some companies I follow and own posted earnings over the past week, and it did not really matter, all of them beat, and very few negatives.
in this market people are selling and not worrying about the earnings.
case in point yamana gold, yes I own this one since 2008, have covered calls on it at $12 (well 75% of the position), they beat estimates and produced 10% more gold than expected. stock popped to 13.81, 13.99 and then fell back to 12.89 -.39 on Toronto (also trades US). stock is cheap, however gold stocks are not moving so have sold call against them. if someone told me gold would double in 2008 and these stocks were up 30% or less would never believe them.
I have a great deal of cash in my two main account the third one have long positons and covered calls on all postions.
thought the bickering in the US and the summer, would mean the market would drift down lower until they got a deal....thought the market would rebound a small amount on a deal annouced as long as it made sense.
what really scared the markets is
1. the GDP numbers in the US and the revised numbers were bad, there is basically no growth.
2. also there are far more bad economic data coming in than good.
3. Europe: pick a country, not worried about Greece, but Portugal, Spain, Italy, (could go on)
the bonds always tell the truth and that should scrare the market.
Positives
1. cash, there is a great deal of cash on many companies balance sheets.
2. the credit markets are still open, if you have a company that has not cashed up the balance sheet at these rates both short and long they are idiots.
I beleive there is a good chance of QE3, but they probably will not call it that.
love many resource stocks but have sold or have many options against postions...., they have gotten thrashed and the worse may still be coming.
will not look to buy at the bottom will get a list of stocks I have always wanted and will wait, many still are not quite in the buying range.
gold will sell off if there is more carnage, if it gets really ugly people will sell their winners to raise much need funds.
if the sell off continues will look at the same things I did in 2008, yield. corporate debt spiked higher, and was a great time to buy....not sure it will get that bad again...., but like to be higher in the food chain. high yield debt had very good returns off of the bottom.
reits 8%+ or higher, and debt.
note: the US will have to grow at 2.5%-3% or they will have to raise revenue....time will tell.
finally in 2008 should have played some options 10-20% out of the money when the carnage was at it highest, and people were terrified, (including myself...at least a little.)....near the bottom have to think binary, sometimes in a bear market long term options can get very cheap....
binary because you make mulitples or lose the small amount invested...we are not at that stage yet though..
thanks
selkirk
