What a market! It giveth and it taketh away…
Long time followers of SR know that the New Year was met with a 50% cash position, expecting a drastic move to the previous fake/stupid/contrived/idiotic crash of late summer. While SR did buy that crash, all those positions were sold at or near peaks except for two that lost half their gains before being sold.
That’s ancient history though! What’s going on now? Oil is in the $20s as was predicted in my email and msg board posts in November 2014. SR’s rationale was correct and most pundits act like it was common knowledge now.
However, oil took the whole market with it! What a surprise?!
In one sense, yes, since cheap oil should be positive for many sectors of the economy. In another sense, not a surprise as a divergence in shorting has occurred the last 6 months. Many individual stocks saw massive short covering, while the indexes were heavily shorted. Seemed every dip was a cover to get out of ‘the box’ and every pop was a chance to sell the old boxed position and initiate ETF shorts.
SR followers who use the Short Report app saw it! Did you? Try out version 2.1.7 from the Windows 10 Store. Click on banner below.
Sales pitch out of the way, back to Market Commentary.
Pundits are now all hee-hawing up and down the business channels but there are some simple facts that all great investors know.
First, no one ever made money selling a quick volatile move down. The market will whipsaw you every time.
Second, reacting vs planning is just plain stupid.
If you got surprised, then Mark Cuban did you a favor a week ago when he Cyber Dusted you his advice to ‘DO NOTHING’ and that’s what he was doing … NOTHING!
Downtown Josh Brown also had some good advice on CNBC today. Effectively stating the same and He’s never seen anyone make money selling into severe drops.
SR agrees! If you weren’t ready for it, then it’s too late now. Keep your 401k contributions going, keep your eye on the retirement prize, and feel lucky to be buying so cheap this contribution period.
Enough with the punditry though, SR bought those dips today and pushed all chips into the center of the table. A 50% cash position only looks good in a down market for so long and most stocks and ETFs at least touched the technical supports counted on for a good buying opportunity.
So SR went CRAZY buying 100 shares here, 1000 there, 500 here, another 1000 there all morning long, until it was all gone.
The portfolio for the first half of 2016 is;
15% – BAC
10% each – SPY, QQQ, AAPL, MNK
7.5% each – PSX, KMI
5% each – ARIA, AST, BTX, GERN, IDRA, RLYP
Win, Lose, or Draw! SR can take some time off and enjoy now.
Please note, the $20s oil call from Nov 2014 was only 3 weeks late and SR is calling a bottom or near bottom now. Energy in general is oversold. So you’ll note a few tickers in the portfolio.
Side note to AMBS fanatics. Always remember, Gerald reneged on a meeting with $250 million worth of Biotech investors back in Oct/Nov 2014. SR closed coverage at that time. Word is, even Martin Shkreli passed on any deal with AMBS last June (per Gerald’s tweets). You may not like Martin, but he is undeniably a smart guy, so take that for what it is worth.
The simple fact is, given the dilution and toxic financing that occurred since Gerald ‘avoided’ that meeting with a real group of investors, he seems to give lip service to wanting real finance but keeps getting into bed with toxic deals.
Was he afraid of conversations with educated Biotech guys? Why did Martin pass when he was on the prowl for anything good to add to his newly formed Turing pipe?
Does anything else matter? Good luck AMBS longs!