First The Good News, Then The Bad

Most of my portfolio is now solidly shrugging off Yellen’s slip of the tongue. Our good bankster friends over at JPMorgan said it best – Yellen is fresh and inexperienced, and she still needs to learn how to speak without actually saying anything.

It will come. It will come.

Despite my state of shock at watching Yellen crack the market like an egg yesterday, I didn’t react. I want to watch a few more days before I make a move, even if they should lose me money. With a +14% year going, I have buffer room.

Now, the good word here is that CCJ and BAS are both moving higher. I suspect HCLP will join in soon as well (that position can be rewarded a little breather, it’s come a long way). The energy themes are solid and intact.

The bad side of the coin is that fear/reality of higher interest rates is going to just ravish the REIT and associated housing space. Check out VNQ over a five day period, and you can almost sink the cracking point up with Yellen’s comments. My current position AEC is breaking down again this morning, and an old position MAA is following.

This has to be treaded carefully. If you’re juggling garbage like NLY, I’d say you’re one four day panic away from another round of 30% losses.

I’ve said well before today, back when I never imagined Yellen would spook interest rates higher, that I was interested in rebuying MAA. This is sort of a blessing in that regards. I’d venture a guess that long term damage to multifamily REITs from higher interest rates will hover somewhere between “negligible” and “not damaging, actually positive”.

But well before that point, there will probably be a lot of indiscriminate selling from emotionally driven fund managers. The climax of that, if it should materialize, is the buying opportunity.

Between then and now, it’s important to keep a wary eye on reform efforts to Fannie and Freddie. There’s been some “bipartisan chatter”. Mortgage origination is >70% dominated by the government backed mortgage giants, and the entire housing market is totally dependent on them. A poorly thought out reform effort could rain chaos. But there’s no sense even having a discussion about that just yet. First things first, interest rates.

Another Day, Another Big Meltup

CCJ is up another 1.3%. BAS is fighting for a +3% on the day. HCLP wants to hit that $41.00 mark, currently up 1.67%. NRP (my only loser so far this year, down 20% from my purchase price) is up 3.3%, back above $16.00. AEC is racing +1.1%. UEC (small position) is up 2.4% (but that thing swings around $1.70 +/- 20%, so let’s just call it flat…).

Really, silver is the only thing I own that’s down. And my emergency put positions are essentially all worth $0.00 – so I took about another 2-3% loss this year from those.

I am looking to re-enter MAA at some point.

And YTD my account is soaring, well above +14% for 2014.

Look, these daily posts, reminding you of how much money I’m making; I get that they’re a little boring.

What do you want from me?

I’m not going to be spending my time researching new positions when I really just want to hang on to what I already have.

My advice to you is to hold on to the things you should have been buying when I was doing research. That’s the high reward play right now – to sit back and reap the fruits of our labors. This has been due for a few years now.

That and to fling manure at enemy politicians who are watching their public ratings getting sucked into a vortex.

Well That Ended Anticlimactically

Here I was thinking CCJ would go on an epic run, and instead it decided to reverse 4.6% on a lazy Friday afternoon.

On the plus side, it and my other main positions (BAS, AEC, HCLP) all seem to be resting just above the higher moving averages. I’m going to pretend like I care about TA for a minute and assume that means paved glory in my future, next week.

China sucks and I’m sitting around just praying PGJ gets assaulted. The BRIC thing is just really a load of garbage. They’ve been shoveling this shit to private retail money for twenty continuous years now; meanwhile, to this day, three of the above four letters in said acronym don’t even have primitive shareholder legal protections in place worth a damn.

Pathetic.

Putin is bringing down US drones and generally showing off now, as if the inability to feed and cloth his own people (or other such humiliating realities of that Russian Exceptionalism lifetstyle) were somehow forgettable next to the nostalgic grandeur of a grey haired, 62 year old man suffocating on his own bullshit.

Suffice to say, if Bush were still in office, Putin wouldn’t have the balls to be trying any of this. I know you Obama apologists will be leaping around like faggots now, whining at me for being “unfair”. What’s unfair is us living in this day and age and still needing to explain how incentives and behavior work to you stupid assholes. Choke on some humility coming off the trio of failures that are Obamacare, Foreign Policy, and the DOJ before you open your mouths in my comments section. Unless I’m mistaken, outcomes still matter more than pathetic excuses and “intent”.

The only one of the BRIC’s I would even look at is Brazil. Even there though, no need to get tangled up in the state owned populism. I’m content to just sit back, crack a beer, and watch Venezuela and Argentina burn to cinders.

I’m 25% cash, a little less cocky from this week, and certainly not up 14.5% anymore (though doing quite well).

BAS And CCJ Resume Trend Higher

The run higher continues, with CCJ and BAS both up over a percent again today. AEC and NRP are trading flat. UEC is north of 4% gains, but it’s small so no one cares.

HCLP is down, naturally. That’s my pick for March madness; so it has to be the lone skunk of my portfolio. Not to worry, not to worry. Just as soon as any chance of personal glory is off the table, it too will continue the run higher, making me a silent, very non-public, fortune.

Can’t give me marketable material that easily, now can we?

Just sit back and enjoy the show. The indices no longer matter to me. Rather, the public storytelling is shifting into my corner now. This is the Atomic Year, the Fracking Year – financial journalists need something to yap about, and my assets will be it.

And accordingly, that makes this the Thaler Year.

At The End Of Today, I Was Up 10% YTD

Here’s a quick review of where things stand. I took a cash position of around 30% towards the beginning of February. In spite of that, it really hasn’t affected my performance noticeably; actually, it’s down to a 27% cash position just from watching the rest of my asset values take off.

BAS is leading the charge higher, no contest. The natural gas cycle is back underway.

02-25-14 BAS 3 Months

Of course, where would well servicing be without the frac sand that makes it all possible? HCLP continues its uninterrupted run, refusing to touch the short range moving averages for more than a few hours before blessing her stakeholders with further gains.

02-25-14 HCLP 3 Months

The multifamily space has been a source of strong performance for years. You wouldn’t know it if you looked at a long time frame. Analysts love to hate on these companies, because they lack vision. But I love them.

02-25-14 AEC 3 Months

I sold this next one out entirely on February 10, while I raised cash. I’ve missed the last stretch there, but still made out handsomely, especially because my shares were favorably converted from CLP last year in a corporate buyout. I’ll look to get back in down the road.

02-25-14 MAA 3 Months

Today’s windfall profits were brought to us by CCJ; it took the reigns and sprinted higher by 8%. UEC (not depicted) was also up 9%.

In case you missed it, this move was led by a report out of Japan confirming nuclear energy’s importance to the economy and intent of Japan to restart their reactors.

The Kyodo News writes:

The government on Tuesday unveiled a draft energy policy that characterizes atomic power as an important electricity source, although the draft waters down some wording in an earlier version that was seen as strongly pro-nuclear in tone.

In the draft, the government said nuclear energy is an “important base-load power source” that usually supplies electricity continuously through the day, while vowing to push for the restart of reactors that have satisfied new safety requirements introduced after the 2011 Fukushima Daiichi complex disaster.

Economy, Trade and Industry Minister Toshimitsu Motegi, who is responsible for compiling the draft of the so-called Basic Energy Plan, told a press conference that the direction of the policy has “not changed in principle” despite the revisions.

The draft is expected to become official with Cabinet approval in March, after consultations with the ruling Liberal Democratic Party and its coalition ally, the New Komeito party.

The cost to Japan for trying to navigate away from nuclear power is enormous. The UK’s Andrew McKillop, former Chief Policy Analyst of the European Commission, in The Market Oracle is estimating the total cost of decommissioning Japan’s nuclear fleet at $500 billion…before power production replacement.

Outside of Japan, the effects of nuclear fuel shortfalls are beginning to be felt. The end of the Megatons for Megawatts program with Russia is beginning to sink in.

Meanwhile, very much not in accordance with the wishes of anti-nuclear activists, Kazakhstan is busy setting itself up as the global trading desk of nuclear power, by creating a low-enrichment fuel bank in cooperation with the IAEA.

Tengri News reports:

The negotiations on Kazakhstan’s bid to host the international bank of low-enriched uranium are nearing their final stage, Tengrinews reports citing the press-service of the Foreign Affairs Ministry of Kazakhstan.

“Kazakhstan is going to be hosting the International bank of low-enriched uranium of the IAEA (International Atomic Energy Agency) and the negotiations of the Country Agreement on the bank’s placement are nearing their end. We believe that development of a comprehensive approach to nuclear fuel, including creation of guaranteed reserves of nuclear fuel, will contribute to promotion of peaceful use of nuclear energy,” says the Ministry’s message timed to the 20th anniversary of Kazakhstan joining to the Non-Proliferation Treaty (NPT).

Kazakhstan plans to take an active part in the upcoming Nuclear Security Summit (NSS), to be held in Hague on March 24-25, 2014. Kazakhstan supports the idea of starting the negotiation process and soonest development of the Fissile Materials Cutoff Treaty that will become an important step towards nuclear disarmament and non-proliferation.

The goal here, of course, is to disarm the arguments against broad adoption of nuclear power, world wide, over the concerns of rogue nations enriching their own fuel to the point of producing a bomb. It’s also designed to make it possible for countries that lack the sophistication to enrich uranium to gain access to nuclear power.

If the IAEA’s new bank approach is broadly adopted, nuclear reactors will for the first time be a possible solution in many places that would never have had the luxury to consider it before now.

02-25-14 CCJ 3 Months

Silver’s rebound brings up the rear. The metal is back above $20 an ounce, and looks good, following a black year and a 33% price drop.

02-25-14 SLV 3 Months

Here’s my only bad investment so far this year – NRP’s 21% drop has cost me 2%.

02-25-14 NRP 3 Months

I also have small (and increasingly smaller) positions in TSLA puts and PGJ puts. The TSLA puts have had no effect on my YTD performance as they blacked out last year – they expire in January of 2015. The PGJ puts were 1-2% of my account and are currently down 50% of where I bought them.

Their purpose is simply to provide absurd gains in the event of the unpredictable. But with a limited downside, neither is big enough to hurt me.

Added Back To AEC – Full Position

AEC’s most recent performance was solid, and the earnings call clinched it for me.

This company is too cheap and literally everyone knows it. Above and beyond the consistent and regular return they’re pulling in, there’s chatter of “realizing the portfolio’s true value”.

With a company this size, in this environment, I can only reach the conclusion that means a corporate buyout is looming.

Their CEO and main shareholder is old. Friedman can’t be around forever. And his company’s management have proven themselves over the past five years to be highly competent. The move to separate their debt covenants from their properties in 2009 alone was probably the smartest move of any real estate company around.

So AEC is going to start getting some real attention from larger companies, who are sitting on piles of cash and looking to keep that shareholder growth coming. CLP getting gobbled up by MAA was the first, but it won’t be the last.

Cash stands between 30-40%.

First The Good News, Then The Bad

Most of my portfolio is now solidly shrugging off Yellen’s slip of the tongue. Our good bankster friends over at JPMorgan said it best – Yellen is fresh and inexperienced, and she still needs to learn how to speak without actually saying anything.

It will come. It will come.

Despite my state of shock at watching Yellen crack the market like an egg yesterday, I didn’t react. I want to watch a few more days before I make a move, even if they should lose me money. With a +14% year going, I have buffer room.

Now, the good word here is that CCJ and BAS are both moving higher. I suspect HCLP will join in soon as well (that position can be rewarded a little breather, it’s come a long way). The energy themes are solid and intact.

The bad side of the coin is that fear/reality of higher interest rates is going to just ravish the REIT and associated housing space. Check out VNQ over a five day period, and you can almost sink the cracking point up with Yellen’s comments. My current position AEC is breaking down again this morning, and an old position MAA is following.

This has to be treaded carefully. If you’re juggling garbage like NLY, I’d say you’re one four day panic away from another round of 30% losses.

I’ve said well before today, back when I never imagined Yellen would spook interest rates higher, that I was interested in rebuying MAA. This is sort of a blessing in that regards. I’d venture a guess that long term damage to multifamily REITs from higher interest rates will hover somewhere between “negligible” and “not damaging, actually positive”.

But well before that point, there will probably be a lot of indiscriminate selling from emotionally driven fund managers. The climax of that, if it should materialize, is the buying opportunity.

Between then and now, it’s important to keep a wary eye on reform efforts to Fannie and Freddie. There’s been some “bipartisan chatter”. Mortgage origination is >70% dominated by the government backed mortgage giants, and the entire housing market is totally dependent on them. A poorly thought out reform effort could rain chaos. But there’s no sense even having a discussion about that just yet. First things first, interest rates.

Another Day, Another Big Meltup

CCJ is up another 1.3%. BAS is fighting for a +3% on the day. HCLP wants to hit that $41.00 mark, currently up 1.67%. NRP (my only loser so far this year, down 20% from my purchase price) is up 3.3%, back above $16.00. AEC is racing +1.1%. UEC (small position) is up 2.4% (but that thing swings around $1.70 +/- 20%, so let’s just call it flat…).

Really, silver is the only thing I own that’s down. And my emergency put positions are essentially all worth $0.00 – so I took about another 2-3% loss this year from those.

I am looking to re-enter MAA at some point.

And YTD my account is soaring, well above +14% for 2014.

Look, these daily posts, reminding you of how much money I’m making; I get that they’re a little boring.

What do you want from me?

I’m not going to be spending my time researching new positions when I really just want to hang on to what I already have.

My advice to you is to hold on to the things you should have been buying when I was doing research. That’s the high reward play right now – to sit back and reap the fruits of our labors. This has been due for a few years now.

That and to fling manure at enemy politicians who are watching their public ratings getting sucked into a vortex.

Well That Ended Anticlimactically

Here I was thinking CCJ would go on an epic run, and instead it decided to reverse 4.6% on a lazy Friday afternoon.

On the plus side, it and my other main positions (BAS, AEC, HCLP) all seem to be resting just above the higher moving averages. I’m going to pretend like I care about TA for a minute and assume that means paved glory in my future, next week.

China sucks and I’m sitting around just praying PGJ gets assaulted. The BRIC thing is just really a load of garbage. They’ve been shoveling this shit to private retail money for twenty continuous years now; meanwhile, to this day, three of the above four letters in said acronym don’t even have primitive shareholder legal protections in place worth a damn.

Pathetic.

Putin is bringing down US drones and generally showing off now, as if the inability to feed and cloth his own people (or other such humiliating realities of that Russian Exceptionalism lifetstyle) were somehow forgettable next to the nostalgic grandeur of a grey haired, 62 year old man suffocating on his own bullshit.

Suffice to say, if Bush were still in office, Putin wouldn’t have the balls to be trying any of this. I know you Obama apologists will be leaping around like faggots now, whining at me for being “unfair”. What’s unfair is us living in this day and age and still needing to explain how incentives and behavior work to you stupid assholes. Choke on some humility coming off the trio of failures that are Obamacare, Foreign Policy, and the DOJ before you open your mouths in my comments section. Unless I’m mistaken, outcomes still matter more than pathetic excuses and “intent”.

The only one of the BRIC’s I would even look at is Brazil. Even there though, no need to get tangled up in the state owned populism. I’m content to just sit back, crack a beer, and watch Venezuela and Argentina burn to cinders.

I’m 25% cash, a little less cocky from this week, and certainly not up 14.5% anymore (though doing quite well).

BAS And CCJ Resume Trend Higher

The run higher continues, with CCJ and BAS both up over a percent again today. AEC and NRP are trading flat. UEC is north of 4% gains, but it’s small so no one cares.

HCLP is down, naturally. That’s my pick for March madness; so it has to be the lone skunk of my portfolio. Not to worry, not to worry. Just as soon as any chance of personal glory is off the table, it too will continue the run higher, making me a silent, very non-public, fortune.

Can’t give me marketable material that easily, now can we?

Just sit back and enjoy the show. The indices no longer matter to me. Rather, the public storytelling is shifting into my corner now. This is the Atomic Year, the Fracking Year – financial journalists need something to yap about, and my assets will be it.

And accordingly, that makes this the Thaler Year.

At The End Of Today, I Was Up 10% YTD

Here’s a quick review of where things stand. I took a cash position of around 30% towards the beginning of February. In spite of that, it really hasn’t affected my performance noticeably; actually, it’s down to a 27% cash position just from watching the rest of my asset values take off.

BAS is leading the charge higher, no contest. The natural gas cycle is back underway.

02-25-14 BAS 3 Months

Of course, where would well servicing be without the frac sand that makes it all possible? HCLP continues its uninterrupted run, refusing to touch the short range moving averages for more than a few hours before blessing her stakeholders with further gains.

02-25-14 HCLP 3 Months

The multifamily space has been a source of strong performance for years. You wouldn’t know it if you looked at a long time frame. Analysts love to hate on these companies, because they lack vision. But I love them.

02-25-14 AEC 3 Months

I sold this next one out entirely on February 10, while I raised cash. I’ve missed the last stretch there, but still made out handsomely, especially because my shares were favorably converted from CLP last year in a corporate buyout. I’ll look to get back in down the road.

02-25-14 MAA 3 Months

Today’s windfall profits were brought to us by CCJ; it took the reigns and sprinted higher by 8%. UEC (not depicted) was also up 9%.

In case you missed it, this move was led by a report out of Japan confirming nuclear energy’s importance to the economy and intent of Japan to restart their reactors.

The Kyodo News writes:

The government on Tuesday unveiled a draft energy policy that characterizes atomic power as an important electricity source, although the draft waters down some wording in an earlier version that was seen as strongly pro-nuclear in tone.

In the draft, the government said nuclear energy is an “important base-load power source” that usually supplies electricity continuously through the day, while vowing to push for the restart of reactors that have satisfied new safety requirements introduced after the 2011 Fukushima Daiichi complex disaster.

Economy, Trade and Industry Minister Toshimitsu Motegi, who is responsible for compiling the draft of the so-called Basic Energy Plan, told a press conference that the direction of the policy has “not changed in principle” despite the revisions.

The draft is expected to become official with Cabinet approval in March, after consultations with the ruling Liberal Democratic Party and its coalition ally, the New Komeito party.

The cost to Japan for trying to navigate away from nuclear power is enormous. The UK’s Andrew McKillop, former Chief Policy Analyst of the European Commission, in The Market Oracle is estimating the total cost of decommissioning Japan’s nuclear fleet at $500 billion…before power production replacement.

Outside of Japan, the effects of nuclear fuel shortfalls are beginning to be felt. The end of the Megatons for Megawatts program with Russia is beginning to sink in.

Meanwhile, very much not in accordance with the wishes of anti-nuclear activists, Kazakhstan is busy setting itself up as the global trading desk of nuclear power, by creating a low-enrichment fuel bank in cooperation with the IAEA.

Tengri News reports:

The negotiations on Kazakhstan’s bid to host the international bank of low-enriched uranium are nearing their final stage, Tengrinews reports citing the press-service of the Foreign Affairs Ministry of Kazakhstan.

“Kazakhstan is going to be hosting the International bank of low-enriched uranium of the IAEA (International Atomic Energy Agency) and the negotiations of the Country Agreement on the bank’s placement are nearing their end. We believe that development of a comprehensive approach to nuclear fuel, including creation of guaranteed reserves of nuclear fuel, will contribute to promotion of peaceful use of nuclear energy,” says the Ministry’s message timed to the 20th anniversary of Kazakhstan joining to the Non-Proliferation Treaty (NPT).

Kazakhstan plans to take an active part in the upcoming Nuclear Security Summit (NSS), to be held in Hague on March 24-25, 2014. Kazakhstan supports the idea of starting the negotiation process and soonest development of the Fissile Materials Cutoff Treaty that will become an important step towards nuclear disarmament and non-proliferation.

The goal here, of course, is to disarm the arguments against broad adoption of nuclear power, world wide, over the concerns of rogue nations enriching their own fuel to the point of producing a bomb. It’s also designed to make it possible for countries that lack the sophistication to enrich uranium to gain access to nuclear power.

If the IAEA’s new bank approach is broadly adopted, nuclear reactors will for the first time be a possible solution in many places that would never have had the luxury to consider it before now.

02-25-14 CCJ 3 Months

Silver’s rebound brings up the rear. The metal is back above $20 an ounce, and looks good, following a black year and a 33% price drop.

02-25-14 SLV 3 Months

Here’s my only bad investment so far this year – NRP’s 21% drop has cost me 2%.

02-25-14 NRP 3 Months

I also have small (and increasingly smaller) positions in TSLA puts and PGJ puts. The TSLA puts have had no effect on my YTD performance as they blacked out last year – they expire in January of 2015. The PGJ puts were 1-2% of my account and are currently down 50% of where I bought them.

Their purpose is simply to provide absurd gains in the event of the unpredictable. But with a limited downside, neither is big enough to hurt me.

Added Back To AEC – Full Position

AEC’s most recent performance was solid, and the earnings call clinched it for me.

This company is too cheap and literally everyone knows it. Above and beyond the consistent and regular return they’re pulling in, there’s chatter of “realizing the portfolio’s true value”.

With a company this size, in this environment, I can only reach the conclusion that means a corporate buyout is looming.

Their CEO and main shareholder is old. Friedman can’t be around forever. And his company’s management have proven themselves over the past five years to be highly competent. The move to separate their debt covenants from their properties in 2009 alone was probably the smartest move of any real estate company around.

So AEC is going to start getting some real attention from larger companies, who are sitting on piles of cash and looking to keep that shareholder growth coming. CLP getting gobbled up by MAA was the first, but it won’t be the last.

Cash stands between 30-40%.

Previous Posts by Mr. Cain Thaler