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Nice looking trade there Split.

What's your portfolio look like these days?
Quoting split_unit
{quote} Update: HGG went up 120% before pausing a little.
Amazing!!
Quoting gregofx
{quote} Amazing!!
Thanks Greg, appreciate it.
  • Post #464
  • Quote
  • Edited at 9:57am Jul 23, 2013 6:41am | Edited at 9:57am
Quoting InfinitySL
Nice looking trade there Split. What's your portfolio look like these days?
Hi Infinity,

Most of my portfolio is in cash at this point. However, the part of it that isn't is in:

The DXJ and large positions in oil companies. I was able to catch that rally in oil, and I expect oil stocks to out perform should oil hold higher.
A normal sized position in SWHC.

Most other positions were liquidated into this rally. I was also short the AUD/USD and gold a while ago and exited as the R/R diminished. I might re-assert a short position in AUD/USD at some point. I don't think that commodities have bottomed yet and neither do I think that the financial bubble in China is over, authorities over there are only prolonging the inevitable bust.

Its summer, I will re-deploy cash should something fit my system.

What about you Infinity?
Attached Image (click to enlarge)
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Quoting split_unit
{quote} Hi Infinity, Most of my portfolio is in cash at this point. However, the part of it that isn't is in: The DXJ and large positions in oil companies. I was able to catch that rally in oil, and I expect oil stocks to out perform should oil hold higher. A normal sized position in SWHC. Most other positions were liquidated into this rally. I was also short the AUD/USD and gold a while ago and exited as the R/R diminished. I might re-assert a short position in AUD/USD at some point. I don't think that commodities have bottomed yet and neither...
I also own DXJ and a number of individual equities. If I find the time, i'll post up a similar pie chart of what I have, although it's hard to incorporate short positions into a nice pie chart! hehehe.

I probably have more bonds than most people as I think the back-up in rates has gone too far (for instance bought MUB for a trade and have been long 2yr & 5yr Morgan Stanley debt).

Just glancing at my exposure screen on interactive brokers, my taxable PA is overweight cash as well. I'm 14% short (Short position divided by total portfolio equity), 65% long equities (but this includes that MUB etf, which is really bonds), 20% bonds (those short duration MS bonds i mentioned), and then the rest cash.

A buddy of mine is still short the AUD and that's been a great trade for him, shame I didn't get in on that one. But we all know we can't trade everything...
  • Post #466
  • Quote
  • Edited at 3:26pm Jul 23, 2013 2:02pm | Edited at 3:26pm
Quoting InfinitySL
{quote} I also own DXJ and a number of individual equities. If I find the time, i'll post up a similar pie chart of what I have, although it's hard to incorporate short positions into a nice pie chart! hehehe. I probably have more bonds than most people as I think the back-up in rates has gone too far (for instance bought MUB for a trade and have been long 2yr & 5yr Morgan Stanley debt). Just glancing at my exposure screen on interactive brokers, my taxable PA is overweight cash as well. I'm 14% short (Short position divided by total portfolio equity),...
Yeah lol no shorts were incorporated on to that pie chart because I have no shorts on, at the moment. Its hard to be short with any conviction with the SPY breaking out on to all time highs. Being short in a bull market is a very hard thing.

One of the prerequisites I look at when developing a short thesis is to look at Companies that are either:

1. In a bubble - AAPL
2. Industry/sector decline - GDX
3. Fraud case - HPQ (http://www.zerohedge.com/news/2012-1...y-plc-business): This is by far the hardest to short and requires the most skill
4. Highly leveraged institutions @ peak of interest rate cycles

Muddy Waters recently came out with a detailed report on AMT, in that report points 1 and 3 of the above were mentioned. AMT is also highly levered with a debt to equity ratio of 2.41, the stock initially decline was bought right back up. The day the report came out now looks like a shakeout, this is just an example of how hard it is to short at the moment. Many short players are capitulating at these levels, which should incline that the time is ripe to short, but I can't get myself around to do it because any down move would be met by some serious headwinds. I remember Chanos being short HPQ when it was at $12, the stock is now at $25.81 and I recently read that he was still short! That's over a 100% move and I don't think I have the stomach for something like that at the moment.

I do have another portfolio where I trade dollar neutral strategies in the form of a long/short pairs. In this environment I don't see myself shorting naked, unless it was on buying puts where my total loss would be on the option premium I paid.

As for the fixed income domain, its hard... I know that the market has entered bear territory with interest rates unlikely to head anywhere but north. It's true that the sell off in fixed income got ahead of itself a little, and that created a buying opportunity but the new overall direction is down.

Just by looking at the chart I think the down move in AUD is far from over, I want to see a shakeout of any weak shorts before I re-enter *short. The fundamentals must also stick. Should the macro economic picture change through factors like government intervention, AUD could easily be ripe for a long...but I dont see that happening... a slowdown is inevitable in that region... and I might be wrong that too...
Quoting split_unit
{quote} ... and neither do I think that the financial bubble in China is over, authorities over there are only prolonging the inevitable bust. ...{image}
split_unit, my friend. yes, i am thinking the same. we all know that china will explode, the question is WHEN?
actually, if there is one market i personally will (and have already) invest, is greece. stock market has plummet dramatically and nobody expects anything. as a longterm-investment with multiple entries, you clearly have a beautiful reward over the next years...
meine augen sind die sterne
Quoting aserbfx
{quote} split_unit, my friend. yes, i am thinking the same. we all know that china will explode, the question is WHEN? actually, if there is one market i personally will (and have already) invest, is greece. stock market has plummet dramatically and nobody expects anything. as a longterm-investment with multiple entries, you clearly have a beautiful reward over the next years...
The only time I see it happening in China is when: a.government intervention fails to have any affect; b. if government fails to intervene all together. I totally agree with you, Greece is very attractive. I was seriously contemplating going long FEZ during the last pullback but missed the move unfortunately.

Btw your post on here in this thread won't be forgotten. That was an awesome call.
Quoting split_unit
{quote} The only time I see it happening in China is when: a.government intervention fails to have any affect; b. if government fails to intervene all together. I totally agree with you, Greece is very attractive. I was seriously contemplating going long FEZ during the last pullback but missed the move unfortunately. Btw your post on here in this thread won't be forgotten. That was an awesome call.

well, yes. i have been to china myself last year to figure out investment opportunities for some clients. mainly around the chengdu & kunming area. that said, i have a big respect for the chinese and their government, but something is simmering there. never i would invest my own money there. as you said it is the government which controls everything, even the economic figures. if china blasts, the 2008-movements will be just a smooth breeze in the eye of a hurricane...
meine augen sind die sterne
Quoting aserbfx
{quote} well, yes. i have been to china myself last year to figure out investment opportunities for some clients. mainly around the chengdu & kunming area. that said, i have a big respect for the chinese and their government, but something is simmering there. never i would invest my own money there. as you said it is the government which controls everything, even the economic figures. if china blasts, the 2008-movements will be just a smooth breeze in the eye of a hurricane...
Aserbfx!

You know I sometimes log onto forex factory just to see if you've added any attachments (i.e. charts). I don't follow that thread you post to b/c there is a lot of noise in there, but I always liked your posts. I think I dropped a char of SRCL in there for you a while back, not sure i you ever saw it. Anyhow, keep up the good work.

Split --

Couldn't agree more on having shorts in a rising market...it's been painful. I'm down to two shorts at this point: RSX & CHE. The former for fundamental reasons (corruption, rule of law, capital flight and my eventual thesis that oil will be less important down the road). I'm about break-even on that one even though I've held it many months. On CHE, that's also a fundamental reason that can be read about here: http://www.citronresearch.com/chemed-game-over/ Time will tell on that one, but i'm fighting the trend there, which I hate doing. Not sure how much more patience I'll have.

Luckily my longs far out weigh my shorts.

And interest rates need to rise at some point but how high they get is up for debate. Keep in mind our debt fueled recession will behave differently than the garden variety kind. People need to pay down debt which is somewhat deflationary. Without inflation the fed doesn't have to be very aggressive.

Anyhow, more later.
Quoting InfinitySL
{quote} Aserbfx! You know I sometimes log onto forex factory just to see if you've added any attachments (i.e. charts). I don't follow that thread you post to b/c there is a lot of noise in there, but I always liked your posts. I think I dropped a char of SRCL in there for you a while back, not sure i you ever saw it. Anyhow, keep up the good work. Split -- Couldn't agree more on having shorts in a rising market...it's been painful. I'm down to two shorts at this point: RSX & CHE. The former for fundamental reasons (corruption, rule of law, capital...
CHE technically looks broken, major H&S pattern on the daily there... Fundamentally, I will have to look at it in more detail...

This article by MarketWatch drew a grin on my face this morning, the likened the current bull market to the walking dead:

"Like a Walker (what zombies are called in the show), the market’s body has been riddled with countless bullets and wounds such as fiscal cliff tax increases and the sequester, along with international headwinds like Europe’s recession and slowing growth in China. But it just keeps on going."


Thank god bull markets don't end when MarketWatch publishes rubbish like that lol. I love to gauge public sentiment through headlines on sites like the one above, it gives me a feel of the overall sentiment. Currently, this gauge tells me that there's fear on wall street that the market might have gone too far. To me personally, I see that as a good sign. As long as the bull market continues to climb the wall of worry, I will continue to be long. With this kind of sentiment going around I see one of two scenarios happening:

1. We get a sharp up move on god knows what reason, freezes out all the weak hands and makes them regret they weren't able to enter earlier. They then enter late, push prices higher where prices saturate and head lower for either a pullback or correction.


2. We get a pullback or correction (depending on the catalyst) and head lower where the decline meets strong demand. This process shakes out all weak hands and we see another leg higher.




Quoting split_unit
{quote}
Yeah lol no shorts were incorporated on to that pie chart because I have no shorts on, at the moment. Its hard to be short with any conviction with the SPY breaking out on to all time highs. Being short in a bull market is a very hard thing. One of the prerequisites I look at when developing a short thesis is to look at Companies that are either:
1. In a bubble - AAPL
2. Industry/sector decline - GDX
3. Fraud case - HPQ (http://www.zerohedge.com/news/2012-1...y-plc-business):...
Michael Santoli (former Barron's Columnist who I find to be a very good read) agrees w/ the above comments and goes into some depth about the plight of short-sellers this year:

http://finance.yahoo.com/blogs/micha...175844113.html

I would push back on AAPL a bit -- Yes, at $700 maybe that's a bubble, but where it is now, the market is pricing in a huge decelleration in their business. With a $416bn market cap and about $150bn of cash on their balance sheeet, their Enterprise value is $286bn. Compare that number versus $43bn/year in free cashflow. That doesn't make it a very pricey stock. Is it heading back to $700, i doubt it anytime soon, but to say it's bubbly at these levels is probably a stretch.
Quoting InfinitySL
{quote} Michael Santoli (former Barron's Columnist who I find to be a very good read) agrees w/ the above comments and goes into some depth about the plight of short-sellers this year: http://finance.yahoo.com/blogs/micha...175844113.html I would push back on AAPL a bit -- Yes, at $700 maybe that's a bubble, but where it is now, the market is pricing in a huge decelleration in their business. With a $416bn market cap and about $150bn of cash on their balance sheeet, their Enterprise value is $286bn....
No lol, I never meant it was a bubble at this point. God only knows whether it bottomed out or not. I meant to use it as an example to stocks I look to short "stocks that are in a bubble" like AAPL back in 2012. But not today obviously, the R/R has diminished considerably for shorts at this point. And as you rightly pointed out, the stock is clearly undervalued.
Quoting split_unit
{quote} No lol, I never meant it was a bubble at this point. God only knows whether it bottomed out or not. I meant to use it as an example to stocks I look to short "stocks that are in a bubble" like AAPL back in 2012. But not today obviously, the R/R has diminished considerably for shorts at this point. And as you rightly pointed out, the stock is clearly undervalued.
Facebook up 21.35% at the time of this writing!!! I have no positions. This is definitely significant, and should impact the entire market tomorrow. If you want to read more, here is a good starting point.
Here's a look at the IRA. Probably have too many positions as of this writing. A few of the smaller ones are test positions to see how they do before I add-on to a full position size. I'll get around to doing a similar chart for my taxable account.

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Quoting InfinitySL
Here's a look at the IRA. Probably have too many positions as of this writing. A few of the smaller ones are test positions to see how they do before I add-on to a full position size. I'll get around to doing a similar chart for my taxable account. {image}
How big are these test positions on average? And when you say bigger positions, how big is bigger to you?

Where I come from, we don't have tax on individuals thank god. So I never incorporate tax on to the equation.

Whats you thesis on MCK and JAZZ? If you don't mind sharing.
I discuss how I do my position sizing in these two posts -

First on on Position sizing (Post #22) on this page:
http://bit.ly/1e27xCE

Position Sizing - Part 2 (first post on the page)
http://bit.ly/16b8MhU

That's in a perfect world -- In reality I have other factors I have to consider to determine the likely volatility/potential of hitting my stop/etc, plus a minimum holding period. These minimums are imposed by my employer, that I HAVE to hold the position a minimum of 30-days. This last case is when i use the test positions -- where i know I have the staying power for a 30-day trade. Anyway...

Lucky you not having to pay taxes! We have them on pretty much everything and different taxes depending on what you buy/what dividends you recieve. If you trade in & out of a stock in < 1yr, it gets taxed the same as income. If you are a long-term investor (>1yr), your tax goes down to 15-20%. So *where* you do the trade, can be as important as what you're trading here.

Mck/Jazz I can discuss later on but suffice to say it was mainly technicals that drove the trades, but I overlayed some company-specific fundamentals to the trades including low valuations, cash generation and growth potential over the next few years.
Quoting InfinitySL
I discuss how I do my position sizing in these two posts - First on on Position sizing (Post #22) on this page: http://bit.ly/1e27xCE Position Sizing - Part 2 (first post on the page) http://bit.ly/16b8MhU That's in a perfect world -- In reality I have other factors I have to consider to determine the likely volatility/potential of hitting my stop/etc, plus a minimum holding period. These minimums are imposed by my employer, that I HAVE to hold the position a minimum of 30-days. This last case is when i use the test positions...
Cool, thanks for the detailed post. Your size is abit too big for my liking, I usually limit my largest positions to 5% of AUM. However, I do make some exceptions. I remember that JAZZ was getting alot of attention some 8-12 months ago, and I never really looked at it so I thought it would be interesting to know what the story was. At these levels I feel the market is getting a bit frothy, its very hard for me to get long or even look at anything, except for stocks like POT.

POT a stock in the agricultural industry just had a major 2 day shakeout at support. With the shakeout occurring on earnings. Sometimes the price action reaction to earnings is more important to me than the value of the earnings themselves, and I think POT demonstrates this idea clearly. The fundamentals also look good in general after the earnings, which encouraged me to get in the stock early. I love these kind of contrarian situations where the R/R is heavily skewed in my favor, if I lose then I lose small and if I gain then I gain big.
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Hi Split,

I do apologize for my being lazy, I grazed through the last posts, but u know stocks like I know Gold,
so what do we like this week?

Perhaps I can use netdania as my demo for stock trading.

Love your analysis and dedication.

Please keep up the good work.

XT-

PS. Miners? How about CSX and COCA COLA not sure the ticker, + playboy for long term holds.
I like railways.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
Quoting split_unit
{quote} Cool, thanks for the detailed post. Your size is abit too big for my liking, I usually limit my largest positions to 5% of AUM. However, I do make some exceptions. I remember that JAZZ was getting alot of attention some 8-12 months ago, and I never really looked at it so I thought it would be interesting to know what the story was. At these levels I feel the market is getting a bit frothy, its very hard for me to get long or even look at anything, except for stocks like POT. POT a stock in the agricultural industry just had a major 2 day...

Looks like she hit HUGE support and that VOLUME spike is a little wild!!! Could this be a reversal ? or just another smash down?...................
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
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