I got into trouble on PBF i bought because of the story not paying attention to technical set up. That is ALWAYS a mistake. I didnt even know the story well enough, not fundementals. The story i liked was the Icahn will be one of Trumps advisors. STUPID mistake.
Friday, January 6, 2017
Its too hard to deal with illiquid positions and maintain a day job. I like targeting small stocks but the liquidity needs to be there.
Unfortunately 100% of my success the last 6 months has been in illiquid shares.
New rule: Once I deal with what i currently own, I will not own more than 3 illiquid names at one time.
Unfortunately 100% of my success the last 6 months has been in illiquid shares.
New rule: Once I deal with what i currently own, I will not own more than 3 illiquid names at one time.
Thursday, January 5, 2017
Monday, January 2, 2017
I read a good article: http://www.safalniveshak.com/email-exchange-with-sanjay-bakshi-on-valuations/
It highlights that if you buy a company with a moat with good long term business prospects than there is virtually no reason to sell, even if the company gets to relatively absurd valuations. Unfortunately with the rapid pace of change I think it's pretty hard to tell which companies have a moat around them. Probably the best long term bet is FDX. If I had bought it 80 points ago maybe I'd hold it forever, but today it's at a multiple that I'm not willing to pay for... and i dont own it. If and when we get a recession this is one to buy. I also really like long FDX and short UPS. If autonomous trucks do arrive within the next ten years, FedEx will clobber UPS. UPS is severely hampered by its unions.
Also was looking at my notes in Zebra for Lion country:
A few things stand out:
1. when a large segment of the market gets overpriced and corrects everybody gets slammed
2. Look for young growing companies with solid balance sheets, experienced, entrepeneurial leaders, and a niche
3. GARP - growth at a reasonable price
I think WLDN and BBI.V squarely fit in point 2.
It highlights that if you buy a company with a moat with good long term business prospects than there is virtually no reason to sell, even if the company gets to relatively absurd valuations. Unfortunately with the rapid pace of change I think it's pretty hard to tell which companies have a moat around them. Probably the best long term bet is FDX. If I had bought it 80 points ago maybe I'd hold it forever, but today it's at a multiple that I'm not willing to pay for... and i dont own it. If and when we get a recession this is one to buy. I also really like long FDX and short UPS. If autonomous trucks do arrive within the next ten years, FedEx will clobber UPS. UPS is severely hampered by its unions.
Also was looking at my notes in Zebra for Lion country:
A few things stand out:
1. when a large segment of the market gets overpriced and corrects everybody gets slammed
2. Look for young growing companies with solid balance sheets, experienced, entrepeneurial leaders, and a niche
3. GARP - growth at a reasonable price
I think WLDN and BBI.V squarely fit in point 2.
Saturday, December 31, 2016
Getting started
I'm going to use this blog to sharpen my thoughts. This is not really meant for outside readers...but if you come across this fine... unless of course my thoughts are proven correct in which case this actually is meant for outside readers. Nothing here is meant to be investment advise, this again is only for my personal use to sharpen my thoughts, and keep a record of what I'm doing so that I can learn. Making this just for personal use gives me some confidence that I'll be able to effectively use this to help me and keep this up - which otherwise may be difficult given my job. It also means I'm not going to spend too long on grammar, spelling, or punctuation....
I'm currently reading George Soros's, Alchemy of Finance. Near the end of the book there are some interesting paragraphs. Part of which has inspired me to pick this back up. If you've read other posts, or other past failed blogs... sorry.
"Financial markets themselves functioning imperfectly as a mechanism for predicting events in the real world there's always a divergence between prevailing expectations and the actual course of events. financial success depends on the ability to anticipate prevailing expectations and not real world developments... that means that the markets themselves can be viewed as formulating hypothesis ease about the future and then submitting them to the test of the actual course of events the hypotheses that survive the test a reinforced, those that fail are discarded... Reading the market as a mechanism for testing hypotheses seems to be an effective hypothesis. it produces results that are better than a random walk. The real time experiment has shown how greatly my decision making process is influenced by the market action. at first sight this might seem to contradict my original contention that markets are always wrong but the contradiction is more apparent than real markets provide the criteria by which investment decisions are judged.
"Financial markets constantly anticipated events both on the positive and on the negative side which failed to materialize exactly because they have been anticipated"
"To bet against prevailing expectations is far from safe . It will be recalled that in the boom bust model events tend to reinforce prevailing expectations at the time and contradict them only at inflection points and inflection points are notoriously difficult to identify. now that the contrary and viewpoint is become the prevailing bias I've become a confirmed anti-contrarian"
My take on this: First i need to record my reasons for buying stocks - and if they dont work cut and if they are working press. (reason for the blog).
Second: if we now have actual policies of volatility suppression maybe the markets are not helping us anticipate events and are not helping us see them which means that the next event will be even more catastrophic. Markets seem to shake of all downturns. this means prevailing wisdom is to buy all dips maybe short term money making strategy but long term will kill your chances of success. Is there actual volatility suppression occuring? Do central banks buying stocks and pensions shorting vol count as volatility suppression? I think it does if that is there intention.
Third:Confidence is high that's not a good recipe for gold unless confidence has peaked. it's at historically very high levels but there's no evidence of the peak. Also liquidity is beginning to drain from the system looks like I might've made a mistake with my gold. liquidity is draining through from the system via interest rate hikes. people truly believe that interest rate hikes are going to continue into the future will take a few meetings of them not being Hiked for that to change. I should get out of HL on Monday on any weakness I should take it easy with JDL see what comes.
Overall I have a number of stock positions. Some of them I'm not so comfortable with. Compounding my uneasiness is that they are not very liquid. I've been expermenting with applying technicals to very illiquid stocks. My thought is that it should work. Except 1. the stock is easier to manipulate to fit a certain picture (if someone wanted), and 2. my tight stops get triggered to often resulting in my needing to ease my stop losses. Two is obviously more of the real concern.
what I own and why:
$SEA - noticed through Noble House that container rates that bottomed at $600 shot up to $1400. There have also been massive consolidation in the industry that should enhance their ability to price set vs price take. I think the USD strength should encourage imports and be positive for them. Also sentiment is black bearish. PE is 5 or 6 and pays a 5 or 6 % dividend . Seems to be consolidating above 200 ma. The risks are: 1. trade tarrif is enacted which cuts down on imports 2. global recession/us recession 3. ships are not scrapped fast enough and there are two many ships relative to demand. 3. china to prop gdp keeps building ships. This is prime case for pressing if working and dumping if it doesnt.
$GBTC -Indian ban on cash and china controls on capital flight are forcing people into non traditional currencies. Bitcoin is the least regulated and most mobile. perfect correlation to weak yuan. risks: 1. chinese capital control reverse or chinse yuan reverses direction. 2. bitcoin is hacked. 3. another block chain currency beats bitcoin. 4. a better bitcoin etf comes to market. 4. this fucker is very illiquid. I'd press now except its too illiquid. Is there a better way to play this trade?
$UNG - fairly tight supply demand balance. any prolonged cold will shoot price much higher. seemingly setting up a very cold winter. the structure of ung sucks. I'm assuming it's rolling contracts. for some reason NG companies havent been acting well either. need another vehicle.
$TLT - bonds got crushed around the time of Donal Trumps election. They were due for a pullback and are at historically reculous levels. But the election was defintiely involved in streching them I dont think trumps policies will have an impact for some time. so grwoth will continue to slow. that makes government bonds a very good place to be. Spread between US bonds and other governments are huge. one will go to meet the other. Risk: growth picks up, or inflation picks up.
I own more... i'll list them later
I'm currently reading George Soros's, Alchemy of Finance. Near the end of the book there are some interesting paragraphs. Part of which has inspired me to pick this back up. If you've read other posts, or other past failed blogs... sorry.
"Financial markets themselves functioning imperfectly as a mechanism for predicting events in the real world there's always a divergence between prevailing expectations and the actual course of events. financial success depends on the ability to anticipate prevailing expectations and not real world developments... that means that the markets themselves can be viewed as formulating hypothesis ease about the future and then submitting them to the test of the actual course of events the hypotheses that survive the test a reinforced, those that fail are discarded... Reading the market as a mechanism for testing hypotheses seems to be an effective hypothesis. it produces results that are better than a random walk. The real time experiment has shown how greatly my decision making process is influenced by the market action. at first sight this might seem to contradict my original contention that markets are always wrong but the contradiction is more apparent than real markets provide the criteria by which investment decisions are judged.
"Financial markets constantly anticipated events both on the positive and on the negative side which failed to materialize exactly because they have been anticipated"
"To bet against prevailing expectations is far from safe . It will be recalled that in the boom bust model events tend to reinforce prevailing expectations at the time and contradict them only at inflection points and inflection points are notoriously difficult to identify. now that the contrary and viewpoint is become the prevailing bias I've become a confirmed anti-contrarian"
My take on this: First i need to record my reasons for buying stocks - and if they dont work cut and if they are working press. (reason for the blog).
Second: if we now have actual policies of volatility suppression maybe the markets are not helping us anticipate events and are not helping us see them which means that the next event will be even more catastrophic. Markets seem to shake of all downturns. this means prevailing wisdom is to buy all dips maybe short term money making strategy but long term will kill your chances of success. Is there actual volatility suppression occuring? Do central banks buying stocks and pensions shorting vol count as volatility suppression? I think it does if that is there intention.
Third:Confidence is high that's not a good recipe for gold unless confidence has peaked. it's at historically very high levels but there's no evidence of the peak. Also liquidity is beginning to drain from the system looks like I might've made a mistake with my gold. liquidity is draining through from the system via interest rate hikes. people truly believe that interest rate hikes are going to continue into the future will take a few meetings of them not being Hiked for that to change. I should get out of HL on Monday on any weakness I should take it easy with JDL see what comes.
Overall I have a number of stock positions. Some of them I'm not so comfortable with. Compounding my uneasiness is that they are not very liquid. I've been expermenting with applying technicals to very illiquid stocks. My thought is that it should work. Except 1. the stock is easier to manipulate to fit a certain picture (if someone wanted), and 2. my tight stops get triggered to often resulting in my needing to ease my stop losses. Two is obviously more of the real concern.
what I own and why:
$SEA - noticed through Noble House that container rates that bottomed at $600 shot up to $1400. There have also been massive consolidation in the industry that should enhance their ability to price set vs price take. I think the USD strength should encourage imports and be positive for them. Also sentiment is black bearish. PE is 5 or 6 and pays a 5 or 6 % dividend . Seems to be consolidating above 200 ma. The risks are: 1. trade tarrif is enacted which cuts down on imports 2. global recession/us recession 3. ships are not scrapped fast enough and there are two many ships relative to demand. 3. china to prop gdp keeps building ships. This is prime case for pressing if working and dumping if it doesnt.
$GBTC -Indian ban on cash and china controls on capital flight are forcing people into non traditional currencies. Bitcoin is the least regulated and most mobile. perfect correlation to weak yuan. risks: 1. chinese capital control reverse or chinse yuan reverses direction. 2. bitcoin is hacked. 3. another block chain currency beats bitcoin. 4. a better bitcoin etf comes to market. 4. this fucker is very illiquid. I'd press now except its too illiquid. Is there a better way to play this trade?
$UNG - fairly tight supply demand balance. any prolonged cold will shoot price much higher. seemingly setting up a very cold winter. the structure of ung sucks. I'm assuming it's rolling contracts. for some reason NG companies havent been acting well either. need another vehicle.
$TLT - bonds got crushed around the time of Donal Trumps election. They were due for a pullback and are at historically reculous levels. But the election was defintiely involved in streching them I dont think trumps policies will have an impact for some time. so grwoth will continue to slow. that makes government bonds a very good place to be. Spread between US bonds and other governments are huge. one will go to meet the other. Risk: growth picks up, or inflation picks up.
I own more... i'll list them later
Wednesday, February 22, 2012
Lost souls
If any lost cyberspace souls happen to find this barbaric relic of a financial blog, please redirect to my new and improved blog http://drinkingfromthehose.blogspot.com/
Tuesday, December 14, 2010
FOMC Statement
Today the Fed reaffirmed its commitment to QE II. No real shocker here. I think it will be quite some time before a policy change...
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