Green Shoots, GM Ford, cdn. mutual funds costs

[selkirk]

Green Shoots, have heard this term daily, many times. have not watched CNBC this week, however they ussually mention it about 5-10 times and hour.

so is the economy in recovery, it no longer seems to be going off of a cliff. however the last retail numbers were down .4%.

the more important number is that unemployment. heard the term green shoots when the numbers were not as bad as feared. still unemployment in the US is climbing and may hit 10% before it stops...(have to see).

anyways unsure of the market direction, however the market is betting with these valuations that we start recovering and grow in late 2009 early 2010. time will tell, may be one hell of a bear trap.

have a large cash positon and have sold puts on stocks (that would not mind owing at much lower levels.)

gold and energy are working well, and so is ag stocks.

GM is going to zero, however Ford has done many things better than Chrysler and GM, not sure why it was over 6 and almost 7. now at 5.26, though it may rebound with the market....would not hold it....sales projections seem very rosy. so will avoid Ford, to much risk for me.

GM and Chrysler made news of cutting dealerships, what shocked me was how few new cars some of these dealers actually sold.

this move should have been done years ago along with trying to get costs down.


MUTUAL FUNDS F

was a study of mutual funds and compared them in different countries.

16 countries Canada mutual funds were average in perfpormance, however scored an F on fees.

the average MER for an equity fund is over 2%, (often around 2.50% or over).

if you buy into a fund that charges you 2.5-3%, well good luck, you may need it.

there are seg. account that almost charge 4%...again good luck....

thanks
selkirk

 

[DOGS THAT BARK]

Thanks for views Kirk.

Basically thinking along same lines--but bit more pessimistic. Think it is inevitable unemployment reaches 10% equalling lower tax revenues compounded by spending and decline of $ and inflation. Hope I'm wrong but taking defensive posture best bet IMO.

Have weighted cash position also--and can't say I can't remember when market has treated me so well for absolutely no fundamental reasons as past few months--rare to see market increase because news is bad but could be worse. Normally would be disappointed that not more fully invested--but this time around--just thankful for funds recouped with smaller stock positions I had-and will probably increase cash position in near future. In fact getting ready to switch SEP from Ameriprise to Ameritrade and considering liquidating stocks before transfer in fear of no stop losses during time period of transfer.

I certainly wish I had listened to you on gold back when it was around $800. I always miss the boat on gold--by time I consider it-its always around highs and I pass.

Ditto with you on commodities and Ag.Have mostly commodities and an ag stock FEED that I got extremely lucky on-catching it at near bottom.

Speaking of commodities--decided to use them indirectly as hedge against againt inflation and fall of $ we discussed last week. I bought small position in Australian $ (FXA).

Thought it would be more conservative and with their natural resources should work as hedge.
--any thoughts on that play?

 

[selkirk]

FEED was a great play DTB, I owe a small amount at 5.10 avg. price...today it is up to $6 up 17% amazing...

great play low was .90 high 17.07, heard about this stock again and again at around 2.50-4...of coarse I watied and paid more...main reason bought it was the short term strenght...

have bigger holdings in agu and pot...these have both done great but not near as well, today they are up .8% and 1.22%... if the market advances the ag stocks will follow and should be the leaders...have done so far...

same for energy as for gold it will trade in a range, my yri is doing good but there are many other just as good. options are great on gold stocks so have wrote 3. so far, every time bringing my cost down 1-1.50 depend on the option.

gold will not break out, so you may get another chance, my covered calls are close to the current prices.. and some are 10% higher...25% of my golds (stocks) do not have calls against them.

FXA is not a bad way to get exposure to resouces and diversify away from the US dollar...would not make it a big position but not a bad way to do it...

mer is .40% and decent volume, also yield over 6% is good.

if resources get smashed then this goes down, however if they continue higher this holds its own or goes higher...probably...so good hedge for US dollar.


my thoughts on the market.

the market sees in the future, so it believe we will recover going into 2010.

bearish case and bullish case

bears

rising unemployment, 10% plus could be on the horizen.

govt.spending and rising debt, means taxes will be raised,...or the spending cut, at a certain point both would have to happen...

housing prices are still fallling though not as much, still in decline.

the large US financials and int. banks have dilluted shareholders 25% or more, and have sold off all of the good assets. they are now more heavily regulated...low growth more shares.

valuations are not cheap, unless there is a recovery.


Bulllish case.

the market goes up on bad news, or ignores it and stays flat, this is very bullish. small caps and large caps that beat the market are now going up 5-50%, incredible gains. before a few months ago in the bear, the stocks would ignore positive and drop on earnings that mathced or slightly off.

the money governements are spending for the most part have not hit the system.

resources, are cheap, it is true, some companies may never trade this cheap again...given a recovery.

housing prices are falling however not widespread, and the decline may be coming to an end, in 2009. stable prices.

money is cheap, the credit makret are improving and now debt issues that would never see the light of day are getting done, even at cheaper rates than thought a few weeks ago.

money on the sidelines, there are trillions of it..

thanks
selkirk

 

[selkirk]

DTB one point though I bench mark my portfolio against mainly the Toronto market and one against the SP do not worry if I beat the index.

actually heard one adivsor say that his funds loss on avg. 30% however at the time his rivals loss 44%. so he outperformed the group..... great. if I owned the fund could be happy in the 30% loss.

many people chase rallies and then get killed. if the market shows strenght would slowly get in, or probably sell put options at prices that would like to enter the market...prices (premiums are still high)...for now will not last if the bull continues.

I know people who got killed at the end of the tech cycle or loaded up on all oil at 140 ect.

we all miss some great recoveries just never chase.

if the market went up 20% and I only made 10-15% would not be happy however that is still a good gain,...maybe satisfied.

thanks
selkirk