Cara's Commentary & Community Chat, Friday, Jun 12, 2009

Yeah - we have been in the dark. But, sites like yours over the past few years generate discussion and action on our part. The light is out there - and you are helping us to see it. If not for finding your site years ago - I would still be in the dark about HB&B. Keep the floodlight on Mr. Cara, the we are rising from the abyss...

Good morning.

NOK - Downgraded to Equal Weight @ Barclays

Updated GLD weekly chart.

If & when it breaks through the neckline then the Target Zone is 130 +/-

http://tinyurl.com/manwwb

GLD Daily support @ 90

http://tinyurl.com/mfh6jj

Still short OIH & UNG.

Telestar3d - GREAT Link [upchucky] from last night... Thanks!

"A new report by msnbc.com and the Investigative Reporting Workshop (of American University in Washington) shows that bad loans increased at 60% of banks in the first quarter compared to the end of the year. Overall, bad loans rose another 22% in the quarter. The information is based on information reported by banks to the FDIC at the end of the quarter.

The report also says that out of the largest100 banks, 86% showed declining ability to withstand losses. And banks are being allowed to pay back their TARP funds early?"

Sy Harding

[Edited: Covered all outstanding oil & gas shorts at opening]

A few days ago, Bill asked us which of the Cara 100 would we short. Did anyone compile the results? Just wondering....I had chosen BMY and cover above 21.25.

BBY - estimates, target raised at Barclays to $42. Estimates also boosted, to reflect expected market share gains. Overweight rating.

PAYX - Downgraded at Goldman to Conviction Sell from Sell. Limited price leveraging and a decline in new sales led to the downgrade. Price target established at $23.

PBR - Upgraded at Morgan Stanley to Overweight. $56 price target. Risks are abating, and there likely won't be more retail price cuts.

QCOM - estimates, target boosted to $52 at Merrill Lynch/Bank of America. Estimates also raised, to reflect the company's new guidance and higher ASP's. Buy rating.

in 4.46

thinking of Vad

(woops sold a little early, Vad would not do that)

I"m seeing some serious distribution in BAC this morning. Massive volume and the price is not responding the same way it did yesterday...

Distribution fits with a "upgrade the stock and distribute" thesis.

FD: no position

It looks like the Fed made a great trade yesterday by buying approximately $5 billion in 30 year bonds,then driving yields down today and I'll wager that they sold futures against the position today. Killed two birds with one move. Made the auction look good and made a profit doing so.

Dan

Dave, do you think that the banks and the market in general can hold off till months end to make the quarter results look good for funds sake ?

Positive $USD today is not surprising . . .

IMO, Daily Pfennig hit the nail on the head today, mentioning traders do not want to be short the $USD with the G-8 coming up and Geithner speaking at the meeting.

Also a report this morning about Bernanke calling for reduced bond buying by the Fed, “thus reducing the pressure on the dollar.”

Finally, the Japanese Finance Minister commented about “complete trust” in the $USD and Treasuries. Of course, considering the source, (Japan is the 2nd largest holder of Treasuries) what would one expect him to say?

Unless the $USD breaks 82, the trend is still down IMO. I don’t see quantitative easing disappearing quite yet.

Does this look like a MACD roll over and may be setting up for a dip to buy? NOT ADVICE dyodd
long PAL
and back into SPNG after missing out of most of the spike after selling way too early.
gee isn't there a guru here who keeps chanting..."let yer winners roll"
Sold 3/5 of CPST yesterday
long SLW, WHY, WNR
Peace from North Puget Sound

Not sure if this has been posted already. If this moves forward, it should be very interesting to follow.

http://tinyurl.com/lgth2d

Depends G. There are a ton of factors that enter in, but the thing about trading that must be understood is, it isn't about price, it is about time and events. What makes for a good trade? A low price? Hardly. A good trade is something you can buy now and sell for more sonner or later, hopefully sooner right? So it comes down to supply and demand. To answer your question, I don't feel reluctant to get back into SQNM WHEN THE ENVIRONMENT IS conducive to a trade. Right now it's a minute to noon on a Friday and this game is closing down faster than Cinderella's social life at midnight. I am not interested in getting chewed up in tops right now, but this stock should power higher. I will be looking closely next week.

What's happened is (totally fictional scenario) Rahm Emmanuel's brother talked to a buddy at FDA and got the word that SWNM is golden. He then contacted his hedgie-buddies and tipped them, causing the radical moves of this week. How else do you think he moved out of his 900 dollar apartment in westwood or wherever and into a ten million dollar mansion in Beverly? Think it was his good looks?

"You're not naive enough to think you're living in a democracy, do you buddy...?"

I know my looks wouldn't buy that 1500 pound steer you mentioned earlier. I'm working on the "brain" part - well, this market is working on my brain.

Trying to get a handle on the market environment is like trying to grab air.

When?

When breadth gets maximally overbought AND
Shorting the weak, not the strong AND
No equity tailwind from weaker dollar (see Gann dollar chart this AM) AND
The small fry don't keep getting a bid AND
VIX stops getting crushed

It is HARD making big money on the short side...see SRS today

The more I read Gann, the more I see his genius.

Quality is out the window, the bird of paradise is resting on the window sill.

Ron - You left out a reference to the Cramer indicator...

Possible inverse head & shoulders on the USD forming. It is ugly looking, but if it breaks through the neckline then commodities related stocks should be effected. Maybe even gold.

Worth watching if you are still holding these types of stocks.

http://tinyurl.com/nm2mwd

CP think of it as a shorting opportunity. :)

But for the record I agree with you. He's basically saying not only did he lie, but he also threw his shareholders under the bus so he and the board could keep their jobs.

They appear to be making good progress on several fronts,and their diabetes drug has done well on limited patient groups... I think this one bears attention, as additional trial placements are underway. As with any Bio., the swings will be large, and I would perfer to wait a few weeks before establishing a large position. At the present, I am buying small amounts. Any of you guys have more insight than is present at this time ?? Thanks, and hope all have a good weekend.....

news was sold
rolling over right now

Anyone buying miners today or waiting for bigger
dip?

Sold PFE and TIP this AM

looking at adding to my KGC at some point

lol

"complete trust"

Would you be trying to secretly unload $134 billion worth of something you had "complete trust" in? Only a few 3 countries even own that much US debt in the first place, so it doesn't even matter if it wasn't Japan trying to unload them quietly.

Maybe this is a good catalyst for a $USD rally, the fact that somebody wants to ditch their treasuries...

Just think of the 100,000pt rally we'd have if Paulson, Bernanke, Bush and Obama all got up on the post to declare they lied to us all about everything we were told!!!!

with the lack of volume, i am suspecting another end of day rally into the close. I am only going by past several sessions.

One side note. How many people here have had their luggage inspected to the point where a batch of treasury notes hidden in their luggage would have been found by customs agents? I mean, really?

I'm guessing this might have been a US intelligence agency success. Try this on for size: The NSA (CIA?) figured out what was going down, and they notified the italians and - italians win, the US government wins, and the chastened japanese are stopped from selling off their treasuries.

Darned Japanese. Who do they think they are, trying to sell their treasuries?

Standing aside on the miners. Sold PAL yesterday at 2.70 BADLY heading toward the close. I just couldn't take it home with the ondexes failing to do what they needed to yesterday.

Haven't touched Yamana since it tortured us longs and depleted our funds at and below the 20 day.

If if makes an A-up on monday good underlying and all that I will load the boat but that's next week. Had it fallen TRAGICALLY to 9 I would have bought there, but so far the 950 turnaround has been a big disappointment.

I think the game's probably over for me 'till nxt week. Besides, the sun came out. I haven't seen the sun in a month and a half!

Hola shark, from the land of sunshine:
Gold seems to be hovering, here, at 940 doesn't look like much change for ABX or Tek.B and YRI:T is only down .35.
Looks like it's holding, reason to sell ?

why I am trading, at this point, lower priced equities, especially biotechs. My belief is that the ' market ' is an endless ocean, basically every cycle repeats itself in chosen points of time vs. sentiment ( ie: the entire course of traders emotions and choices ).. kinda like the cycles of the moon and its effects on the oceans ( no, I don't use astrological charts... not yet, anyway !! ... although there is some valid ' research ' out in the wild blue )... but anyway, it seems that, at This point, the fund managers have just about played their hand and what they are investing in, or going to invest in ... which leaves ' the trade '... I am strictly thinking of the extreme trade moves, the 2,3 and 5 baggers... America, and the world for that matter, is getting sicker every day.. Yep, certain disease rates have come down, but the overall expansion is increasing ( does that make sense ? ).. The more ' common ' ailments such as Diabetes, ALS, Lupus, joint destruction, etc, are multiplying.. No one will tolerate pain and discomfort for long, so either suicide will go up, or the search for relief will go up ( or both...blame it on politics )..... I do believe we are reaching a point in time where the new ideas will come to fore, bringing their respective companies with them. There are so many ' once high flyers ' that trade for basically pennies... The really neat thing is, their research has advanced, while the stock prices have fallen... what a great and perfect combination. Risky, yes... But isn't that why we are here.....

Did not expect this reaction when I opened the Linux/Ubuntu subject.
For those of you who may object to the posts, lo siento!
For "trading" using anything BUT Linux is dangerous. The only MS O/S that worked , IMHO. was PRO 2000. If you want or need help, please email me, not the forums.(6+ yrs Linux)

http://ronsen.blogspot.com/2009/06/we-are-here-tel...

Intraday tells. Use at your own peril.

baz22 - Welcome, please keep posting here but you must promise not to follow my trades.... for I don't understand any of the basic concepts of market psychology. ;)

From a newbie whose still very "wet behind the gills" to one just joining us...welcome. These people are great!
salty

I'm standing back from it today, but the rise to the close is on again. A good entry would have been $64.3 at 12pst

Looks like some serious sector rotation into REITs. The market is moving sideways, but individual sectors bounce up and down with enough volatility to make HB&B some money.

Isn't this interesting it happens right after the MACD crossover yesterday? Wonder how many people got short (in SRS) only to have the rug pulled out today?

I was looking over JPM and it looks like S & P downgraded some Jumbos and other stuff recently today.

From what I've been reading on Minyanville today, the housing market is going to be a drag on America for a long time to come, the equity market may consolidate and base sideways in a range...what Kruger called "inlier event". I'm thinking of loading up on some yield product and riding out the summer. give trading a break and get some fresh air. Given the apparent fundamentals, can oil really go much higher? If it does, it starts to hurt the economy. The market appeared lethargic today.

SMH
$RLX
XLK
XLY
GS
JPM
XLF
MS
WFC?

They are up half and down half...it has been a battle for direction recently. Light volume compared to yesterday except xlk and xly.

Few of you have held TBT for a while, does it have the same decay characteristics as 3X funds, any opinions? I think we are going to get another opportunity to go long with TBT & am thinking how i should deal with it?

"I'm thinking of loading up on some yield product and riding out the summer."

I've been thinking the same thing, can't afford to waste another summer.

SRS - Looks like it may be headed to ~$20... just confirmed support today.

OOOOooooo... Lookie here!

A trade war with Israel:
http://tinyurl.com/luqjg2

The US can stop subsidizing the Israeli state for billions annually... and stop favoring the Israelis with corporate contracts.... and stop allowing Israelis undue influence in management and regulation of inistitutional and govermental procedure and policy here in the US.... This might be our chance to take them out of the military-industrial-banking loop altogether here in the US! Where do I sign up?!??!?!

I suspect big Benjamin will have a short convo with this guy soon. He will say ; "Dont bait the goyim, Peled."

...hehe...or something else just as profound.

I saw on a different board that Merril Lynch upgraded Simon Property (SPG) this morning but haven't seen anything else to confirm that. SPG was very weak Wednesday with a modest bounce on Thursday.

Today looked like the market trapped traders that tried to reshort SPG on the Thursday bounce (off the Wednesday low). If it was indeed the upgrade from Merrill I think it is a great indication of how powerful market participants can use media to influence short term market direction. Also Friday upgrades/downgrades are about as suspicious as they come. SPG has made lower highs and lower lows since 6/1/09 -> next lower low to break is that $51.08 from Weds.....

NLY also looked like it may have just closed an overhead gap in its 5-day chart at end of day and could be susceptible to a reversal next week.......or not.

In general these REITS look tired and I am skeptical that HB&B can pump enough sectors to create another leg of this rally soon.....unless the US dollar gets blown to smithereens that is.

Billy I watched SRS really close this week. I believe its movement this week could be linked almost entirely to treasury yields in anticipation of future mortgage rates. I believe upgrades and down grades had little effect. Today's decline was due to the perception that the 30 year auction went well yesterday blah blah IMHO.
Bob

Canada's former Prime Minister on BNN today:

"Sooner, or later, China's Hedge Funds are going to fail. There's going to be a mortgage meltdown in India."

Whoa! That sent a shiver up my spine.

No, not part of a snippet - it was a 30 minute interview. I rushed to post it here. When pressed a little later (I think he unnerved one of the interviewers) he did qualify it by saying something along the lines of "look, it's inevitable. As Brazil, China and India's economy become as large as the U.S. they are bound to experience financial crisis. I managed my way through 4 or 5 of these since the 90's. It's going to happen."

Nevertheless, it was his specificity as to the source of the flashpoints that jarred me.

Here's the full interview: http://watch.bnn.ca/the-close/june-2009/the-close-...

The issue begins around 13:00.

Morgage meltdown in India?
less than 10% of home have morgage in India. and they don't give you morgage unless you have 25% down payment

Maybe commercial mortgages?

2nd
Now I am not planning to make killing, but to make or lose small amount. When time is right I do have my eye on OEX. Wants to make only few OEX trade every now and than but wants to hit it right. I know market always will give us that time. Went with airliners instead of DUG

CP said: "but I assume there was no specific horizon given in terms of chronology?"

Yes, CP, that's correct.

Say, while it's the weekend and trading decisions are less "urgent", I'd love to discuss a (possibly) really dumb idea that has been rattling around in my head for months.

The idea is basically the following: Invest where you spend

Maybe, at least, at the core of your investments, how about investing in dividend paying assets that reflect your personal expenditures, proportionally? So, I'm talking about REITS if you are a rentor (no sense in doing this if you are a home owner), Telecoms if you are a home/mobile user, Tobacco if you are a smoker, Utilities if you pay such a bill, Gov't Debt if you pay taxes, Mutual Fund Companies if you are being bled dry in your RRSP (401K) management, Real Return Bonds if you are subject to inflation in your home country, Banks if you have debt with one, Food Providers if you eat :), etc., etc.

The goal would be to recoup your core expenditures almost exactly. Once achieved on a consistent basis, if you're a saver, that money is truly disposable income that can be invested in willy-nilly as you please, secure in the knowledge that if you fail, you are certainly immune from calamity.

(after writing this, I had another dumb thought - maybe that's precisely what prudent investing is all about ?)

Mackinaw
My son goes there five times a year for his company’s business. And I hear from him is there was never a recession, no slow down or any impact of global slow down. Only sector that was affected was software Service Company who had contract with US Company. And Impact there wasn’t much. No one cancel contract but they got more contract.
I don't know about commercial morgage but do know that over 80% of home are self finance and has no morgage.

Mackinaw - Certainly not dumb thoughts by any stretch of the imagination, don't sell yourself short (Ha, a trading term!). Sometimes we miss the forest for the trees and need to step back for a panoramic view. I'm going to give it some time to sink in and see what comes to mind....

I'm playing a round on a slot machine that's burned every player for the past 3 months.

That's what I hear also, Vinod. And I'm banking on it, if you know what I mean :P.

Yes, I did. As I mentioned, I believe it has some more upside but the timeframe on that is a bit unclear to me now. I sold it on 8th of June @ $56.27. Today I bought TLT at $90.22. I'm nervous about it, but the strength (and now weakening) of the C$, the decent yield, the hedge it provides to my other stuff in this market condition, and the confidence I have in the signals (including many opinions here) I use, made me do it. There's a stop on it - pretty clear in the charts.

Mack, as the CDN$ passes the .90 mark it becomes a mutifold problem for Canada.
The slight dip is good for exports, which go mainly to the U.S., but we can buy many Canadian food products at Mega (Mazatlan) , at some point the C$ becomes a burden past 90cents. Plus California has enough trouble paying it's electric bills to B.C.

Rather than listen to the opinions of others, sometimes I try to just think things through using common sense.

(a) Last Friday's employment report was viewed 'positively,' as it presented the POSSIBILITY that the rate of layoffs/job losses may be slowing. However, (i) 600k+ jobs lost is still a huge number- that's 600k+ fewer paychecks every 1-2 weeks available to pay the mortgage or the rent, (ii) the number is subject to upward revision next month, and (iii) next month's numbers may again show an increase in the rate.

(b) The official unemployment rate is now 9.4%. I can't recall a rate that high in my career. That has to be meaningful. It doesn't matter how low home prices are- you won't qualify for a mortgage without a job.

(c) I haven't seen 4.875% for a 30-year fixed for several weeks. It's now closer to 5.5%. Absent a subsidy from Uncle Sam, interest rates are not contributing to affordable loans right now.

(d) Personal experience. I purchased a home in the Bay Area in 1993 at a 33% discount to its (prior) peak- I was pretty sure it was 'the bottom.' It wasn't far from the bottom. But it was another 5 years before prices began to move up. Is the 2008/09 recession about as bad, or worse than the early nineties recession? I think it's worse.

(e) It was only 3 months ago that lenders and homebuilders were being sold off indiscriminately. XLF is up 2x from the low, XHB +50%. I can see the trend is up, but I don't want to be opening positions now.

(f) Pz- That was a magnificent spike down on Sponge Bob today. It was about a year ago bloggers here were speculating that SKF and SRS might hit 200. They went on to hit 300 (albeit only momentarily). I'm not looking for 200, of course. But hitting doubles with today's buys is probably not off anyone's radar screen.

Yes Mark, we need to get more creative. Maybe a hip hop flavor. How about M-Dub or Emindubayu or maybe MW-UNG.

Mr. Martin's comments relate to the fact that an absent regulatory framework for every participant in the global economy will see a major meltdown for the beneficiaries of legerdemain, for example Chinese hedge funds, or that a housing boom in India could burst like a bubble, because there is no real political will to create an effective one.

But you know, this goes back to the New York Times article by the former IMF economist who outlined how this is occurring in the U.S., how the emphasis is on the effort of diverting any political pressure from the banks and keep it on the shoulders of the populace.

If Canada is to see its way out of the deficit by 2014, then obviously Mr. Harper's conservative government is leaning towards legerdemain of the type we have seen in the U.S. and creepily announcing the fact on Fox news.

Little known to the public is that Canadian banks ARE exposed to legerdemain already, with exposure both to real estate and hedge funds both in the U.S. and the U.K. There have already been somewhat hushed minor incidences of trading impropriety by a major Canadian lender tied to derivatives in London, and another just took major writedowns due to exposure in the U.S. mortgage market. Not even discussed is the merger of the Montreal derivatives market with the TSX, which was the epicenter of the ABCP scandal, which simply got swept under the rug.

For instance, should the $C decline in an oil price debacle, that would effectively scotch stability in the bond auctions, so how does the former Prime Minister even get away with such rotten drivel? Glibly glossed over.

Over to you!

MarkW - yeah the TBT thing I bailed out of a couple of days back. I got stopped out, bought back in, and got stopped out again. I figured it was a sign. Then Bill says he went and bought TLT and that kinda put a damper on my enthusiasm to get back in. Looking at the TLT chart just reinforced that feeling.

Also, I bailed out of my UNG long. Still have my short Oct 13 puts, but I was feeling kinda twitchy today. I like the play, I'm just not sure I like the vehicle, or the timing. The natgas companies are bid up all to hell and gone, and the commodity ETF seems squirrelly. And the futures have dreadful leverage and volatility.

I will miss Mark Barry. MarkW just doesn't seem the same. But then again, my last name really isn't fairtex so I shouldn't say anything. :)

ALOHA !!

When my wife and I were in Sydney, Australia in 2008 we went to the movie theater at Circle Quay. We wanted to see this movie entitled KITE RUNNER, but we got there too late. Now over a year and a half later we are going to watch it on DVD tonight. It has a Middle East theme.

Last night we watched BODY OF LIES, also a distinct Middle East theme. Essentially the movie is about EMPIRE and its folly, even if the EMPIRE is high teched up its ying yang! What EMPIRE, past and present, is more high tech than that of the USA? In terms of EMPIRE ... HISTORY REPEATS AND HISTORY REPEATS PRECISELY!

I guess this weekend we are on a Middle East theme, so where's the couscous and falafel?

ALL OUR BEST THINKING ...

Kaimu, Kiterunner is an afghan movie - nice one.... hv u watched whale rider (about Maori life), you might enjoy it as well

Mark - FWIW, I promise to think of you as "The UNG Guy".

kaimu - Yes, that chart does reveal a certain perspective... of what "it" isn't! As in "it" isn't pretty at all, and not isn't "it" pretty?...!

MORE SUGAR!!!!

CP- Ah, like Mark is full of gas?!

Just a quick note to all, as you will see tomorrow, my NG stance hasn't changed at all. I just need to get my head around UNG and how it really works.

http://research.stlouisfed.org/fred2/categories/11

It is interesting to me which of the charts are the steep steady slope up, and which are not.

steady upward:
All Employees: Construction (not that steady, but rather close)
All Employees: Information Services (but strong down slope since 2000)
All Employees: Retail Trade
All Employees: Professional & Business Services (does this include finance?)
All Employees: Service-Providing Industries

inverted U shaped:
All Employees: Durable Goods Manufacturing
All Employees: Nondurable Goods Manufacturing

How much of the US economy produces/provides goods and services that can be exported?

I like these charts better:

All non-farm payrolls (non-seasonally adjuested): http://research.stlouisfed.org/fred2/series/PAYNSA...

Service-providing industries: http://research.stlouisfed.org/fred2/series/SRVPRD...

All professional services: http://research.stlouisfed.org/fred2/series/USPBS?...

Retail trade: http://research.stlouisfed.org/fred2/series/USTRAD...

Leisure and Hospitality: http://research.stlouisfed.org/fred2/series/USLAH?...

Education and health(talk about recession-proof): http://research.stlouisfed.org/fred2/series/USEHS?...

Government: http://research.stlouisfed.org/fred2/series/USEHS?...

It all looks to me like a wealthy, prosperous, highly evolved service economy experiencing a recession(correction). I would imagine that Luxembourg's manufacturing data looks pretty weak too but I doubt they are too worried about it.

ALOHA !!

Shiva ... If its remotely Oceania and Polynesian I have seen it. Yes, I did see Whale Rider and it was a good movie. For a different Maori take there is the movie "Once We Were Warriors". I do love Maori art and carvings, which I have collected over the decades. My favorite New Zealand based artist is John Pule(Pacific Islander from Niuea). He is also fairly well known author. Here he talks of his artistic influences.

"Dreams were the holy ground from which your ancestors could stand and direct your life, introduce you to visions, symbolic pictures of places, caves, faces, animals, insects; also where they cry and lament, laugh and run, bring rain and storms, set canoes adrift, destroy gardens and homes, take children, leave messages in stone.

A lot of my work then was about the entry of Christ into the Pacific. I depicted him as a sickly, unhealthy person, being carried by Islanders, and also hanging loosely on the crucifix . . . he's up there for ages . . . no one wants to bring him down. No one wants to have anything to do with darkness. It's a dark subject, even though Jesus is supposed to generate light." END

PULE LINK: http://www.artsfoundation.org.nz/johnpule.html

Hummmmmm ... anyway, I love most anything OCEANIA! That's why I am in Hawaii ...

Gold:Silver ratio

Historical patterns, trade considerations.

http://tinyurl.com/nhz4kw

Mackinaw,

This is something like the approach of Peter Lynch who was very successful at Fidelity Magellan with companies he researched by using their products — Dunkin Donuts, Bed, Bath & Beyond.

I bought stocks of a few computer related companies whose products I found superior to others — two went bankrupt, (Eagle Computer, Syquest) the others I made a little, but nothing grand. I didn't buy, but thought Beta much better for video.

I suggest caution in trying to use any hard and fast theories there are too many variables.

When it worked for Lynch computer trading was minor, 24/7 news was only beginning and the Fed, the President and financial entertainment TV were not always in your face. When he was hot and looked brilliant, even I was making annual gains of as much as 30% (late 1970s to early 1990s). My only losing year since I was able to manage my own retirement account (beginning 1983) until now was 1993.

Last year I was lucky to break even.

BP,

"-if everyone is printing money, any debt problems should go away. Would love to hear opposing opinions."

I will assume you are serious or simply speaking in view of the market hype & government jawboning and phony data which has driven the equities to an annual high.

Debt problems are growing by leaps and bounds. The mortgages of people with major home equity and excellent credit history are now in danger of default.

Commercial real estate has not hit the "non- producing loan" fan yet.

"Less bad" is to job growth what remission is to lung cancer.

Add in the dollar image deterioration and massive bond sale issue.

You were kidding... right?

Mack,

"I'm not so sure that that diversification idea saved one from any great pain."

Just this morning I read about a local area, fee-only investment managing firm making the list of the best managers. (a never-heard-of-publication blowing smoke)

I attended a presentation at which a very nice young man showed graphs comparing stocks, bonds, real estate, etc. from before 1900 to 2007. His point in the long run stocks will out perform. Great no brainer for those who never plan to die.

Diversification was his point and the company strategy — including domestic and foreign investments — his clincher: "What are the chances of 70,000 companies going down at the same time?"

My question to him (after the presentation) "So, couldn't a person simply buy the Vanguard Total Bond, Total Stock and Total foreign of both?" (Implication: Who needs your company?)

A short time later I read "The Black Swan". A little later 70,000 companies (at least) went in the tank.

Last I looked Vanguard too had a whole bunch of -30% funds last year.

"Last I looked Vanguard too had a whole bunch of -30% funds last year."

The part I don't understand is how these suposedly professionally managed funds could loose so much in such a short period of time unless they were contractually obligated to do so. If that were the case, they would have to outperform considerably under normal conditions before I would consider accepting the risk.

For me, the inverse is true in terms of Treasuries from a buy and hold perspective, as the risk is supposedly low but the returns are substandard.

http://finance.yahoo.com/tech-ticker/article/26299...

Alcoa(AA) and Talisman(TLM.TO) have been strong well priced scalpers for last couple of weeks. Those 100$ scalps do add up although if i had kept my initial purchase of 1000 shares of Alcoa at 9.89 and done nothing, the gains would have been better.

I will keep buying from 'fear' and sell to 'greed' on a daily basis.....That's what this casino is good for...

"At 666 it felt like a tightly compressed spring. If we assume this is a bear-market rally, then was it not fueled/refueled by negative sentiment/continuing skepticism?"

Agreed, let's not rely on a false sense of security. What we have here I gather, is a false rally sponsored not by improving fundamentals so much as by manipulatory prodding. The FED is holding $7 Trillion off balance sheet and the extremely leveraged financial system is still hemorrhaging in triage. These guys are so far under water there's just no way most won't drown with the weight they're carrying. After all, how do we know this rally wasn't bought and paid for as a last ditch attempt, and what arrangements have been made for when the final bill comes due?

Treasury receipts, if they are to be believed, simply don't support a case for recovery while government spending has gone exponential. This could be a recipe for disaster; practically any kind of powdery substance is capable of explosion under the right set of circumstances:

http://www.osha.gov/dts/shib/shib073105.html

Of note: The fires are burning, are we nearing stage 4 or 5?

Elements Needed for a Fire (the familiar "Fire Triangle"):

1. Combustible dust (fuel);
2. Ignition source (heat); and,
3. Oxygen in air (oxidizer).

Additional Elements Needed for a Combustible Dust Explosion:

4. Dispersion of dust particles in sufficient quantity and concentration; and,
5. Confinement of the dust cloud.

It looks to me as if there's an over-abundance of dust about to be delivered into a confined space inhabited by a slew of firebugs.... GLTA!!!

It's time for me to go fishing, enjoy the summer, and sit back and watch the concert from high up in the bleachers where chances of being drenched with blood stains are lowest.

I think if you look more closely, you'll find a very high degree of common holdings within fund families, and as a result, even if they decide to exit any one issue, it slams that issue, so instead they try to hold on through downturns, because as we have all been brainwashed to see, stocks always go up in the long term. In my mind, that more due to intentionally low reporting of inflation (ie increased money supply) than anything else.

cheapy,

Buy & hold is still treated as Gospel by some of my friends. They think I'm a nut who sees conspiracies all around us. I occasionally watch CNBC and other TV BSers and read the popular financial pubs and see they are still pushing the same babble IN SPITE OF ALL THEIR RECENT BAD RESULTS — unbelievable!

Money Magazine, Kiplinger, — and of course, the US Government data!

Currently, however, IMO the CPI housing sector (the largest single category) is softpeddling the deflationary effect of the mortgage melt. Owner Equivalent Rent is the skewing item — rent being a lagging indicator.

The unemployment numbers would be a joke if not so sad for so many people. I am skeptical of anyone's attempts to forecast beyond a day. But I'm the same way about the weather — look out the window and look at the market — is best.