Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)

Out With the Old… (DIA,XRT,PIR,FIT,SLV,XBI,XLE,GS,UIS,SIRI,RSX,QQQ)   The local authorities in my city have just notified me that my newborn son’s name is  not acceptable to them, and that I’m going to have to change it.   If ever there were a case of government overreach, this is it.   They’ve informed me that in order to keep the moniker that I’ve longed to give him, I’ll have to go to the courthouse on my own time and at my own expense to have the child’s name officially registered before a judge.   If, of course, the judge agrees. In this day and I age, there’s no shortage of asininity in the world.  I can be a Satanist.  I can have a sex reassignment.  I can purchase and cohabit with a robot.  But I can’t call my kid what I want to call him?!   What the hell is going on!?   People call their kids all sorts of crazy, dimwitted names, like Sourberry or Gauzeleak, while my wife and I sit puzzled at what could possibly be so wrong with the sweet sound of ‘Dander’.   That’s right, Dander.   My wife’s great uncle from Denmark, who passed away nearly…

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The Lord Giveth… (QQQ,DIA,VOX,HYG,CBOE,KKR,FB)

The Lord Giveth… (QQQ,DIA,VOX,HYG,CBOE,KKR,FB)   It’s hard to find anything negative to say about a market that has been on an even-keeled, upward trajectory for the last eight years.   You can mock what underpins its strength, you can deride the foolishness of those who’ve made millions just buying and sitting put, and you can wail like a newborn over the fundamental and technical excesses that are sure (eventually) to rock the very foundations of the financial edifice and send the global economy off the edge of the planet. And eventually, we admit, you’ll be right.  The fun will come to an end.   But it’s far more likely to be a jagged up-and-down affair than the simple cliff-dive that most imagine.  We’re of the school that contends that a wild volatility will seize the market before the final top is in, sending it hithering and thithering in a manner that breaks every man Jack who has more than a few bucks invested in the equity amusement park of the next few years.   And a quick look at the charts of the major world indexes reveals that we might now be approaching our first fitful turn in that process….

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“I Hear Voices…” (QQQ,TYL)

“I Hear Voices…” (QQQ,TYL)   There’s different kinds of insanity.  There’s the psychotic kind that no one likes to talk about, except when it exits the world, as Charles Manson did just weeks ago.   There’s also the less dangerous but far more common ‘dementia’ that strikes far too many good souls in their later years.   Then there’s a host of other illnesses for which both prescription meds and the ‘talking cure’ have been administered, with more or less success, for decades.   Schizoid Market   Schizophrenia is one of those illnesses, and it’s also what first pops to mind when we consider the current state of the stock market.  For how could it be that among the major equity indexes in the country, one has moved staggeringly higher while the other has slumped meaningfully?   Sure, there will be those who offer immediate pat answers to the question, citing the overbought condition of tech stocks that led to the NASDAQ’s recent sell-off, but we’re not satisfied with that.  We acknowledge the argument, but aver that it ignores some of the tougher realities at work in the market.   But before we get to that, take a quick look…

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Investor, There’s a Bug in Your Olive Oil (CGNX,BOTZ,TGT,LVNTA,QQQ)

Investor, There’s a Bug in Your Olive Oil (CGNX,BOTZ,TGT,LVNTA,QQQ)   In what might be considered a perfectly apropos metaphor for the state of investing these days, the Kansas City Star yesterday reported that Vincent Van Gogh’s ‘Olive Trees’, painted in 1885 directly before the artist took his own life, has been hiding a secret for better than 125 years. Curators at the city’s Nelson-Atkins Museum report finding a grasshopper that was lodged in the paint all those years without anyone noticing, attributing it to the simple vicissitudes of painting outdoors.   The Bug in the Oil   And we wonder if, after the ‘suicide’ of the current bull run, this stock market’s ‘grasshopper’ will be so easily identified.   For we’re no doubt headed toward a structural event in the financial world.  And though many will point to their favorite bugbear as being responsible for the calamity-to-come, we believe that the larger cycles of human history – and particularly those related to finance and economics – make it all too predictable. No geniuses here.  Just keen observation.   The market cycle is essentially one of arrogance and humility.  It follows the larger course of human events and can therefore be…

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Investor Want a KracKeR? (KKR,LMNR,HAIN,QQQ,TREE)

Investor Want a KracKeR? (KKR,LMNR,HAIN,QQQ,TREE)   We’ve long admired legendary investor David Dreman, author of the ‘Contrarian Investment Strategies’ series of books.  His approach to value investing was a tremendous help to us when we began in the business some 25 years ago.  And even though the days of pure value investing are likely behind us for good, once a while a good opportunity does pop up, and we try to avail ourselves of it.   What was the essence of Dreman’s approach?   Contrarian investing for Dreman was a matter of finding desperately battered stocks and buying them for the long haul, say, three years or more.    Three measures, for him, marked a security that was ripe for purchase: a low price to book ratio, low price to earnings and a healthy dividend yield.   When those three metrics were in play, the stock was considered good value, and Dreman bought. But investing trends change and markets don’t always avail themselves of the systematic and disciplined approach that marked the last generation’s methodology.  Today, stocks will rise – even soar – with little if any of what Dreman sought before he bought.   Today, it’s all about momentum and…

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Melancholy Bull (QQQ)

Melancholy Bull (QQQ)   There’s an old Lou Reed tune that offers the following bit of pithy wisdom –   I do believe, if you don’t like things, you leave. What comes is better than what came before…   Now, forgive us if it ain’t Neitzsche or Schopenhauer, and perhaps we were young when we first imbibed the lines.  (OK, we admit we dallied now and then with a sniff of the odd petroleum based adhesive).  But we’re adamant that Lou had something sufficiently deep to offer, and it goes like this –   Very simply, “If you don’t like things, you leave” is excellent advice.  Unfortunately, in many cases the state apparatus doesn’t always condone the dropout option.  And at times, it even forbids it.   Ask the Russians of East Ukraine and the Crimea, or the Catalans or Basques or any other group of individuals that seek self-determination from the larger collective.  Heck, go and ask someone who’s trying to homeschool his kids!   They’ll tell you. We’ve always advocated the ‘dropout’ route, insofar as we believe that self-sufficiency is the ideal and safest course of action for any man or family to take – particularly in these…

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The Wages of SIN! (BF.B,QQQ,SLV)

The Wages of SIN! (BF.B,QQQ,SLV)   There’s not enough time in the day to catalog all the possible sources of information, all the data series and analytics that Wall Street produces on the broad market and specific asset classes and stocks – let alone read them.   One has to focus on the macro if one wants to be a generalist.  Or specialize, if one prefers to be a niche player.   But here at Normandy, we attempt to do both.  We have our advisory group that meets once a month to discuss longer term trends and possible near term surprises.  And we have our in-house analysts and interns who crunch the numbers and scan the full array of charts on a daily basis.  Between the two groups, we admit to setting our sights high, but it’s all worthwhile when the numbers come back positive, and we can treat ourselves to a friendly game of backgammon and a chilly little bourbon at day’s end. Speaking of a chilly little bourbon, it turns out that the distillers are right now due for a pop – as we read the tea leaves.   An Invitation to Sin   Truth is, sin stocks…

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New Leg Afoot (HYG,DIA,QQQ,SLV)

New Leg Afoot (HYG,DIA,QQQ,SLV)   When you start dreaming that you’re a close associate and friend of former presidents and various other statesmen it’s very likely something’s wrong.   Now, that’s not to say that all who mucky-muck about with the bigshots have mental problems; certainly not.  But we ham and eggers have to keep our feet on the ground.   After all, if we’ve never even met or seen these fellers in person, what could there possibly be to dream about?   It was with that in mind that we assured the Mrs. our next visit to Dr. Ludmilla would settle the matter; we’d tell her the whole story, purge ourselves of our nonsense and come away cleansed. Oh dear, Doctor, yes!  Yes, yes!  Flesh it.  Fleshitgrasp.   Ahem.   The point of the matter is that a fellow should never get too big for his britches.  He should know his place, more or less, if he wants to have a good, safe and meaningful life.  After all, the search for fame and glory nearly always ends – unfortunately – in either death or jail.   That’s what Dr. Ludmilla was trying to explain to me when I finished…

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Things We Like. And Things We Don’t (QQQ,AAPL,PIR,SPY,DIA,AOBC)

Things We Like.  And Things We Don’t (QQQ,AAPL,PIR,SPY,DIA,AOBC)   Ed. Note – the devastation in Florida and across the southwest warrants a word of hope and encouragement for all those who experienced the wrath of Irma … Hang tough, friends.  And be good to each other.   Our thoughts are with you.   There are currently a number of discordant trends in the market that are worthy of our scrutiny, and that we believe point to precisely where we’re positioned in this longest and most powerful of all bull markets.   We hope that a firm understanding of that position will also reveal to us an appropriate trade for the week, as unlikely as it may appear as we begin.   So…   We start with a look at the dollar, in the midst of one of its worst declines in recent history, a bearish move that began on New Year’s Day and has spiraled lower by 12.5% as of this writing.   Here’s the buck – It doesn’t look good.   The dollar’s struggle seems to grind on despite the threat of higher interest rates, despite the rally in both the stock and bond markets, and despite the jawboning of…

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Tortoise vs. Hare, Avionic Version (BA,NOC,HYG,BIDU,QQQ)

Tortoise vs. Hare, Avionic Version (BA,NOC,HYG,BIDU,QQQ)   Where in the world will it end?   General Jenny Tull, the first female, four-star officer in the U.S. armed services, yesterday announced procurements totaling $82 million for the purpose of ‘gender nullification initiatives’ and ‘tactical androgen support ops’. Although our efforts to contact the General’s office have yet to meet with a reply, our curiosity as to what those two items would look like in some of the Mrs.’ choicest lingerie have set our hearts absolutely a’flutter!   And further, we ask: is there a chance that Jenny Tull’s own tacticals have ever been manacled? Her cuticles ridiculed?  Or her clavicles or mandibles manhandled?   Haha!   Moreover, what, pray tell, turned the general into such an irascible Hannibal, so fanatically concerned with the exclusively bacchanal?   Call us puritanical, but when the goal of armies turns from killing the enemy into a vehicle for social engineering, all hope of victory is lost.   The Death of War   Thankfully, there are still those who believe that wars have to be won, and most of them walk the corridors of the corporate weapons industry.   We’ll return in a moment to discuss…

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