Albie's Take:
My predictions for the S&P500 are that we will see it arrive at the Monthly Resistance this month or next and that after that time stocks will take a downturn toward Monthly Support - which should last some five or six months. Of course, this is not accounting for any catalyst that should turn the tide to break Monthly Resistance and head up to the Highs of 2007. From more of a fundamental point of view, it seems that things are going better for the U.S economy as of late. We seem to be taking a turn out of the 'mud', so to speak. So I honestly cannot tell you what the catalyst to go lower will be upon reaching Monthly Resistance.
My analasys of the Daily and Monthly Support and Resistance is as follows: The S&P500 was riding Daily Support last week but this week has gains going half way up towards Daily Resistance. It has gained new highs in Febuary and March of this year, excellerating up past the Highs of May 2011 and going up past that Resistance line. Technically speaking, the Daily Resistance line should be drawn much lower, as of last weeks major drop but it seems to have broken past those grounds and is back on track with its old Daily Support and Resistance lines. It now is heading toward Daily Resistance of 1418. If the S&P500 has no catalyst that takes it lower, it will in time head up to its monthly Resistance of 1434.4. I expect profit taking and a drop to Daily Support though, before that time. Even if it gets to Monthly Resistance however, it still has 2007 Highs to beat at 1575.1 Why does all this matter? Well, my opinion is that the S&P500 will find a catalyst at some point to gravitate back towards Monthly Support before it ever tries to break through 2007 Highs.
Friday, March 16, 2012
Thursday, March 1, 2012
Take One: China, Europe and US Growth Increase.
Albie's Take:
The S&P500 hits Daily Support level. Why does this matter? Well, firstly it gives you an idea that a lot of odds are in favor of stocks rising as a apposed to falling any further! After a week at Resistance levels, and a week dabbling in the middle, the S&P00 has finally made a touch down with Support. Despite so much good news this week, the Dow hitting its highest levels since 2008 and the economy of China, Europe and the US showing positive signs of growth, the S&P500 still found its way to drop to Daily support levels. I see this as a good thing, as stocks will probably begin to rise. It's not that stocks haven't already been rising but the weekly fluctuations have gone to either extreems fairly quickly.
The S&P500 hits Daily Support level. Why does this matter? Well, firstly it gives you an idea that a lot of odds are in favor of stocks rising as a apposed to falling any further! After a week at Resistance levels, and a week dabbling in the middle, the S&P00 has finally made a touch down with Support. Despite so much good news this week, the Dow hitting its highest levels since 2008 and the economy of China, Europe and the US showing positive signs of growth, the S&P500 still found its way to drop to Daily support levels. I see this as a good thing, as stocks will probably begin to rise. It's not that stocks haven't already been rising but the weekly fluctuations have gone to either extreems fairly quickly.
Thursday, February 23, 2012
Take One - S&P500
Albie's Take:
The S&P500 is now on its way down to Support after having hung around at Resistance for about a week. Even with all the good news regarding Greece's bailout deal with the Euro, we find there still to not be enough news to create a catalyst to alter the S&P500 decent.
2-25-12: I find myself mistaken slightly. It seems that there was enough catalyst to keep the S&P500 in limbo between Resistance and Support for most of the week. My prediction: As soon as there is a lack of fundamental reasons to keep the market up, the S&P500 will drop to Daily Support.
The S&P500 is now on its way down to Support after having hung around at Resistance for about a week. Even with all the good news regarding Greece's bailout deal with the Euro, we find there still to not be enough news to create a catalyst to alter the S&P500 decent.
2-25-12: I find myself mistaken slightly. It seems that there was enough catalyst to keep the S&P500 in limbo between Resistance and Support for most of the week. My prediction: As soon as there is a lack of fundamental reasons to keep the market up, the S&P500 will drop to Daily Support.
Thursday, February 9, 2012
Take Three: S&P500 Riding Resistance Line, Super Cycle Theory, & DMND's Cooked Books
Albie's Take:
2-10-12: After having ridden the top of the Resistance line all week, the S&P500 found it's excuse to take profits today and drop downtoward support. Problems with Greece's debt deal is no doubt the 'excuse'. Here was my report from earlier this week:
2-8-12: "The S&P has been riding the Daily Resistance line now since last friday and may continue in same manner or break Daily Resistance if all goes well with the Greek debt deal. But pressure is there for traders to take profit and there is reason to start taking a short position. Personally, I would wait till the high's of the news wears off and there is not much fundamental play before I took a short position."
As to the Australian dollar (AUD), it has reason to hold strong against its other currency pairs - especially the EUR: "Australia Holds Key Interest Rate at 4.25%
"Australia’s central bank unexpectedly kept its benchmark interest rate unchanged as domestic growth withstands Europe’s debt crisis, sending the nation’s currency soaring to a six-month high."
www.IronFX.comMARKETS UPDATE
07 Feb 2012"
However, if news breaks in favor of the Greece debt deal, the EUR will have some new fighting power. Presently, speculation about the results are keeping the EUR strong.
Troy's Take: The Super Cycle Theory: This idea was made famous by famed investor Jim Rogers. This concept says that the investment world goes through 20 yr Bull and bear cycle markets in Stocks and Commodities. This concept goes back at least 100 years but I will start from 1940.
1940-1960’s- Stock/Equities were in a Market Bull. We were just recovering from the Great Deflationary Depression. In the early 1950’s the Dow returned to its pre-Depression price.
1960’s to 1980’s- Equities fell into a major bear market. The market was basically flat and the price of Gold surge and basically equaled the price of the Dow at about 850. There was also high inflation during the 1970’s. Stocks (except commodity stocks) were not a place to be.
1980 to 2000-Things changed again. Equities were now back in a bull market. From 1980 to 2000 the Dow went from 835 to over 10,000. The Gold price plummeted from $800 to approximately $260 per ounce. This is what most average investors remember and hope will return soon. This is what I call “Pathological Nostalgia” because it’s not going to return anytime soon.
2000-2020. Things changed again. We started our major recession after the stock market bubble burst in what year? That would be about 2000. Imagine that… This was when gold, silver and oil and other commodities started to trend upwards. This was kinda when gas prices started to get higher… The price of gold fell to about 250 per ounce to $1660 per ounce now…Silver went from about $5 per oz to $30 as of today. This is one of the main reason why I am very bearish on equities. History may not repeat itself but it does rhyme…
Bryan's Take:
"Since Albie and Troy's comments about the Macro environment, gold, and what China is up to lately don't interest me, and I am therefore completely ignorant on the subjects, I present to you something fun and speculative (not for the faint of heart)
Taking a bite of Diamond Foods: An analysis in behavioral psychology
One thing I learned from Warren Buffett is to take big bets when the odds are in your favor, much like someone who counts cards in Las Vegas. You won’t win every time, but when you do win you win big! I believe such an opportunity may have presented itself here in Debacle that Diamond Foods has gotten itself into. In a nutshell (no pun intended) it looks as if management tried to cook the books (again no pun intended) to a certain extent by not categorizing the money paid to Walnut Growers properly on their financial statements to tune of approximately $60 million. The CEO and CFO were both ousted from their posts yesterday because of it. The stock, having already been hammered this year due to financial misgivings, was given a veritable death blow today as it careened down another 40% today finally settling at $23.13 end of day. Keep in mind this was a $90 stock just a few months ago. This puts the P/E ratio at just over 10 times “earnings”. Now, there are many ways you can look at this. A bear might say that they just found two cockroaches in the kitchen and there are always more. In addition, since this debacle is related to their financials, who’s to say what their real financials are? Both valid points.
Here’s how I see it. Since their financials are obviously unreliable, at least for the last couple of years, I can’t really form a thesis based on them. Therefore, I am switching to the other side of my brain, and I ask myself “what would I do if I were Wall Street?” Since the majority of the money in stocks is institutional (mutual funds, ETF’s, Index Funds, etc), whatever they do is going to dictate the direction of the stock, both short term and long term. This stock is like a nightmare to a fund manager right now because it has been going down off and on for several months. When stocks take a nose dive, it means that the institutional guys are fleeing in mass. I think the stock may be at or near it’s bottom now. Why do I think this? Well, first the stock pretty much flat lined all day today after hitting a low of just over $21 dollars. That means that some value oriented investors were there as a buoy in case the stocked dropped down again, in which case they would pick up more shares. But also, just knowing how Wall Streeters think, they bank on certainty. They will kill a stock that misses earnings, much more one that misstates earnings. They are notorious for way overselling stocks surrounded by controversy, and then coming back in slowly as the smoke begins to clear. Think Johnson Meade, Carnival, Pepsi, Netflix….I could go on and on. So here are the 3 scenarios that COULD play out:
Worst Case Scenario: We find out that this thing is even bigger than we thought. There are more cockroaches in the kitchen, and the result is negative earnings. Wall Street news hits Main Street and people in all cities and towns in the world boycott the company, and stop buying Pringles, Walnuts, Almonds, Chips and everything else from Diamond because they are disgusted with their Shenanigans. Their stock drops to zero and we lose all our money as shareholders
Best Case Scenario: The already ousted CEO and CFO take the fall for the company’s misgivings. The financials are restated and it turns it was nowhere near as bad as everyone thought…earnings aren’t affected very much, and an analyst at Piper Jaffray gets excited and upgrades the stock….causing all the high paid lemmings at the other Investment Banks and Institutions to follow suit and the stock goes back to $50 dollars in a matter of a few months.
Most likely scenario: The worst part is over. They got the fall guys out of there already. Diamonds board pledges that their reputation is paramount to their success. The financials are restated and it’s bad but the company will survive and over the next few quarters things start to improve once this is behind them, and once bitten Wall Streeters learn to trust the good folks at Diamond again. They even start to play golf with the new CEO and CFO. People around the world continue to eat Pringles, Chips, and nuts of all varieties. They go about their lives completely oblivious to Diamond Foods former financial problems.
From the money in RISKY BUSINESS portfolio I am betting that the third scenario will play out. I won’t buy right at the open tomorrow. I will wait to see if the stock goes anymore before I purchase, but if it stays under $24 I am pulling the trigger tomorrow morning. I have the advantage of not having to report a profit to my shareholders next quarter, so if it takes a little longer for the company to recover so be it. That just means I won’t have to pay the short term capital gains rate. I am long DMND
2-10-12: After having ridden the top of the Resistance line all week, the S&P500 found it's excuse to take profits today and drop downtoward support. Problems with Greece's debt deal is no doubt the 'excuse'. Here was my report from earlier this week:
2-8-12: "The S&P has been riding the Daily Resistance line now since last friday and may continue in same manner or break Daily Resistance if all goes well with the Greek debt deal. But pressure is there for traders to take profit and there is reason to start taking a short position. Personally, I would wait till the high's of the news wears off and there is not much fundamental play before I took a short position."
As to the Australian dollar (AUD), it has reason to hold strong against its other currency pairs - especially the EUR: "Australia Holds Key Interest Rate at 4.25%
"Australia’s central bank unexpectedly kept its benchmark interest rate unchanged as domestic growth withstands Europe’s debt crisis, sending the nation’s currency soaring to a six-month high."
www.IronFX.comMARKETS UPDATE
07 Feb 2012"
However, if news breaks in favor of the Greece debt deal, the EUR will have some new fighting power. Presently, speculation about the results are keeping the EUR strong.
Troy's Take: The Super Cycle Theory: This idea was made famous by famed investor Jim Rogers. This concept says that the investment world goes through 20 yr Bull and bear cycle markets in Stocks and Commodities. This concept goes back at least 100 years but I will start from 1940.
1940-1960’s- Stock/Equities were in a Market Bull. We were just recovering from the Great Deflationary Depression. In the early 1950’s the Dow returned to its pre-Depression price.
1960’s to 1980’s- Equities fell into a major bear market. The market was basically flat and the price of Gold surge and basically equaled the price of the Dow at about 850. There was also high inflation during the 1970’s. Stocks (except commodity stocks) were not a place to be.
1980 to 2000-Things changed again. Equities were now back in a bull market. From 1980 to 2000 the Dow went from 835 to over 10,000. The Gold price plummeted from $800 to approximately $260 per ounce. This is what most average investors remember and hope will return soon. This is what I call “Pathological Nostalgia” because it’s not going to return anytime soon.
2000-2020. Things changed again. We started our major recession after the stock market bubble burst in what year? That would be about 2000. Imagine that… This was when gold, silver and oil and other commodities started to trend upwards. This was kinda when gas prices started to get higher… The price of gold fell to about 250 per ounce to $1660 per ounce now…Silver went from about $5 per oz to $30 as of today. This is one of the main reason why I am very bearish on equities. History may not repeat itself but it does rhyme…
Bryan's Take:
"Since Albie and Troy's comments about the Macro environment, gold, and what China is up to lately don't interest me, and I am therefore completely ignorant on the subjects, I present to you something fun and speculative (not for the faint of heart)
Taking a bite of Diamond Foods: An analysis in behavioral psychology
One thing I learned from Warren Buffett is to take big bets when the odds are in your favor, much like someone who counts cards in Las Vegas. You won’t win every time, but when you do win you win big! I believe such an opportunity may have presented itself here in Debacle that Diamond Foods has gotten itself into. In a nutshell (no pun intended) it looks as if management tried to cook the books (again no pun intended) to a certain extent by not categorizing the money paid to Walnut Growers properly on their financial statements to tune of approximately $60 million. The CEO and CFO were both ousted from their posts yesterday because of it. The stock, having already been hammered this year due to financial misgivings, was given a veritable death blow today as it careened down another 40% today finally settling at $23.13 end of day. Keep in mind this was a $90 stock just a few months ago. This puts the P/E ratio at just over 10 times “earnings”. Now, there are many ways you can look at this. A bear might say that they just found two cockroaches in the kitchen and there are always more. In addition, since this debacle is related to their financials, who’s to say what their real financials are? Both valid points.
Here’s how I see it. Since their financials are obviously unreliable, at least for the last couple of years, I can’t really form a thesis based on them. Therefore, I am switching to the other side of my brain, and I ask myself “what would I do if I were Wall Street?” Since the majority of the money in stocks is institutional (mutual funds, ETF’s, Index Funds, etc), whatever they do is going to dictate the direction of the stock, both short term and long term. This stock is like a nightmare to a fund manager right now because it has been going down off and on for several months. When stocks take a nose dive, it means that the institutional guys are fleeing in mass. I think the stock may be at or near it’s bottom now. Why do I think this? Well, first the stock pretty much flat lined all day today after hitting a low of just over $21 dollars. That means that some value oriented investors were there as a buoy in case the stocked dropped down again, in which case they would pick up more shares. But also, just knowing how Wall Streeters think, they bank on certainty. They will kill a stock that misses earnings, much more one that misstates earnings. They are notorious for way overselling stocks surrounded by controversy, and then coming back in slowly as the smoke begins to clear. Think Johnson Meade, Carnival, Pepsi, Netflix….I could go on and on. So here are the 3 scenarios that COULD play out:
Worst Case Scenario: We find out that this thing is even bigger than we thought. There are more cockroaches in the kitchen, and the result is negative earnings. Wall Street news hits Main Street and people in all cities and towns in the world boycott the company, and stop buying Pringles, Walnuts, Almonds, Chips and everything else from Diamond because they are disgusted with their Shenanigans. Their stock drops to zero and we lose all our money as shareholders
Best Case Scenario: The already ousted CEO and CFO take the fall for the company’s misgivings. The financials are restated and it turns it was nowhere near as bad as everyone thought…earnings aren’t affected very much, and an analyst at Piper Jaffray gets excited and upgrades the stock….causing all the high paid lemmings at the other Investment Banks and Institutions to follow suit and the stock goes back to $50 dollars in a matter of a few months.
Most likely scenario: The worst part is over. They got the fall guys out of there already. Diamonds board pledges that their reputation is paramount to their success. The financials are restated and it’s bad but the company will survive and over the next few quarters things start to improve once this is behind them, and once bitten Wall Streeters learn to trust the good folks at Diamond again. They even start to play golf with the new CEO and CFO. People around the world continue to eat Pringles, Chips, and nuts of all varieties. They go about their lives completely oblivious to Diamond Foods former financial problems.
From the money in RISKY BUSINESS portfolio I am betting that the third scenario will play out. I won’t buy right at the open tomorrow. I will wait to see if the stock goes anymore before I purchase, but if it stays under $24 I am pulling the trigger tomorrow morning. I have the advantage of not having to report a profit to my shareholders next quarter, so if it takes a little longer for the company to recover so be it. That just means I won’t have to pay the short term capital gains rate. I am long DMND
Tuesday, January 31, 2012
Three Takes - The S&P500, RSH & China
Albie's Take:
The S&P500 has reached support and has stopped its spiral downward. However, after having headed back up it has shown weekness again and fallen back to Daily support lines. Hour four Charts are encouraging as new support and resistance lines are now able to be drawn, but it seems that only the Daily support lines are really holding. Reflection on the odds of it going up are still questionable in my mind. I am thinking that the deal between Greece and the Euro will be more of a favorable short term indicator than anything at this point. After having just written this, I see that some progress has been made between Germany and Greece this morning. However, there is still some more work that needs to be done this week before everything is finalized. As I edit this on 2-1-12 The S&P has headed on it's way back up from Daily support.
Bryan's Take:
Buy Radioshack! (RSH)
I don't normally make short term predictions or speculate on companies within the stock market. RSH got hammered yesterday and was unduly punished, losing over 30% of its value. This company is not going out of business any time soon. Although I wouldn't consider this a long term play or a wonderful company by my standards, if I had a hankering for a short term trade to make at least a 10-15% quick pop, I would put some money down on this one. Of course this is pure speculation and I could be way off, but I think this one has found a bottom. As I write this, RSH is trading at 7.25 a share. Keep your eye on it!
Albie's Take: Thanks Bryan. I think you've given us something practical to use! On a different note: "Did you read the article on MSN about China? ("China Goes On Gold Binge; World Wonders Why" 1-31-12) China has been dramatically increasing its supply of gold. 'Why' is the question! Here is the quote: "Third, the purchase of gold would be especially risky for the central bank, which is already insolvent from a balance sheet point of view. The PBOC needs income-producing assets in order to meet its obligations on the debt incurred to buy foreign exchange, so the holding of gold only complicates its funding operations." MSN
Troy's response: "In one word: 'Propaganda'. Gold has gone up nearly $200 in the last 4 to 5 wks... In other words ain't selling... I sleep good at night knowing I have gold and silver..."
Albie: "Good to know! But the fact that China has doubled its intake of Gold lately is a fact. China's buying of gold seems fear related. This seems like something I want to keep my eye on..."
Troy: "China doubling its gold in take... For me that's called a clue..."
Albie: "Again - you have a point. I understand its fear of the world economy. But when you consider that gold does not help ITS economy right NOW and its having a hard time keeping currency flowing and jobs. Check out the article quote above. Surely that is based on some real facts!
Troy: "It does help its economy because China has an inflation problem. Gold and silver is the best remedy for this problem..."
Albie: "You are on the ball... But check this out from MSN: "A better explanation for the gold-buying binge of Chinese citizens is that they are using the shiny commodity as an inflation hedge, as the Financial Times recently suggested. Yet the buying of gold has increased while inflation has eased. And that means there must be another explanation. The best explanation is that individuals in China are using gold as a substitute for capital flight."
Troy: [Troy referring to the article from MSN, 1-31-12] "When China says no asset is safe...they are referring to the USD.
Albie: "That makes sense... (Albie's laughing). Why do they say buying gold does not produce income? They can hold and sell gold like anything else?!! Right? The question comes from the quote from MSN:'but there are real constraints on its ability to purchase assets that do not provide current income.'"
Troy: Gold does not purchase income because it's a form of insurance. It's a hedge. It's a hedge that been producing a good appreciation return.
I know it does not produce "income" but most mutual funds don't produce income either. Gold for me is a form of savings not investing
Albie: Good answer. So do u have any clue why China's doing what they're doing considering the bind they're in?
Troy: Yes inflation may be dying down a LITTLe but do you drop your health insurance just because you just got over the flu?
Troy: I think they are preparing for the day where they have the world's major currency.
Albie: True - but do you hold any thoughts on the fact that China is 100% dependant on US. And this quote from MSN: "the Chinese government rarely benefits others - and hurts itself - by telegraphing its short-term investment strategies." How to be a world dominating power when your a miser. Miser's become hated & even rejected because they only think of themselves.
Troy: China 100% dependent on the US?? How many people does China have again?? Gold is not a short term investment. China is thinking long term.. The US is thinking more short term. How is China being a miser?? If they were a miser they would have let the RMB float & the dollar would have tanked. If they were a miser they would have stopped buying our troubled bonds then we would be in deep deep trouble. They have actually been holding us up. We have actually to beg to them to keep buying our bonds to keep the % rates low.
Albie: Wow! Ok - terrific comeback! But China does have tons of people & resources but in the last century its track history of using them was grade of 'D' if you know what I mean, and I don't trust this gov much more than Mao tse Dong's. But the actual people of China are a different matter... True that about them helping USD. But on flip side - what would have happened if we stop buying all their stuff!
Troy: I know exactly how you feel. But people change. But we both have to look at the numbers and as Jim Rohn says the numbers tell the whole story. A legendary bank robber was asked why he robbed banks. His reply? Thats where the moneys at...Unfortunately the Asian countries are where the money is at...
Albie: So true! Haha! Good one!
The S&P500 has reached support and has stopped its spiral downward. However, after having headed back up it has shown weekness again and fallen back to Daily support lines. Hour four Charts are encouraging as new support and resistance lines are now able to be drawn, but it seems that only the Daily support lines are really holding. Reflection on the odds of it going up are still questionable in my mind. I am thinking that the deal between Greece and the Euro will be more of a favorable short term indicator than anything at this point. After having just written this, I see that some progress has been made between Germany and Greece this morning. However, there is still some more work that needs to be done this week before everything is finalized. As I edit this on 2-1-12 The S&P has headed on it's way back up from Daily support.
Bryan's Take:
Buy Radioshack! (RSH)
I don't normally make short term predictions or speculate on companies within the stock market. RSH got hammered yesterday and was unduly punished, losing over 30% of its value. This company is not going out of business any time soon. Although I wouldn't consider this a long term play or a wonderful company by my standards, if I had a hankering for a short term trade to make at least a 10-15% quick pop, I would put some money down on this one. Of course this is pure speculation and I could be way off, but I think this one has found a bottom. As I write this, RSH is trading at 7.25 a share. Keep your eye on it!
Albie's Take: Thanks Bryan. I think you've given us something practical to use! On a different note: "Did you read the article on MSN about China? ("China Goes On Gold Binge; World Wonders Why" 1-31-12) China has been dramatically increasing its supply of gold. 'Why' is the question! Here is the quote: "Third, the purchase of gold would be especially risky for the central bank, which is already insolvent from a balance sheet point of view. The PBOC needs income-producing assets in order to meet its obligations on the debt incurred to buy foreign exchange, so the holding of gold only complicates its funding operations." MSN
Troy's response: "In one word: 'Propaganda'. Gold has gone up nearly $200 in the last 4 to 5 wks... In other words ain't selling... I sleep good at night knowing I have gold and silver..."
Albie: "Good to know! But the fact that China has doubled its intake of Gold lately is a fact. China's buying of gold seems fear related. This seems like something I want to keep my eye on..."
Troy: "China doubling its gold in take... For me that's called a clue..."
Albie: "Again - you have a point. I understand its fear of the world economy. But when you consider that gold does not help ITS economy right NOW and its having a hard time keeping currency flowing and jobs. Check out the article quote above. Surely that is based on some real facts!
Troy: "It does help its economy because China has an inflation problem. Gold and silver is the best remedy for this problem..."
Albie: "You are on the ball... But check this out from MSN: "A better explanation for the gold-buying binge of Chinese citizens is that they are using the shiny commodity as an inflation hedge, as the Financial Times recently suggested. Yet the buying of gold has increased while inflation has eased. And that means there must be another explanation. The best explanation is that individuals in China are using gold as a substitute for capital flight."
Troy: [Troy referring to the article from MSN, 1-31-12] "When China says no asset is safe...they are referring to the USD.
Albie: "That makes sense... (Albie's laughing). Why do they say buying gold does not produce income? They can hold and sell gold like anything else?!! Right? The question comes from the quote from MSN:'but there are real constraints on its ability to purchase assets that do not provide current income.'"
Troy: Gold does not purchase income because it's a form of insurance. It's a hedge. It's a hedge that been producing a good appreciation return.
I know it does not produce "income" but most mutual funds don't produce income either. Gold for me is a form of savings not investing
Albie: Good answer. So do u have any clue why China's doing what they're doing considering the bind they're in?
Troy: Yes inflation may be dying down a LITTLe but do you drop your health insurance just because you just got over the flu?
Troy: I think they are preparing for the day where they have the world's major currency.
Albie: True - but do you hold any thoughts on the fact that China is 100% dependant on US. And this quote from MSN: "the Chinese government rarely benefits others - and hurts itself - by telegraphing its short-term investment strategies." How to be a world dominating power when your a miser. Miser's become hated & even rejected because they only think of themselves.
Troy: China 100% dependent on the US?? How many people does China have again?? Gold is not a short term investment. China is thinking long term.. The US is thinking more short term. How is China being a miser?? If they were a miser they would have let the RMB float & the dollar would have tanked. If they were a miser they would have stopped buying our troubled bonds then we would be in deep deep trouble. They have actually been holding us up. We have actually to beg to them to keep buying our bonds to keep the % rates low.
Albie: Wow! Ok - terrific comeback! But China does have tons of people & resources but in the last century its track history of using them was grade of 'D' if you know what I mean, and I don't trust this gov much more than Mao tse Dong's. But the actual people of China are a different matter... True that about them helping USD. But on flip side - what would have happened if we stop buying all their stuff!
Troy: I know exactly how you feel. But people change. But we both have to look at the numbers and as Jim Rohn says the numbers tell the whole story. A legendary bank robber was asked why he robbed banks. His reply? Thats where the moneys at...Unfortunately the Asian countries are where the money is at...
Albie: So true! Haha! Good one!
Wednesday, January 25, 2012
Bryan 's Take: Success Without Personal Development? Troy's Take: Commodities
Bryan's Take: Why it’s impossible to be a successful long term investor without becoming personally developed along the way.
How you think about money directly affects your performance in stock market as well as in life. We’ve all heard the stories of people who won the lottery and within a short period of time have lost all their money. In fact, statistically this is the norm. We’ve also heard the opposite story about millionaires who lost their money and within a reasonable period of time made it all back, and then some. This is because each one of us has a “money blueprint”, if you will, that goes back to what we were taught about money when we were young. When we come of age, each one of us has the power to change this blueprint and to expand it at the same rate we expand our thinking.
A perfect example: Isn’t it interesting that people who live paycheck to paycheck always have just enough money to make it till the next payday? This is not an accident.
In the same way, if you think you can make riches in stock market, and you have yet to change your blueprint from a middle class or poverty mindset to a rich one, you are severely deluding yourself. Since the decisions you make affect what your eventual return will be, this makes perfect sense. After all, isn’t it the decisions we have made in life that have gotten us to where we are today? And aren’t all of our decisions based on who are at the particular moment we make them? After all, if a person finds themself homeless one day it is because he or she has made a series of bad decisions internally which are reflected now in their lives externally. The adverse is also true. Therefore, if you expect to gain riches in the stock market, but you have not grown mentally to be able to house the types of ideas and thinking of someone ready to receive the money and keep it, ask yourself two questions:
Who makes the buying decisions for the stocks you purchase?
Answer: YOU DO
Who makes the selling decisions for the stocks you sell?
Answer: YOU DO
Isn’t it apparent then, that since your success in stocks is wholly dependent on making the decisions a rich person would make, that you need to learn to think this way in order to have success? Now, here's the million dollar question: If you make the stock buying decisions a poor person would make, what do you think you will continue to be?
Troy's Take:
From a Commodities perspective gold & silver have consolidated and they both appear to be trending back up again. Silver, several weeks back, was at about $27.00/oz (because that's when I bought some more) and now its about $32.00. Gold has, for several weeks, corrected to the $1560 range and now its back up around the $1650's. I'm still paying lots of attention to whats going on in the Euro. When Europe gets their finances together (one way or another) I believe that the idea that the US dollar - as a safe haven - will have run its course. I think you may start seeing another flight from the dollar. Which is usually bullish for the precious metals.
How you think about money directly affects your performance in stock market as well as in life. We’ve all heard the stories of people who won the lottery and within a short period of time have lost all their money. In fact, statistically this is the norm. We’ve also heard the opposite story about millionaires who lost their money and within a reasonable period of time made it all back, and then some. This is because each one of us has a “money blueprint”, if you will, that goes back to what we were taught about money when we were young. When we come of age, each one of us has the power to change this blueprint and to expand it at the same rate we expand our thinking.
A perfect example: Isn’t it interesting that people who live paycheck to paycheck always have just enough money to make it till the next payday? This is not an accident.
In the same way, if you think you can make riches in stock market, and you have yet to change your blueprint from a middle class or poverty mindset to a rich one, you are severely deluding yourself. Since the decisions you make affect what your eventual return will be, this makes perfect sense. After all, isn’t it the decisions we have made in life that have gotten us to where we are today? And aren’t all of our decisions based on who are at the particular moment we make them? After all, if a person finds themself homeless one day it is because he or she has made a series of bad decisions internally which are reflected now in their lives externally. The adverse is also true. Therefore, if you expect to gain riches in the stock market, but you have not grown mentally to be able to house the types of ideas and thinking of someone ready to receive the money and keep it, ask yourself two questions:
Who makes the buying decisions for the stocks you purchase?
Answer: YOU DO
Who makes the selling decisions for the stocks you sell?
Answer: YOU DO
Isn’t it apparent then, that since your success in stocks is wholly dependent on making the decisions a rich person would make, that you need to learn to think this way in order to have success? Now, here's the million dollar question: If you make the stock buying decisions a poor person would make, what do you think you will continue to be?
Troy's Take:
From a Commodities perspective gold & silver have consolidated and they both appear to be trending back up again. Silver, several weeks back, was at about $27.00/oz (because that's when I bought some more) and now its about $32.00. Gold has, for several weeks, corrected to the $1560 range and now its back up around the $1650's. I'm still paying lots of attention to whats going on in the Euro. When Europe gets their finances together (one way or another) I believe that the idea that the US dollar - as a safe haven - will have run its course. I think you may start seeing another flight from the dollar. Which is usually bullish for the precious metals.
Tuesday, January 24, 2012
TAKE TWO
Albie's Take:
S&P500 has reached Daily Resistance/Retail value and chances are there will be some profit taking. These are my expectations but with all the good news on fri & weekend it might continue up to Weekly resistance.
News Events That I see as effecting the market:
Yahoo News: "The CBOE Volatility Index, or VIX, a measure of what investors are paying to protect themselves against the risk of losses, is at its lowest level in seven months."
IronFX: "Manufacturing in India and China improved in December, a sign the world’s fastest-growing major economies are withstanding Europe’s debt crisis."
MSN: Friday 20th "Cash-strapped Greece is fast running out of time as it pushes to wrap up an agreement by Monday paving the way for a fresh injection of aid before 14.5 billion euros ($18.5 billion) of bond repayments fall due in March."
TODAY: Yahoo.news: "Eurogroup chief: Eurozone wants interest rate on swapped Greek bonds 'well below 3.5 pct'"
Yahoo News: Thursday, January 19, 2012, 3:00 PM PST
"Rate on 30-year fixed mortgage falls to 3.88 percent, the 8th record low in the past year."
NOTE: Don't forget to look at Take Three on the last blog. Many of the takes are still valid!
Bryan's Take:
Since I take a long term approach to investing,the way I view these events are as something temporary and inconsequential. They are merely a snapshot as to state of things on a particular day. The way I invest is to consider whether individual businesses are worthy of being bought as an enterprise. If so, then I buy as many shares of that business as possible, provided I can get the shares at the right price taking into account it's probable future cash flow generation. Case in point: Today I bought shares of TNAV because the company boasts high returns on invested capital (a sign that management is adept at investing the company's excess capital at high returns)and is trading at an extremely reasonable valuation compared with it's future growth prospects. So the events and indicators Albie mentions, though they may useful tools for various types of Traders and Chart Enthusiasts, have about as much relevance to me as they would to your local convenience store owner. They are not going to have an affect on his business on a day to day basis, and are certainly not something he would pay the least bit of attention to...
Albie: Albie's Take:
Even though I agree that valuing a company and finding a great price to buy in on it is a great thing, I do not think that world economics plays only a part in the short term traders life. Big events happen very slowly. Identifying key things can help you get a grasp on what the turns the market will make for possibly six months to several years. And though I am presently in the process of valuing some new business to invest in, I also find that getting into a trade just to hold it at the same price or watch it fall for six months or more due to world events is perhaps a waste of my 'money's time'. As I found out a while back, Wall Street often will have a bad day not because anything bad is happening in the US. It often will take a spin out of control based on the EURO or something happening in China for instance. And if the Dow or S&P500 is having a bad day or month or year - it very well could mean my stock is too. If things are in process to influence long term trends for a bear or bull market, I for one want to know about it so that I at least have some clue as to how long I expect the market to continue this way. On the flip side, as Bryan stated in 'Take Three' (1-19-12) more negativity means a better discount price to get into a stock. And while this is plausible and desirable, it also helps to know what the S&P500's support line is so that you can get a feeling for the bottom price. If the odds that your stock will drop even lower along with the market, I would rather wait to buy.
S&P500 has reached Daily Resistance/Retail value and chances are there will be some profit taking. These are my expectations but with all the good news on fri & weekend it might continue up to Weekly resistance.
News Events That I see as effecting the market:
Yahoo News: "The CBOE Volatility Index, or VIX, a measure of what investors are paying to protect themselves against the risk of losses, is at its lowest level in seven months."
IronFX: "Manufacturing in India and China improved in December, a sign the world’s fastest-growing major economies are withstanding Europe’s debt crisis."
MSN: Friday 20th "Cash-strapped Greece is fast running out of time as it pushes to wrap up an agreement by Monday paving the way for a fresh injection of aid before 14.5 billion euros ($18.5 billion) of bond repayments fall due in March."
TODAY: Yahoo.news: "Eurogroup chief: Eurozone wants interest rate on swapped Greek bonds 'well below 3.5 pct'"
Yahoo News: Thursday, January 19, 2012, 3:00 PM PST
"Rate on 30-year fixed mortgage falls to 3.88 percent, the 8th record low in the past year."
NOTE: Don't forget to look at Take Three on the last blog. Many of the takes are still valid!
Bryan's Take:
Since I take a long term approach to investing,the way I view these events are as something temporary and inconsequential. They are merely a snapshot as to state of things on a particular day. The way I invest is to consider whether individual businesses are worthy of being bought as an enterprise. If so, then I buy as many shares of that business as possible, provided I can get the shares at the right price taking into account it's probable future cash flow generation. Case in point: Today I bought shares of TNAV because the company boasts high returns on invested capital (a sign that management is adept at investing the company's excess capital at high returns)and is trading at an extremely reasonable valuation compared with it's future growth prospects. So the events and indicators Albie mentions, though they may useful tools for various types of Traders and Chart Enthusiasts, have about as much relevance to me as they would to your local convenience store owner. They are not going to have an affect on his business on a day to day basis, and are certainly not something he would pay the least bit of attention to...
Albie: Albie's Take:
Even though I agree that valuing a company and finding a great price to buy in on it is a great thing, I do not think that world economics plays only a part in the short term traders life. Big events happen very slowly. Identifying key things can help you get a grasp on what the turns the market will make for possibly six months to several years. And though I am presently in the process of valuing some new business to invest in, I also find that getting into a trade just to hold it at the same price or watch it fall for six months or more due to world events is perhaps a waste of my 'money's time'. As I found out a while back, Wall Street often will have a bad day not because anything bad is happening in the US. It often will take a spin out of control based on the EURO or something happening in China for instance. And if the Dow or S&P500 is having a bad day or month or year - it very well could mean my stock is too. If things are in process to influence long term trends for a bear or bull market, I for one want to know about it so that I at least have some clue as to how long I expect the market to continue this way. On the flip side, as Bryan stated in 'Take Three' (1-19-12) more negativity means a better discount price to get into a stock. And while this is plausible and desirable, it also helps to know what the S&P500's support line is so that you can get a feeling for the bottom price. If the odds that your stock will drop even lower along with the market, I would rather wait to buy.
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