Friday, October 2, 2009
Mistakes ,,, Mistakes
Well, I made the mistake of hoping alot semiconductors and overpaid for many of them, partculary MU. I haven't sold a share and believe the DRAM pricing has stabilzing and will benefit them greatly. Unfortunately, I have whacked away alot of my cash reserve and currenly only have 40% cash. If we dip seriiously, I will cover my shorts and deploy capital agressviely. As for shorting, I rather catch a strong rip before I do. The job's report was utterly terrible - over 100,000 more jobs lost than expected. It's hard to be a bull, given job losses. However, I am a big believer in a small niche of stocks and will sell of alot of my holdings soon - to reload a smaller concentration of my holdings and others. I took a position in STLD - believing it was be smacked since the GS downgrade the other day. I think it's worth $18 low end and $22 high end; however, China is facing oversupply issues, which will put pressure on shippers, iron ore miners, and steel companies. Instead of shorting them, I will take this time to build positions in them - for a longer duration trade. AAPL is smoking and i think will rip higher - I put 6% of my portfolio in Apple today and will add more on dips. BAC is another big bet i will play. I want the stock to drop to $15 and i will LOAD up on it. All in all, i am keeping cash reserves and I am buyer, rather than a seller here due to the oversold indicators. I said since 800, we would see 1050 and that was my sell target - that trade is over, I will be more selective and use options more agressively and buy dips. Tech season will heat up soon, it always does in Nov-Dec - I want semiconductors: NSM, ENTR, and MU are good picks, along with AMAT. Banks need a pullback and i will load up in serious size. I need to clear some of the junk in my book but want a bounce first - don't like selling on low days.
Jobs
Horrible, lost 263,000 vs. 173,000 estimate! Not time to play around, buy solid companies with good funamentals - like AAPL that just got upgraded with $265 Price Target! I will post report later. Cash is key
Position Update: PEP
Barclays Capital today removes Kraft (KFT) from top Food pick and adds Pepisco (PEP) as top Food pick!
Booyah!
Booyah!
Market Outlook - October 2
Well, yesterday was pretty rough - even with some shorts, i got knocked around pretty good. Semiconductors got hit the hardest but I believe that the semiconductors trade is alive in well. I will use this dip to buy semis. In addition, I will take this dip as an opportunity to build an position in AAPL, which i will buy right now in pre-market. I will add steel too on this dip.
All in all, is that I have boatloads of cash and will put it to work. Now, is not the time to be "all-in" on stocks, with no cash because the economy is a little weak and ISM (sign of productivity) was weaker than previous months - hence the selling.
All in all, we are in a correction mode but it's hard to see how "deep" it will be.
Jobs reports at 8:30a - will guide the day.
All in all, is that I have boatloads of cash and will put it to work. Now, is not the time to be "all-in" on stocks, with no cash because the economy is a little weak and ISM (sign of productivity) was weaker than previous months - hence the selling.
All in all, we are in a correction mode but it's hard to see how "deep" it will be.
Jobs reports at 8:30a - will guide the day.
Thursday, October 1, 2009
ISM
The Institute for Supply Management’s September index fell to 52.6 from 52.9 in August, a weaker-than-expected reading, which will add to market concerns about the speed of recovery. The data suggest “peak upward momentum” has passed in leading indicators of cyclical activity. In September, the most-heavily weighted new orders component fell to 60.8 from 64.9 in August. The August reading had reached the highest level since April 2004, and all else constant, was consistent with a 6% pace of overall GDP growth. But this overstated the pace of improvement in other parts of the economy away from a snap back in manufacturing, particularly the trend demand pace. Among other components, production fell to 55.7 from 61.9, while backlogs rose to 53.5 from 52.5. Supplier delivery times (a member of the Index of Leading Economic Indicators) rose to 58.0 from 57.1. Inventories fell at a slower pace, with the index at 42.5 (still well below a break-even 50), from 34.4 in August. Employment fell to 46.2 from 46.4. According to the ISM report, “while the rate of growth moderated slightly whencompared with August, the recovery broadened as the number of industries reporting growth increased from 11 to 13 (of 18).
RF Buys and Sells
Sold out of TSYS at 8.28 for 3.5% wins
Buy 100 more shares of NSM at 13.66
The market is selling of with the ISM number, be safe here
Buy 100 more shares of NSM at 13.66
The market is selling of with the ISM number, be safe here
BAC - CEO Ken Lewis Leaving
BAC
Sad story here - Ken Lewis did nothing wrong in my eyes and told the truth...now he is canned for it.
Sad story here - Ken Lewis did nothing wrong in my eyes and told the truth...now he is canned for it.
Wednesday, September 30, 2009
Market Recap
What a moody day on the street - MU got praises across the board and the stock sold off today. I posted some reports on it but for the most part here is a recap of MU earnings:
The shares are off a bit as investors lock in the 400% gains from the lows in March. In addition, management set a pessimistic tone for the pricing outlook for the current quarter, which probably spooked the traders as well. CEO Steve Appleton said that the market was still "challenging" but is "beginning to improve." Management also stated that DRAM product sales were up 28% sequentially, thanks to a 19% jump in sales volumes and an 8% increase in ASPs.
Revenue from NAND flash products were up 10% sequentially due to a 23% increase in sales volumes. This increase was partially offset by an 11% decrease in ASPs in NAND flash products.
Management stated that if pricing remains flat for the rest of the current quarter, Micron would benefit by a 5% increase in ASPs in both DRAM and NAND flash. The company said that it would be profitable in the November quarter. The expectations are for gross margins to expand significantly in the current quarter given cost per bit productions in the low to mid teens for both DRAM and NAND, combined with our expectations for sequential average selling price for both products. All in all, good numbers and a return to profitability for Micron. I was surprised to see it trade lower.
As for the market in general, the Chicago PMI data was horrific this morning. It shows we have a weak consumer and a slowing productivity. If earnings are weak this quarter, we could lose 100-150 points on the S&P, due to the high expectations. We need some solid revenues this time. In addition, there has been alot of thought and talk on deflation. Pimco's Bill Gross is one of the best investors of all time and said he is buying long bonds. That floors me honestly because he is either 1) shorting other type of bonds and hedging or 2) he is betting on deflation. The General Mills (GIS) quarter had a deflationary flavor to it. Only 6% of professional investors believe deflation is a threat and in my view, I think deflation is more of a problem than inflation. If deflation hits, load up by buying TLT and short every energy and commodity stock in sight.
The shares are off a bit as investors lock in the 400% gains from the lows in March. In addition, management set a pessimistic tone for the pricing outlook for the current quarter, which probably spooked the traders as well. CEO Steve Appleton said that the market was still "challenging" but is "beginning to improve." Management also stated that DRAM product sales were up 28% sequentially, thanks to a 19% jump in sales volumes and an 8% increase in ASPs.
Revenue from NAND flash products were up 10% sequentially due to a 23% increase in sales volumes. This increase was partially offset by an 11% decrease in ASPs in NAND flash products.
Management stated that if pricing remains flat for the rest of the current quarter, Micron would benefit by a 5% increase in ASPs in both DRAM and NAND flash. The company said that it would be profitable in the November quarter. The expectations are for gross margins to expand significantly in the current quarter given cost per bit productions in the low to mid teens for both DRAM and NAND, combined with our expectations for sequential average selling price for both products. All in all, good numbers and a return to profitability for Micron. I was surprised to see it trade lower.
As for the market in general, the Chicago PMI data was horrific this morning. It shows we have a weak consumer and a slowing productivity. If earnings are weak this quarter, we could lose 100-150 points on the S&P, due to the high expectations. We need some solid revenues this time. In addition, there has been alot of thought and talk on deflation. Pimco's Bill Gross is one of the best investors of all time and said he is buying long bonds. That floors me honestly because he is either 1) shorting other type of bonds and hedging or 2) he is betting on deflation. The General Mills (GIS) quarter had a deflationary flavor to it. Only 6% of professional investors believe deflation is a threat and in my view, I think deflation is more of a problem than inflation. If deflation hits, load up by buying TLT and short every energy and commodity stock in sight.
Tuesday, September 29, 2009
H1N1 FLU Analysis
H1N1 Flu
Special request for my good buddy J aka the president of the Tony "can I pass more than 8 yards" Romo Fan Club
Special request for my good buddy J aka the president of the Tony "can I pass more than 8 yards" Romo Fan Club
RF Update
MU - Quarter was good as I suspected. Traded sharply in after hours but now it's selling off - my guess is that guidance is weak, but I haven't listened to the conference call yet.
Shippers (DRYS and GNK) - Ripping...supply is concerning after all the steel/iron ore reports are showing slowing demand. Will hold out for a while.
NSM - Bears fear TXN is stealing all the share and there is no growth. I disagree with the first argument and the second argument is fair - they don't have the growth like a MCHP. I will add more on dips.
Shippers (DRYS and GNK) - Ripping...supply is concerning after all the steel/iron ore reports are showing slowing demand. Will hold out for a while.
NSM - Bears fear TXN is stealing all the share and there is no growth. I disagree with the first argument and the second argument is fair - they don't have the growth like a MCHP. I will add more on dips.
RF Buy MU
Bought 300 more now into earnings today
I might lose, warning!
You knew what happened with AMD!
I might lose, warning!
You knew what happened with AMD!
General Electric (GE)
GE 9.29
Even with all of the "love" - I remain VERY skeptical on GE. When Jack Welch left in 2000, the stock was $56 a share. Since Jeffrey "boy" Immelt stepped in, the stock went from $56 (from his start) to $5.50 this year and now is at $16. I honestly don't know how he has a job to be honest. It's sad that a 9 year shareholder is down over 70% on their investment.
Even with all of the "love" - I remain VERY skeptical on GE. When Jack Welch left in 2000, the stock was $56 a share. Since Jeffrey "boy" Immelt stepped in, the stock went from $56 (from his start) to $5.50 this year and now is at $16. I honestly don't know how he has a job to be honest. It's sad that a 9 year shareholder is down over 70% on their investment.
Monday, September 28, 2009
Follow RF on Scribd!
Scribd is a cool place where you can upload documents and share files. I have setup my TRADE247 account and you can "subscribe" to me for FREE. Signing up for Scribd is free, just go to http://www.scribd.com/ and get a user name. To find me, go to:
www.scribd.com/trade247 and just click subscribe to trade247 and everytime you log-in, all of my recent uploads will be there to view. This research reports are very rare and may not be sharing them for a long but I will have a fee-based service coming where they will be present. Research houses, like Citigroup, cost as much as $10,000 a month to subscribe to, so needless to say, the information is valuable. Like I said early along time ago, my goal off this blog is not to be rich but just for fun and make some cash on the way. I do have some overhead, so when I mean "fee-based" just means some sort of donation - it does or does not have to be major - i know some people who follow have tons of cash, some don't - I am not in this in for money, just for a good time and if you learn something - it's worth it. But that is when that comes, not now - so enjoy the free research. Often times, I am reading about my next move and not buying, so I figure why not share some information to make us smarter? The new blog will be up in the next two weeks - so it will be improved and with a cleaner look.
(these files are also downloadable)
www.scribd.com/trade247 and just click subscribe to trade247 and everytime you log-in, all of my recent uploads will be there to view. This research reports are very rare and may not be sharing them for a long but I will have a fee-based service coming where they will be present. Research houses, like Citigroup, cost as much as $10,000 a month to subscribe to, so needless to say, the information is valuable. Like I said early along time ago, my goal off this blog is not to be rich but just for fun and make some cash on the way. I do have some overhead, so when I mean "fee-based" just means some sort of donation - it does or does not have to be major - i know some people who follow have tons of cash, some don't - I am not in this in for money, just for a good time and if you learn something - it's worth it. But that is when that comes, not now - so enjoy the free research. Often times, I am reading about my next move and not buying, so I figure why not share some information to make us smarter? The new blog will be up in the next two weeks - so it will be improved and with a cleaner look.
(these files are also downloadable)
Market Update
I am pretty much done for buying today. I'm alitte surprised we shot up today. Frankly, I knew we were approaching oversold territories but thought we might get another weak day then shoot up. If I was buying another - I would consider GLW. This would be more of a 6 month play but at $15 it's not bad. I think we might be able to get it cheaper, so I will wait to see if we get $14. DKS is another one I like, along with M. Both retaliers seem to have good traffic and are not getting big attention. RIMM is interesting as well. The problem with RIMM is revenues. They are setting prices so low and new products, so far, seem not to be the answer. There is so much competition in the market with Apple's Iphone, Motorla's Android, Nokia new smartphone, etc - that i just rather plays the instruments in the phone than the phone makers. I see RIMM in a neutral range of $60 - $80/$85. Low end is $50 - high end is $100. At $67, I see $7 down loss, +$18 up for gain at current levels. So, that is the risk reward that I see. MU is strong - I wouldn't want to be short going into earnings, unless they (the shorts) know something I don't. If you want a "chart dice roll" - ABT might be worth a scalp but I have no position
Market Outlook - Sept 28th
Futures look to be rebounding; however, we may correct a bit more. We are approaching oversold levels, so I believe it's safe to start "nibbling" at these levels then scale into more over time. I am looking at stocks that I feel are cheap regardless, but also have cash to cost average down.
NSM - will continue to add more on dips
MU - Earnings 9/29 - I suspect earnings will be strong since they are gaining pricing strength. I own 400 shares but may add more. My only concern is that the stock is near a 52-high - however, I think that earnings will be great and it can print at least $10 in time. The semiconductor index is far from over, in it's amazing run.
RTP - Starting to get attractive again. I will wait for a further dip and take back my position. The surplus in steel, iron ore, and coal are putting pressure on shippers and iron ore firms, making it good buy now for 6+ months from now. I think the downside will continue near-term for a slight bit.
NSM - will continue to add more on dips
MU - Earnings 9/29 - I suspect earnings will be strong since they are gaining pricing strength. I own 400 shares but may add more. My only concern is that the stock is near a 52-high - however, I think that earnings will be great and it can print at least $10 in time. The semiconductor index is far from over, in it's amazing run.
RTP - Starting to get attractive again. I will wait for a further dip and take back my position. The surplus in steel, iron ore, and coal are putting pressure on shippers and iron ore firms, making it good buy now for 6+ months from now. I think the downside will continue near-term for a slight bit.
Sunday, September 27, 2009
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