Stocks

[dougrz]

Snippet from an article. He mentions the CAPE ratio, which I had been worried about as well.

Updated Valuation
Its CAPE ratio declined from over 30, where it reached only briefly for a moment before the Great Depression, tech bubble, and Covid-19. At 23 today, it is still somewhat higher than its historical average. The market cap to GDP almost reached 150% right before the tech bubble burst and surpassed 150% right before Covid-19. Now it is back to 108%. Based on both measurements, such levels now offer a modestly positive implied future annual return. However, both are currently misleading as they have yet to reprice earnings and the GDP after the onset of the pandemic, so you still may want to protect a significant amount of capital from the equity markets.

[oldno7]

Bought VSTO last night at 6.01

Added to that this morning at 5.90 as I mentioned I would

Just sold half at 7.2128

I'll buy that half back lower, on a buy signal.

Or if we make new highs--I'll sell my other half

My system sells the highest priced lot first, so the 6.01 sold for 7.2128

[oldno7]

Sold my 2nd half at 7.315--24%ish gain from 5.90

In less than 2 hours.

My day is done unless I get a great buy signal.

Now I'll get some spare time to post meme's on bogley

[oldno7]

So back to indices based funds.

As a tech trader, yesterday day was a fibonacci projection date I had from some time ago.(I gave these dates to my bogley tech learnin' guy on March 4th)

Today, in a perfect tech world would be a slight blow off rally/dead cat bounce/or as I prefer, a Ross hook.

My next fibonacci date is 3-20, tomorrow.

So in a perfect tech world, tomorrow would take out yesterdays low, we then rally from there into the DOW 24,000 range.

From there more math is needed.

Right or wrong--thats how a tech trader thinks.

If I'm wrong--I will only have 95% of my allocated funds in the market.

If I get lucky, I'll be 100% invested for the run up to 24,000.(20%+ profits from here)

If it continues down, I'll play the cards I've dealt myself, knowing I purchased a lot of funds in the last couple weeks for a great discount.

[dougr]

We're about 113% at the moment. Knock 5% off GDP this year maybe and we'd be at 120%. Still overvalued, unless you apply the old Graham Dodd interest rates to market multiple math.

Doesn't terribly impact oldno's style of trading.

At the depth of 08/09 valuation, the market now would go to around 12k. I think we're in a bear market rally. A lull in shock, cautious belief that we're prepared, but to be followed by a sharp rise in positive cases and further real damage to the economy from the now statewide shutdowns being ordered.

[twotimer]

We're about 113% at the moment. Knock 5% off GDP this year maybe and we'd be at 120%. Still overvalued, unless you apply the old Graham Dodd interest rates to market multiple math.

Doesn't terribly impact oldno's style of trading.

At the depth of 08/09 valuation, the market now would go to around 12k. I think we're in a bear market rally. A lull in shock, cautious belief that we're prepared, but to be followed by a sharp rise in positive cases and further real damage to the economy from the now statewide shutdowns being ordered.

Excellent...I too believe that many stocks are still overvalued, but there's plenty that have room to grow. Take a look at Diamondback Energy and Apache Corp. for example...

Everybody's ready to go, but you're right...the bottom end of this thing may still be past the end of this month. As long as these closures keep coming...

[dougr]

Take a look at Diamondback Energy and Apache Corp. for example...

Check the bond market for their take on distressed names. Once you start seeing yields in the teens, strong warning. Anything in the 30s or above, the bond market is pricing in bk and I would never take a risk on common in that case. Corp bond research link: http://finra-markets.morningstar.com...er/Default.jsp

I'm putting together a list of distressed small energy plays that aren't hugely distressed in their debt, looking for some plays.

The yield on the 2 Apache near term bonds most recently traded is about 10%. Looks like somebody snatched them in the high 70s and peddled them a few hours later in the mid 80s.

[oldno7]

So back to indices based funds.

As a tech trader, yesterday day was a fibonacci projection date I had from some time ago.(I gave these dates to my bogley tech learnin' guy on March 4th)

Today, in a perfect tech world would be a slight blow off rally/dead cat bounce/or as I prefer, a Ross hook.

My next fibonacci date is 3-20, tomorrow.

So in a perfect tech world, tomorrow would take out yesterdays low, we then rally from there into the DOW 24,000 range.

From there more math is needed.

Right or wrong--thats how a tech trader thinks.

If I'm wrong--I will only have 95% of my allocated funds in the market.

If I get lucky, I'll be 100% invested for the run up to 24,000.(20%+ profits from here)

If it continues down, I'll play the cards I've dealt myself, knowing I purchased a lot of funds in the last couple weeks for a great discount.

So with the amount of money I had from my blended dividend fund at the 2-12 highs, I'm now 100% re invested with that money in indices funds.

I'm a bit troubled that we didn't take out the Wed. low, as I had hoped but here I sit.

I planned a trade and I've traded my plan.

When I do Fibonacci date projections(which are generally quite accurate) one never knows what the projected date might bring

BUT there are usually only 3 choices---A market high----A market low---a continuation of existing market trend.

A new low would have been best for my tech. analysis, we were close but maybe not close enough? Monday will tell, a prime day for ugly drops

I'm not positioning myself for a long hold of mutual funds, I'm shooting for a 20%ish gain--I should get a sell signal in that area and I'll be once again, out of indices funds.

So, in the very near future, I'm banking on a 20%ish profit.

After that I think we are in serious trouble and I'll re evaluate my position.

[oldno7]

Excellent...I too believe that many stocks are still overvalued, but there's plenty that have room to grow. Take a look at Diamondback Energy and Apache Corp. for example...

Everybody's ready to go, but you're right...the bottom end of this thing may still be past the end of this month. As long as these closures keep coming...

Lots of choices--I bought MLPA yesterday, for your style of holding I think it would be a good fit, with a dividend.

I won't own it long enough to get one, I'm sure.

It was a technical buy for me.

[BasinCruiser]

What’s the difference between illegal investor insider trading and this corrupt legislator trading?





https://www.forbes.com/sites/jackkel...rus-briefings/

[twotimer]

Check the bond market for their take on distressed names. Once you start seeing yields in the teens, strong warning. Anything in the 30s or above, the bond market is pricing in bk and I would never take a risk on common in that case. Corp bond research link: http://finra-markets.morningstar.com...er/Default.jsp

I'm putting together a list of distressed small energy plays that aren't hugely distressed in their debt, looking for some plays.

The yield on the 2 Apache near term bonds most recently traded is about 10%. Looks like somebody snatched them in the high 70s and peddled them a few hours later in the mid 80s.

Dougr...hey man, I appreciate you're detailing info about these companies I mentioned...but what you posted is absolute Chinese to me. Are you saying these two stocks are to be avoided?

[twotimer]

What’s the difference between illegal investor insider trading and this corrupt legislator trading?





https://www.forbes.com/sites/jackkel...rus-briefings/

Gordon Gekko to Bud Fox..."See that bum sitting there? The only difference between him and me if that I have information, and he doesn't".

I listened to an analysis of this yesterday and they're going to get away with it.

[dougr]

Dougr...hey man, I appreciate you're detailing info about these companies I mentioned...but what you posted is absolute Chinese to me. Are you saying these two stocks are to be avoided?

It comes down to what the bond market is saying about a company's prospects for survival. Normally bond market info says nothing, other than beating along to the drum of interest rates in general. But when a company is in trouble, the bond market speaks. What normally would be a 3% bond might go to 10, 20, 50, 100%+ "interest rate" (more correctly called the "yield"). The bond market is much smarter and less emotional. It's filled with professionals, and retail buyers in it have professional advice and guidance.

So in picking energy names when there's an existential threat to the survival of the company and/or the industry it's in, you look to the bond market numbers. In the above screenshots, those are the most recent trades of Apache and Diamondback bonds. If you start to see yields into the teens (the "yield" column, 5th from the left), the bond market is saying the risk of bankruptcy is elevated and real. Generally in a bankruptcy, the common stock goes to zero. Bonds recover 15 to 40 cents on the dollar, roughly, or in some industries that have a lot of capital in plants and such you might get 60 cents on the dollar. Lot of variables. The "price" column (4th from left) is showing the most recent trades of Diamondback bonds at 65, 65.5, and 63.315 cents on the dollar.

Compared to a mega like Exxon, where the bond market assigns zero risk of bankruptcy. The prices and yields in XOM are stable. Understand that prices will move somewhat, 90 to 110 range, which changes the yield as the market demands more or less from corporate bonds across the board.

Then compare to a micro with serious bk risk, Laredo Petroleum, LPI ticker, where some of the recent trades were around 28 cents on the dollar. Which gives a yield of 41.861% on that most recently traded bond. Consider that: 41% on a bond that matures in 2028. Who wouldn't take that? Except the market believes you'll never see the money with bankruptcy coming.

So for Diamondback shares, you have two issues. 1, what is the profitability going to be going forward, and 2, you have some bk risk. For Exxon you have no perceived bk risk, just profitability risk. LPI has large bk risk. For us retail investors, since it's difficult to fully understand the risks in a company, it's best to avoid any where the smart bond market is saying bk risk is real. Hence why I'm looking for beaten down names with little bk risk. And it may end up being only the megas that qualify in my end thinking.

[dougrz]

Overview of sectors and country selloffs so far.

[dougrz]

For prior 30%+ declines, the market's subsequent moves.

[dougrz]

Dougr...hey man, I appreciate you're detailing info about these companies I mentioned...but what you posted is absolute Chinese to me. Are you saying these two stocks are to be avoided?

I didn't directly answer your Q. For these 2 it's a relative question probably. If, for example, there are dozens of names 60% off, and in ranking what the bond market is saying these 2 are near the bottom, then I'd avoid. Then layer on top your projection for oil price recovery. Then on top the length of the virus shutdown. Hard to say, can't answer.

Lame I know, but I haven't formulated an opinion yet.

[oldno7]

Lame I know, but I haven't formulated an opinion yet.

In trading the markets--No opinion is indeed an opinion.

Generally marked by consolidation, narrow channel, etc.

[twotimer]

I didn't directly answer your Q. For these 2 it's a relative question probably. If, for example, there are dozens of names 60% off, and in ranking what the bond market is saying these 2 are near the bottom, then I'd avoid. Then layer on top your projection for oil price recovery. Then on top the length of the virus shutdown. Hard to say, can't answer.

Lame I know, but I haven't formulated an opinion yet.

Thanks Dougrz...I appreciate your insight and time spent on this. I'll be doing research on these companies to see just how healthy they are...they looked like good buys because of their price history along with my notion that this gas was won't last for an extended period.

Picking stocks outside the big boys can be a lot of work!

[dougr]

I think we're getting closer to maximum hysteria. The media has really ramped it up this weekend. That doesn't mean the market bottom is near, that's still going to be a function of how much economic damage is done by the lockdowns. But it's one variable pointing to it.

[oldno7]

I think we're getting closer to maximum hysteria. The media has really ramped it up this weekend. That doesn't mean the market bottom is near, that's still going to be a function of how much economic damage is done by the lockdowns. But it's one variable pointing to it.

I believe we are at or near a market bottom for this--the first leg down.

Like I've said before--I'm positioned for a sharp snap back rally, then going back to cash.

We have exceeded the first leg down low of the 1987 crash, about 9% short of the 1929 crash.

Both markets had a rebound--then sold off to take out the first leg lows(Now we are into History and Math)

The "29" crash dropped 89% by 1932.

In the stock Market--90 year cycles are very important.


I had hopes of a quick rebound on the first 16% drop, now--too much wealth and business are being destroyed.

They will require a slow, methodical recovery.IMO


No one knows anybody with covid-19 but how many know folks with big fancy houses,cars, trucks, boats, RV's etc

And all the above financed to the hilt.

These people will get a couple months reprieve with bailout money, if they qualify, if not, their journey down will be expedited.

The ol' axiom of "cash is king" will become more important as the economy tanks.

There will be 80-90-100% off sales on items that people could afford in good times but lost everything in bad.

This is the 3rd major crash I've lived through, the first I didn't have enough wealth to even notice what folks were complaining about.

The 2nd, I lost several hundred thousand in real estate.

I tried to learn, this one I was mostly prepared for.

I will say I was positioned for a correction and the crash was a surprise but I was set to profit-this time.(slow learner)

No one knows where this market is going or will end up, but there are tools--mathematical tools and history tools, that give us some insight.