Thursday, January 20, 2011

Total Coverage

A somewhat more muted day than I would have thought but still plenty going on. That is good as it keep me from thinking about the NFL playoffs and the Patriots in particular, until......

Watched the Second Half of Patriots vs. Jets on NFL Network
After the Patriots failed to move the ball at all on their opening 3rd quarter drive last week, I turned the TV off and went about making lunches for the wife and I for Monday, brushing my teeth, getting changed, and other errands. I knew what was going to happen. I switched the game on a t the very end to see the score a caught a few highlights (lowlights?) on ESPN. I gave in and watched the second half last night on NFL Network. Wish I did not.

The game was won as the Pats were down only 3 points and the Jets had a play where Crotchery (or whatever his name is) came out in the slot, ran into the center of the field, and the Patriots never had anyone on him and the middle linebacker Spikes ran off to the sideline to cover a wide receiver who was double covered already. Given 35 yards of room and an open throw the game was over then. So glad I did not see that live as I may have destroyed the TV.

Total Coverage
Quite a few things caught my eye today so here we go.

What am I Doing?
I thought I had been pretty clear what my New Year strategy was going to be but maybe I was not clear enough. I want to be more active in my own trading and after testing the iBankCoin PPT product, I felt like it was a great tool for my own use. Using screens I designed I came up with a couple of ideas to try based solely on TECHNICAL stuff, not long term fundamentals or other things. I have bashed NFLX plenty here and I do not believe they are going to be a long term winner (some reasons below) but the chart was right and the score I used offered a shot at a 10% return in a short period of time. Readers will know I aim for 10% TOTAL return yearly on my holdings, so this was interesting. Now I did not commit too much to the trade, about 15% of my trading account, but I felt good about it. A couple days ago I was up almost 9% and should have called it a day, but I was ok with the chart. Then an outlier event occurred (Steve Jobs) and everyone got nervous all of a sudden, like a cancer patient on immuno suppressive drugs is not going to get cancer after a transplant? Ok. I had rolled up stops all the way and was closed out first thing in the morning at 188 and change for about a 6% gain.

I know trading POMO-MOMO stocks is dangerous and that bad stuff can happen. I am not stupid. No one needs to worry, I will be fine.

I am still in EW, and the same tight stops apply. Of course as Kid Dynamite has noted, overnight blow-ups will take you out even with stops but after the flash crash unless you want to day trade and be out every day at days end, it is what it is. I will be looking for new trades this weekend. Instead of worry, offer ideas guys!

Gold and Silver Charts You Need to See
My fellow blogger Mark of Illusion of Prosperity, has a couple of charts well worth a look if you are a believer in the metals which I am. Here is the Gold chart (Gold vs. All Commodities-PPI):

And Silver:

Thanks Mark!

Mark and I just do not see things in the same light and that is fine. I even sent him a Christmas card the last two years as proof!

Now when I see these things I think in terms of total credit outstanding, debt outstanding, what I have termed notional money, etc. The last bubble was tied to severe inflation and the release of the gold standard. I was just a baby in the late 70's'-early 80's (yet that is my musical preference, go figure!) so I guess I am dumb and cannot make the connection to commodities only as a comparison. Of course I am biased and you should know I have a large physical gold and silver position to this day (don't worry, I am aware they can gap down overnight!). I guess one could always take thousands of metric tons of corn with them to escape a country, or just some gold:
Tunisia Central Bank Admits It Is Missing 1.5 Tons Of Gold
I am being a bit glib here, but I guess at this point I don't want to debate this angle any more. Either you believe notional money will cease and reality will be upon us, or you don't.

Now I am not a gold/silver at any price sort. My near term targets may scare metal bulls!:
Gold: $1250
Silver: $22.50
I am not insane, smarter folks than I see some of the same stuff. I would be very interested in those targets should they come up.

The Internet, Social Media, and Cattle
No worries, it will all make sense!

One of my absolute favorite films starred Albert Brooks and Meryl Streep in "Defending Your Life". If you have not seen it, put away the IPad, cell phone, computer, and settle in with someone you really care about and WATCH the film!

Ok, where was I? Oh yes Cattle! Barry reminds us today:
Cattle Prices Stampeding
Which brought to the following memory. In the film Albert Brooks had a chance to get into Casio Corp but went with Cattle instead (skip to 1:45 mark):

"I never got a straight answer. All I know is their teeth fell out."

Social Media and the Internet Combined
Has anyone else heard enough?

The Internet is as big as it gets. So 90% of it is porn? Big deal, what isn't?

One of my long term issues with a company like Netflix (NFLX) is that the Internet will get them in the end. Is it hard to imagine in 2, 4, 10 years film premiers in London-Los Angeles-etc then an instant feed of the film right to your home? Who needs a cinema except 15 year olds that want to make out? Most 20 somethings will live at home until they are 30 somethings anyway (no jobs!) so why not watch a film in the parents basement apartment! The Internet is the single greatest invention ever that is misunderstood to this day. It lowers things, it does not bring them up. What can be almost free will always be so, big splashes aside. This is a long term trend that cannot be fought.

Social Media makes even less sense. I am not that into such things, but one of my friends is VERY into it. He blocks all ads and will bolt if a Facebook ever tries to monetize usage ("so corporate!" he says). Indeud.

My man Josh Brown is on the other side of the fence on this, and writes:
With Facebook, however, the game is about being there - placement. As big ad buyers come to Facebook, the company is wisely selling ads the way Yankee Stadium does: There's no way that Budweiser can tell how many incremental beers were sold based on their having a giant billboard in center field, they just know that they have to be seen there.

Every single large corporation now has a line item on their ad budgets for social media and it is said to be double what the number was for last year according to my peeps in the business. With the disappearance of MySpace from these budgets, Facebook basically has this game on smash right now.

Fair enough.

What will the return be? The same as junk mail? Does anyone even see ads on web pages anymore (besides the ones with big boobs!)?

He is right though, they will spend because they have to. Returns be damned!

Look, times are changing and I get that. The total interconnectedness idea is great in theory.

I have a few long term, more philosophical ideas about all this that I believe will be macro issues for such things going forward. It is not now. Email me (top left!) and I will share them with you, but for now I will be silent. The Pony Express allowed better contact, then the Telegraph, then the Telephone, then the Internet, then Mobile devices, now Social Media. And all the time people got more distant. Go figure. It's called the diffusion principle:
One cannot be all places at all times at the same concentration.

Increase, AGAIN, Au/Ag margins!

Have a good night.


Stagflationary Mark said...

Thanks for the illusion of prosperity plug. Um, well, you know!

I'll chime in on the cattle topic.

Ag news: Cattle prices jump again

“The market is telling producers to keep feeding the animals to their maximum weight and at the same time, buy the more expensive corn,” said Roose. “Consumer demand for beef is strong right now. The question is how long consumers will keep buying when prices go up and they can buy lower-priced pork and chicken.”

The U.S. Meat Export Federation reported strong increases of as much as 50 percent in U.S. beef exports through November of last year, figures that may increase further with the reported heavy losses of cattle in Australia due to flooding.

Another factor is an outbreak of foot-and-mouth disease in South Korea, which has caused that nation to cull about 16 per cent of its livestock herd.

At the same time, investment hedge funds which already have pushed up the prices of corn and soybeans have shifted their focus to livestock.

It's a perfect angus storm!

The investment hedge funds are like Sauron in the Lord of the Rings apparently.

Memorable Quote

Eomer: We cannot achieve victory through strength of arms.
Aragorn: Not for ourselves. But we can give Frodo his chance if we keep Sauron's Eye fixed upon us. Keep him blind to all else that moves.
Legolas: A diversion.
Gimli: Certainty of death, *small* chance of success... What are we waiting for?

getyourselfconnected said...

My favorite scene from the whole series is when Sauron shows Aragorn what will happen to Frodo, and he sees it, and says:
"For Frodo" with such sadness in his eyes.

Good stuff Mark!

Stagflationary Mark said...


GawainsGhost said...

Do not despair, GYC. You could be a Cowboys fan.

I was at that game in Dallas against New York on Monday Night Football. I watched as the entire season was destroyed by an unblocked blitzing linebacker. It reduced my friend Michelle to tears.

But I don't think the Cowboys would have made the playoffs even if Romo had not been injured. The defense utterly collapsed and quit on the coach. That was even more painful to watch. The players never quit on Landry or Johnson, but they did on Switzer, then never bought into Gailey or Campo. Parcells started them back on the right track, but he gave up on them. Phillips tried as best he could, but he was hamstrung by an incompetent owner who wouldn't grant him authority. The jury's still out on Garrett, but my vote is not yet ready for prime time.

I wouldn't worry about the Patriots. They have more picks in the top 100 than any other team, and they always draft well. Brady had foot surgery to repair a stress fracture, so he'll be back next season. But it wasn't because he was playing injured that New England lost. It was because the Jets went with 11 DBs and used a lot of disguised blitzes and coverages. Their defense won that game, not their offense.

Anyway, as to cattle futures, the reason why beef prices are rising is because 20% of corn is now used to make ethanol. That raises the cost of feed, and in fact is causing food shortgages around the world. Yet another brilliant idea by our oil-hating, environmentally friendly politicians.

For Friday Night Entertainment, how about a little comedy?
Madeline Khan, what a beautiful woman. And she could sing too. Sherlock Holmes' Smarter Brother, that movie is really funny, very underappreciated but so well done.

Anonymous said...

That movie was funny - ive never seen it but I plan to now (nflx)??

I see why you identify with Brook's character. I do too. I will see you on the fear train back to earth one day!

As an aside, you said "I am still in EW" what is EW?

getyourselfconnected said...

I am not worriede about the Patriots, trust me, mothing to worry about HA!

glad you will see the film. EW is a stock ticker symbol.

getyourselfconnected said...

Bernadette Peters was even more pretty!

GawainsGhost said...

Yeah, that's why Steve Martin dumper her but couldn't get a date with Madeline Khan.

By the way, if you thought that scene was funny, watch this one.

Dom Deluise at his best.

And just to give an idea of how truly ridiculous this movie is, there's this one.