We've held this since day 1 of the fund and we leave with a $6500 loss. Since this is a market not of individual stock but of sector, I won't feel bad if the stock rebounds because to the quant computers Fluor = KBR = Foster Wheeler = McDermott = Shaw Group = corn = oil = coal = fertilizer. It's all the same vehicle to them; individual stocks or individual sector dynamics mean nothing in this current era. So if oil goes down, all these will be sold and it doesn't matter what you own, Fluor showed us that yesterday after one of the best earnings reports I've seen this quarter - and down 12% as a result. McDermott - with a not so impressive quarter? Down 14% - woo hoo! So as you can see, there is no difference if you perform or don't perform - if you are in the wrong sector the algorithim returns conclusion: sell at all cost. And the trade is executed.
If oil goes up, then we still have some other names in this space to benefit. McDermott has now disappointed 3x in the 5 reporting periods I've held it so that's enough. Maybe "this" is the bottom since it just bounced off August 2007 lows (and is down by nearly half in a month since oil dropped by 20%), but quality of management and being able to trust them is half the battle, and right now I am tired of the constant disappointments. We have a solar stock we own that does the same thing and I'm near wits end with them; if they did not trade at 8 PE ratio for 100%+ growth they'd be "gone" as well.
Oh, by the way, the U.S. needs $1.5 TRILLION in infrastructure upgrades over the next 20 years but that's useless information - in the next 3 months the globe is slowing, so infrastructure stocks must be trashed since no one is an investor and everyone is a trader. Anything longer than 90 days does not matter because the money that moves markets is paid on 90 day increments, and we need to make our quarters to get paid! 20 years? That's for those old fogeys at mutual funds - haha "investing" - how quaint. Buy and hold? So old school.
- Southern Company Chairman and Chief Executive David Ratcliffe said Wednesday he expects as much as $1.5 trillion will need to be invested in new power plants, construction and other infrastructure over the next 20 years to meet the growing demand for energy.
- “We’ve got to invest in major capital and new infrastructure by some estimates over the next 20 years -- as much as a $1.5 trillion in new power plant, transmission and infrastructure,” he said, in an interview on CNBC. “It will be a challenging time to meet the growth of this economy.”
7 comments:
HAL 9000 does not care about fundamentals, only movement.
Must... assimilate....
Wait, am I mixing up sci fi movies??
Meredith Whitney is on the cover of Fortune. Could this mark the bottom of financials? Stay tuned. I am sticking with commodities and QLD. It will be interesting to see how Heebner did today.
Uh, I think not
We had Meredith here last week in relation to Fortune article and CNBC but its a longer article than the piece I posted
http://tinyurl.com/682fjk
I am curious how CGMFX does today. I can only imagine all the people yelling at home for riding the commodity stocks for the past 7 weeks being the same people yelling today that he was not in the commodity stocks ;)
You really should check out the Yahoo Finance message board some day for that fund - I bet no other fund has more than 10 messages a month. hah
Sliman,
I'm going to say no way. Financials are impossible to value right now and more bad information comes out nearly every day. You might be able to bottom feed on a few select names, but even then there is nothing to let you know that they won't suddenly take a multi-Billion write down.
I think them and builders are going to hurt for awhile. I was condo-shopping last weekend. Without making an offer I was offered 15k off the price (it was only a 185k list price condo lol), they would rip out the carpet and put in hardwoods, pay 2 years of HOA, give me cash for my down payment, and give me a 2k gift card to best buy. With that sort of desperation it was clear to me that the time to buy is still a ways off in the future.
I agree but covers of magazines are a good contra indicator. My guess is another wave of selling (tax loss) and then a bottom. Stocks will start up 6 to 9 months before the banking crisis is over as in 1990.
FWIW,
I've been bottom fishing in the less desirable areas (airlines, financials, and refiners) for a while now. I started moving out airlines last week, and concluded that exit yesterday by selling my AAI. My refinery plays were short lived, only a week in length, sold those yesterday, nice profit but left some money on the table with WNR, oh well.
Here is the real intent of the post. I am actually thinking some fundamental analysis may be considered by this market. Namely the solars. I've made money in the group before, they are looking cheaper today and are making much more money. What happens when things like the Chevy Volt go mainstream? Are they going to go mainstream? Toyota will have a plug in hybrid next year? Mark, you had a post about Tesla motors a while back. I would love to drive/own a Tesla. So, maybe some electric power plays (solars) are worth a try. I'm long some TSL and CSIQ as of today. Just thought I'd share some information. Good luck to all.
P.S. tight stops on all of them, no rooom for thrasing allowed!
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