Thursday, September 30, 2010

Amazing Stat - Over 12 Year Period You Made More on 1st Day of Month then all Other Days Combined

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Some amazing statistics from an unlikely source - USA Today.  I wish these folks would use the broader S&P 500 than the old DJIA.

First, 7 of the 9 first days of the year have been up (78% win rate) Partly due to "first day inflows" (401ks and such) and a lot of those days we were waiting for Chinese Purchasing Managers Index reports overnight (released before their first day of the month) which usually led to premarket surges in the U.S..  Translation to bears: You feeling lucky punk?? (remember there is a very interesting Manufacturing ISM tomorrow - let's see if it can break the pattern)

 FIRST DAY RALLIES
The first trading day of the month has been a good day to own stocks in 2010. First-day performance, measured by points, for the Dow Jones industrials:
January
156
February
118
March
79
April
70
May
143
June
-112
July
-41
August
208
September
255
Source: USA TODAY research

  • The last day of the month this year has been poor from a performance standpoint, with the Dow either flat or in the red each month.

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While that is a quite interesting statistic here is the astounding one.  I am curious why they stopped at May 2009 (perhaps data mining) but in a 12 year period you could make as much on the first day of the month, as all other days of the month combined!
  • There is no sure thing on Wall Street. But making money in stocks on the first trading day of a new month is a good bet.  
  • The 2010 edition of the Stock Trader's Almanac notes that in the 12-year period ending May 2009, the Dow Jones industrials "gained more points on the first trading days of all months than all the other days combined." The tally: plus 4,399 points on the first days of months, vs. a loss of 3,809 points the rest of the days.
That is just amazing.  Wish they had gone through mid 2010 to see if it continued.

Look for a second fund launch in late 2011: 1st Day Fund   Our strategy? 100% net long from 3:59 PM the last day of previous month through 3:59 PM first day of the month, 100% cash otherwise.  Boo Yah.

Whirlpool (WHR) Cuts Guidance for 2010 due to Price Fixing Scheme

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You know you are in a market on heroin when companies lower guidance and the stock is hit to the tune of 0.5%.  Whew!  It is pretty pathetic for bears when the stock price is holding up to such a level you did not even notice there was an earnings warning until a reader tells you.
  • Whirlpool on Thursday cut its 2010 earnings outlook to a range of $7.80 to $8.30 a share as a result of a plea agreement of its indirect subsidiary Embraco North America Inc. in a price-fixing case. Whirlpool had previously forecast full-year earnings of $9.00 to $9.50 a share. The appliance maker will also record a $1.20 a share expense in the third quarter due to the plea agreement. The Department of Justice said earlier Thursday that Embraco will plead guilty for conspiring to fix the prices of refrigerant compressors and pay a fine of $91.8 million.
Apparently reducing your profits by $0.70 to $1.70 is only worth a loss of 20 cents to a stock nowadays.... was I teleported to 1999 somehow a month ago?  Ricky Martin and Backstreet Boys are not on the radio so I still seem to be in 2010... hmmm.   I do understand this is not an operational issue and hence a 1 time hit but cmon people, let's get a little depressed and sell some stock ;) Or at least this one.



The stock made me sweat profusely yesterday as it finally broke over the 50 day moving average which was its ceiling for the previous 3 days.  Thankfully I still had the 200 day moving average as a backup resistance level, but I thought that would be useless on this morning's gap up and run in the broader index.  But it served nicely as a stopping post, as my stop loss was just above it and missed by about 20 cents.

Someone congratulated me on the timing of the short in comments, but frankly any random news events have little to do with skill  - just plain luck.  That goes to the downside or upside (if WHR had raised guidance today, I would not of penalized myself in terms of design of the trade) - you own enough stocks, and you will get hit with "out of the blue" news eventually.  Same goes if you bet on a 50/50 proposition of an earnings release... little to congratulate anyone on as they simply put their chips on black or red and crossed their fingers.

Bigger picture I am still down 3% on the position from my averaged cost as the market that takes no prisoners (to the bears) continues to pummel.  But -3% in the past month on any short position is considered "winning".

p.s. I see Netflix is down today; time to gather the governors at the Fed for emergency session.  There must be a malfunction in the system.

Short Whirlpool in fund; no personal position


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Bookkeeping: Adding to Acme Packet (APKT)

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Having gutted a lot of long exposure and refusing to chase things that could now fall 10-20% and still not reach even their 20 day moving average, I am going to selectively buy a few things here or there, that actually are in reasonable areas of the chart in case I am wrong and the S&P goes to 1170 (and beyond) without retracing.  I'll throw the same caveat as I should have attached to any short position in the past month - any long side purchase will look foolish if the market finally reverses.  This is consistent with the environment much of the past 3 years, where almost without exception, your individual stock is dominated by the movement in the greater market.

Acme Packet (APKT) has now fallen enough that it is within spitting distance of the 20 day moving average; other than a few days in early August this has been the right place to re-enter for trading positions.  I am adding a 1% exposure today to bring the position size up to about 1.7%.  Still modest.



Long Acme Packet in fund; no personal position


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[Video] Former Intel CEO Craig Barrett: U.S. Looking Back While Rest of the World Passes Us By

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Looks like more and more people are 'getting it'.  Some excellent comments by ex Intel (INTC) CEO Craig Barrett in this Tech Ticker interview.  Unfortunately, it appears people with vision and long term intentions want little to do with our politics and I cannot blame them.  The country's toxic mix of "short termism" (do nothing until the couch is on fire... and then only deal with the couch....rather than seeing the neighborhood on fire) and political dysfunction, is a massive retardant to our prosperity.  While it is popular now to say all government is evil, that's not true - we are biased based on "OUR" government.  Indeed much of our innovation was born from public/private partnerships in the 40s, 50s, 60s.  Other countries actually have a government who assists rather than serve to hinder the private sector - so everyone domestically starts from a huge disadvantage from day 1 in our global competition.  That doesn't mean government needs to be "big" - just functional and (somewhat) efficient, and open to solutions that will take more than 1 election cycle to bear fruit.  The two headed monster (which from time to time, take turns being the head) has been a self serving failure the past few decades.  Perhaps even longer but with much of the developed world rebuilding from wars, it wasn't so obvious.  Now there is little margin for error.

p.s. if you missed it, there was a great cover story in BusinessWeek this summer with another former Intel CEO Andy Grove (see here) on the problems we now have by gutting our manufacturing base.  It was an excellent piece, even if one does not agree with every solution.

-----------------------------------

5 minute video





When former Intel CEO Craig Barrett joined us earlier this week to talk about President Obama's education initiatives, we asked him about Otellini's comments, which fueled criticism that President Obama is anti-business.

"I don't think Paul Otellini said he's anti-business: he said the admin is having trouble understanding the needs of business, especially in this difficult time," Barrett says.

To that point, Otellini also said the Obama administration is "flummoxed by their experiment in Keynesian economics not working."

A Bipartisan Failure
Without speaking for his successor, Barrett was quick to point out America's problems  didn't start with President Obama. "Both sides have done exactly the same thing, which is not much," to address what Barrett says are the three things necessary for countries to compete in the 21st Century:
  • -- A good education system. (Barrett, who is on the board of the President “Change the Equation” initiative talks about those challenges here.)
  • -- Investment in R&D.
  • -- The right environment for good ideas to become viable, i.e. immigration policy, protection for intellectual property and tax policy.
"We're zero for three," the former CEO quips. "What we're seeing now - stimulus spending which is 'shovel ready'. We're paving roads instead of putting in infrastructure for the 21st century. U.S. corporate tax rates are the highest in the world, which is a disincentive to investing here. Those are the things Paul was talking about."

"If you want to be competitive you've got the have education, research and development and tax policy to make the U.S. the best place in the world to invest. None of that is happening - none of that," he laments. "Meanwhile, the rest of the world are in their vehicles looking through the windshield."

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Could Be an Important Reversal

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Today's move will be interesting.  When the S&P was playing with 1130 I talked about a 'trap'... that is a move over a key level (causing bears to give up, and every last person feeling performance anxiety to join the long side) and then a reversal back down.  That was working out well last Thursday as the S&P 500 fell back below 1130....until Mr. Tepper showed up premarket Friday to tell us "no one loses in the current paradigm".  That caused the gap up Friday (back over 1130) and away we went without a care in the world.

Eventually these bulls are going to get trapped on a surge and reversal.  The market has become too easy - just buy every dip, any dip, even if its 3 minutes in duration.  S&P 1130, 1150, 1170 - somewhere.  Now we have to scan CNBC guest list for tomorrow to see who can goose the markets with talks of "no one loses ever in America due to Ben Bernanke."



As always the close is more important than the intraday, so let's see what happens at 4 PM.  One word of caution... casting aside today's good Chicago PMI, this is the first regional report in a long while that has been quite good.  A month ago this rally started on pledges of QE by the Fed but was turbocharged that first day of the month.  The catalysts were "ok" Chinese PMI followed up by a US ISM Manufacturing number mid morning Sept 1 that came out of the wild blue yonder.  It did not fit with any of the other regional data, and hence caught everyone off guard.  It still makes no sense to me in retrospect.  While the market has been taking ALL news as good news of late, tomorrow we have another US ISM Manufacturing and aside from today's Chicago PMI the regional surveys still show weakness.  Can we count on 2 months of outliers?  Or will we see a return to mean and a 'disappointing' US ISM?

Even bigger question, does anyone care?  Disappointing data just means more QE.  But how many more times can we rally on "things suck, but more QE coming?"  It's been non stop for weeks.

Anyhow the next 24 hours will be interesting.

(As an aside I have read that on some technical measures the NASDAQ is more overbought than at any time in 1999.  If you lived 1999 you know how insane that means things are right now)

By the way, this whole rally has been about debasing your buying power (backdoor theft of wealth) as the dollar has been crushed this month.  Priced in gold, the S&P 500 has done nothing this month and has had an awful year.   Thankfully we're pricing everything in little pieces of green toilet paper.

S&P 500 priced in gold.... not so 'rosy'.


Bookkeeping: Selling 20% of BorgWarner (BWA) & 66% of DB Double Long Gold (DGP)

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I am selling 20% of BorgWarner.com BorgWarner (BWA).  This has been an excellent core + trading stock; last purchase was in the $46 area September 8th; now it is in the $53s just three weeks later.  Hard to take any credit because if you throw a dart using your local zoo's monkey to choose stocks you are making money, so who knows how much of the move is due to the company itself and how much due to the rising tide.

I'll spare you talk of overbought, insane, ridiculous or other such comments.


I am selling 2/3rds of Double Long Gold.com DB Double Long Gold (DGP) - there is no fundamental reason to sell it as central banks are out of control.  Technically... well see comments above - I'll spare you talk of overbought, insane, ridiculous, etc.



Long BorgWarner; DB Double Long Gold in fund; no personal position


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Bookkeeping: Closing Thoratec (THOR)

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I restarted a position in Thoratec (THOR) on what appeared to be a potential technical breakout not too long ago.  However, the action the past 2 days has been troubling.  Yesterday the stock reversed down hard on a bit of a jump in volume, and this morning in a market on overdrive, it is down another few %.  Searching around all I see is a remark by the CEO talking about 'lumpiness' in the quarter which could be translated to 'miss'.  Maybe.  Either way I don't want to take a chance and will close out with a 5% loss.

In the interim, THOR stressed the lumpy nature of the market, noting implant volume can be impacted by a variety of external factors, including seasonality. As such, quarterly growth is "not linear" and quarter-to-quarter (and even month-to-month) variance will remain high.



No position


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Why S&P 1170 Would be a Perfect Fit as an Ultimate High if You are a Fibonacci Fan

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As the market jumps over S&P 1150 on an "improvement" in Q2 GDP (of 0.1%) and "better than expected" jobless claims (of still recessionary >450K levels) you just have to sit back and clap.  The news has become just a sideshow and any news is being used as an excuse nowadays to gun this market.  Bad news = QE, and good news = good news.  It takes many swigs of Kool Aid to consider today's premarket data good news but it was enough for the 'urgent buyer' to swing in from the treetops and do his SPY futures buying to get the S&P 500 over a key technical level.  Which long time readers realize by now almost always happens in premarket when the trading is thinnest and we approach a difficult level the market cannot breach during normal trading hours... it has just become a bit amusing at this point to see it repeated countless times.

-------------------------

I mentioned in this week's weekly summary, that if you are a proponent of Fibonacci levels, [Aug 4, 2010: Amazing Fibonacci] we can sort of reverse engineer an ultimate high in this move at S&P 1170.  For a quick overview, you measure the distance from the move's lows to its highs and apply 3 major retracement levels: 38.2%, 50%, and 61.8%.  We know the lows at S&P 1040, but the highs are the mystery.

There are two gaps in the S&P 500 chart (S&P 1090, and S&P 1110).  Generally those fill within 2-3 months from creation.   For the lowest of the two to fill (1090) the S&P would peak to 1170, and then do a 61.8% retracement.  This move in September has been so large the other two retracement levels (38.2%, and 50%) no longer come into play if S&P 1090 is going to be filled via Fibonacci.   S&P 1170ish also fits nicely as it coincides with May 2010 highs.

I've shown it in chart form rather than the raw numbers below - if none of this makes sense and sounds like gobligook, just ignore and buy stocks. ;)

[click to enlarge]


DetNews: Michigan Sees Sharpest Income Plunge in Nation over Past Decade

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As long time readers know, I've warned I have Michigan economic bias  [Jun 25, 2008: I have Michigan Economic Bias][May 15, 2009: One City Block in Detroit]  - as much as you try, you cannot be unaffected by what you see around you.  Frankly seeing what was happening here well in advance of the recession helped me make a lot of accurate calls [Dec 4, 2007: Predictions for the Coming 6 Months] on what was to come for the U.S. in general during the 'Great Recession' - a cheat sheet of sorts; only in more dramatic form (and earlier) locally.

However, I try to remember the farmer in Nebraska, oil rig worker in Houston, or the lobbyist in Washington D.C. (or indeed every person in the adjoining D.C. district) is living a different economic experience.  Indeed, in the metro Detroit area are 3 major counties - one of those [Oakland] was some 10 years ago the 2nd or 3rd 'richest' in the country.  Showing the changing direction of the country as public work (or in the private sector finance) have come to dominate wealth creation, this mantle has been take by counties in Connecticut (hedge fund land) or a swathe of counties in the D.C. area as the federal government largesse creates 'wealth'. [Mar 11, 2010: [Video] America's 3 Wealthiest Counties Now Ring Washington D.C.]

All that said, to feel it and see it is one thing.  But when you see the statistics it is still quite staggering.  Truth be told, due to union auto contracts (of old, they have changed dramatically) it was not so much the high end that kept the average wages up in the region, but the low end of the income chain was far higher than would be considered 'reasonable' versus education levels.  Hence part of this situation is a 'return to mean' - but the pace is traumatic.  As I've touched in other pieces on why automotive (stock) related investing is now a good thing, new labor contracts have made entry level blue collar work not much more expensive than your typical Walmart employee.   Good for profits, not so great for labor class.   The situation in Michigan is not a trend that has happened in the past 3-4 years - while the rest of the country enjoyed a boom coming out of the Bush recession of 01-02, this region had some modest uptick but nothing of the magnitude of the rest of the country.  And it had been falling (2005+) well in advance of the Great Recession as 'globalization' wrecked havoc on the manufacturing base (auto and non).  Simply put, it's been a 1 state Depression.

--------------------------------------

Put into raw numbers, the average household lost over 21% of income in the past decade - roughly $12,000 a year, or $1000 a month.   (national average 6.6%)  That would be hard enough to adjust to in a generation, not to mention in 9 years.    Income ranking has dropped from 16th in nation to 35th in less than 10 years.  In the entire United States, 13 of the hardest hit 25 cities are in Michigan... in many cities households have had to adjust to 25-33% reductions in income in 9 years.  Staggering.

[click to enlarge]


Should you care?  Maybe not - unless one believes what happened in Michigan is a canary in the coal mine for what is happening (slower and less dramatically) in the rest of the country, as the middle class is slowly but surely being decimated by some structural global forces.  [Dec 8, 2007:  Do the Bottom 80% of Americans Stand a Chance?]  As income and wealth disparity continue to expand, much of this was hidden by the house ATM earlier in the decade, and now the government ATM.  (try to imagine our economy without government and federal reserve intervention at every turn).  It will be interesting to look back in 20 years to see how this turns out.


Via Detroit News:

  • For most families in Michigan, the long-running recession has meant a simple, unrelenting truth: living with less. And census data released on Tuesday shows how much less -- the state's median household income fell by more than $12,000 over the last decade -- the equivalent of trimming $1,000 from a family's monthly budget.
  • The drop was stunning in both its size and its singularity: No other state came close to losing the estimated 21.3 percent of its median income between 2000 and 2009, and no state endured the 6.5 percent drop seen from 2008 to 2009.
  • Dana Johnson, chief economist for Comerica Bank, thinks the scope of the income losses alters how we view the economic carnage. He no longer says Michigan was in a one-state recession.  "Michigan was in a one-state depression, it lasted so long," he said.
  • Nationwide, median household income was down 2.9 percent from 2008 and 6.6 percent from 2000.
  • Most states with higher incomes have more educated work forces. For Michigan, it's high-paying, lower-skill manufacturing jobs that obscured the need to create knowledge-based economies, Metzger said. Ranked 16th in income in 2000, the state had plummeted to 35th by 2009, now nearly matching its rank in terms of higher education.  "Our income did not represent the tie between income and education,"

Bookkeeping: Closing Out Three "Generals" Positions

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I probably should explain this more often (perhaps every 6 months) since newer readers don't have the benefit of historical information but I often keep a 0.1% allocation in stocks I want to buy back in the future on a pullback.  The reason I don't sell completely is my watch lists are pretty big and I find that when I leave a stock completely out of the portfolio and only in my watch lists I don't want it as closely.   Therefore many times I have more positions than I am actually focusing on as 3,4,5 of them are simply 'holding positions' as I call them.   This often happens during big runs in the market as I liquidate stocks I was buying at lower prices into strength.

That said, we are now at the point with some of our stocks that the stocks have run so far, there is not any reasonable near term area I'd be interested in buying them back.  That does not mean they can't keep running and running and running since some of these names are now firmly in the hands of momentum traders and the moves won't stop.... until they do.  But certainly for someone looking for "growth at a reasonable price" and or like to trade around a core position, buying on backfills - the opportunities for me are sparse.

Hence, rather than doing my normal and holding onto these... with the prospect of no near term price I'd be interested in buying back... I am going to sell them out completely.  So while most mutual funds are engaged in 'window dressing' (buying stocks in the closing week of the quarter they did not own the entire quarter just so they can create a false impression to shareholders during quarter end statements on what they owned) I suppose I am engaging in anti-window dressing.  If you had no idea what my moves were the past 90 days, the statement on Sep 30, 2010 would show I did not own any of these names which have become the market darlings.

This morning I am closing Priceline.com (PCLN), Amazon.com (AMZN), and Netflix (NFLX).   All 3 positions were restarted in the portfolio in the summer doldrums and have had (obviously) amazing runs.  If someday in the future the market goes down (Bernanke permitting) and these stocks come in, I'll consider adding them again of course.






No positions


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Wednesday, September 29, 2010

Bookkeeping: Putting a Second Leg into Short of Whirlpool (WHR)

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If you notice, whereas 2 weeks ago everyone was talking about a pullback and trying to catch it, now almost no one is talking about... they seem resigned to the "David Tepper can't lose market".  I don't blame bears because they have been beaten to a pulp this month, but this is a good step towards a sentiment change needed.

Late last week I began a short of Whirlpool (WHR) but the price was not exactly where I wanted it, so I began with a modest starter position.  Today, I am going to (nearly) double up and short a second leg.  The stock has bobvious resistance at the 50 day moving average, stopping there intraday every day.  Can it break above?  Certainly - but it would take a change of pattern and the S&P 500 running over 1150.  So I'll take the probability that it does not, and add here around $79; this will raise my cost basis.



I've also added some modest index short positioning as we are near the top end of the range - will stop out of it if S&P 1152 or so is broken.

Short Whirlpool in fund; no personal position


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Vanguard Ends Fidelity's Two Decade Reign as Largest Fund Family (by Assets)

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The go go days of the 1990s was the heyday for growth oriented stock picking fund families like Fidelity.  Their star manager system - led by legendary Peter Lynch - and huge funds (Lynch's Fidelity Magellan was once the largest in the country) made them the most prominent fund family in America.  But the past decade has not been so kind as "close your eyes, throw a dart, long only is the way to go, and stocks just go up almost every year in a magical way" investing of 1983 to 1999 came to abrupt end in 2000.   [Feb 5, 2009: Mutual Funds Have Tough Decade]   While still a dominant player, the mostly passive index folks at Vanguard (i.e. we cannot beat the market, so we will best try to replicate it) have now taken the mantle as largest fund manager in America after a two decade reign.  With many (human) stock pickers now throwing up their hands as the complexion of the stock market changes from humans to computers, correlations skyrocket, and some 50% of the trading has morphed to ETFs rather than individual stocks - it will be very interesting to see what happens in the decade ahead.

Via Bloomberg:

  • ... this year when Vanguard Group Inc. unseated Fidelity as the largest U.S. mutual-fund company by assets, a distinction the Boston firm had held for more than two decades.  Vanguard had $1.31 trillion in fund assets as of July 31, compared with $1.24 trillion for its main rival.
  • A decade bookended by bear markets has sapped U.S. investors’ faith in the ability of money managers to protect them from losses, spurring a rush into cheaper index funds pioneered by Vanguard. Bogle, 81, founded the Valley Forge, Pennsylvania-based firm in 1975 on the idea that most professionals can’t beat the market, so it’s not worth paying them to try. Edward “Ned” Johnson, 80, took over Fidelity two years later and built the family business by betting on star stock pickers such as Peter Lynch.
  • Index funds mimic the makeup of the market benchmarks they are designed to track, while active managers pick securities based on research.  Fidelity Magellan Fund, run by a prominent list of managers including Johnson, Lynch and Jeffrey Vinik, produced middle-of- the-pack returns in the past decade. Once the world’s largest mutual fund, Magellan is now one-fourth the size of the $87 billion Vanguard 500 Index Fund.
  • Vanguard has benefited as the stock market foundered, said Michael Miller, a managing director at the firm. The market in 2009 came through its first full decade of losses since the 1930s, and U.S. bond yields are near record lows this year.
  • “It is possible investing has changed for good,” he said. “People don’t want to rely on stock pickers who have not earned their keep,” and active managers will have to “demonstrate that they have an edge that is worth the management fee they charge.”

Now for the ironic part... despite lower fees in index funds, and the often repeated mantra that active management cannot beat passive indexing, index funds actually have lagged (in aggregate) the past decade.
  • In the 10 years ended Aug. 31, actively run domestic stock funds returned 0.9% a year compared with an annual loss of 2% for index funds.

Specific to this story, the same holds true in Vanguard v Fidelity.... again despite Vanguard's lower costs.   But perception is everything in life.
  • Fidelity’s equity funds returned an average of 2.1% a year versus 1.2% for Vanguard’s, according to Lipper.
My first thought for this was the way human psychology workers - investors tend to (a) performance chase and (b) sell at the worst times.... i.e. March 2009.  Hence their results in actively managed funds would actually lag someone who just bought and closed their eyes for 5-10-20 years.  But on second thought, one would think the same human psychology would hit those who invest in index funds.... unless the type of investors in the 2 groups are different.   Perhaps those in index funds are more of the "buy it and forget it" types, who hence do not sell at the worse times - whereas those picking individual managers are more actively watching things and hence prone to the issues of buying at the top, and selling at the bottom.

  • Investors took a net $301 billion out of actively run equity funds in the U.S. from the start of 2008 through August, Morningstar estimates, while stock-index funds attracted $113 billion.

Or maybe Vanguard is just a much better marketer ;) [plus offers more in the way of bond funds while the retail crowd is buying as they abandon the lure of equities]

  • Fidelity doesn’t have the marketing zing Pimco can bring with Bill Gross,” Bonnanzio said.
  • Indexing drew Kent Grealish, a financial adviser in San Bruno, California, outside San Francisco, to Vanguard in 2004. Grealish said he spent most of his career as a believer in stock selection. Over time, “I changed my attitude about my ability and the ability of others to beat the market,” he said in a telephone interview.

Random factoid:  Can you guess who was the largest fund family before Fidelity in 1988?

Answer:  Merrill Lynch. 

[Video] CNBC: Maidenform (MFB) CEO - Women 'Getting Bigger and Living Longer'

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Well one advantage of having certain companies in your portfolio is seeing some interesting headlines.  In timely fashion, the CEO of Maidenform Brands (MFB) had an appearance on CNBC yesterday, soon after being one our newest additions.

(6 minute video - email readers will need to come to site to view)







A 30 percent sales increase over the last year is due to a "laser-focus on product,” including the growing line of "shapewear," Maurice Reznik, the CEO ofMaidenform, told CNBC Tuesday.  “We see shapewear growing at a faster rate. Two out of 10 women wear it,” said Reznik. “They [women] are getting bigger and living longer.”



[Sep 24, 2010: Bookkeeping - Starting Maidenform Brands]

Long Maidenform Brands in fund; no personal position


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Tuesday, September 28, 2010

Bravo Bob Marcin

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I often get emails on what I read, or how I learned this, that, or the other and what I subscribe to for my information.  Everything I get is from free sources other than a long time subscription (decade+) at Realmoney.com - I'm talking since dot com era.  Mostly it helps me get a feel for what "Wall Street" think is so I can get a gauge of what is going out there in "consensus" land similar to watching Fast Money.  That said, there are a few outlier folks who I enjoy ... for the hour by hour "Rev Shark", for strategic multi week views Doug Kass, and for big picture views Bob Marcin.  I probably like Bob Marcin so much because we think almost identical on the economic policy, problems and 'solutions' this country has been through the past decade... I am sure the Wall Street crowd who only cares about making the next buck no matter the long term consequences views him as the old curmudgeon who yells at the speculators to get off his lawn!

Every so often Marcin says something so good I have to copy it over here - hot off the presses.  Bravo Bob...now go buy stocks cuz we're all gonna get rich in the new paradigm financial asset economy!

The clowns at the Fed are center ring of the circus and they have brought out their one trick pony named All-Ease-All-The-Time. The Fed insists this trick is panacea for the economy.


Certain bozos at the Fed, starting with the Lead Clown himself, Alan Greenspan, believed asset speculation creates wealth and economic prosperity. Current Ring Master Bernanke believes currency debasement will create jobs, reflate housing, spike financial assets, and cure cancer. And, it will accomplish this by only gently nudging inflation up to 2%. What a joke.


The next QE performance will create trillions of paper dollars and create no jobs and minimal GDP growth, inflate no home prices and not cure cancer. It might goose financial assets a bit temporarily, but that seems to be the Jokers end game.


QE2 however will crush the dollar, hurt pension funds and savers, spike inflation, especially in commodities and distort market pricing signals. And if it persists, will force investors out on the risk curve and may initiate bubbles in bonds, stocks, and commodities. Easy Al has relinquished the circus ring to Bubble Ben.


In an act of suspension of disbelief, the markets wants to applaud this pony trick. How foolish. Printing money and inflating asset prices creates no sustainable wealth or economic activity. It creates the illusion of wealth and fosters major economic imbalances. That's our problem today, yet the clowns running the circus don't understand that sentence.


We all know how sustaining debt imbalances and supporting uneconomic activity ends. Very badly. After the this circus gets driven out of town, a pile of horse manure will be the only thing their pony leaves. The Fed is short members, and I nominate Ronald McDonald. As far as clowns go, he comes with no pony and less harm.


When will investors understand that the Fed's one-trick pony is phony?

I'd Say Gold (GLD) and Silver (SLV) are Overbought but Bank of England Official Chimes in on Race to Bottom for Fiat Currencies

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It is one thing to make predictions that you think will come true, but are far out of the mainstream, and it is quite another to see them happening before your eyes.   Once the consensus (in early 07 in fact!) was home prices could never fall nationally because... well, they had not in the past.  Pundit after pundit came on CNBC expressing the view.  Meanwhile, I said home prices were wildly inflated versus historical trend and would stage a tremendous national drop.  [Dec 2007: Analysis - What Should Median Home Prices Be Today?]   Three years later you see who was correct..... and it was not the CNBC crowd.  But saying it, and then watching it play out so dramatically was another thing.

Maybe 15 months ago I said gold would rally but not for reasons people were using at the time - i.e. inflation.  Instead it would be as a reserve currency as central bankers went wild as there would be no real recovery and central bankers became increasingly desperate.  Now in the past 3 months, I hear everyone talking about gold as a reserve currency... what was unthinkable a year and a half ago has become consensus.  Again, it is one thing to predict something and quite another to see central bankers attempt to destroy their country's currencies and the living standards of their citizens along with it.  All 4 of the major developed central banks have done, are doing, or are planning to do more of it.  Brazilian officials said just as much earlier this week as emerging markets are receiving much of this fiat money (Brazil, after raising taxes against capital inflowsto offset Bernanke's QE1, is now considering another round to offset this next iteration!) .

  • Brazilian Finance Minister Guido Mantega said the government will buy all “excess dollars” in the market to curb the real’s appreciation as governments around the world engage in a “currency war.”
  • We are experiencing a currency war,” Mantega said. “Devaluing currencies artificially is a global strategy.”
  • “There is a very serious currency problem, which should be addressed,” Meirelles said today. The central bank and the Finance Ministry “agree that’s not something Brazil should pay the price for.”
  • “We should have a balanced global economy,” Meirelles told reporters today in London. “We can’t have some countries having their currencies weakened. Evidently, we’re going to have a few countries paying the price for that.”
  • Brazil’s government is considering increased taxes on capital inflows in a bid to stem the real’s rally as other countries adopt policies to weaken their currencies.  Brazil’s government last October slapped a 2 percent tax on foreign purchases of equities and fixed income securities to fend off what Mantega considered “excess speculation” involving the real.

These type of actions by the Fed, BOE, and BOJ were not part of the ECB charter (ECB was once viewed as the central bank that actually cared about their currency) but even the European central bank is out there buying sovereign debt at auctions so we can pretend "all is well" when these outlier countries try to float sovereign debt.  (wow look how well the auction went!  It's amazing how good they go when the ECB is buying)  Hear no evil, see no evil, believe no evil.

Hence a conundrum... gold and silver continue to rocket for GOOD reasons.  No one can find a reason that gold should go down anymore because of what central banks are engaging in.  But now everyone is on the same side of the trade (know any gold bears?).  So in many ways this becomes a much harder trade now than before... even if in the long run the central bankers will continue to punish their paper currencies and make gold ever more valuable, do we believe it just happens in parabolic fashion?  Good question, I don't know.  Rarely does a trade no one is against keep working.




Today a Bank of England official was the latest to jump on the "we piss on all paper money" parade.  If you choices are limited to one of the major global currencies - dollar, pound, yen, euro - I don't know which poison you would pick.  Each central bank is panicking as the 'recovery' rolls along in fine fashion. It truly is funny how the bulls have their cake and eat it too ... the global economy is just fine thank you.  So fine in fact (recession "over" 1.5 years ago!) that we need to continue to print paper money as if its going out of style.  Yep, that sure is a signal of "health".

Via Bloomberg:

  • Bank of England policy maker Adam Posen said the central bank should restart its asset-purchase program to prevent persistent slow economic growth.  Posen said the U.K. central bank should consider buying gilts in its initial effort to do more so-called quantitative easing, though purchases of private assets may be needed later.  (re-read that last part.  Then re-read it again.  And again!)
  • U.K. policy makers signalled this month that they’re closer to adding stimulus to the economy after they held the key rate at 0.5 percent and their bond- purchase plan at 200 billion pounds ($317 billion).
  • “Additional monetary stimulus at this point should begin in the form of additional QE as the Bank of England pursued by purchasing gilts in 2009-2010,” he said. “In case such QE were to prove insufficiently effective,” Posen said he would “still want preparation ahead of a Plan B of large-scale non-gilt asset purchases” in close coordination with the Treasury.
  • Posen’s call for action comes a week after the U.S. Federal Reserve said it’s prepared to ease monetary policy further if needed and has highlighted asset purchases as one option. The Bank of Japan may also discuss more steps to ease monetary policy at its meeting next week.

With talk and actions like this you can see why precious metal investors fell "Bulletproof"




Long gold in fund; no personal position

Bookkeeping: Selling SPY Calls

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First, a technical note - my "fill" on these SPY 114 Oct calls was horrendous; straight out of a Friday the 13th movie.  The price I received should have been somewhere near $1.70ish but instead it was $1.89... that is roughly a 11% haircut.   I am none too happy about it.

That said, the trade worked out perfectly in terms of strategy - my intent was buying in S&P 1133-1134 area and looking for 10 to 15 points.  Just over an hour later my trade is "done".  Please note I don't care about time frames - to outsiders this is a "daytrade".  Not to me; it was a price target... if it took 4 days, 4 hours or 4 minutes my goal was those 10 to 15 points.  (if I was talking a stock I'd say if it took 4 months, 4 weeks, 4 days or 4 hours but since its an option, due to volatility risk, I usually hold them for hours or at most days)



I'll be taking off my trade in the next few minutes with a nice gain of about 33 cents per option contract (roughly $1.89 to $2.22)  That is 17% for maybe 75 minutes of work.  It should have been closer to 30% if my entry point was anywhere near what it should have been.  Can't do much about it.

p.s. today was a POMO day - I am sure it was just happenstance we shook off a horrid consumer confidence number and rallied just as the Fed was infusing the primary dealers with hundreds of millions.  (indeed today was a small POMO day, usually they send in $3-$5B, today was less than a billion)

No position


x

Bookkeeping: Adding to Spreadtrum Communications (SPRD)

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Spreadtrum Communications (SPRD) is down sharply this morning on what seems to be a small firm downgrading it.  Truthfully it needed an excuse to come in, so any reason will do but I still find it amazing investors take so much heart in analyst actions.  While I hate "gap downs" as they tend to cause havoc on the charts, this analyst action took the stock down to its 20 day moving average (slightly below intraday) finally offering a more reasonable entry period.  With the S&P 500 so extended I am still treading carefully because SPRD is the type of stock that when the S&P sells off 3%, will drop 10%... but I have added a small 0.9% exposure...

As long as the name holds the 50 day ($11.22) in the long run, it's in decent shape.  I'd prefer to be a buyer "down there".



Long Spreadtrum Communications in fund; no personal position


x

Bookkeeping: Long SPY Calls Off S&P Support Levels

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I need some turbo charge to make up for a weak 2 weeks, so I am going under the theory S&P 1131 will hold and have bought some SPY calls (SPY Oct 114 calls) as we test the lower end of this range.  My goal is maybe 10-15 S&P points if and when.... if the S&P 500 breaks below 1129ish, I will sell no questions asked.  About a 3.3% allocation.

Looks like the index is in a 19 point range waiting to decide which way it is going to break (1131 at bottom, 1150 at top)  Rather than caring which way we break out, I just want to see the S&P 500 trade towards the top end of the range at which point I could book some nice profits.

Long SPY Oct 114 Calls in fund; no personal position


x

Bookkeeping: Closing Cleveland Cliffs (CLF)

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I thought the 'student body' would buy all commodities en masse, and most are running together.  However natural gas, oil, and iron ore (and coal to some degree) have been the laggards.  Meanwhile, copper & soft commodities (agricultural especially) have been rockstars.   Therefore, my position in iron ore/met coal producer Cleveland Cliffs (CLF) has been the wrong choice.  Instead I should have been in Freeport McMoran Copper & Gold (FCX) for example.



Here are the "ags"


Since I've added some new positions in the past week, and I don't want the # of portfolio positions to expand too much I am going to boot the 1% allocation in Cleveland Cliffs and close it out with a 4% loss.  Technically the stock is forming a sideways base over the past 7 days.  From such bases come breakouts:  if it holds the 50 day moving average there is still a good chance the move from the base will be upward, but if the S&P 500 can show any signs of weakness, the breakout could be to the downside.  It's a flip a coin proposition at this point so one to review later.

No position

Bookkeeping: Covering 2nd Half of Intuitive Surgical (ISRG)

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Nice to get a victory on the short side... been a while.  I covered half the Intuitive Surgical (ISRG) short yesterday at $294 area, and am covering the rest today around $287/$288.  Roughly a 3% gain cost averaged.  Modest victories but that is all you can ask for on the short side until the S&P 500 experiences real selling.  Specific to ISRG if the stock can rally back north of $300 I'd like to try the same trade.



At the time I was looking at new names to short late last week I considered Monsanto (MON) in the $54s which had a similar chart - obviously I should have grabbed that one in retrospect.  That would have been a 10% gain in 2 sessions!



S&P 1131 remains the bogey.

No positions

Even the Bulls Need a Break

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I mentioned Baidu.com (BIDU) yesterday - too many charts look like this; it is to the point even the bulls must ask for some backing and filling.  The stock actually opened up into the $107s, before reversing hard and dropping $6 quick points.  (I guess that is a "buying opportunity").  I am sure we've had some other moments such as this in the past year and a half but so many stocks are now not even within shouting distance of their 20 day moving average.... it is boggling.  It's now a game of musical chairs if you are chasing this type of merchandise... just hoping you don't hold the hot potato when the music stops.



No position


x

Las Vegas Sands (LVS) Upgraded

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I take little stock in analyst actions on stocks, other than the fact it moves individual equities as people react to such words.  The estimate upgrades however, are significant.  A remarkable turnaround for a company who some feared was at the door of bankruptcy in 2008.  [Sep 3, 2009: Las Vegas Sands - Too Big to Fail?]   Again, despite the name (which the company is considering changing to get rid of the "Las Vegas") this is now a global company, and one focused more on Asia than the U.S.  [Jul 29, 2010: Las Vegas Sands Wins Bet on Asia in Q2]

Since upping Las Vegas Sands (LVS) to the largest position in the fund last Thursday, the stock has continued it's breakout from a 11 day range [Sep 22, 2010: Nice Base Building in Las Vegas Sands] and in a benign environment this is exactly the type of chart you hope to buy as a breakout candidate. Obviously the question remains how much longer things remain benign.

"Textbook breakout"



Via AP:

  • Las Vegas Sands Corp.'s Singapore properties are performing well and a revaluation of the Chinese yuan might help the company, an analyst said Tuesday in removing his sell rating on the stock.  KeyBanc Capital Markets analyst Darnel J. Bentz said in a note to investors that Singapore visitor arrivals have grown sequentially every month since it opened two new Singapore resorts.  "Arrivals are up 23 percent year-to-date through July," he wrote. "We now expect each resort to appeal to a wide variety of tourists and attract more visitors than we previously forecast."
  • In addition, the revaluation of the Chinese yuan should help the company, he said. Sands owns three casino-hotels in the Chinese gambling enclave of Macau in addition to its Venetian and Palazzo casino-resorts on the Las Vegas Strip.  China announced in June that it planned to introduce more flexibility in the value of its currency, but in the last three months the yuan has risen less than 2 percent against the dollar.
  • Bentz raised his rating on shares of Las Vegas Sands, the world's second-largest gambling company behind Harrah's Entertainment Inc., to "Hold" from "Underperform." He lifted his 2010 profit estimate to 84 cents per share from 52 cents per share and his 2011 estimate to $1.25 from 85 cents per share.
[May 7, 2010: Las Vegas Sands Narrows Loss]
[Feb 24, 2010:  First Phase of Singapore Casino for Las Vegas Sands to Launch in April]

Long Las Vegas Sands in fund; no personal position

Monday, September 27, 2010

Bookkeeping: Starting Home Inns & Hotel Management (HMIN)

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The market remains on a tear.  Don't be fooled by the lack of action in the index...after a big move going sideways remains bullish.  All algorithms are set to buy on the inevitable breakout over SP1150 which surely must come if not in the closing flurry of buying today.....in premarket tomorrow (recall if the market can't lift past a level during normal hours it is the 'urgent buyer's' job...he is happy to buy SPY futures at any price).  Even on days like today you see some near vertical moves in the SPY as seen about 90 minutes ago...weird.  Oh yes tomorrow is a POMO day...Dow 11,000 hats?

I have not discussed Home Inns (HMIN) on the blog before but it is one of the larger and more stable Chinese names (I am excluding the mega caps like China Life).  Normally when I go China travel it is Ctrip.com (CTRP) ..a stock I've had on and off for the better part of a decade.  But the chart turned parabolic.  So instead I have gone with this hotel chain which has been in a bull run since early May.  Friday it pulled back to the 20 day and today has bounced close to 4%...so I am going in with eyes toward SP 1170.  2.2% allocation for now.

The valuation is extreme but right now nothing matters but more fiat money (Japan apparently was the latest with a 2nd currency intervention) chasing fixed amount of stock certificates.  Speaking of which please go see chart of Baidu.com for parabolic.  I considered retarting that name 2 weeks ago but thought the rally in the indexes was going to reverse soon.  Wrong.

Long Home Inns & Hotel Management in fund; no personal position

x

Bookkeeping: Covering Half of Intuitive Surgical (ISRG) on Goldman Downgrade

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Goldman Sachs downgraded Intuitive Surgical (ISRG) this morning; the stock fell exactly to its 20 day moving average which is providing support.  With bears cowered, short positions of any gain are apt to be taken quickly since the market threatens to go on a new run any second.   Hence, to make up for a litany of -3, -4% stop losses I am going to take a measly 2.3% gain on half the position, and look to find a better entry point nearer to $305 to rejoin the short.   If ISRG can fall through this $294 level there would be more downside, but this market is lifting all boats so you cannot count on it.


As an aside, this sort of cover is exactly why its tough to make money on the downside when the day comes... bears will be so exhausted, and so thrilled with tiny victories that by the time the real swoon happens they will mostly be back to cash after making their small wins.

Short Intuitive Surgical in fund; no personal position

Bookkeeping: Weekly Changes to Fund Positions Year 4, Week 8

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Year 4, Week 8 Major Position Changes

To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.

Cash: 63.7% (v 73.8% last week)
22 long bias: 25.9% (v 17.1% last week)
7 short bias: 10.4% (v 9.1% last week)  [Note: Long bond and volatility positions considered 'short']

29 positions (vs 26 last week)

Weekly thought
Last week followed a pattern often seen since March 2009... key resistance levels that could not be broken via trading during normal hours were bested in a premarket surge.  There was no particular reason for last Monday's premarket jump other than "destiny", and that's just what we do 8 out of 10 Mondays.  Bears lost their backstop at S&P 1131 as the drumbeat for QE2 blared through the cathedral of speculators.  Bernanke delivered Tuesday, with almost clear intent to deliver the good ship monetary easing November 3rd.  The last two Fed meetings marked the top of those respective moves and it appeared that might happen again, and by Thursday the S&P had cracked 1131 setting up a more typical (historically) "break out then fake out" that would trap bulls.  Instead, bears were "Teppered" Friday morning by the new stock market mantra of "you can't lose" - whatever happens, stocks must go up.  This morning the headlines of national publications such as USA Today declare a rising stock market as the best form of stimulus... lo and behold, words central bankers have been whispering to anyone who listens.  Somewhere Bernanke is dressed in robe, in a plush recliner, scratching the cat in his lap and whispering "Excellent".

  • ....former Federal Reserve chief Alan Greenspan has suggested a different form of economic stimulus: an old-fashioned stock rally with legs that makes investors feel richer and CEOs more confident. In a recent speech, Greenspan said the "most effective" stimulus is rising stock prices — not more government spending.
  • Many Wall Street experts agree. "The stock market is a barometer of how people feel," says Quincy Krosby, market strategist at Prudential Financial. "Higher stock prices inspire confidence and help ignite spending."
  • Retail investors have pulled cash out of stock funds all three weeks in September, extending a streak of net outflows to 20 weeks


[click to enlarge]



For anyone keeping track with just a few days to go, this is the best September for the S&P 500 since 1939.  This is the best month, regardless of designation, in a decade - even better than the bounce of March 2009 lows - even better then the move in late 2002 or early 2003 off the 2000-2002 bear market.  Hence anyone playing probabilities of a pullback assuming normal action, has been trounced.

Eventually this market will fall or else Netflix will have a greater market valuation then Exxon Mobil - but if history is any guide very few will be positioned for it, and almost all who will be will have suffered serious damages waiting for their moment of victory.  Until further notice the level broken Thursday but quickly regained premarket Friday, S&P 1131, is the floor.  Two gaps beckon - S&P 1090, and S&P 1110 and generally these fill on indexes within 6-14 weeks.  We are roughly 1 month from the first gap but the movement up from said gap has been much more extreme than normal due to the above mentioned performance metrics.  Reverse engineering some Fibonacci levels, the level the S&P 500 needs to reach (using S&P 1040 as the floor) for 1090 to be filled as each of the 3 retracement levels is as follows:

61.8%: S&P 1170
50%: S&P 1140
38.2%: S&P 1120

Obviously 2 of those choices have been left null and void, so if one expects a Fibonacci pullback to come into play the only option remaining is the 61.8% and that would require the S&P 500 to run to 1170.  Which would put it very close to May 2010 highs, creating a nice 'double top' pattern.  Un

Until the psychology that the Fed can micro manage the stock market to exactly where it wants it go to via threats, primary dealer actions using POMO money, or other actions in concert with the PPT changes - this is where we are.  Neutral observers remain amazed this market can rally for much of the past year and a half with a tidal wave of net outflows from the retail investor - hence, unless Economics 101 has been defeated "someone" is buying.  With bears smarting from the hurt Bernanke put on them during QE1 and the epic run in stocks between March 2009 and April 2010, recency bias dominates.

----------------------------------

Last week was the second in a row economic news mattered not at all to the market.  All eyes were on QE and all other news was either ignored, or bought.  Even CDS on European debt exploding out is "no problem" because of course the ECB is the backstop to Europe as the Fed is backstop to the U.S. - can you imagine a world without central bankers inflating bubbles than needing to print fiat money like mad to offset the damage they have created?   Either way it's a light week with almost nothing to move the market - we had a similar week not too far back and I said during weeks like that there is little emotion and hence the market almost always now drifts up without news on pathetic volume.  Hence, until Thursday evening (Friday premarket) only secondary type of data points exist.

The only big day is Thursday overnight, and Friday morning where the globe releases manufacturing data.  Europe has been slowing but it has been ignored.

Tuesday: Case-Shiller House Prices (9 AM), Consumer Confidence (10 AM)
Thursday: Third revision of Q2 GDP & weekly jobless claims (8:30 AM), Chicago PMI (9:45 AM)
(Thursday night) - China PMI data
Friday: Personal Income & Outlays (8:30 AM), Consumer Sentiment (9:55 AM), ISM Manufacturing & Construction Spending (10 AM)

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Portfolio


Running any form of hedged portfolio in this sort of environment is an exercise in frustration.  Especially when the moves are so atypical.   Performance has been stagnant the past 2 weeks as I've incorrectly been looking for even the mildest of pullbacks... none to be found.  The one positive is unlike late spring 2009 (especially May) when I "fought the law Fed and the law Fed won", the portfolio is simply suffering from lack of participation rather than outright serious losses.  Back then, some great gains in the first 2 months of the 2009 as the market imploded, were almost completely erased by May as "the market just had to go down!" ... but did not.  I would only be proven correct in July 2009 but by that point the Fed had cowered me and taken many of my sheckles.  Hence, this time around I am more in a cat and mouse game - throwing a short out here or there, to have it snatched away by my friendly central banker but keeping losses limited.   On the long side of the portfolio it remains nearly impossible to find new entries as all our favorite names have now become the market's favorite names and there is no shame now running stocks up 18 out of 20 sessions, or stocks pulling 15%+ away from even the 20 day moving average.  "I Want my Salesforce.com" has now become applicable to a bevy of stocks.


For the portfolio I kept throwing out some short bait that was hammered.  Being under exposed long, the continuous -3, -4% type of losses on shorts keep eating away at gains from the long side and we remain in quicksand.  I have the right stocks in the portfolio as many of our names are the biggest stars of this move, but obviously in retrospect they were liquidated too early.   I did an an insurance to the downside component this past week with a small (1%ish) SPY put position and if the market makes another 25 or so S&P points I'll add another, and keep doing it every 20-25 points because while hard to believe now - the market can go down.

On the long side:

  • Monday, half of F5 Networks (FFIV) was sold
  • Wednesday, the majority of the remaining Rovi (ROVI) was sold after a big surge due to Apple partnership.  A limit order to purchase shares at the 'gap' from which it surged will be the plan to rebuy shares. 
  • Thursday after the market bounced hard for reasons no one could find after dropping on bad european levels, I went long some SPY calls.  The market reversed back down within hours, through S&P 1131, causing frustration and losses
  • Las Vegas Sands (LVS) was noted as a chart with a multi week base building; when the stock jumped outside of its range, the position size was increased materially (+3%).
  • Friday, because I appeared to be the last man on Earth not buying stocks I added to Thoratec (THOR), VMWare (VMW), Spreadtrum Communications (SPRD), and Riverved Technology (RVBD)
  • A new position was created in "shapewear" name Maidenform Brainds (MFB)


On the short side:

  • Wednesday, Best Buy (BBY) was shorted as it kissed the 200 day moving average for 3 straight sessions.  This was covered the next day for a 2% loss as the stock broke over resistance.
  • Thursday, "good" existing home sales (the numbers were awful) rallied the market after bad european news led to a rarity - a premarket downdraft.  Index shorts (TNA/BGUwere shorted just below S&P 1130, but the market bounced for no particular reason during the day causing a forced cover.  Then late in the day the market plunged but our position was already gone.
  • A longer term 'insurance policy' was bought with a modest SPY put position - Dec 110 puts, hoping for a fill of S&P 1090 sometime in the next 3 months. 
  • Intuitive Surgical (ISRG) and Whirpool (WHR) were shorted. (reason: stocks nearing resistance)
  • Plantronics (PLT) was shorted as the stock was at a make it or break it level - a double top or not.  In this case - not.  The stock was covered the next day for a 2.5% loss. 
  • Friday, the 'best' short of the past few weeks - NASDAQ OMX (NDAX) finally broke over resistance, causing a 4% loss as we were stopped out.  The stock failed to rally with the market for weeks but finally succumbed in the "David Tepper" rally. 

Sunday, September 26, 2010

Updated Position Sheet

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Cash: 63.7% (v 73.8% last week) 
Long:
25.9% (v 17.1%) 
Short:
10.4% (v 9.1%) 


This data is updated weekly and can be found on 'Performance/Portfolio' menu tab on thewebsite. As always the total gain/loss (both dollars and percentages) only apply to the open portion of the position; it is does not apply to portions of the position sold earlier. 

[click to enlarge]


LONG (1 photo file)



SHORT



OPTIONS




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