No brainer, the DOW 50 day moving avg was breached and lower bollinger band was breached in high volume one day sell -off. This is how it started in 2008. I would aggressively start accumulating ladder like approach in SHORT etf's.
IT IS, BUT REMEMBER, THE RECALL COSTS ARE ONE TIME EVENTS. Also, the recall delays are sparking alot of new sales, I saw this firest hand. We are in the midst of a replacement cycle, composed of long time holders of cars, 10+ years and demographic trends, baby boomers retiring ussually buy a new vehicle with 2-3 years after their retirement age is hit. I see GM going to 50-100 with in five years, but it could drop to 15 or lower when the BIG MARKET CRASH hits. I would go short the S&P 500, with symbol SH. Right now........cash is king. Market fundamentals very negative and spell huge losses in next 6-12 months, nothing is safe, not even REIT's. Why buy AGNC now at 23 when you can get it on sale for 50% off with a 22% yield.
I think it is. If market starts to slide, almost all of the trading volume of past two months was existing bagholders, very little new money coming in. The lack of new buyers, could signal a downswoon, if existing bagholders don't step up and start levering and margining more, otherwise the bull market has lost it mojo. All you need now is a feeling among fund managers that this is the TOP and it would be wise to take some chips of the table at the new highs.
The Bubble Witch at the FED said there are bubbles, that rates will likely rise sooner, and normalization is a certainty.........this was telegraphed to the investment community the past 2 months. My bet is sometime in the fall after the elections action will come.
You have to be very careful, wait until the normalization starts from the FED, they always give hints and the frequency increases. Yellen has been hinting for several months now, the sooner is more likely. LISTEN TO THE FED......DON'T FIGHT THE FED is what they always use to say, today, DON'T GO AGAINST THE BUBBLE WITCH, the will be popping soon.
At these inflection points of the HIGHEST VALUATIONS IN ASSET PRICES, one can have a buy and hold strategy. My strategy is to trade news and valuations, of very limited durations. You can not buy 50 year duration stocks with 1-2% yields, you have got to hedge if you do this and set very narrow trade timelines. If you have to buy and hold, look to preferred stocks but have a strategy to limit losses if their is a decline. The next BIGGEST time to get into REIT's is after the shakeout that is coming when rates do start to normalize and increase. There will be m-reits that get downed, like a 777, quickly, because they took extreme risk like flying over a war zone to boost profit from fuel savings. There will be more conservative M-REIT's, like NLY, that will just drop 50-60% and possibly be in a vegetative survival mode for 5-15 years. Then there will be the ZOMBIE'd M-REIT's, who leveraged extremely, and pushed the pedal to the floor to max yields, who will get wallopped and liquidate or get Zombied awaiting to be resued by another Capital infusion, like Bimini Capital Management (BMNM) the best performing REIT in 2013-2014. Zombie REIT's have the highest rewards and lowest risks, they ussually have deleveraged and converted to a very riskless low yield strategy to survive, I love these situations, they ussually result in 10 - 50 fold increase in your investment in a relatively short period of time. I can afford to wait in 1-2% treasuries, sitting in my back yard by the pool with a Corona, wasting my time away, in Mortgage REITAVILLE.
QE was instituted to save the banks and to reduce unemployment from the recession, not to prop up the stock market, which was an ancillary effect of QE. Now, the FED has telegraphed that stock prices are bubbled, make no mistake, when FED says something they are telegraphing changes are coming. THIS TIME, THE STOCK MARKETS WILL PLUNGE FROM OVERVALUATION, LIKE 1987, not from slowing economy, not from rising unemployment, not from failing banks. I looked at stress test data, and the FED is fairly confident we can have a 50-80% correction across all averages without any disruption to the job engine, or business solvency or bank solvency. Mainly the only ones that will get hurt is the average Joe who is in funds or doesn't know how to hedge correctly, The professionals, pension funds, banks, gov. pension funds will use the correction to bone up their long term investments to pay for baby boomer retirements. THE BIGGEST RISK TO THE FED now is the retirement system and job creation for the children of the baby boomers. Big corps., medium corps, are sitting on TRILLIONS of investment dollars waiting to invest when interest rates are normalized. THE FED IS LISTENING TO THEM. The next phase will save the pension system and create jobs for the children of the baby boomers, this is the transition phase from one generation to the next, we went through this in the late 70's and early 80's from the last baby boom, "Bob Hope" generation, all perfectly normal. The best time to load up the truck then was 1979-1982, which was the market asset valuation bottom. Right now we are at the TOP of the asset valuation or the YELLEN BUBBLE POINT.
Your 100% right. IL Sen. Obama and Illinois Democrats have 35 years of actually doing this in ILLINOIS. In fact the more they bing in, the more needy the existing skilled workers become dependent on gov. handouts and programs.
This is so clear to see, but I will briefly cover the bullet points. Short rates were pushed to zero from 4-5% from QE. Long Rates were pushed down to 3% from 4-5% from QE . Long rates are near 3.5-3.7% now and will slowly rise to 4.5% over next two years, very easy to forecast this and not much demand from 90 million baby boomers retiring over the next 10 years, hence these should stay low. The short term rates will rise, this is the most risky, since FED intervention is leaving. Market makers and demand will become KING. You need money quickly for short period of time you are going to pay the market rate. Look at payday loans and income tax refund loans. I see short rates really soaring, back to what they should be. This will bring the economy back to a free market. THE M-REIT and carry trade industries will be wiped out, from a kryptonite disease called FREE MARKETS and risk based compensation. This will be good for the economy expecially at a time when one generation, the Baby Boomers are transferring to the younger folk. Look for sudden and enormous drops in asset prices, when the FED is confident the stock markets can take a 50-80% plunge, they stock fund managers will take their cue and start selling. I would be getting out of stocks and book profits., I would be 40% in cash (money market or 1-2 yr treasuries held to mat.), 40% in US dollar etf fund, like UUP, and 20% in an etf short fund 1x, something like Short S&P (SH). I WOULD BE TOTALLY OUT OF STOCKS AND BONDS AND REAL ESTATE AND BUSINESS OWNERSHIP. The prices now are extremely elevated, and the future growth over 10-15 years is zero or negative.
Totally different. Why would long rates go up much. It the short rates that will rise. This will be like Kryptonite to Mortgage REIT's.
Bimini Capital Management looks really good at .70-.80, PE is less than 5 and earnings can only go up from their low level.
I had the same first impression. But when they got hit with the ignition switch thing, they decided to use it to drive traffic to the showroom and to make a marketing pitch to 2,3 4,5,6 year holders of GM vehicle to trade for a modern 2014, lots and lots of people took them up on the deals, there was on 2 Chevy Impalas on the lot on June 3, from May 3, out of 33 new ones at May 3. They sold everything out, when I went back on June 16, they had one Chevy Impala 2014 left. This was a market play that was almost like the battle of midway during world war II.. They cleaned up on sales and got rid of the 2014's pretty early. BIG PLUS here, I think GM is a buy.
PDL Bio Pharma, PDLI. The PE is about 4-5 and yield is 6%. I bought this at 7.50 and have just been promoting it on messageboards got it up to 9-9.50. No real news or changes. In fact Credit Suisse put a SELL on it at 7.50, with target of $6.00
I forgot to tell you, insiders purchasing direct buys in the .70 area. I would buy 100,000 sh blocks of this stuff for the kids school fund.
Bimini Capital, BMNM, was recommended as a long, a Zombie REIT which fell from $10 to 10 cents in 2012-2013. But it was a bargain, because Orchid Capital came to their rescue. They just reported .25/sh profit and shares have rise from .10 to .90, a 900% increase. THIS IS THE BEST PERFORMING REIT in the world now. BEST MANAGED AND BEST CAPITAL GAIN IN 2014.
I found this Zombie, in the Mortgage REIT trash can in 2012 and summer of 2013. Look through the gargage, their is alot of valuable stuff getting dumped. I also found a drug company trading at PE of 3 near its low, and it has 20 drug patents and very strong cash flow and now debt. IT IS A STEAL.
I recommended buying this at .10-.12. I got in at .11. I bad mouthed REIT's back in 2012 -2013, but if you had to own one, buy the cheapest one, which was trading at .11 - .12 cents a share back then, I bought a couple of 100,000 shares for principle reasons, they were dead cheap and they were going out of biz. since Orchid Capital took over management. Orchid Capital was an excellent bet too. I always look for the worst player, who stumbled badly but had a guardian angel step in to save. These buys got bailed out. Now they just earned $.25 per share and the stock price is around $.90, (nine dimes). PE ratio is under 5. I am up 9 fold on my original investment, while you guys watched AGNC go from $18 and change to 24.
AGNC has another hurtle to go through, 10 year treasuries going to 4-4.5% in about 1-2 years. If inflation picks up the FED may spead the rise up. I know when unemployment falls below 6%, they start raising the FED FUND rate, which could happen as early as August 2014.
Flame, I beg to disagree. I was not looking for a car, but GM recalled my Impala (6 years old) so I took it in and had them check it out. While in service, I enjoyed the coffee, tea and softdrink bar, the free computer usage and internet and the free wifi. While there, I looked at the new Impala's 2014's, Oh My God, the prices were $32,000 - $39,000, I test drove a demo and took it home as a loaner while the warranty work done. Then they gave me the price on the demo, which had 5,350 miles on it, and had the old price sticker of $30,800, Impala LT, loaded with everything. I got the car for $22,800 cash price after all the discounts, rebates, gmcard cash, etc. I BOUGHT A CAR AND I HAD NO INTENTION TO DO SO. I could not believe the discount they gave me and then the cash for my used car, was $11,300, which I sold to them after I bought the car. They put it on the lot with $13,999 tag on it, AS IS NO WARRANTY, only 24,854 miles and in perfect condition, black leather 2LT, silver metallic. I paid $22,800 - 11,300 = $11,500 for a new 2014 never titled Chevy Impala LT. Blue book wholesale is $27,454 for the 2014. I can use this for two years and trade in with no loss.
I was investing in Energy MLP's, which are super hot on the long side. But now I am back to short the rise in rates, REIT's will get hurt, but the best play was TBT, ultra short 10 yr treas, I loaded up the truck at 60-61, when everyone was saying rates were headed lower. Econ. numbers show rates will soar over the next two years. If jobs data keeps improving, wage inflation is not far behind, with all this 0 interest money still out there the FED is going to get squeezed BIG TIME.