So as i write this, Russia has some how managed to organize and execute a massive military movement that has largely gone completely unnoticed by our intelligence community (thanks homeland security and the NSA), meanwhile our president managed to squeeze in a press conference between volleyball practices to address mainly the murder of Americans in china and by the way the war that has begun in Eastern Europe. Watching the president talk he spoke of the aggression of Russia in the same manner as he did when he spoke about the weapons of mass destruction back when he started the war in Iraq and later spread violence to Afghanistan.
Once again we have people talking into microphones and having no idea the recourse of their words. As the president speaks and talks about Russia with his casual swagger as is he is referring to some third world oil sultan, in fact what he is doing is completely insulting the proud Russian nation whose exports are primarily oil and natural gas. Slippery slope President Bush, slippery slope. So once i saw all this i went online and headed to the World Russia website and low and behold one of Russia's biggest news outlets has the president's comments posted for all of mother Russia to see cleanly edited together and translated. Say hello to my little friend, the COLD WAR.
Meanwhile we have more Americans being murdered in China and Germany making deals with Russia to make use of the Georgian pipeline they will soon control. And can i add the judging discrepancies in the women's gymnastics events? It seems that American sentiment is about as high as our president's approval ratings.
So what to do?
First move to Costa Rica. My wife and I have long dreamed of buying a small hotel down there on the beach and teaching surf lessons for the rest of our days. Ahh Costa Rica....OK I'm back from my little daydream. Well since the US has all ready over extended itself in the Middle East and therefore can't do anything about Russia marching across eastern Europe through the Ukraine and onto the former Chzeck republic our answer is NATO sanctions. But this isn't Cuba and we are not boycotting sugar, we will be natural gas and oil.
So after reading that guess what my trade is. Although it may be too soon to back up the truck and start loading up on OIL (OIL) today I started to open a position. Besides oil is at a three months low so we may be able to get a small pop and take some profits as the rest herd out there in the world tries to make the same trade.
Our other trades still remain the same, I'm keeping my eye on Gold. The technical charts on Gold (GLD) are starting to look ripe to open a position and get in a quick trade but also start building a position for the next two years. $1200 gold in my view is not unreasonable in the next two years as the economy feels the effects of commodities stabilization.
Next Wells Fargo (WFC) I have been picking up of down days and unloading as volatility allows. In my opinion Wells Fargo is the only bank worth owning and therefore would be willing to execute short term trades.
Lastly I opened a position in Eagle Bulk Shippers (EGLE) last week and got a nice surprise on the quarterly report, but still i will add to this position as it pulls back in the coming weeks. This is the only individual stock I am accumulating right now in my long account. Take a listen to their conference call and you will see why.
Any way that is all for now. To every one out there have a great weekend,
T
Friday, August 15, 2008
Monday, August 11, 2008
For the love of baby Jesus read this!
OK that may be a little over dramatic for this blog title, but I'm trying to convey the importance of what I'm about to share with everyone.
So as some of you may know the market for the last few weeks has been on a tear. The DOW has trended upwards almost above it resistance and seems to be die hard set on breaking that 11,900 level, but as i write this i can see the flow of money pulling back and as a result of this the Dow will most likely stay perched comfortable at its 11,700 level. Also in not so breaking news OIL and Commodities have fallen adding to the recent rise in stock prices. Adding to the fan fair the Dollar has bounced off the ropes and shown some signs of strength.
So what does this mean?
It means stay very causiuos. Remember most money managers are sheep, but in this case they are acting more like lemmings and the boys club that is Wall Street, it seems to me that most of these guys have trouble with original thought and it is them who are driving stock prices up.
OK I'm done venting and let me get to my point.
Let me begin with this, like all things the market and our investing environment are always changing and this day is no exception.
If you look below to my first posts when the market was down at 11,000 and i was writing to you to get into Well Fargo (WFC). Or look below when i told you to buy what ever or sell options and if you were on my side of these trades you would be up 22% on the year. Not so bad for the worst market since the Great Depression. Of course i write that jokingly.
But before when i told you to pull these short term trades the US economy was growing slowly and the only thing driving stock prices was the doomsday reports i saw on the news. But now as I look at the economic data i see, in my opinion, the real beginning of a true bear market. Unemployment is growing along with jobless claims, which is going to start being reflected in Real GDP growth. I also see US exports growing which tells me we our losing our own products to foreign bids. This in my opinion is wealth leaving our homes and going across the oceans to improve other people quality of life. We also have a Fed that has over played its hand and has no option now but to do nothing and watch all of this unfold due to inflationary constraints. Oil and commodities are down due to the lack of global demand signaling the world is starting to curb its spending habits. All of this in the long run will kill cooperate profits and only allow for single digit returns on most market investments.
So where is the trade?
First is first, decide your level of tolerance to risk. If you are over 50 let me decide that for you...you have no tolerance to risk. The purpose of life to to relax and enjoy. So nothing is worth the risk of taking that away from you. If you are closer to 35 your risk level is at your own discretion, but still there is never a need to be reckless in the market.
Next get into Cash, just shy of 40% should do. If you have been in the market for the past couple of weeks take those gains of the recent run up and trim those positions and with that money buy into some sort of BBB rated notes and lock in some gains. If you have access to convertible cooperate bonds the better. A good medium risk debt trading just below par will allow for growth of your portfolio and limit your ability to jump in on an impulse when things look misleadingly good. Most people treat bonds as this thing they only talk about in their 401K but call your broker and get educated and learn to trade them, they can be a great addition to your portfolio and most of them return more than you think.
Next look for growth, find companies that are growing their business in this very uncertain time. For example I like two, ABB Ltd (ABB) they are build transformers and and will be their to profit from the aging and expanding power grid. The next is Eagle Transport (EGLE) they ship dry bulk goods such as coal and steel. They are planning on growing their business by 300% in the next 5 years. Imagine the returns of investment and EBITDA once they acquire the new business when those ships get built. As Chindia expands it will be their boats that take all our resources away. Take a gander at these two and you'll notice two very confident and well run companies that are not hiding from the world economic environment.
Take Care All,
T
So as some of you may know the market for the last few weeks has been on a tear. The DOW has trended upwards almost above it resistance and seems to be die hard set on breaking that 11,900 level, but as i write this i can see the flow of money pulling back and as a result of this the Dow will most likely stay perched comfortable at its 11,700 level. Also in not so breaking news OIL and Commodities have fallen adding to the recent rise in stock prices. Adding to the fan fair the Dollar has bounced off the ropes and shown some signs of strength.
So what does this mean?
It means stay very causiuos. Remember most money managers are sheep, but in this case they are acting more like lemmings and the boys club that is Wall Street, it seems to me that most of these guys have trouble with original thought and it is them who are driving stock prices up.
OK I'm done venting and let me get to my point.
Let me begin with this, like all things the market and our investing environment are always changing and this day is no exception.
If you look below to my first posts when the market was down at 11,000 and i was writing to you to get into Well Fargo (WFC). Or look below when i told you to buy what ever or sell options and if you were on my side of these trades you would be up 22% on the year. Not so bad for the worst market since the Great Depression. Of course i write that jokingly.
But before when i told you to pull these short term trades the US economy was growing slowly and the only thing driving stock prices was the doomsday reports i saw on the news. But now as I look at the economic data i see, in my opinion, the real beginning of a true bear market. Unemployment is growing along with jobless claims, which is going to start being reflected in Real GDP growth. I also see US exports growing which tells me we our losing our own products to foreign bids. This in my opinion is wealth leaving our homes and going across the oceans to improve other people quality of life. We also have a Fed that has over played its hand and has no option now but to do nothing and watch all of this unfold due to inflationary constraints. Oil and commodities are down due to the lack of global demand signaling the world is starting to curb its spending habits. All of this in the long run will kill cooperate profits and only allow for single digit returns on most market investments.
So where is the trade?
First is first, decide your level of tolerance to risk. If you are over 50 let me decide that for you...you have no tolerance to risk. The purpose of life to to relax and enjoy. So nothing is worth the risk of taking that away from you. If you are closer to 35 your risk level is at your own discretion, but still there is never a need to be reckless in the market.
Next get into Cash, just shy of 40% should do. If you have been in the market for the past couple of weeks take those gains of the recent run up and trim those positions and with that money buy into some sort of BBB rated notes and lock in some gains. If you have access to convertible cooperate bonds the better. A good medium risk debt trading just below par will allow for growth of your portfolio and limit your ability to jump in on an impulse when things look misleadingly good. Most people treat bonds as this thing they only talk about in their 401K but call your broker and get educated and learn to trade them, they can be a great addition to your portfolio and most of them return more than you think.
Next look for growth, find companies that are growing their business in this very uncertain time. For example I like two, ABB Ltd (ABB) they are build transformers and and will be their to profit from the aging and expanding power grid. The next is Eagle Transport (EGLE) they ship dry bulk goods such as coal and steel. They are planning on growing their business by 300% in the next 5 years. Imagine the returns of investment and EBITDA once they acquire the new business when those ships get built. As Chindia expands it will be their boats that take all our resources away. Take a gander at these two and you'll notice two very confident and well run companies that are not hiding from the world economic environment.
Take Care All,
T
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