Thursday, September 29, 2011
Wednesday, September 28, 2011
Friday, September 23, 2011
Sold TZA
Sold TZA at $53.49. Never like to hold short over the weekend, and we have a strong bottom forming signal. Hopefully we'll get a late day run-up as well.
Wednesday, September 21, 2011
Tuesday, September 20, 2011
Volatility Got You Spooked?
Confused by the fact that the stock market just keeps going up and down? Did you get burned taking on a leveraged position only to see the market completely reverse trend and wipe you out? Spooked by the New York Times front page article on volatility? Well don't worry, because we have an actual answer for you. Or rather, Adam Warner has a pretty good dissection of what's been going on lately over at http://www.schaeffersresearch.com/commentary/content/sky-high+volatility+slice+it+dice+it+and+its+gone/outsidethebox_blog.aspx
Friday, September 16, 2011
Sold TZA
Sold TZA at $41.03. Not 100% how this is going to go, but don't want to be short over the weekend.
Wednesday, September 14, 2011
Tuesday, September 13, 2011
Sold MPEL
Sold MPEL at $12.09. Somewhat disappointing trade. We believe it still has more upside and MPEL is still one of our intermediate term picks. However, it's not going up as fast as we'd like, so it's time to turn our sights on other stocks.
Friday, September 9, 2011
Thursday, September 8, 2011
Covered WLT
Covered WLT at $87.67 for 4.95% gain. Slightly disappointed since we had opportunities to do better but we kept on thinking the stock would crack further. We do still think WLT's headed lower, but we don't think the opportunity cost of holding is worth it.
Wednesday, September 7, 2011
Tuesday, September 6, 2011
Sold CVI
Sold CVI at $26.93. Just goes to show that even in a market like this it's always possible to go long and make a profit if you know what you're doing.
Monday, September 5, 2011
September Outlook
So as we come off the Labor Day weekend and enter September trading, what's the outlook?
Well, September is historically the worst month for stocks. This is somewhat counterbalanced by the fact that we're in year three of the Presidential cycle, which tends to be positive. Overall though, we expect to see plenty of volatility in September, so we'll be strongly defensive for the month.
That being said, if we do see opportunities to the long side some of the stocks we'll be looking at will be CVR Energy (CVI), HollyFrontier Corp (HFC), Melco Crown Entertainment (MPEL), and MineFinders Corp. (MFN). Happy trading!
Well, September is historically the worst month for stocks. This is somewhat counterbalanced by the fact that we're in year three of the Presidential cycle, which tends to be positive. Overall though, we expect to see plenty of volatility in September, so we'll be strongly defensive for the month.
That being said, if we do see opportunities to the long side some of the stocks we'll be looking at will be CVR Energy (CVI), HollyFrontier Corp (HFC), Melco Crown Entertainment (MPEL), and MineFinders Corp. (MFN). Happy trading!
Friday, September 2, 2011
Thursday, September 1, 2011
Can You Invest Like Warren Buffett? No. You Can Do A Whole Lot Better
So we read this article over at Slate the other day and were a little befuddled, to put it mildly. Just to get it out of the way, yes the article's central premise is factual. Buffett does have access that the average investor doesn't. He can call up pretty much any company and get a private tour of its plants, distribution channels, etc. He can directly speak to CEOs pretty much on a whim. The US government turned to him to help prevent the financial crisis. He can negotiate special deals and dividends for himself because his seal of approval on a company drives its stock price up. And in addition to his hard work, Buffett is also a very talented stock picker. All things being equal, he'll still outperform you in a head to head stock choosing matchup.
All of which sounds good until you see his performance in recent years. BRK.B has underperformed the S&P 500 over the last three years. These are the superhuman returns that get articles written about your special access? Anybody could have just bought SPY without putting any thought into the transaction and still beaten the Oracle of Omaha.
It would be one thing if Buffett were getting 25% a year like he used to. But he's down 12% over the last 12 months. If that's what being able to call up CEOs whenever you want gets you, then we'll pass.
The simple truth is that Buffett can't deploy his capital as efficiently as he used to because he's just got too much of it. So while the average investor has a stock universe of roughly 10,000 companies to choose from, he's severely restricted in where he can place his money. He also can't just jump out of a stock if it starts to turn against him. As the man himself said, "It's a huge structural advantage not to have a lot of money. I think I could make you 50% or more a year on $1 million. No, I know I could. I guarantee that."
So don't worry about all those special advantages he has, because they still don't get him the returns that can change your life. While we do offer a bunch of products to help average investors like you find good companies to buy, at the end of the day investing is pretty simple. Buy companies that are selling for less than they're worth, sell them when they reach fair value or you find an even cheaper company, rinse, and repeat. When you get to the point where you have so much money you can't find good places to put it anymore, then fly out to our beach house in Thailand and we'll all commiserate with you.
All of which sounds good until you see his performance in recent years. BRK.B has underperformed the S&P 500 over the last three years. These are the superhuman returns that get articles written about your special access? Anybody could have just bought SPY without putting any thought into the transaction and still beaten the Oracle of Omaha.
It would be one thing if Buffett were getting 25% a year like he used to. But he's down 12% over the last 12 months. If that's what being able to call up CEOs whenever you want gets you, then we'll pass.
The simple truth is that Buffett can't deploy his capital as efficiently as he used to because he's just got too much of it. So while the average investor has a stock universe of roughly 10,000 companies to choose from, he's severely restricted in where he can place his money. He also can't just jump out of a stock if it starts to turn against him. As the man himself said, "It's a huge structural advantage not to have a lot of money. I think I could make you 50% or more a year on $1 million. No, I know I could. I guarantee that."
So don't worry about all those special advantages he has, because they still don't get him the returns that can change your life. While we do offer a bunch of products to help average investors like you find good companies to buy, at the end of the day investing is pretty simple. Buy companies that are selling for less than they're worth, sell them when they reach fair value or you find an even cheaper company, rinse, and repeat. When you get to the point where you have so much money you can't find good places to put it anymore, then fly out to our beach house in Thailand and we'll all commiserate with you.
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