I feel like I've fallen asleep and someone transported me back to about 9 months... the whole gang is back!
HAL9000 is on a buying spree of epic proportion.
Breakout... breakout... breakout... breakout... global growth is back. Obama says so. (well actually he said yesterday the economy is bad and getting worse - details, details) Everything he touches, turns to gold. Best. President. Ever. And he hasn't even started. At this pace the market might get back to all time highs by Inauguration day. Surely Dow 40,000 will be in reach by end of term 1 in 2012.
I'm having flashbacks as all my old positions are being taken back to the future by HAL. The charts above are why I say it makes zero sense for you to spend even 1 minute of research in commodity stocks. In the new hedge fund era of the past few years - you just buy 1, and they all go together - they are all the SAME stock in their eyes. If it's coal, if it's natural gas, if it's wheat, coffee, oil service, infrastructure, steel, fertilizer, iron, dry bulk shipping, oil service - it all is 7 degrees of Kevin Bacon and the hedgies will move en masse into ALL of it. And vice versa. That is the casino we've built... so don't need to waste a precious moment doing research or fundamental analysis on any of the companies - just buy 1 or 2 and you own them all. You can even buy 8th derivatives like Gafisa or Mercadolibre - as long as the stock is located in a country with commodities to sell - it gets run up as if it has an oil field under its headquarters.
"Student body left". "Student body right" - it's been like this for well over a year now. It's nonsense - but this is the 'efficient market' in action. Horde trading. Computers at their best.
When I start seeing action like this - stocks no one wanted two weeks ago there are now fist fights on the casino floor over who can buy it first - and reading the bullishness that has now overtaken everyone.... time to get my jacket on, and begin slinking to the door with the Exit sign over it... keep one foot in the party with my Vodka & Kool Aid tonic in hand... but be ready to be the first to the door when the cops come.
p.s. personally I'm hoping for a return to $140 oil so we can hear talk about how $4 gas is a great thing for the American economic recovery. But that's just me.
5 comments:
Hah right on cue...market is pulling back as you and I write... now this could be 1 of two things: either this is the start of the rest that is needed -the pause that refreshes or someone in the control room fell asleep and the buy, buy ,buy button is jammed.
Oops....person woke up (I think) or the buy button is working again
Thankfully Geithner is on the transition team and Paulson can quickly teach him the "buy it" button.
I am now wondering what % of goldman sachs revenue is government purchases.
For all this euphoria we are strangely barely over the 50 day moving average on S&P. Some individual names are making meteoric moves but you'd expect the indexes to be far higher. I guess its the January small cap effect - i.e. hedge fund speculation effect. They have some major high water marks to make up in 2009 so .... they're baaaaack.
ANR is the one commodity stock that has lagged. Its playing along now, but it'd be at 30 instead of 21 if it had doubled like the rest of them.
Yes - strange since steel is so sexy now. Its more of a steel play than thermal coal play. The movements are sort of random - it really is what hedge funds already own them and what hedge funds are moving into which names to drive them up. We can never know that sort of stuff. But directionally they are all the same stock - its just a matter of degree. JRCC is the one I own and it broke out ahead of most of the other coal stocks, but now is lagging a bit. Who knows.
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