I don't know who keeps pumping this stock as being a strong pick with good color and no risk, but you would think that with the market going up that even the worst stocks might catch a bid. Granted that AVACF isn't a big volume mover and only a few thousand shares have traded, but still it is a big move. But then again, this stock was $13 at the end of December and the spot rate which they use now $21k per day after being 48k in January.
On Feb 9, AVACF was trading at 9.84 and stagg said on the AVACF board "j-man...I feel the forward outlook and the current yield (about 24%) is fine as most 'fourth quarter weakness' is seasonal."
william, why do you say the last rate cut was premature? If anything it was overdue and the Fed was actually behind schedule. The unemployment rates have met their targets. If you remember, Bernanke said a few years back that they would raise rates when unemployment got under 6% and that happened several months ago. No, if anything, the Fed missed the opportunity to raise rates when the economy was still producing growth in the over 2% range, and now since growth is declining, they find themselves in a bind.
The answer is because payback is not crazy or blind and knows that AVACF's spot rates have declined by almost 50% in the quarter, likely leading to a divy cut and further stock price declines.
Pay, I quickly looked at GLBL to see what was going on. It looks like they had just declared a divy in early March, so that next divy is not likely to be declared until early June if it is a quarterly payer, and that's a very long time when you have the events that are going on now. If SUNE does indeed go bk, that is likely to happen sooner than June and that is just more bad news that is going to drive the algos to sell everything connected to it. At some point, GLBL could be worth the gamble, but you had better be sure you understand all of the risks it has, including its own 10K issues and any debt covenant issues or short term funding issues. It's one thing to gamble on a stock that is priced like it is not going to survive the week when you are pretty sure it is solvent, but it's another thing to base that gamble on something like the size of a dividend which would be the first thing that gets cut if they are fighting to survive.
DH must be confused by the postings on the TVIX board. They are likely referring to an article that was posted on zero hedge yesterday that the number of TVIX units created has exploded. As I understand it, units of ETFs and ETNs are created when large institutions exchanged the securities that underlie these instruments for the ETF or ETN instrument. So for the gold ETF, an institution would exchange units of gold that it held for units in the GLD (the gold ETF). They do this for liquidity reasons and probably for arbitrage. The TVIX units are not being bought, so the RSI isn't increasing. The same thing can happen in reverse and did so earlier with the DWTI ETF.
If techincals and fundamentals don't matter, then I wonder what is making the market move. Could it be that a little old lady from Brooklyn spoke at around 12:30 today and the market, oil and gold all went up together. Wonder who that lady was?
Stagg, was I wrong when I pointed out the risk with SDRL, NMM, KCAP, NYMT, WMC and PSEC and now AVACF (which you are down about 50% on), all holdings that you said had good color and turned out to be duds? Your FRO is down 50% from when you first mentioned it. Stagg, you can always prove me wrong by listing your buy prices, but somehow I don't think you will because your voodoo math won't add up. Oh, BTW, my closed end muni bond portfolio continues to climb in value.
Helmet, you do have to remind us to look at those when they dip. I know it's hard to compete with all of Stagg's pumping of SFL FRO and the rest of the risky high yielders, but these appear to have good long term records of increasing divies. Every so often they take a dip when the market does or when they do an spo to fund an acquisition, but they do have the demographics on their side.
Ed, I noticed something going on with your posts. I tried to look at one of your responses on the SFL board and it wasn't there. I blame Stagg.
Stagg, I posted that info about 2 weeks ago after an interview aired on Bloomberg TV. April and May is the important bank borrowing base redetermination for many energy companies and if the banks cut those credit lines, watch for high yield bonds to collapse in price. That action will spill over into all finance companies and any company dependent on the capital markets (i.e. all high yielding stocks). It's no coincidence that when oil bounced up over the last month that banks and finance companies like BDCs also rallied. You have been saying that FRO has been oversold since it was $15 post-split ($3 pre split) and it is now under $8, representing an almost 50% decline from when you first started pumping it. You keep saying it must be oversold and yet the RSI is still in neutral territory. Denial is not a river in Egypt.
stagg, are any of these holdings long term because you seem to be trading in and out of most of your positions. Isn't the true definition of dollar cost averaging when one buys when the stock is going up as well as when it goes down. You admit on the other board that you mostly buy when your picks are down, so that would make you more of a dip buying opportunistic trader rather than a true dollar cost averaging long term buyer. Otherwise, why would you sell something (like NRZ or PSEC) that is going up if you believed that it was going to continue to go up Unless of course, you don't believe that any of these holdings are going to continue to go up.. In fact, other than SFL, I can't think of any of your holdings that are long-term positions. You seemed to have sold BDCL and CEFL before and recently added them again despite both of them yielding over 20%, so if your strategy is about maximizing revenue, I don't see how you could beat a 20%+ yield with any stock that you replaced them with.
As I often do, let me offer the flip side to DH's apparent sounding of an "all clear" sign for equities. There have been numerous posts from technicians about whether there is still overhead technical resistance. But looking past technicals, which we all know can give different signs depending on whether one is looking at the short, medium or longer term, looking at corporate earnings, one sees the S&P trading at a 20+ p/e multiple with declining earnings in the last 4 quarters (if not longer). So if you are looking forward to corporate earnings, what do you think the chance is that corporate earnings will be up this quarter? Switching to the GDP view, the Atlanta Fed just downgraded their Q1 GDP estimate to 1% based on a downward revision to January's consumer spending, so clearly the economic winds are in the market's face.
Yes, it is true that the market has been resilient and this latest bounce was suprising both in the amount and time. But for the market to continue to advance, there has to be either some good news on the corporate earnings front or something good from the economic front. With corporate earnings falling and economic growth stagnating, I don't think that is the goldilocks economy that will keep the market trading at 20+ times earnings. I don't think less bad news is going to cut it.
Gambler, you do mean Cypress Energy Partners, correct? Just checking as stagg is also pumping CEFL which is an ETN on closed end funds.
I don't know about CELP. It seems to have a high level of debt despite their interest coverage (almost 6 times last year's EBITDA) and it's DCF only covers distributions to units because of the subordination. I would want to know the terms of when those sub units become common units. If oil recovers and there is more drilling, then it could rally, but if not????
Good for both you and JK. I have to admit I didn't like the action here. I would really rather buy TVIX higher when the averages start to break down and break support levels because you never know when some Fed governor is going to say that they shouldn't be raising rates (now they are saying April is on the table --- sure sure).
I'm looking at HYG to try to see if this is just a correction of the bounce or if the bounce was just a correction to the larger slide.
This was on Bloomberg last night and it's about time. Cooperman suckered a lot of people into the Couen #$%$ and he was frequently on CNBC and quoted in Barron's pumping these picks. No one ever asks him about his record or how his previous picks turned out. Can't wait to see the indictment. Maybe then he will disappear and we won't have to see his awful toupee again or hear about his "picks" which he no doubt front ran, a technique he no doubt learned well at Goldman. It would be rich if he took Eddie down too.
Chad, I am starting to change my mind on TVIX after reading several of the stock twit posts. There's nothing wrong with trying to hedge one's long portfolio by playing an instrument that will benefit from a market selloff, but it is all about getting the timing absolutely perfect. TVIX doesn't just track the VIX, and of course, the VIX doesn't just track the market. So Vinny's point is well taken.
I do think the market is overbought and overvalued and there is plenty of metrics that support that view, and plenty of economic stats that support the view that the economy is soft. But so what. One can lose a lot of money in these types of instruments if you are early.
Even though the case can be made that the market is overbought and the economy soft, there are a couple of things that keep me thinking it still could be early for a selloff. One, history shows that bull markets usually die only after a "blow off" top that occurs after a correction -- the proverbial time when every short capitulates and every retail investor gets long on the belief that stocks can't go down based on some belief that later turns out to be wrong. Second, Goldman is now telling everyone to sell risk assets and be prepared for increased volatility. We all know about Goldman. On the flip side, Cramer said it was a bull market. So who is more of the contra-indicator, Goldman or Cramer? We may need Gartman to break the tie.