Skip to comments.Investment & Finance Thread (Mar. 30 edition)
Posted on 03/30/2014 5:37:23 PM PDT by expat_panama
This is the thread where folks swap ideas on savings and investment --here's a list of popular investing links that freepers have posted here and tomorrow we'll go on with our--.
Open invitation continues always for input on ideas for the thread, this being a joint effort works well. Keywords: financial, WallStreet, stockmarket.
Year to date trends with stocks'n'metals--
--along with 'end-week' articles:
Amid signs that many technology and biotech stocks may have peaked -- the Nasdaq fell 3 percent last week -- markets will look to this coming Fridays U.S. March employment report for support. The rout in tech and biotech stocks last week has some investors worried that a bubble has indeed [...] Forbes
This Fool sees a limb to go out on. And another. And another. Motley Fool
Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday March 28 . 11 Things to Watch In The Week Ahead: CarMax ( KMX ), Monsanto ( MON ), Buffalo Wild Wings ( BWLD ), Micron ...Seeking Alpha
financialsense.com — pro NYSE, anti-commodity
Head start ping!
[adding to list...]
Looks like 60 minutes might be worth a looksee tonight. Wyatt’s Torch gave me a heads up. It,s on a book coming out “Flash Boys” about high frequency trading and a piece on Elon Musk and SpaceX.
For me that's a great balance between return/volatility, but of course that's a choice only the individual investor can make.
This weekend I was looking at stock strategy screens and came across http://www.aaii.com/files/PDF/9143_2013-Stock-Screens-The-Year-of-the-Bulls.pdf (it came out last November) and in it is this--
--which means (for example) using the "Piotroski: High F-Score" stock screen has typically been able to yield almost 32%, but that means putting up with an occasional 42% loss in one month before the high returns kick back in. Not everyone's willing to put up with that. I know I'm not. The good news is we got soo much to choose from all we have to do is decide.
Abi, the thing to remember with those returns is that 15%/year means you double your money every 5 years --that means if Catfish began in '83 w/ $100 and never spent a penny, then he's now got $25,600 because that's 8 doublings.. otoh, using a more aggressive strategy at say, 30%/year, it means he would have gotten 16 doublings, leaving Catfish with $6,553,600 and a stomach full of ulcers...
Unfortunately this is past my bed time, but please let me know how they show it. What I'm seeing is the loopy-left press is using flash trades and yet another excuse for more mindless laws against investing. A quick google shows we got a lynch mob forming that includes our favorite drive-by's: Bloomberg, CNBC, CBS, etc. etc.
It's a controversial hot button topic, but I can tell you for a fact that flash trades add to profits.
The part that I don’t like is that when the regulators do something about it it will be to the small time investors that don’t matter in the scheme of things anyhow.
Thanks. I need as much head start as I can get. I’m hunkered down with SLW and PHYS and (SODA from the 37$ days). I’d like to get more beta but I see flashing warning signs everywhere I look.
When you see all numbers coming from the government appear to faked, you got to wonder what exactly are they trying to hide?
When I talk to someone that is watching banks buy paper that no one in their right mind would buy, by paper I mean consumer loans, you got to wonder what they are thinking. Buying paper that they know will not pay off and will default seems to be a bad idea.
Could it be they are under orders to buy crap paper by the government? Trying to camo a failing economy by papering it over with bad loans till the elections are past?
Lying about inflation, unemployment, GDP, Obamocare signups, these things are obvious to anyone who looks, all to keep the Senate? Or is there another reason, a more sinister one? I wonder.
Wow, sorry I missed 60 mins; sounded interesting.
The premise was these guys know your order and buy ahead of you and fill your order in milliseconds shaving a penny or two on your trade. They say everyone in the market is getting screwed by this. They seem to be pushing a new trading platform IEX http://www.iextrading.com/.
I don’t think it is that big of a deal. As my dad used to say “it’s a lotta do about nuthin”. I found the Elon Musk interview a lot more interesting.
Booyah my ass. Give us an hour of Rick Santelli instead.
Whoa, we got strong positive sentiment with futures traders in both metals and stocks on this first day of the week which is also the last day of the quarter. The new quarter sometimes means that since the biggest trades are by institutions, some times the trades are only made in consideration of how the portfolio list may end up appearing to others. Compounding this is the fact that an increase in misleading action has historically been known to take place on April 1st...
Asian stocks edge up on hopes of China stimulus Asian stocks edged higher in a cautious start to the week on Monday, with investors holding out hope that China would take steps to stimulate its economy.
Draghi Sifts Data on Slack as Inflation Cements Low-Rate Vow 10 hours ago Mario Draghi, president of the European Central Bank (ECB), mentioned slack for the... Read More. Mario Draghi, president of the European Central Bank (ECB), mentioned slack for the first time last month to reassure investors that borrowing costs will stay ...
Wall St Week Ahead: Healthy job growth may calm stocks Moneycontrol.com - 7:11am Improvement in the labor market, along with a pickup in the manufacturing and services sectors, could also bolster the case for the Federal Reserve's scaling back of economic stimulus and put more focus on the timing of when the central bank will begin ...
Naw, you're absolutely right --most pundits have to be taken with a grain of salt but many can't even be taken seriously. My thought was that it's often useful to ignore what they say but know what they're talking about, although I'm definitely a morning person and that makes a Sunday nite post more work.
That's actually very good news. I mean, a flash trade is good for me if it pays me more than I ask for or sells to me for less than I ask. My thinking is that flash trades are good but everyone should be able to do them and not just those with special 'connections'.
Interesting, these past few weeks I've been inserting a beta control into my screens to lower the volatility by setting it at say <1.4 or <2.0. Now iirc there's been controversy over how the beta's being calculated and published.
Cramer is a huckster. He’s the latest version of Dan Dorfman.
Wait till the DC braintrust goes after the “problem”. I can see it now. A bi-partisan group advocating a transaction tax on every trade to alleviate this horrid problem. Sure it will cost you more but think of the “fairness”.
You should watch the 60 Minutes piece. I got Lewis’s book last night (comes out today). The main issue is that the HFT firms are frontrunning trades by milliseconds and driving up the price based on the traders intent to buy or sell. It’s only pennies but they are making them by doing something that if it wasn’t done via technology and measured in milliseconds, is already banned.
I bought the book also. It does seem to me to be a bit of hyperbole though. Saying the entire market is “rigged” I think is an exaggeration. Scaring the general public into staying out of the market over basically rounding errors I don’t think is good. I usually use limit orders so I don’t see how they are hurting me. That’s just my opinion though.
That's an accurate appraisal. During the '08 debates Obama was asked why he favored gains tax hikes even when they lowered revenue, and he said flat out "it's a question of fairness!"
That's what the guy was saying on Rush just now, but it just doesn't make sense. My "intent" simply does not exist until the instant I mash 'enter' and by then it's no longer an intent-order, it's a buy-order. OK, so maybe they're anticipating people's trades beforehand by watching market trends but that's exactly what we're all doing. Finally, the only way they can sneak in and confiscate my order is when they offer me a better price.
That's supposed to make me feel 'cheated'?
NYSE MAC DESK MID-DAY MARKET UPDATE:
DOW 16,465 (+142 points), S&P500 1873 (+16 handles), Brent Crude $107.20/barrel (-$0.87), Gold $1,288.40/oz. (-$5.40)
MARKET DRIVERS: (Stocks are sharply and broadly higher on the final trading day of Q1 as traders react bullishly to comments from Fed Chair Janet Yellen; a disappointing Chicago PMI report and dampened geopolitical tensions surrounding Ukraine.)
Federal Reserve Chair Janet Yellen said considerable slack in the labor market is evidence that the central banks unprecedented, extraordinary accommodation will still be needed for some time to put Americans back to work.
The Institute for Supply Management-Chicago Inc. said today its business barometer decreased to 55.9 in March from 59.8 in February - well below the 66.6 recent-high in October and also failing way short of the Streets consensus of 59.9.
Euro-zone inflation has fallen to its lowest level since late 2009; slipping to 0.5% on year in March from 0.7% in February and undershooting forecasts of 0.6%. The slowdown is likely to strengthen concerns that the euro-zone is sliding towards deflation and could add pressure on the ECB to further ease policy at a meeting on Thursday.
Japanese industrial output slumped 2.3% month-over-month in February after rising 3.8% in January; badly missing consensus for growth of 0.3%.
The U.S. and Russia agreed Sunday to resolve the situation in Ukraine without escalating tensions, but there remains lots of uncertainty.
In what appears to be a very strong final lap for Q1, traders were quick to note that the relative calm status in Ukraine combined with new expectations of further central bank easing in the euro-zone got the Bulls on track for a positive start to the day. However, stocks really put the pedal to the metal about 20 minutes into the session when the text of Janet Yellens speech was released. Here are a few snippets which had the Bulls taking offers and had the shorts running for the hills: There is still considerable slack in the labor market. This extraordinary commitment (by the Fed) is still needed and will be for some time, and I believe that view is widely shared by my fellow policymakers at the Fed, -— The recent decision to slow QE purchases is not a lessening in the Fed’s commitment, she added — “it’s only a judgment that the recent progress in the labor market means our aid for the recovery need not grow as quickly.” One market-watcher called it one of the most dovish speeches ever given by a Fed Chair. While another market dude snidely remarked, This looks like a further attempt to backtrack from the tongue slip in her FOMC statement. Whatever you want to call it, the Fed Chairs comments have helped push the S&P 500 to within 4 points of its all-time closing high. The bottom-line is that employment is nowhere near the level it needs to be, while the latest inflation numbers are making some Fed officials uneasy, too Q1 scorecard update: S&P +1.4% and the Dow -0.67%. Lets call it a quarter of healthy consolidation following a year of ~30% gains One interesting factoid: Investors exited Treasury ETFs by pulling $10.3B in March, the largest amount withdrawn since December 2010 Finally, an earnings note: For Q1 2014, 93 companies in the S&P 500 have issued negative EPS guidance and 18 companies have issued positive EPS guidance. (Just a quick heads-up) Moving on, the Dow remains just off session-highs, and volume is light, with ~230M shares on the tape at this time Internally, breadth is bullish across the board. Advancing Issues: 3175 / Declining Issues: 1044 — for a ratio of 3.0 to 1. New 52-Week Highs: 185/ New 52-Week Lows: 18 Meanwhile, in the trading pits, The yield on the 10-year Treasury note ticked up to 2.743% from 2.712% late Friday. In addition, gold is furthering losses to a near seven-week low A lot of floor buzz about Michael Lewis book and the piece on 60 Minutes yesterday. If you have questions or concerns feel free to shoot me a note. This topic, and the topic of equity market structure in general is right in my wheelhouse Once again, March Madness does not disappoint! Every game was absolutely incredible to watch this weekend Should be an amazing Final Four, and I am pulling for the underdogs Have a tremendous day!
Nope. You actually place the buy order and in the milliseconds it takes to actually process and execute the order the HFT’s are already buying thereby driving up the price and they are profiting on the spread difference.
The guy said they built their own fiber optic line from New Jersey to Chicago that was a few milli-seconds faster than the normal route. In those milli-seconds they buy up the available shares and sell to you at a slightly increased price. I don’t know how they accomplish all this but it looks like an interesting book.
So we'll see...
All of my trades and virtually all exchange trades are limit orders; I see a bid price, I sell at that bid price, and often I see it executed at a few thousands of a penny above that other guy's bid. Same thing with limit sell orders in reverse. What Mr. Flash did was scour the market for a better deal and then he pocketed the bulk of the spread --minus that fraction of a penny he gave me.
First, any way you cut it I end up with more money.
Second, if I really want all that spread money that Mr. Flash is scarfing up then I'm free to move to New York and spend a hundred grand on equipment, software, and a better connection. Given that I've chosen to pass on that option, I'm in no position to belly ache about Mr. Flash's obscene murderous unpatriotic dishonest profits that have been making me better off.
Sure, I wouldn't mind my broker offering some kind of 'flash option' on my account, but I'll first need to know how much in fees we're talking about. In the mean time I guess I got to look forward to next family dinner hearing my socialist brother-in-law tell me that he thinks flash trades are proof that capitalists are dishonest.
--so 812 miles at $21,700/mile = $17.6 million. I want one!
The retail traders like me and you aren’t the issue (I don’t know about you but I’m not doing millions of trades a day). Hedge funds and other institutional traders, not to mention the prime brokers, are being impacted. The 60 Minutes piece had Einhorn on there and he has backed the answer you mention. The RBC trader who discovered the isue has started his own exchange and they rout the trades to the multiple exchanges in NJ to get there at the same time so there is no time arbitrage opportunity. Also they have a mechanism that routes HFT trades through 60km of fiber looped in their facility to slow those trades down. Pretty ingenious stuff.
I love Lewis’s work. Should be a good read.
I guess I don’t need to read the book. They got it all hashed out over here.
Is the U.S. stock market rigged?
60km of fiber looped in their facility to slow those trades down
--but that's not illegal. OK, so this is--
18 U.S. Code § 1343 - Fraud by wire, radio, or televisionWhoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
--and so far nobody's saying that this has happened.
Sometimes when there's a lot of mindless hype, the polititians lean on the AG to harass someone until they can trump up some charge. Typically it involves constant questioning day after day until they find the slightest discrepancy, then the charge is lying to the investigator. That's how they put Scooter Libby and Martha Stewert in jail. It's a politically perverted miscarriage of justice.
99% of the people on that thread who say it’s rigged have no idea what the issue even is. Par for the Free Republic course...
Some of my bestest opinions are totally uninformed.
LOL! I think that’s true for everyone :-)
--and while that last 1% can be worth the lurk the rest is entertainment you can't buy!
So the first quarter ended with modest gains with both stocks and metals --and this morning seems like more of the same at least according to futures traders. A few headlines:
U.S. Stock Futures Point Slightly Higher Victor Reklaitis takes a look at the markets, including three stocks to watch today. Photo: Getty Images. WSJ Live
Should You Be Selling Your Stocks Right Now? If you have a $500,000 portfolio, you should read the latest thinking on the markets by billionaire investor Ken Fisher's firm. Learn more here!
Soda sales in US decline at faster pace NEW YORK (AP) Americans cut back on soda at an accelerated pace last year, extending a slow retreat from the category that began nearly a decade ago. Associated Press
Just how dovish was Yellen's speech? Just how dovish was Federal Reserve Chairwoman Janet Yellen's speech? Economists are emphasizing different parts. MarketWatch
LOL! I think thats true for everyone :-)
Exactly! Somehow an issue seems clear to me when it first comes out but the more I look into it the less I understand it.
CNBC fight between Katsuyama and BATS Exchange President OBrien. It pretty much shut down the NYSE trading floor as traders looked on the debate. Fantastic stuff:
Just the same, all this market ‘fairness’ talk is a crock. I think ‘access’, and if it’s not fraud then it’s ok.
It's fascinating and important stuff if you are a trader/institution that has to worry about 1/10th of a quarter point when buying/selling huge blocks. I'm now a long term investor only looking at 1-10 years into the future. I look at investments, determine whether I am willing to buy/sell them and then place buy/sell orders. I don't have to trade around my position. That's it. Now, this brilliant Katsuyama screams to the world that the "Market is Rigged". I don't like the drama queen ploy he used to sell his book.
First - not his book. Lewis wrote it.
Second - Lewis points out that the retail investor isn’t harmed by the pricing. It’s the large traders/firms that make up 95% of the trading volume.
I thought Katsuyama was very poised. O’Brien was incredibly defensive and belligerent. Borderline hysterical.
NYSE MAC DESK MID-DAY MARKET UPDATE:
DOW 16,500 (+42 points), S&P500 1879 (+7 handles), Brent Crude $106.21/barrel (-$1.55), Gold $1,281.00/oz. (-$2.40)
MARKET DRIVERS: (Stocks are looking strong again today, as the S&P 500 touched a new all-time intraday record high. An increase in the ISM manufacturing index has boosted investor-optimism on the state of the U.S. economy.)
The U.S. Institute for Supply Managements manufacturing index increased to 53.7 in March from 53.2 in the prior month; falling short of the Streets projected reading of 54. Readings above 50 indicate growth.
In addition, construction spending rose 0.1% in February, as expected..
PMI data from China was mixed, with the official gauge, which focuses on larger state-owned enterprises, edging up to 50.3 in March from 50.2 in February. However, the HSBC index, which gives more weight to smaller private companies, slipped to 48 from 48.5. HSBC said that its reading confirms the weakness of domestic demand and that it implies 1Q GDP growth of below the annual goal of 7.5%.
Euro-zone manufacturing PMI slipped to 53 in March from 53.2 in February. The survey indicated that production rose 1% in Q1 and GDP was +0.5%. Meanwhile, euro-zone unemployment held steady at 11.9% in February, coming in below consensus of 12%.
A lot of market factors in our favor today First day of a new month and a new quarter has a solid history of an upside bias as we usually see new money being put to work by money managers. In addition, history also dictates that the month of April is the best month of the year for the Bulls Then, when we got to the floor at the crack of dawn this morning, we saw global markets rallying on hopes that more China economic stimulus is on the way after more disappointing economic data came out of the worlds second-largest economy. Chinas official purchasing managing index inched up to 50.3 in March from 50.2 in February, (small expansion); however, some economists argue it still suggest weakness because activity usually picks up more after the Lunar New Year. Meanwhile, the Markit/HSBC Purchasing Managers Index, which focuses more on the private sector, slid to an eight-month low of 48.0 last month. Look for the powers-that-be in China to make a stimulative move very soon In following, US ISM hit the tape after the opening bell and was cheered by traders; pushing the major indices to session-highs and, particularly, moving the S&P 500 to a new intraday high To this point, traders contend that the most important issue going into Q2 is: will the economy pick up? We need GDP to lift from 1.5 to 2% in Q1 to at least 2.5% in Q2 and over 3% in the second half. Hence, the big debate on trading desks for Q2: growth versus value. The popular trade going into Q1 was to be long growth and short non-growth. However, many traders have been hurt badly in the last few weeks on that trade. A lot of the debate is over whether the growth names with big run-ups remain buys at the higher prices Time will tell Moving on, the Dow has settled into a narrow trading range, and volume is heavier, with ~260M shares on the tape at this time Internally, breadth is bullish across the board. Advancing Issues: 2631 / Declining Issues: 1603 — for a ratio of 1.6 to 1. New 52-Week Highs: 205/ New 52-Week Lows: 17 Meanwhile, in the trading pits, The yield on the 10-year Treasury note ticked up to 2.752% on a slight sell-off. In addition, gold is furthering losses to a near seven-week low Still hearing much buzz about Michael Lewis book, Flash Boys. If you have questions or concerns feel free to shoot me a note. This topic, and the topic of equity market structure in general is right in my wheelhouse. Bottom-line, the current structure of equity markets is waaaay too complex and needs real reform Would love to discuss over a few cold ones with anyone who is available! -— Good for now Have a tremendous day!
1) I believe I addressed your point by stating this: It's fascinating and important stuff if you are a trader/institution that has to worry about 1/10th of a quarter point when buying/selling huge blocks.
2) Right in the beginning Katsuyama to agreed that the Markets are Rigged.
I have no dog in this hunt, but claiming that “The Market is Rigged” puts (pun intended) me off. ; ) I'll let you big boys sort this out. BTW, I agree with Lewis to keep regulators far away from this issue because the smart people will find away to get around the new regs. I also agree with Brad, that they are talking their books.
Thanks for that ping. Good stuff. Thought we were going to see a WWE match.
The only thing that's 'rigged' is the loopy extreme leftwing press that demanded O'Brian explain his 'unfair' profits. That part put me off even more. Of course the bottom line here is that the loopy-lefty press is fact of life --just like all the fact that we got a mob of union-loonies infesting FR "capitalism-is-rigged" threads.
We just need to remember that life is good, and if it were too easy it wouldn't be any fun.
Talking about life being good and fun! My sister clued me into the travel coffee show “Dangerous Grounds.” Todd Carmichael went to your neck of the woods and came up with this coffee. I still haven't seen the Panama episode, I will let you know when I do. He built his coffee company from scratch. It is now worth $20 million. He searches the world for the perfect bean.
Yesterday the S&P500 cut a new high with indexes higher with volume. IBD TV says the market's officially back in an uptrend, and this morning's metals and index futures point to more of the same. Other news:
- Stocks: Pushing cautiously onto new ground CNNMoney - an hour ago Markets look ready to grind higher Wednesday, as investors make a cautious push into uncharted territory. U.S. stock futures were edging up, and global markets posted gains, after the S&P 500 closed at an all-time high Tuesday.
- Caterpillar hearing morphs into tax-code debate USA TODAY - 10:06am The Senate committee hearing was scheduled to focus on heavy machinery giant Caterpillar's avoidance of $2.4 billion in U.S. taxes by shifting profits to a wholly owned Swiss subsidiary.
- World stocks rise on US data, Japan stimulus hopes World stock markets pushed higher Wednesday on signs of a pickup in the U.S. economy and expectations of further stimulus in Japan.
- Gold nudges up but still near seven-week low; China demand rises
- U.S. construction spending barely up as homebuilding tumbles U.S. construction spending barely rose in February as outlays on private residential construction projects recorded their biggest decline in seven months, a sign that severe weather continues to hobble the economy. Construction spending edged up 0.1 percent to an annual rate of $945.7 billion, the Reuters
- Google investors are about to get GOOG and GOOGL shares in stock split Google stock is set to split Wednesday in a move meant to give founders Larry Page and Sergey Brin more control. MarketWatch GOOG $1,134.90 1.83%