Author Topic: what are you selling today?  (Read 146960 times)

Cigarbutt

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Re: what are you selling today?
« Reply #240 on: August 28, 2019, 06:56:15 AM »
Sold another portion of the residual TLT (20-30 yr US gov. bond ETF) position.
Moving away from macro trends as this position makes less and less sense from a long term (and fundamental) point of view.
Have kept a smallish position in case the reflexive crowd takes over before the whatever it takes modern fiscal stimulus crowd does.
An interesting aspect is that the pre-defined trigger (price) for the sale of that portion was met before actual economic deterioration made it to the surface, a combination of divergence I never thought possible when this theme was developed in my portfolios years ago.
What is unfolding is absolutely fascinating.


TwoCitiesCapital

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Re: what are you selling today?
« Reply #241 on: August 28, 2019, 07:19:33 AM »
Sold another portion of the residual TLT (20-30 yr US gov. bond ETF) position.
Moving away from macro trends as this position makes less and less sense from a long term (and fundamental) point of view.
Have kept a smallish position in case the reflexive crowd takes over before the whatever it takes modern fiscal stimulus crowd does.
An interesting aspect is that the pre-defined trigger (price) for the sale of that portion was met before actual economic deterioration made it to the surface, a combination of divergence I never thought possible when this theme was developed in my portfolios years ago.
What is unfolding is absolutely fascinating.

I tend to agree. Bonds are literally screaming recession and stocks are still bumping along like it's not a big deal.

I wasn't old enough, or educated enough, to recall much of the events from 2000 and 2008 (other than I was the naive idiot buying banks, autos, and dry shippers in 2007/2008 ), but this seems crazy and I'm assuming is atypical.

It's not so much a divergence in performance that bothers me, but the divergence in the narrative.

Bonds are saying there's no need to be concerned with inflation and/or GDP growth is going to be muted for the next 30-years.

Stocks plucking along at high P/Es with near record margins suggests equity markets see no danger to nominal GDP growth/inflation.

I know I've sounded like a broken record since 2016, but my concern is contracting multiples on top of contracting earnings. Not hard to get a 60% decline in such a scenario.

SHDL

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Re: what are you selling today?
« Reply #242 on: August 28, 2019, 08:27:14 AM »
Sold another portion of the residual TLT (20-30 yr US gov. bond ETF) position.
Moving away from macro trends as this position makes less and less sense from a long term (and fundamental) point of view.
Have kept a smallish position in case the reflexive crowd takes over before the whatever it takes modern fiscal stimulus crowd does.
An interesting aspect is that the pre-defined trigger (price) for the sale of that portion was met before actual economic deterioration made it to the surface, a combination of divergence I never thought possible when this theme was developed in my portfolios years ago.
What is unfolding is absolutely fascinating.

I tend to agree. Bonds are literally screaming recession and stocks are still bumping along like it's not a big deal.

I wasn't old enough, or educated enough, to recall much of the events from 2000 and 2008 (other than I was the naive idiot buying banks, autos, and dry shippers in 2007/2008 ), but this seems crazy and I'm assuming is atypical.

It's not so much a divergence in performance that bothers me, but the divergence in the narrative.

Bonds are saying there's no need to be concerned with inflation and/or GDP growth is going to be muted for the next 30-years.

Stocks plucking along at high P/Es with near record margins suggests equity markets see no danger to nominal GDP growth/inflation.

I know I've sounded like a broken record since 2016, but my concern is contracting multiples on top of contracting earnings. Not hard to get a 60% decline in such a scenario.

Congrats to Cigarbutt and others for the successful trade.  I agree that it is probably a good idea to avoid overplaying this one.

Regarding the divergence between the bond and stock markets, I think the general consensus among macro traders has long been that the bond market tends to be the better forecaster.  This tendency may have strengthened in recent years by the rise of algorithmic trading and passive investing in equity markets.

I personally think the big long term risk for equities in general now is political, i.e., changes in regulations/taxes/etc that make businesses much less profitable.  We’re already seeing all sorts of signs pointing in that direction.  This is also the worst type of risk for investors IMO because it is the kind of thing that can potentially cause businesses to gradually lose their value over the course of many years and not recover. 
« Last Edit: August 28, 2019, 08:33:40 AM by SHDL »

Cardboard

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Re: what are you selling today?
« Reply #243 on: August 28, 2019, 08:33:48 AM »
I think that you guys ignore that there are 2 stock markets: the hyped/new/very large high tech and the rest trading like a depression is coming.

Cardboard

TwoCitiesCapital

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Re: what are you selling today?
« Reply #244 on: August 28, 2019, 10:44:42 AM »
I think that you guys ignore that there are 2 stock markets: the hyped/new/very large high tech and the rest trading like a depression is coming.

Cardboard

I own oil stocks Cardboard. Along with other base metal royalty owners and producers, a few good miners, and a ton of EM exposure particularly to Russia.

I know where the market is cheap - but cheap sectors get cheaper in a recession so why blow the load and throw caution to the wind just because SOME areas are cheap now?

I'd rather wait for everything to get cheap and throw darts at the board.

Spekulatius

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Re: what are you selling today?
« Reply #245 on: August 28, 2019, 11:42:26 AM »
I wish puts were cheaper, but with a VIX if 19, puts are a no- go for me, so I raise some cash instead. I do share the aforementioned concerns.
Life is too short for cheap beer and wine.

Gregmal

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Re: what are you selling today?
« Reply #246 on: August 28, 2019, 11:52:35 AM »
Trimmed about 10% of my BX. Dont know what's wrong with this stock but it won't go down...

Cigarbutt

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Re: what are you selling today?
« Reply #247 on: August 29, 2019, 07:14:19 AM »
Trimmed about 10% of my BX. Dont know what's wrong with this stock but it won't go down...
-Have followed BX for a long time and thought they did very well bridging the 2007-9 period (well timed IPO, timely reversal to mortgage exposures).
-Since that time, the market return on BX has been more lumpy and to some extent better (especially if measured after the recent run) than the S&P index.
-Is Mr. Byron Wien still around? I felt he was an interesting contrarian input vs downside risk.
-Alternative asset managers have done very well in this investor post-traumatic stress syndrome and reaching for alternative yield world and, in retrospect, it's a good thing they didn't follow Mr. Wien's instincts.
-In the PE world, it seems to me that leveraged deals are more leveraged and coverage ratios are tighter. Is BX following the trend and is the reported carried interest at risk?
-In one sentence, where do you see BX in 5 to 10 years?
https://www.blackstone.com/media/press-releases/article/the-smartest-man-is-a-firedancer
https://www.blackstone.com/docs/default-source/black-papers/seeking-an-alternative_standard_v68_web.pdf?sfvrsn=fd0c2cad_22

Feel free not to answer or start a new thread.
FWIW, I'm still working on a life lesson mentioned by Mr. Wien some time ago:
"Younger people are naturally insecure and tend to overplay their accomplishments. Most people don't become comfortable with who they are until they're in their 40's. By that time they can underplay their achievements and become a nicer more likeable person. Try to get to that point as soon as you can."  :)

Gregmal

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Re: what are you selling today?
« Reply #248 on: September 05, 2019, 11:48:04 AM »
Paired down some CVS at $63. ~18% total return in about 6 months... still think its got some upside, but looking to raise some cash. Just another example of a super obvious, not going anywhere/will be around forever, blue chip with an above average yield and single digit pe....right there for the taking.. but yea, the markets overvalued...
« Last Edit: September 05, 2019, 11:50:18 AM by Gregmal »

Castanza

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Re: what are you selling today?
« Reply #249 on: September 05, 2019, 12:13:21 PM »
I wish puts were cheaper, but with a VIX if 19, puts are a no- go for me, so I raise some cash instead. I do share the aforementioned concerns.

Are you buying puts with the VIX around 16?
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