gipa69
collegio dei patafisici
Rimbalzo del mercato e nuovo spunto ribassista sul finale di seduta con volumi meno sostenuti che nelle sedute precedenti.
Naturalmente occorre sempre un occhio ai cambi in quanto la loro stabilizzazione potrebbe dare il la al rimbalzo più corposo mentre la situazione attuale non mostra ancora alcun segno di stabilizzazione sebbene i volumi della discesa coomincino ad avvicinarsi ai volumi precorrezione.
Molto interessante il commento di Saut soprattutto nella parte riguardante la correzione attuale ed il suo possibile sviluppo.
Investment Strategy
by Jeffrey Saut
“What time is it?!”
“We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air. We know, by the rules, that at some moment the Black Horsemen will come shattering through the great terrace doors, wreaking vengeance and scattering the survivors. Those who leave early are saved, but the ball is so splendid no one wants to leave while there is still time, so that everyone keeps asking, ``What time is it? What time is it?’’ but none of the clocks have hands.”
. . . Adam Smith, Supermoney
“I have should have ‘sold’ two weeks ago,” was the lament from many stock market participants we encountered in our travels last week. Consequently, it will be interesting to see if that same sentiment is prevalent at Raymond James 28th Annual Institutional Conference here in Orlando this week. Nevertheless, even though we have been too cautious over the past number of months due to optimistic valuations and waning earnings momentum, readers/listeners of these comments should have been well prepared for last Tuesday’s Tumble. Our thoughts on the subject were best expressed in our verbal strategy comments recorded last Wednesday morning. To wit:
“We think Tuesday’s Tumble was set up a few weeks ago when Japan raised interest rates, thus signaling it was ending its zero interest rate policy of over a decade. While we got into a few heated discussions with various panglossian pundits on CNBC that Japan’s rate-ratchet would be gradual, we argued that while we agreed it will indeed be gradual that was NOT the point. The point was the direction of Japanese interest rates and that direction is now UP.
Given the massive amounts of hedge fund money feeding at the Japanese carry-trade trough, we warned that the environment calls for even increased caution. Recall that for years the hedge funds have been borrowing a million bucks in Japan at virtually zero percent interest rates, levering that money ten, twenty, or even thirty to one and taking that ten, twenty, or thirty million dollars and buying something that either yielded more than the cost of the borrowed funds, or was going “up” in price, be it New Zealand bonds, gold, Brazil stocks, or in this case Chinese stocks. As long as the purchased vehicle was going ‘up’ in price, and the Japanese yen held steady or better yet declined, it was nirvana and highly profitable. Yet when Japan raised interest rates, the Japanese yen went into a bottoming pattern, in our opinion. We spoke repeatedly about the yen’s bottoming sequence and in fact, to take advantage of this, recommended purchase of the newly created Japanese yen currency shares (FXY/85.85) a few weeks ago.
Well Monday night (last week), one of the hedgies levered-long positions of choice, namely Chinese stocks, got shellacked for 8.8% overnight and when you are levered 30:1 the margin calls mount quickly. Adding to the hedge funds’ pain was a sharp rally in the Japanese yen and therefore it became the ‘shot heard round the world.’ Verily, the Chinese ‘movie theaters’ were packed to overflowing and somebody yelled ‘FIRE!’
The result was a massive dash for the exits as the Japanese ‘carry trade’ started to be unwound. This unwinding is reflected in the CFTC data, which shows speculative ‘short’ positions in the yen starting to unwind. Interestingly, many markets like China, Vietnam, Thailand, etc. don’t have much liquidity so when a hedge fund gets a margin call they sell what they can sell. In this case it was very liquid U.S. stocks. That selling begat more selling and when the closing bell rang on the NYSE last Tuesday the DJIA had shed 416 points to 12216.
So what do we do? Well, we would expect some kind of throwback rally attempt today (last Wednesday). Regrettably, we think that rally attempt will fail, leading to a series of bottoming attempts at best as the markets attempt convulses, or at worst they take-out Tuesday’s lows and extend the correction. In any event, the market has had a heart attack and just like a heart attack patient does not get right out of bed and run the 100-yard dash, we don’t think the stock market will do that either. Consequently, we remain cautious. If you want to try and buy something, we continue to suggest the long/short mutual funds of Icon Funds (IOLCX/$16.84) or Diamond Hills (DHFCX/$17.51). As for us, we are not inclined to bottom-pick individual situations because we know old traders, and we know bold traders, but we don’t know any old and bold traders!
The Call for Today (last Wednesday): Well, this morning the talking heads are trying to explain away yesterday’s Dow Dump on a computer glitch that occurred around 3:00 p.m. and took the Dow Jones Industrial Average down over 200 points in about four minutes. But the selling that caused the 3:00 p.m. glitch had already taken the Senior Index down some 300 points before the glitch ever occurred! And that, ladies and gentlemen, is the real story as things continue to get curiouser and curiouser . . . “
So we said last Wednesday and from our mouth to the market’s “ears” because the major market averages have traded pretty much in accord with last Wednesday’s “call.” Troublingly, the late week “fade” broke the DJIA below its December low (12194.13) and as long-time readers/listeners of our comments know, that raises another red warning flag (see our strategy comments of 2/5/07). So what is the “call” from here?
Well, all day Friday we told accounts, “Never on a Friday” meaning that markets typically don’t bottom on a Friday once they get into one of these sorts of downside skeins. Indeed, participants tend to not want to hold “long positions” over the weekend, fearing that investors will brood about their weekly losses and therefore show-up the beginning of the following week in sell-mode. And that, dear readers, is what gives us the trading sequence whereby stocks bottom in the Monday/Tuesday timeframe leading to the perfunctory three- to five-session throwback rally. From there another pullback should be in order and that is when it will become more apparent if this is something more than just a 5% - 8% correction.
As for us, we remain cautious and will be attending a number of presentations at this week’s conference in an attempt to decide if we should be putting some of our outsized cash position back to work. Some companies we will be seeing include: Covanta (CVA/$22.04/Outperform); AT&T (T/$36.44/Outperform); HCC Insurance (HCC/$31.11/Strong Buy); L-1 Indentity Solutions (ID/$16.75/Strong Buy); and Sprint Nextel (S/$19.96/Strong Buy), most of which did not pull back all that much in last week’s carnage. While we already own many of these names, as well as numerous “stuff stocks” (oil, gas, coal, timber, base/precious-metals, fertilizer, grains, water, cement, uranium, etc.), one energy name we are particularly excited about seeing is Petrohawk Energy (HAWK/$11.64/Strong Buy). Hawk’s story is pretty simple.
Indeed, Petrohawk Energy is a premier E&P provider in the Permian Basin, Mid-Continent and Gulf Coast regions. It’s a value-asset play with huge reserve/production growth, a low-risk profile, and developmental focus. The company boasts a 93% success rate over the past few years and has 10 years worth of inventory. It has 724 proved and 4,000+ unproved drilling locations that offer 2.6 Tcfe potential. Petrohawk Energy makes acquisitions and divest assets. The street sometimes looks unfavorably upon this as if they "buy growth". Yet Petrohawk Energy buys assets, aggressively drills and ramps production, then looks to sell once the growth moderates. The recent acquisition of KCS should provide meaningful cost synergies with neighboring properties and KCS’s technological expertise in the area will help decrease drilling time. KCS had an extremely low-cost profile and its COO is now the COO at Petrohawk Energy. Overall finding costs have decreased since the merger and there is room for them to move even lower. We expect Petrohawk Energy will realize 30%+ production growth coupled with decreasing finding costs that should maximize EPS and cash flow growth over the next few years. If that analysis is correct, Petrohawk Energy’s 38% discount to our proved NAV should narrow, as should its 12% discount to the peer group.
The call for this week: Last week our investment portfolio held up pretty well due to its cautionary composition and outsized cash position. Moreover, our long trading positions in the Volatility Index (VIX/18.61) recorded spectacular gains, while our Japanese yen shares registered decent gains. Such is the story for the well-prepared investor. We continue to invest and trade accordingly.
March 5, 2007
Naturalmente occorre sempre un occhio ai cambi in quanto la loro stabilizzazione potrebbe dare il la al rimbalzo più corposo mentre la situazione attuale non mostra ancora alcun segno di stabilizzazione sebbene i volumi della discesa coomincino ad avvicinarsi ai volumi precorrezione.
Molto interessante il commento di Saut soprattutto nella parte riguardante la correzione attuale ed il suo possibile sviluppo.
Investment Strategy
by Jeffrey Saut
“What time is it?!”
“We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air. We know, by the rules, that at some moment the Black Horsemen will come shattering through the great terrace doors, wreaking vengeance and scattering the survivors. Those who leave early are saved, but the ball is so splendid no one wants to leave while there is still time, so that everyone keeps asking, ``What time is it? What time is it?’’ but none of the clocks have hands.”
. . . Adam Smith, Supermoney
“I have should have ‘sold’ two weeks ago,” was the lament from many stock market participants we encountered in our travels last week. Consequently, it will be interesting to see if that same sentiment is prevalent at Raymond James 28th Annual Institutional Conference here in Orlando this week. Nevertheless, even though we have been too cautious over the past number of months due to optimistic valuations and waning earnings momentum, readers/listeners of these comments should have been well prepared for last Tuesday’s Tumble. Our thoughts on the subject were best expressed in our verbal strategy comments recorded last Wednesday morning. To wit:
“We think Tuesday’s Tumble was set up a few weeks ago when Japan raised interest rates, thus signaling it was ending its zero interest rate policy of over a decade. While we got into a few heated discussions with various panglossian pundits on CNBC that Japan’s rate-ratchet would be gradual, we argued that while we agreed it will indeed be gradual that was NOT the point. The point was the direction of Japanese interest rates and that direction is now UP.
Given the massive amounts of hedge fund money feeding at the Japanese carry-trade trough, we warned that the environment calls for even increased caution. Recall that for years the hedge funds have been borrowing a million bucks in Japan at virtually zero percent interest rates, levering that money ten, twenty, or even thirty to one and taking that ten, twenty, or thirty million dollars and buying something that either yielded more than the cost of the borrowed funds, or was going “up” in price, be it New Zealand bonds, gold, Brazil stocks, or in this case Chinese stocks. As long as the purchased vehicle was going ‘up’ in price, and the Japanese yen held steady or better yet declined, it was nirvana and highly profitable. Yet when Japan raised interest rates, the Japanese yen went into a bottoming pattern, in our opinion. We spoke repeatedly about the yen’s bottoming sequence and in fact, to take advantage of this, recommended purchase of the newly created Japanese yen currency shares (FXY/85.85) a few weeks ago.
Well Monday night (last week), one of the hedgies levered-long positions of choice, namely Chinese stocks, got shellacked for 8.8% overnight and when you are levered 30:1 the margin calls mount quickly. Adding to the hedge funds’ pain was a sharp rally in the Japanese yen and therefore it became the ‘shot heard round the world.’ Verily, the Chinese ‘movie theaters’ were packed to overflowing and somebody yelled ‘FIRE!’
The result was a massive dash for the exits as the Japanese ‘carry trade’ started to be unwound. This unwinding is reflected in the CFTC data, which shows speculative ‘short’ positions in the yen starting to unwind. Interestingly, many markets like China, Vietnam, Thailand, etc. don’t have much liquidity so when a hedge fund gets a margin call they sell what they can sell. In this case it was very liquid U.S. stocks. That selling begat more selling and when the closing bell rang on the NYSE last Tuesday the DJIA had shed 416 points to 12216.
So what do we do? Well, we would expect some kind of throwback rally attempt today (last Wednesday). Regrettably, we think that rally attempt will fail, leading to a series of bottoming attempts at best as the markets attempt convulses, or at worst they take-out Tuesday’s lows and extend the correction. In any event, the market has had a heart attack and just like a heart attack patient does not get right out of bed and run the 100-yard dash, we don’t think the stock market will do that either. Consequently, we remain cautious. If you want to try and buy something, we continue to suggest the long/short mutual funds of Icon Funds (IOLCX/$16.84) or Diamond Hills (DHFCX/$17.51). As for us, we are not inclined to bottom-pick individual situations because we know old traders, and we know bold traders, but we don’t know any old and bold traders!
The Call for Today (last Wednesday): Well, this morning the talking heads are trying to explain away yesterday’s Dow Dump on a computer glitch that occurred around 3:00 p.m. and took the Dow Jones Industrial Average down over 200 points in about four minutes. But the selling that caused the 3:00 p.m. glitch had already taken the Senior Index down some 300 points before the glitch ever occurred! And that, ladies and gentlemen, is the real story as things continue to get curiouser and curiouser . . . “
So we said last Wednesday and from our mouth to the market’s “ears” because the major market averages have traded pretty much in accord with last Wednesday’s “call.” Troublingly, the late week “fade” broke the DJIA below its December low (12194.13) and as long-time readers/listeners of our comments know, that raises another red warning flag (see our strategy comments of 2/5/07). So what is the “call” from here?
Well, all day Friday we told accounts, “Never on a Friday” meaning that markets typically don’t bottom on a Friday once they get into one of these sorts of downside skeins. Indeed, participants tend to not want to hold “long positions” over the weekend, fearing that investors will brood about their weekly losses and therefore show-up the beginning of the following week in sell-mode. And that, dear readers, is what gives us the trading sequence whereby stocks bottom in the Monday/Tuesday timeframe leading to the perfunctory three- to five-session throwback rally. From there another pullback should be in order and that is when it will become more apparent if this is something more than just a 5% - 8% correction.
As for us, we remain cautious and will be attending a number of presentations at this week’s conference in an attempt to decide if we should be putting some of our outsized cash position back to work. Some companies we will be seeing include: Covanta (CVA/$22.04/Outperform); AT&T (T/$36.44/Outperform); HCC Insurance (HCC/$31.11/Strong Buy); L-1 Indentity Solutions (ID/$16.75/Strong Buy); and Sprint Nextel (S/$19.96/Strong Buy), most of which did not pull back all that much in last week’s carnage. While we already own many of these names, as well as numerous “stuff stocks” (oil, gas, coal, timber, base/precious-metals, fertilizer, grains, water, cement, uranium, etc.), one energy name we are particularly excited about seeing is Petrohawk Energy (HAWK/$11.64/Strong Buy). Hawk’s story is pretty simple.
Indeed, Petrohawk Energy is a premier E&P provider in the Permian Basin, Mid-Continent and Gulf Coast regions. It’s a value-asset play with huge reserve/production growth, a low-risk profile, and developmental focus. The company boasts a 93% success rate over the past few years and has 10 years worth of inventory. It has 724 proved and 4,000+ unproved drilling locations that offer 2.6 Tcfe potential. Petrohawk Energy makes acquisitions and divest assets. The street sometimes looks unfavorably upon this as if they "buy growth". Yet Petrohawk Energy buys assets, aggressively drills and ramps production, then looks to sell once the growth moderates. The recent acquisition of KCS should provide meaningful cost synergies with neighboring properties and KCS’s technological expertise in the area will help decrease drilling time. KCS had an extremely low-cost profile and its COO is now the COO at Petrohawk Energy. Overall finding costs have decreased since the merger and there is room for them to move even lower. We expect Petrohawk Energy will realize 30%+ production growth coupled with decreasing finding costs that should maximize EPS and cash flow growth over the next few years. If that analysis is correct, Petrohawk Energy’s 38% discount to our proved NAV should narrow, as should its 12% discount to the peer group.
The call for this week: Last week our investment portfolio held up pretty well due to its cautionary composition and outsized cash position. Moreover, our long trading positions in the Volatility Index (VIX/18.61) recorded spectacular gains, while our Japanese yen shares registered decent gains. Such is the story for the well-prepared investor. We continue to invest and trade accordingly.
March 5, 2007
152,44......dopo aver ritestato in nottata 150,70 che robba....che gain avrei fatto porka pupazza ma andare over long con questa vola è un suicidio...
