Investments Trade Log

[jennypenny]

Took some profits on TSO, used it to buy more WMC at $14.52.

[George the original one]

Adding WPC. 6% yield, strong dividend growth, though it's slowing due to size of company.

[jennypenny]

Added TICC, TCAP, and ARCC. Added some more PCL and CLF when they were down.

[jennypenny]

Any thoughts on what this might mean going forward?
http://www.bloomberg.com/news/2014-05-0 ... s-why.html

[George the original one]

Guess the world still prefers US debt to their own.

[George the original one]

Feels like "sell in May" has begun... I'm noting broad market decline this week, yet the "widows & orphans" stocks are going up.

For the BDC players, it's time to begin filling from your shopping list

[George the original one]

Added to KLAC position. Last week they had guided lower for next quarter and the stock has been beat up by a sufficient amount. The bet is that the reason for the guidance (delayed purchasing by customers) is only temporary vs. a longer-lasting scenario.

[Chad]

Any thoughts on what this might mean going forward?
http://www.bloomberg.com/news/2014-05-0 ... s-why.html

I'm not sure this shows a lot by itself. I can think of multiple positives and negatives this could show. For one, it could be demonstrating that everyone still really...really...really trusts the US economy long-term or it could be suggesting they don't trust it short-term and want the safest investment with the highest percent return...or it could be both. There are a lot of other variables too.

[jennypenny]

Added to TCAP and WMC.

[Chad]

Put an order in for Gazprom ADR.

[jennypenny]

I really hope this is the start of a meaningful correction.

Tepper's comments on the market ... http://www.bloomberg.com/news/2014-05-1 ... acent.html

[Chad]

We already have a meaningful correction in small-caps and some tech names (I'm thinking about Twitter here).

[tylerrr]

I really hope this is the start of a meaningful correction.

Tepper's comments on the market ... http://www.bloomberg.com/news/2014-05-1 ... acent.html

I agree, I've been 80% cash for a while now. The market doesn't make any sense to me right now. I don't understand why the S&P500 keeps going higher. It doesn't feel right to me at all.

So I'll keep waiting and trust my gut. I still feel a significant correction will happen this year. The small correction hasn't been nearly enough. I'm waiting to jump big into JNUG if it comes down to 14ish range.

[IlliniDave]

I really hope this is the start of a meaningful correction.

Tepper's comments on the market ... http://www.bloomberg.com/news/2014-05-1 ... acent.html

I agree, I've been 80% cash for a while now. The market doesn't make any sense to me right now. I don't understand why the S&P500 keeps going higher. It doesn't feel right to me at all.

So I'll keep waiting and trust my gut. I still feel a significant correction will happen this year. The small correction hasn't been nearly enough. I'm waiting to jump big into JNUG if it comes down to 14ish range.

Just curious, but what do you base your gut feel/need/hope for a "correction" on?

I've been following the SP500 for about 30 years. It being near or at "record highs" is pretty routine from a historical perspective. Simple inflation necessitates that even if business is stagnant.

Valuations are slightly high in the aggregate relative to historical, but not really in bubble territory.

I've never felt as though I understood the stock market well. Jack Bogle has a quote he uses occasionally, that I'll paraphrase because my memory is inexact: The markets are a giant distraction to the business of investing. About all I feel I can count on is that at times returns will go negative in the years ahead, and at times returns will be positive in the years ahead. I believe the latter will be the defining characteristic (or else I wouldn't risk my money in the stock market at all).

I'm not a "trader" by any stretch, just curious about the reason for the sentiment.

[Chad]

I'm not a "trader" by any stretch, just curious about the reason for the sentiment.

Some people on here are a little obsessed with DOOM!

I'm mostly kidding. I do think a few on here are a little more negative than necessary on a regular basis (not necessarily Jenny or tyler) when it comes to the markets, but we are at an inflection point with stock prices. If the economy does not grow fast enough, it won't support the current prices with earnings going forward. Now you can say this is always the case, but the current prices are at the high end of that price envelope, so we are priced closer to perfection.

With that being said, most of the time it is difficult to time a market correction, but not always. Bogle is right that most people can't time the market or pick stocks, but that's because most people do it based on the two finance articles they read a year in the USA Today or financial advice "genius" who sends them an email. People have proven the ability to time the market and be good stock pickers, and it's easier if you aren't managing $40 billion.

I like measurables or at least semi-measurables to make a decision on.

[IlliniDave]

With that being said, most of the time it is difficult to time a market correction, but not always. Bogle is right that most people can't time the market or pick stocks, but that's because most people do it based on the two finance articles they read a year in the USA Today or financial advice "genius" who sends them an email. People have proven the ability to time the market and be good stock pickers, and it's easier if you aren't managing $40 billion.

I like measurables or at least semi-measurables to make a decision on.

Okay, just wondered if there was another triple-Heimlich omen or something

I take an agnostic position on whether people can be persistently successful with market timing and speculative activity ("success" for the sake of that comment is equaling or exceeding broad index returns). I admit it is alluring, and something that in Phase III of my life (my nickname for ER) I'll probably set aside a little play money and see what I can do with it.

About the only thing I trust enough to take action on is PEs of the broad market. I prefer simple PE(1), even though PE(10) is regarded as a slightly better predictor. I think in ~ 10 year chunks of time. With current PEs where they're at, one might anticipate rather low returns going forward, probably less than 5% real for SP500. The Gordon equation suggests even lower. For my planning purposes I'm using 3.5%. Whether there will be sharp declines sandwiched by strong positive years or just a sequence of tepid years, who knows. If PE(1) gets north of 25 I might lower my equity exposure by 10%, at 30 maybe something more substantial.

Otherwise, I shovel money in, buckle my seat belt, and hang on for the ride.

[Chad]

Okay, just wondered if there was another triple-Heimlich omen or something

There is always a "triple-Heimlich" omen or something else you can find, it's how guys like Peter Schiff can be negative 99% of the time even though the market has a clear long-term trajectory of "up."

Here is a nice listing of some current negatives:

http://www.thereformedbroker.com/2014/0 ... nt-to-see/

I'm mostly in cash right now, except for Gazprom and a few emerging market ETF's. However, that's mainly because I'm rolling over my 401k from my recent employer into an IRA and I don't want to be stuck in something I don't like during the transition. Plus, I don't want the mediocre funds my old 401k had. I can't wait to get that money in an IRA.

[workathome]

Evidence suggests returns will be poor over the next 10 years, but short term is probably unpredictable. I think the worry is if there is no correction in the short-term, and the bull market runs unimpeded for a while longer, when the correction happens it will be bigger, scarier, and destructive to all the baby-boomer retirees wealth as they bail out at fire-sale prices.

I think ideally, for the sake of everyone's mental health, the market should remain neutral/decline slightly for a while as interest rates go up (if they do) and corporate profits (probably) gradually return to historical levels.

[IlliniDave]

There is always a "triple-Heimlich" omen or something else you can find, it's how guys like Peter Schiff can be negative 99% of the time even though the market has a clear long-term trajectory of "up."

I have a former colleague/friend who cashed out his 401 (penalties and all) in the mid 2000s because he became absolutely convinced the stock market was nothing but a sanctioned Ponzi scheme. Within limits I can see his point, obviously, but he just couldn't get over the fact that P/B > 1, and apparently had some belief the corporate economy could simply vanish. Had he not put it all in real estate, he probably would have felt pretty smart a couple years later when 2007-2009 happened. He's definitely a "perma-bear", and of much higher than average intelligence.

There must be some sort of survival strategy mechanism inherent to human DNA that causes a variety of hardwired responses to excess resources, so that the species in the aggregate has as many bases as possible covered.

[workathome]

I actually pretend to be a doomer so Chad would sell me his positions on the cheap. Set and match!