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InvisibleArden
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Re: Stock Update for January 18, 2011 - CAT, MSI, AAPL [Re: Arden]
    #13833640 - 01/22/11 08:19 PM (13 years, 9 days ago)

Also, any comments about the viability of short term investments in PZG, USAT, and CCIH?


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OfflinegeokillsA
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Re: Stock Update for January 18, 2011 - CAT, MSI, AAPL [Re: Arden]
    #13841347 - 01/24/11 10:13 AM (13 years, 7 days ago)

Quote:

Are Solarfun (SOLF) stock values expected to rise any time soon?




It looks like SOLF (as well as several other stocks in the solar industry - LDK, TAN, CSIQ, FSLR) are setting up nicely for 2011.  They were lagging during the year end rally of 2010, but are definitely perking up here in January.  Goldman Sachs just added First Solar to its conviction buy list today, which is giving the sector a lift.

I'm closely watching SOLF and CSIQ for evidence that the current choppiness is abating.  They're both right around their 20, 50, and 200 day moving averages, and appear to be breaking through.  I'm tempted to take a "get involved" position in SOLF today, as it is currently setting a new two month high.  However, I am a bit cautious after last week, since the market is up some 10% in less than two months and over 20% in the last four.  It would appear to be due for a rest, and I will save the bulk of my buying power for a better entry.

Nevertheless, I'm setting price alerts above current ranges so that I will be ready to add at least some exposure on any breakouts to the upside (as well as setting several levels of price alerts on the way down, so that if we continue to correct, I can take "get involved" positions in my favorite names on the weakness).

What are my favorite names, you might ask?  Here's off the top of my head:
  • Solar: SOLF, CSIQ
  • Metals: FCX, TCK
  • Coal: PCX, WLT
  • Financial: C, COF
  • High Dividend (financial related): PSEC, NLY, ARCC
  • Tech (mobile related): AAPL, MMI, SWKS
  • Oil Service: RIG, HAL
  • Transportation: UPS, KSU
  • Short Bonds: TBT


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OfflinegeokillsA
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Stock Update for February 2, 2011 - TBT, DIS, SOL, SLW, AEM, COP, VALE [Re: geokills]
    #13893011 - 02/02/11 10:37 AM (12 years, 11 months ago)

This is a pretty big update, I hope I don't bore you too much! :tongue2:

Another week, and quite a few new developments with respect to a global revolutionary spirit and the increasing unrest in the middle east.  What's NOT very new, is that the market has continued to shrug off a lot of these hazards and any weakness seems to abate as quickly as it sets in.  Take last Friday's swoon for example, and how we have now made a new high since then.  Of course, now that I'm posting this, watch the market crash this week! :wink:

The point remains what I've been saying for some time now: cash is an unattractive asset class, bonds are an unattractive asset class, real estate is probably OK for those with a longer term time horizon but where does all that extra money held by pension funds, sovereign wealth funds, banks and even private individuals go when the yield on cash is less than the rate of inflation?

The answer (and that which we have been witnessing) is stocks.  They're pretty much the only game in town, for now.  It is however, important not to marry oneself to any specific idea or predisposition.  It is necessary to manage risk at all times, which includes both the risk of being too heavily invested when the market falls, versus the risk of being too lightly invested when the market stands to rise.  In other words, if you're going to invest in stocks, the key take away is that you should always have some measure of involvement, some skin in the game.  Yes, you will lose money sometimes; that is unavoidable.  But by managing your risk, you will lose less when the market stinks up the joint and gain more when things are rosy!

That being said, I started to load up the boat on Monday, as the S&P was holding Friday's low at the open and soon started to move higher.  That type of action is evidence that even after all of the turmoil on Friday that caused a big washout, the downside momentum had been halted.  While not a guarantee of further increases, it did provide a low risk buying opportunity; as you could easily define your risk.  Put simply, you buy on signs of strength after a big wash out, and you place your sell stops right below the washout low.  That way, if downside momentum does pick up again, you are stopped out of your positions for a very small loss.  On the other hand, if the market does behave and move higher, you have gotten in close to a short term bottom.

I still believe that 2011 should be a good year for stocks.  Based on the average bull market cycle, we still have some 16 months to go on this one.  Granted, there is a lot of uncertainty that could throw a wrench into the upside, but we haven't seen it yet.  The chart of the S&P depicts a very steady climb higher.

Since there is uncertainty lurking, and a lot of it is concentrated within the world's largest oil producing region, it makes sense that oil is an important sector upon which to focus.  Furthermore, all commodities should stand to benefit from weakening currencies and any signs of improvement in the domestic economy.  With the US striving for its own energy independence, it is worth having some exposure to natural gas and coal as well.  Metals and mining stocks also stand to benefit from an inflationary environment OR an economic recovery.

Therefore, I have opened positions in ConocoPhillips (COP), a large integrated oil company that many of you might know from the "76" gas station.  It pays a dividend and should benefit handily should oil prices rise to $100, as many are expecting will happen.  I also am maintaining my stake in Transocean (RIG), a deepwater oil driller, though I did sell 1/3 of the position for a rather handsome 40% gain last month.  Any pullback on RIG to its 50 day moving average and I will be looking for any strength to be a buyer.

VALE is a metals and mining company that principally produces iron ore and iron ore pellets, which are used in steel production.  It also produces a number of other products, and will certainly benefit from inflation OR economic recovery.  The stock is not particularly attractive to buy TODAY, and may indeed consolidate for some time at these levels, but buying at the 50 day moving average has historically proven to be a low risk entry, which is close to where the stock is currently trading.

Food related stocks are also an important theme, but I have yet to get a good hold on any one of them in particular.  Some to watch include MOS, POT, and BG.

As a way to prepare for an inflationary environment OR geopolitical risk/uncertainty, gold and silver are also good ideas.  Gold in particular is getting close to testing its 200 day moving average, and has begun to form a base on the heels of the news out of the middle east and Egypt in particular.  AEM is a gold miner that is presently hanging around its 200 day moving average, which provides a low risk entry that I took for myself on Monday, with a sell stop below last week's low of $66.79.  SLW, a silver miner, has also started to move higher and I took a small position in that name on Friday in the midst of the panic selling (as notably, SLW was markedly higher even amidst all the selling pressure).

The TBT is the ultra-SHORT long bond (US Treasury maturities of 20 years or more) ETF that moves inversely to the TLT.  It is basically a bet that bond yields cannot stay this low, despite the Fed's attempts to keep rates artificially low.  TBT has seen a steady uptrend over the past several months, and has now entered a period of consolidation where the bollinger bands are tightening around the current price which is also quite close to the 50 day moving average.  This is an excellent setup for a strong upside breakout, and I would not hesitate to add to my position between $38 - $39.

Lastly, I used some options to capitalize on some nimble trades in a solar energy company SOL and a media/vacation company that we all know: DIS.  Let's look at these a little closer, as this again hammers home the importance of technical chart patterns in being able to determine LOW RISK and/or HIGH PROBABILITY trading opportunities.



We'll start with SOL, a solar power company that tested its 200 day moving average in December,
ultimately breaking out above its 50 day moving average in January.  From there, the stock has
been consolidating in a wedge pattern over the past few weeks (lower highs, but also higher lows,
with the 20 day moving average serving as support).


     


When you see this type of setup, the likelihood of a strong move one way or the other increases as
the wedge gets tighter and tighter.  So, I set a price alert to let me know if SOL was trading above
the descending resistance level (indicated by the red line on the chart above).  That happened
yesterday, so I took a small long call option position, in anticipation of a larger breakout.  After
nearly getting stopped out this morning, the stock bounced and hasn't looked back, now setting a
new short term high and also beginning to expand the bollinger bands.  Due to the leverage of
options, I'm already up 50% on the trade in only two days.  Also due to the leverage of options, I
keep my positions very small so even though I'm up 50%, in absolute dollar terms it's not as
significant as it might sound.  Nevertheless, the entire solar industry has been seeing a lot of buying
interest over the last month, and it would be a bad idea to ignore this developing trend! See my
previous posts for other names in the sector that you may want to keep an eye on.




Next up, Disney (DIS).  These guys were in a volatility squeeze when the year began and
immediately broke out to the upside.  We've seen a lot of consolidation over the month that has
passed since then, and thanks to having a price alert set to notify me when the stock moved above
its early January high, I was able to hop on board a quick long call option trade this morning that is
also up nearly 50% in less than three hours.


     


It is worth noting that the bollinger bands had also started to squeeze tighter yesterday, which
should give more staying power to the move in DIS over the next few trading days.  Typically, a
stock that breaks out to close the day above a tight bollinger band setup will continue to rise for a
while.  Because DIS releases earnings on the 8th of the month, there may also be anticipation of
good numbers which can add even more fuel to the upside momentum into the earnings report.
Again, due to the volatile nature of options trading, my position size is small, and because I bought
the near term (February) contract, I do not want to hold the position over earnings, as if the
company reports bad numbers and the stock gets hammered, my near term option is likely to expire
worthless.


I hope this helps some of you get a better grasp on the overall trends in the market and how to better read and understand a good looking stock chart.  There are a lot of subtle nuances that are impossible to effectively convey in a clear and concise manner here, but through experience, you will come to learn them for yourself.  As always, if you have any specific questions, I welcome the opportunity to try my hand at answering them!



Positions (largest to smallest):

    61% Long stock: KMP, PSEC, NLY, AAPL, RIG, TBT, C, COP, ARCC, AEM, VALE, CPNO, SLW, WM, WLT
    29% Cash
    8.5% Long Peer-to-Peer Unsecured Debt via LendingClub.com @ ~13% APY
    1.5% Long Call Options: Citigroup (C) April $4.5, Disney (DIS) February $41, ReneSola (SOL) February $11


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OfflinegeokillsA
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Stock Update for February 3, 2011 - AMZN, MMI [Re: geokills]
    #13898605 - 02/03/11 09:33 AM (12 years, 11 months ago)

I don't know if we have many options traders around here, but I put on an AMZN bull put spread today, by:
  • Buying the February $165 puts
  • Selling (i.e. shorting) the February $170 puts
  • Receiving a net credit on the transaction of $1.40 (or $140 per contract)


If Amazon (AMZN) stays above $170, both puts will expire worthless in two weeks, and I get to keep the $130 per contract that I netted from the pair transaction.  If AMZN falls to around $168 at the time of options expiration, I will break even, and if AMZN is below $168 in a couple of weeks, I will be losing money.  There is a greater static potential for loss than gain, but the idea behind this trade is that Amazon has already taken a big hit after earnings, and significant support has developed over the past week, specifically the high volume intraday low of $166.90 that occurred on 1/28.  Also, because Amazon just announced that they will be launching a video service to compete with the very popular and very successful Netflix, this should reinforce the underlying bids from eager buyers who want to snap up the stock ahead of the launch of the new video delivery system.  Nevertheless, if AMZN falls below $169, I will likely close this spread out of cautionary respect for the prevailing market forces.


In other news, Motorola Mobility (MMI), after getting crushed from its earnings report, has formed a base just under $28.  It has bounced significantly over the past 36 hours, currently trading around $30.50.  The stock has likely put in a pretty solid floor, as not only did they have best of show at CES for one of their new mobile devices, but they are also aiming to launch a competitive tablet computer at the end of March that will run Google's new Android 3 operating system.

Quote:

Jha said the [the tablet] Xoom will feature a dual-core processor -- yielding total computing power of 2 gigahertz -- as well as front- and back-facing cameras for video conferencing. The device will be "upgradeable" to 4G capabilities after it ships, and future versions of the Xoom will come 4G-ready.

The company has also built a dual-core processor into its new 4G smartphones for AT&T and Verizon.

AT&T announced earlier in the day that it will launch the Motorola Atrix later this year for its 4G network. Verzion will get a device called the Droid Bionic. Both devices will run on the Android operating system.

T-Mobile will get the Cliq 2 -- a new iteration of Motorola's first Android smartphone, launched back in October 2009.




Had I been watching my screen at the market open, I would have picked up some MMI, but not up another 5% on the day... I will wait.  In fact, I've been bidding $1 for the July 2011 $35 calls on MMI, which would allow time for MMI to release some of these new products and get the initial sales figures.  If I can get filled at the $1 price, I would likely end up selling half of the position into the stock strength that is likely to be seen strictly from the anticipation of the new products, and hold the remainder to see what kind of preliminary sales figures ultimately are produced by the products in the retail market.

At any rate, taking some longer dated options or buying the stock outright, below $29, is a very attractive low risk and high probability trade for this stock.

In other news, I was stopped out of my starter position in COP this morning.  Oil has failed to respond to the crisis in Egypt.  Granted, Egypt's Suez Canal and their pipeline do not account for a significant amount of the global oil trade, and therefore a disruption would not be likely to have a marked impact on global oil prices aside from psychological fear that the crisis would spread to more important assets in neighboring countries.  Jordan is likely one of the more tenuous situations that could spark in the near future, and of course there are several other countries in the region that would be susceptible to the revolutionary spirit that has been sweeping the globe.  If this revolutionary wildfire were to spread, oil will definitely be going higher.  However, if it remains confined to Egypt, there should not be a big affect on the market going forward as a result of that specific situation.

I added a little to my position in SLW this morning (initiated the position last friday, up 7%+ since), and solar continues to work.  My SOL February $11 calls are now up 92% in less than a week.  I am likely to close part of the position before today's close to lock in my original investment and let the remainder ride with the house's money.

Lastly, pay attention to the Dow Jones Transportation Index.  It has been leading this market and is threatening to break down below its 50 day moving average.  If this happens (i.e. if the 1/28 low of 4988 is breached), I will start to reduce my long side exposure and take a much more cautious stance.

Until then, let it ride baby! :cool2:


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··∙   long live the shroomery  ∙··
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InvisibleZippoZM
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Re: Stock Update for February 3, 2011 - AMZN, MMI [Re: geokills]
    #13904254 - 02/04/11 10:06 AM (12 years, 11 months ago)

always an interesting read.

thanks GEO.


--------------------
PEACE

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"in times of widespread chaos and confusion, it has been the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m management, too much programming and control, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"

"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."


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OfflinegeokillsA
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Stock Update for February 4, 2011 - AMT [Re: ZippoZ]
    #13905582 - 02/04/11 02:40 PM (12 years, 11 months ago)

Glad you're diggin' it ZippoZ. :smile2:


Just a quick note today that American Tower (AMT) is really looking good.


        Daily Chart: AMT

       



I should've highlighted this yesterday, as the bollinger bands on the daily chart began to expand at the same time the stock traded
to the upside, making a new short-term high.  Today, it's confirmed the move by making an all-time high.  Unfortunately, I didn't
buy any yesterday but sometimes it's better late than never, and so I took a small piece today.  Even though the stock has had an
impressive run over the last couple of weeks, it's the volatility squeeze on the weekly chart that really tells the story, inspiring me
to get involved right here, right now.


        Weekly Chart: AMT

       



The long term trend is clear and there is now zero overhead resistance, since (as with any stock that trades at an all time high)
everybody who has ever bought shares is presently a winner.  AMT reports earnings on the 23rd, and I don't mind stepping in front
of the numbers since the cellular and wireless industry continues to require more robust infrastructure (that AMT provides) due to
increased bandwidth and usage.



With respect to some of the other trades I've highlighted this past week...
  • RenaSol (SOL) and the solar industry in general has been cooling off today.  SOL still looks the most attractive in the group to me,
    and I am maintaining near term call option exposure at the $11 strike price, and will consider adding to the position next week on
    signs of a bounce if I'm quick enough to get a decent fill/price.  One of the major suppliers to the solar industry (MEMC Electronics,
    ticket symbol WFR) reported that their Solar Materials revenue shot up 292.8% year over year to $279.9 million and contributed
    32.9% to the total revenue. The improvement was driven by strong solar wafer volume growth and modest ASP growth.  This
    offers some fundamental basis for support in solar stocks such as SOL, so I will stick with the February $11 call and depending on
    what happens between now and this month's expiration, may look towards buying March call options as well.

  • Stopped out of Walter Energy (WLT) this morning.  In fact, I wish I hadn't been, since the stock held its short term support from
    the low created on January 20th.  I made an error in placing my sell stop just below the 50 day moving average, instead of the
    nearby January low.  This resulted in me getting shaken out of my position, though I will consider re-opening the position next
    week since I believe the longer term prospects for US coal remain positive.

  • Closed position in VALE as it took a pretty steep slice intraday, below its 50 day moving average.  This one I was aware enough
    to place my stock below the January low, but the stock broke through that level and I took my leave.  There will always be time to
    get involved again if signs of strength emerge.

  • My February $41 call options on Disney (DIS) are up nearly 70% as of the close today.  The company reports earnings on
    Tuesday and I will sell at least half (and probably, in fact, the entirety) of my position prior to the report.  The volatility expansion
    in DIS stock is working, with higher intraday highs and higher lows every day this week.  I believe that Monday will see the stock
    continue to be bid higher in anticipation of the earnings report.

  • The AMZN bull put spread, so far, so good!

  • The TBT ultra-short on long dated US treasuries is also kicking some serious ass, expanding to the upside out of a volatility
    squeeze and marking a new six month high.  This is one of my longer term positions, as I don't see signs of this trend quitting any
    time soon.



The take away for this week is that the underlying bid for stocks is very much alive and well, as investors continue to see stocks as
the most attractive asset class with interest rates so low; even as inflation is resulting in higher bond yields and a pickup in the
metals (silver and copper in particular).


Positions going into the weekend (largest to smallest):

    56% Long Stock: KMP, PSEC, NLY, AAPL, RIG, TBT, C, SLW, AEM, ARCC, CPNO, WM, AMT
    33% Cash
    8% Long Peer to Peer Unsecured Debt via LendingClub.com @ 12.44% APY
    2% Long Options:  AMZN Feb $165 puts, C April $4.50 calls, DIS Feb $41 calls, SOL Feb $11 calls
    1% Short Options: AMZN Feb $170 puts


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InvisibleZippoZM
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Re: Stock Update for February 4, 2011 - AMT [Re: geokills]
    #13910720 - 02/05/11 02:40 PM (12 years, 11 months ago)



I'm long on Iron ore... its spot price is up around $185/ton and holding strong. it will be interesting to see what happens after Chinese new years...


--------------------
PEACE

:mushroom2:zippoz:mushroom2:



"in times of widespread chaos and confusion, it has been the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m management, too much programming and control, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"

"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."


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OfflinegeokillsA
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Stuff to Know... [Re: ZippoZ]
    #13918256 - 02/06/11 09:47 PM (12 years, 11 months ago)

This video is a bit rant-eriffic, but the concepts are central to the fundamental thesis behind putting your money in stocks.




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InvisibleZippoZM
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Re: Stuff to Know... [Re: geokills]
    #13920056 - 02/07/11 09:22 AM (12 years, 11 months ago)

Yeah, I don't have any money, just millions and millions of tons of Iron ore, which if drilled out would have a net present value at this point of several hundred million dollars.

Rock Rich, Cash Poor.

but one day soon enough, ill be buying some stocks.


--------------------
PEACE

:mushroom2:zippoz:mushroom2:



"in times of widespread chaos and confusion, it has been the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m management, too much programming and control, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"

"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."


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OfflineThe Ecstatic
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Re: Stuff to Know... [Re: ZippoZ]
    #13950897 - 02/12/11 12:01 PM (12 years, 11 months ago)

looking into a small, start-up portfolio, position in a simple index fund.  Any particular recommendations? 


I've been looking at VTI recently.


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OfflinegeokillsA
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Re: Stuff to Know... [Re: The Ecstatic]
    #13955005 - 02/13/11 09:28 AM (12 years, 11 months ago)

VTI would work.  You could also consider buying into the SPY, a highly liquid (130 million shares/day versus VTI's 2 million/day) exchange traded fund (ETF) that tracks the daily movement of the S&P 500 index.  For a little added juice, look at the DVY, which is another ETF that focuses on dividend paying companies.  It yields over 3% annually through its dividend, and still tracks the S&P 500 with pretty good correlation.  Any of these three will provide straightforward exposure to the stock market.


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Offlineimachavel
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Re: Stuff to Know... [Re: geokills]
    #13955900 - 02/13/11 01:33 PM (12 years, 11 months ago)

whoa, can't believe what I typed the first time. Jesus that is confusing: fixed

hey, for all you gold freaks out there, looks like the dollar is GAINING strength, and a lot of gold buyers are going to begin to sell:

http://www.bloomberg.com/news/2011-02-11/gold-declines-from-three-week-high-as-dollar-advances-on-economy-egypt.html


i'm sure it was great while it lasted


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:kingcrankey: I did not say to edit my signature soulidarity! Now forever I will never remember what I said about understanding the secrets of the universe by paying attention to subtleties!

:facepalm: I'm never giving you the password again. Jerk


Edited by imachavel (02/13/11 10:33 PM)


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OfflineThe Ecstatic
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Re: Stuff to Know... [Re: geokills]
    #13956732 - 02/13/11 04:25 PM (12 years, 11 months ago)

Quote:

geokills said:
VTI would work.  You could also consider buying into the SPY, a highly liquid (130 million shares/day versus VTI's 2 million/day) exchange traded fund (ETF) that tracks the daily movement of the S&P 500 index.  For a little added juice, look at the DVY, which is another ETF that focuses on dividend paying companies.  It yields over 3% annually through its dividend, and still tracks the S&P 500 with pretty good correlation.  Any of these three will provide straightforward exposure to the stock market.




I've heard good things about SPY, but am not very familiar with ETF's in general.  Do they trade the same as mutual funds? Fee differences?


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OfflinegeokillsA
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Re: Stuff to Know... [Re: The Ecstatic]
    #13957576 - 02/13/11 07:22 PM (12 years, 11 months ago)

The fees are negligible.  ETF's trade just like a stock.  You can buy and sell in real time (during trading hours), whereas mutual funds generally require that you wait until an end of day closing price to buy or sell shares in the fund.  Mutual funds generally carry higher fees.  As for hearing "good things about SPY"... there's really nothing good or bad about it.  It mimics the S&P 500, so if the market is on a tear higher, SPY is a great place to be.  If however the market is falling off a cliff, forget about the SPY (or think about shorting it instead!).

Since my general view on the market is unchanged from my last updates, here's a quick down 'n dirty update on my own positioning going into next week, from largest to smallest:

  • 52.5% Long Stock: KMP, RIG, PSEC, NLY, AAPL, TBT, C, ARCC, CPNO, WM, MMI, AMT
  • 36% Cash
  • 3.5% Long Options: UNP Mar $100 calls, PBR Apr $35 calls, GS Apr $170 calls, C April $4.50 calls, AMZN Feb $165 Puts
  • < 1% Short Options: AMZN Feb $170 Puts (part of the $165 / $170 bull put spread that has been working absolutely perfectly)
  • 8% Long Unsecured Peer-to-Peer Debt via LendingClub.com at 12.44% APY


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OfflineThe Ecstatic
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Re: Stuff to Know... [Re: geokills]
    #13959848 - 02/14/11 06:56 AM (12 years, 11 months ago)

No positions in the bond market?

Why so much liquidity? (cash)


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OfflinegeokillsA
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Stock Update for February 14, 2011 - BG [Re: The Ecstatic]
    #13960114 - 02/14/11 08:51 AM (12 years, 11 months ago)

I am short bonds with 20year+ maturities through the TBT.  I certainly don't want to own any bonds at these crappy interest rates!

On the subject of cash, it is ALWAYS important to have cash on hand.  You'll never find me 100% invested, because I am never arrogant enough to assume with 100% certainty that the market cannot fall at any specific point in time.  I keep cash on hand as a feature of risk management.  10% is an absolute minimum level of cash to carry.  I'm holding more now for a couple of reasons: 1) My options exposure (which is leveraged, by nature) and 2) the fact that the market's (i.e. S&P 500's) 20 and 50 day moving averages are becoming ever more extended above the 200 day moving average.  Ultimately, there is always a reversion to the mean.


   


In other news: I picked up some April $75 call options on BG this morning.  Bunge is in the agricultural sector, and with food inflation expected to continue higher, I needed to pick up some exposure to this area.  On the daily chart, you can see that the bollinger bands on BG started to squeeze a little bit last Thursday, indicating a period of reduced volatility (ironically, on a day that saw a lot of indecision and volatility due to the company's earnings report).  Friday saw the stock hit the upper band, and I opened the call position this morning as soon as I saw the stock peak above the upper bollinger band, causing the bands to expand to the upside.  This cyclical volatility expansion in conjunction with the fundamental back drop for food inflation should lend upward momentum to this stock in the near term.  A close above the high of $72.65 noted on the above chart would help add confirmation to this trade by eliminating overhead resistance.


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OfflineThe Ecstatic
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Re: Stock Update for February 14, 2011 - BG [Re: geokills]
    #13960291 - 02/14/11 09:43 AM (12 years, 11 months ago)

Seems like sound logic.  I'm trying to cram my head full of as much knowledge as I can before I stick my toes in the water.  Options are one of those things I've yet to explore.

My short-term goal is to let my money grow in an index fund until I have enough buying power to diversify (and also once I feel I've learned enough to raise my risk tolerance).

Out of curiosity, Geo, which broker(s) do you use?  I'll most likely open an account with Scottrade, but what is your opinion on guys like Zecco and Tradeking?  Are you just sacrificing trade execution or are there are other major differences?


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Discount Online Brokers [Re: The Ecstatic]
    #13960502 - 02/14/11 10:37 AM (12 years, 11 months ago)

Quote:

My short-term goal is to let my money grow in an index fund until I have enough buying power to diversify (and also once I feel I've learned enough to raise my risk tolerance).




Smart! :thumbup::thumbup:

On the brokers, I haven't used most of them, and they all have slightly different trading platforms and pricing, so if you can "test drive" their platforms without having to deposit money (i.e. paper trading), I'd recommend doing so with as many brokers as you can, in order to feel out which platform you prefer.  Since some brokers have monthly fees with very low trade commissions and others have no monthly fees but higher trade commissions, you'll have to make your decision based on your anticipated account value and trading activity in order to determine which broker is the most cost effective for your own personal needs.

I'm familiar with and have used TDAmeritrade for the last five years or so.  Frankly, I would have switched to another platform (I was focusing on TradeStation and InteractiveBrokers), were it not for the fact that TDAmeritrade acquired the "Think or Swim" trading platform that I have become very accustomed to, and - upon asking - they reduced my commissions to $7 per trade in order to keep my business.  All you have to do to get the reduced rate is ask them for it, and maybe mention that you're considering ScotTrade because their commissions are lower.  They shouldn't give you any trouble, although if you're a brand new account, they may only lower you to $8.  I've even seen some people get $5 commissions with TDAmeritrade, however that rate is on a limited time schedule (6 - 24 months) and only during specific promotional periods with minimum account deposits typically in excess of $20,000 required to qualify.

Personally, I'd suggest that TDAmeritrade (for less frequent to moderate trading activity) and TradeStation (for very frequent trading) are the best choices.


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Re: Discount Online Brokers [Re: geokills]
    #13960783 - 02/14/11 11:32 AM (12 years, 11 months ago)

you guys ever buy/sell/trade stock in something that isn't on the s&p 500 index? Something you expect to go up?


what about micro technology? is that growing or not really?


anyone ever do any insider trading? lol a little gordon gekko type stuff? haha


btw another question. I heard that after 9-11, the flat dollar didn't drop considerably, silver and gold didn't go up majorly. anyone know why this was??


I thought the world trade center being destroyed would have decimated the economy, at least dropped the flat dollar down a bit. why did silver and gold remain about even?


btw speaking of s&p 500 index, I thought safeway would be a great stock right about now, so I asked my dads friend who was a stockbroker, he gave me a report apparently they aren't doing so great:

Check out this report on Safeway below (external link to full report).  We have an ‘Underperform’ rating which basically means that our research team believes there are better opportunities out there:
Synopsis:
SWY reported 3Q10 EPS of $0.33 vs. our $0.34 estimate and $0.31 Cons. We are trimming our EPS for F11 and 12 given ongoing deflation risks. Maintain Underperform rating & $18 PO.

External Link:
http://research1.ml.com/C?q=HTScoyEu3Ae1BU0W36jwEg__&s=lopech

As for gold and silver, you can’t just buy one share, you’ll have to buy an ETF that tracks the performance of those commodities if ever.  As for renewable energy, I prefer a play on natural gas.  You can either buy individual companies such as El Paso Corp or Chesapeake Energy or just buy the ETF that tracks the performance of the natural gas companies index.




any way I would still BUY a safeway STORE and RAKE in the profits, if you think about how much money each store sells a day. None the less as a stock option right now they aren't doing too great.


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Edited by imachavel (02/14/11 11:44 AM)


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Re: Discount Online Brokers [Re: imachavel]
    #13960949 - 02/14/11 12:14 PM (12 years, 11 months ago)

> ever buy/sell/trade stock in something that isn't on the s&p 500 index?

Sure, but it better trade through the NYSE or be listed on another major index such as the Russell 2000.  I will NOT buy stocks that trade "over the counter" (also designated by OTC or OTC.BB), aka penny stocks.  These stocks are not held to the same standards of accounting/reporting as are the stocks of companies who belong to the major indexes.  Furthermore, they are also not very liquid, which tends to result in increased volatility and higher spreads between the bidding and asking prices.  In other words, OTC/penny stocks are a crap shoot and should only be used with the clear understanding that they are lottery tickets, nothing more.


> what about micro technology? is that growing or not really?

Not sure what micro technology you are talking about here.  Semiconductor stocks such as MEMC Electronics (WFR), who provides product to the solar power industry has performed well; so has Cirrus Logic (CRUS), who makes integral components for the iPhone, among other mobile devices.  In so far as "micro technology", I would focus on mobile technology, stuff that will make portable technology function more efficiently and with greater capability.  Other companies to watch: MMI and QCOM.


> 9-11 and silver/gold prices

When global tensions are on the rise (which is what happens immediately after events such as 9-11), the dollar can often be seen as a safe haven.  The dollar is seen this way because the US is still widely respected as the most militarily capable and financially stable nation on this planet.  Whether or not both of these suppositions hold true does not matter in the short term, as it is the perception of these things that drives short-term reactions to geopolitical events such as 9-11 and their relationship to currency and thus, precious metals.  Furthermore, people don't like to talk about it but wars are economically profitable.  Perhaps the idea of a retaliatory effort by the US military after 9-11 also lent strength to the dollar, and thus kept a lid on precious metal prices.


> I thought safeway would be a great stock right about now

The "consumer staples" sector, which is where Safeway belongs, is under pressure due to the fact that investors are anticipating a near-term economic rebound and/or inflationary pressures over the next 6 - 12 months.  This in turn encourages investors to take on more risk.  Investors will flock to consumer staple stocks such as the food stores, when there is increasing uncertainty in the macroeconomic picture.  Well, we are just coming out of a period of INTENSE uncertainty during the plunge of 2008, and now we're experiencing the opposite reaction by understanding that things are not THAT dire, at least not right here right now, and therefore since cash and bond yields are incredibly low, investors seek higher returns by assuming riskier investments such as can be found through the industrial and energy sectors.  When the economy appears to be slowing a bit more, consumer staples will see more support, however in general, food stores like Safeway are not a great place to be as they are already mature companies and typically operate with very small profit margins.  In other words, there is not much room for GROWTH, and growth is the crack of the Wall Street investor.


> I prefer a play on natural gas.

Be careful.  While I personally buy into the idea that natural gas is the necessary stepping stone for the US to increase its energy independence by reducing consumption of oil and ultimately moving towards more clean energy sources; I am also aware that there is a glut of natural gas on the market right now.  This, conjoined with the seasonality effect (i.e. summer is coming, so there will be less gas used for household heating over the next 6 months), should put pressure on the price of natural gas, and therefore the upside to natural gas stocks will likely be limited for the time being.

El Paso (EP) is interesting because they hedged a lot of their future production by locking in a specific contract price.  Therefore, if the gas commodity price falls, EP will be OK since they already sold at a higher rate.  This is the reason their stock has been on an absolute tear over the last month.  However, if natural gas prices begin to rise, they will be punished, as they have already sold a lot of future production at a fixed rate and would not be able to take advantage of higher commodity prices in the near term.


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