I took profits in a variety of small capped stocks this morning — because that’s what I said I’d do weeks ago when the Qs hit $175. Well, here we are and now is the time to harvest gains and relax.
Booked NIO +15%, QD +15.3%, LX +9.8%, HYRE +21%, OLED +9.5%, BILI +10.6%, PLUG +7.3%, and CY +1.2%.
Try to keep up.
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Sold TNA SOXL HYRE. Sold half of NUGT and bought options with part of the profit. Bought 1/4 position in UVXY. Sold half of YINN and half of my FXI calls. Still plenty long. About 75% including leverage.
I have no opinion on short-term direction. Booking profits…not Fly numbers but I’m happy.
Good job
Thanks. Sold TQQQ, replaced with options on Qs. I think I’m done for today. Got some ceiling fans to hang for wife’s cousin.
Small Caps still have some room to run. IWM now up !8% since December lows.
So the last time, I pointed out that Trump came out with trade news (a few months back), I pointed out that he is a liar and can’t be trusted. Everyone said, “Of course!” – and then the market went up on Trump’s trade news anyway, then it corrected when it was found to be “fake news.”
Today, the market is going up on the real news that Tarifss are postponed, and the uncertain news that talks are successful – according to the White House, which has released zero details.
This recent news conference excahnge speaks volumes:
https://www.newsweek.com/video-trumps-trade-chief-changes-terminology-after-president-contradicts-him-1341759
https://theconservativetreehouse.com/2019/02/22/transcript-president-trump-meets-with-u-s-china-trade-negotiation-teams-in-oval-office/
*Trump is actaully dead accurate here.* A MOU is worthless and has no teeth at all in the business world. It just means that peopel agree on goals, but no penalties if the goals aren’t hit. We knew Mnuchin would be soft as all trade is beneficail to the 1%. Lighthouszer was supposed to be the “hardliner,” but his support of MOUs show that he is pretty soft after all. This excahnge from Lighthouser tells us that the US is currently seeking nothing more than back to the status quo. Probably the only hard concession they will get is China will buy more crops.
So waht is the end game for Trump? Obviously, he will announce Trade success. But what will he actaully consider as “success”? Back to the status quo? It seems like a lot of econmic damage (tarriffs) for nothing. Of course, maybe Turmp is just a bad strategist and didn’t think it through.
What about Tech Transfer? Doubtful this will change. Tariffs on auto imports: probably same as before: a *promise* to *eventually* reduce them. What about chinese governemtn industry subsidies? Probabbly not goign to change. How will Trump, his base, and the market react to this kind of trade deal?
Possible outcomes:
1) Good trade deal with enforcebale provisions. Not going to happen
2) President “I like Tariffs” shows up and wants a real dael, whcih the Chinese won’t give him: more tariffs. I give this about a 1 in 5 chance. Market crashes.
3) Weak as water deal, but Trump surrenders and declares victory anyway. Most likely scenario. How will market react?
Also, waht are the odds of 10 staright up weeks?
Still short NFLX?
I’ll answer that question if you answer these:
1) Do you think NFLX will be acquired by some other company within the next two years?
2) What do you think the fair value of NFLX stock is?
No, $363.91
I’m not short, because I gave up fighting the waves of idiots that think “Math is hard” but pricing stocks is easy. The same people that pump the stock every time a buyout rumor is circulated, or everytime NFLX wins an award.
However, I believe a reckoning is edging closer, in the form of Disney, Apple, and other streaming services. NFLX is like China: just throwing money at the problem, with no concept of Return on Investment. This stock will see sub $200 (and still be overpriced). I On the other hand, NFLX is my White Whale.
I now have 20% in UVXY, but will reduce it on Friday.
Thanks for the thoughts Numbers. Good stuff.
Also, to be clear, I’m not really sure how the market will react to a watered-down deal. There never really was a lot of interest from the 1% and the corporations they own in changing China’s trade practices before Mr. Tariff entered the picture. Maybe the status quo is the preferred solution, rather than anything that could raise worker wages – excuse me, I meant business expenses – here or in China
Companies that already do a lot of business in China should benefit, but companies looking to do more buisness there or Tech companies with a lot of IP should underperform on a relative basis.
I take a very simple view: the Chinese leadership needs to continue exporting unemployment, in order to keep their heads off pykes.
They will likely outclass the US negotiating team, and will cheat and lie to get what they want anyway. Market reaction- Everybody thinks it’s a joke, they just want it to go away.
I hope people weren’t so stubborn to miss out on these Jan/Feb gains. Crazy stuff.