The Actions Taken (last week’s plans)
- Covered 3/4 of my short position in MWA for minimal gain – did not want to hold the full position over the long weekend. The resiliancy of MWA run after earnings has been a surprise,
- Traded in and out of ACBFF and CRON for ~10% gains; still hold small position in each as in my ‘big 4 Canada Weed’ stocks
- One comment on ACBFF – my sale was really broken up into small lots (<100) … for most of the day, this and its cousin, APHQF, trade in small lots with larger trades coming in the last 10 minutes or first 5 minutes of market. Taking large positions >500 seems like a liquidity risk and i will focus mostly on CRON and CGC to see if liquidity is better.
The Clues this Week
- Equity / Stocks
- A couple of posts on Canada Weed companies this week here a bit helpful, especially the second on on the different province-level legal structures for retail distribution
- https://seekingalpha.com/article/4176516 – From one of the better technology analysts on Seeking Alpha, a review of AAPL. While his take on AAPL is worth the read, his methodology is even better. Thinking of DCF as a floor for some companies is an interesting approach, but for me i would want to include a larger set of DCF methods like https://finbox.io provides.
- https://seekingalpha.com/article/4175850-american-gridlock – an often read author posted something that is a bit political and may distract people from the key message – the next cyclical downturn in US economy will be different than anything post WWII given the structural changes to demographics, economics, jobs and government social safety nets.
- Actionable take-aways include: a) Non-US investments (Canada, China and India are my current targets); b) high quality corporate debt (Apple, Berkshire, Microsoft); and c) multinational companies w/ global product / services reach, and d) small US companies with superior products / services (IOTS is an example).
- https://seekingalpha.com/article/4176193-pattern-energy-group-go-wind-blows#alt1 – A good valuation study on PEGI. I am over extended on PEGI in several accounts. My goal is to collect the dividends for the intermediate term as i do not see material downside risk to capital ($17.00 would be an extreme macro event imho), and closer to end of year can make better tax management decisions on the range of positions.
- S&P week was quieter than last week
- A very busy ‘news and data’ week; ISM and jobs will be the ones most likely to spark irrational movements
- Jeff Miller’s weekly indicator set is interesting – look at 10yr, SP and inflation expectation
- https://seekingalpha.com/article/4177534-bristol-myers-squibb-one-stock-ignore – Here is an example of why i cannot confidently invest in Pharma companies (even though i have small positions in JNJ and PFE)
- This is NOT to knock this author. This is to suggest that i just do not understand the Pharma business well enough to form strong opionions (that can drive investment decisions). I have also yet to find a Pharma author that simplifies this sufficiently.
- While BMY may be a great investment, i just cannot bridge my ignorance to make that call w/ conviction.
- https://seekingalpha.com/article/4177567-place-like-cone – Brad Thomas on CONE – while the data center REITs fit within my IOT narrative and i was once interested in them as growth vehicle (ala Brad), i find that risk to that assumed growth is greater than i want to take on w/ REIT investment.
- Debt / Bonds
- Automation and Robotics
The Plans for Next Week
- Specific Analysis
- Water component makers is next deep dive for possible new (revisit) narrative – XYL, PNR, ITRI, BMI and MWA are the current list
- Actions Set Up
- Weed Trades – CRON (holds support @ $5.90), ACBFF (holds support @ $6.20), CGC (unclear on patterns after NYSE listing)
- Tech Trades – CLDR, FEYE, IOTS and CY
- Investments – TU, RCI (value entry points not fully discerned – patterns still being understood)
I am extending my work time on this week’s update thru Monday … i am refining tactics and tools some and taking the holiday downtime to refresh, test and possibly share
Credit, Rates and Bonds
S&P and other equity
Jeff Miller’s WTWA https://seekingalpha.com/article/4175654-weighing-week-ahead-will-higher-interest-rates-lead-lower-stock-prices
- From Doug Short – the weekly S&P view; look at the volume patterns at the bottom. The greatest yield by far (from visual) is in the closing hour – does that closing hour direction set the ‘morrow, too?
- Rail Traffic is usually interesting and this table is great … the key for me was the ‘accelerating’ labels
- Port traffic as well – quote: Port traffic improves on both imports and exports. Steven Hansen’s (GEI) analysis suggests that the implications are stronger for global economic growth than for the U.S.
- Weekly indicators … seems quiet and stable other than the 10yr
- And the big indicators … the green trends are holding
- Jeff points to this article as a ‘should read’ https://seekingalpha.com/article/4171190-want-see-bears-go-zoo
- Stay calm, stay focused
- I add – always understand the business (profit) motivations of the people sending you information – few are doing anything for your benefit alone
Actions and Analysis
Lance has a way of articulating heavy data sets to render understandable; the counter to his perspective is that it is very close to mine
More General / Macro Oriented Weekly Reads (a journal of my thinking and reading, not intended for investment advice)
- Positive post on HASI http://www.seekingalpha.com/article/4165016
- A couple of interesting posts on Fed put and market technicals
- I am not feeling stupid for being big cash holder https://seekingalpha.com/article/4167221-ray-dalio-pretty-stupid-cash-holders
- I will take the opportunity costs today for better values tomorrow
- Another view that rates have some resistence https://seekingalpha.com/article/4166727-sentiment-speaks-fed-may-raising-rates-2nd-half-2018
- Acknowledge that this is contrarian view for sure, but the logic / rationality is hard to dismiss
- Jeff Miller’s WTWA https://seekingalpha.com/article/4167288-weighing-week-ahead-will-strong-economic-data-send-interest-rates-higher
- Starting w/ S&P – almost no change on the week, but the range is interesting
- Jeff referenced this article on GDP announcement – this author states: “In the past, that’s held true, but I don’t see a recession anytime soon. Consider the following:” — this level of confidence always bothers me http://blog.yardeni.com/2018/04/stall-speed-inverted-yield-curve-and.html
- Standard reference to Brian Gilmartin on S&P earnings – Q1 is rosy in both directions (rearview and forward) http://fundamentalis.com/?p=7726
- The week ahead announcement schedule is heavy and worth noting (FOMC on Wednesday is possible logjamb)
- S&P unchanged wtw
- 10yr unchanged wtw
- summarily no change across the board?
- This was an interesting reference and a different view of recent actions in some specific stocks https://seekingalpha.com/article/4166216-eeny-meeny-miny-mo-buy-one-now-general-electric
- GE is starting to get somewhat interesting but still too opaque for me
- As the data dude that i am, Jeff made a remarkable and valuable commentary on other author’s data visualizations; quote:
A key question is whether your chart is designed to make an argument or to present data. The colors, terminology, and extension of the future debt levels are the marks of a man on a mission. Technically –
- Any chart of debt that does not compare with assets or ability to pay is telling only half of the story.
- No inflation adjustment.
- The left scale covers a brief time, does not start at zero, and does not use a log scale. It results in an exaggeration of the growth in debt.
- The debt ceiling labels are deceptive. Most would infer that the debt ceiling was doing something positive. In fact, it forced a variety of extraordinary measure and delays in spending that had already been authorized. We should expect a burst of spending when that period ends.
The MarketWatch version really emphasizes the need for a log scale. Looking at time intervals for a fixed increase of $1 trillion is deceptive. Why not look at the time interval for the debt to double in real terms. As I have written, the US and the world have a debt problem. This kind of analysis does not advance the case for those seeking objectivity and sound solutions.
- *** Here Ends Morning Reads***
Specific Actions, Plans, & Analysis
- KR was one of my possible deep dig value mining tasks
- MDT is another company on my watch list – recent Morningstar report helps – i did not start position this week, as stock price jumped above my buy mark http://news.morningstar.com/articlenet/article.aspx?id=859449&SR=COM807
- VTR / WELL – two healthcare REITs that were both in my IRA.
- I sold VTR at my stop-loss capital preservation mark and have reduced my exposure to WELL by about 25% (it is still one of my largest losing positions)
- I was considering additional positions in 1 of these REITs depending on market inefficiencies (price reductions) …
- This article helped change my mind somewhat; i removed VTR from possible list, and will watch WELL carefully https://seekingalpha.com/article/4166828-healthcare-operators-best-portfolio
- My healthcare $$ will be focused in near term on product / services suppliers and not realestate owners
- CY – this is an odd company and my perspective is that it is positioned very well to ride the IOT tailwinds and is rightly focused on BLE and higher featured memory solutions (higher price / user value)
- CCI – the tower REITs dropped big time this week after Sprint and T-Mobile announced another run at merging
- Established 50% position @ 101.55, with >4% yield
- While the expected merger may make CCI leases more complex in short term and lower in intermediate term, i believe that the build out of 5G is more of a FFO driver in the longer term
- INTC – i am moving into capital / profit preservation mode here – there may be more upward price action, there may be long period of consolidation (again), or gravity takes hold … either way, i want to keep my profit / capital
- TCEHY – a high priority target for capital growth portfolio, but hard to find the right price / value
Weekly Reads (a journal of my thinking and reading, not intended for investment advice)
- A pretty good round up of information from Fear & Greed – https://seekingalpha.com/article/4164539-s-and-p-500-weekly-update-one-believes-stocks-can-go-higher
- I am a bit more on the fear side than the author … cash continues to grow thru stop-loss capital preservation steps (see below on stop loss)
- Doug Short’s data on S&P’s week https://seekingalpha.com/article/4164553-s-and-p-500-snapshot-0_5-percent-wow
- my caution lights are flashing all over
- Another cautionary tale from an author i respect – Lance Roberts – https://seekingalpha.com/article/4164614-rally-hits-wall
- Why the ‘buy the dip’ may not work moving forward https://seekingalpha.com/article/4164586-official-buy-dip-failed
- I found myself resisting the learned behavior to pile in on material dips … i have created a rule of thumb: a) use my entry and exit targets with greater discipline, and b) if i left either full or partial position, i will not re-entry unless LOWER than exit point (no dip trades)
- Another good post on the yield curve … seems to get a good dose of attention these days. https://seekingalpha.com/article/4164384-next-yield-curve-inversion-like-2008-1968
- I am watching here … i have two target areas: a) cash equivs at the 1-2 year range w/ treasuries and b) ~10yr investment grade corporates … key entry point decision will be where 10yr rates hit a ceiling (even temporary). My target 10yr yield >3.75%
- Brian Gilmartin on 10yr rates and probability of of yield break-out … more caution https://seekingalpha.com/article/4164616-probability-10-yr-treasury-yield-breaks-late-2013-high
- Looking ahead to the next recession and using unreliable leading indicators is probably a recipe for error … but i find the analysis interesting, and my personal bias is that 2019 is not going to be friendly for economic cycle. https://seekingalpha.com/article/4164507-cbo-shown-next-2-recessions-will-occur
- Jeff Miller’s WTWA https://seekingalpha.com/article/4164595-weighing-week-ahead-costly-quest-fresh-fears
- In the “good news” section, Jeff adds a quote on the earnings and revenue good news so far, but then quickly references Gilmartin on the importance of rates (even more than earnings) http://fundamentalis.com/?p=7708
- Quote: “To date, 17% of the companies in the S&P 500 have reported actual results for Q1 2018. In terms of earnings, more companies are reporting actual EPS above estimates (80%) compared to the 5-year average. In aggregate, companies are reporting earnings that are 5.9% above the estimates, which is also above the five-year average. In terms of sales, more companies (72%) are reporting actual sales above estimates compared to the five-year average. In aggregate, companies are reporting sales that are 1.6% above estimates, which is also above the five-year average.”
- Caution about reading too much into yield curve inversion:
- “Yield curve inversion. So many who are rookies at recession forecasting are jumping on the yield curve inversion. Dr. Robert Dieli, the top expert on this topic, repeatedly warns not to forecast this signal. When it occurs, it will still provide lead time of about nine months. And it is more than just the yield curve. One must also consider the economic background and confirming indicators”
- An opimistic view of where we are in the cycle (i am struggling to agree, but will watch carefully)
- The 10yr nearing the 3% mark
- Earnings yield above 6% again
- Anticipated inflation ticks upward
- Bullish technicals reappear
- Watch the 30yr bond? http://alephblog.com/2018/04/19/why-i-watch-the-thirty/
- Blackrock on 2 fed scenarios … the second ‘happy path’ seems too convenient for me, though i do think their guidance to tread carefully until we see how this fork in the road plays out https://www.blackrockblog.com/2018/04/19/fed-two-possible-paths
- An interesting take on China and one that i find plausible more / less https://www.advisorperspectives.com/commentaries/2018/04/20/china-plays-it-cool
Actions, Plans, & Analysis
- General positioning: a) resist buying dips without strategic confirmation of entry points (regardless if trade or investment), b) watch the earnings reactions for flashes of inefficiency (really low or high prices), c) preserve capital and d) build higher cash flow rates on invested capital
- Stop-loss analysis -> i went thru all my equity positions and created detailed stop-loss targets to both preserve capital and lock in gains. I am not planning on eliminating core holdings, e.g., INTC, CSCO, T, VZ, UMPQ … BUT, i may reduce positions
- VTR – hit the stop loss mark and is now a 0 position
- Problem Children
- positions are so negative that i am just going to claw my way up w/ DRIPs
- a very small position but similar to WELL – relying on DRIPs to help, BUT due to my admiration of LTC management team (and value) i may double down here – in taxable account
- Took profits in speculation trades this week: CRON (my account) and ACBFF (daughter’s account) … will go back in at validated support levels
- Favorite watch items for new positions unless adding: SWKS, MDT, ETSY, TCEHY, PFE(adding)
Posts and readings of note from the week
- Chuck Carnevale (Fast Graph Wizard) published a series of 3 posts on dividend growth stocks (posts 2 and 3 this week). Again, the methodology is more important than the specific recommendations. Here are some of the common analyses done between us and i am not a fan of the specific company
- CAH and OMI – the distribution business has too much risk to margins given the disruption that i see coming from autonomous machinary in supply chain and the every present Amazon threat – too much risk for me given the narrow profit margins in the segment
- WBA – i am avoiding almost all retail given both the Amazon risks (not specifically Amazon across all things but similar supply chain disruption that will risk these retailers margins beyond the risk calculations being used, and the top of the economic cycle) – one would have to have confidence that WBA best margin is in non-discretionary high margin vectors.
- TGT – punted on the retailer over a year ago … no returning
- OHI – way too much risk in the SNF area – i have sold all my OHI and minimized my LTC position which i think is the better company … i MAY increase LTC if bargain basement prices surface
- Here are the companies Chuck recommended that i do own and my view
- PFE – buy more around $34 for nearly 4% dividend – could double current position with cost basis $33.01
- VZ – full position
- RY – full position w/ its cousin BMO
- T – full position – though could extend it if Time Warner deal crashes the stock
- There were several posts on Healthcare REITs that have increased my angst and hence why i upped my stop loss w/ WELL (below)
- TCEHY is one of my favorite nonUS companies regardless of the China government risks … getting my head around the valuation and a good entry point is still baffling, and this author’s attempt did not help much https://seekingalpha.com/article/4162861-tencent-holdings-ltd-americans-finally-ready
- Jeff Miller’s WTWA – https://seekingalpha.com/article/4163039-weighing-week-ahead-stock-prices-already-reflect-strong-earnings
- My key view of this last week – the distracting noise is deafening and hard to focus on strategy and rational investing, but these times may provide similar opportunities as 2008/09 for entry points, but one will have to be very nimble imho
- Watching the details rather than simple aggregates and averages is growing in importance for me – looking thru the details in the recent CPI report out shows that growth above the top level numbers is very narrowly placed: Housing, Energy and Transportation … bad side of those = non-discretionary
- Jeff pointed to Brookings report on debt https://www.brookings.edu/blog/up-front/2018/04/11/the-fiscal-picture-is-worse-than-it-looks-and-it-looks-bad/ … i share people’s angst on debt and the short and long term risk the constant build up of debt (government, personal and corporate)
- a key quote: “Under current law, CBO projects that the debt—currently 77 percent as large as annual GDP—will rise to 96 percent of GDP by 2028. And that’s if Congress does nothing. If instead, Congress votes to extend expiring tax provisions—such as the many temporary tax cuts in the 2017 tax overhaul—and maintain spending levels enacted in the budget deal (which is called the “current policy” baseline), debt is projected to rise to 105 percent of GDP by 2028, the highest level ever except for one year during World War II (when it was 106 percent).”
- The weekly indicator board
- 10 yr is back up to last month’s level
- Equity risk premium is down but not to last month’s levels
- Anticipated inflation ticked up
- Technical health is degrading … any question why i continually to raise cash w/ capital preservation stop-loss orders?
- Lance Roberts posted a good summary around why hold cash https://seekingalpha.com/article/4163050-8-reasons-hold-cash
- Lance thinks (at least in his writings) very close to my own models, so i have to be careful to not find too much support for my own thinking
- Another good post on the decelerating rate of consumption and the growth of debt http://www.seekingalpha.com/article/4163082
- Blackrock’s Q2 advice took some effort to get enough details to make sense of it https://www.blackrock.com/investing/literature/whitepaper/bii-global-investment-outlook-q2-2018-us.pdf
- I was paying the closest attention to the bond proxies section … the advice is a bit late if you ask me; this would have been best to have heard and implemented in early January. Blackrock’s disdain for RUST is easy after the drubbing received in March
Actions and Plans
- WELL – Stop loss executed in taxable account – position is now 50% with greater unrealized loss.
- CRON / ACBFF – took new speculation positions at recent lows – @$5.35 and $5.49 respectively – both have stop loss orders in place that keep moving up
- Still haning on to 2/3 of the position in June 250 SPY puts … the next up/down cycle will offer some profit
- ZBH – as close to $100 as possible for a good value entry
- ETSY – still working the right entry point, but i love the business in future ($26-$27 is where i am interested, vs current $29.87)
- CLDR – was watching this for speculation, but the recent jump took my risk tolerance off the table … will watch for another momentum trade
- Water Equipment – BDI, MWA, XYL, ITRI … the list is just getting started, but smart water infrastructure is going to be a non-discretionary expense, investment across the globe in the next 5-10 years. (my opinion)
- ILP.pr.d – added another portion to this preferred position. This is only 1 of 2 preferred stocks that i own outside of an ETF (PGX and PFF); the yield rose to my comfort / low risk zone, so grabbed a bit more to up the cash flow (taxable)
After a short vacation and a small bout with a gastro bug, i have the focus to post. Just a reminder. I write this blog to help me understand, plan and make investment decisions. This is NOT any semblance of recommendation or advice. Just my way of holding myself accountable for sound, data-based investment planning and execution … using the best Plans and Clues I have!
- Doug Short put together a good look at Treasury yields – worth the read for additional historical context. https://seekingalpha.com/article/4161348-treasury-yields-long-term-perspective
- Lance Roberts posted on debt and inflation … i am WAY more anxious about debt than inflation. There is a narrative that can be built that depcits debt as the method being used to prevent disinflation. Sooner or later unless there’s a major jubilee, the debt must be paid. https://seekingalpha.com/article/4160453-ballooning-debt-really-inflationary
- A short’s perspective on Canada Weed https://seekingalpha.com/article/4161019-aurora-canopy-time-sober-90-percent-downside
- This guy may be fueling his own position – short, so a bit overly negative perhaps
- The one big retort I have on the author’s position is using the average production cost from areas (WA, OR, CA, CO) where growers can actually grow outside. It’s rational for me to see how outdoor farming will be lower cost as well as higher capacity
- I do agree, however, that these companies are NOT investments yet.
- Brian Gilmartin posted on S&P earnings yield and where that indicator sits going into Q1 earnings season. I totally share Brian’s opinion / anxiety in one of the comments. I will paste both the question and Brian’s answer as it’s spot-on. https://seekingalpha.com/article/4161628-s-and-p-500-earnings-yield-remains-elevated-good-thing
- Q: Looks like we are approaching earnings season with market weakness… could be good for the market
- A: Market weakness but earnings season optimism. Dont like to see all the bullishness headed into earnings season
- I have read several posts / articles that sugggest earnings will create the floor in market over the next few weeks … i think misses will be severly punished, and there may be collateral damage with competitors and / or suppliers to those punished.
- Jeff Miller WTWA https://seekingalpha.com/article/4161614-weighing-week-ahead-trump-trade-reached-tipping-point
- A perfect quote from Jeff on this graph; as i was surprised when i reviewed as i was expecting Friday’s close below Monday’s. Quote: “The loss this week was only 1.4%, but the dramatic daily moves made it seem like more. The trading range was 4.8% including 3% in a single day.” -> it felt much worse than it was …
- Interesting that both Rail and Trucking are up —
- Weekly Indicators – Earnings Yield over 6, 10yr down from last month, technical health declining … Here’s Jeff’s summary: “I have increased the 9-month recession probability to the 18% range. I am monitoring, but not yet especially worried. The long-term technical health is 1.5, but I rounded it up to reflect the change.”
- Jeff, like many of us, is keeping eye on Trade War consequences, and has a great summary: Quote: “What is the worst case from a trade war? Estimates suggest it would lower world GDP growth from about 3.5% to 2.5% in China and the US – a reasonable level, but not the fuel for a big rally in stocks. Since none of the US or China proposals will take effect for two months, there is plenty of time to negotiate and modify positions. On the US side there is evidence that this is already happening with close allies. But there is a reason for additional worry – the loss of business confidence.” My bold on where i agree strongly.
- One data point a trend does not make … but i also negatively react to analysts who parse out a report to point out how things are not what they seem. https://seekingalpha.com/article/4161585-suspiciously-pessimistic-march-jobs-report
- This is a great post and i walked away w/ 2 key points https://seekingalpha.com/article/4161625-trade-wars-just-beginning-war-fight-indefinitely-shrinking-pie
- Helps explain some of the motivation behind the huge China infrastructure investments into Africa / India – that’s where consumption growth will be in long term
- Fits as well into the debt-driven consumption that many of us are concerned about … where is the next debt wall, and what will be the fall out
- From the folks at Fast Graphs, the first in a series of posts of potential value investments https://seekingalpha.com/article/4161426-dividend-growth-stocks-remain-expensive-50-part-1-5
- As always from Chuck’s posts, the methods and tool usage are more important than the specific content
- REIT master, Brad Thomas, posted on VTR https://seekingalpha.com/article/4161244-ventas-inc-grand-slam
- The comment section is equally valuable
- I share Brad’s interest in VTR and am looking to add to position
- A short post on Friday’s job reports … this points out that the March numbers while below expectations are maybe not as important as the downward adjustments to January and February http://www.crossingwallstreet.com/
Plans and recent actions
- Sold off portion of PEGI in taxable account to preserve capital – sold for nominal gain after x-Div. This bring PEGI position into more rational size and increases the cash position – target reinvestment is VTR with a target around $49.50
- Sold my full CRON position in my speculation trading account for loss of ~10% which was my stop target. (see above Weed pointer). I will continue to look for trades in the large 4 TMWJF, ACBFF, AHPQF, and CRON, but the winds need to shift to more positive sentiment after the bears make some money. These are NOT investments yet, IMHO.
- Bought several SPY June puts, and sold 1 for decent profit – holding the remaining puts for the next big swing
- My investment discards at today’s valuations: CY, SQ, and HBAN … both CY and SQ have solid business plans and fit within my narratives, but valuations (Risk / Reward) are just too high
- My investment ‘watch’ for rational entry point within today’s ranges are: PFE, ZBH, and VTR.
- My speculation trades are focused on: ETSY, IOTS, CRON, ACBFF and APHQF … no positions today
- The dilemna that central bankers face … while this is focused on Japan, it is not too hard to generalize to EU and US. I think the scenarios following these breakdowns are terrible in most instances. Successful outcomes 5-10 years from this points seem like threading the eye of a needle w/ a camel, or … the perfect goldilocks global economy (and politics) http://www.seekingalpha.com/article/4156394
- A decent post from an often read author, Rida Morwa – SA profile, on PEGI (one of my problem children) https://seekingalpha.com/article/4155835-green-energy-stock-yields-10-percent-opportunistic-buy-50-percent-return-potential
- A rather positive environmental scan with a bias toward stocks … i did not find it actionable, however https://seekingalpha.com/article/4157323-s-and-p-500-weekly-update-pause-secular-bull-market-investor-worries-everywhere
- Jeff Miller’s WTWA
- The S&P chart shows clearly how it felt too
- Weekly Indicators
- Anticipated inflation is down a notch – pretty interesting, and not expected by me
- Looking month to month data helps imho … in the month, lots of activity, not much movement in 10 yr, Inflation, and S&P earnings
- Another environmental scan – this one is a bit more neutral bias https://seekingalpha.com/article/4157321-will-fed-rate-hike-dollar-bullish
- Lance Roberts posted a brief update this week due to his vacation, and there was one paragraph that is striking and cautionary – https://seekingalpha.com/article/4157373-investors-jump-back
- Quote: “But then again, since the media’s “business” is to sell advertising, the best way to keep fund managers “paying” for ads is to make sure investors keep buying. Not surprisingly, since investors have been repeatedly “taught” to “buy the dip” over the last 9 years, it is not surprising to see they did just that. In fact, currently, investors are more long stocks today, and have the least amount of cash, since 1999.”
- My take – anytime Main Street comes jumping back in like banshees … the top is nigh
- There is also a good point about Central Banks and China included as another warning
- Quote: “Appropriately, this central bank handoff is also the topic of the latest presentation by Matt King, in which the Citi credit strategist once again repeats that ‘it’s the flow, not the stock that matters’, a point we’ve made since 2012, and underscores it by warning – yet again – that ‘both the world’s leading marginal buyers are in retreat.’ He is referring to central banks and China, the world’s two biggest market manipulators and sources of capital misallocations.”
- A great MIT Technology Review post on renewable energy and one of the best views on the required retrofit scale … there is a crisis and yet we just cannot seem to get our cummulative energy (pun intended) to solvve the problem … worth the read https://www.technologyreview.com/s/610457/at-this-rate-its-going-to-take-nearly-400-years-to-transform-the-energy-system
- It seems like Brian Gilmartin is making an inference on S&P earnings and attributing the increased estimate to tax changes in US … at surface level that makes sense, so this is just a reduction in expenses, not a business growth … should i pay more for the business as the inherent future value will increase? I am skeptical and need to wait to see how the companies use this additional cashflow to reinvest FOR future value. http://fundamentalis.com/?p=7610
- Bond advice for the short end of the duration curve https://www.advisorperspectives.com/commentaries/2018/03/17/rare-bond-market-conditions-set-up-complacent-investors-for-subpar-returns
- I understand their thesis and points, but not sure that i agree … the front end of that duration curve is going to get whipsawed w/ Fed actions. I remain more interested in the 7-10yr window with high quality issues. Tho that has been challenging as of late as my bond prices have declined
- One tactic to follow this author (and i have thought about) would be to buy VCSH which has held value fairly well during the last couple months of churn
- Invesco on CPI and how apparel factored in … i found interesting https://www.advisorperspectives.com/commentaries/2018/03/16/inflation-takes-a-breather
- An important question asked, but the answer was wowfully insufficient https://www.advisorperspectives.com/commentaries/2018/03/15/china-japan-are-reducing-us-dollar-holdings-why
- An interesting look at networth https://www.financialsamurai.com/the-average-net-worth-for-the-above-average-person/
A bullet to itself … the risks presented here are making me start to lose sleep https://seekingalpha.com/article/4157393-fed-hike-set-collide-mccabe-firestorm-trying-week
Actions and Plans
- For the most part, i am still in capital preservation mode and anxiously waiting for the political fallout and FOMC update to see what new opportunities and risks will surface
- I sold 2 of my 3 SPY June 242 puts … i sold right around $8.00 after buying at $6.09 … i will continue buying / selling SPY as a much easier income producing method than individual stock calls / puts. (at least given current market behavior and my confidence)
- Problem Children
- PEGI – watching carefully – may still take some losses to offset gains elsewhere in taxable account
- WELL –
- New ideas
- SQ – Square … what is not to love about this except the valuation – more diligence required here too
- ETSY – here is a recent post https://seekingalpha.com/article/4157327-etsy-solid-growth-path
- I have not done due diligence here yet but it is now on my list
- I see two longer term drivers for ETSY business – a) gig generation is getting stronger and better at it, and b) if economy / jobs falter, more will resort to self-sufficiency, e.g., Etsy
a good post from one of my favorite writers using tariff scenarios from Goldman https://seekingalpha.com/article/4155949-tillerson-kudlow-cpi-oh
bottom line – no scenario is stock positive … oh my!