Wednesday, April 27, 2011
Solar Energy
Apparently the consensus on wall street is that solar energy companies are completely dependent on government subsidies, and so have no future. The Chinese solar companies I own are all down a lot in value, because not only are they solar, but they are Chinese. A lot of Chinese companies bought US shell companies since this was an easier way to get listed on the US market, but that has started to be considered dishonest. Also, quite a few Chinese companies who appeared to have plenty of cash on hand, sold more shares for no good reason except to have cash for paying off their relatives. Thus, most Chinese companies are now thought by cows to be crooked (and actually, they know quite a bit about that)
Wednesday, April 20, 2011
Selling at a Profit
There is nothing quite so nice as selling at a profit!
A couple of days ago I sold some companies I had "gone off" a while back.
5N Plus Inc., is engaged in developing, and producing metals and compounds for electronic applications, including solar modules and medical devices.The Company focuses on specialty metals, such as tellurium, cadmium, germanium, indium, antimony, selenium and its chief customer is First Solar. It had peaked, and then pullled back considerably after announcing good but not earth-shaking earnings .
Mosaid, MSD had also risen 30% in the time I have held it (maybe a year...same as VNP) and although it will probably continue on up, I have lost my enthusiasm for what they do. So I took my profits on both of them. Now if they go on to quadruple, I will gnash my teeth, but at least for today, I am happy that I have culled some of my holdings.
I have not been enthusiastic about the markets lately. I read the news, and I've always prized the investing exercise because I have always thought of it as representing "skin in the game" of " history as she is being made". Lately, there has been so much speculative volatility that it just isn't any fun. But selling some things at a profit reassures me that there may still be some things of interest to me. A lot of things are changing.
A couple of days ago I sold some companies I had "gone off" a while back.
5N Plus Inc., is engaged in developing, and producing metals and compounds for electronic applications, including solar modules and medical devices.The Company focuses on specialty metals, such as tellurium, cadmium, germanium, indium, antimony, selenium and its chief customer is First Solar. It had peaked, and then pullled back considerably after announcing good but not earth-shaking earnings .
Mosaid, MSD had also risen 30% in the time I have held it (maybe a year...same as VNP) and although it will probably continue on up, I have lost my enthusiasm for what they do. So I took my profits on both of them. Now if they go on to quadruple, I will gnash my teeth, but at least for today, I am happy that I have culled some of my holdings.
I have not been enthusiastic about the markets lately. I read the news, and I've always prized the investing exercise because I have always thought of it as representing "skin in the game" of " history as she is being made". Lately, there has been so much speculative volatility that it just isn't any fun. But selling some things at a profit reassures me that there may still be some things of interest to me. A lot of things are changing.
Wednesday, March 30, 2011
On Energy
The price of oil is $104 this morning, as Obama prepares to give a speech on why the government should support renewable energy projects in the US. My heavy holdings of renewables are down across the board about 40% on what I paid for them. Many of them are China based, and the investment community has been on a tear against all things Chinese lately, with assertions that they are dishonest. That's pretty funny, coming from our own investors, who generally oppose any legislation to make disclosure more open, or standards more enforceable. But I guess you suspect others of what you are up to yourself. I am not selling my Chinese renewables. I am not focussed enough to be a trader...there are more things than money to attend to in life! (Like cooking, knitting, chatting...)
One of my major holldings is Cameco, whose CEO said on March 21 (10 days after the tsunami struck Japan and Fukushima Daishi) that while China has frozen approvals of all new nuclear power projects, he believes the country will still ramp up its nuclear output to at least 70 gigawatts from its current capacity of 11 gigawatts."I still don't see, even with a slight pause, why that wouldn't be achieved," Grandey said. "If they achieve by 2020 only 40 gigawatts, which is what's under construction and what's operating, they still would require 20 million pounds a year."
Current global uranium demand is about 180 million pounds a year, with mine output accounting for about 140 million pounds of that. The remainder comes from stockpiles and downgraded weapons-grade uranium.
Cameco, the world's No. 2 uranium producer, plans to double production to 40 million pounds a year by 2018. With contracts in place through 2017, the crisis will not have a material impact on the company's long-term outlook, Grandey said.
Kazakhstan is the world's top uranium producer, and its output is forecast to grow 12 percent this year to 20,200 tonnes. On March 23, Japan's envoy to Kazakhstan, Yuzo Harada, said he doubts the tragic events in his country will affect nuclear cooperation or uranium supply pacts. Kazakhstan aims to capture 40 percent of the Japanese uranium market.
On both Cameco and Dennison mines, I am about breakeven on my holding, even after renewed fears from the radiation in Japan. Cameco pays a 1.3% dividend, pretty low, but better than nothing. I am unhappy with myself for failing to monitor my portfolio while so many people were suffering dramatically on the news. They are still suffering, and indeed, the suffering is going on all around the world all the time. Mostly it doesn't make the news- like the hundreds of thousands of children dying of hunger annuallly. It doesn't do them any good if my emotions of solidarity prevent me from watching my portfolio and leads me to lose a lot of money.
In my version of the investing and philanthropy of Buffet and Soros, my philanthropy division is proud that I have just made my nineteenth micro-loan through Kiva: this one to a middle-aged bee-keeper in Central Asia!
One of my major holldings is Cameco, whose CEO said on March 21 (10 days after the tsunami struck Japan and Fukushima Daishi) that while China has frozen approvals of all new nuclear power projects, he believes the country will still ramp up its nuclear output to at least 70 gigawatts from its current capacity of 11 gigawatts."I still don't see, even with a slight pause, why that wouldn't be achieved," Grandey said. "If they achieve by 2020 only 40 gigawatts, which is what's under construction and what's operating, they still would require 20 million pounds a year."
Current global uranium demand is about 180 million pounds a year, with mine output accounting for about 140 million pounds of that. The remainder comes from stockpiles and downgraded weapons-grade uranium.
Cameco, the world's No. 2 uranium producer, plans to double production to 40 million pounds a year by 2018. With contracts in place through 2017, the crisis will not have a material impact on the company's long-term outlook, Grandey said.
Kazakhstan is the world's top uranium producer, and its output is forecast to grow 12 percent this year to 20,200 tonnes. On March 23, Japan's envoy to Kazakhstan, Yuzo Harada, said he doubts the tragic events in his country will affect nuclear cooperation or uranium supply pacts. Kazakhstan aims to capture 40 percent of the Japanese uranium market.
On both Cameco and Dennison mines, I am about breakeven on my holding, even after renewed fears from the radiation in Japan. Cameco pays a 1.3% dividend, pretty low, but better than nothing. I am unhappy with myself for failing to monitor my portfolio while so many people were suffering dramatically on the news. They are still suffering, and indeed, the suffering is going on all around the world all the time. Mostly it doesn't make the news- like the hundreds of thousands of children dying of hunger annuallly. It doesn't do them any good if my emotions of solidarity prevent me from watching my portfolio and leads me to lose a lot of money.
In my version of the investing and philanthropy of Buffet and Soros, my philanthropy division is proud that I have just made my nineteenth micro-loan through Kiva: this one to a middle-aged bee-keeper in Central Asia!
Friday, March 25, 2011
The investing world breathes easier
There is only so long that the investor class can hold onto a great fear. The fighting goes on in Lybia, and the Japanese continue to suffer from the tsunami/nuclear catastrophe, but it seems we have all got used to it. In retrospect I can see that I am unwilling to focus on whether and how much money I am winning or losing when I am watching people suffer.
Happily, one of our holdings has started to skyrocket. This is the Chinese company Telestone, which has lately been attacked by an "anonymous blogger" with the kind of accusations of fraudulence which are fashionable. Thirty percent of the stock is held by short sellers, but they are about to come out with earnings. Somebody knows whats going on, it seems, and the shorts are now scared. Hurray!
Generally, I hold a lot of Chinese stock, and it is not doing well at all. I plan to hold.
Happily, one of our holdings has started to skyrocket. This is the Chinese company Telestone, which has lately been attacked by an "anonymous blogger" with the kind of accusations of fraudulence which are fashionable. Thirty percent of the stock is held by short sellers, but they are about to come out with earnings. Somebody knows whats going on, it seems, and the shorts are now scared. Hurray!
Generally, I hold a lot of Chinese stock, and it is not doing well at all. I plan to hold.
Sunday, March 20, 2011
When things are not going the way I like, I stop looking
As we all watched the uprising in Lybia, followed by tsunami and nuclear fear from Japan, it seemed to me that only terrible things were happening in the world! I didn't do the obvious thing and sell my uranium miners. I've lost a bundle.
The lesson I've taken: when I don't like the way something is going, I blank it completely. This month I see that is not just in the world of investing: it's in my marriage, and everywhere else. Now, I'm catching myself every day as I react to the many things I don't approve of....and I see there is something very useful to learn here. There is a different way to be. All I have to do is be willing to experience pain when it's present. Simple, but not easy!
Now that I'm admitting to my recent losses, I am back in business. It seems we live in interesting times (reminded of the Hebrew saying "May you not live in interesting times") It seems that things which have gone the same way forever, are shifting. I am not upset at the shift, but it's going to take some staying awake to steer through it! The US dollar will fall, unemployment will not abate, the large corporations will continue to generate profits, and the internet savvy young people of the world may just be able to shake up the status quo of endless wars and repression.
I think I have too many holdings. I'll be writing about them as I consider which ones to keep and which ones to sell. GE, for example, earns only 1% of its income from the nuclear business, but has been hit out of proportion to that. I'll keep it.
The perceived threat of possible impending nuclear disaster has overshadowed the real disaster brought about by the earthquake and tsunami, and I am disgusted by that. Let's pray for the suffering people of Japan, and let's pray for the rest of us too. We are usually prepared to accept real death cause by burning coal, because it's slow, sneaky and familiar. It helps if somebody else has the chronic bronchitis and emphysema. I read somewhere that we are much more resigned to death and injury from falling tree limbs and "nature" than we are to the same injury afflicted on us by a human agent, and that makes a lot of sense.
I'm working on myself to let go of all this righteous disapproval! After all, most people don't have my perspective on life. Medical school surprised me in the first year, by being the study of death. We spent every Saturday in the dissecting room with our cadaver. Part of the traditional training is of course designed to desensitize us as a group, and it is successful. I see there is a tepid backlash against the desensitization, but so far the forces of reaction appear to be winning.
What I'd really like to spread about before I die is an understanding that all of life is a risk, and that by contemplation we can sometimes limit the risks, but we can never eliminate them. I love investing because it keep my nose pressed hard up against what's happening in the world but in the past month, I just haven't wanted to know. Now, it's past time for me to go back to looking at those risks!
The lesson I've taken: when I don't like the way something is going, I blank it completely. This month I see that is not just in the world of investing: it's in my marriage, and everywhere else. Now, I'm catching myself every day as I react to the many things I don't approve of....and I see there is something very useful to learn here. There is a different way to be. All I have to do is be willing to experience pain when it's present. Simple, but not easy!
Now that I'm admitting to my recent losses, I am back in business. It seems we live in interesting times (reminded of the Hebrew saying "May you not live in interesting times") It seems that things which have gone the same way forever, are shifting. I am not upset at the shift, but it's going to take some staying awake to steer through it! The US dollar will fall, unemployment will not abate, the large corporations will continue to generate profits, and the internet savvy young people of the world may just be able to shake up the status quo of endless wars and repression.
I think I have too many holdings. I'll be writing about them as I consider which ones to keep and which ones to sell. GE, for example, earns only 1% of its income from the nuclear business, but has been hit out of proportion to that. I'll keep it.
The perceived threat of possible impending nuclear disaster has overshadowed the real disaster brought about by the earthquake and tsunami, and I am disgusted by that. Let's pray for the suffering people of Japan, and let's pray for the rest of us too. We are usually prepared to accept real death cause by burning coal, because it's slow, sneaky and familiar. It helps if somebody else has the chronic bronchitis and emphysema. I read somewhere that we are much more resigned to death and injury from falling tree limbs and "nature" than we are to the same injury afflicted on us by a human agent, and that makes a lot of sense.
I'm working on myself to let go of all this righteous disapproval! After all, most people don't have my perspective on life. Medical school surprised me in the first year, by being the study of death. We spent every Saturday in the dissecting room with our cadaver. Part of the traditional training is of course designed to desensitize us as a group, and it is successful. I see there is a tepid backlash against the desensitization, but so far the forces of reaction appear to be winning.
What I'd really like to spread about before I die is an understanding that all of life is a risk, and that by contemplation we can sometimes limit the risks, but we can never eliminate them. I love investing because it keep my nose pressed hard up against what's happening in the world but in the past month, I just haven't wanted to know. Now, it's past time for me to go back to looking at those risks!
Monday, March 7, 2011
Revolution in the Arab world
One trouble with me as an investor is that I get distracted and forget all about managing my money. This has happened again. I have been so enthralled by events in Tunisia and Egypt, then so appalled by events in Lybia , that I forgot all about the effect of wars on oil prices, and the effect of oil prices on the stock market!
Oops...consequent losses.
Really, if some temporary paper losses
on my part are the price of a better world for those wonderful young people,I guess I'll put up with them.
Oops...consequent losses.
Really, if some temporary paper losses
on my part are the price of a better world for those wonderful young people,I guess I'll put up with them.
Monday, February 21, 2011
Sustained uptrends
An impressive pattern of prolonged, sustained uptrend in the 3 indices I follow : ( Dow, S&P, & Nasdaq) looks rather steady. I came upon an interesting partial explanation in an essay to-day by S& P's Vaughn Scully. He points out that state and many municipal governments have serious budget problems. The new Republican house wants to rewrite legislation that will allow them to go bankrupt. This would mean that municipal bonds could default.
I have a wealthy, elderly friend who has long been a fan of municipal bonds, because their interest is tax free It turns out that investors like my friend have pulled $15 billion out of municipal bonds this year in fear of their default. Everybody knows that while local governments are suffering, & social services are cut, corporate profits are strengthening rapidly. Productivity gains and falling need for manpower are at least a short term recipe for success. The investing money that is taken out of municipal bonds has to go somewhere, so at least some of it is heading into equities.
Interesting side note: tax breaks for business jets mean buyers can depreciate their price in ONE YEAR....it may be time to reconsider Bombardier and Embraer. I went downtown at noon to join a citizens' demonstration in solidarity with the Wisconsin public service workers, chanting "workers rights are human rights" and "save the people, not the banks", and so forth. It was most enlivening. I have hopes that the Lybians may soon throw out Muamar Qaddaffi.
I have a wealthy, elderly friend who has long been a fan of municipal bonds, because their interest is tax free It turns out that investors like my friend have pulled $15 billion out of municipal bonds this year in fear of their default. Everybody knows that while local governments are suffering, & social services are cut, corporate profits are strengthening rapidly. Productivity gains and falling need for manpower are at least a short term recipe for success. The investing money that is taken out of municipal bonds has to go somewhere, so at least some of it is heading into equities.
Interesting side note: tax breaks for business jets mean buyers can depreciate their price in ONE YEAR....it may be time to reconsider Bombardier and Embraer. I went downtown at noon to join a citizens' demonstration in solidarity with the Wisconsin public service workers, chanting "workers rights are human rights" and "save the people, not the banks", and so forth. It was most enlivening. I have hopes that the Lybians may soon throw out Muamar Qaddaffi.
Friday, February 18, 2011
The flow of money
Here's Ben Bernanke today: "capital flows are once again posing some notable challenges for international macroeconomic and financial stability." Of course he means that "hot money" flies across international time zones according to the perceptions of the trading class and actually constitute a kind of global government beyond the control of any government. Too bad wisdom and concern for the good of the whole is not a part of the perspective. The more the volatility, the higher the profits, so these guys are not interested in the kind of stability it takes to plan businesses for the long term. The markets react on an ever shorter time frame (yes, computers talking to each other in New Jersey parking lots again)
I read in the Financial Times that a growing body of economists no longer think supply and demand is "the whole story"...that they are thinking of supply, demand, and quantity of money as all part of the equation. This is good news, although entirely insufficient. It's unlikely that there will be broad understanding among main stream economists any time soon that the core economy, the criminal economy, and the ecological economy are part of the equation as well. Meanwhile, I'm doing my best to profit from the uncontrolled casino of the mad financial world, with its vanishing correlation to any underlying "real" economy (defined in the traditional narrow sense of actual business enterprise). I'd like to say I'm a great success, but more accurately I'd have to say only that it's more profitable than keeping the money in the bank. I've never liked banks, but since the 2008 fiasco I'm very interested in them and their shenanigans. It's only because I do know an honest banker that I don't think every one of them is a gold plated crook!
I take long term positions in areas where I see inexorable future growth (for example LED lighting, uranium, wind & solar energy, environmental remediation) and stick to companies that appear to have good management. There are plenty of other good stock trades, but I'm not interested in them. I have too many companies to follow as it is...(good thing my son and husband are into "due diligence") I'm happy that my accounts are all up this week, my boat lifted by the rising tide. Will I know enough (or be alert and active enough) to get out when the tide turns next?
I read in the Financial Times that a growing body of economists no longer think supply and demand is "the whole story"...that they are thinking of supply, demand, and quantity of money as all part of the equation. This is good news, although entirely insufficient. It's unlikely that there will be broad understanding among main stream economists any time soon that the core economy, the criminal economy, and the ecological economy are part of the equation as well. Meanwhile, I'm doing my best to profit from the uncontrolled casino of the mad financial world, with its vanishing correlation to any underlying "real" economy (defined in the traditional narrow sense of actual business enterprise). I'd like to say I'm a great success, but more accurately I'd have to say only that it's more profitable than keeping the money in the bank. I've never liked banks, but since the 2008 fiasco I'm very interested in them and their shenanigans. It's only because I do know an honest banker that I don't think every one of them is a gold plated crook!
I take long term positions in areas where I see inexorable future growth (for example LED lighting, uranium, wind & solar energy, environmental remediation) and stick to companies that appear to have good management. There are plenty of other good stock trades, but I'm not interested in them. I have too many companies to follow as it is...(good thing my son and husband are into "due diligence") I'm happy that my accounts are all up this week, my boat lifted by the rising tide. Will I know enough (or be alert and active enough) to get out when the tide turns next?
Wednesday, February 9, 2011
Unemployment & real estate
I am reading Jeremy Rifkin's book "The End of Work", published in 1995, a rich expansion on ideas I first encountered in the work of Bernard Lietaer (whose book I have been translating )I am surprised to see Ben Bernanke remark on insufficient "employment growth" yesterday. Surely it is part of his job to educate legislators. We are seeing a profound transformation that is making "work" as we have known it a thing of the past. There is not going to be a rebound in employment. Jobs are over. Productivity has been rising since the 60s, and ever fewer workers are needed. Not just manufacturing workers, but all workers, are being replaced by our wonderful software and machinery.
It is not just happening in the US, but all over the world. The "redundancies" are more related to machines taking over than to off-shoring. We are going to have to deal with that, .either by working toward the old dream of more leisure for everyone(that is, some way to share these wonderful profits around more equitably), or by unconsciously sinking further into social division and chaos. It is worth remembering that local currency experiments led to decreased unemployment in Austria and Germany until they were made illegal (for fear of loss of central bank control), whereupon unemployment skyrocketed along with membership in the National Socialist Party-the Nazis. I think we have seen something parallel in our day in the frenzied rhetoric of extremist parties- not just in the USA. I highly recommend the book.
An article in the San Francisco chronicle reports that Bay area real estate prices suffered an accelerated decline in December, a harbinger (as we chart follower's know) of the approaching bottom (we call them "blow-offs") The chief economist of Zillow, Stan Humphries, is quoted as expecting "a long flat bottom" (so far so good= I agree). He goes on, though "before resuming a more normal appreciation of 2-4%" What is this? How can a "normal" market appreciate 2-4% annually. That kind of growth in biology is either juvenile, or tumerous.
Since the mad market makers have been little influence by their most recent toxicity, there seems to be hope among the financial fraternity that markets too will return to "a more normal appreciation" The indices have continued on an uptrend. If you can't beat them, join them. I read that there has been some return to "buy and hold" investing. Here I am, buying and holding. My Chinese stocks (APWR, JST, SOL, SOLF, TSTC, SDTH) are down, my Canadian uranium holdings (CCJ & DNN) are up. See-saw Marjorie Daw. I am also a holder of CREE, since it fell on some slight earnings disappointment recently. I expect LED lights to be with us for some years, and since the Chinese have 20 nuclear plants in construction, uranium miners should do well.
On my street, several people fear for the upcoming loss of their employment. They are engineers. I have weekly quilting parties with their wives, where we take part in a pale sort of "local currency", trading fabrics and doing each other good turns. North Carolina real estate values never rose as high as California's, so it has not fallen as far either. Most of the gigantic houses I have seen built lately could comfortably house several families, and the people in them would be less lonely, too! There would be other folk to share the work- wouldn't that be nice? The only price we would have to pay is the price of learning to put up with each other again!
It is not just happening in the US, but all over the world. The "redundancies" are more related to machines taking over than to off-shoring. We are going to have to deal with that, .either by working toward the old dream of more leisure for everyone(that is, some way to share these wonderful profits around more equitably), or by unconsciously sinking further into social division and chaos. It is worth remembering that local currency experiments led to decreased unemployment in Austria and Germany until they were made illegal (for fear of loss of central bank control), whereupon unemployment skyrocketed along with membership in the National Socialist Party-the Nazis. I think we have seen something parallel in our day in the frenzied rhetoric of extremist parties- not just in the USA. I highly recommend the book.
An article in the San Francisco chronicle reports that Bay area real estate prices suffered an accelerated decline in December, a harbinger (as we chart follower's know) of the approaching bottom (we call them "blow-offs") The chief economist of Zillow, Stan Humphries, is quoted as expecting "a long flat bottom" (so far so good= I agree). He goes on, though "before resuming a more normal appreciation of 2-4%" What is this? How can a "normal" market appreciate 2-4% annually. That kind of growth in biology is either juvenile, or tumerous.
Since the mad market makers have been little influence by their most recent toxicity, there seems to be hope among the financial fraternity that markets too will return to "a more normal appreciation" The indices have continued on an uptrend. If you can't beat them, join them. I read that there has been some return to "buy and hold" investing. Here I am, buying and holding. My Chinese stocks (APWR, JST, SOL, SOLF, TSTC, SDTH) are down, my Canadian uranium holdings (CCJ & DNN) are up. See-saw Marjorie Daw. I am also a holder of CREE, since it fell on some slight earnings disappointment recently. I expect LED lights to be with us for some years, and since the Chinese have 20 nuclear plants in construction, uranium miners should do well.
On my street, several people fear for the upcoming loss of their employment. They are engineers. I have weekly quilting parties with their wives, where we take part in a pale sort of "local currency", trading fabrics and doing each other good turns. North Carolina real estate values never rose as high as California's, so it has not fallen as far either. Most of the gigantic houses I have seen built lately could comfortably house several families, and the people in them would be less lonely, too! There would be other folk to share the work- wouldn't that be nice? The only price we would have to pay is the price of learning to put up with each other again!
Tuesday, February 1, 2011
The Baltic Dry Index
My son has just told me that the way the Baltic Dry Index is created is that people call shippers and get quotes on today's price to send coal or wheat or whatever "dry"commodity (not oil) in a ship. This index is thus NOT party to the general casino. It reflects the prices actually being charged by shipping companies. Wow, a toe-hold in reality!
In the glory days of the last stock run-up/economic expansion, it seems there were not enough ships to carry all the trade generated by the first major wave of globalization. So a lot of ships got built. Then came the crash. Now there are too many ships, so the prices they are charging are historically low.
The people who own the ships have a lot of long term debt (it costs a lot to buy one of these ships) and shipping prices are at this historic low. So everybody is afraid they will be unable to service that debt. Hmmm. Supposed to be there is a rebound in the global economy this year. China's entire population depends on food imports from Brazil. Some huge percentage of the energy we all use is generated by coal, much as visionaries such as myself hate it! It seems that there is likely to be continued need for dry bulk shipping.
In the glory days of the last stock run-up/economic expansion, it seems there were not enough ships to carry all the trade generated by the first major wave of globalization. So a lot of ships got built. Then came the crash. Now there are too many ships, so the prices they are charging are historically low.
The people who own the ships have a lot of long term debt (it costs a lot to buy one of these ships) and shipping prices are at this historic low. So everybody is afraid they will be unable to service that debt. Hmmm. Supposed to be there is a rebound in the global economy this year. China's entire population depends on food imports from Brazil. Some huge percentage of the energy we all use is generated by coal, much as visionaries such as myself hate it! It seems that there is likely to be continued need for dry bulk shipping.
Monday, January 31, 2011
The great in Davos are confused and uncertain
I read from the BBC news to-day that the heads of state, CEOs, finance ministers and other sophisticated leaders gathered for the last day of the annual Davos forum are not sure what's going on either. The volatility of these markets is unparalleled. In "Manias, Panics, and Crashes", Charles Kindleberger studies the global interrelationship of these events which are so increasingly obvious in the daily media.
The general collapse of the indices late Friday afternoon did not continue in spite of on going demonstrations in the streets of Egypt. The price of oil rose, of course, supposedly because of fears that the Suez canal would be blocked, but these days I doubt that would make so much difference, since the really giant tankers can't get through there anyway. The price of oil always rises when there is threat of war.
This morning I bought more shares of both TSTC and CREE instead of fiddling with the options as I had planned to do. I was too late to take a promising position in the options. The best profits there are only to be had very near to exaggerated tops and bottoms. In the case of both these companies, things seem to have settled down from the initial exaggeration. Both actually make useful products, actual profits, and growing revenue- the kind of reality that would have made them investments in the old days before flash trading. I am still buying them as investments, but one has to have a high tolerance for the interim swings- a prevailing belief that life is not over even when I lose!
I wrote about TSTC a little while back, when it was savaged by an anonymous blogger and dropped 28% (The blogger undoubtedly made big profits from his shorts)
CREE anounced earnings very slightly less than the pundits had expected, and added that their next quarter would be quieter than usual. For a few percent less profit, the stock immediately sold off 15% I already hold shares in a tiny Canadian company (Carmanah) that makes LED lights, but I had been looking longingly at CREE for some time- it is the elephant in that sector, and the sector is growing 40% annually.
The general collapse of the indices late Friday afternoon did not continue in spite of on going demonstrations in the streets of Egypt. The price of oil rose, of course, supposedly because of fears that the Suez canal would be blocked, but these days I doubt that would make so much difference, since the really giant tankers can't get through there anyway. The price of oil always rises when there is threat of war.
This morning I bought more shares of both TSTC and CREE instead of fiddling with the options as I had planned to do. I was too late to take a promising position in the options. The best profits there are only to be had very near to exaggerated tops and bottoms. In the case of both these companies, things seem to have settled down from the initial exaggeration. Both actually make useful products, actual profits, and growing revenue- the kind of reality that would have made them investments in the old days before flash trading. I am still buying them as investments, but one has to have a high tolerance for the interim swings- a prevailing belief that life is not over even when I lose!
I wrote about TSTC a little while back, when it was savaged by an anonymous blogger and dropped 28% (The blogger undoubtedly made big profits from his shorts)
CREE anounced earnings very slightly less than the pundits had expected, and added that their next quarter would be quieter than usual. For a few percent less profit, the stock immediately sold off 15% I already hold shares in a tiny Canadian company (Carmanah) that makes LED lights, but I had been looking longingly at CREE for some time- it is the elephant in that sector, and the sector is growing 40% annually.
Sunday, January 30, 2011
Revolution in Egypt
The US markets all plunged together late on Friday. Apparently this is a response to public upheaval on the streets in Egypt. It seems that the investing class worries that if thirty years of tyranny end in Egypt, corrupt agreements will be at risk, and profits may suffer. Certainly my profits have suffered, or they would do if I were to sell now.
I can't help but hope that they are successful in getting rid of Hosni Mubarak anyway. Even if popular sentiment is unsympathetic to the needs of global corporations, I feel confident that global corporations will survive. There is supposed to be a general global economic recovery underway. It is probably a good time for addressing the needs of ordinary people, and it seems the young people protesting on the streets are mostly interested in basic stuff, rather than religion.
I think I will be selling puts on some of my favorite companies tomorrow morning: nice little short term profits (6% in a month), and in the worst case I end up instead holding companies I like. TSTC, maybe CREE
I can't help but hope that they are successful in getting rid of Hosni Mubarak anyway. Even if popular sentiment is unsympathetic to the needs of global corporations, I feel confident that global corporations will survive. There is supposed to be a general global economic recovery underway. It is probably a good time for addressing the needs of ordinary people, and it seems the young people protesting on the streets are mostly interested in basic stuff, rather than religion.
I think I will be selling puts on some of my favorite companies tomorrow morning: nice little short term profits (6% in a month), and in the worst case I end up instead holding companies I like. TSTC, maybe CREE
Sunday, January 23, 2011
Green money, green placemats
On Friday, the Dow was up, NASDAQ was down, and the S&P went sideways. According to "The Economist", analysts from Goldman Sachs in New York think this will be an up year for the market because of the growth in Brazil, Russia, India and China,while analysts for Societe General in France think it will be a down year because of difficulties in the economies of the Euro-periphery (Greece, Portugal, Spain and Ireland).
CNN Money reports that nearly half of the companies in the Dow Jones industrial average are scheduled to release quarterly reports this week, and expectations are very high for stronger-than-anticipated profits and sales. The economy has supposedly been showing signs of strength recently, with many economists raising their forecasts for 2011 . None of this will necessarily make any difference to the direction of the markets.
Government stimulus programs fade are supposed to be the origin of all this happiness, yet "If it turns out that the economy needs another round of government aid in the form of liquidity, I think you'll start to see the market decline into the summer as investors send a message to the Fed," according to an investment guru.
So much for the opinions of experts.
I can't imagine who these "investors" are, or why anyone would pay attention to any message they would send. I mean, except that loads of money are apparently flowing into and out of one thing or another according to the whim of the computers talking to each other in parking lots in New Jersey. (See my blog on Canadian banks & high speed trading.) I am going back to making quilted green placemats from scraps.
CNN Money reports that nearly half of the companies in the Dow Jones industrial average are scheduled to release quarterly reports this week, and expectations are very high for stronger-than-anticipated profits and sales. The economy has supposedly been showing signs of strength recently, with many economists raising their forecasts for 2011 . None of this will necessarily make any difference to the direction of the markets.
Government stimulus programs fade are supposed to be the origin of all this happiness, yet "If it turns out that the economy needs another round of government aid in the form of liquidity, I think you'll start to see the market decline into the summer as investors send a message to the Fed," according to an investment guru.
So much for the opinions of experts.
I can't imagine who these "investors" are, or why anyone would pay attention to any message they would send. I mean, except that loads of money are apparently flowing into and out of one thing or another according to the whim of the computers talking to each other in parking lots in New Jersey. (See my blog on Canadian banks & high speed trading.) I am going back to making quilted green placemats from scraps.
Sunday, January 16, 2011
High speed rail
China is poised to build a national system of high-speed trains that go 300mph, and Brazil is investing heavily in trying to ease congestion in its mega-cities. Eurostar has claimed a 'renaissance' in rail travel after experiencing a 3% growth in passenger numbers despite the pre-Christmas snow disruption. The Guardian asks," are we entering a new golden age of rail travel?" On Friday, new EU rules came into effect that encourage high speed rail across Europe. They also give passengers rights to cash compensation for delays on international travel. If the train is 60 to 190 minutes late they will receive 25% of the fare and if longer, 50%. Passengers will also be able to receive free meals for a one-hour delay and accommodation where the delay has forced them to make an overnight stay.
Meanwhile, in the US, governors of Ohio and Wisconsin have turned down a combined $1.2bn in funding from the 2009 economic recovery act, dedicated for high-speed rail, and asked if they could instead build more roads. This outraged commuters, but is certainly gratifying to the auto and petroleum industries. It reprises early twentieth century responses of entrenched interests to developing auto makers, all the time New Yorkers worried about how they would succeed in clearing the streets of the growing volume of horsesh*t.
The whole idea of government imposing passenger protections seems to insult to American "pioneer" myth. Every person needs to stand completely on his "own two feet." The masthead of "Investment Business Daily" reads "For those who choose to succeed". IBD uses strict transparent criteria for assessment of investment opportunities, a really scientific approach. Their commitment to educating investors is clear, and was certainly useful to me. I recommend IBD for people who want to learn how to invest, although I gave up my subscription because their editorial pages don't use anything like such a reasoned approach to social ills. After 40 years in medical practice, it was clear to me that in the real world, a lot of people will never be equipped to stand on their "own two feet" (or to succeed.) Those editorials were another case of too much horsesh*t to bear.
I'll be reading about Bombardier....the world's largest maker of "rolling stock".
.
Meanwhile, in the US, governors of Ohio and Wisconsin have turned down a combined $1.2bn in funding from the 2009 economic recovery act, dedicated for high-speed rail, and asked if they could instead build more roads. This outraged commuters, but is certainly gratifying to the auto and petroleum industries. It reprises early twentieth century responses of entrenched interests to developing auto makers, all the time New Yorkers worried about how they would succeed in clearing the streets of the growing volume of horsesh*t.
The whole idea of government imposing passenger protections seems to insult to American "pioneer" myth. Every person needs to stand completely on his "own two feet." The masthead of "Investment Business Daily" reads "For those who choose to succeed". IBD uses strict transparent criteria for assessment of investment opportunities, a really scientific approach. Their commitment to educating investors is clear, and was certainly useful to me. I recommend IBD for people who want to learn how to invest, although I gave up my subscription because their editorial pages don't use anything like such a reasoned approach to social ills. After 40 years in medical practice, it was clear to me that in the real world, a lot of people will never be equipped to stand on their "own two feet" (or to succeed.) Those editorials were another case of too much horsesh*t to bear.
I'll be reading about Bombardier....the world's largest maker of "rolling stock".
.
Friday, January 14, 2011
Banking again
J P Morgan Chase, has set aside $10 bn for the salaries and bonuses of the investment bankers it employs (an average of $360,000). The second largest bank in the US this morning reported a 47% jump in profits for the last quarter of 2010. European government debt (from bailing out banks) has not deterred China from buying European government bonds. With this reassurance from human overseers, our upward trend in the markets is now for three months old, quite a long time for a volatile system run by computers talking to each other in New Jersey parking lots.
Banker's Community Trust (BTC) has started up. Even Allied Irish Bank (AIB) has a little smile on its face. Morgan Stanley is up: it remains a nice candidate for selling alternate calls and puts
Banker's Community Trust (BTC) has started up. Even Allied Irish Bank (AIB) has a little smile on its face. Morgan Stanley is up: it remains a nice candidate for selling alternate calls and puts
Wednesday, January 12, 2011
Volatility and trust
Yesterday at noon, a blogger alleged that a Chinese company I have owned on & off for the last few years had sold shares on a fraudulent basis. The stock immediately plunged 28%. The company (TSTC) is profitable, but they did report a month or more back that some of their clients were slow to pay. An earlier commentator had suggested they would have trouble because of cash flow. They had many orders to fill, and maybe not enough cash on hand for the raw materials they needed. They could get money as a bank loan, or sell shares, so they sold shares. Of course, the company's people were asleep on the other side of the world when the smear hit the press.
John, who looks at companies from the point of view of the basics, first bought this company at about $6.00 before the "great crash", held it while it dropped to $.75, sold it out last year at $24 and has bought and sold it from time to time. It first caught the eye of the "players" last year with its huge rise, and has been very volatile ever since. I sold my holdings yesterday anyway, because even if "Tyler Durden" (pseudonym of the anonymous blogger) is the scammer, people will take a while to sort it out. (The principle is "your first loss is your best loss"....which is true sometimes) I also sold puts. The stock is back up 11% today.
This is exactly the kind of volatility I have been writing about lately (not wishing to experience it myself, of course) It summons up all those issues of trust. Are the Chinese companies really more corrupt than the American ones? How much protection does American law offer? In spite of the technological advances that make much more information available to small investors than was ever available in the past, it seems to me we never know what's going on. At least, I don't. I like the market, because nothing else keeps me paying such close attention to the world, and somehow that seems good to me.
John, who looks at companies from the point of view of the basics, first bought this company at about $6.00 before the "great crash", held it while it dropped to $.75, sold it out last year at $24 and has bought and sold it from time to time. It first caught the eye of the "players" last year with its huge rise, and has been very volatile ever since. I sold my holdings yesterday anyway, because even if "Tyler Durden" (pseudonym of the anonymous blogger) is the scammer, people will take a while to sort it out. (The principle is "your first loss is your best loss"....which is true sometimes) I also sold puts. The stock is back up 11% today.
This is exactly the kind of volatility I have been writing about lately (not wishing to experience it myself, of course) It summons up all those issues of trust. Are the Chinese companies really more corrupt than the American ones? How much protection does American law offer? In spite of the technological advances that make much more information available to small investors than was ever available in the past, it seems to me we never know what's going on. At least, I don't. I like the market, because nothing else keeps me paying such close attention to the world, and somehow that seems good to me.
Sunday, January 9, 2011
From Canadian Banks to high speed trading
Canadian culture is sufficiently distinct from US culture to frown on the obvious levels of financial excess that led to the recent financial meltdown. Canadian banks were largely spared from the worst of all that because they are more highly regulated. In my Canadian affairs, I bank with Toronto Dominion (TD), and I cordially dislike them. They could be the Canadian bank to compete with US banks. They actually have moved into the US quite successfully. As my mother used to say, "they are up to all the tricks". Even their website is annoying, and as for service, forget it! Not something they provide (although as a Canadian, I'd have to say that goes way beyond banking n my home and native land.) No such consideration is supposed to matter to investors (including me). I found TD on a list of "highly rated large cap stocks", along with the Bank of Nova Scotia (BNS) and Suncor (SU)
I'm not sure what happened to the Royal Bank of Canada, which did not make that particular list, and calls itself RBS here, well understanding that neither "Royal" nor "Canada" would be a winner. Sneaky buzzards, "flying in low under the cultural radar", as was once said of another Canadian who succeeded in the USA. I always disliked banks, and never invested in any until after the crash, when because of volatility they became attractive for option trading.
I'm not sure what happened to the Royal Bank of Canada, which did not make that particular list, and calls itself RBS here, well understanding that neither "Royal" nor "Canada" would be a winner. Sneaky buzzards, "flying in low under the cultural radar", as was once said of another Canadian who succeeded in the USA. I always disliked banks, and never invested in any until after the crash, when because of volatility they became attractive for option trading.
Reuters says "any weakness in earnings reports during the upcoming earnings season (Jan 4-Feb 15) will give traders a reason to pull back from the rally of recent weeks, which stalled on Friday on bank stock losses and lackluster jobs data." Nevertheless, according to the NY Times, the biggest "upcoming jump" (assuming there are upcoming jumps) is expected from "financial services", with profit growth of 250%, (Standard & Poor figures).
It depends on your time frame. My dear friend Linda sent me an article from the NY Times reporting that these days one new strategy is to use powerful computers to speed-read news reports automatically, then to let the machines interpret and trade on them. High-frequency traders now account for 56 percent of total stock market trading. A measure of their importance is that rather than charging them commissions, some exchanges now even pay high-frequency traders to bring orders to their machines. This is not a time frame that has any interest for me. I wonder about "any weakness in earnings reports during the upcoming "earnings season" will give traders a reason to pull back from the rally of recent weeks" .... Which traders do they mean? Not me, for sure.
“Markets are there for capital formation and long-term investment, not for gaming,”says Michael Durbin,
author of the book “All About High-Frequency Trading" How ingenuous. Bah, humbug. Since I've got my eye on Canada, I'm thinking of Suncor instead- another very dirty bunch.
Friday, January 7, 2011
Creating trust and tea leaf reading
This morning, it looked as if the indices were all topping. This afternoon, there does look like the beginning of a downturn- whether a real downturn, or just another waver on the trend remains to be seen. My Allied-Irish Bank is further down the drain (glug, glug) whereas somebody may have started to buy back Bankers Community Trust in earnest.
To-day's reports confirmed that US unemployment figures remain grim: 9.4% in spite of a flutter early in the week about private employment numbers improving. I see that there is widespread disenchantment with investing in China because Chinese figures are "unreliable", and it does seem that there is a good deal of underhanded wheeling and dealing there..
On the other hand, Bloomberg had a review article to-day about Goldman's $1.5 billion Facebook stock offer to clients, as an illustration of its "potential conflict of interest" in the face of news that Goldman did not promise not to sell its own $375 of Facebook holdings without warning the clients to whom it is selling this stock. After all, the clients are wealthy and sophisticated.
This summoned up the story how Goldman got sued for selling its mortgage bonds to investors in 2007 while its hedge fund went short at the same time. They justified this by claiming their investors had been among the "most sophisticated mortgage investors in the world" (therefore capable of making their own decisions) Actually, I think you could say the figures were unreliable.
Michael Farr, president and founder of Washington-based Farr, Miller, & Washington, LLC told Bloomberg, "Having an obligation to your shareholders as an investment bank to remain profitable means you're going to be making money off your clients, and so there is an inherent conflict." A very funny footnote to the whole matter is that in response to its legal challenge, Goldman set up a committee! Yes, a "business standards committee" to "reinforce client focus" and "improve upon transparency of our activities". Improve upon transparency means going from completely opaque to just a little murky, maybe.
To-day's reports confirmed that US unemployment figures remain grim: 9.4% in spite of a flutter early in the week about private employment numbers improving. I see that there is widespread disenchantment with investing in China because Chinese figures are "unreliable", and it does seem that there is a good deal of underhanded wheeling and dealing there..
On the other hand, Bloomberg had a review article to-day about Goldman's $1.5 billion Facebook stock offer to clients, as an illustration of its "potential conflict of interest" in the face of news that Goldman did not promise not to sell its own $375 of Facebook holdings without warning the clients to whom it is selling this stock. After all, the clients are wealthy and sophisticated.
This summoned up the story how Goldman got sued for selling its mortgage bonds to investors in 2007 while its hedge fund went short at the same time. They justified this by claiming their investors had been among the "most sophisticated mortgage investors in the world" (therefore capable of making their own decisions) Actually, I think you could say the figures were unreliable.
Michael Farr, president and founder of Washington-based Farr, Miller, & Washington, LLC told Bloomberg, "Having an obligation to your shareholders as an investment bank to remain profitable means you're going to be making money off your clients, and so there is an inherent conflict." A very funny footnote to the whole matter is that in response to its legal challenge, Goldman set up a committee! Yes, a "business standards committee" to "reinforce client focus" and "improve upon transparency of our activities". Improve upon transparency means going from completely opaque to just a little murky, maybe.
Thursday, January 6, 2011
C$ off its highs, indices topping..banks taken care of
I quote Rep. Spencer Bachus (R-AL)who says “my view is that Washington and the regulators are there to serve the banks.” Certainly this is in line with William Greider's "Secrets of the Temple", which was our breakfast reading last fall.
Yesterday's news was of increased hiring by the private sector: to-day's that jobless claims are up anyway.
Many big banks (as well as brokerage houses) make money from trading commissions, which have been hurt by the 16% drop last year in trading volumes (they are 24% below 2008 figures). Investors took 80 billion out of their 4 trillion in stock and shifted $250 billion into bonds in 2010.
It was a good year for company profits, and a second year of rising stock markets, which was generally not predicted back in Jan 2010.The NY Times now says the past year's profits generally were bolstered by job cuts and restructuring rather than by revenue growth, an approach that may not have much further to go.
Nevertheless, there is apparent investor enthusiasm that the Bush era tax cuts were prolonged, and that a further 600 billion was pumped into the system by the Federal Reserve in November. Surely the banks will be saved!
Our bank holdings are MS, BTC, and AIB....very small amounts of the last two. BTC could be a turnaround (up 24% this morning, and still deeply underwater for me) I have AIB long term call options, a risky bet suggested by Chris that the Irish pension fund will not disappear. MS is what I call a "steady honker", which John had the chutzpah to buy at the very bottom of the '08 crash and to use profitably in option trading while it was volatile.
Yesterday's news was of increased hiring by the private sector: to-day's that jobless claims are up anyway.
Many big banks (as well as brokerage houses) make money from trading commissions, which have been hurt by the 16% drop last year in trading volumes (they are 24% below 2008 figures). Investors took 80 billion out of their 4 trillion in stock and shifted $250 billion into bonds in 2010.
It was a good year for company profits, and a second year of rising stock markets, which was generally not predicted back in Jan 2010.The NY Times now says the past year's profits generally were bolstered by job cuts and restructuring rather than by revenue growth, an approach that may not have much further to go.
Nevertheless, there is apparent investor enthusiasm that the Bush era tax cuts were prolonged, and that a further 600 billion was pumped into the system by the Federal Reserve in November. Surely the banks will be saved!
Our bank holdings are MS, BTC, and AIB....very small amounts of the last two. BTC could be a turnaround (up 24% this morning, and still deeply underwater for me) I have AIB long term call options, a risky bet suggested by Chris that the Irish pension fund will not disappear. MS is what I call a "steady honker", which John had the chutzpah to buy at the very bottom of the '08 crash and to use profitably in option trading while it was volatile.
Wednesday, January 5, 2011
To-day's private employment figures are up
Unemployment stands at 9.7% (not very accurately measured, it seems) Anyway, the unexpected rise in privately generated employment is encouraging. This means the markets can resume the trend of the moment....UP But of course, the gambler asks, "for how long?"
The Baltic Dry Index has fallen dramatically, indicating low volumes of world shipping, and the world price of basic foods are up....usually a harbinger of rioting and social ills. This fall in world shipping puzzles me in light of the wave of optimism I read about business for this year. How can business be doing so well if we are not seeing shipping? I understand that business can do well while people can't get work (at least, it can do well for a while, although eventually they do need people to have money to buy their stuff) But don't they need to be shipping?
Do the stock markets have anything to do with the real economy? I suppose they do, if you can live through all the volatility created by casino trading. Anyway, I hope so.
The Baltic Dry Index has fallen dramatically, indicating low volumes of world shipping, and the world price of basic foods are up....usually a harbinger of rioting and social ills. This fall in world shipping puzzles me in light of the wave of optimism I read about business for this year. How can business be doing so well if we are not seeing shipping? I understand that business can do well while people can't get work (at least, it can do well for a while, although eventually they do need people to have money to buy their stuff) But don't they need to be shipping?
Do the stock markets have anything to do with the real economy? I suppose they do, if you can live through all the volatility created by casino trading. Anyway, I hope so.
Tuesday, January 4, 2011
Why don't I want to look at my accounts?
Really, that's a pretty good question. By "good", I mean it's a question that reveals to me how much I love things to be certain and sure! There is also my bias against wasteful meaningless activity. Also, I would like "the system" to be rigged in favor of the good of the enterprise "humanity" as a whole. And I have hotly contested the suggestion that my activities in the market were "gambling"
Well, ho, ho to all that. After the US elections, the indices roared up with what looked to me like a vote of approval from the "investing class" (whoever they are, given the low volumes that were trading all through the fall.) I think they must be all those clever young men employed by banks, hedge funds, etc. They graduated with my son and went into "financial engineering", thus being lost to any worthwhile endeavors, at least for a decade. They program computers to do the trading, and the profits are best when there is volatility...great for day trading, good bye investment. I don't approve.
Then the indices all fell back to where they had been before the election, and THEN they resumed the upward movement that has been going on all fall. Now they are hovering at new highs, maybe reflecting the consensus that 2011 will be a better year for the companies than 2011 was. For sure the interests of the professional investors have nothing much to do with any interest in the "real economy" where people make things and do things that other people need or can use. It seems unlikely that there will be much growth in employment. It seems likely that the American dollar will fall.
I don't like gold in spite of the way it has been going up (it did crash today) I do like uranium and alternative energy (solar, geothermal, wind). I do like China in spite of the way it is dealing with such toads as Robert Mugabe. Like, not like, invest, gamble...hello 2011! I call this "the private investor's puzzle"....but maybe it is the "local gambler's conundrum". My accounts are up.
Well, ho, ho to all that. After the US elections, the indices roared up with what looked to me like a vote of approval from the "investing class" (whoever they are, given the low volumes that were trading all through the fall.) I think they must be all those clever young men employed by banks, hedge funds, etc. They graduated with my son and went into "financial engineering", thus being lost to any worthwhile endeavors, at least for a decade. They program computers to do the trading, and the profits are best when there is volatility...great for day trading, good bye investment. I don't approve.
Then the indices all fell back to where they had been before the election, and THEN they resumed the upward movement that has been going on all fall. Now they are hovering at new highs, maybe reflecting the consensus that 2011 will be a better year for the companies than 2011 was. For sure the interests of the professional investors have nothing much to do with any interest in the "real economy" where people make things and do things that other people need or can use. It seems unlikely that there will be much growth in employment. It seems likely that the American dollar will fall.
I don't like gold in spite of the way it has been going up (it did crash today) I do like uranium and alternative energy (solar, geothermal, wind). I do like China in spite of the way it is dealing with such toads as Robert Mugabe. Like, not like, invest, gamble...hello 2011! I call this "the private investor's puzzle"....but maybe it is the "local gambler's conundrum". My accounts are up.
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