Weekly Update, Nov 5, 2017

What a week … just a rollar coaster for my portfolio … actions taken and my personal thoughts at the end

  • Avondale interesting executive quotes http://avondaleam.com
    • “this is a broad-based growth…We’re really growing across the globe…better than we’ve seen in over five years. Really, really coming out of the recession was the only other time we saw this kind of growth number.” —UPS (Logistics)
    • “the data that we see has the ocean utilization at over 97%. So you have a high, high, demand environment now with capacity really becoming tight…then you get up in the air, this is the fourth consecutive quarter where you really had demand outpacing capacity.” —UPS (Logistics)
    • “The inventory destocking would seem to be behind us, and we’re building against the underlying growth in the categories going forward” —Colgate Palmolive (CPG)
    • “It’s an environment where the uncertainties are unusual in terms of number, scale and insolubility, where prospective returns are just about the lowest they have ever been, where asset prices are high across the board and where pro-risk behavior is commonplace. It’s impossible for us to predict what will catalyze the market’s correction, how severe it might be and when it will occur…We do not believe this is a time in the cycle for reaching for return” —Oaktree (Investment Management)
    • “the kinds of workloads now that are moving to the cloud has qualitatively changed. In the past we participated, but a lot of Tier 1 workloads were not on Microsoft stack, whereas now, a lot of Tier 1 workloads are in fact increasingly on Microsoft cloud.” —Microsoft(Enterprise Tech)
  • This is aligned to some of my observations as i have focused on shorter term trades over a small universe of stocks (<15 names).  https://seekingalpha.com/article/4120041-black-hole-passive-investing-became-new-qe
    • wide (hard to explain) moves occur at market open
    • big money (large trades) determine the final close in the last 15-20 minutes of trading
  • I could not make much sense of this post, but i need to re-read in reference to my passive holdings in VNQI.  I have a good gain without tax consequences, so … open question
  • Doug Short’s weekly S&P chart (via Jeff Miller)  — the week was much more variable than the index based on my observations
  • This came from Bespoke (via Jeff Miller) that is very interesting given the perceived confidence and overheating of capital assets … but confidence is not as high as pre-2007
  • Jeff’s weekly indicators … 10yr notes are up (and a range this week of of 2.387% high to a 2.33% low – CNBC Graph) … also note that anticipated inflation is lower this quarter than last (that’s something to continue watching imho)
  • Another post worth reading, and especially the comments … https://seekingalpha.com/article/4120577-heisenberg-uber-bull
    • the one point that struck me and still has me scratching my head is the rate gap between US and EU

Commentary / Actions

  • Two stocks went irrational this week and I bought both of them:  HASI and NWL.  HASI i bought at $22.42 and sold 50% of that position at $23.50 in my non-taxed account; this increased my HASI position to full allocation with cost basis of $20.37.  NWL i bought on the 25% down day at $30.37 (just an irrational exaggeration) and then sold the full position the next day at $31.68.  I would have kept them if needed to add to my position (cost basis of $11.48) … without that very low cost basis, i would not be a long term holder of NWL.
  • I also sold 50% of one of my speculative weed companies – APHQF which i bought at $5.26 and sold at $6.06.  I have additional shares in APHQF and will add to it if price cycles down again.  I also hold a small position in TWMJF purchased at $10.23 … both are Canada companies.
  • I took small profits in O in my non-taxed account to add capital to HASI and prepared to take on more BEP but it did not get to my price target under $33.00.
  • Cash positions are still uncharacteristically large and i will continue to take advantage of short term moves like HASI and NWL, but will not be looking for new long term positions (unless something really hits the floor)
  • Preferred stocks yielding >5% and investment grade corporate bonds less than 10years are being watched carefully … especially on the days where interest rates spike temporarily
  • My problem children really made the week a pain … T and GE
    • T is just a mess and my position is maxed out and i have written calls against my losing positions to reduce loss – but will most likely sell 1/3 of my position in December for tax purposes
    • GE is a hold until this week’s strategy discussion … the stock could go either direction and i want to know what the business is going to look like before i exit / increase my holding … i have watched this come down from ~$35 but with a cost basis of $17.63 i may need to make a decision as i will not sit in GE w/ loss.

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