afraid that would be too late, too little. Some time ago I wrote "Why So Much Gloom". Now I know.
Looks like my call on Google and Intuitive Surgical was right. Didn't have any time yesterday, it was time to buy something. Didn't have time to analyze Goldman Sachs earnings today. Cramer says it was good. Dunno. Anyways, my job stayed in the way of stock trading last two days. I'll try to do better later.
But. The cash is the king. The dollar is the king of cash (and yen is a queen). Some tech with very deep pockets and very high growth rate might be good despite of everything. Anything else is scary. I'm thinking of selling every rally instead of buying dips.
Long forgotten, but necessary addition to the list of basket case countries:
Haiti: Type 1 (was type 2 under Docs, but nobody knows how to fix it). I think only North Korea is worse, but I might be wrong.
Full disclosure: at the time of publication author had long positions in Google, Intuitive Surgical and US dollar via UUP, and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Monday, September 15, 2008
Are We There Yet?
No. But we are getting close. If Gov and Fed let AIG fail, then that's it. Run for the hills.
Seriously, Fed and Treasury missed an opportunity to inject liquidity, so badly needed liquidity into the system. Now deflation, from theoretical possibility, becomes reality. If AIG fails, we are going Japanese road. Sad.
No trades today. I don't think financials selloff is done. Maybe I'll buy Wells Fargo. Not sure though.
Cash is the king. Tech might be the shelter. Google didn't fall that much today and still above the point I bought it lately.
We'll live. The question is: how?
Full disclosure: at the time of publication author had a long position in Google and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Seriously, Fed and Treasury missed an opportunity to inject liquidity, so badly needed liquidity into the system. Now deflation, from theoretical possibility, becomes reality. If AIG fails, we are going Japanese road. Sad.
No trades today. I don't think financials selloff is done. Maybe I'll buy Wells Fargo. Not sure though.
Cash is the king. Tech might be the shelter. Google didn't fall that much today and still above the point I bought it lately.
We'll live. The question is: how?
Full disclosure: at the time of publication author had a long position in Google and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Sunday, September 14, 2008
Can't Relax on Weekend
The only thing I can say reading financial press today: WTF! Lehman going down, Merrill bought by BoA for a huge premium, oil is going down despite all damage hurricane Ike done. We are up for a huge selloff tomorrow morning.
One question my readers might have: why didn't I buy Goldman Sachs again when it hit $150? Answer: I don't like repeated (and misguided) research reports calling for $145 (or even higher) oil price by the end of the year. If it's just a research mistake, fine. I don't want to accuse respected (most respected by me, for sure) brokerage of pump and dump, but I can't completely ignore a possibility that Goldman still has a lot of money in oil and now is trying to recover it. I just can't ignore this possibility in my investment decisions. Even if it's much more innocent, even if some brokers at Goldman believe their own research and are buying oil right now, it's a red flag for me. I currently agree with Jim Cramer that only Wells Fargo, BoA, US Bancorp and, maybe, Wachovia are financial companies to (maybe) buy today. On tomorrow selloff, I mean.
Situation in Russia changed. Government is trying to stop stock market selloff by using all money it can, including government pension fund. Short term volatility should be huge, and I don't see much possibility to use options, so now it's not an investment opportunity for me, short or long. I don't think, though, that it invalidates my opinion of Russian market.
Couple more additions to the list of basket case countries:
Nicaragua: type 2
Honduras: type 2
Full disclosure: at the time of publication author did not have positions in any stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
One question my readers might have: why didn't I buy Goldman Sachs again when it hit $150? Answer: I don't like repeated (and misguided) research reports calling for $145 (or even higher) oil price by the end of the year. If it's just a research mistake, fine. I don't want to accuse respected (most respected by me, for sure) brokerage of pump and dump, but I can't completely ignore a possibility that Goldman still has a lot of money in oil and now is trying to recover it. I just can't ignore this possibility in my investment decisions. Even if it's much more innocent, even if some brokers at Goldman believe their own research and are buying oil right now, it's a red flag for me. I currently agree with Jim Cramer that only Wells Fargo, BoA, US Bancorp and, maybe, Wachovia are financial companies to (maybe) buy today. On tomorrow selloff, I mean.
Situation in Russia changed. Government is trying to stop stock market selloff by using all money it can, including government pension fund. Short term volatility should be huge, and I don't see much possibility to use options, so now it's not an investment opportunity for me, short or long. I don't think, though, that it invalidates my opinion of Russian market.
Couple more additions to the list of basket case countries:
Nicaragua: type 2
Honduras: type 2
Full disclosure: at the time of publication author did not have positions in any stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Tuesday, September 9, 2008
OPEC Is Killing Itself
OPEC decided to move into irrelevance. Today's cut is an illustration. It's a repeat of endless cuts in the end of 1970s and beginning of 1980, when OPEC (with a little help from Iran, remember 1979 revolution) ran oil price into $40 (huge price then, probably somewhat close to $110 now, taking inflation into account). Then cuts led to constant cheating among OPEC members (and how do we know it doesn't happen now), Norway and UK started producing North Sea oil, USSR put more oil on sale and priced dropped to $30 in 1983, below $15 in 1986 and below $10 in 1998. People who think that we are at peak of oil are up for a big surprise fairly soon: new developments in the Gulf and Brazil are coming online soon, Iraq increases oil production (and far from reaching its quote), and oil sands in Canada are booming. If new technologies increase shale oil yield at least to 5%, we are going to have plenty of oil soon.
I don't know how much oil will cost tomorrow. It might go up, or down. But eventually, in several years, oil is going down to $50, which is cost of deep underwater extraction and top cost of oil from sands. It might (and will at some point) go even lower, because markets don't care about production costs.
Can we make money on oil right now? Afraid not, too many unknowns.
More on basket case countries:
Basket cases:
Pakistan: type 2. Might recover some time, but I'm not sure.
Bangladesh: type 1 (?).
Burma (Myanmar): type 2.
Sri Lanka: type 1.
Afghanistan: type 2. Current situation is a result of internal troubles, Soviet aggression and Pakistan meddling. Soviet initial support for "revolution" which turned into full blown aggression is the main reason. Maybe US and NATO allies can save it, but they need to spend a lot of time and money. I think there is no choice but doing that, but who knows! Wish this country well.
All above countries are bad cases of mismanagement, nearby India, China, Vietnam are good examples how some economic freedom coupled with more or less reasonable economic policies can save even extremely bad basket cases (China).
I don't know how much oil will cost tomorrow. It might go up, or down. But eventually, in several years, oil is going down to $50, which is cost of deep underwater extraction and top cost of oil from sands. It might (and will at some point) go even lower, because markets don't care about production costs.
Can we make money on oil right now? Afraid not, too many unknowns.
More on basket case countries:
Basket cases:
Pakistan: type 2. Might recover some time, but I'm not sure.
Bangladesh: type 1 (?).
Burma (Myanmar): type 2.
Sri Lanka: type 1.
Afghanistan: type 2. Current situation is a result of internal troubles, Soviet aggression and Pakistan meddling. Soviet initial support for "revolution" which turned into full blown aggression is the main reason. Maybe US and NATO allies can save it, but they need to spend a lot of time and money. I think there is no choice but doing that, but who knows! Wish this country well.
All above countries are bad cases of mismanagement, nearby India, China, Vietnam are good examples how some economic freedom coupled with more or less reasonable economic policies can save even extremely bad basket cases (China).
Monday, September 8, 2008
More Google.
Bought a little bit more Google (GOOG) today. This is a repeat of this year's bottom in March. I don't know what is the reason for this vicious sell off, might be just hedge funds margin calls. Yes, tech is going to get hurt by stronger dollar, but it can't explain almost 20% drop in a month. And not all tech is going down. So I added a small number of shares to my position.
Nationalization of Fanny and Freddy has a lot of consequences, most of which are not clear at all. The deal itself is not clear. It might be bearish for a dollar, but dollar is up big today. I think it's up because foreign investors feel more comfortable investing in US, when huge indebted corporations are saved by government. There is also indirect evidence that dollars are needed to pay off debts which are part of dollar carry trade which was going on since November 2007. At least I know that in Russia about 100 billion dollars of loans taken by government supported companies are due in the nearest 12 months. It's not much, but Russian companies are not the only ones which used dollar carry trade. They are up for a big hit, because of currency move, but it's carry trade risk which they should've taken into account.
My idea that Russia is sell short was right. I chickened, again. OK, they say that profit not made is better than loss taken. Honestly, I don't see much difference.
Full disclosure: at the time of publication author had a long position in Google. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Nationalization of Fanny and Freddy has a lot of consequences, most of which are not clear at all. The deal itself is not clear. It might be bearish for a dollar, but dollar is up big today. I think it's up because foreign investors feel more comfortable investing in US, when huge indebted corporations are saved by government. There is also indirect evidence that dollars are needed to pay off debts which are part of dollar carry trade which was going on since November 2007. At least I know that in Russia about 100 billion dollars of loans taken by government supported companies are due in the nearest 12 months. It's not much, but Russian companies are not the only ones which used dollar carry trade. They are up for a big hit, because of currency move, but it's carry trade risk which they should've taken into account.
My idea that Russia is sell short was right. I chickened, again. OK, they say that profit not made is better than loss taken. Honestly, I don't see much difference.
Full disclosure: at the time of publication author had a long position in Google. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Saturday, September 6, 2008
More Intuitive Surgical.
Bought more Intuitive Surgical(ISRG) yesterday. This drop is way too big on no news. This is a trade around base position, so I have sell price defined, as well as a stop. I never forget that I can always be wrong.
Full disclosure: at the time of publication author had a long position in ISRG and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Full disclosure: at the time of publication author had a long position in ISRG and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Thursday, September 4, 2008
I Am Not A Prophet
I am not a prophet. I didn't predict today's nightmare in my yesterday's post. It just happened.
But today's action makes me less (a little bit) scared of market. Several stocks reached levels at which they are becoming interesting. Still thinking.
But today's action makes me less (a little bit) scared of market. Several stocks reached levels at which they are becoming interesting. Still thinking.
Wednesday, September 3, 2008
Oil Behaves Strange
Last trade patterns in oil are quite different from what we saw in August. And several hedge funds folding up because they we leveraged long in commodities are telling similar story. It's telling me that we might have some sharp movement soon. I don't know which way, maybe I'll think about a straddle on USO. I still think that oil going down medium term, but short term movement might be up as well.
As for stocks, the picture is awful. There is no trade, no investment in sight, with exception of defense. Retail, as Jim Cramer suggests? In recession at least a quarter of them are going through bankruptcy or (with 2005 change in bankruptcy law) close to that. Tech? Google just broke down from triangular formation. I understand that technical analysis is not always right and might be completely wrong, but on clear charts it's more often right than wrong. Short term Google is going down or staying down. Apple might go up on tomorrow announcements, or go down regardless.
Euro is going down too fast to my taste. There should be correction, but it goes down every day.
So everything is wrong. The only targets on my screen are still Raytheon (under 58), DRR and UUP.
Full disclosure: at the time of publication author had a long positions in AAPL, GOOG and UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
As for stocks, the picture is awful. There is no trade, no investment in sight, with exception of defense. Retail, as Jim Cramer suggests? In recession at least a quarter of them are going through bankruptcy or (with 2005 change in bankruptcy law) close to that. Tech? Google just broke down from triangular formation. I understand that technical analysis is not always right and might be completely wrong, but on clear charts it's more often right than wrong. Short term Google is going down or staying down. Apple might go up on tomorrow announcements, or go down regardless.
Euro is going down too fast to my taste. There should be correction, but it goes down every day.
So everything is wrong. The only targets on my screen are still Raytheon (under 58), DRR and UUP.
Full disclosure: at the time of publication author had a long positions in AAPL, GOOG and UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Tuesday, September 2, 2008
Back To Work And Market
Labor day weekend was great! Now back to business. I wish I understand today's action. But I don't. All explanations are different and that means that actually nobody understands anything.
Dollar strength is amazing. Especially against Euro and Pound. Looks like a lot of money is looking for home in US now. Some of it came from Russia, but most probably is coming from Europe. We'll see. I'm too cautious to take DRR position or increase my UUP position now. Maybe I'm way too cautious.
Still don't see investments here, with exception of investing in dollar strength.
Political developments are interesting. Russia and it's rulers are crazy. They are trying to make enemies of the West and don't see China quietly pulling away former USSR countries in Asia. The whole story with recognition of breakaway provinces of Georgia stinks, of course. But it's also extremely dangerous for Russia itself, because there are at least 3 Russian provinces in Caucasus which would want to become independent. And if defense of own citizens (which just received Russian passports this year) can be made a casus belli, what would Russia say about several million real, natural born Chinese, currently living in the Russian Far East and Siberia? Of course, this blog is about investing, and all this situation is telling: get out of Russia. Short Russian market (through RSX) if you are brave enough (I'm not yet). Sell everything which depends on Russia. Which makes oil and oil companies not good for investing right now as well. Russia is likely to increase defense budget sharply and will have to sell more oil as a result. Just one of the factors, but a pretty big one.
Full disclosure: at the time of publication author had a long position in UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
Dollar strength is amazing. Especially against Euro and Pound. Looks like a lot of money is looking for home in US now. Some of it came from Russia, but most probably is coming from Europe. We'll see. I'm too cautious to take DRR position or increase my UUP position now. Maybe I'm way too cautious.
Still don't see investments here, with exception of investing in dollar strength.
Political developments are interesting. Russia and it's rulers are crazy. They are trying to make enemies of the West and don't see China quietly pulling away former USSR countries in Asia. The whole story with recognition of breakaway provinces of Georgia stinks, of course. But it's also extremely dangerous for Russia itself, because there are at least 3 Russian provinces in Caucasus which would want to become independent. And if defense of own citizens (which just received Russian passports this year) can be made a casus belli, what would Russia say about several million real, natural born Chinese, currently living in the Russian Far East and Siberia? Of course, this blog is about investing, and all this situation is telling: get out of Russia. Short Russian market (through RSX) if you are brave enough (I'm not yet). Sell everything which depends on Russia. Which makes oil and oil companies not good for investing right now as well. Russia is likely to increase defense budget sharply and will have to sell more oil as a result. Just one of the factors, but a pretty big one.
Full disclosure: at the time of publication author had a long position in UUP and no positions in other stocks mentioned. Positions can change any time.
Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.
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