June 17, 2006
My Last Post
I have a new design and domain - www.howardlindzon.com
I wanted a simpler and more personal design and to try out the wordpress software.
Thanks Loren for getting this done quickly and painlessly - at least for me!
If you feel like making CONSTRUCTIVE CRITICISM - go ahead over at the new site.
It is a work in progress but was fun starting with a clean slate and I love the simplicity and style of Loren's sites so I basically took it from him.
Off to New York for a few days so will hopefully have some fun stuff to report.
Happy Father's day to all my favorite hard working fathers.
Art Rockert - I miss you dearly.
US Open and Father's Day
Nothing like teeing up on US Open weekend.
I love seeing Tiger win and used to root against Phil. I guess I love a winner and now find myself rooting for Phil.
No one touches him tomorrow and he wins running away.
No more boob jokes. He is the shizzle.
I played one of his courses today and fired a low number so now I am a fan of his course design as well.
June 16, 2006
I love it when he talks dirty to me!
Everyone can play in this trend - RIGHT NOW!
Chartruese brings home the point better than me with this post .
June 15, 2006
Apple's MacFlashtic - When not if!
The content explosion has just begun.
It sucks, but that is not the point.
Zero cost and it can only get better. Great soundtrack guys.
Attitude is Everything - Why America is Great!
The Fed Blinks! - WHY? The rally was upon us anyway!
Today Bernacke has forecasted his hand to the world by saying the US can withstand higher oil prices. Is he just insane! He can't be that stupid. Oil has barely budged to the downside and prices are likely low compared to where they should be.
He has become a puppet in record time! He has forced himself into a rate cut on the next market decline. OIL PRICES ARE HURTING US. ALWAYS HAVE. THIS TIME IS NO DIFFERENT and based on our personal balance sheets - LIKELY WORSE.
He put a bottom in Gold tonight and it is up $18 TONIGHT! Fine with me.
This rally was coming either way. It is important to look back when things go right and things go wrong. It is one of the best things about a blog and SEARCH. I felt this storm brewing on May 12th . I started selling a little early, but did not sell everything and did not go short. STUPID! The trend was stretched but I was trying to stick to my plan of not timing the market.
When things seem extreme (like this past week), I set a gameplan and go to my trusted sources. Fed statements like today's are just icing on the cake.
On the markets, my best source for straight data is Degraaf from Lehman. I could sense the panic and I posted what I thought was the most important two charts he had. The VIX extreme and the mutual fund cash. Short-term, the VIX extreme offered me some insight from past patterns. The low cash position of mutual funds is a reminder that rallies will likely be shortlived. As good as today felt, mutual funds are tight on cash.
Tonight, Japan is up 500 plus points and gold up another $18. Bernacke's comments are fuel on a short squeeze.
The most important thing to remember about peaks and troughs in the markets, is the acceleration at turning points.
The last few days I posted that the speed of the descent was not sustainable for the MARKETS.
Those that overstayed their welcome on the shortside are seeing gains turn to losses. When I was active on the shortside in years past, nothing felt worse than days like today. Nothing is worse than being short when the market goes up. Nothing!
Sweet Day for the Longs - Pay me!
Put myself on the line with this Gold and Emerging market trade and it is looking good. India up 10 percent (IFN) and closed on the high. Russia closed up 10 plus percent for the second day in a row.
I was hopeful for this rally but you never expect to get paid on risky trades like this.
My gold buys intra-day were all positive and I am waaaay long gold right now.
I booked some profits at the end of the day in India and MDG. I think the gold stocks could really play catch up tomorrow or Monday where I will look to deleverage from gold.
I really think you look back at $540 gold and even $570 gold and go wow - I can't believe I passed on that price. I think the Fed will choose to start cutting aggressively this fall as the next wave down in the US will be worse.
The rally aside today, big companies are hurting and confidence has taken a big smack both here and more importantly - emerging markets.
ETF's good or bad?
The last 4 weeks have really been interesting for me.
I have truly found a new tool for trading extremes.
ETF's, while still illiquid in many cases, are the new new thing for all types of investors.
You must adjust position sizing for the illiquidity factor, but when all is said and done
WHY OWN STOCKS.
It will help when options make their entrance into the ETF space but they will.
Owning a piece of Templeton Russia dopwn 50 percent feels much different than owning a ukrainian mining stock down the same amount.
Whether purists argue with me I could care less_if you want to trade the markets, learn the ETF's.
Taking out Highs - adding to Gold stocks with tight stops for the day
Ringing the register but staying with Gold
Feels great to have gotten this one correct after all the worrying.
I am not selling gold stocks but did not add. I can press here because I have lightened the load in India and Russia.
I am looking around the US stocks now in case the rally is for real. There are a ton of stocks that could have big bounces.
Note to self - ****Even on the rallies, it is the emerging countries, leading the US markets. Times have changed.
Gold bullion is up strong. If it persists, I look for the stocks to open strong, but continue HIGHER throughout the day and expiration so I may pile in if we stay strong through the first 30 minutes.
June 14, 2006
"Blogentrepreneurship" - Everyone can be acquired and the Empire of ONE - All Aboard!
Jeff Clavier, who I met at a web 2.0 unconference and just seems tireless, has my idea of the perfect job. Impossible work, and long hours, but surely rewarding.
He has a great post on "blogentrepreneurship" that gave me a few Eureka moments that I can't wait to flesh out and share.
True Ventures , who is funding Om Malik as he leaves Business 2.0 to focus on his blogging brand, will most likely be hugely successful for the exact reasons they post on their homepage. Om Malik has an awesome blog. I have not met him, but love his style and I am sure can build something that will make a nice return for the size of the investment needed.
It is an undeniable fact. Content is becoming cheaper and cheaper to create and the pool of global talent is getting wider and deeper. Get ready for a 10-20 year continued frenzy of create, build, flip businesses in the blogentrepreneurship space. media companies forced to grow and seeing market share sliver as content goes deeper and wider will continue their acquisitions unabated.
How can this all happen and how come everybody is an acquisition target? As Ted Knight so eloquently put in CaddyShack (my all-time fave movie) - "The world needs ditchdiggers too." Web 2.0 will always need the ditchdiggers. Thank goodness, the money is loose and there are "deep" established big venture firms like Bessemer with big guns like David Cowan , digging the ditches and investing the big VC money so that blogentrepreneurship can assume the lead in the next "bubble" of the internet (which will only be bottom of the second inning).
Two trends get clearer every day - The necessary move to smaller, wider, deeper, seed stage investments that need less capital AND blogentrepreneurship. Fewer billionaires, but plenty of millionaires in the making. As Chartreuse always says, "Small is the new Big!"
James Cramer needs a new tag line...
"Show me the ...margin call!"
There's always a bull market somewhere...until there is a bear market everywhere and you are so mixed up by my shenanigans on CNBC that you are on margin and have lost your wife and your dog just peed on you and your kids are now going to Devry!"
At times like these, it is most glaringly obvious why CNBC and their "reporters"? offer ZERO value. Unfortunately, this is the ONLY time that listeners need value from this group of yahoo's.
Surely included in that list is James Cramer. I love this open letter to Cramer which I just came across - well done!
I think Greg Brady of Brady Bunch said it best when he said:
"It's all fun and games until Alice gets smacked in the head or Marcia loses an eye" or something.... :) OK NOT important, but,
Someone needs to remove this show and most CNBC daytime programming from the air immediately and replace with some responsible programming. Much damage is done but it is never too late. Dr. Phil would be better, Oprah would be much better, and Howard Stern would kill doing stocks (nobody has ever been hurt investing in porn!).
It is time for a change. Web 2.0 was made for Finance; on demand, on topic, educational and responsible. I know it's coming and I hope I can be a part of it.
Real Estate - 10,000 foot view
Jeff Matthews chimes in on New York
I have some real estate investments with one of my best friends who develops in Payson and Prescott, Arizona and he says things have REALLY slowed lately and fast! These fringe areas can disintegrate into a sea of illiquidity.
On a positive note, the lending business (which I am hevily reliant upon) always looks better at times like this as the "rookies" get smacked around. Blair, who has been teaching me the ropes, has been doing this for 20 years and has never seen so many "newbies" lending out money at "too low" rates and "too risky" deals.
Part of what I do is make sure I see every real estate deal I can in the area and there has been a whole lot of crap being pitched around town - "in size" as well.
I do not short, but have pulled the following stocks onto my watchlist in case I get tempted:
Let me just say I am tempted on these if we get a rally.
The homebuilders have already been smoked and I am not as negative on these as everybody else from these levels.
The renters are smiling a little.
Nice Close and a little relief from the Margin Dudes
Rumor on the street is that Niederhoffer (legenday trader? for Soros) was down 28.5% in May. Wonder how June is going? And he JUST got to $400 million under management!
Back to my struggles:
Russia was up 10 percent so that was nice and India up 5 percent. I am still loaded up on these so one more great day would be NICE. I thought TRF could easily bounce to 60 when I posted midday and - sweet - we almost closed there.
In support of my two new most important countries, I am headed out for Indian food tonight with a Vodka chaser and than home to watch "From Russia With Love."
Tomorrow, I am off to Zales, Tiffany's and some other jewellers as I feel I need to start my Gold Mantra chant to get my stocks in gear. I think there could be a vicious bounce here, but did not add any positions, actually sold some of my calls into the early gold stock rally today. I am asking Robert Bruce , poetry guru, to write a cheerful gold poem for me and will recite it every hour tomorrow. If I could just get my Avatar going, you would be able to hear me recite it.
Not convnced on the US bottoming as interest rates shot higher, but hopeful for those long.
OPPORTUNITY - Even free can be monetized if you offer uncommon value
I have talked at length about the opportunity in the blogging industry. The stats are Ginormous (Don Kingism). Something like 100,000 people a day or month (too lazy to Google, but it's Ginormous amounts - trust me) are signing up, and posting their thoughts.
The tools will also help monetize another internet model - Fred Wilson's favorite business model - "Freemium". Adsense is nonsense as I have posted before. My friends at LunchClub(a local company I have consulted) were over for lunch yesterday and because of my pathetic dealings trading, I wanted to mix things up and take my mind off the market. With a four year old mailing list of loyal 40,000 plus Phoenix LunchClubbers and 500 plus restaurants on the program, the lack of a revenue model continually bothers me. I have urged the management to look outside the box for their revenue and look to their users who enjoy the service. Strike up some conversations, don't be afraid to ask for something, put a human touch on the whole Phoenix lunch scene.
Needless to say, there were many new ideas developed and some new energy hopefully instilled. I can't let go of this local opportunity and there are many more just like it.
Last night I also came across another great post at Union Square Ventures . It is so important and relevant to Lunch Club and other internet companies like them, that I have enclosed it in it's entirety.
WHY WE ADMIRE CRAIGSLIST
Craig Newmark came by last week and spent an hour with us and the leaders of several of our portfolio companies.
I kicked off the conversation by describing how Charlie, who was short two softball players for a game last Monday, posted on Craigslist that morning and by game time that afternoon had two ringers and a number of alternates lined up. I was astounded by that kind of liquidity - Craig, characteristically, smiled cryptically and said that he was happy to hear that the list was useful.
It was a broad ranging conversation where we talked about the challenges of managing a "community" the unusual business model of offering it for free until your users insist that you charge them, and the remarkable efficiency of user generated web services.
I spent most of the time trying to ascribe motive, direction, and strategy to the choices Craig made in the eleven years since he started the list. Craig refused to take the bait, insisting, as he always has, that he, Jim and the rest of the 21 people at Craigslist are reacting to the community, not acting on a plan.
So with little help from Craig, I am going to take a shot at why we admire Craigslist. We admire Craigslist because it is a remarkable combination of scale, relevance, and efficiency. Craigslist serves 200 (soon to be 300) cities, in 35 countries, where is presents 8 million listings to 10 million users, every month. Its relevance to any specific user is, in part, due to the network effect of this scale, but it is also driven by many subtle choices in interface, utilities, and business model. These design decisions, which Craig would argue, were driven by his need in the early days to support a growing number of users with few servers and no employees, are also the key to Craigslist's efficiency. Craigslist still employs only 21 people. For a system of its scale, I can think of no other service that comes even close to that level of efficiency.
Many of the web services we admire seem to have this combination of scale, relevance and efficiency. Google, del.icio.us, and Last FM, come to mind. They all get there in slightly different ways, but they all get there; leading me to wonder if getting this combination of things right is the critical success factor for web services.
WATCHED markets rarely move
Days like today usually do not give either party what they want, so I would not be surprised to see some chop.
If the sellers show up after lunch, the whole late day margin mess will unravel again.
People have given up on Russia (not me), so it is having a good day. Nobody could care watch that TRF pig anymore and my buys yesterday are being sold right now. I think TRF can see 60 in a few days and if so, my trade is a big win. With the partial sales, I have the option of reloading if we sink this afternoon because of the US close.
I still believe we need a huge down open to clear out the sellers so we can rally for a while.
Do not chase this small move up today. Lot's of headfakes will be coming.
I see that my UPS is breaking down today and that could drop like a stone (talking my position). I am wearing Brown today :)
A pause in the MAULING
We are due for a pause in the downside looking at the VIX, but the cash position of mutual funds does not get me excited to rush out and get 100 percent invested.
Other breaking news:
This morning, the heat wave broke in Phoenix - the high will be 109, down from 112. Good news though - A CLOUD WAS SPOTTED OVER THE PACIFIC AND SHOULD ARRIVE IN AUGUST.
Listening to our weather forecast is like watching CNBC's Bob Pisani cheer a 20 point rally. You want to strangle the messenger.
June 13, 2006
I repeat - nothing works ALL the time
Few opinions, zero a few years ago. Cool charts and information. Well organized. Always adding features. A positive outlook on life in general.
VERY AMERICAN. May William O'neal be blessed.
One problem is the IBD 100. It is only as good as the MONEY MANAGEMENT behind the scenes. That is the hardest part. Unfortunately, it is like giving people Taser's for their financial well being. People shock and awe themselves to death with that list when the markets turn - LIKE THEY ARE NOW!
I am a trend follower so I know my risks and I choose managers that understand risk management and can clearly display them and explain them to IDIOT ME in about 10 seconds.
I am emailing back and forth with my buddy Eric who manages the Blackstar Equity Trend program and being a 100 percent long only program, imagine the joy in that house. The thing is, Eric and Cole understand risk. They embrace it and harness it. It bites you in times like this, but their fund's risk continues to drop - NOT INCREASE - as markets crash. That is how you stay alive. Furthermore, the drawdowns generally come after big runups - playing with the house's money.
Most traders do not employ this part of risk management. If you don't, one bad stretch like this puts you OUT OF THE GAME - FOREVER.
With that in mind, I include this chart of the IBD 100 fund. For the risk, the performance is very underwhelming. I include it not to disrespect the fund or the strategy, but to say that I n a rising market, pretty much EVERYTHING WORKS.
Markets like this tell you who should be managing your money. Now is the time to interview new people and make changes if they need to be made. The good managers stand out NOW.
Robert Scoble - YAWN!
I have never seen such ass kissing for a guy in my life.
I have met Robert briefly - absolutely a nice guy and seemed sincere. Liked our golf doohickey website. So I bought his book - a real page turner - UNTIL PAGE 3!
It is still WAY early in the blogging phenomenon and the big money has not even been thought of (video is getting wamer), so I guess you have to put up with this stuff. But Geez, if Scoble and Amanda whatever her name is can get this much attention, just wait until we get a Madonna or Howard Stern baby.
No offense Robert, good luck.
The Rout Continues in metals Tonight
Back to what really is important - the INFORMATION trend
Lot's of new Web stuff introduced today . Ebay integrates Skype into certain auctions, Google launched a Shakespeare site, many more web tools were funded and Fred made anther cool investment . Note to Trader Mike and Bill Cara - OddCast is worth a try.
The world keeps on turning.
OK back to worrying :)
What is Richard Russell saying?
He has seen all the cycles. He is not one to pull punches.
I checked in today and he has a few insights, but not much more than I have been writing about here.
Richard is correct in saying that margin and debt will bleed you and kill you in markets like this. I am stupid for even trying to trade this. I know better and will be LUCKY to trade my way out of my Gold, Russia and India positions without big losses.
I do know enough to have kept posiion sizing small and use no margin, but the losses are still losses.
Here you go and I hope it helps:
Thanks for the kind messages and some other miscellaneous stuff...
The next biggest readership adder is the Kobe dunks on Nash post . Classic how the internet works. I think it is just my friends from LA pinging away at it and laughing at my expense.
One of my fund partners, who surprisingly, is reading my blog from China had a few key comments as per my requests on shipping strength.
What other freight choices are there AND business is not bad.
Also, although there is TOO much construction and should correct, nothing fundamental has changed. The US is fast becoming the tail (no argument there) and BUY CHINA.
Trust me when I say that this partner is WAYYYY ahead of the game and has been for a long time. I always listen to him.
Pulling up the China chart now.
Tomorrow's Gameplan - TONIGHT
I like the daily recaps that I get at TraderMike's site
Problem is I am long Gold and got longer today. I don't really trade off moving averages much, mainly because I do not trade much anymore, but it looks like Gold is still OK technically. Big Woop. A lot of good that will do me if we gap down again tomorrow.
Here is the Gameplan for tomorrow:
1. Call mom (again) ask for help with my margin call :)
2. Mom won't answer as she is glued to CNBC and panicked so I leave another nasty message.
3. Lie to my clearng firm in the morning and say money must be lost in transit.
OK, not my gameplan, but one that is pretty close to many others out there and why we are getting the nasty closes.
So, what happens tomorrow - no idea.
My gameplan is to continue to scale into gold stocks and calls here for up to 10 percent of my portfolio for this trade. I am at about 5 percent now. That would be a big position for me and I would unwind half quickly into a rally above $600.
I don't see how Gold continues to collapse quite so fast. At this rate, Russia will be at zero in ten days, India, 40 days and Gold 10 days. Even I am not that unlucky :)
Because I saw most of this damage coming back in Mid May with the help of people in the blogroll, I had been pretty cautious until yesterday. Risk/Reward says that this trade is a winner 10 days out and I am sticking with my plan for now.
I hope an audible is not called for, but mine would be to cut and fight another day.
Long - lot's of Gold stocks and calls, TRF, IFN, and SPY PUTS and UPS PUTS.
Short - patience.
Back Office Conversation - Brokerville USA
It's 3:00 pm - your turn to make the margin rounds
Come on Dick, why do I have to keep making the rounds. Come on Dick, help me out a little Dick, the brokers are ready to hang me. Dick, cut me some slack.
No can do TINY.
And so it goes. Strong open, forced SELL's on close.
Many lives being destroyed in this global selloff. It is a shame really. Speculation is wieding it's ugly heads to many first time global investor's and the blame and fallout will not be pretty.
I sense much worse stuff for the US markets.
A quick survey of the Landscape - Cash, Porn and Desert Real Estate, the last standing bull markets.
China (FXI) is now down 30 percent off its high of last month, Russia 50 percent, India, 40 plus percent. These are not stocks, these are diversified (LOL) ETF's.
The US markets as I again suspected this morning are now down big. These fall positive opens brought to you by CNBC and the BIG Bank traders are just not good. They are just baiting the little guy and the afternoon is met with forced selling of the same person as margin calls are made. That is what leaads to the horrible market closes.
I was fooled by the early reversal in metal stocks and I forgive myself of that. With Gold down big I saw the strength in the stocks as a turn and jumped the gun too early. Big mistake. The big traders took me there.
Google is flat and Shipping stocks are flat. I understand Google.
I am amazed at the strength in UPS and Fedex. If you know what that means - please yell at me or write your comment - OR BOTH 480-555- YUTZ!
If we are in a slowdown from rising rates, would shippers not be hammered.
Elsewhere, Oil is down 41.70 and that does not surprise me.
For the most part I have been in cash since the middle of May. Unfortunately, my trend followers are being SMASHED as well.
Cash and Porn are the two safe havens.
The market is WAY bigger than me and I am wrong
I am early and wrong on my bigger buys today.
Gold is just being wrecked and I will be taking some daytrading losses if we close on the lows.
India, Russia - wrong as well. More losses.
I think we are close or at a bottom in price, but I am not willing to make or break my year on any one trade.
I have gotten some good feedback from readers today and appreciate the emails.
I would make the trades I have made the last few days over and over again because of my gameplan, but this time the gameplan is not playing out and I am looooosing.
I hope everyone else reading is in cash and just amused at my last few days of losses . That would be fine with me.
Heading to Zales
I am standing at the mall urguing people to buy gold chains.
It seems to be working :)
Despite the metals 6 percent selloff, the stocks are rallying off the lows.
Gold - Buying the metal
Sticking to my gameplan and stepping up on the metal down nearly 30 bucks more this morning.
I think the FED may be forced to cut at this point.
When I wrote about seeing Gold back below 600 I really did not think it would happen, at least this soon.
Why I am avoiding the US Market for a trade
This morning Lehman's Degraaf had this to say which is what I suspect as weel and mentioned yesterday:
"When the catalyst for a decline remains vague, the decline usually has greater
durability because the discounting mechanism works with less urgency. There is
no doubt that blow-up risk is rising with tighter credit, and maybe there is
something beneath the surface, not yet seen, but all present. LTCM prompted
market weakness weeks before the world was privy to the Greenwich hedge fund’s
existence. Historically, a tightening cycle is rarely complete without the
curtain being pulled open to reveal the simplicity of an institution whose
profits appeared to magically defy gravity (the illusion of leverage), and that
has yet to happen in headline fashion here. "
I have to agree with this and rallies will likely fail until we get this scenario. At least history suggests this.
Trades I am trying...
This is why it is good to have some cash as the options are just too expensive for the money (my opinion)
Covered my Fedex puts.
I am amazed that with the crash in metals, oil has not plunged as well. It could plunge $10 at anytime so avoiding the stocks.
If this isn't Panic....except?
What is happening globally is a one month version of our markets circa October 1987.
It is a real shame that no one on the net is really covering this well.
The global panic does not seem to be bothering US traders this morning in anything other than GOLD. I think that is a FALSE TELL and since Asia wags our tail, will push off a big US rally further still. I am surprised the traders have not pushed us down much further this morning.
Should be an interesting day indeed.
June 12, 2006
The Big Whoosh?!@^#%*??
I see that the Nikkei is down another 500 plus points. Gold is down another $10.
I am setting a late night game plan.
I would love to see Gold down another $10-$20 overnight and the US futures limit down. With quadruple option expiration this Friday, volume will be dizzying as it is.
The trader in me would buy a limit down and scale in with calls into a further mess for a bounce next week.
Screening through the option chains now of stocks I would consider for the biggest bounces. Unfortunately, most of the stocks I would buy are ETF's that don't trade options yet. RatFarts!
One trend this market downturn will surely end - Venture Dollars for Eyeballs!
I don't believe the Web 2.0 that most of my blogroll covers is a BUBBLE. I think it is vibrant and sexy and an exciting "sign of the times", but, for those Web2.0 companies that have raised money to launch their "EYEBALL", "SOCIAL NETWORKING" "Alpha and Beta" experiment. they better make their funds last.
If the market downturn lasts 6 months or more, the doors wiill close again on this sector of the internet and only those internet businesses that are conducting transactions or have models that don't solely rely on advertising revenue will get new monies.
Not to worry though, the EYEBALL race will resume an upward trend for inning 3 somtime in 2008. It will be bigger and better than ever I am sure, with a whole new cast of characters.
Blogging - The new new newest best big trend is almost mainstream!
Blogging will lead to the next big burst in internet winners as I have been saying here for a while.
Google and Apple are the big public players, but there is so much talent, GLOBALLY, that it is impossible not to have ten baggers in the eventual next leg up. The tool makers will provide some winners as will those companies that help bloggers monetize their content. I use Google's blogger, but most of the serious bloggers use Automattic's Wordpress (venture backed - I a plan on switching shortly). There will be mergers galore as the big media companies continue to gobble up start-ups. All the ingredients for a big trend.
Go through the venture blogs that you can tap into from the "Venture Dudes" in my blogroll. Read them once a week to spot their investment trends and discussions. Mashable and Tech Crunch and TechMeme are profiling the next winners. There are a lot of pretenders for sure but that is part of big game hunting.
PS - My buddy Chartreuse was part of the mostly innocent scafuffle that Time, Inc has stirred up regarding the Angelina Jolie/Brad Pitt baby pictures. There are few cooler new media writers, and linkers than Chartreuse and he is a daily read of mine. A good story here outlines the problems for old media and why bloggers continue to flex new muscle . Chartreuse is showing you how to get things done in this new media age. DEEEEP ! Keep it up.
How can we have a rally in the stock market with this stuff going on...
Mixing Mentos and Coke really does make this happen.
PS - You Tube just keeps getting better and easier to use. If not them, they are paving the way for the winner, which could still very well be Google.
On the Bright Side - If you are "Feeling Lucky"
Jeff DeGraaf, the uber technical analyst at Lehman is someone I read everyday and pay extra close attention to in times of extreme euphoria and panic.
He covers such a broad range of topics and delivers the info in a clear, unemotional way.
This morning I picked out a few of his indicators that seemed most relevant to the selloff and they are one of the reasons I have been looking at a trade to the long side and hesitant of shorting.
Ask questions if you have any. This is NOT a recommendation to go LONG, but a piece of the puzzle that I look at on days like today.
These indicators only have to be wrong once to MAKE YOU BROKE. The idea is to get as many indicators aligned in your favor as possible, so that when you are wrong (you will be), at least you were wrong for the right reasons (LOL).
I am a trend follower and if this is a bottom or near a bottom, there will lot's of opportunities in the months ahead to enter stocks with lower risk. Because I run a fund and try to make money off extremes from time to time, I have decided to post more often lately and share other ideas.
What you can see from the past oversold conditions like these, that strong upside moves can follow with a lot of time and entry points to make money along the way.
Soros - says CASH - preferrably not US Dollars - IS KING
Yes she is a little late, being beat to the punch by Amanada from Rocketboom of all people, but she had one good question.
WHAT IS THE ONE COUNTRY OR ASSET WORTH OWNING?
He believes CASH.
Yikes for the bulllish speculators.
Do remember that he too is a speculator and is wrong all the time and could be talking his own positions, but he did look rather calm and likely not down the same $1 billion he lost in Russia in 1998.
Why Stops are Important - especially in Broken Markets.
The last great boom that began in 1996 carried the stock to 65 from a low of 15.
It ended in mid 1997 with the Asian currency crisis and BOTTOMED AT UNDER 8 after the Long - Term Capital Management Crisis (LTCM). Yes - remember those lovable geniuses.
This boom which began right after LTCM has carried TRF to the upper 90's. It has been an 8-year boom this time, with more speculation and loose money than EVER.
It is HIGHLY UNLIKELY that the drop from 97 to today's 54 is suddenly over based on the financial cocktails that have been brewing since 1998.
You need some perspective and some good money management (ability to take small losses and try again) if you want to catch a falling knife - in this case country.
I will be shocked if we do not here of some banking or hedge fund crisis in the next 24-48 hours. Until that type of announcement, every rally will be sold off. The big money smells a carcass in these markets and is piling on top of the redemption sales. Trust me on this.
Eulogies for the Global Stock Trend
I have to look at myself in the mirror every morning, so rest asssured, I am not easily shocked.
Only those in cash or short have something to smile about today.
I had been warning of this since mid May. The rest of the market mavens on my blogroll have as well.
The last few days of trading have been a nightmare for me and I should not have even dipped. That said, there will be opportunities for trading now that panic is setting in again and markets are fast. I am going to try and pinpoint my favorites, although my last few long trades (gold, russia, and India)are underwater for me.
To try the S&P I would like to see 121 on SPY's which is a nother 2-3 percent drop. For Gold, I want to see $20 more lopped of the metal to average in with more money.
Google still is very resilient and I am watching that stock for a turn. As I suspected last week, Apple is broken as a stock and could see the 40's so I am staying away for now.
A big bounce can also happen at anytime now as many stops have been cleared across a wide range of industries, including oil, but it is really tough to game.
Low Growth, inflation and a BAD MOOD = Horrible Market Cocktail
I am taking a loss in Mother Russia and will look to re-enter, but basically that market has seen two years of gains wiped out in 2 months.
The Gold stocks are being pounded again despite the stability in Gold.
Most worrisome to ME, is the pending closing breakdown in the Oil Service Index even though Oil stands above $70.
A good time to watch from the sidelines with just my Gold Longs, my shipping shorts and a few selected names.
It is realy painful to watch so I am not and paying bills, making phone calls and evaluating a few short ideas.
The US market could crash as easy as it could rally and I am tempted to play the downside but am just looking for the perfect idea.
Despite the commodity pullback, there is inflation in the system, no wage growth and heavily service reliant United States that may suffer in this type of economy.
What that could mean is the DREADED STAGFLATION. Others from my blogroll agree. I don't really care about the terms or exact definitions as does CNBC - just the results.
Low growth and inflation is just BAD! If we continue this drip with no bounce you get a BAD MOOD. We are not a patient country that likes to stay in a bad mood for long. Things will get interesting very soon.
June 11, 2006
Gold - nearing my kill zone.
We are pretty much there. More to my surprise, many of the stocks are down 20-40 percent with the 10 percent drop in the metal.
That is very out of whack. The gold stocks should firm and/or we could see another $30-$40 drop in the metal itself.
With that in mind, I am bullish on gold stocks but won't likely add more stocks or the metal itself until we break $600. If we rally straight up from here, my buys the last week should do fine.
I would like to see another $30 break in the metal to build a big position.
Son-you're just not Goldman material; or Dude-You've been MYSPACED (FaceBooked too)
In the stock market, bottoms and tops are often made on events that no one ever pinpoints beforehand.
Markets go up and down further than the experts think and turn for reasons the pundits miss.
I just read a great piece in today's New York Times that reports recruiters checking out candidates MySpace and FaceBook pages. It is starting to cost candidates jobs.
It is the first time I have read about this angle and I think it alters the landscape immediately.
I think it's fair and completely relevant for recruiters to include this material in an overall evaluation.
The landscape for freedom of expression could change fast.
Sex or a Career. Let' s see who wins.
Digg expanding verticals - About Time!
No market is more in need of this service than the financial and stock markets. There are some great financial bloggers trying to offer clear advice and their voices should be heard.
As the blogsphere explodes, Digg, Techmeme and others should find a great vertical in financial and stock news.
Google has got a good head start, incorporating stock news from Bloogers in their Google Finance, but much improvement is possible.
Judging by the way I use TechMeme, StockMeme or DiggStocks would be a winner.
SQUEEZE or be SQUEEZED
It has been concluded that the World is Shrinking and/or Flat.
There is a power shift underway in every industry - that is fact.
A few months back I wrote a post entitled "Honey You shrunk the Trading World." The U.S. is no longer the dog wagging the tail when it comes to financial markets.
Today - let's look at media. The explosion of blogs is pushing the media companies to rethink their strategies or risk decimation.
I love that Amanda from Rocketboom pulled off this interview with George Soros . Forget how or why; the point is she pulled it off and with the new tools of distribution can create a large audience for the interview and continue to build a reputation as a media source despite the size of her Company (4 people).
Ali G is another great example of the phenomenon, using "goof" tactics once the interviews were set up. He has built a great brand around himself. He has developed a unique problem as he will have to keep reinventing himself because his own celebrity status has affected his ability to get interviews.
A few days ago, my buddy Chartreuse received this threatening letter from Time, Inc., for posting the Angelina Jolie/Pitt/baby photos that Time inc. say they paid $4 million to have exclusive rights. Once they found the internet, it was easy for Chartreuse to find them. I was just talking to him about the incident and he reminded me that people today want to go "deep". For example, the traffic at his ALL JOLIE blog is incredible high. Bloggers can afford to do that right now and mainstream media can't. Bloggers are squeezing themselves into the mainstream with depth of knowledge in specific subjects. They are taking control of their destiny and the talented, even the obscure can thrive.
In the Financial World, Trader Mike has created a fantastic community for traders that get access to global content on trading strategies and commentary in real time. He does it using RSS syndication.
If you are not interested in SQUEEZING, you can choose to be SQUEEZED. It's not if, it's when.
Let's look at three tech behemoths, Intel, Microsoft and Dell.
All three stocks continue their descents into the teens and maybe lower. I see nothing on the horizon to stop it. Microsoft can't launch new products anymore in a timely manner - as I mentioned on my guest Chartreuse post - "Live" should be called "Dead". Dell is cutting customer service at a time it can ill afford to lose customers and Intel is in a constant price war , despite capacity restraints - maybe the worst position of the three.
Google is perceived as the new bad boy, when quite simply the talented people of Intel and Microsoft are either getting older and retiring, leaving to start their own businesses (even businesses unrelated to tech) or moving to where they have upside and/or their talents would be better served. The most talented people entering the workforce also want to work for Google.
The weak will continue to be squeezed. As we enter a difficult market environment with higher global rates, those companies with weak balance sheets will parish quickly. Anyone remember Gateway!
June 09, 2006
Actually, the US Dollar had a good week at the expense of Gold and the Euro. You generally see that when global markets have big selloffs but I was still a bit surprised and I was punished in my small gold position.
I have a lot of ammunition if need be and think that Gold makes a strong comeback sometime this year.
I had the great pleasure of writing a guest post for Chartreuse today . It was fun to just try and be funny about the internet.
I love the new free wifi at Phoenix Sky Harbour. My plane is 30 minutes delayed and I could care less.
My Friends in Bombay - thank-you.
I really think that Japan bottomed as well as it plunged again mid day and fully recovered to close up nearly 1 percent,
I am too lazy to check what happened in Russia, but it was likely up. I will have a glass of Vodka for them tonight in San Francisco.
For the US, I don't know who really leads us going forward. It is quite boring for me to be cheering Gold stocks. I guess I will hang around Zales and Tiffany's with my kid's today and chant "Go Gold" and "Gold Rocks".
Any better ideas?
June 08, 2006
All is well for now - maybe - I think, toes and fingers crossed
It may not last long but it sure got fast and ugly in Asia and Europe and right here in our markets.
We closed strong and as Trader Mike points out, the volume was huge. JAPAN is up 1 percent in early trading.
I don't think we go stright up from here, but I would not be surprised to see some good gains in Commodities and Emerging markets off the lows set today.
Blogger has been down and I got a lot of email today about my thoughts. I am sticking with India, Russia and japan for a trade and a few oil and lots of gold stocks. I stayed short Fedex and UPS, but may cover early.
I am off to San Francisco tomorrow for some GolfNow related business and a blogger conference. I love San Francisco and am looking forward to the cool weather and some Chinese food.
If you have some good ideas on where to hang or want to talk stocks or internet just send me an email or leave a comment.
I guess the selling was done for now
Where did the buyers go
Who was buying stocks us this morning?
One continuing positive "tell" is how Google has held up today. Even with the China scare, the stock is now flat.
If I was aggressive, I would hammer the market here in to the close but am content and leaving for meetings.
The carnage in emerging markets is frightening. Korea is down 8 percent TODAY (kef), and Turkey which was in a raging bull market 3 month ago is down 50 percent since March (tkf).
I have no idea where countries like this bottom and if you own and trade them you are learning that just like stocks, they need to be treated carefully and with good money management.
Can't be a hog
We are in absolute freefall.
That was almost too easy when we went positive. For all the work I put in though, I would like to say I earned this one.
Another 100 points to the Downside and I may have to start nibbling on the Dow and S&P on the longside as to my original plan last night.
Dislocation begs for some action
The US markets could get real ugly and I am happy to have had a gameplan for that false positive push at the open.
Commodities are truly getting smoked. The US dollar is strong and rates are down. All the normal flight issues in a panic mode.
With most gold stocks down 5-10 percent more today, I am stepping up. Again, these trends and prices are breaking, but so is everything during a panic and the risk/reward looks best here.
I have bought some deep in the money puts on SPY, FDX and UPS and a few others. I bought EWJ and IFN as well.
All my stops are extremely tight as the market could explode in either direction from here.
I won't likely post as I watch these positions for most of the day.
Call me confused - not a surprise!
I turn on CNBC and see the US markets flat, despite my knowledge that it is Asia and India wagging our tail. What gives?
The US media will have you believe an Iraqi leader was killed and oil is down below $70. They will also pound the table that inflation is beat and Gold is down $9 more dollars and heading lower.
Don't listen because traders will smoke you this morning if you buy.
This is not a "Kick the dog open and go back to bed mornings" but the media is doing their best. I will hold my dog "bagel" play with the kids and even consider a few shorts because my gut says traders will have to spank the market later.
We are just pushing off the inevitable pain.
Based on the oil stock action I described last night, I am not surprised to see oil down below $70 and would not be surprised to see a quick 10-20 percent drop.
I will likely only Nibble at Japan and India today and just watch my small gold positions get smacked.
June 07, 2006
Google bashing amongst the "Nerds" is reaching a crescendo!
I think I may have found a "tell" for calling tech stock tops and bottoms. It is the "nerd bitching" factor. When the "nerds" are bitching - BUY.
If you go into my blogroll "nerd section", you will read, with absolute boredom, an increasing drone of whines about Google. It is as if Google is the girl that shunned these same nerds during their high school prom years.
Right now, I cannot believe the biiitching about how Google is blowing this, wasting that, missing this, not taking risks....
Meanwhile, they have a hoard of cash, are totally in the driver's seat, have pretty sincere leadership , have competitor's chasing shadows and enemies that don't exist and all the while have well fed, well groomed, happy, smart employees, loaded with confidence and waiting to exploit the burgeoning video search market. It is text multiplied 1,000 billion, zillion times!
I should not have to remind you of this, but despite the massive global selloff underway in everything high tech, Asian, Indian, software, hardware, gold, silver, copper, drug related and oil related - TWO THINGS STAND OUT:
1. OIL IS AT $71/barrel
2. Google is still at $390 freaking dollars. Google can't be sold down. If there is a stock that should have been sold down in this global meltdown, it should have been Google. Aren't they the most expensive stock, screwing things up....
Guess what - Google may do better if people don't drive! Google does not need oil to survive.
This stock should rocket if the market firms. I am interested in finding out why.
This could be it! READ IT! If it is, look out ABOVE!
PS - How does a soft married, TIRED father (Gates) and a talking at shadows Ballmer take on these three relaxed dudes you see in the PHOTO. Game, Set, Match GOOGLE!
Disclosure - I do not own Google, but just may have to again soon!
Nikkei is crumbling - Google the reason?
Shaping up to be an interesting day for sure.
This Google News could be the reason . If it is, it will pass.
Adsense is NONSENSE!
I have been entering the conversation saying that none of the networks really work if you are looking to monetize.
Most bloggers don’t have the tools or solution to properly monetize good content and structure good sales pitches. Google sprayed a solution from 1 billion feet. Good for them. It has worked well for them for sure. I think there is a huge underbelly to attack from a much lower altitude. Google won't build brands and won't really help bloggers in it's current state. If you don't believe me, maybe Scott Karp? The nerds that vote with their eyeballs and clicks say that he is smart!
I say AdSense is NONSENSE and the “Hockey Stick” ( I am Canadian and hate "Tipping Point") in blogging is at hand. Bloggers won’t quit. Too many good ones entering the fray with too much to say. There is a MASSIVE OPPORTUNITY HERE TO HELP BLOGGERS MONETIZE. It just has to be better than ADSENSE. How hard can that be?
The big money will be in the companies that can deliver tools and services that properly equip the professional blogger with solutions that make money for their efforts. The Venture Capitalists have identified a few. Feedburner is one .
UPDATE - Other cool ideas that may work are:
If you have any other ideas, please share your thoughts with me on this if you would be so kind.
I WANT IN!
If I were a trader...
I sense another good opportunity brewing.
Here is my gameplan for tomorrow:
I will be watching the open closely.
Strong open – Kick the dog, Back to Bed (maybe golf – scrap that its too freaking hot). It will likely get sold off.
Weak open - play with the kids and keep an eye open for a big selloff
Overseas crashing and Futures limit down – action…
My main focus is on the OIL stocks and the Index (OIH). With oil still at $70, the stocks act horrible. Something is giving here soon. Either OIL is coming down or these stocks are ready to rally. Maoxian has a great post on why these are his "tell" right now . READ IT if you are trading!
Shorting – Not for me right now – watching Federal Express for some reason. I have been for a while and am amazed at the resilience
Would not touch the semis – they smell rather putrid! That goes for QQQQ and most tech.
Biotechs – NOT
Diamonds (DIA) – Love to see 107 and would take a long trade in the area
Gold – more nibbling, maybe some calls or sell some puts on major weakness
Spiders (SPY) – 122-123 would be an interesting panic entry for a long trade but would probably start buying at 124ish
India – Nibble on IFN (down almost 40 percent)
Japan – I am a buyer tomorrow of EWJ for a trade, maybe a hold.
An interesting post on the Homebuilders today from Bill Cara . I agree in principle; but here is my take (slanted from the booming city of Phoenix):
Everyone is panicked on homebuilders but they are much different companies than the last cycle. They carry much lower inventory risk these days.
If they fall 10-20 percent more I am looking to add MTH. They have a southwest US focus. Steve Hilton, their CEO is a smart operater and tough cookie. They have a very efficient process to building and leveraging and would not bet against him when this turns and it will.
I believe that the US dollar stays WEAK and the Asians and Europeans will be your neighbors before the real estate end is really here.
Don't get me wrong, from a trend perspective, thehomebuilding stocks are cooked, but all the charts look bad in a bad market and I can't help myself when everything looks like crap.
If you can't help yourself - now you know what I am looking at.
Gold stocks go another range down. Nibbling.
I am nibbling today on GOLD, AAUK, and NEM. India will rebound and the dollar will stay weak based on our monetary policies. With that in my mind, I have to view the recent drops as an opportunity.