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Talking stocks, trading, and investing in general - Page 566

post #8476 of 11197
Quote:
Originally Posted by chogall View Post
 

 

bear market is -20% by definition.  this isnt even a correction (-10%)

We have oil tanking and healthcare deflating. I feel other sectors will begin to follow.

 

We will see though. I hope I am wrong.

post #8477 of 11197
Quote:
Originally Posted by SkinnyGoomba View Post

I'm slightly baffled.....seemed like the rate rise was a sure thing last week, and so the market went up which I thought was an odd move. Then tumbles all week, partially due to oil and partially due to interest rates.

And so OK, the market is digesting information, but why are banks not rising?

Also, they keep hammering at the notion that oil companies are going to cut dividends....most of these oil companies have been through worse in the past and so many of the majors have stated that they're committed to the dividend. I think it's just fear mongering at this point.

 

 

Quote:
Originally Posted by GreenFrog View Post

I'm confused too. The market rallies like crazy on a strong jobs number because that implies rate hike and less uncertainty.

Then the following week the market sells off on the impending rate hike? Wtf?

This market has me confused af.

 

 

Quote:
Originally Posted by lawyerdad View Post


Well, you're kind of commingling market sentiment with fundamentals, no? Pretty sure this is the former. Shit-ton of scare mongering press this week both about the oil situation, and about supposed indicators that equities are due for a correction. Plus we're getting into the season when people rationally sell losers to capture losses and somewhat less rationally sell winners because they think there's some value in locking in the ability to say they made X amount this year. Overall, in my completely amateur opinion, today was just one of those days and not a great signifier of anything in particular.

 

 

Oil situation is only a very minor slices of the problem.  i.e., prices did not reflect Russian's attacks on ISIS/Turkey oil smuggling trucks (supply drop), decrease in rig counts in US (supply drop), or the potential escalation in the Shia crescent (potential supply drop).

 

The bigger problem is, everywhere else in the world is in a recession as reflected in the commodities pricing and Baltic Dry.  Part of it could be from China's attempt to shift from construction driven growth to domestic demand growth.  Even then, China's export number sunk low, signaling worldwide demand is anemic.

 

The catalyst for this past few days sell off is Third Avenue halted redemption for their high yield credit fund as they can't sell high yield bonds fast enough to fulfill the redemption demand.  That grabbed the headlines and spooked many on the insufficient liquidity in the high yield market, especially for the energy/commodity ones.  Illiquidity tends to turn into insolvency rather quickly for the levered high yield guys.

 

p.s., high yield market has been broken for the whole year and media has just starting to catch up.

p.s.s., @MSchapiro above is the reason I am cautious about SCTY/SUNE, especially when the latter is using off balance sheet vehicles to increase assets in the residential space (low quality, similar to SCTY).

post #8478 of 11197
Quote:
Originally Posted by chogall View Post






Oil situation is only a very minor slices of the problem.  i.e., prices did not reflect Russian's attacks on ISIS/Turkey oil smuggling trucks (supply drop), decrease in rig counts in US (supply drop), or the potential escalation in the Shia crescent (potential supply drop).

The bigger problem is, everywhere else in the world is in a recession as reflected in the commodities pricing and Baltic Dry.  Part of it could be from China's attempt to shift from construction driven growth to domestic demand growth.  Even then, China's export number sunk low, signaling worldwide demand is anemic.

The catalyst for this past few days sell off is Third Avenue halted redemption for their high yield credit fund as they can't sell high yield bonds fast enough to fulfill the redemption demand.  That grabbed the headlines and spooked many on the insufficient liquidity in the high yield market, especially for the energy/commodity ones.  Illiquidity tends to turn into insolvency rather quickly for the levered high yield guys.

p.s., high yield market has been broken for the whole year and media has just starting to catch up.
p.s.s., @MSchapiro
above is the reason I am cautious about SCTY/SUNE, especially when the latter is using off balance sheet vehicles to increase assets in the residential space (low quality, similar to SCTY).

Yeah, prominent among the semi-hysterical press I was thinking of were articles saying "ZOMG weakness in junk bonds, which is often a harbinger of recession!!!"
post #8479 of 11197
Quote:
Originally Posted by MSchapiro View Post
 

We have oil tanking and healthcare deflating. I feel other sectors will begin to follow.

 

We will see though. I hope I am wrong.

 

BioTech deflating.  Healthcare is not.  Gotta thank ObamaCare that caused the insurance price surges and M&A to create giant health insurers to jack up prices even more.  It's an wonderful idea to siphon more subsidities in addition to already ridiculous medicare into Health Insurance Complex!

post #8480 of 11197
Quote:
Originally Posted by lawyerdad View Post


Yeah, prominent among the semi-hysterical press I was thinking of were articles saying "ZOMG weakness in junk bonds, which is often a harbinger of recession!!!"

 

"[,,,] problems in the subprime market seems likely to be contained.” - Bernanke, 2007

ISIS had been "contained" - Obama 2015

Junk bond weakness being contained - ??? 2016

post #8481 of 11197

Stone Lion Capital Partners Suspends Redemptions in Credit Hedge Funds

http://www.wsj.com/articles/stone-lion-capital-partners-suspends-redemptions-in-its-oldest-fund-1449870782

post #8482 of 11197
Quote:
Originally Posted by chogall View Post

"[,,,] problems in the subprime market seems likely to be contained.” - Bernanke, 2007
ISIS had been "contained" - Obama 2015
Junk bond weakness being contained - ??? 2016

To be clear, I wasn't expressing a contrary view. Just noting that a couple of articles that contained no real analysis, mouthed some generalities about issues that as you note have been percolating for a while, and people jump. The big difference being the articles got picked up and reposted by Google Finance or CNN or whatever and so deluged people's RSS feeds and the news feeds on whatever site they use to track their portfolios . . .

Your Bernanke quote made me laugh, because much of my professional time over the following few years was defined by the fallout from those supposed contained problems. The phrase "we've priced and reserved for the risk" became something of a running inside joke with a few of my then-colleagues (yes, we were a f**ing riot).
post #8483 of 11197

Off-BS transactions still have to be noted in the notes to the financial statements so it shouldn't be a big issue if REITs are using them.  Enron rings a bell as for the reason for the disclosure.

post #8484 of 11197
Quote:
Originally Posted by lawyerdad View Post

Well, you're kind of commingling market sentiment with fundamentals, no? Pretty sure this is the former. Shit-ton of scare mongering press this week both about the oil situation, and about supposed indicators that equities are due for a correction. Plus we're getting into the season when people rationally sell losers to capture losses and somewhat less rationally sell winners because they think there's some value in locking in the ability to say they made X amount this year. Overall, in my completely amateur opinion, today was just one of those days and not a great signifier of anything in particular.

Just venting to a degree, if it werent for extreme sentiment I'd never get a good price on anything, but the fear mongering gets annoying after a time.

I think we're likely to see even more of this until the rate rise shakes out a bit.

I'm not a bond trader, so forgive me I'm off the mark here, but does not a selloff in junk bonds make sense? The potentiality of a rate rise, now seeming quite certain, means heavy re-pricing for the highest yielding bonds?

I've been completely out of bonds for some time now, expecting that they would be hit worse than stocks when the rates started rising, especially considering that from dec. until, who knows when, we're looking at rising rates. For as long as they've been considering raising the rates I've been out of bonds (2012 or 2013, IIRC)
post #8485 of 11197
When payday was Friday but your net worth hasn't budged because of all those paper losses

😊😊😊😊😊
post #8486 of 11197

At work we had a weird request to look into pharma stocks and particularly VRX.  Since we have no insider knowledge of that sector we just gave a view of what equity analysts were saying and stock prices throughout the year as requested.  The funny part of the request was to "predict a bottom" as this person seems to have had a large stake pre-drop and wants to buy more at a bottom to dollar cost average.  Seems even people with a high degree of financial knowledge think a bottom can be predicted these days...

 

I laughed and thought I would share.  

 

Since we are close to 2016, is anyone changing strategy for their longer term holdings?  I have debated moving some of my International Fund allocation into an Emerging Markets Fund but EM got killed this year.

post #8487 of 11197
The bottom is always zero. teacha.gif
post #8488 of 11197
Quote:
Originally Posted by jbarwick View Post
 

Since we are close to 2016, is anyone changing strategy for their longer term holdings?

 

I'm going to start buying stocks that Cramer and Seeking Alpha writers recommend.

post #8489 of 11197
Quote:
Originally Posted by jbarwick View Post

Since we are close to 2016, is anyone changing strategy for their longer term holdings?  I have debated moving some of my International Fund allocation into an Emerging Markets Fund but EM got killed this year.

Biasing away from oil related for new purchases, pretty heavily staked there.

I'll probably load up on banks this year, they're still the largest individual positions in my portfolios, but I'd like to increase them. I'll probably also add more dow/dupont because I like the prospect of them breaking up into 3 companies in the future.

I always love it when there is some bonus M&A action in my portfolio, which, with the sizes of the companies I purchase is usually them either buying companies which doesnt do anything in the short term, but is helpful longterm, or splitting up which I enjoy.

Some companies seem quite prone to it. My brother beat me to the punch on this one, he bought Phillip Morris in 2007~, which split up into Altria and Phillip Morris international, which then split into kraft, phillip morris int and Altria. Later kraft spun off mondelez and then was merged with heinz. I was a little later to the same and bought PM and MO individually but now have PM, MO, KHC, MDLZ.

For original shareholders that still hold all of the above they would own, 1 share PM, 1 share MO, .233 share KHC, 1 share MDLZ and collect;

$7.53/annually on an original cost basis of about $70/sh = 11%~ and an annualized return of 14.5% on cap gains if my math is correct.
post #8490 of 11197
Quote:
Originally Posted by SkinnyGoomba View Post


I'm not a bond trader, so forgive me I'm off the mark here, but does not a selloff in junk bonds make sense? The potentiality of a rate rise, now seeming quite certain, means heavy re-pricing for the highest yielding bonds?

I'm pretty ignorant about bonds as well. I think that's generally a true statement. But it's not like the imminent bump in the Fed rate is catching anyone by surprise at this point. If it were that alone, I'd expect the reactions in the junk bond market to roughly track that expectation in timing and degree. Again, though, I don't even know enough about bonds to toss around buzz words and fake a dangerous bit of knowledge it like I sometimes do with equities.
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