The bears are the market's black swan!

Where did we hear that before?

Before we answer that, let's ask where we heard that today? Wasn't it from the bearish, but highly readable Zero Hedge?

Here's what ZH had to say today:

The curveball: Now VIX is directly correlating with stocks. Last time that made sense was, well, never, even though it happened just over a week ago. The Black Swan reverse migration is the market melt up this time around.

That's the definition of a black swan? According to "The Black Swan" author, Nassim Taleb, it is this:

First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact making it explainable and predictable.

• Rarity
• Extreme Impact
• Retrospective predictability

I guess we now have that here, on this blog. Because wasn't this not said?

Those that missed the bottom, or don't know why stocks are going up, come up with clever and sophisticated reasons to explain why the market is wrong. Just like a lie. The truth is never complicated. But no one on Wall Street seems to be able to say "I was wrong" or "I missed the bottom." Instead, we get stories like these.

From the same people, who missed the bottom, and have a self interest in stock prices coming down, because they missed it, or are short!

And if only one of these quants funds is up since Marth 9th, how much firepower then, is on the sidelines, who will soon be forced in?

And that my friends, is the black swan event that the bears are missing!

And of course the bears can't recognize it---because the bears are the market's next black swan!

It's good to see that this black swan, as advertised here now has its restrospective predictability!

It did have its rarity. I didn't see anyone else touting this market.

But it still hasn't had its extreme impact.

Because we are just getting started! After all, we're heading to new highs next year!

As advertised!!!

Mr. Softee misses, AMZN sells off

MSFT: Won't get worse, but won't get much better

AMZN: Instead of the margin noise, let's look at their acquisition of Zappos. I don't have my Goldman research in front of me, but from this morning Goldman said that AMZN will be able to save $1 per order on shipping, the average ticket on Zappos is $130ish versus $25ish for AMZN, and that Zappos net will be about $20-30 million. That's the story on AMZN, not tonight's margins.

Cramer on his show told people to take some profits tonight and buy a sweater. But then he said tech was going higher. Anyone want to have it both ways?

Here's what Richard Russell of the Dow Theory had to say today:

But next question, did the bear market hit bottom on March 10, 2009? I am doubtful. First of all, valuations on March 9, 2009 did not come anywhere near the typical valuations seen at major primary bear market bottoms -- nor did price earnings ratios for the Dow or the S&P come close. At a true bear market low, the sentiment is beyond bearish, it is total revulsion. At the final bottom, people don't want to hear about Wall Street or stocks. They've been too badly battered, and the losses have been too upsetting and frightening.

Today, just four months after the "supposed March bottom," the public is turning bullish again. At the March 10 low, Lowry's Buying Power Index stood at 96. Four months later, on July 10, Buying Power had dropped to 82. Never in the 78 year history of Lowry's has Buying Power fallen to a new low following a perceived market bottom. In other words, Buying Power now is lower than it was at the March 9 "bottom."

Which means that this after-hours selloff is just profit taking by nervous folks.

And it means nothing.

Weisenthal eats crow

I've outlined how Joe Weisenthal at Business Insider has been slamming the earnings reports. Today, with the DOW at 9,000, he comes up with a different tune:

Judged solely by market action, this has been a stellar earnings season so far.

What was that?

It's just another bearish Pied Piper!

To get hits, you need to get bullish!

Bears starting to panic!!!

And oil starting to ramp!

Wasn't that advertised?

I'll do my best to yell "Fire" in the crowded theatre of shorts!

Because isn't that what these folks did, when we were breaking down?

Dow 9,000--Just a baby step!

Dow 9,000? How about 44,000?

SPX 965? Bears thinking we are exhausting ourselves? Maybe they should try 4,444.

You think that is ridiculous?

Maybe you should re-read what was written on March 12!!

Thursday, March 12, 2009

Wall Street's recovery

It's the bull market of the beast.

The low in the S&P was 666.

The low in 1982, on the DOW was 777 before it's 18 year run.

And when the market crashed in October of 1987, to the high in 2000, the S&P had moved 666%, and it took 3,141 trading days (pi).

So let's take the S&P low of 666.666 X 666.666% and we have a target of 4,444 in the S&P.

Since I was born at 4:44 AM, on this earth that spins around the sun at 66,666 miles an hour, I'll take those numbers.

But no one else will. The bulls flip to bears when the market stalls, just like a sober alcoholic goes back to his drink.

The bears can't go in the bull camp because their positions are contrary to it, and so is the news.

And like an alcoholic, who thinks a drink will make him feel better, they go back to their shorting ways, not realizing that the punch bowl for the bears has been taken away, and the market is on the road to recovery.

So I threw in some math, that only someone with "wet brain" would appreciate.

The market just got it's white chip.

It's not going into relapse yet!

The green chip comes in 90 days.

And that's when the bears will sober up!

What happened to the cheap homes?

Only a six month supply of homes under $250,000.

Wait--That wasn't supposed to happen! Didn't the bears tell us that?

And the SPX. Why is that breaking out? I thought we were supposed to rollover?

And the NASDAQ--up for the 12th day in a row. That wasn't supposed to happen either, wasn't it?

It's all HFT! High Frequency Trading.

Oh. Gimme a break.

Stocks are cheap, and every day, we have the dumb downed folks telling us otherwise.

We aren't rolling over, and we'll be at all time new highs next year.

So deal with it.

And get out of denial.

And speaking of that, it's time to buy Blue Nile (NILE 46.81) again!

Love is in the air!

What happened to the concrete stocks?

After all, they were only touted here just 10 days ago.

VMC 40.60, now 44.42
EXP 22.72, at it's monthly low, now 27.77, at it's monthly high.

As advertised!!

500,000 new stock accounts in China in less than a week

Spectacular gains for Shanghai stocks and a blazing resumption of initial public offerings have enticed nearly half a million novice Chinese investors to open trading accounts in less than a week.

The arrival of what some analysts are describing as China’s “post-crisis investor herd” is expected to add yet another layer of volatility to mainland stock markets where retail share-pickers account for about 70 per cent of turnover and ownership.

What did you expect the Chinese to do during market hours?

The swimming pool is already full!



And Wall Street doesn't think that Macau will heat up again?

It's time to throw the dice on the casinos, with the Macau IPO's!

MMM rocks!

$1.20 versus .94 estimates.

On my DOW piece Sunday, I had a year-end target for this number at 77. It's now on its way!

Wait--maybe Joe Weisenthal will come out with another hack piece, saying that sales are down so the market is going to hell! And he calls sales earnings!

Why doesn't anyone call him out on that? Didn't the world call Obama on March 3th when he said the profit earnings ratio? The bloggers had a field day with that.

Did it mean anything?

It was the same a few days ago, with the $23.7 trillion figure bandied about, that supposedly our Fed was on the hook for. That is, only if we have a nuclear explosion of the earth, and no-one is left!

Just meaningless drivel.

These blogs are like the toilets in China.


They're four star, but it's just a place for sh*t!

Garmin poised to break-out?

On January 6, Goldman put out a conviction sell on GRMN when it was 20. I highlighted that piece here. On April 30, with GRMN at 25, Goldman raised it to a sell, with a target of 15.

Yesterday, it finally broke out of the channel it has been trading in. GRMN doesn't report earnings until August. The stock is still a sell by most firms; two weeks ago the NY Times said that the iPhone compass will displace GRMN, and that it will soon go the way of the tape deck.

So why then, is the stock on the cusp of a breakout?

Maybe because the NY Times can't read the tape!

Goldilocks spotted on Wall Street

11 straight daily gains on the NAZ. Maybe it's just chance!


8 straight days of gains in China. Chance or Goldilocks? The bears think we are in an "Alice in Wonderland" moment but they've got the wrong girl!

Revisiting some low priced numbers

A few weeks back, I was eating with the greatest Seminole politician in the country at Houston's, and we were talking stocks. He had bought some HGSI at 2 and change. I told him I liked it, but I didn't have a position.

He did.

And he scored.

Biotech gives you huge scores when they work. Look at what BMY did tonight.They decided to buy Medarex (MEDX) at 16, for an 88% premium. Some people kill to get a stock like that.

Now the reason that I didn't buy HGSI, was because last year, I had OGXI--It was my "biotech stock of the year."

I touted it at 3.68; it's now $25.87, after raising money at $20.

But I didn't hold it. That's biotech. Which is why I didn't buy HGSI. And which is why I didn't "advertise" my pick of OGXI after it made an 800% move!

And which is why I congratulate anybody that wins in biotech. Because sometimes you have to have the patience of Job to score.

But when news is good, does anybody else notice how these stocks eerily anticipate the good news that is coming?

Anyway here's the tout that gave me biotech frustration.

It's my cathartic response to get over it, because it's time to get back on the biotech bandwagon!

Monday, October 6, 2008

Biotech action

ImClone gets swallowed up for $70 in cash by E.I. Lilly, and Dendreon, (DNDN 5.25) a favorite stock of the shortsellers, will announces it's intermin Phase 3 results for PROVENGE, it's prostate cancer drug today at 9:00 am.

If the results are good, this number could skyrocket. If not, it seems they have at least tried propitious timing with their news release.

If we get good prostrate cancer news today, then traders will probably take a look at this very thin and very small microcap company Oncogenex Pharmaceutical (OGXI 3.68), which six weeks ago, was fast tracked for their metastatic prostrate cancer.

Berkshire touted on MSNBC

Here:

One fan tells Barron's that the stock could top $110,000 in the next year. If so, it would trade for roughly 1.4 times our estimate of book value in 12 months: $80,000 a share. That price target doesn't seem outlandish in view of the projected price-to-book-value ratio. In a better economic and financial environment, Berkshire might even trade up to $125,000 a share, implying a multiple of book value closer to the 10-year average.

Cheaper shares even cheaper?
Berkshire's class B shares, worth about 1/30th of the A shares, fetch about $3,000 each. The B shares look like an even better buy than the A shares because they sell at a 2.5% discount to their theoretical value. But the discount has persisted for some time and could continue, as the B shares can't be converted into A shares.

The cheap seats

Check out A.H. Belo (AHC 1.40) a stock that I'm in at .94 and have advertised on the comments section. Media General (MEG 4.33) was up 84% today; AHC reports Monday, and you should get a two handle on this before earnings, as a sympathy play on media.

Private equity is also sniffing around the company, and none of those players seem to be able to keep their mouth shut.

The health care play

Obama is touting his health care plan tonight.

Which means you'll have a tough talk on health care, but nothing will happen, just like we had tough talk on the financial companies, and nothing happened.

The March 18 calls on PFE are at .66. They look like a good play.

And in managed care, the September 29 calls on UNH at .55 look like a good spec on Obama's failure.

And in devices, I like the MDT Nov 37.5 calls at $1.10.

After all, didn't health care companies just spend $127 million in the first three monyths of the year lobbying?

Goldman buys back TARP warrants

Goldman anted up $1.1 billion to buy back the TARP warrants, and heralded this news in a press release because they decided not to screw the taxpayer:

"New York, NY July 22, 2009 - The Goldman Sachs Group, Inc. (NYSE: GS) announced today that it has redeemed the warrants the U.S. government received in connection with its investment in the firm through the TARP’s Capital Purchase Program at $1.1 billion, the full value the U.S. Treasury Department has determined.

While there are a number of ways to value the warrants, including through a public auction, we believe that in the context of the extraordinary actions taken by the government to help stabilize the financial system, this valuation of the warrants represents full and fair value."

Just a few days ago, Goldman said they were going to pay $600-650 million to buy back the warrants.

Huh?

12.2 million warrants with a strike price of $122.90, with ten years?

The January 2011 LEAPS, with a 120 strike are selling at 53.25. That's $650 million, and the taxpayer has another 8 years, yet Goldman's models valued these as equivalent?

So today, they paid the market price, and for the extra $500 million, they drummed up a press release, because for the first time this year, Goldman had to play by the rules.

Which just means that when oil gets to $67, Goldman will put out a call pimping oil higher, so they can make up the money elsewhere.

And once again, ride the taxpayer's back!

The new straw man

OMG! Sales are down! Look at what The Business Insider trumpted:

"Folks, These Companies are Missing Earnings"

That being said, we can second-guess the media, which is kind of banging on this signs-of-stabilization-green-shoots drum again, with respect to earnings. The problem is, earnings are crap.

And then, they quote another blog.

Who cares? Who writes this stuff? Stocks are going higher! Does this make you any money?

None.

Nada.

Zero.

So what is the purpose of putting out these headlines?

Well, what is the purpose of these blogs, writing doom, and costing you money?

So top line growth is the new "fearful straw" man.

OMG! Just get me a match!

Because this talk is like a fart in a bathroom.

Just light a match, and burn it up!

Sandisk on Deck

Sandisk reports and the simplistic explanation is that its the play on Apple.

On their last earnings report, SNDK said they saw firmer pricing.

Or you can do your own pricing channel checks here.

The latest earnings

What's the difference between a photoshop and some of these bank's earnings?

A photoshop is easier to detect!

And you don't mind looking at 'em!

Obama's health care program

We'll hear about it tonight in a prime time news conference.

His result will probably be like the last person that decided she would change health care.

So she just switched sides.

And used the Dr.'s to help her look better!