Ah, BB is rallying on speculation... 25% in 3 days?
Tempted to go all in and make a ton in a week. On the other hand, I could lost a huge chunk with one leaked rumor.
Goodness, AAPL up 21 today just because Icahn buys in?
He used the key term, "undervalued".
Apple has been delivering dwindling EPS but there free cash flow is huge and they do trade at massive discount to their peers on a number of metrics.
Looks like it is on a rocket to 500, where it looks to be fairly valued IMO.
I don't see how they continue to sell overpriced iPhones. Though I love the device.
Beyond that,...
This market is B-A-N-A-N-A-S!!!
https://www.youtube.com/watch?v=Xa2QtxMpEIo
Even though their EPS has been decreasing, it's still insanely large compared to the majority of companies. Isn't AAPL still making $10-12 EPS each quarter? Pretty ridiculous imo.
bought some Apple 8/23 465 calls. C'mon >$500!
Goodness, AAPL up 21 today just because Icahn buys in?
"Imagine that you are a bank. The Fed tells you that it is lowering short rates and holding them low for a long time. That is, in essence, a signal to borrow short and lend long. In the summer of 2009, T-Bills were yielding roughly 0.5% and 10-year Treasuries were roughly 3.5%. If the bank were to borrow short and lend long with Treasury securities (no credit risk), it could get a spread of roughly 3%. Lever that trade up a "conservative" 10 times and you get a 30% return. 20 times leverages gets you 60% return. Pretty soon, you've made a ton of money to repair your balance sheet.
The banks weren't the only ones playing this game. The hedge funds piled into this trade. Pretty soon, you saw the whole world reaching for yield. The game was to borrow short and lend either long or to lower credits. Carry trades of various flavors exploded. There were currency carry trades, some went into junk bonds, others started buying emerging market paper. You get the idea."
...
"Imagine that you are the bank in the earlier example which bought risk by borrowing short and lending long, or lending to lower credits in order to repair your balance sheet. When the Fed Chair tells you, "Last Call late this year", do you stick around for Last Call in order to make the last penny? No! The prudent course of action is to unwind your risk-on positions now. We are seeing the start of a new market regime as risk gets re-priced.
That's the message many analysts missed. The Fed is signaling that risk premiums are not going to get compressed any further. It will now be up to the markets to find the right level for risk premiums. Watch for Ben Bernanke to elaborate on those issues on Wednesday* (see note below). In the July 4 edition of Breakfast with Dave, David Rosenberg wrote the following about the Fed's communication policy:
I actually give Bernanke full credit for giving the markets a chance to start to price that in ahead of the event, and to re-introduce the notion to the investment class that markets are a two-way bet, not a straight line up. Volatility notwithstanding, I give Berananke an A+ for shaking off the market complacency that came to dominate the market thought process of the first four months of the year (to the point where the bubbleheads on bubblevision were counting consecutive Tuesdays for Dow rallies). Ben's communication skills may be better than you think - underestimating him may be as wise as underestimating Detective Columbo, who also seems "awkward" but was far from it.
Bernanke knows exactly what he is doing when he hints about tapering in his public remarks. It's the risk premium, stupid! And it's going up."
http://humblestudentofthemarkets.blogspot.com/2013/07/its-risk-premium-stupid.html
"Just in case there is still some confusion about what passes for a "catalyst" in this market, moments ago just as the 10 Year was threatening to run away on its unmerry way to 3.00% and higher in the aftermath of the fatalistic tweet by Bill Gross, there promptly emerged, since it is 3pm on a Friday after all, a rumor that Hilsenrath was about to hit public on the latest NYFed plant handed to him in order to stabilize the market. Not in itself surprising: we have seen it a million times in the past, the only difference is that this time the target of the WSJ "intervention" would be the bond market, not stocks. Which is the saddest thing: while idiot stocks traditionally move on the dumbest of triggers, at least bonds had been immune from such stupidity. To see even the bond market succumb to the lowest of rumormonerging, is indeed a slap in the face."
http://www.zerohedge.com/news/2013-08-16/hilsenrumor-strikes-offset-damage-gross-tweet
http://video.cnbc.com/gallery/?play=1&video=3000191148 (markets are apparently really, really thin now and it doesn't take much to move them. Bob Pisani said the 200 point drop in Dow was pretty much a buyer's strike with normal selling volume more than anything else.
That first bout of intense volatility / interest rate spike in May when SH-iBor spiked was apparently engineered by those devilish Chinese during a patch of illiquidity when they could do most damage (I think there was supposed to be expected rollover or refinance of debt the week after they struck) Pre - (http://video.cnbc.com/gallery/?play=1&video=3000176107) and post - (http://video.cnbc.com/gallery/?play=1&video=3000178429) PBoC jawboning in May.
"Job creation at small companies has almost doubled in the last six months, reaching 82,000 jobs at firms with 49 or fewer employees in July, according to payroll processor ADP.
Borrowing by small businesses and sales of new franchises have also climbed, indicating business owners are willing to take on new expenses and risk."
"There is still a healthy enough middle class to support growth,'' said Don Fox, CEO of Jacksonville-based Firehouse of America, which expects to add 140 Firehouse Subs stores this year, most of them owned by franchisees. ''Unless there's a major change in the environment, we're building out toward 2,500 restaurants.''
Other data also suggest small businesses are ready to grow:
• Small-business borrowing is up 10% this year, according to data through March, according to the Federal Deposit Insurance Corp.
• Small-business loan guarantees through the Small Business Administration's largest program have risen 13% in the October-March period.
• Sales of business franchises are up 4.3% this year, although below last year's 4.9% gain from 2011, according to the International Franchise Association.
The gains are beginning to shift the terms of the debate over the health care law. Under the law, businesses with 50-plus full-time-equivalent workers must offer insurance to people working 30 hours a week beginning in 2015. That mandate, originally slated for 2014, has not deterred hiring as feared, some economists now say.
As more data come in, the law's impact can't be seen in hiring statistics, says Mark Zandi, chief economist of Moody's Analytics.
"I was expecting to see it. I was looking for it, and it's not there,''says Zandi, whose firm manages ADP's surveys of overall private-sector job creation.
If the Affordable Care Act "were causing a drop, you would see meaningful slowing.''
"New research from Moody's and other economists also challenges the idea that small employers are hiring only part-time workers to avoid falling under the health care law's mandate to insure full-time workers.
It's true that about 77% of jobs added nationwide in 2013 are part time. But this year's new jobs are concentrated in industries such as restaurants and hospitality that use as much as twice as many part-timers as other companies, Moody's economist Marisa DiNatale found in a July paper. Most industries are actually using fewer part-timers than last year, DiNatale said.
Likewise, FT Advisors chief economist Brian Wesbury says this year's gains in part-time hiring offset a late-2012 drop in part-time jobs when full-time employment was surging. For the last 12 months, 75% of new jobs are full time, according to the Labor Department."
"As I outline in this week's video, the data now paints a picture where the economy peaked in summer 2012, and almost drifted into recession territory in the fourth quarter as a result of Hurricane Sandy and reduced business confidence because of all the fiscal uncertainties in Europe and the United States. The lack of confidence manifested itself in greatly reduced inventories in the fourth quarter. Dramatically slowing defense spending hit hard both fourth-quarter and first-quarter data.
The first quarter of 2013 was better, though a drastic (and perhaps artificial drop) in spending on commercial buildings weighed on the first-quarter data. The second quarter showed even more improvement, though consumer spending was a touch weaker, perhaps because of the delayed effects of the increase in taxes. Also, the first quarter benefited from a consumer-related rebound from Hurricane Sandy that didn't recur in the second quarter. Second-quarter improvement was largely due to a swing in commercial buildings and defense spending. Through thick and thin, consumer spending was not much statistically different among the four most recent quarters with the exception of some Sandy-related effects."
http://news.morningstar.com/articlenet/article.aspx?id=607259
http://finance.yahoo.com/news/goldman-payrolls-shmayrolls-investors-being-174317919.html
(IIRC, last Thursday's (second) violent sell-off in bond market was ostensably triggered by initial jobless claims last Thursday)
so back in april i had most of my money in a ...
i sell everything and start scaling into a position in precious metals ETFs after the april slam down (though sadly i bought some before the slam down and during it since it took quite a while). everyone hated the metals, miners were starting to lose money on production and are now heavily losing money.
also i dont know much about coal or natural gas. but i am looking at a stock symbol PVR. they do natural gas and coal resource management (like nat gas lines, coal processing i think). its near its 52 week low, and has a 9.5% dividend. any thoughts?
"Stipp: You mentioned earlier that stocks definitely are looking more attractive to you relative to bonds, but what about stocks in an absolute sense? So, for example, a lot of our readers point to the Shiller P/E, and it looks elevated now compared to its average. Would you say the stock market, looked at just on its own, could be due for a bit of a correction just because the valuations might be a little lofty?
Doll: In absolute terms, it's hard to deny that, but my view is absolute valuations are wonderful things to talk about, but they are academic. It's always relative to everything else. If you tell me the P/E on the U.S. stock market is 16 times earnings, do you like stocks or not? I say, I don't know. Tell me where are interest rates and inflation? If interest rates and inflation are at 2%, at 16 times, I want to buy stocks. On the other hand, if interest rates are 6%, and P/Es are 15, I am not so sure I am interested. So, my comment about stocks being interesting is relative to everything else, that I have a choice to make."
http://www.morningstar.com/cover/videocenter.aspx?id=605163
"At Oakmark, we decided to use a seven-year U.S. government bond as our risk free asset because that matches the timeframe we use for valuing our equity investments. Our historical analysis suggests that equity investors usually demand that an average stock earn about five percentage points more in expected return than that government bond. (More precisely, we use 450 basis points over the average seven-year AA-rated industrial bond, which averages about 50 basis points more than the government bond, but this commentary is easier to follow without that complication.)
In the early 1990s, when the seven-year U.S. government bond yielded 7%, our model said that an average stock needed a total expected return of 12% to be equally attractive. As bond yields fell, to 6%, 5% and 4%, our bogies fell to 11%, 10% and 9%. In early 2009 when the seven-year went under 3%, we said enough is enough. We simply didnt believe that bond investors buyers that were willing to hold their bonds to maturity were really accepting a return of less than 3%. Renters maybe, but not investors. So we stopped lowering our average equity discount rate when it hit 8%. Had we not done that, last summer, when the seven-year reached a yield under 1%, our equity value estimates would have skyrocketed. Then, when rates last quarter went back up to 2%, we would have brought values back down, albeit to a valuation level higher than the one we currently use.
For four years we have been saying that bond prices are not being set by long-term investors, so instead of using the actual interest rate, weve used a 3% floor. This way, our equity valuation estimates have not inflated to what we see as unsustainably high levels. Instead, we believe that stocks were, and continue to be, somewhat undervalued relative to a seven-year government bond that yields 3%. Even after the recent increase in interest rates, the seven-year has moved only a little more than halfway back toward our floor of 3%. So the declining bond market has not at all dimmed our enthusiasm for equities. We are effectively already factoring in the assumption that rates continue their upward march until the seven-year hits 3%.
Should interest rates rise further than that, to levels above 3%, we will have to examine the cause of that increase. If rates rise because of higher inflation expectations, our earnings and dividend growth projections will likely also rise, largely offsetting the valuation impact. If, however, higher rates are not accompanied by expectations of higher inflation and earnings growth, our valuation estimates would need to decline.
Fortunately, with the maturing of the TIPS (Treasury Inflation Protected Securities) market, we can easily derive investors estimate of future inflation. That presently stands at about 2% per year, which we use as an input in our growth estimates. If rates rise above 3%, we will be keeping an eye on inflation expectations to determine whether or not our equity values require adjustment."
https://www.oakmark.com/Oakmark/web/me.get?WEB.websections.show&OAKMARK_1062
Stimulus expected to officially pull back more or end Wednesday. My preferred are effed... But I don't feel like selling. It'll probably go back up once the dust settles. Maybe it's even in oversold territory.