Birchtree's Account Talk

[remark]

If I had money I was considering putting into the Internet/TV market I'd go with Netflix, in my opinion they will pick up million's of subscriber every year for the next half decade at least. On the other side I'm just talking out my ass as I don't own any of the three companies discussed, and haven't put my money were my mouth is.

Honesty is good!

 

[Birchtree]

Today my oceanic account needs to pull in $16K and I'll make a +$100K week. Have received 34 dividend increase announcements so far with 2 dividend reductions. Slowly making my way toward margin opening up - this will provide me a golden opportunity to further leverage up my life. It does take money to make money.

 

[Birchtree]

Better economic numbers this morning. Financial markets do not require bright sunshine news to change tone and emotional feel, they simply require circumstances at any time to get less bad. Sometimes by the time fundamental circumstances are actually good, the best of the cyclical market moves may indeed be behind us. I think I see a better day ahead to make money.

 

[Birchtree]

"Small capitalization outperformance for a few months is not what is normally seen at the end of a bull market. It is usually witnessed in the early stage of a bull.

http://www.marketwatch.com/story/small-cap-action-is-good-for-the-market-2013-02-14

 

[Birchtree]

The VIX continues to ease lower in the 12 zone and bonds are holding for now. The current risk aversion is unlike anything I've seen but it will change over time. The advance/decline line is the ultimate technical tool as it measures - here and now - what people are actually doing with their money. The key in my opinion is to already have great positions sitting in the portfolio when the next bull move comes. Make me money.

 

[Birchtree]

Darn, there goes my +$100K week - have to give some back instead.

 

[Birchtree]

Well we just had a nice intraday V bottom - that's hot. Hesitation in this climate can be costly. Many folks are anticipating a leg down that should keep them from going all in - they are missing a great opportunity.

 

[wavecoder]

i see a couple o' cluckers on the autotracker above me who are bout to eat some hoof dust

 

[Birchtree]

My oceanic this week responded well right up until Friday: +$2K, +$41K, +$9K, +$32K, -$12K for a generous gain of +$72K so I won't belittle that even though I did want +$100K. Sometimes you just have to take what you can get. Did you all know that the 1933-37 bull market gained 381% from the bear market low of July 1932. Our great recession did almost as much financial damage and so far from the March 9th low of 2009 the SPX has gone up 124% - seems we might have a long way to go yet.

 

[MrJohnRoss]

The VIX continues to ease lower in the 12 zone and bonds are holding for now. The current risk aversion is unlike anything I've seen but it will change over time. The advance/decline line is the ultimate technical tool as it measures - here and now - what people are actually doing with their money. The key in my opinion is to already have great positions sitting in the portfolio when the next bull move comes. Make me money.

I knew you were a closet technician. Time to come out of the closet, Birch. :laugh:

 

[Birchtree]

We are experiencing some desertions of the I fund - that's good from my perspective as a contrarian. When share prices fall more rapidly than any change you perceive in business value, you should be looking to take advantage of that and buy. The best way to deal with a chaotic and unpredictable market is to own extremely undervalued stocks with strong balance shhets - that means own large cap shares of European companies via the I fund. My WSJ tells me that Europe is in recession - it wasn't long ago that we were also in recession and profits were exciting. Bull markets show their strength while the economies are still in recession - I suspect the I fund will show gains of 40% to 50% higher than now when all is said and done. As normally happens, the markets (I Fund) tends to turn up in the middle of a recession. If you're a lomg-term investor and you can actually withstand the volatility, you should be thinking about equities in a more serious way. I maintain a hopefulness toward the future. Because I am a confirmed bull I will hold my 80% I fund position until Betsy comes home.

 

[Birchtree]

Sticking to principles I've developed over decades as a contrarian investor in the markets allows people like me who live and breath investments to be relatively relaxed about their retirement portfolios. This is hardly the time to hunker down and take bets off the table. It's long-term money and I look at it that way. I'm staying the course and riding this bull higher and higher. The longer that amateurs and hedge funds are afraid to get back into the stock market, the longer it will be able to rally, and therefore the more elevated it will become in 2013. My target price of 1700 on the SPX may be too conservative if amateurs continue to be afraid. I don't expect them to stay out of the market indefinitely because eventually they will realize they have missed out on one of the most powerful rebounds in many years. They'll start to overcome their fears, and will jump aboard the bandwagon - but until then it's safe to stay in the stock market. Remember, the financial markets will always act in the way for which the fewest number of participants are prepared. So when the time comes the market will force the emotional traders to unload their positions during periods of weakness eliminating all those who were encouraged to sell their stocks for emotional reasons - yes fear is the greatest emotion.

 

[Birchtree]

If I could take another moment I'd like to discuss the virtues and dangers of margin. What margin does is allow you to access unrealized capital gains without having to sell stocks and be held accountable for taxes. As an example, last week I earned +$72K in capital gains - that would allow me on margin the ability to take $72K in cash or spend $144K to buy more stock. You can see the potential of pyramiding the gains in a bull market. The more you spend the more you can make and it builds. The danger is getting a margin call from the girls in the back office when the market begins to take some of your gains back. I've been through this experience and that's where having a strategy in the wings to meet this obligation helps. You can either put up fresh cash or sell equity to meet the call and you only have three days to even up. I've built my sacrificial lamb chop account to square me away if the time approaches. But right now the leverage of margin is like having a home equity line of credit and your costs of borrowing are tax deductable. So I'm patiently waiting for margin to open up and when I have access I'm going to push as hard as I can. It's my opportunity to score because I've been true to my discipline and I'm ready to rock-n-roll. It's going to be one heck of a very fun ride. Snort.

 

[Birchtree]

"The next decade could coincide with a serious boom in American stocks. Wall Street may be on the verge of a historic secular trend."

Race to Debase | Puru Saxena | Safehaven.com

 

[RealMoneyIssues]

"The next decade could coincide with a serious boom in American stocks. Wall Street may be on the verge of a historic secular trend."

Race to Debase | Puru Saxena | Safehaven.com

And it could and may not be...

Only time will tell

 

[Birchtree]

PRAGMATIC CAPITALISMNYSE Margin Debt Stalks All-Time Highs - PRAGMATIC CAPITALISM

 

[Birchtree]

In February of 2012 my oceanic took in +$128K - so far this month I've taken in +$127K. With 8 trading days left I may actually better those gains up to +$200K. There may be a consolidation at some point and of course that will set me back, but I remain optimistic for strong future gains. In March 2012 the oceanic only took in +$30K so the possibility of March is endless for 2013. I'll be patiently waiting on margin to open up and when it does - all I can say is whew let'er rip. The more you can build your assets, the more you can afford to risk if you have the fortitude for it. The Fed's attempts to get credit flowing again are meeting with success. More money will come off the sidelines to propel equities higher.

 

[Birchtree]

From Steve Reitmeister of Zacks: "This just feels like another one of those rallies that will not give late consumers a real pullback to safely climb on board. And at some point the bears and late comers will capitulate which creates a rush higher for stocks...which then becomes a blow off top". A blow off top at around Dow 16,000 would be most welcome.

 

[RealMoneyIssues]

In February of 2012 my oceanic took in +$128K - so far this month I've taken in +$127K. With 8 trading days left I may actually better those gains up to +$200K. There may be a consolidation at some point and of course that will set me back, but I remain optimistic for strong future gains. In March 2012 the oceanic only took in +$30K so the possibility of March is endless for 2013. I'll be patiently waiting on margin to open up and when it does - all I can say is whew let'er rip. The more you can build your assets, the more you can afford to risk if you have the fortitude for it. The Fed's attempts to get credit flowing again are meeting with success. More money will come off the sidelines to propel equities higher.

If you have time, you might want to read the link I have in this post:
http://www.tsptalk.com/mb/members-account-talk/9279-realmoneyissues-account-talk-84.html#post395211

Getting more money off the sidelines doesn't necessarily cause stock prices to go up if that isn't what the traders want.

Traders can make money going up or going down; however, the typical retail investor doesn't know how to do that.

Where are the traders going to get the new money from? Not from each other... from the retail investor?

The building credit bubble (or you call equity bubble) isn't on the retail side. With the government bail out the banks again?

The markets have not been free for years, the buildup of the markets to the first bubble pop in 2000 will not happen again. The markets are now a farse.



That doesn't mean I won't make money.

It doesn't mean you won't make money, just means buy and holding success is dependent on when you buy and when you sell. At some point you will have to sell, and I hope the markets are up when you do. Your strategy has the benefit of being dividend based, getting automatic growth, but you still own stocks and their value is dependent on the market.

You have already lived through 2 bubble bursts (2000-2003 and 2008-2009) where the value of your portfolio potentially lost 50% (obviously unrealized loss since you don't sell) each time and still are a PermaBull. Truly impressive.

I hope for all of our sakes, that the market continues past 1577, but don't mind me being a little cautious about the institutional players and how they take your money on a moments notice.

Here's to a profitable 2013 for all of us!
​

 

[Birchtree]

I read your article yesterday - very interesting. The best I can do is close my eyes and hold my nose while I jump into the market pool. I fully understand that we've been through a terrible stretch twice, and that the skies are far from clear. But while I don't know exactly when the market will make it BIG move upward, I do believe that long term investors who stay calm and forge ahead through the tough times will be rewarded in the end. But while the specifics of each crisis are always different, history has shown that the way for investors to emerge victorious and intact from such crises is the same: stick to a strategy that buys the stocks of good companies when they are cheap. "Many investors having missed what amounts to a 4 year stocks stealth bull are wondering whether now is a good time to jump aboard or not." It don't matter to me - I'm all in up to my nostrils. When it comes to the stock market I am optimistic - realistically optimistic. The question is: does my psychological make up allow me to take short-term but significant losses in the hope of long-term and outsized investment gains? You bet. By having a disciplined asset allocation and long-term plan I will prosper in the long run. I've already collected a 124% gain from the 2009 lows and there is substantially more to come especially if I can indulge myself with margin buying. You have to know I'm having a blast getting rich. Snort. My SPX target is 1700 cob this year - but I wouldn't be surprised if we exceed that level rather dramatically - few people are talking that way but I've been around since the 1974 bottom and nothing would surprise me - I'm prepared for the gusto.