The Insider Report

‘s Failure to Panic

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I just got off the phone with a source on Capitol Hill who has spent the past few days trying to convince Republicans to vote for a debt ceiling hike. He told me that the biggest obstacle he faces has been “market complacency.” “Frankly, a bit of panic would be very helpful right now,” he said. As he explained it, lots of people in Washington, D.C., expected that this would be a week marked by panic in the markets. Stocks would tank. Bonds would get clobbered. The dollar would do something dramatic. And all of this would help convince reluctant … Read more

Support & Resistance

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Support and Resistance are two of the most closely watched and utilized technical indicators. Although difficult at times, identification of these key indicators is an essential ingredient to succesful technical analysis and even being aware of their existence and location can greatly improve your forecasting and analyzing abilities. Both are price levels at which either supply or demand for a security is often perceived greater than the other and this in turn can affect the movement of that security. Support: is the price level at which demand is thought to be great enough to prevent the price from declining any further because as … Read more

Has the world turned short seller?

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It seems that the smart money is going short this market. Probably the most destructive internal conflict since the Civil War is threatening the U.S.  It’s finally become clear to me that this is all about the balance budged amendment.  What’s the big deal?  Go for it.  We need that discussion.  We wouldn’t have had the disastrous Bush and now Obama wars if we had to pay for it today.  We wouldn’t have allowed pharmaceutical companies to charge us exorbitant fees on a government paid for prescription plan.  At some point the market may move over to the Tea Party … Read more

Debt Ceiling Debacle Sets up Well for a Strangle

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A strangle is an options strategy where the investor holds a position in both a call and put with different strike prices but with the same maturity and underlying asset. This option strategy is profitable only if there are large movements in the price of the underlying asset. This is a good strategy if you think there will be a large price movement in the near future but are unsure of which way that price movement will be. There will probably be no deal tonight or Friday on the debt ceiling negotiations.  If we don’t see a bill to extend the … Read more

Managing Investments in a Crisis

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Mobility and a long term outlook are essential when managing your portfolio in a crisis. The ability to select the best quality long term investments from the traditional and emerging markets. For hedging mobility is key, the ability to access Foreign Exchange, Commodities and Futures to balance your risk is a new fundamental asset for investors. Cash is no longer king and the value of the USD is being eroded which means everyone must rethink their investment strategy and adjust their portfolio holdings. While many think that if they live in the USA and earn in USD nothing will change, … Read more

S&P Sees Greek Default on Debt After EU Plan Takes Effect

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July 27 (Bloomberg) — Greece will partially default on its debt once European officials push through a plan that will see bondholders foot part of the bill of a second bailout agreed to last week in Brussels, Standard & Poor’s said. The rating company also cut its ranking for Greece to CC, two steps above default, from CCC, according to a statement published in London today. The outlook on the debt is negative. “The proposed restructuring of Greek government debt would amount to a selective default under our rating methodology,” S&P said. “We view the proposed restructuring as a ‘distressed … Read more

Time For More Fed Action?

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With the economy still weak and the politicians unable to agree on a plan to lift the debt ceiling, it might be time for the Federal Reserve to embark on QE3. Before you think I have lost my mind, please examine the three facts listed below. First and most important, the economy — supposedly out of recession for two years — is not in good shape. After rising at a paltry rate of 1.9% in the first quarter, the gross domestic product likely crept ahead at an even slower pace in the second, according to the MarketWatch consensus. This is … Read more

The Joy of Cash

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By Chris Farrell You’ve probably heard of a “black swan,” the catchphrase coined from the 2007 book by author and investor Nassim Nicholas Taleb. A black swan for investors is essentially an outlier event that dramatically affects the economy and markets. For example, the 1998 Russian debt default that unexpectedly took down the Long Term Capital Management hedge fund and the 2008 global financial free fall when Lehman Brothers imploded. It doesn’t take much imagination to see black swans lurking throughout the global economy. Europe’s crisis with the sovereign debt of the euro zone’s periphery nations threatens the health of … Read more

USA Regulators Punish Banks

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US regulators are straining to keep pace as they write more than 200 rules to rein in risk-taking throughout the financial system. A year after the enactment of the Dodd-Frank financial oversight law, regulatory agencies have finalized only a handful of reforms (50) but are expected to pick up the pace during 2-H of the year. Lobbyists and Wall Street executives, as part of their efforts to delay and scale back reforms, are raising pointed questions about whether Dodd-Frank will hamstring the economic recovery. A broad rollback of reforms is not expected, at least in the near-term. Here is a … Read more

Using Logic To Examine Risk

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This article is very interesting and should be read. You can find it at:http://finance.yahoo.com/news/Using-Logic-To-Examine-investopedia-437029966.html?x=0 Brian Bloch, On Friday July 22, 2011, 11:52 am EDT In 1660, Blaise Pascal did some pioneering work on risk. He was dealing with theology, but the implications for the capital market are unmistakable. His original concern was the expected value of believing in god.. He attempted to convert nebulous uncertainties into calculable probabilities – what we now call risk. His “expected values” are the basis of modern risk theory. Pascal demonstrated that uncertainty is about people, their beliefs and their courage, while calculated risk is … Read more

New Emerging Markets a Buy

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Last week the World’s smallest stock exchange opened in Cambodia joining a growing group of small exchanges in the developing World. In places like Laos, Mozambique, and Cameroon, only a few companies are listed, but these exchanges hold the biggest potential for trading in and bidding on the future. The markets these exchanges serve effect the lives and the livelihoods of thousands of people in many ways including; health care, education, and other social values will be lifted as the developing economies grow. China and India are the countries most people think of in terms of economic growth and power. … Read more

‘s Banks causes lots of pain for short sellers

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Time and again, Sean Egan and his team at Philadelphia-based Egan-Jones Ratings have made important calls months ahead of their better-known rivals. The firm has won grudging respect for its work on Ambac, CIT, Countrywide, General Motors, IndyMac, Lehman Brothers, MBIA and New Century, all of which encountered big problems after getting poor credit grades from Egan-Jones.  Read the rest of the report by clicking on the link below. A very scary interview with Sean Egan from Barron’s This is a very convincing report and may prove to be true but the short covering on the banks mentioned in this … Read more

USA Miners a Buy as Nations Tighten Grip on Resources

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USA Miners a Buy as Nations Tighten Grip on Resources     USA Miners a Buy as Nations Tighten Grip on Resources A new dynamic is developing in the flow of natural resources, countries from Indonesia and India to China and Russia are tightening their grip on natural resources as they limit exports to build up domestic industry in a trend that will spawn many challenges to World Trade Organization rules. However the move is not going to stop, this makes natural resource owners and miners in large consumption markets in the USA a strong buy. USA Industry will have … Read more

Euro Rises to Two-Week High as Bailout Terms for Greece May Ease

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By Catarina Saraiva and Allison Bennett July 21 (Bloomberg) — The euro advanced to the highest in two weeks against the dollar as officials said European governments may expand the region’s bailout fund and accept a temporary Greek default, reducing contagion concern. The dollar briefly pared its drop versus the yen on a New York Times report that President Barack Obama and House Speaker John Boehner have reached a budget pact. The Canadian dollar rose to a three-year high versus the greenback and the Norwegian krone advanced as crude oil gained. The Swiss franc fell against most of its major … Read more

Money Managers Seek to Profit from Europe’s Woes

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Money Managers Seek to Profit from Europe’s Woes They’re buying downgraded bonds and betting on a slowdown Illustration by Oliver Munday When Moody’s Investors Service (MCO) downgraded Ireland’s sovereign debt to junk status on July 12, a week after giving Portugal’s debt similar treatment, it came as no surprise to Sandor Steverink. Europe’s best-performing government bond fund manager over the last decade, Steverink predicted both downgrades. Soon it will be time to buy, he says. “What we’ve learned from emerging markets is that you get only a full recovery after a proper restructuring,” says Steverink, who is co-head of a … Read more

South Korea sees ratification of trade deal with US in August

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South Korea sees ratification of trade deal with US in August South Korea sees ratification of trade deal with US in August South Korea wants its bi-lateral trade deal with the United States ratified by August, a trade official said here Wednesday, heralding a parliamentary deadlock amid opposition protests against the pact. “We seeks parliamentary endorsement of the free trade agreement in August,” deputy trade minister Lee Si-hyung told reporters in a press briefing, referring to the two-way trade accord awaiting legislative approval in Seoul and Washington. The government and the ruling party are seeking to pass the deal, originally … Read more

Weatherford International, Ltd. – Is Aging Inventory an Issue?

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       This is a checklist I use to quickly come to a conclusion on a stock.  I score a stock, each line getting a 1, 0, or -1.  A stock  that scored 1 on each line would be a perfect 10.  Buy it! Some of these items are quite subjective.  For example how would I score Cash Flow?  If a company’s cash flow is much lower than it’s reported earnings, that raises a flag and I would score it a -1.  If there are more insiders buying than selling, I would score it a 1.  If there are no apparent … Read more

What you need to know before Apple earnings

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From Silicon Alley Insider Apple’s REAL Earnings Expectations Apple is reporting earnings tomorrow and it is bound to deliver spectacular quarter results once again, based on the fact that the company has always been lowballing its guidance. Its quarterly EPS has been outperforming guidance by 41% on average, and revenue has been 16% higher than revenue guidance. Based on this trend, Apple should report EPS of $7.09 on $26.72 billion revenue, while its June EPS guidance was announced at $5.03 of EPS on $23 billion revenue guidance. Wall Street consensus is at $24.92 billion for revenue and $5.80 for EPS, … Read more

Using the Relative Strength Index (RSI)

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The Relative Strength Index (RSI) was first developed by renowned technical analyst J. Welles Wilder. It is not to be confused with relative strength, which compares a stock’s price performance to that of an overall market average, such as the S&P 500. Instead, the RSI analyzes the recent performance of a security in relation to its own price history. RSI is a valuable tool to determine overbought/oversold levels. There are five major principles of RSI analysis: 1)  When RSI goes above 70 or below 30, it indicates that a stock is overbought or oversold and vulnerable to a trend reversal. … Read more

Will The U.S. Default Before Greece?

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    Will The U.S. Default Before Greece? By Dirk Van Dijk on July 18, 2011 | More Posts By Dirk Van Dijk | Zacks.com    I thought this was an interesting article on default and earnings by Van Dijk “The fundamental backing for the market continues to be solid. It is important to keep your eyes on the prize. There’s lots of news out there, and much of it is more dramatic than earnings results, but rarely does it have more significance for your portfolio. Earnings are, and are going to remain, the single most important thing for the … Read more

S&’s yell ,”shark!”, and everyone runs into the water instead of out of it

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These days the headlines ‘calamity’, the ‘disaster”, ‘financial Armageddon’, and the”Titanic sinking” are used to describe what will happen if Congress refuses to pass the debt ceiling authorization in a timely manner.   If the U.S. government defaults on its sovereign debt obligations and other payment obligations, there will be an immediate downgrade of our trillions of dollars of debt to something less than AAA.  This will cause enormous upheaval and increased interest costs, thus exacerbating the already enormous burden of debt the country shoulders.  These events could lead to an uncertain chain reaction of cascading financial upheavals around the world; … Read more

Insider Buying: 5 Recent CEO Buys of at Least $100K

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Insider Buying: 5 Recent CEO Buys of at Least $100K 12 comments  |  by: Steven Kiel July 8, 2011  | about: KGJI, NPO, RENT, TEAR, TRST         This week I have five stocks with CEO insider buys of at least $100,000. One of the reasons why I regularly do these lists is to learn about companies that I otherwise wouldn’t have come across. There are a few interesting ones in this list that I think require more research and are reasonably priced. As I’ve previously mentioned, I prefer CEO and CFO insider buying to other buyers. Those two positions give … Read more

ConocoPhillips Splitting Up

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ConocoPhillips Splitting Up By Zacks Investment Research on July 15, 2011 | More Posts By Zacks Investment Research | Zacks.com   ConocoPhillips (NYSE:COP) has surprised the market with its decision to split its operations into two. The third biggest U.S. integrated oil company plans to separate its upstream oil and gas exploration and production unit from its downstream refining division into two standalone, publicly traded corporations. The spin-off, which is subject to market conditions, regulatory approvals and the receipt of a U.S. Internal Revenue Service ruling that endorses its planned tax-free status, is expected to take effect in the first … Read more

Silver Wheaton Corp. (USA) NYSE: Live Trading calls it a Strong Buy

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Silver Wheaton Corp. (USA) NYSE:SLW a Strong Buy Silver Wheaton Corp. (USA) NYSE:SLW has been upgraded to a strong buy with a 2012 price target of $43 issued today by Shayne Heffernan. Silver Wheaton Corp. announced that it forecast fiscal 2011 attributable production is 27-28 million silver equivalent ounces, including 15,000 ounces of gold. By 2015, annual attributable production is anticipated to increase significantly to approximately 43 million silver equivalent ounces, including 35,000 ounces of gold. The Company also announced that its Board of Directors has declared its second quarterly cash dividend payment for 2011 of USD0.03 per common share. … Read more

‘s Burgeoning Debt Crisis Hits Markets Around the Globe – Barrons.com

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Once again, it’s the PIIGS. For the past year, the focus on eurozone’s debt crisis has been on the PIGS — Portugal, Ireland and especially Greece, plus Spain. But the crash in Italy’s bonds has put the second I back in that acronym. Global markets shuddered in reaction because, in the words of Goldman Sachs Asset Management head Jim O’Neill, “neither the euro area nor possibly the rest of the world can afford a full-blown Italian bond crisis.” Or as Nomura Securities foreign exchange strategist Jens Nordvig pithily asserts: Italy is too big to bail. The slide in the prices … Read more

‘t use the stock as their own piggybank.

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Atmel’s dominance of the capacitive touch screen controller market Contributed by Jerico Garcia and Sam Thumm 2010 and 2011 have seen a rise in popularity in consumer electronics devices like tablets, smartphones, and e-book readers. Many of these hot, new products also feature a relatively new way for consumers to engage with the user interface: touch screens. One manufacturer benefitting greatly from the rise in popularity of touch screens has been Atmel, with capacitive touch solutions being Atmel’s runaway winner in growth performance last year. In its first year of production alone, Atmel’s maXTouchTM touch screen controller product line cornered … Read more

Call us paranoid

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Call us paranoid but we still see some of that “deer in the headlights” look from Chairman Bernanke in recent public appearances.  After all why shouldn’t he be concerned? Unemployment appears to be intractable, the national deficit is in arithmetic realms never before seen and the remedy for its correction in the hands of Congress who seem more like a squabbling couple in divorce court than elected representatives.  Furthermore the housing bubble collapse appears to have been replaced by an even bigger bubble, sovereign nation debt defaults.  Buying more house than you can afford appears to be a relatively trivial … Read more

Harvest Natural Resources VP buys 44,600 shares in May. Why?

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This extract is taken directly from the 10k   Is there a connection to the recent headline from the WSJ PetroVietnam Eyes Conoco’s Vietnam Assets WAB-21, South China Sea General           In December 1996, we acquired a petroleum contract with China National Offshore Oil Corporation (“CNOOC”) for the WAB-21 area. The WAB-21 petroleum contract covers 6.2 million acres in the South China Sea, with an option for an additional 1.25 million acres under certain circumstances, and lies within an area which is the subject of a border dispute between China and Socialist Republic of Vietnam (“Vietnam”). Vietnam has executed an agreement on a portion of … Read more

Weekend Reading

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Lords of Finance

As a rule, I don’t post weekend reading that I think is just interesting but only stuff that I think can make you money or save you money or stimulate you to do one or the other.  But the book I’m reading is so well written, I had to share it.  I don’t know how it will make us money other than to provide some historical perspective.  We live in an unusually precarious economic world.  It’s not unprecidented.  In fact it shares some remarkable patterns with the Roaring Twenties, the Great Depression, and the inflationary/deflationary spirals leading up to WWII.

http://www.economist.com/node/18928514

 

 

The Age of Deleveraging: Investment Strateg...
Exorbitant Privilege : The Rise and Fall o...
Endgame: The End of the Debt SuperCycle and How...

I can’t honestly say I read these four books over the weekend but I did download samples to both my Kindle and iPad.  I am “listening” to Lords of Finance.  That’s from my Audible account. I’m listening to more books these days as I prefer to soak up my mountain biking, exercise, walking the dogs time listening to books and podcasts.

Lords of Finance is a fascinating read ( I mean listen). It’s an important work of economic history that covers a period of time between World War I and the events that led up to the most horrific time in mankind’s history, WWII.  I think it’s really important to understand what economic collapse can do to nations and individual’s psyches.   Of course, history doesn’t repeat itself, it rhymes and that’s why this link to some words from the author himself are interesting: What is quite shocking to me is how as a country we have gone from the creditor to the world to the lead borrower.  Historical context of this leads me to the conclusion that nothing good will come of this and perhaps something very bad indeed will result from it.  Lords of Finance will be our book of the month selection in July as soon as I can find some time to put it up.

Amazon Exclusive: Liaquat Ahamed on the Economic Climate

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Where are the insiders?

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There is always a blackout period before earnings when insiders are forbidden to buy or sell their own stock.  Usually this is a 45 day period before earnings and 24-48 hours afterwards.  The idea is that by the end of the quarter insiders have a good idea of what their companies are going to earn and to avoid trading on this knowledge most companies impose a black-out period in which insiders are forbidden to trade the companies’ stock. The exact days and trading windows differ slightly from company to company as they are based on an interpretation of SEC rules. The last two … Read more