Post: #351

@jj90- I have about 20 other positions but those are the ones I am itching to buy the most. Berkshire looks pretty cheap too, but I think w/the Gates foundation liquidating shares and the old generation of Berkshire diehards dying off, the stock will keep dropping slowly over the next 2 months. Most retirement plans require a minimum distribution of 4-5% so BRK will drop another 4-5%.

Its really following the pattern of Bill Gates and his microsoft shares. He had a preset schedule to liquidate x% of shares every quarter no matter what. He basically sold off a decent chunk of his shares every year from 1998-2008. He dumped all this $$$ into Cascade investments. Nobody knows exactly how its long-term performance has been, but its estimated at 20% compounded which is now a very huge $$$$.

Considering this has already happened and Gates foundation will likely want to diversify from BRK-A, i foresee continued selling from Gates foundation on a purely portfolio rebalancing strategy.

Post: #352

(09-12-2015 08:20 PM)Sourcecode Wrote:  What do yall think of defense and aerospace stock and funds.

I like both Oshkosh and Booz Allen in terms of defense stock.
There is a new generation Humvee coming out, made by Oshkosh and Booz Allen is swiping up Air Force and Navy Contracts left and right -Cyber security and communications.

But I'm also funds for diversification.

The one I'm looking at is:
XAR SPDR S&P Aerospace & Defense ETF
Their top holding are things like, Lockheed,Northrup,General Dynamics.
But they don't hold either OSK or BAH.


On the otherhand:
PowerShares Aerospace & Defense (ETF)
Holds the big companies and OSK and BAH..just in smaller percents.



Which do you think would be a better pick.
Going with individual picks.. or going for the funds?

TL;DR version: Unless you have some distinct knowledge about OSK and BAH(read revenue segments, margins, product launches, EPS estimates, etc etc) or you just absolutely want to buy these stocks just because, buy the ETFs. Obviously buy the ones that hold OSK and BAH.

Post: #353

@Peregrine,

Me too I moved my long term stuff into dry powder for the time being.

Lets just say, with my 4k loss the 600$ in profit I made feel very nice. I'd like to eventually make it into green.

Post: #354

I am really interested to see how this turns out.

We are already in mid-september

(08-02-2015 05:54 AM)Steve9 Wrote:  IMHO this is utter bullshit. I would say the chances of a 58% correction mid September is less than 1%.

Lets check back in 6 weeks and see where the market is at. However, it wouldn't surprise me to see a 6-12% pullback before the end of 2015.

(08-17-2015 07:46 PM)Steve9 Wrote:  If RVF members are taking investment ideas from anyone else I urge them to investigate their background, and to obtain their audited investment returns over at least 10 years.

(08-17-2015 10:46 PM)Steve9 Wrote:  Creating a trading strategy that works on past data is very easy. Applying that system to the present/future is totally different story.

I understand Rickards IMPACT strategy is buying puts or calls on ETFs that are plays on foreign currencies like the Yen, Euro, etc.

Deepdiver, if you do pay for this service (I believe entry level is around $1500), make sure they offer a full refund because I think there is a good probability that this strategy will end up losing your money.

Post: #355

General caution, I read at least 4 of the largest 10 single day percentage DOW drops were in October -- 1987 ( two days) and 1929 ( two days)

In addition the market has been going up for 6-7 years in a row and I believe it is very rare for it to go up more years I in a row than that.

Post: #356

So, the fed's Yellen has decided to maintain the current policy interest rate unchanged, which means that the short term volatility will go back to a normal level, and that we won't witness a significant equity selloff for now. This was a major decision and markets seemed really unsure what the outcome was going to be (so a source of volatility).

Tomorrow is the expiry for september contracts, markets should get quite busy but i do not expect any significant move. Stocks should gravitate towards the strike level of whichever option has an open interest and is close to the current spot.

Post: #357

I'm surprised they didn't raise rates. Was not expecting this.

Back into long term mode for the time being...

Post: #358

(09-17-2015 04:35 PM)The Beast1 Wrote:  I'm surprised they didn't raise rates. Was not expecting this.

Back into long term mode for the time being...

Given the current correction and brutal volatility of the last few weeks in stocks, they almost couldn't raise rates. More Zero interest rate policy (ZIRP) to keep this ship afloat.

They were afraid the already fragile stock market couldn't handle any more "bad news" for stocks. Hence, the non fed action.

Post: #359

I wonder if the "big boys" turn up the volatility before FOMC to dissaude the feds from raising rates.

Slightly para here, but considering all the rigging scandals lately it wouldn't surprise me at all.

I'm not the most knowledgeable one here, but a lot of things are CHEAP especially considering the low interest rates.

There are insurance companies selling at 5- 8 (GNW, ANAT, NWLI) forward earnings and less than 60% of book value, REITs (O/ARCP) paying out 5-7% distributions (some of which are triple net w/built in rent escalations of 2-3% per annum), energy distributor companies (DNOW/MRC) selling at 15x earnings (probably 10x normalized in 2-3 years), blue chips (GE/Nestle/Diageo) paying out between 2.5-4% dividends. Even berkshire is trading right near 1.2 book. I mean the bottom could fall out, but I am looking at a long-term yield of between 8-12% if I bought all of these.

Lots of these companies have re-financed their loans at lower fixed interest rates or had floating rates w/interest rate swaps (basically locking it in).

Then you have all these consumer staple companies like Diageo and Nestle that aren't exactly cheap but are essentially inflation proof and w/a huge rising tide behind it of the emerging middle class. Nestle is taking out long-term loans near 0% interest and using it to buy productive assets. Both are priced around 20 P/E so 5% yield +built in 2-3% inflation adjustment plus rising middle class = 9-11% yields long-term. Both have world-class distribution networks, operate in 100+ countries, and have tremendous pricing power.

I don't really think its that bad, then again we could get another 2009 and I'll have a huge egg on my face.

I'd start getting more nervous if Nestle or Diageo shoot up to low 30s P/E or if insurance starts trading near 1.5 book (excepting chubbs or one of the high-end guys), but until then its make more $ and buy more stock.

What is more interesting to me is how long this world-wide currency war will continue. Every country is devaluing their currency. I sure as hell don't want to be holding cash when the printing presses are turned on. Hell, Sweden has a negative interest rate. Thats mindboggling to me.

If I see heavy protectionist tarrifs being imposed, I will likely switch my portfolio to 50% cash and 25% stock and 25% gold/silver/industrial metals. Odds are few that this will happen but who knows maybe a repeat of the 30s will happen.

Post: #360

This is short term, but who knows.

I bought into Brazilian short etf. BZW a a while back pending this Brazil crash.

It's up over 20percent in the last couple days.

Couple hundred dollars in the last week.

Post: #361

Brought a position in Kinder Morgan (KMI) at $26.28 yesterday. They are the largest energy infrastructure company and the third-largest energy company in North America. I think the market has sold out of the energy sector indiscriminately. Dividend yield at today's share price is 7.5% and they said their dividend would grow at a 10% annual rate for the next five years.

Post: #362

Anyone invested in or pay any attention to TTM aka Tata motors? A few years back I was following that stock closely, it then wound up rising to near 50 if I remember correctly and I see it now at about $22. Anyone know why it fell or have any opinion on the future of this stock?

Post: #363

I added to my position in Enbridge with 65 shares @ $50.41 last week.

Post: #364

Added TCK.B at 6.72 last Friday.

@jamaicabound: TTM has been hit due to China slowdown concerns. They own Jaguar/Land Rover so a bet on them is a bet on those 2 brands.

Post: #365

(10-05-2015 12:44 PM)jj90 Wrote:  Added TCK.B at 6.72 last Friday.

@jamaicabound: TTM has been hit due to China slowdown concerns. They own Jaguar/Land Rover so a bet on them is a bet on those 2 brands.

Cool thanks for commenting. I had read something about slowdown in China hurting them, was wondering if they had something really bad happen due to the size of the drop. WHat's your thoughts on TTM?

I started following them years ago when they were talking about producing the first car under 6k for a new car or something like that but have since kind of lost interest and stopped following news regarding them.

Post: #366

(08-02-2015 05:54 AM)Steve9 Wrote:  

(07-31-2015 12:53 PM)Deepdiver Wrote:  I met with my retired Hedge fund Guy for cigars and baseball and markets yesterday - he charted the super cycles and cycles of the market for the past 25 years and he sees a major correction on or about mid September and is focused on S&P futures one month Options since with the slow summer volumes the one week options have not been worth the effort.

He also has been seeing a narrowing triangle pattern showing tightening trading ranges on the S&P Futures through August leading up to mid September super cycle correction of 58%... No I did not misstype - repeat a 58% correction mid September 2015 as he said like clockwork.

So sage advice here would be to keep your powder dry now and not try to catch any falling knives and than back up the truck after this correction er ah um incompetent Obamunists induced CRASH.

IMHO this is utter bullshit. I would say the chances of a 58% correction mid September is less than 1%.

Lets check back in 6 weeks and see where the market is at. However, it wouldn't surprise me to see a 6-12% pullback before the end of 2015.

September has come and gone and this "Hedge fund guy" who predicted the 58% correction by mid September was totally wrong and we experienced a modest pull-back in the 6-12% range as I thought.

Please do not take seriously anyone predicting market crashes based on "super cycles" and reading historical charts.

Post: #367

Bought some BBEP at $2.03 a couple days ago. Looking to buy some more on the next pull back. Would like to get some RDS.A on the next pull back too, hopefully tomorrow.

I think we'll probably head towards 2035 spx and then see what's up. If we really are in the Big Bear it will crash hard between here and there, otherwise it might be another long bull run up to 4,000 spx

Post: #368

My thinking is simple - the zero percent interest rate environment since the market lows (crash) of March 2009 can not continue for ever especially considering 75 Million baby bombers (born 1946 to 1964) are retiring in droves and have basically been penalized for saving by these low interest rates - with real inflation they see a negative return - which have ironically boosted real estate values post crash so many are looking at reverse mortgages to augment retirement income...

Looks like the Fed trying to keep markets stable through the election cycle - not sure if they will be successful if the October markets get the 7 year itch. Three of my newsletters are making a case for serious correction - so not willing to be a knife catcher will see how the year end holiday sales season does as the US consumer demand drives companies and the markets most of the time.

Still working with my hedge fund guru - he executed some amazing trades - his methods thrive on volatility both up and down swings. He still has concerns for a major correction as well.

I am in all cash at the moment and will be into the new year unless a major trading opp presents.

Post: #369

(10-06-2015 05:04 PM)Deepdiver Wrote:  My thinking is simple - the zero percent interest rate environment since the market lows (crash) of March 2009 can not continue for ever especially considering 75 Million baby bombers (born 1946 to 1964) are retiring in droves and have basically been penalized for saving by these low interest rates - with real inflation they see a negative return - which have ironically boosted real estate values post crash so many are looking at reverse mortgages to augment retirement income...

The even bigger crisis that no one is talking about (and even fewer know about) is the coming pension crisis. Many of these pensions need interest rates in the range of 6-8%. But it's 0. In addition, many insurance companies in their calculations assume higher interest rates, meaning they are also in trouble.

Since we don't know when this all goes down, the timing is tricky. When it starts to melt, though, hello mess.

Post: #370

^what role do the interest rates play in insurance companies' calculations?

Post: #371

(10-06-2015 08:08 PM)SunW Wrote:  

(10-06-2015 05:04 PM)Deepdiver Wrote:  My thinking is simple - the zero percent interest rate environment since the market lows (crash) of March 2009 can not continue for ever especially considering 75 Million baby bombers (born 1946 to 1964) are retiring in droves and have basically been penalized for saving by these low interest rates - with real inflation they see a negative return - which have ironically boosted real estate values post crash so many are looking at reverse mortgages to augment retirement income...

The even bigger crisis that no one is talking about (and even fewer know about) is the coming pension crisis. Many of these pensions need interest rates in the range of 6-8%. But it's 0. In addition, many insurance companies in their calculations assume higher interest rates, meaning they are also in trouble.

Since we don't know when this all goes down, the timing is tricky. When it starts to melt, though, hello mess.

Holy SHTFan Chartman:

Critical Warning from Rogue Economist Harry Dent:

October 6, 2015

“This is Just the Beginning of a Nightmare Scenario as Dow Crashes to 6,000”
http://economyandmarkets.com/exclusives/.../?z=405498

Dent further details the “perfect storm” of economic and demographic realities brewing that will likely make the next few years some of the most trying times in U.S. economic history.

“Housing prices will start to fall by as much as 40% over several years… unemployment will surge… many state and municipal governments will be forced into default…and the federal deficit will balloon to as high as $1.5 to $2 trillion,” warns Dent.

We are approaching what he terms “The Greater Depression”, and the coming months look bleak: “The recession is NOT over yet. $100 trillion of the $225 trillion in loans, bonds and stocks across the world…will simply disappear.”

And this will happen on a worldwide scale, unleashing a tidal wave of destruction across the globe. Dent emphasizes that this is not a concern to simply shrug off and pass onto future generations– he warns: “this global phenomenon has already begun.”

The silver lining:

Hopefully most investors have taken steps to avoid some of the carnage.

For those who haven’t taken such steps, the past few days have been one heck of a wake-up call!

Dent says those who prepare and position themselves beforehand could have the opportunity to earn millions through specific “decline-related” investments year after year, over the next decade as well as maximize the next long-term “boom cycle,” which he predicts will begin between early 2020 and late 2022.

Post: #372

(10-07-2015 12:59 AM)Deepdiver Wrote:  Holy SHTFan Chartman:

Critical Warning from Rogue Economist Harry Dent:

October 6, 2015

“This is Just the Beginning of a Nightmare Scenario as Dow Crashes to 6,000”
http://economyandmarkets.com/exclusives/.../?z=405498

Dent further details the “perfect storm” of economic and demographic realities brewing that will likely make the next few years some of the most trying times in U.S. economic history.

Harry Dent failed big time with his own investment fund in 2012 -

"After three years of dismal performance and lack of investor interest, Dent Tactical ETF (DENT), the brainchild of Harry Dent -- founder of economic forecasting and research firm HS Dent -- is shutting down Wednesday." :

http://www.nasdaq.com/article/harry-dent...z3ns1Ykxp6

Post: #373

@jamaicabound: Not really an auto industry guy but TTM has 2 main drivers that stick out at a glance.
1)Jaguar/Land Rover Brand
2)Global reach of sales markets.
A bet on them is a bet on either/or the above holding up. Hope this helps.

@Brodiaga: rates play a role in setting expected return vs expected liabilities in pension/insurance etc as they dictate the overcontribution/shortfall to said liabilities. This is a very basic example:
Say a company is expected to payout 1M a year in pensions, they have a 100M portfolio currently. The portfolio needs to generate 1% per year or it starts losing value. Management either has a model internally or outsources the fund management to a 3rd party who then uses their expected return in their model to derive the % return needed to maintain paying pension liabilities. If that return % is off, the fund is over/underfunded. What does this have to do with interest rates?

If this company has a 30 year duration in which it needs to meet pension liabilities and needs a 5% rate of return to do so but the 30 year bond is only yielding 2%, it has a shortfall of 3% and is underfunded. That underfunding has to come from somewhere, say company earnings. But management never wants to sacrifice EPS for something like pension liabilities so many plans are underfunded. Management then slaps on a higher discount rate(expected return) to justify the underfunding. As the pension portfolio drops in value to meet pension liabilities which don't change, an ever higher rate of return is needed to bring the portfolio to a sustainable level. At 50M in the above example the company needs a 2% return for 1M. At 25M that's now 4%. You get the idea, these things are very hard to turn around.

Insurance works on the same idea.

Hope this makes things clearer.

Post: #374

Stocks, as of the end of last week, are back in "buy mode" at least according to my own trading methodology.

Here are the reasons:

1. Signs of accumulation in the market - there has been a proliferation of "follow through days" meaning, trading days on successively higher volume than the days before where the market closes higher.
2. A proliferation of stocks "setting up" - individual stocks will form bases and identifiable patterns such as the "flat base" , " Double bottom" or the "Cup and Handle" as referenced in a previous post:

/thread-43531...pid1093862

By the way, none of this is meant as investment advice or recommendations. It's simply my take on the markets and reflects my strategy for the time being.

It takes a constructive market and the beginning of an uptrend to create the patterns which are shown in that link, i.e., stocks that are "setting up". Stock patterns and bases such as these are not created in a correcting market and certainly not in a bear market.

At this point, it appears the low is in. This is not to say that the market may not take another dip before eventually establishing a new uptrend, but that at this point, it appears the low which occurred a few months ago on that horrendous Monday, will not be pierced. Obviously, this could change if conditions change, but given current conditions, this is how things appear.

This correction reminds me a bit more of the 2010 correction. It is also similar to the 1998 correction in the stock market, yet that correction recovered rather quickly before transforming into the parabolic "bubble" phase of the stock market commonly referred to as the "dot com boom"

First, a look at the 1998 correction:



Where it says "new highs" in blue is where the '98 correction started. It was a sharp and rather vicious fall in real time, similar to the one that occurred a few months ago. Notice how the correction formed a "W" shape. Stocks fall from the new highs, then try to recover, forming the middle of the W. Then, the market falls again forming the second "V" of the "W". From there, the markets ascended up the "right side" as we say and , with minimal resistance formed a new uptrend which culminated in the parabolic rise which lead to spectacular gains from the end of 98 until March 2000. This was the blow off phase, the bubble, in internet stocks.

I think that our current correction will play out a bit more like correction that the stock market experienced in 2010 based on what we're currently seeing:



Instead of forming one nice, identifiable "W", the 2010 correction formed a more messy series of W's or V shaped ups and downs. It had a harder time resuming the uptrend. It would go back up to try to break out of it's correction range, then decline back again, forming another "V".

Notice in the above chart, when the markets tried to come up and break through that trending, snaky looking blue line ( the 200 day moving average) they failed that last time. They 'bumped' the 200 DMA and corrected again forming another "V", then they recouped themselves and eventually got above the 200 day and moved higher.

In similar fashion, currently stocks are moving back up to the 200 day moving average, which I think will offer a level of resistance and potential temporary pullback ( like in 2010) before stocks can gather enough momentum and break to new high ground.

One of three things is going to happen from here.

1.Markets will, straightaway break through the 200 and 50 day moving averages and trend higher.
2. Markets will struggle getting through this "overhead" resistance of the moving averages, and fall a bit or "base" a bit under the moving averages before, eventually rising above them and forming a new uptrend.
3. Markets will fail to get through the moving averages and eventually decline lower, meaning we are currently in a bear market but don't know it yet.

I think # 2 is the most likely and #3 the least likely at this point.

So, what to do with this knowledge? Well, everyone has their own investing methods and for those who shot from the hip and bought at the extreme lows, Kudos to you! Your aggressiveness paid off. It won't always pay off as eventually, buying at new lows like that, you're going to be buying at what will be the beginning of the next devastating bear market only to see new and more brutal lows. But this time, as I said, the gamble paid off.

If you're a stock buyer based on charts, as I am, you can begin to buy stocks as they "break out" of their patterns on good volume. Again, refer to the first link of here to see what a breakout of a cup and handle looks like.

If you've been in cash a while, perhaps you could consider moving into stocks now, as I mentioned, the market is in "buy mode" for the time being.

With all things tied to the markets, it is of course, subject to change. The most effective way I've found to trade stocks and "time the market" if it can be called that, is to look at what is currently happening and base your decisions on that. Predictions or what your "gut feeling" of where things are going is a reliable way to go broke.

A trader should, with cold blood, observe what markets and individual stocks are telling him currently, each day, then base his buys, stops and length of holding on that, day by day, week by week until conditions tell him otherwise.

Along with that, the trader must stay flexible knowing that a series of "distribution days" ( days where the markets are down on increasingly higher volume) means that the current uptrend is in jeopardy and we are likely entering "sell mode" for lack of a better term.

Markets can change on a dime.

Things are looking better and risk appears diminished, but until we're in a confirmed uptrend, I'd say buy good stocks coming out of bases, but put in stops and keep them, rather tight ( no more than 8%)

Post: #375

Hope none of you guys were holding Valeant Pharma (VRX) as of this morning.