This is one of those instances where “noise” becomes primary mover and lets the crowd get emotionally involved. If there is a 300 point rally in the Nasdaq from here, the 80 point gap in Google is just the beginning. I talked about the financials when the market was almost 800 points lower than where [...]
Ivanhoe Energy, for having figured out how to dramatically alter the energy equation of bringing Bitumen (Oil Sand) to market in a cost effective and very ingenious manner that is patent protected, environmentally friendly, and has been tested by all the major producers with investment in Oil Sands, the market seems to not have noticed. [...]
FC Stone Group (FCSX) is up huge on blowout earnings. I indicated in the April 2 post that the fundamentals here are absolutely incredible, the volatility in the markets is the equivalent of a major gold rush, and they are shielded from the mortgage market because none of their trading partners are exposed to anything [...]
SLM: Sallie’s showing great bid support after a 4-point run from where the entry was. It’s probably tempting to sell for $19 something you just bought for $15 about ten days ago. I know, “compound it out and that’s a fortune”. The problem is that it hasn’t been a year and this is a volatile [...]
I’ve been slammed with emails from people wondering why no global macro commentary on the recent action. My response has been: “It’s far too late for commentary now. There’s nothing to do or change based on the market operation that was put in place when everyone else was screaming bloody murder”. In other words, as [...]
Financial stocks in the stock market presenting major buying opportunities but risk is high so trading sizes should be reduced significantly and long term positions built up over time. Exploit the volatility.
There’s absolutely no way to predict how the market is going to behave in the near term. This is where the “chaos” meter spikes off the charts. Pure random noise. But one can, if one so chooses, to react based on certain “tactical” guidelines. I would prefer to see some retracement early in the trading day, a base to develop over several hours, and then a continuation on Thursday and Friday for another 10% to 15% from here. These short term bear market rallies are hands down the best market environments to trade the bull side. The problem is that it would also require sitting on one’s hands for several days, weeks even, keeping the powder dry. Since most full time traders can’t sit out from the market for sustained periods, there is a tendency to give gains back.
The massive gap to the upside is a bitter-sweet move for those with long-term investment horizons around the financial stocks that have been mentioned here in the past two weeks. Bitter-sweet because although it should show good profits for long positions, it also places a big, nasty gap right below current prices. And being that [...]
A great way to take advantage of the excess pessimism in the REIT sector is to buy URE, another geared ETF that holds a portfolio of very strong REITS. Remember, this is also a 2X ETF so it will move twice the regular Real Estate index.
The true nature of an Investment Capitalist includes the ability to implement the appropriate mechanisms available to a financier. This implies that one must be a great industrialist, speculator, capital provider, opportunistic (i.e. vulture), optimistic (i.e. venture) and everything in between.
Morgan Stanley (MS) has rewarded us for being patient. In my last post on January 21, I suggested she would trade down in the low 40′s. If you missed the idea, this stock is looking very attractive as a long term investment for so many reasons that I don’t want to even bother discussing them all here, but I will list them: Forward P.E. in the single digits, Fed is in aggressive cutting mode and lending margins are expanding, sub-prime is expected to get much worse from here and thus priced in. Therefore the risk is to the upside.
Remember, it’s times like these when fortunes are made. Contrarian traders have to buy when most market participants think their stocks are going to be worthless, and sell when these participants think they’ve missed the boat. Now is the time for the former so get your buy orders ready, and let’s make some money.
