rovo's Market Journal -- 2011

[clarkrl2]

If the dollar declines commodity prices should rise. It will probably take a while to play out so a person might benefit by investing in companies that do well with rising commodity prices. Food and timber were mentioned by yclept and I would throw in oil and steel. I agree that insurance is probably a bad place to be. In that scenario I also still like short treasuries. Mostly I'll try not to do anything too rash and wait and see how it plays out.

[yclept]

The steel will come from Taiwan and S. Korea, but the insurance claims will have to provide the money before that is needed. Japan exports more to China than it does the US. Japan imports twice as much from China as it does from the US. Scroll down the following page to figures 11.4 and 11.5 for some graphic representations of these balances prior to the earthquake/tsunami. www.stat.go.jp/english/data/handbook/c11cont.htm

With respect to animosity between China and Japan per Rovo's statement:

Just a thought on the China / Japan trade that I believe was mentioned by Yclept. I have no idea what the current state of trade is between these two countries but I do know they despise each other from WWII.

, the above website demonstrates that they trade a lot with each other. They may still have festering wounds, but they trade none-the-less.

I think the main thing the US is going to contribute to the rebuild is money as the Japanese repatriate a lot of their US investments. The contributions won't be voluntary on our part -- we owe them the money.

[Deleted]

Bloomberg's info ---

Japan is the largest and most consistent importer of corn in the world. The United States satisfies nearly all of Japan's demand. During fiscal year 2009, Japan imported 15.9 million metric tons (626 million bushels) of U.S. corn.

www.grains.org/corn

[rovo]

Wow. Talk about a fear trading day. The Qs are down about -2.75% and AAPL is down over 3%. It is what it is and there is nothing I can do about it other than watch it. Even gold is dropping significantly. Good luck everyone.

[Bluerobin]

I am going to call in well and take the day off! Maybe I will bargain shop at 3:30.

[yclept]

Well, all work and no play makes jack. I sold quite a bit of the long positions in the ports this morning, then just for fun, bought 300 URA (uranium ETF) and 200 DXJ (2x Japan ETF).
I'm a bit wary of picking up any more negatively-biased ETFs as this whole thing may be getting blown out of proportion. It is, after all, still the historically favorable period of the year and this year is the third of a presidential term, so all the goat entrails auger that none of this negative market movement should be happening. So by stooping low to swoop up these two insanely out-of-favor tickers, it will give me something over which to wring my hands and rent my garments. I didn't buy a whole lot of these -- having torn garments is not the same to me as going shirtless.

[yclept]

I don't know which of this stuff I may have mentioned on which threads or when, but today I liquidated the following positions: CCCL CEU CVVT NEP PWER SBS SKBI. I picked up URA and DXJ as I mentioned above. After these moves, I am about 49% cash and 10% short using QID. For what it's worth!

Got to take my dad for a doctor's check-up, so that's it for today.

[yclept]

Sold URA picked up yesterday: (14.95-13.36)/13.36 = 11.9%
Sold DXJ picked up yesterday: (34-33.59)/33.59 = 1.2%

I'm getting very disappointed with TBT movement lately -- it's given back in the last week almost everything I've made on it over the past 4 months. I think the play is correct long term, I expect inflation and interest rates to skyrocket soon. But it's nasty watching all gains from the last several months melt away. I think some folks are seeing treasuries again as an alternate form of cash and running there for shelter.

GLL is giving similar disappointing results. I'm still a little ahead on it, but not enough to justify the risk I'm taking. I'm obviously betting against strong religious fervor. Gold isn't a commodity, it's not a currency, it's a religion.

I'm probably going to both GLL and TBT in the next hour or so.

[yclept]

sold the GLL (0.2%) and the TBT (~7%). I'll wait awhile on those before taking the positions again.
Bought 120 JJG @ 49.3099 and 200 COW @ 30.6099 -- reckon folks still have to eat.

Mmm -- grain and cows -- must be getting time for breakfast.

[livinincali]

I'm getting very disappointed with TBT movement lately -- it's given back in the last week almost everything I've made on it over the past 4 months. I think the play is correct long term, I expect inflation and interest rates to skyrocket soon. But it's nasty watching all gains from the last several months melt away. I think some folks are seeing treasuries again as an alternate form of cash and running there for shelter.

Those all in all the time investors do create a interesting scenario in our money printing environment. Instead of running from all investments they just move money from one investment to another. You'd think money printing equals higher interest rates but if the stock market declines people still rush back into treasuries which in turn keeps the yields low. There probably will be a moment sometime in the future where the desired destination will be despised cash but we aren't there yet. People would still rather own something rather than be in a position to buy something. The wonderful world of inflation expectations still rules the day.

[livinincali]

DI,
The all in all the time investors tend to be pension, mutual funds, etc. Individual investors can and will have periods of time where they might find themselves in a fairly large cash position. The biggest thing for the individual investor is access to the bond market because it takes a lot of money to invest directly into bonds. People can buy TLT/TBT, JNK, MUB (these products are relatively new), or mutual funds (there's a pretty significant penalty to short term trading in these) to temporarily move into bonds but to be perfectly honest most cash investments at a brokerage house are moved into a money market quickly which is mostly invested in short term bills (I.e. 3 month treasuries).

401Ks typically have some kind of bond fund option and some kind of money market option so that's another place where you see people all in all the time. It's really just the allocation that changes.

[clarkrl2]

I added a short position today using an Apr. 16 expiration Put spread on QQQQ with 56/55 strikes. It costs $44 per contract so if QQQQ is below 55 on expiration I will make $56. I think its unlikely the indexes will be higher Apr. 16 than they are now.

[yclept]

Rovo,
Except for posting the POTW, you've been quiet as a church mouse lately. What are you up to?

[2kids10horses]

DI,

It looks like your PEP Leap Put is up 16% over the weekend. You gonna keep it or cash out early?

[2kids10horses]

DI,

Back in the day, I used to sell Puts every month. And let them expire worthless. I had lots of fun collecting those little credits into my account.

The only thing I didn't like about doing that, is the last trading day is Friday, and the last day to exercise the option is SATURDAY! One time, I sold a put and thought it expired worthless, when news broke after the close on Friday that caused me to be put, and the stock tanked on Monday!

I learned my lesson, that it was worth it to Buy-to-Close even if it was a negligible amount to prevent that from ever happening again.

[2kids10horses]

DI,

I understand what you're doing, you're using LEAPS as a proxie for the stock. My play was to take advange of the degradation of the TIME VALUE. I was selling PUTs, banking the time premium, and hoping the stock would rise or at least stay above the strike I sold at, and I'd be able to collect the premium.

One time it was close. I think the strike was at 40, and the closing price on expiration day was 40.25. I thought I was safe, that I wouldn't get PUT. Friday after the close, the company either lost a lawsuit or settlement, but it was bad news for the company. I got put, and the stock took a 10 point hit on Monday.

I should have Bought-to-close on Friday.

I used to like to buy LEAP calls, too. You'd get the appreciation of the rise in the stock without having to pay the full price of the stock. I'd buy the 2 year and sell it once it got close to losing "LEAP" status, because the of the TIME VALUE drop.

These days, I primarily trade the ULTRA ETFs.

Sorry, rovo, for hijacking your thread!

[rovo]

2&10, Nobody is hijacking this thread. It is here for all to contribute their ideas to it.

[rovo]

Off Topic

So the house is mighty quiet as Mrs. rovo is in New York City (again). DW and a couple of girl friends went to the Martha Stewart show a few weeks ago for the premier show. They had so much fun traipsing around the city they decided to do it again. They left this morning and are currently in the audience for tonight's David Letterman show. Tomorrow they again are in the audience for the Martha Stewart show. It must be nice to be able to just flit around the east coast at will. ;D

[yclept]

Although I can think of a whole lot of other things I'd rather do than go to a Letterman or Stewart show (unless she had some stock inside information she wanted to dish out to the audience!).
It finally stopped raining here (at least for a few days, more is predicted for the weekend) -- seems like we've had three or even four weeks of almost constant rain. Reckon none of the water companies will be talking drought this year.

[mtntigger]

It must be nice to be able to just flit around the east coast at will.

Dontcha be talkin' bad about Mrs. rovo! I remember what you did to her last year.





ETA: So what kind of trouble are you getting into?

[yclept]

This message has been deleted.

[IPAfan]

I've got my personal portfolio invested 12% in tobacco stocks right now. Got to admit that I'm very late to this party, and am hesitant to chase stocks up. However I think MO and PM are excellent companies which should produce decent long term returns while hopefully performing better in a market pullback than most other companies. I've got about 5% in MO and 7% in PM at this time. I'd honestly like to increase this tobacco position to about 20-25% of the portfolio since I believe the strong tobacco companies will probably be one of the better long investments in a stock market downturn. Even though MO and PM are doing very well and near their highs, I still think both are more attractive than the market as a whole.

I'm skeptical about the market at this valuation, but will continue to be basically all long in my investment portfolio (I've been cutting down leverage to reduce risk.) My personal portfolio is about 50% TTT, then 25% between FRFHF/ENH, 12% PM/MO. The other slice of my portfolio has several small positions most of which are sitting on losses.

This is certainly not a conventional portfolio. It's also not a conventionally "safe" portfolio, however I think the business fundamentals of my investments are solid. Well managed companies selling mostly below book value (except the tobacco stocks.) My avg. yield is around 3% and I hope the dividend yield should grow faster than avg. (but of course I don't know for sure.)

[IPAfan]

Here's a new presentation on ENH. Nothing new, and nothing about Japan losses. Sure looks like a buy to me, and it has since I first bought it. This is a long term investment. This company has returned 150% for shareholders since 2003 (at which time the company traded at a premium to book value.) It's grown diluted BV per share at 18% per year since inception (in a mostly soft market) and has reduced diluted share count by 40% since inception (mostly over the past 1.5 years when the stock traded at a discount to book, but some bought back at a premium to book a few years ago.)

If this company can continue to produce the types of full cycle results it has since inception (and this may be possible because the company has bought back so many shares that it can remain versatile) and even returns to a 1.3 multiple I could see 20% annual returns over the next 5 years.

yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7824088-5908-26741&type=sect&dcn=0000950123-11-029993

[livinincali]

TTT Technicals made significant long term improvement with today's big move up on earnings. 50 day crossed through the 200 day to the upside and a higher low was established on the daily. Just based on a guess I expect TTT to challenge the recent high of 9 before pulling back somewhat and then it could easily go on a tear if the market cooperates. A challenge of the 2010 highs around 15-16 by late 2011 wouldn't be out of the question.

[IPAfan]

Cali,

TTT is actually doing way better than the chart suggests. TTT has spun out KHD Humboldt Wedag over the last year and this is a significant value. I'd be happy to see the stock trade at a multiple of book so that it could use its stock for acquisitions.

[rovo]

The jobs report came in with very decent numbers this morning, actually beating expectations. Also, the previous month's data was revised slightly upward. The job rise was in spite of a reduction in government jobs. Very positive in my opinion.

The ISM Index came in slightly below expectations at 61.2 vs. the expected 61.4. Not too bad and within the "noise" margin.

Construction spending came in at -1.4% vs. the expected -0.7%. This is a big miss.

The data I am waiting for is the auto sales by company and this is usually published around noon, Eastern time.

[rovo]

First to report is GM.

GM sales rise slows in March; deals not as good today, 2011 10:57 AM ET.

DETROIT (AP) - General Motors' U.S. car and truck sales rose 11 percent in March, a smaller increase than the prior two months as it offered fewer rebates and other incentives.

The largest U.S. car company says it sold 206,621 vehicles last month. Sales were led by small cars and crossovers as people bought higher mileage vehicles in response to rising gasoline prices. GM says the Chevrolet Cruze small car led its sales increase.

GM is the first major car company to report U.S. sales on Friday.

Analysts expect overall industry sales in the U.S. to increase 17 percent from March 2010.

GM raised discounts by about $400 per vehicle in January and extended them in February. But Vice President of U.S. Sales Don Johnson says the company cut incentives by $600 to $800 in March.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed

[/size].[/quote]

GM's auto sales rise 9.6% in March 11:45a ET today, 2011 (MarketWatch)
CHICAGO (MarketWatch) -- With March auto sales for most car companies expected to show year-over-year growth, General Motors, the first out of the box to report numbers, managed a gain even as its sales pace slowed to close out the quarter.

GM moved 206,621 vehicles last month, compared with 188,546 in March of 2010, a gain of 9.6%. For the full quarter, sales rose 24.1% on-year to 592,545. All of the company's brands -- Chevrolet, Buick, GMC and Cadillac -- gained retail and total market share during the quarter.

Particularly hot was the company's new Chevrolet's Cruze compact sedan, with sales almost triple those of the model it replaced.


"Our plan was to get out of the gates quickly in the first quarter and we succeeded," said Don Johnson, vice president of U.S. sales operations, in the sales report. "Consumers responded favorably to the value of our broad lineup of fuel-efficient cars, trucks and crossovers."

For the month, the numbers "demonstrated our newest models continue to win over customers," he added. "Vehicles like the Chevrolet Cruze and Equinox put us in great position to benefit from consumers' increasing desire for fuel-efficient vehicles."

Still the sales rise was smaller than in the previous two months as the company sharply curtailed incentives and discounts.

"The hefty -- and costly -- incentives from GM in the first two months of the year fell back to Earth in March, and that translated to lackluster retail sales," said Edmunds.com analyst Jessica Caldwell. "The industry will be carefully watching GM's performance this month to see if March was an aberration or the start of a downward trend."

Shares of GM were up about 1% at $31.26.

Overall, auto makers are expected to post sales of 1.24 million car and trucks for the month, a 16.5% rise, according to Edmunds.com

[/size] [/quote]

[rovo]

No story out yet and I can't even find where the following data has come from but .......

Today's News, April 1, 2011
12:03p Ford: Largest 1Q Retail Sales Increases Were On West Coast, Northeas (Dow Jones)
12:03p Ford Cites 'Major Contributions From The Fiesta And Edge' >F (Dow Jones)
12:02p Ford:Newest Pdts Helping Co. Connect With Non-Traditional Customers (Dow Jones)
12:01p Ford Brand March Sales 204,276, Up 28.2%>F (Dow Jones)
12:01p Ford:Consumer Demand For Fuel-Efficient Vehicles Continues To Grow >F (Dow Jones)
12:01p Ford Lincoln Brand March Sales 8,501, Down 2.2%>F (Dow Jones)
12:00p Ford U.S. March Sales Up 19 % (Dow Jones)
12:00p Ford Outsells GM On Monthly Basis For First Time Since Feb 2010 (Dow Jones)
12:00p Ford Motor March Total Sales 212,777, Up 19.2% >F (Dow Jones)
10:29a Edmunds.com: Avg Auto Maker Incentive In U.S. Was Dn 16.7% From March 2010 (Dow Jones)

[rovo]

From Fiesta to F-Series, Consumers See Growing Value in Ford's Fuel-Efficient Lineup; U.S. March Sales Up 19 Percent

12:00p ET today, 2011 (PR NewsWire)
Ford's March sales totaled 212,777, up 19 percent versus a year ago

Fiesta sets U.S. record as monthly sales reach 9,787, up 56 percent versus February

Fusion and Escape also set monthly sales records, up 21 percent and 25 percent, respectively, versus a year ago

Explorer sales up 111 percent year over year

F-Series sales up 25 percent; new V6 engines account for 37 percent of 2011 F-150 retail sales

Consumer demand for Ford's fuel-efficient vehicles continues to grow as March sales increased 19 percent versus a year ago. Year-to-date, Ford sales totaled 496,720, up 16 percent.

"With gasoline prices eclipsing $3.50 a gallon, consumers are placing a high priority on fuel efficiency in every size and kind of vehicle," said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. "Customers are rewarding Ford for our investment in new products as well as more efficient engines and transmissions, which save them money at the pump whether they drive Fiestas or F-Series trucks."

Ford offers 12 vehicles that lead their sales segments in fuel economy, including four vehicles with EPA certified 40 mpg or higher fuel economy ratings - a claim no other full-line automaker can match.

Cars

Ford's new Fiesta set a record in March as monthly sales reached 9,787, up 56 percent from February. Fiesta's retail share of its segment has increased every month since it was introduced last summer, and Los Angeles continues to be the No. 1 sales region for Fiesta.

Fusion also set a new record with sales of 27,566, up 21 percent versus a year ago.

The Ford Mustang (up 47 percent) and Lincoln MKZ (up 28 percent) also posted higher sales than a year ago. Sales of the MKZ Hybrid reached a record 615, accounting for 20 percent of MKZ retail sales.

Total Focus sales were lower than a year ago (down 12 percent) as the all-new model is just starting to arrive at Ford dealers, but the nameplate's retail sales were up 16 percent.

Utilities

Sales of Ford's utility vehicles were paced by the all-new Ford Explorer, which had its best sales month since June 2007. Explorer sales totaled 12,482, up 111 percent, making the new Explorer Ford's fastest-turning vehicle in the showroom for a third straight month.

Explorer's class-leading EPA estimated highway fuel economy of 25 mpg is attracting owners of other makes. Its current conquest rate is 43 percent.

The Escape set a new March sales record - and its second best month overall - with sales of 23,975, up 25 percent versus a year ago. Sales of the new Ford Edge (up 21 percent) and Lincoln MKX (up 12 percent) also were higher as were sales of the Ford Expedition (up 40 percent) and Lincoln Navigator (up 10 percent).

Trucks

Strong sales to commercial fleet customers as well as higher sales to retail customers powered Ford truck sales growth in March. Sales of Ford's F-Series truck totaled 53,272, up 25 percent versus a year ago.

In January, Ford launched the 2011 F-150 with four all-new powertrains including two V6s - a 3.7-liter and a 3.5-liter EcoBoost. In March, V6-equipped F150s accounted for 37 percent of all 2011 F-150 retail sales.

"The No. 1 unmet need for full-size pickup truck owners has been fuel economy," said Doug Scott, Truck Group marketing manager. "The good news is the 2011 Ford F-150 has best-in-class fuel economy, best-in-class capability and power, plus more powertrain choices to suit customers' different needs."

Ford's commercial vehicles also posted strong year-to-year increases. Econoline sales totaled 11,827 (up 13 percent) and Transit Connect sales were 2,690 (up 47 percent).

Sales Summary

In March, total sales were 212,777, up 19 percent. Retail sales were up 14 percent and fleet sales were up 29 percent (commercial was up 50 percent, government was up 33 percent and daily rental was up 13 percent).

In the first quarter, total sales were 496,720, up 16 percent. Retail sales were up 20 percent and fleet sales were up 8 percent (commercial was up 34 percent, government was up 11 percent, and daily rental was down 8 percent).

Two independent market research studies cited the growing strength of the Ford brand in March. Ford was named the most considered auto brand among new-car shoppers in Kelley Blue Books' Market Intelligence Brand Watch study, and Ford was named top full-line automotive brand in the 2011 Harris Poll EquiTrend study.

"Our newest products are helping Ford to connect with customers beyond our traditional geographic areas of strength," said Czubay. "In the first quarter, our largest retail sales increases were on the west coast and in the northeast with major contributions from the Fiesta and Edge. We believe the new Focus and Explorer will help us to achieve further growth in these and other key markets as even more customers look for fuel-efficient, high-quality vehicles with technology they truly value."

Note: The sales data included in this release and the accompanying tables are based largely on data reported by dealers representing their sales to retail and fleet customers.

About Ford Motor Company

Ford Motor Company (NYSE: F), a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 164,000 employees and about 70 plants worldwide, the company's automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford's products, please visit www.ford.com.

[yclept]

Rovo,
Well, we're certainly getting hammered on that TSTC we bought the other day. Sorry for leading you astray. If we could just get a bit of a spike up to shake some of those 7 days worth of shorts, it could make for a nice little run; since the whole market cap is only about $82M, shares could be hard to come by and therefore shorts painful to cover.
I'm going to be a bit patient with this, as, unless the reported financials are completely bogus, it really looks to me fundamentally cheap, and something that can't fall off the floor. Today, however, it does seem to be scratching hard on the carpet! It is above $5/sh, so some institutions are allowed to buy it, but it might be the liquidity is just too low for many of them to venture into. On the other hand, if the data is true, institutions do own about 12% of it, so somewhere there must be a couple of them taking the gamble -- hopefully one of them will push enough money into it to drive a stake in the heart of the shorts.