Birchtree's Account Talk

[Birchtree]

jp,

Pay no attention to amoeba - he's in his bear suit. If all I had to chat about was my tugboat (TSP) I'd be bored out of my gord. Many investors like our friend amoeba miss the fact opportunity missed can be just as harmful to achieving their investment objectives in the long term as money lost. He needs medical treatment for his myopic loss aversion. No fear here when pain rolls over me - the only thing we have to fear is no fear.

 

[jpcavin]

Thanks Birch. I think I am going to reduce my TSP contribution (the percentage over the matching) so that I have more money to invest in individual equities. I have GLW on my buy list and possibly LOW. Not completely sold on BAC. What would happen to my shares if someone was to buy out BAC? I really like WFC for financials.

 

[Birchtree]

If someone were to buyout BAC your shares would appreciate in price and they would pay you either cash or give some of their shares so you are grandfathered into a new stock position. DPL is wanting to buy AES - and since I own them both the outcome doesn't really matter. I've owned DPL since the early 1970s.

 

[Happy_Trails]

jp,

Pay no attention to amoeba - he's in his bear suit. If all I had to chat about was my tugboat (TSP) I'd be bored out of my gord. Many investors like our friend amoeba miss the fact opportunity missed can be just as harmful to achieving their investment objectives in the long term as money lost. He needs medical treatment for his myopic loss aversion. No fear here when pain rolls over me - the only thing we have to fear is no fear.

Really great points, BT.

 

[Happy_Trails]

Today feels like the bottom to me. Not sure why and definitely could be wrong. Probably wishful thinking. What do you think, Birchtree?

 

[Birchtree]

The SPX put in a last hour push down to the 1123 level - that's close enough for me to be a successful retest of the low at 1101. We've had four weeks of wicked panic selling for really no reason - but that's how the game in the arena is played. I think we will start up next week anticipating something positive from the Fed. Any way the oceanic put in another painful week: +$99K, -$70K, -$12K, -$202K, -$67K for a grand total devaluation of -$252K. I'm light -$1030K for the four week period. My base remains essentially intact and that is important to maintain my cash flow for dividend reinvestments - this will be used to support my lifestyle when my wife retires. Now if Obummer finaly does something for the unemployed and reduces taxes to spur the ecomomy - this market could be looking at SPX 1675 real soon. Am I dreaming - could be but surprises do happen and bears get crushed in their own pessimism.

 

[RealMoneyIssues]

Serious question. Will there ever be a point where you adjust your strategy because we are in a bear market?

 

[Birchtree]

Life doesn't end because of a bear market and not all equities head lower. I've ridden several bear markets over the years and I'm still standing. Capital gains will be reduced but the income remains stable until a better day. My strategy is to build income and save the capital gains for larger purchases when the opportunity presents itself. Capital gains will fluctuate as the market fluctuates but dividend income is usually stable and dividend reinvestment is golden when prices are lower.

"One reason I have been loath to join the doom and gloom crowd in recent weeks has been the state of corporate finances in North America."

http://www.huffingtonpost.ca/andrew-pyle/putting-cash-to-work_b_931903.html

 

[Birchtree]

"Sonders says that a couple of poor economic readings we've seen recently tend to be good contrarian indicators for stocks."

http://theguruinvestor.com/2011/08/19/sonders-u-s-recession-unlikely-europe-needs-to-do-more/

 

[polarbear]

Here, here! American business is going strong. After all, what is there to poison it, to knock over its apple cart? It's competitive and the weak dollar makes exports sell well. But Amer.banks are getting hurt by their holdings in Euro.banks. And Europe down depresses our exports to them. But the big picture, after all Asia, etc. Financials are a leader, the mkt cannot go up w/o financials not recovering, at least not go up in a healthy way, or so people say. OK, Tony Caldaro thinks 1090 is as low as we'll go, early next week it seems. And some surprise over the wkend could propel the market up smartly on Monday. We'll see. It's useful to read Mike Swanson, whom Tom recommended a couple of years ago. Here is his latest, written today:

DOW down 400 yesterday. I just posted an article and at end of talk about potential double bottom for US markets:
http://www.wallstreetwindow.com/node/3283

Check it out. He remarks about the bottoming process and the involvement and example of Germany, etc.

His projection for the rest of the year is sobering. Gains yes, but 1) up and down, of course, and 2) moderate at best, nothing to get delirious about. A bone with only a scrap of meat on it to us beggars, us hurtin' gators has got to be received with gratitude. May the force be with us, as one of ours likes to say. Reality for now is not a quick return to any penthouse suite by any means. But the easy fruits of QE2 pretty much petered out in February anyway, it sputtered into mid-May, and from there on it was entering a market inflection point territory with corresponding defensive positioning and no running after pennies in front of a steam roller for the wise. I got overconfident and I've paid for it, just trying to recupe. so Mike Swanson says that won't happen anytime soon. In increments.

 

[polarbear]

...as was similarly noted by coolhand, per where the mkt seems to be going now. In response to your own remark below, Birchtree, per what Sonders says, yes. Yes, indeed. With the caveat that I'm not sure -- headed into another recession or not -- the economic recovery has been anemic and will continue to be so -- for years, not just several months. Well, that exhausts whatever wisdom I have. That's not much, I'm just an amateur who's trying to make a few bucks and not lose a lot. In this case, recover.

 

[Birchtree]

Monday I'll be watching for the Chicago Fed National Activity Index - currently at -0.60, please don't let it drop below -0.70 I beg of you. So far there has not been an inverted yield curve to indicate a recession approaches. With interest rates to stay low into 2013 it is unlikely to invert. I'm staying bullish like I was in March'09 and August 2010 - although I've paid my dues in pain I'm holding tight. Remember, panic is not a strategy.

 

[robo]

Monday I'll be watching for the Chicago Fed National Activity Index - currently at -0.60, please don't let it drop below -0.70 I beg of you. So far there has not been an inverted yield curve to indicate a recession approaches. With interest rates to stay low into 2013 it is unlikely to invert. I'm staying bullish like I was in March'09 and August 2010 - although I've paid my dues in pain I'm holding tight. Remember, panic is not a strategy.

IT'S TIME TO BUY STOCKS NOW (August 8, 2011): It has been a very long time since I advocated purchasing equities. Mostly this was because there was far too much confidence by the average investor, and an even greater degree of complacency about the possibility of a significant equity pullback.

http://truecontrarian-sjk.blogspot.com/

 

[Happy_Trails]

IT'S TIME TO BUY STOCKS NOW (August 8, 2011): It has been a very long time since I advocated purchasing equities. Mostly this was because there was far too much confidence by the average investor, and an even greater degree of complacency about the possibility of a significant equity pullback.

http://truecontrarian-sjk.blogspot.com/

Since I joined the board earlier this year, I don't recall ever seeing so many of the top 100 in G and F funds.

 

[robo]

Since I joined the board earlier this year, I don't recall ever seeing so many of the top 100 in G and F funds.

You are correct! Amateurs are frantically selling and we have near-record amateur outflows from equity funds primary in retirement accounts -
Top corporate insiders are buying - the VIX reached 48 last week and around 45 Thursday - there is elevated fear like this is 2008 again. The signal is clear to me.....

Insiders Buying Stock at Highest Rate Since March ’09 as S&P 500 Drops

http://www.bloomberg.com/news/2011-...rate-since-march-09-as-s-p-500-drops-18-.html

Weekly Outflows From Domestic Equity Mutual Funds Surge To $13 Billion, Nearly Surpass Post-Flash Crash Record

http://www.zerohedge.com/news/weekl...-13-billion-nearly-surpasses-post-flash-crash

 

[Birchtree]

Thanks Robo for the Steven Jon Kaplan read - do you still follow Don Hayes? Ben will probably provide us a shock and awe of some type that will lift all those sad 401K programs and free up the consumer from panic.

 

[Birchtree]

"And yet here we stand with corporate profits at all time highs and corporate balance sheets in the best shape in a generation." I just hope the market provides me with some flower buying power next week - the list is ready. Fears are reason to embrace stocks, not run from them. I'm ready to leverage up the game now that I'm paying only 2.75% margin interest which is tax deductible. Evinrude says it is only the contrarians, the wise minority, that have hardened and steeled themselves to trade fear rationally, that buy low, sell high, and earn fortunes. I hope he's right.

 

[Birchtree]

"The Rydex market timers have finally turned bearish."

http://www.safehaven.com/article/22245/investor-sentiment-the-rubber-band-is-stretched

Since 1940 there has never been more than on 10% (or more) correction in an ongoing bull market. Well we can put that puppy to rest.

 

[robo]

Thanks Robo for the Steven Jon Kaplan read - do you still follow Don Hayes? Ben will probably provide us a shock and awe of some type that will lift all those sad 401K programs and free up the consumer from panic.

Hope you are doing well Big Bull…. I’m not following Don or Bob these days , but do follow some chart slaves and watch a couple other so called Guru’s to see what the herd is doing. When the chart slaves are all on sell signals - the VIX is in the mid 40’s or higher and the market is oversold I add to my long positions. I have been using a modified version of Alpha Power Investing as an early retirement test- and it has been working out pretty well so far. I like his Backtested numbers.

The systems uses well-defined and repeating time periods, which they call "power zones", and has helped me with risk management solutions.

http://alphaim.net/power_newsletter.html

http://alphaim.net/index.html



Ha.... I like the sound of "Shock and Awe" that would be very nice. Bear Market rallies are so very sweet since so many go short and are forced to cover. I'm looking for some nice 3% plus days in the next few months and of course some ugly down days also. We can't have one without the other.

Sorry Big Bull, but this is just a medium-term trade only – I’m not long-term Bullish, but I did buy this sell-off. When the VIX is back down in the 20’s and the insiders are selling again – I’ll be back to cash. I stop by TSPtalk daily and lurk around some, but don’t post much these days. However, I did sleep at a Holiday Inn last weekend…..

Take Care!

Robo

 

[robo]

"The Rydex market timers have finally turned bearish."

http://www.safehaven.com/article/22245/investor-sentiment-the-rubber-band-is-stretched

Since 1940 there has never been more than on 10% (or more) correction in an ongoing bull market. Well we can put that puppy to rest.

Dennis,


When I go against the herd I like to see what Douglas Kass is doing. I rate him very high and he is currently buying......


Over on Real Money - Why the Market Should be Bought on Dips

http://twitter.com/#!/dougkass


Yeah - I know that this market can go lower folks, but I'm not trying to pick the bottom here. It will be interesting to see how Alpha's - The E-System does this year.

http://alphaim.net/e_system_exploit_bull_market.pdf