tag:blogger.com,1999:blog-2986124651030959736.post3228361327664661371..comments2024-03-28T09:42:38.695-05:00Comments on Stocks, Bonds & Politics: Observations and Sample of Recent Trades: APLE, HTPRD, NWH.UN:CA, XRE:CATENNINDEPENDENThttp://www.blogger.com/profile/17444227958539559639noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-2986124651030959736.post-53200890873443712972017-08-03T12:21:46.953-05:002017-08-03T12:21:46.953-05:00I have published a new post:
https://tennesseein...I have published a new post: <br /><br />https://tennesseeindependent.blogspot.com/2017/08/observations-and-sample-of-recent_3.htmlTENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-25243929355541577092017-08-01T13:21:31.263-05:002017-08-01T13:21:31.263-05:00The government's Personal Income and Outlays r...The government's Personal Income and Outlays report for June, released earlier today, continues to print anemic consumer spending. <br /><br />Personal consumption expenditures rose just .1% in June and at zero adjusted for inflation. Real disposable income declined by .1%. The PCE Price Index was up 1.4% Y-O-Y. <br /><br />https://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm<br /><br />The numbers for the first six months of 2017 are notably weaker than the last six months of 2016: <br /><br />See Table 13, Line 17: <br />https://www.bea.gov/newsreleases/national/pi/2017/pdf/pi0617.pdf<br /> <br />% Change from preceding period-Real PCE<br />June to December <br />2016: +.4%, +.2%, +.1%, +.5%, +.1%, +.3%, +.4%<br />2017: -.1%, 0, .7%, .1%. .2%, 0 <br /><br />The non-inflation adjusted numbers can be found in line 13.<br /><br />The Bond Ghouls have noted the sluggishness even if the Stock Jocks continue to celebrate. <br /><br />S&P 500<br />2,476.56+6.26 (+0.25%)<br />As of 2:19PM EDT<br /><br />iShares Trust - iShares 20+ Year Treasury Bond ETF (TLT)<br />$124.53 +1.03 (+0.83%)<br />As of 2:19PM EDT<br /><br />Construction spending declined by 1.3% last month. <br /><br />Other numbers released today can be found here, which is a site worth a bookmark: <br /><br /> http://www.marketwatch.com/economy-politics/calendars/economic?link=MW_Nav_EPTENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-86113026946759027752017-08-01T08:54:34.899-05:002017-08-01T08:54:34.899-05:00Sam: Greenspan is relying on the Fed Model to just...Sam: Greenspan is relying on the Fed Model to justify stock prices at current levels. In the event inflation and interest rates normalize to normal levels, then stocks lose their primary support for their current valuations using that Model: <br /><br />Quote from Article: <br /><br />"Stocks, in particular, will suffer with bonds, as surging real interest rates will challenge one of the few remaining valuation cases that looks more gently upon U.S. equity prices, Greenspan argues. While hardly universally accepted, the theory underpinning his view, known as the Fed Model, holds that as long as bonds are rallying faster than stocks, investors are justified in sticking with the less-inflated asset.<br /><br />Right now, the model shows U.S. stocks at one of the most compelling levels ever relative to bonds. Using Greenspan’s reference of 10-year inflation-adjusted bond yields, currently around 0.47 percent, the gap with the S&P 500’s earnings yield at around 4.7 percent, is 21 percent higher than the 20-year average. That justifies records in major equity benchmarks and P/E ratios near the highest since the financial crisis."<br /><br />The gist of that argument is that stocks are less inflated in price than bonds given the current low interest rate and inflation environment. <br /><br />I have mentioned in the past that one danger for stock investors is a persistent rise in inflation and interest rates which has yet to occur. <br /><br />That threat exists primarily due the rich valuations in stocks measured by historical standard. Many investors have been buying stocks and continue to do so for the simple reasons that they are going up in price and there is no where else to go. <br /><br />There are a multitude of other events that could cause a major correction. <br /><br />For example, there has not been a recession in the U.S. since the last one ended in June 2009 which is already one of the longest periods in without a recession. Several quarters of negative real GDP growth could easily cause a 20%+ decline. <br /><br />Another factor is a market event that causes a stampede for the exits. People fear losing their profits and hit the sell button so that a 5% decline turns into a 10% or higher fairly quickly. The higher this market goes now IMO the harder it is going to fall. The market invariably will go down far faster than it goes up. <br /><br />Currently, the market internals, including those relevant to my Vix Asset Allocation Model, do not indicate that a major decline is likely to occur presently. And, while there are several nascent events that could potentially trigger a long term bear market, they appear to be slowly developing but could erupt without a long lead time (e.g. trade wars). <br /><br /> <br />TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-56744100657041607122017-08-01T06:41:43.602-05:002017-08-01T06:41:43.602-05:00
https://www.bloomberg.com/news/articles/2017-07...<br /><br /><br />https://www.bloomberg.com/news/articles/2017-07-31/no-bubble-in-stocks-but-look-out-when-bonds-pop-greenspan-says<br /><br />Hello southgent,<br /><br />I wanted to get your take on the above article. As you know and been well aware, investors like myself, self-directed, have been struggling with the conundrum of lightening up. As you remember I have been investing in dividend stocks to supplement my pension and Social Security.<br /><br />I know you have been selling slowly as you often do into strength. I also know you have been shortening your bond duration.<br /><br />I wondered what you thought of the above article and more specifically how serious the Fed is shrinking its balance sheet and how quickly inflation will come back to the world economy.<br /><br />I wanted to know whether you think the big enemy of investors in stocks is really inflation or just balance sheet contraction by the Fed and the central banks across the world.<br /><br />I know these are not questions that have easy answers and are only guesstimates. Since I have been investing in dividend stocks, I have been lucky enough to have them at fairly low prices with capital gains on paper.<br /><br />My major goal however is to collect the dividends, so I have tried to buy what I consider investment-grade large companies that hopefully will survive. I do understand the risks of modernization and changing tastes in the world. I do follow cash flow and revenue growth. And understand the risk in something like General Mills.<br /><br />So any help in managing a portfolio like this would be appreciated.<br /><br />I understand clearly this is only your interpretation and this is only data collection for me to make my own decisions. I know you have stated that you are not willing to undergo another long-term secular bear market in your lifetime.<br /><br />Sam<br /><br /><br /><br />Sam Atmanhttps://www.blogger.com/profile/00864308896329431033noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-64348620169724809592017-07-31T21:01:23.501-05:002017-07-31T21:01:23.501-05:00Asaleo Care: For the third time, I bought 1000 sha...Asaleo Care: For the third time, I bought 1000 shares of AHY:AU. Usually, as in more often than not, the third time is not a charm for me, so I wish that it was possible to go from a second round trip transaction to the 4th. <br /><br />I bought at A$1.35 and paid IB an AUD$6 commission. The share price has declined meaningfully over the past few days. <br /><br /> https://www.bloomberg.com/quote/AHY:AU<br /> <br />Dividends are paid semi-annually. The past two dividends totaled A$.1 which results in about a 7.41% yield at A$1.35.<br /><br />My last purchase was at the same level. <br /><br />Asaleo is a personal products company. The Essity company based in Sweden owns about 37.1% of the stock based on a recent Australian security filing. Essity was recently spun out of Svenka Cellulosa Aktiebolget which I have also owned in the past. <br /><br />I may discuss this company some in a subsequent post.<br /><br />Results in the first half of fiscal 2016 torched the stock as more fully explained in the "2016 Full Results-Presentation" that can be downloaded at the company's website: <br /><br />http://www.asaleocare.com/investor-relations/results/TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-86402961315775370262017-07-31T13:51:37.639-05:002017-07-31T13:51:37.639-05:00Apparently the Mooch lasted only 10 days as Trump&...Apparently the Mooch lasted only 10 days as Trump's Communications Director:<br /><br /> http://www.cnn.com/2017/07/31/politics/anthony-scaramucci/index.html<br /><br />I suspect that the new Chief of Staff Kelly, a former 4 star Marine General, made that his first order of business. TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-5221513608837534622017-07-31T12:22:33.537-05:002017-07-31T12:22:33.537-05:00Y: I looked into buying DVAX last week but passed ...Y: I looked into buying DVAX last week but passed on it for reasons that I do not remember or have chosen to forget. TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-3446993058858968922017-07-31T11:52:20.615-05:002017-07-31T11:52:20.615-05:00IMDZ (Own 60 Shares Small Cap Biotech Lottery Tick...IMDZ (Own 60 Shares Small Cap Biotech Lottery Ticket Basket)<br /><br />I just wanted to make an observation about this bungee jumper. Early this morning, I noticed that IMDZ was down about a $1 per share. I looked again a few minutes ago, and the stock was up $1.05 or+ 9.57%. <br /><br />Immune Design Corp. (IMDZ)<br />12.60+1.10 (+9.57%)<br />Day's Range $9.55 - $12.60<br />Volume 182,332<br />Avg. Volume 159,969<br />Market Cap 320.92M<br />As of 12:50PM EDT<br /><br />I have seen no news to account for either movement. TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-87680405676029493132017-07-31T11:28:52.457-05:002017-07-31T11:28:52.457-05:00South Gent,
DVAX trades at $15.85, up 71%, as of ...South Gent,<br /><br />DVAX trades at $15.85, up 71%, as of 12 noon today. But its all time high was $106.6 back in 2006. It has its ups and downs and went through a 1 for 10 reverse split in 2014. This just shows how precarious the small cap biotech sector is. <br /><br />The performance of individual stocks in my small cap biotech lotto ticket basket goes from -82% (AVGR) to +267% (DVAX). The basket is still up 10% this year after the disposition of 3 stocks with profit. I am very glad that I took the basket approach.<br />Y2000https://www.blogger.com/profile/07490088548749061927noreply@blogger.com