CNBC it is not 1982

[selkirk]

I only watch a few minutes of cnbc a day, maybe less.

for the most part critical of CNBC however their documentaries are good, at least some of them are....house of cards, cruise inc., McDonalds, ect.

not all are good but for the most part they do a good job and hopefully they produce more...

during the day try to avoid the station, however saw two bullish guest, ( not many bears, and when they do they are ussually shouted down by four or five other guests, hosts)

anways one guest compared this time to 1982. and the great stock market run, we would enter.

I believe we are going to be in a trade range. (did not catch his name).

here are some of the differences from 1982 this applies to the US.

1. taxes, in 1982 taxes would start to fall, that is over, taxes will be increasing.

2. govenrment spending under both rep. and dem. are rising quicker than the rate of inflation. in fact if someone offered me a bond that would be tied to government spending over the rate of inflation...would take it. that would be a great 10-30 year bond.

3. DEBT saw a documentary it was not that good, called 12 trillion and counting...the debt is a larger percentage of GDP than in 1982... and it is growing.
a problem but not a crisis, however that may change in a few years, if it continues to rise at the annuall pace.

4. programs, from the 12 trillion doucmentary they talked about a new program and expansion to some federal health programs, medicade ? anyways with an aging populaiton the costs and how much of the total budget this will take up in 10 years is....alarming.....

5. state and city debt, there is always one state that is a basket case, however there seems to be a large number of states that have a debt concerns.

6. limited tech revolution: technology changed the economy and society, a great deal...consider most people did not have a computer in their home, email, cell phone, ect.

there will always be some, but probably not any more than in 1982, the start.

it is simple, either the economy has to grow quickly, and govenment spending has to be controlled, chance are taxes will also be higher.

hard to see the next great bull start here, probably more standard returns (historical).

thanks
selkirk

 

[DOGS THAT BARK]

I certainly agree Kirk--

I can see no correlation to 1982 whatsoever and doubt we ever see those times again.

Within the next year or so we will reach an unprecedented occurance--the federal tax payor will become a minority-- an unbelievable step from the ole 80/20 standard--
--compound that with a gov expanding at unprecedented rate and thats a pretty tough combo.

I only see two choices
--print money and expand debt until the $ is worthless.
-Or tax the hell out of the minortiy tax payors and corps--

--don't like either option

 

[DOGS THAT BARK]

Thought this was interesting--especially list of those doing the selling.

http://seekingalpha.com/article/156048-insiders-continue-to-sell-sell-sell?source=article_sb_popular

Insiders Continue to Sell, Sell, Sell

We have to send a tip of the hat, to ultra popular finance blogger at Zerohedge.com for alerting us to the huge number of insiders who are selling off stock in their companies.
We have noted this sort of activity over the last few months and it appears that corporate insiders are selling with increased fervor. In late April (Insiders Are Selling Into the Rally), insiders were selling at a rate of 8.3 times the amount that insiders were buying. When we revisited the issue about two months later in June (More Evidence of Skepticism from Insiders), insiders had become even more bearish as they were selling at a rate of 9 times for each insider buy.
Now, we are nearly two months later and the ratio of sellers to buyers continues to expand. In the last week, corporate insiders sold 13.6 times more than insiders bought according to information compiled by Finviz. In terms of per transaction value, the sellers are being more aggressive than the buyers as well. Of course, this is not necessarily a sign that the market is about to falter. However, it is always interesting to see what the insiders are doing because they are some of the very most informed investors. Management may be sounding an optimistic tone on many conference calls, but actions speak louder than words. Clearly, the trends are suggesting that stocks are overbought right now, and insiders are lowering their exposure to risk.
Click here to get a graphic of the recent transactions. Interesting to note, that three of the ten insider buys from last week were from Bank of America (BAC) and Citi (C).

 

[selkirk]

insider trading is an interesting item to look at, and over time can prove correct. though sometimes a long period of time can pass, months, years.

ie. Nortel which is now bankrupt, an insider acutally shorted the stock and later sold all of his stock... that was given to him in 1997/1998 (saved the paper).

it was explained that he was going to be given stock so this was just selling it earlier than he normallly could. more like he has so little faith he did not want to wait 3 months.

anyways this scared me though the internet came, and Nortel, Cisco, and dozens of other networking stocks saw their values go up 300-500%. in a year or two.

though the insider was wrong at first in the end he knew what he was doing. should have re read the artcile in early 2000, still made money, but could have made much more.

how much management owns, is very important which is often overlooked. you have insiders that sometimes have next to nothing invested in the company.


should also note : read an article on how high margin investing is; though has come off of its peaks, it is still higher than in 2007 which was until then an all time high.

this probably means (not that the market will correct) though when it does; market corrections will be more violent than in the past.
similar to the most recent sell off.

thanks
selkirk

 

[DOGS THAT BARK]

--update on insider trading--per article above in April insiders were selling at 8.3 over buyers--if this article is correct last 4 months has increased to 30.6..

--my thoughts while earnings have surprised almost all have achieved by reducing payroll and cost as they have done so with reduced revenues and uncertainty of gov regs coming down are making those in the know--very nervous and rightfully so.

update
http://seekingalpha.com/article/158926-pace-of-insider-sales-continues-to-escalate

We have noted the fact that insiders have become increasingly bearish over the last few months, and each time the extent to which the sellers have outnumbered the buyers continues to rise. Today, a press release from TrimTabs Investment Research shows that insiders are selling at a pace not yet seen; insider selling is 30.6x greater than insider buying! This is the highest ratio on record since TrimTabs began tracking this data in 2004. Furthermore, their data reveals that insiders have sold a record $105.2 billion worth of stock in just the last four months.

 

[selkirk]

read the same articles DTB insider trading is very high, hope for a small pullback.

my three main accounts (do not count my drip/spp portfolio since that is long term and buy and hold for the most part).

the largest account is all in cash except for two stocks, I have written an equal amount of puts and uncovered calls, however trying to buy some stocks but even after put the highest bid, some of these would rally sharply.

2nd largest account and the best performer by far is all in the market with some covered calls, which at the time were sold at 20-30% higher levels, and most of them are in the money, or close to it...
this account will also have a large cash component in oct.

3rd biggest account has only a few holdings, actually own the one ag stock that has not moved VT (on Toronto) and AGU which has done well. basically flat for two years.

this fall will see the direction of the market, believe we will trade in a range, and slowly to the downside, however in a range.

that just might be a wish because I hate to have a high cash position and would like to buy some stock that go on sale even briefly.

will post though the cdn. banks posted very good earnings, it started with BMO and then continued, they all rallied over or around 10%, some of the that was given back as the week went on....

still will add to these on a pullback.

did buy bns at 45.39 cdn. on Tuesday and wrote a 46 oct covered call for 1.65 (will also get the div),

went to over 48 ( should have forgot about the call, ) but has since fallen back to 46.40 cdn.
the trade should work out.

thanks
selkirk







thanks
selkirk

 

[DOGS THAT BARK]

I always look forward to your take and methods Kirk.

My positions have not changed much as still in defensive mode.

I adjust stops and and try to lock in gains and avert losses. Adjusted them a little tighter than usual this weekend--because I always get bad omens in Sept and Oct--not a very scientific approach

I did put about 25% of cash in TIP and wonder what your thoughts are on that?

 

[selkirk]

TIPS are a decent/good place to park cash. not sure I would have 25%, however much better than simple t-bils.

for fixed income would look at tips, (any government debt would be short term), corporate debt (be carefull), preferreds also offer value but will often trade in line with equity markets so may get better buying opportunity.

do not expect inflation to bolt higher however it should slowly climb higher over time. how inflation is tracked is also a very interesting story....

actually heard an interview with someone (missed most of the info)
anyways believed he complied data since early 90s 91? and sept was a down month.

october was actually up but just slightly and then better returns until the end of the year, nov. higher and december higher than nov.

the summer was in general a bullish time, ie. starting in may and increasing until fall.

should note: the differences in the months are not large -2% to +5% often not even that much.

in the fall people are back from holdiays, also people look closer at their holdings, ect. and volume will pick up.

the market has had a good run so would expect a pullback...

however some of these companies only have to beat depressed numbers and they rally.

expect the market to trend lower, though that may just because I have so much cash on hand and would like to get some stocks, cheaper...nothing new there....lol.

thanks
selkirk

 

[DOGS THAT BARK]

Thanks as usual Kirk--Just wanted to clarify the 25% in TIPS- it is just 25% of cash position in SEP not 25% entire account.
I was getting tired of getting next to nothing in cash position each month--maybe I should have more patience.

Ditto with you on looking for bargains on next pull back. It kinda takes the bite out of market drops as it adds a positive element also.

Have list of bout 25 stocks that I have followed for length of time and am familiar with and generally have been trading them back and forth--maybe I need to expand my horizons--
Would like have bout 75%of stocks in the div paying catagory by time I'm 62 (2 years) if possible--but expect next 2 years to be extremely volitile.