TRADE UPDATE – VHC
Sold short VHC at 36.97 for a trade. Have one more allocation if need be.
HOW CHEVRON, QUALCOMM AND STARBUCKS CAN BRING US WORLD PEACE
This article also appears on Forbes There are 10 million different methods of determining whether a company is ripe for an investment. You can look at a variety of different measures of value until your brain begins throbbing. You can dissect a balance sheet until you dream of numbers dancing in mini-skirts. You can measure industry trends. You can look at price momentum. Future growth projections are another way. Follow your favorite fund manager into a stock, otherwise known as being a 13F zombie. The list goes on. For longer-term investments that don’t involve any measure of hero worship or emotion, I prefer to look at two simple factors: Do macro-trends within an industry, society or economically favor the company? Is the price action confirming what I perceive the macro-trend to be? Without favorable price action, I expect that my macro theory is flawed. This comes as a result of the understanding the financial markets hate me, you and every single person who attempts to pee in its beloved ocean of free flowing cash. When the realization that you are hated by the entity you are pursuing for profit becomes the core of your existence within the financial markets, you approach things from a very different point of view. I’ll have more on that another time. There are three large/mega-cap companies that I am particularly fond of for investment over a long-term basis. These are all companies that are well positioned within the macro sphere for their own individual reasons. They have all been experiencing significant price momentum, confirming that all is well. In no particular order: Chevron (CVX): The only reason you have not to own CVX stock is if you are in the camp that believes the global economy is going to grind to a halt over the next few years and all progress we are seeing will suddenly stop. If you are somewhat optimistic or even agnostic about the future of global economy, then CVX is a must to own. CVX is at the forefront of the global trend towards expansion at any cost. There is a real movement amongst developing countries to cultivate a middle class. A movement to create infrastructure, economy, industry and jobs. This used to be the mantra of the United States and Western Europe. While we still aspire to be these things, the truth of the matter is that Brazil, India, China and a whole host of smaller countries are doing a much better job than we are at expanding, building and creating. Special Offer: Make big money this earnings season. Intel reports on July 20. Click here for editor Paul McWilliams’ “State of...
5 CHARTS THAT WILL MAKE YOU A TIGER IN THE BEDROOM DURING THE WEEK AHEAD
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CASE CLOSED: THE NFLX VS. AAPL STUDY COMES TO AN END
I'm putting a lid on the NFLX vs. AAPL performance study. In February I said that during the expected correction that was to come, NFLX would outperform AAPL due to the market dynamics involved and the support mechanism it would create for NFLX. It wasn't a study of how delivering movies was a better business model than creating Ipads. Most of the voracious AAPL groupies did take it that way, however. It was a study and proof of how the market works and why. Here are the...
FURTHER PROOF THAT THE MARKET HATES YOU
One more bout of truth that the market lays on investors. It's only that investors don't get it. They never get it. They like to think of the market as a logical mechanism for pricing companies. A market where sophisticated men and woman from outstanding educational backgrounds come to flex their cranial muscle. A logical mechanism for pricing companies? How about an illogical mechanism that supports itself through deception of human emotion. Through a play on fear and greed. Through hating you immensely and wanting nothing more than to watch you bleed. You want proof of this? Look at the market action over the past few weeks. Falling to lows that made even the most optimistic investors writhe in depression. Followed by a furious move to the upside that caught many investors off guard, underallocated and overhedged. Is that love? Is that even like? No, it's hate. It wants you out. It wants you gone. It wants you dead. Happy 4th of...
A CONFESSION: I HEAR VOICES IN MY HEAD
At any single moment in the financial markets there are two voices in operation. The voices come along with anticipation and desire for what is to be expected from the markets in the coming days, weeks or years. One voice is constantly on the receiving end of betrayal and deception. The other speaks the truth. The two voices are that of your average market participant (hedge funds, professional investors included) and the voice of the market itself. You can observe the two voices at work presently: Voice of average market participant: The markets have gone up very quickly over the past couple of weeks. I thought we were going to move lower into the summer months before going higher. I don't think I can chase this market up here without losing money when the market pulls back in the next few weeks. Earnings season is approaching. There will be a lot of risk and volatility. Market has been so choppy. Volume hasn't been that great on the move up. I can't chase it up after such a large run over such a short time. Voice of the market: I shook a lot of weak hands out with a standard pullback. I have retested the March lows and shot up so fast that most investors have been caught off guard. There are a lot of fund managers out there who are not allocated properly waiting for me to pullback. I may pullback a little, but it won't be much. I simply have too many people off balance here to give them a chance to get in at a favorable price. I'm going to FORCE them to chase me when I take out the highs of the year. Only then will I put together a pullback that matters. Those are the voices I am hearing on this day. I know which one to listen to. Do...