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Author Topic: Markets.......  (Read 4216 times)

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BENTON PIGGEE

Re: Markets.......
« Reply #200 on: January 04, 2019, 05:50:15 pm »

please enumerate his policy mistakes that would cause disasters like these

JOBS UP BIG!
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Only in retrospect will we know if they are mistakes or not, and that could take years to make the final judgement. Most of these are just differences in opinion or outlook. For example, if you don't believe in trickle-down economics, if you think trade and immigration restrictions will shrink our GDP, etc.

Boardon Hamsay

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Re: Markets.......
« Reply #201 on: January 04, 2019, 07:00:01 pm »

I don't know too many people that put their politics in front of a 3% day. 

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Boardon Hamsay

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Re: Markets.......
« Reply #202 on: January 04, 2019, 07:00:40 pm »

Only in retrospect will we know if they are mistakes or not, and that could take years to make the final judgement. Most of these are just differences in opinion or outlook. For example, if you don't believe in trickle-down economics, if you think trade and immigration restrictions will shrink our GDP, etc.

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Boardon Hamsay

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Re: Markets.......
« Reply #203 on: January 04, 2019, 07:07:03 pm »

Making policy judgments based on past looking data points and prior to said policy impacts even being known is reckless.
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Pat Goss

Re: Markets.......
« Reply #204 on: January 04, 2019, 07:11:36 pm »

but it's perfectly fine to speak of policy mistakes now, how about waiting years for that as well
« Last Edit: January 04, 2019, 07:34:30 pm by Pat Goss »
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Boardon Hamsay

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Re: Markets.......
« Reply #205 on: January 04, 2019, 07:14:27 pm »

As for today, give some props to one Jerome Powell! Guy finally brought notes and expresswd the word everyone wanted to hear. Patience. One word worth 500 points to the Dow.

Finally feel much better about checking “Dovish Fed” off the market needs list. Now we have to check on guidance, earnings, trade, government shutdown, and see if oil has bottomed. Don’t pound the table or back the trucks up yet.
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Pat Goss

Re: Markets.......
« Reply #206 on: January 04, 2019, 07:38:55 pm »

Thank you Mr. President for waking the Fed up to its responsibilities to the public
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BENTON PIGGEE

Re: Markets.......
« Reply #207 on: January 04, 2019, 09:07:33 pm »

I'm just an investor that enjoyed quite a few elective investment, econ, and finance classes in college at the UofA.  That gave me the fundamental analysis side of understanding markets. My day job is a supply chain analyst so that probably feeds into also enjoying the technical analysis side of understanding market movements.

Man, I wish I'd taken some finance classes while I was up there. I was a chemistry major. I got interested in investing when my first job mandated that we put 5% of our salary into a 401k. I read a ton of investing books, and I've even studied for a Series 7 but never took the test. My career is going well, so I decided to keep it a hobby.

 I've gone through 3 financial advisors since then and now do it myself. Things are going quite well, but I'll get an advisor when I retire to set up income distributions, go more risk-off etc.

My son took Macroeconomics last semester- he liked it OK, but I don't think finance is his bag. Nevertheless, I've taught him a few things. Maybe some day he'll get interested. My older son is in year 2 of his profession and is getting more and more into it- I help him with his Robin Hood account.

ricepig

Re: Markets.......
« Reply #208 on: January 05, 2019, 09:32:03 am »

Man, I wish I'd taken some finance classes while I was up there. I was a chemistry major. I got interested in investing when my first job mandated that we put 5% of our salary into a 401k. I read a ton of investing books, and I've even studied for a Series 7 but never took the test. My career is going well, so I decided to keep it a hobby.

 I've gone through 3 financial advisors since then and now do it myself. Things are going quite well, but I'll get an advisor when I retire to set up income distributions, go more risk-off etc.

My son took Macroeconomics last semester- he liked it OK, but I don't think finance is his bag. Nevertheless, I've taught him a few things. Maybe some day he'll get interested. My older son is in year 2 of his profession and is getting more and more into it- I help him with his Robin Hood account.

My oldest had a Walton MBA, his CFA designation, and is an equity research analysts, he still asks if it's a good time to buy/sell, lol. I'm like you can read a financial/quarterly report inside out and backwards, what do the other 1500 people in your office think?? My daughter will graduate with two degrees in May, she's taking an intercession course on the stock market right now, she said I don't know what these mean Up/Down arrows in the market? I told her it was a good time to learn!

HawgWild

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Re: Markets.......
« Reply #209 on: January 05, 2019, 10:06:05 am »

Stanford's Graduate School of Business offered a free, 7 week on-line course a few years back, which I took, on The Finance of Retirement and Pensions. I found it helpful in understanding market fundamentals, bonds, various investments strategies, etc. I followed that up with an Economics course which was pretty much Greek to me. I'm not sure if either of these are still available.
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HiggiePiggy

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Re: Markets.......
« Reply #210 on: January 05, 2019, 10:06:46 am »

I have 14 years to go before my son is 18.  I am hoping by then I will be able to help him in saving money throughout his adult life.   
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BENTON PIGGEE

Re: Markets.......
« Reply #211 on: January 05, 2019, 10:18:29 am »

My oldest had a Walton MBA, his CFA designation, and is an equity research analysts, he still asks if it's a good time to buy/sell, lol. I'm like you can read a financial/quarterly report inside out and backwards, what do the other 1500 people in your office think?? My daughter will graduate with two degrees in May, she's taking an intercession course on the stock market right now, she said I don't know what these mean Up/Down arrows in the market? I told her it was a good time to learn!

That is amazing. I wonder if any of their classes actually go over the entire process of choosing when to buy/sell using fundies and technicals like the guys on Fast Money do. Where did those guys learn it? Whartons? Their first hedge fund job? It seems like most schools teach students that market timing is impossible.

My CFA 15 years ago recommended Carnival Cruises. I asked why and why not 2 weeks ago when it was 20% lower, and he said he didn't know, his analysts at [major brokerage firm] had just recommended it that day(?!) Of course I passed. It's not much higher now than it was back then!

While I'm at it, what is up with analysts buy/sell and target price recommendations? Most of them are buy or hold and seem months behind the most recent data.

ricepig

Re: Markets.......
« Reply #212 on: January 05, 2019, 10:54:06 am »

That is amazing. I wonder if any of their classes actually go over the entire process of choosing when to buy/sell using fundies and technicals like the guys on Fast Money do. Where did those guys learn it? Whartons? Their first hedge fund job? It seems like most schools teach students that market timing is impossible.

My CFA 15 years ago recommended Carnival Cruises. I asked why and why not 2 weeks ago when it was 20% lower, and he said he didn't know, his analysts at [major brokerage firm] had just recommended it that day(?!) Of course I passed. It's not much higher now than it was back then!

While I'm at it, what is up with analysts buy/sell and target price recommendations? Most of them are buy or hold and seem months behind the most recent data.

I know that in some classes, it may have been in his MBA, that they actually trade a real portfolio, and his group did well. He actually does better than me, as he is willing to take more chances on growth stocks, but he was talking at Christmas about looking for a REIT of two that paid big dividends. He bought and sold Apple and Nividia at $90 and sold at $200, but he's 26 and just really getting started. His analysis is mid-cap consumer names, so most of them aren't sexy, lol.

He's a Chartered Financial Analyst, not to be confused with a Certified Financial Advisior.
https://www.cfainstitute.org

je100

Re: Markets.......
« Reply #213 on: January 05, 2019, 11:55:59 pm »

I know that in some classes, it may have been in his MBA, that they actually trade a real portfolio, and his group did well. He actually does better than me, as he is willing to take more chances on growth stocks, but he was talking at Christmas about looking for a REIT of two that paid big dividends. He bought and sold Apple and Nividia at $90 and sold at $200, but he's 26 and just really getting started. His analysis is mid-cap consumer names, so most of them aren't sexy, lol.

He's a Chartered Financial Analyst, not to be confused with a Certified Financial Advisior.
https://www.cfainstitute.org


CFA is a beast of a designation, and far more revered than his MBA for those who know.  I have a buddy that went thru that.  Something like a 20% pass rate....
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ricepig

Re: Markets.......
« Reply #214 on: January 06, 2019, 08:21:00 am »

CFA is a beast of a designation, and far more revered than his MBA for those who know.  I have a buddy that went thru that.  Something like a 20% pass rate....

Yeah, 3 pretty exams spread over a couple of years.
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Boardon Hamsay

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Re: Markets.......
« Reply #215 on: January 07, 2019, 02:58:07 pm »

I have 14 years to go before my son is 18.  I am hoping by then I will be able to help him in saving money throughout his adult life.   

Nothing wrong with buying a share of say, DIS for him now. Then, when he's 8 to 10ish years old, introduce him to being a shareholder and the markets in general.
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HiggiePiggy

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Re: Markets.......
« Reply #216 on: January 07, 2019, 04:07:32 pm »

Are you allowed to buy stock for children under 18?
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woodrow hog call

Re: Markets.......
« Reply #217 on: January 07, 2019, 05:06:07 pm »

Are you allowed to buy stock for children under 18?

My dad would buy stock for me starting when I was about six, then I had to bottle feed it every morning before school, and again every evening. That's how I learned what to look for when buying stock.
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BENTON PIGGEE

Re: Markets.......
« Reply #218 on: January 07, 2019, 06:23:07 pm »

Nothing wrong with buying a share of say, DIS for him now. Then, when he's 8 to 10ish years old, introduce him to being a shareholder and the markets in general.

I bought 100 shares of DIS @$15.26/share for my 7yo in 2003. In 2014 with the stock @$75, I cashed out and got him a used Infiniti for a graduation present.


/csb
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Boardon Hamsay

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Re: Markets.......
« Reply #219 on: January 08, 2019, 02:07:24 pm »

That is amazing. I wonder if any of their classes actually go over the entire process of choosing when to buy/sell using fundies and technicals like the guys on Fast Money do. Where did those guys learn it? Whartons? Their first hedge fund job? It seems like most schools teach students that market timing is impossible.

My CFA 15 years ago recommended Carnival Cruises. I asked why and why not 2 weeks ago when it was 20% lower, and he said he didn't know, his analysts at [major brokerage firm] had just recommended it that day(?!) Of course I passed. It's not much higher now than it was back then!

While I'm at it, what is up with analysts buy/sell and target price recommendations? Most of them are buy or hold and seem months behind the most recent data.

In regards to the technical analysis, it was touched on a bit in my Principle of Investments class at the UofA years ago. Nothing major, just the basic support and resistance recognition, intro to the various moving averages, and maybe a mention about cup and handle patterns and of course, the head and shoulders top.

I kind of look at learning technical analysis in college similarly to learning excel. You get an intro to it in college that you think prepares you decently but then you go to work in excel and realize college only taught you the bare basics. That was at least my experience in excel at the UofA many years ago. In fairness, excel tends relative and ad hoc in terms of what you need to do on a given usage so a lot can be learned on the fly via youtube, forums, google, etc.

I tend to see techical analysis the same way. You can learn some basics in college but the best "ah ha" moments are probably going to come once you start your job at a firm. I have a spreadsheet with 102 different oscillators, moving averages, indicators, trend measures, etc because I dig technical analysis but I couldn't imagine a college course for it unless it was part of a graduate level degree. 

I think certain industry level metrics are similarly learned on the job vs in college, at least at the undergraduate level. For example, college can teach you about how to compare balance sheets and income statements for two different airlines. When you go to work as an analyst covering airlines, you quickly learn when given two airlines with comparable balance sheets and income statements, you should look at their revenue per available seat mile to determine which has the advantage.

In regards to analysts, there's a couple things I keep in mind. First, most analysts have to have a certain number of buy, hold, and sell rated stocks for the sector and/or industry they cover. So, an analyst could have a perfectly fine stock rated as a sell because other comparable stocks may have been marginally, objectively, or subjectively better at that time thus warranting a "hold" or "buy" rating.  Secondly, analyst ratings are fluid, like opinions, and therefore also like arseholes. 

I’ve seen all kinds of reasons for ratings changes and price target changes. For example, if WMT runs up to $115 per share, it’s probably due to be downgraded because relative to TGT, COSTCO, etc. WMT’s P/E is starting to get on the expensive side. So, you might see an analyst downgrade WMT  to hold or sell and upgrade TGT to buy based on little more than valuation.  Then a couple week’s later, WMT might increase 2019 EPS guidance. So, with that new guidance in mind, that previous seemingly expensive P/E has now become cheaper. So, WMT may get an upgrade in rating as well as a 12 month price target increase based on the new guidance info.

Overall, I find reading different analyst thesis/reports over time has helped me determine who really is providing great coverage, who gets behind on their price targets, who offers passive/limited coverage, who hasn’t rerated their sector or industry in a while, who is just sloppy, etc. I've never looked into why but Zack's rerates some stocks by the damn hour at times so they either rate for day trading or may have algos doing their ratings, lol.

Just a few thoughts…
« Last Edit: January 08, 2019, 02:20:40 pm by Boardon Hamsay »
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BENTON PIGGEE

Re: Markets.......
« Reply #220 on: January 10, 2019, 05:52:30 pm »

We are a little below S&P 2630, which is where we would go back above the 50 day moving average, as well as 2 recent downside support levels AND the support level from Feb. 2018's correction.

If we get through that, the next resistance is 2760, which also happens to be the current 200 day ma and the two most recent market tops. Of course, the October top was even higher.

I hope we don't fail here, but if we do we could go to 2100, which is where we were the morning after the 2016 election. Please grade my paper, Boardon.

Boardon Hamsay

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Re: Markets.......
« Reply #221 on: January 10, 2019, 09:32:10 pm »

We are a little below S&P 2630, which is where we would go back above the 50 day moving average, as well as 2 recent downside support levels AND the support level from Feb. 2018's correction.

If we get through that, the next resistance is 2760, which also happens to be the current 200 day ma and the two most recent market tops. Of course, the October top was even higher.

I hope we don't fail here, but if we do we could go to 2100, which is where we were the morning after the 2016 election. Please grade my paper, Boardon.

Solid work, BP. Lots to digest in the market right now so I think it’s prudent to be as nimble as you can, expect volatility to continue, and understand the potential support and resistance levels. Afterall, fundamentals tell us what stocks to buy and technicals tell us at what levels to buy.

Rarely does the market snap back from a sell off without retesting the most recent low. Given the headwinds still in play, continuing upward in a “v” pattern would start to get as similarly parabolic as last January’s euphoria turned violent, volatility based, slide downward.

Earnings season gets going next week and guidance will be under the microscope. I thought we’d get some selling pressure here around 2600 based on continued lower guidance preannouncements, pre-earnings scrutiny, and lack of Dow theory based sector confirmations. This week’s move upward has been on relatively lower volumes too so there’s some movement holding back to see how guidance continues to come in.

I think we ultimately go retest 2350. We had strong buying volume at that level which equated to the S&P trading around 14 times 2019 earnings. If guidance stays steady, 2350 should be a strong floor and we should bounce before that and establish a higher low. If guidance continues to drop, we’ll find support somewhere around 13.5 - 14 times those restated 2019 earnings.

Said differently, I think it could come down to the simple price to earnings ratio of the S&P. Below 14 is oversold and above 16ish is starting to get expensive due to continuing slowing growth seen in the manufacturing numbers, current guidance, etc. Simplicity is actually fitting given the headwind complexity in play right now. Keep watching those 20, 50, and 200 day moving averages for reference points for sure and also note that a lot of the alogorithms now run on some form of exponential smoothing model, which logic-wise says apply more weight to the most recent data when calculating buy/sell levels.

I’m still watching MSFT as a proxy and will, minus any new news, be a buyer below $94ish. The good news right now is I don’t see the gold miners, gold etfs, and treasury etfs monopolizing the 52 week high lists this week.

Conversely though, it’s going to be all about 2019 guidance and then hopefully getting some kind of consistent, sustainable, sector confirmations. ISM manufacturing numbers are slowing and are much better forward gauges than say, employment numbers. That tends to be a precursor to the transports slowing. The banks are also now trading basically based on tangible book value (buy support around 0.75 and then selling resistance around 1.1). Energy is getting some footing but then defensive sectors like utilities, consumer staples, and Healthcare are still maintaining.  Inconsistent  sector reads tends to tell me to keep sitting tight and pay attention to guidance.

Ideally, we’d like to see industrials move, get some higher guidance(loans) out of the financials, and then also get confirmation from the transports that they’re taking guidance up because shipments are up. Three calls to listen to are CAT, JPM, and UNP. If those three are all positive, we might have something to support a breakout towards retesting the highs. Add MSFT in for a tech view and we’re off to the races.

Just some more semi rambling thoughts....

je100

Re: Markets.......
« Reply #222 on: January 10, 2019, 09:52:03 pm »

Good stuff Hamsay.
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BENTON PIGGEE

Re: Markets.......
« Reply #223 on: January 11, 2019, 12:54:08 am »

Solid work, BP. Lots to digest in the market right now so I think it’s prudent to be as nimble as you can, expect volatility to continue, and understand the potential support and resistance levels. Afterall, fundamentals tell us what stocks to buy and technicals tell us at what levels to buy.



Very good! Nice of you to add in the fundies, sectors, etc. I'm more technically focused which is usually enough for swing trading options. I need one more strong bear market rally before I can get out.
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onebadrubi

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Re: Markets.......
« Reply #224 on: January 11, 2019, 04:08:16 am »



Ideally, we’d like to see industrials move, get some higher guidance(loans) out of the financials, and then also get confirmation from the transports that they’re taking guidance up because shipments are up. Three calls to listen to are CAT, JPM, and UNP. If those three are all positive, we might have something to support a breakout towards retesting the highs. Add MSFT in for a tech view and we’re off to the races.

Just some more semi rambling thoughts....

Man, Cat is extremely screwed up internally.  Their stock price has been numb to boom the last couple of years in their industry.  They should have sky rocketed and their inept HQ has really held them back. 
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onebadrubi

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Re: Markets.......
« Reply #225 on: January 11, 2019, 04:08:59 am »

Very good! Nice of you to add in the fundies, sectors, etc. I'm more technically focused which is usually enough for swing trading options. I need one more strong bear market rally before I can get out.

Spoken like a guy on the tables in Vegas!!  Haha
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Boardon Hamsay

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Re: Markets.......
« Reply #226 on: January 11, 2019, 05:56:34 am »

Man, Cat is extremely screwed up internally.  Their stock price has been numb to boom the last couple of years in their industry.  They should have sky rocketed and their inept HQ has really held them back. 

Yeah, CAT is heavily levered to China and their finance arm has been interest rate sensitive so before even getting into their own decisions, the stock has been punished. Would like to hear an update on their order book just to see if there is a light the end of the tunnel. URI might provide a better current domestic lens in lieu of CATs added headwinds.
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onebadrubi

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Re: Markets.......
« Reply #227 on: January 11, 2019, 06:05:58 am »

Yeah, CAT is heavily levered to China and their finance arm has been interest rate sensitive so before even getting into their own decisions, the stock has been punished. Would like to hear an update on their order book just to see if there is a light the end of the tunnel. URI might provide a better current domestic lens in lieu of CATs added headwinds.

URI is likes to burn cash on acquisitions to much for me.  I play in the equipment sector more than I should, it’s my business.   I personally think 19 will be a down year or flat year for equipment.   Diesel engines are back logged, equipment mnfg are still running behind but there is starting to be some saturation of inventory. 

Cat dealers have all been having record years, but yet Cat couldn’t capitalize on it.  They have multiple pieces of equipment on massive back orders, some over 12 months.  Cat is also still trying to dig itself out of the grave the last ceo dug.  He way over spent on a shovel company and I think way over built inventory for certain emerging markets.   
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ricepig

Re: Markets.......
« Reply #228 on: January 11, 2019, 07:40:51 am »

URI is likes to burn cash on acquisitions to much for me.  I play in the equipment sector more than I should, it’s my business.   I personally think 19 will be a down year or flat year for equipment.   Diesel engines are back logged, equipment mnfg are still running behind but there is starting to be some saturation of inventory. 

Cat dealers have all been having record years, but yet Cat couldn’t capitalize on it.  They have multiple pieces of equipment on massive back orders, some over 12 months.  Cat is also still trying to dig itself out of the grave the last ceo dug.  He way over spent on a shovel company and I think way over built inventory for certain emerging markets.   

Yeah, I use Deere as my equipment play, it can and will move along with CAT, but doesn't seem as volatile. I've had it for 20 years, so my kids will be the ones getting out, lol.

The local CAT here in Jonesboro has so much inventory, I always wonder who floor plans them. The JD guys get their inventory for free for a period, and then it starts hitting them in increments, increasing over time, I assume it runs the same for CAT.
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BENTON PIGGEE

Re: Markets.......
« Reply #229 on: January 11, 2019, 08:22:16 am »

Spoken like a guy on the tables in Vegas!!  Haha

Yes, it sounds risky, but I don't trade naked options which is WAY riskier. Naked options are more like putting chips on the poker table.

What I do is more like selling someone else the opportunity to gamble on the market with calls, but selling puts is more like selling stock "insurance".

I'll increase my bond and buy/hold % of my portfolio as I get older.
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onebadrubi

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Re: Markets.......
« Reply #230 on: January 11, 2019, 08:35:08 am »

Yeah, I use Deere as my equipment play, it can and will move along with CAT, but doesn't seem as volatile. I've had it for 20 years, so my kids will be the ones getting out, lol.

The local CAT here in Jonesboro has so much inventory, I always wonder who floor plans them. The JD guys get their inventory for free for a period, and then it starts hitting them in increments, increasing over time, I assume it runs the same for CAT.

Part of the Cat agreement, all inventory is paid for!  Haha now that really will make your head spin.  Cat dealers do not floor plan equipment, which is MIND BLOWING to me. Riggs (Jonesboro Cat) will not have any equipment (cat or allied equipment or their other ventures like spartan etc) on their lot unless it’s paid for. 

Deere runs specials from time to time, but industry standard is 6 months interest free on floor plans.  Deere made a huge push in to compact construction equipment (mini x and skid steers) a few years back and would give dealers 12 months and some other programs like that. This way they could build up more inventory to compete with Kubota dealers and cat guys who were flush with inventory. 
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ricepig

Re: Markets.......
« Reply #231 on: January 11, 2019, 08:53:31 am »

Part of the Cat agreement, all inventory is paid for!  Haha now that really will make your head spin.  Cat dealers do not floor plan equipment, which is MIND BLOWING to me. Riggs (Jonesboro Cat) will not have any equipment (cat or allied equipment or their other ventures like spartan etc) on their lot unless it’s paid for. 

Deere runs specials from time to time, but industry standard is 6 months interest free on floor plans.  Deere made a huge push in to compact construction equipment (mini x and skid steers) a few years back and would give dealers 12 months and some other programs like that. This way they could build up more inventory to compete with Kubota dealers and cat guys who were flush with inventory. 

I wasn't certain with CAT, and my Deere experience is just from the Agri side, I kept a couple of dealerships in business for years, lol. I ran a few CAT track tractors when they first came out, and had a couple of VFT for grain carts and had 416 backhoes. I liked Rob and John, enjoyed the times doing business with them. Man, that's a lot of interest sitting on their lots, however it comes!
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onebadrubi

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Re: Markets.......
« Reply #232 on: January 11, 2019, 09:14:35 am »

I wasn't certain with CAT, and my Deere experience is just from the Agri side, I kept a couple of dealerships in business for years, lol. I ran a few CAT track tractors when they first came out, and had a couple of VFT for grain carts and had 416 backhoes. I liked Rob and John, enjoyed the times doing business with them. Man, that's a lot of interest sitting on their lots, however it comes!

I assume they do that so there is never a situation for a lien, but not real sure. 

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Boardon Hamsay

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Re: Markets.......
« Reply #233 on: January 11, 2019, 09:14:41 am »

URI is likes to burn cash on acquisitions to much for me.  I play in the equipment sector more than I should, it’s my business.   I personally think 19 will be a down year or flat year for equipment.   Diesel engines are back logged, equipment mnfg are still running behind but there is starting to be some saturation of inventory. 

Cat dealers have all been having record years, but yet Cat couldn’t capitalize on it.  They have multiple pieces of equipment on massive back orders, some over 12 months.  Cat is also still trying to dig itself out of the grave the last ceo dug.  He way over spent on a shovel company and I think way over built inventory for certain emerging markets.   


I think inventory saturation will be a continuing and growing theme in 2019, which aligns to a slowdown. We've already seen it in autos, minus Tesla's model 3s. We've seen in housing in certain areas. We've seen it hit the semiconductor space more recently (NVDA and MU especially). And, we're seeing the ISM manufacturing numbers softening. I think we'll hear it more from the industrials in 2019 and at some point, it will more broadly slow down the transports, especially the rails.

Earnings this quarter should be pretty good but I keep coming up empty when it comes to finding a solid 2019 guidance thesis that includes some Dow theory sector confirmation. So, it's hard to find a reason for the S&P to have a sustainable breakout over 2600. I suppose though it depends on how much near term buying is based on the ~19% earnings growth expected this earnings season versus forward guidance of around 4-6% earnings growth the next couple quarters and then an even more muted 3% to close out 2019.

It would be nice if CAT, DE, URI, UTX, HON, etc. came out with strong 2019 guidance. That would be a good foundation for rally. I think the narrative though will be more around inventory becoming more stagnant, revenue growth coming via more aggressive pricing activity, and of course, the resulting margin compression.

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onebadrubi

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Re: Markets.......
« Reply #234 on: January 11, 2019, 09:32:52 am »


I think inventory saturation will be a continuing and growing theme in 2019, which aligns to a slowdown. We've already seen it in autos, minus Tesla's model 3s. We've seen in housing in certain areas. We've seen it hit the semiconductor space more recently (NVDA and MU especially). And, we're seeing the ISM manufacturing numbers softening. I think we'll hear it more from the industrials in 2019 and at some point, it will more broadly slow down the transports, especially the rails.

Earnings this quarter should be pretty good but I keep coming up empty when it comes to finding a solid 2019 guidance thesis that includes some Dow theory sector confirmation. So, it's hard to find a reason for the S&P to have a sustainable breakout over 2600. I suppose though it depends on how much near term buying is based on the ~19% earnings growth expected this earnings season versus forward guidance of around 4-6% earnings growth the next couple quarters and then an even more muted 3% to close out 2019.

It would be nice if CAT, DE, URI, UTX, HON, etc. came out with strong 2019 guidance. That would be a good foundation for rally. I think the narrative though will be more around inventory becoming more stagnant, revenue growth coming via more aggressive pricing activity, and of course, the resulting margin compression.

Rails have seen it coming, I know UP has been tightening the belt with layoffs the last few months.

I expect UR to have a strong outlook.  Construction rental market looks good, but just because that is their main core business, you never know with them. H&E is another one I like to look at. 
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Boardon Hamsay

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Re: Markets.......
« Reply #235 on: January 11, 2019, 09:35:31 am »

URI is likes to burn cash on acquisitions to much for me.  I play in the equipment sector more than I should, it’s my business.   I personally think 19 will be a down year or flat year for equipment.   Diesel engines are back logged, equipment mnfg are still running behind but there is starting to be some saturation of inventory. 

Cat dealers have all been having record years, but yet Cat couldn’t capitalize on it.  They have multiple pieces of equipment on massive back orders, some over 12 months.  Cat is also still trying to dig itself out of the grave the last ceo dug.  He way over spent on a shovel company and I think way over built inventory for certain emerging markets.   

Yeah, I use Deere as my equipment play, it can and will move along with CAT, but doesn't seem as volatile. I've had it for 20 years, so my kids will be the ones getting out, lol.

The local CAT here in Jonesboro has so much inventory, I always wonder who floor plans them. The JD guys get their inventory for free for a period, and then it starts hitting them in increments, increasing over time, I assume it runs the same for CAT.

Part of the Cat agreement, all inventory is paid for!  Haha now that really will make your head spin.  Cat dealers do not floor plan equipment, which is MIND BLOWING to me. Riggs (Jonesboro Cat) will not have any equipment (cat or allied equipment or their other ventures like spartan etc) on their lot unless it’s paid for. 

Deere runs specials from time to time, but industry standard is 6 months interest free on floor plans.  Deere made a huge push in to compact construction equipment (mini x and skid steers) a few years back and would give dealers 12 months and some other programs like that. This way they could build up more inventory to compete with Kubota dealers and cat guys who were flush with inventory. 


Good info here by all. Interesting towards understanding industrial sentiment from a more local perspective.  CAT, for better or worse, has been one of those earnings calls that I've put an ear on since I started getting interested in the market. Their call used to be a great toe in the water for global infrastructure projects, commodity trends, mining, finance/credit, even currency due to their international breadth. I still laugh about their CFO calling 2018 Q1 a "high watermark" last April. It's never good to hear the equivalent of, "we have nowhere to go but down..."
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woodrow hog call

Re: Markets.......
« Reply #236 on: January 11, 2019, 10:28:38 am »

You can probably expect a good steady climb in the markets, and possibly see new record highs with everybody making huge gains,,,,,,,,,,,,,,,,,


because I just turned an IRA into cash.
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Boardon Hamsay

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Re: Markets.......
« Reply #237 on: January 11, 2019, 10:42:25 am »

You can probably expect a good steady climb in the markets, and possibly see new record highs with everybody making huge gains,,,,,,,,,,,,,,,,,


because I just turned an IRA into cash.


Thanks for taking one for the team. I was starting to get concerned based on some more gold miners and very defensive names showing up on the 52 wk high lists today.
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ricepig

Re: Markets.......
« Reply #238 on: January 11, 2019, 10:49:49 am »

You can probably expect a good steady climb in the markets, and possibly see new record highs with everybody making huge gains,,,,,,,,,,,,,,,,,


because I just turned an IRA into cash.

That is good to hear, much appreciated.
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snoblind

Re: Markets.......
« Reply #239 on: January 11, 2019, 12:33:56 pm »

You can probably expect a good steady climb in the markets, and possibly see new record highs with everybody making huge gains,,,,,,,,,,,,,,,,,


because I just turned an IRA into cash.

My horror story goes back to 2000.  Worked for a small, privately owned company that was sold so the 401K was liquidated.

Set up an rollover IRA at Vanguard, and since all of the funds had worked well in the 401K over the years I bought the same ones at the height of the market (obviously having many less shares in each fund).

Then the crash. 
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HawgWild

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Re: Markets.......
« Reply #240 on: January 11, 2019, 02:49:25 pm »

I've had 2 stocks in my IRA do a reverse 1 for 20 split and then drop below $1pps. Can't write those losses off. Do I win for dumbest investor?
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ricepig

Re: Markets.......
« Reply #241 on: January 11, 2019, 03:14:07 pm »

I've had 2 stocks in my IRA do a reverse 1 for 20 split and then drop below $1pps. Can't write those losses off. Do I win for dumbest investor?

I don't know, I've been holding on to my Windstream for when another stock goes all cash/private, I've sweated it a few times, lol.
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HotlantaHog

Re: Markets.......
« Reply #242 on: January 11, 2019, 03:44:40 pm »

I've had 2 stocks in my IRA do a reverse 1 for 20 split and then drop below $1pps. Can't write those losses off. Do I win for dumbest investor?
You can write them off when you sell them... Everybody has losers -- even Warren Buffett... Says nothing about how you are doing overall.
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HawgWild

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Re: Markets.......
« Reply #243 on: January 11, 2019, 04:13:21 pm »

You can write them off when you sell them...

I don't think you can in a Traditional IRA. It'd be nice to be wrong.
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McKdaddy

Re: Markets.......
« Reply #244 on: January 11, 2019, 09:56:06 pm »

« Last Edit: January 11, 2019, 10:29:05 pm by McKdaddy »
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Boardon Hamsay

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Re: Markets.......
« Reply #245 on: January 14, 2019, 11:02:02 am »

The lastest revised 2019 earnings growth projection as of today is down to 6.4%.  I think they still have around 2% more downside to go. If they land in that 4-5% growth range, the resulting S&P 500 multiple based range between oversold (<14x) and overbought (>16x) is 2300 and 2650, respectively. The market tends to overshoot both ways so the actual range may be more in the 2260 to 2680 neighborhoods.

The downside concern I have is if we are to retest previous support around 2350, we won't have that pension fund rebalancing volume coming in in mass as we did at the end of 2018. That would be more of a quarter end reconciliation. Technically, strong support should come in at 2350 but declining sentiment around earnings may pressure lower lows short term. Minus a trade deal, it's hard to see a really consistent breakout above 2600 because the forward P/Es start to get above 16 and sellers prevail.

I'm hoping for a sideways-ish "let's digest the first earnings reports" kind of week as opposed to more volatility based plunging coming back into play. I can't figure out where the pundits calling for the S&P to hit 3000+ this year are getting those levels....  ???

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HotlantaHog

Re: Markets.......
« Reply #246 on: January 14, 2019, 11:35:00 am »

I don't think you can in a Traditional IRA. It'd be nice to be wrong.

No not in an IRA, misunderstood.
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HawgWild

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Re: Markets.......
« Reply #247 on: January 14, 2019, 03:05:17 pm »

Yep, 4 years of IRA contributions, vanished.
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BENTON PIGGEE

Re: Markets.......
« Reply #248 on: January 14, 2019, 04:59:00 pm »

I nearly wiped out a rollover IRA account learning to trade options. Shoulda practiced with paper trading.   :(
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je100

Re: Markets.......
« Reply #249 on: January 18, 2019, 09:47:05 am »

Boarden, Hussman uses "profit-margin adjusted cape" to normalize earnings in his valuation calculations.  What are your thoughts on his methodology, and is this any different than Shiller's? 
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