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Legg Mason Opportunity C Message Board

marklibera 507 posts  |  Last Activity: 2 hours 34 minutes ago Member since: Aug 14, 2007
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  • There have been a lot of bad stories about European and Canadian banks. There are a few ETFs that cover these, including one inverse fund for Canadian banks, symbol HFD traded on the TSX. From what I am reading, the Canadian banks are under reserved for energy losses and Canada is going to go into a recession.

  • Reply to

    O/T ETP

    by wingnut90266 9 hours ago
    marklibera marklibera 2 hours 39 minutes ago Flag

    kee, the biggest risk for ETE/WMB/WPZ is bankruptcy by CHK because CHK would likely seek to restructure their distribution agreements with Williams. That is why they were tanking. It was announced that CHK hired restructuring lawyers. CHK also has a $500mm bond payment due in March. If they are considering bk, you would think they do it before that date.

  • Reply to

    SFL vs FRO

    by hcomhlu 4 hours ago
    marklibera marklibera 2 hours 47 minutes ago Flag

    You will never know that. Sometimes there are false signals, like when a hedge fund is blowing up because of bad investments and they have to sell everything, including their good investments to pay off debt. But there are people who work with this company or who are competitors or who work in this industry that are much closer to what is actually going on.

    Another poster mentioned his previous history with SFL when it traded down to $5. Why did that happen and what was the global economy doing at that time? Do you think there was a correlation between the economy and the price of SFL? What do you think is happening now with the global economy?

  • Reply to


    by staggman99 Feb 9, 2016 1:34 PM
    marklibera marklibera 2 hours 54 minutes ago Flag

    contrain, you have to be careful at what part of the market cycle you are investing in. Yes, it is true that many stocks get beaten up and then bottom out. You can tell that from their charts (they stop going down day after day). But that usually doesn't happen when a market decline is just starting. Right now, we are still in the early stages of the bear market. The bear actually started last summer when the market topped out, but it took until January for some to begin to believe stocks could decline. Some still don't believe the US and global economies are slowing. There are at least 3 sets of potential bad news that can hurt a stock: company specific, industry specific and market or global specific. Any one of these can tank a stock.

  • A couple of points to consider. First, PSEC has been in this pattern for over two years (just look it up). The stock declines, but then it pops on some news, usually related to a divy announcement or earnings report. But the stock almost invariably hits resistance (often at the 50 or 200 dma), and resumes the decline again to new lows. So some may be able to trade this successfully.
    Second, despite earning 28 cents in income, the company lost over 50 cents in book value. While some yield hogs like to chase yield, one has to note the continuing decline in book value. The company also bought back a lot of stock at much higher prices, thus losing money on that trade.
    Finally, while many posters just like to read the earnings report or other communications put out by the very skilled public relations managers that all companies use, that is no substitute for reading the SEC reports. These are difficult documents to read and understand for the lay person. I skimmed PSEC's and note one key statistic: Close to 17% of the company's assets ($1 billion out of $6 billion) are in the equity tranches of CLO's. These positions are in the first loss position. PSEC provides the discount rates at which they value these positions based on their MODEL. I encourage readers to read a post on seeking alpha on CLO valuation that was written about KCAP (another stock that has plunged) and to go see the movie The Big Short and pay attention to the scene with the jenga blocks to see how structures similar to CLOs work.

  • Reply to

    SFL dividend

    by golob.chad 9 hours ago
    marklibera marklibera 8 hours ago Flag

    As what to do now, the market can overshoot and a catalyst (earnings report, economic report or Fed speech) can help reverse a trend. So if I was you, I would be inclined to hold until SFL reports. But I would also look harder at the technical levels after SFL reports to see if the stock runs out of gas if there is good news. If the old trend is not broken, you have to be willing to admit that you made a trading mistake and wait for a better opportunity. Right now the market hates anything related to China, global trade, oil and high yield. At some point, that may stop, but you have to understand that that could be several months and more declines from here. Good luck.

  • Reply to

    SFL dividend

    by golob.chad 9 hours ago
    marklibera marklibera 8 hours ago Flag

    Chad, we have all been there before (maybe not with SFL) but with other stocks (many here are in the same position with NRZ). So the questions are how to deal with your present position and how to learn not to get in similar situations again (easier said then done). Let's deal with the second question first. While it is easier said than done, when one is investing, you can't just take the views of others (many of whom will be permabull pumpers) and ignore risks that can effect your investment. Risks are usually qualified in such categories as operational, market, credit, liquidity. Many of these are hard to judge unless you are inside the company, and they can also change on a dime. There are always others who have a better handle on these risks because they have better access to information and they are first to spot when the "inflection point" is reached. If you have ever seen a Bloomberg terminal, you know there are thousands of charts and stats that professionals have access to that the average investor does not.
    When you bought at $18 two years ago, things were different, but notice also that the stock seemed to hit resistance at that level and never went higher. That should have told you something that the stock had peaked (despite what some argue, technicals do matter and entry points do matter). Many stocks trade in channels and many investors use those channels, selling when the stock gets to the top and buying if the lower end of the channel holds. When the bottom of a channel breaks, there will be pressure on the stock. The upper bound of a channel can often break (more so for growth stocks) and we always hope that happens for stocks we own, but when that channel holds after numerous tests, that is important to take notice of. More in next post.

  • Reply to

    WHERE IS SARGE NOW (???)...!

    by staggman99 12 hours ago
    marklibera marklibera 10 hours ago Flag

    stagg, is this not a cheap shot at me? I'm sorry that Sarge appears to have disappeared, but I can't control that. None of my posts were directed at him personally, and none of my posts in response to your many posts are personal. Both of you offer your views, and 99% of the time they are in positive on a stock that you own (some call this pumping) without even considering the possibility that one of your assumptions could be wrong. Your basic assumption has been that high yields win, which worked for a time. Now it is not working and you have multiple positions with huge stock declines and some divy cuts.
    Second, you have expressed your views numerous times about LINE and other energy stocks. Whenever someone mentions something negative about one of your picks, you go back to that. So isn't that a cheap shot?
    To review the record, Sarge has been a vocal proponent of many stocks. I have disagreed with him about Apple because he seems to have overlooked their issue with China and other technical factors, and does nothing but repeat items (usually from Cramer) that really have little or no bearing on its current performance (like the Watch, the future of ApplePay, TV and cars). Note, I have said that I would buy Apple at a lower price. He has admitted to being in love with a stock, that we all admit can cause one to lose profits from overlooking risks.
    On Facebook, they reported great earnings and the stock popped and Sarge was on this board encouraging others to buy it after it had run up and became overbought. I merely reminded him that buying a stock that is over RSI 70 is not a good entry point. I have mentioned this point about technicals on many different stocks (yesterday about gold) but some posters keep making this very avoidable mistake.
    The fact is that many posters are mad because their stocks are down. If you and Sarge can't handle opposing views, then maybe neither of you belong on a message board.

  • Reply to

    Insane pricing?

    by jkprice Feb 9, 2016 1:00 PM
    marklibera marklibera Feb 9, 2016 4:33 PM Flag

    75 seems like the support on UNP, but this bounce may just be an oversold bounce, similar to what happened in July through October. If you look at the period in 2012, that's where the long term support is, and that's a worry because it is another 20 points down from here.
    Except for some utilities, it seems that now every sector has finally broken. So I wouldn't be surprised to see a rally soon (if not for China next week). But I just don't think that is the end of this bear.

  • marklibera by marklibera Feb 9, 2016 3:05 PM Flag

    Gold (based on the GLD chart) is overbought with an RSI of 78. It also looks like it ran smack into resistance at 115. We'll see if it can hold above the 200 dma at 108.45.

  • Reply to

    Insane pricing?

    by jkprice Feb 9, 2016 1:00 PM
    marklibera marklibera Feb 9, 2016 1:38 PM Flag

    JK, as I have said, the thing that is different this time is all of the computer algos that do most of the trading. When there were people doing the trading, there were limits, both emotional and physical, as to how many sell orders could be processed at one time. This gave the market a chance to pause. While we have circuit breakers, we just don't know how liquidation of ETFs is going to exacerbate a market sell off a la flash crash.
    Yellen speaks tomorrow, so the market could bounce if it hears something that it wants to hear, or it could exacerbate the slide. But next week China comes back, so who knows what could happen then.

  • Reply to

    Stagg AVACF

    by williamlebotschy Feb 9, 2016 8:24 AM
    marklibera marklibera Feb 9, 2016 12:06 PM Flag

    Here's what I found from a search of LPG markets in one of the Oil and Gas journals. I don't know anything about this Drewry firm:

    While US LPG exports and Asian demand for US supply will remain high, Drewry says, fleet growth will accelerate next year. Meanwhile, expansion of the Panama Canal will cut the voyage distance between the US and Far East by more than one-third.

    “Although we do not anticipate a sudden fall in freight rates, we do expect rates to start decreasing from the second half of 2016 as the fleet expansion accelerates,” Drewry says.

  • Reply to

    Stagg AVACF

    by williamlebotschy Feb 9, 2016 8:24 AM
    marklibera marklibera Feb 9, 2016 10:11 AM Flag

    william, respectfully, the market does not agree as the stock is down 11% today. Further, if you read their presentation, they are not covering the dividend. Their operating profit was $51mm and they paid out $73mm in divies. While their 2015 total year profit was higher, that could be because the performance was better in the earlier quarters and is now trending lower.
    I readily admit that I do not know the market for LPG with the exception of the nice chart that they provided on their website. There always exists the possibility that the market is missing the potential for future improvement in LPG rates. But we have seen this in so many high yield names where the high dividend becomes jeopardized because of the declining trend in the business. This stock was over $14 when it was first mentioned on these boards.
    My intent is not to bash you, but the facts are what they are and it appears that the risk of a divy cut is real and this will continue to get reflected in the share price.

  • marklibera marklibera Feb 8, 2016 5:29 PM Flag

    But if we challenge a poster who has the wrong assumption, we can also save many posters from following a pied piper down a money losing rat hole. There's plenty of sources to get picks, but what good is a pick unless you also can identify the risks and even better, when it's time to take profits.

  • marklibera marklibera Feb 8, 2016 5:06 PM Flag

    Sarge, I have honestly tried to help you by offering my view of risk in some of your picks. You are just mad because you are losing money. You post your opinions and I am free to post my views whether or not you put me on ignore. I wouldn't be posting these messages if I had not made many of these same mistakes before. What good is making paper profits if you don't keep them when the market turns down?

  • Reply to

    More bad news

    by marklibera Feb 8, 2016 10:03 AM
    marklibera marklibera Feb 8, 2016 4:58 PM Flag

    More bad news. From today's WSJ, a piece comparing some stats to 2000. Two that jump out: all time high in margin debt and all time low in levels of cash held at mutual funds.

  • Reply to

    Gold back on the way up

    by jkprice Feb 8, 2016 2:20 PM
    marklibera marklibera Feb 8, 2016 3:28 PM Flag

    Someone mentioned that it is forming a cup and handle. Imagine what happens to gold when either the dollar starts dropping or when the Fed starts QE or goes to negative interest rates.

  • marklibera marklibera Feb 8, 2016 3:04 PM Flag

    Stagg, my apologies to anyone on this board if you think I am attacking you (even though I have been the subject of attacks on these boards). The fact is that I have seen this scenario play out several times in my experience, both at the whole market level and with individual names. You simply have to take profits when the cycle changes, and the cycle started to change in the summer.
    I have said over and over that we all make mistakes, and I have mentioned mine. The point is that we need to learn from our mistakes instead of burying our heads in the sand. The technical metrics that I tried to learn about are one way to see these signs. If people mention their stock picks, then they should be happy if someone points out risks they may be overlooking.
    Second, I have mentioned the "puffery" that the securities industry uses to keep people invested, everything from stock analysts talking their book on TV, to big sophisticated investors talking their book, to "phony" bullish articles that are planted, to CEO's and Boards promising to maintain divies. There is a great video on youtube in which none other than Cramer reveals the trickery that he used at his hedge fund to move the market so that he could unload positions. Others have also talked about falling in love with a stock, which we all can do.
    Stagg, it is interesting that you like to mention my mistakes, like EVEP, so are you lumping yourself in with your own criticism. There was a poster on the EVEP board who warned about it and he had some real insight into its properties, but no one wanted to consider that risk. That taught me that it's always easier to want to ignore bearish views because psychologically we all want to be positive even when the situation doesn't justify it.
    Stagg, you continue to pump stocks that you like and then when someone raises a risk, you are mad, and then you get more mad when that person turns out to be right.
    P.S. Let Sarge fight his own battles.

  • marklibera marklibera Feb 8, 2016 10:35 AM Flag

    Kenny rogers, Kenny Rogers, Kenny Rogers. I told you about Apple. On FB, you just got greedy, but do watch that 200 dma level at $94.

  • marklibera marklibera Feb 8, 2016 10:28 AM Flag

    Well I actually did work for an mREIT and you can look it up, whereas you hide behind a made up alias. Why do I care? Because there's a bunch of posters who don't understand what this company does or the risks that its business entails. I've been the beneficiary of learning from these message boards and so if I can offer a view, I do that. It doesn't mean that I am right, but it's a view from experience that trumps "buy and hold, it will all be ok in the long run" views with no actual analysis or historical support. You are free to ignore my posts, while contributing whatever it is that you contribute to this board, which is ????? oh, that's right, nothing.

13.19+0.07(+0.53%)Feb 10 6:45 PMEST