Friday Thoughts

Yield Curve
The yield curve has started flattening. When comparing January curve to December curve you can see a significant move towards horizontal. In some circles the yield curve is very impressionable.

     Why is the yield curve important and why is it [usually] sloping upward? Think about the Expectation Theory. For starters, yield is on the y-axis and maturity on the x-axis. Short term is inherently less risky meaning the interest you receive on bonds will be lower. When you start moving out - 10 years, 20 years, 30 years - the yield will increase to account for the risk of time. Most cases you'll see a fairly significant difference between the 10 year and the 30 year. Why, besides time risk?

Week of November 6th

Sunday - Since I forgot to say anything Friday, I'll start with my uninformed thoughts on the new Fed chair Jerome Powell. From what I heard, if you liked Yellen, then you'll like Powell. He seems to be a good continuation and has been Hawkish in 4 of the last 5 votes to raise rates. Meaning he voted to raise them. Which I think is a good thing. Especially when Janet had said that the Fed's goal is to return interest rates to normalcy. Looking at the big picture, normalcy is equal to about 3% or 4%.

If that is in fact the big-picture goal, then that type of mindset is important. There are signs pointing to a strengthening economy and there are signs pointing to an inflated, false high economy. If the thought is this is a strong and strengthening economy, then this is the prime time to raise interest rates. Inflation is still below the ideal levels - levels set forth by the Fed - which could be a reason for leaving them as is. But, in the event of another recession the go-to move will be to lower them again.
You can't lower them if there is nowhere else to go. I realize Germany went negative, but that shouldn't even be a thought. That just raises a whole crop of new issues.
 - The grey bars in the 'Fred' screenshot indicate recessions. Just by doing a quick once-over, you are able to see that, especially in the last 30 years, the reaction is to lower interest rates.

Week of October 30th

Monday & Tuesday & Wednesday - My portfolio is very sad now. My position in INFY is still pretty effed up from the spread. I was an idiot about CVS and it got worse. I checked this morning and saw it was down $192. Yes. At the end of the day though, it climbed to only down $169. #Nice. Except not at all.

That represents a fall of just about 50%. I am surprised it's only that bad. I didn't check all weekend after the tumultuous Friday and was expecting a fall near or around 70%/80%. Whew? CVS reports earnings in one week before market open and let me tell you, I am nervous. They have had a really rough year and even though they are expected to show growth I have a feeling it will be overshadowed by other things. Like their recent bid for insurer Aetna. At $200 dollars a share, for a total $66 billion+, they will likely have to take on debt and I don't think it is worthwhile. It looked like a retaliation move to the Amazon news the day prior. In two days, last Thursday and Friday, CVS fell a total of 9.81%. BRUTAL. Such an idiot.

I felt very ehh on Sunday, like poop on Monday, and came home with a fever yesterday. Which is why I am so delayed. Excuses, excuses I know. But, there they are.

More portfolio and actual market updates to come this week!

Week of October 23rd

Monday & Tuesday
Monday = Good.
Tuesday = Bad.

Starting with the good. This actually goes back to Friday when CVS shot up to $76.49 from an open of $74.87. The big of a jump pushed my option position through the roof! If the roof is at 20%, then through the roof is accurate. Three consecutive up days and my CVS position gained back everything that was previously lost and then some. Monday was their ex-dividend date so the 50 cent fall wasn't actually a fall. Actually pushed my position up another 5% to a total gain of 28.60% (+$102.30). Monday was an even better day because my INFY position was almost at break-even! The stock popped almost two percent and my call saw a likewise jump in value.

The Week of October the 16th

Monday the 16th
Work sucked. It was my first real bad day and it is going to be followed by two, maybe three more. I am almost losing my voice from talking so much. I had zero time to check any investments, or even how the market did today. My only bright spot was Cara Therapeutics. Was up 7% in the pre market, but only finished +3.29%. Better than the last two days of lower and lowerer.

As for my option contracts - both fell by dollars. The plural kind. When I have more time and energy and feedback about the day I will do a more rigorous update.

The Week of October 9th

Monday the 9th
Heck of a start to my week. AMD took off for the moon this morning and my call was following suit. It opened up 0.88% and I thought, "Ok great. If it stays around this level then that's a solid day. I'll take it." I got busy with work for a few minutes and didn't check again until 9:47am. Up 2.47% after 17 minute and my own position was about about 12%. I was feeling it! Getting excited after seeing the chart going almost vertical was like seeing a unicorn. I was really excited for where it was going. The price was approaching the resistance line and I knew my time was limited. An hour later, the stock was up to $13.72 and it wasn't done. Around 11:00am the price of one share of AMD hit and broke $13.80 and for me that was it. My position alone was up 20% on the DAY and I ended up making the sale and pocketing a near 30% after commission and fees. One hundred and ten dollars, usd.

Actually writing that out makes it seem pretty sad that I am so pumped for that. There are people that you read about making thousands and thousands of dollars on one trade. For me personally, this is what it's all about. I know I'm not going to me making thousands of dollars on my trades. Realistically  - with the money I am putting down - I am elated when I'm able to get just one hundred. My hope is that the more I do this, the more I am able to learn about investing, the better I will get at writing (because I'm sure I'm fairly boring), and the more I will be able to make. Hopefully this will document the growth of my portfolio instead of the demise.

Other notable portfolio movements. My INFY contract didn't move at all. It opened up $10.00 but fell to no gain by market close. My position in MACK - Merrimack Pharmaceutical - fell 7.09% taking exactly ten dollars from my investment. Besides that it was a day of little to no movement.
I forgot to mention that I recently acquired shares of SKT and UBNK.  I liked where each of them stood financially, technically, and they give a good, consistent dividend. Neither of them moved too much since the buy or today. That concludes my Monday update.

The Week of October 2nd

Monday the 2nd
I started the day feeling fantastic about myself. I actually rolled out of bed at my alarm and strolled on over to the gym, ate breakfast, and was ready for work early! Too bad traffic destroyed me,as per usual. You'd think after three months I'd be used to it. Nope. I mean I was still early to work, but being stuck in traffic is the bane of my existence. Top 5 least favorite things I have experienced.

As far as the market goes I was really surprised that we had a positive day. After the terror attack that occurred in Las Vegas I just assumed the futures would be red, the VIX would be up, and the DOW, S&P, and NASDAQ would be down. To my bewilderment, it was only the Nasdaq that dipped into the negative, though it quickly recovered.

Infosys closed today at $14.69, up 9 cents from the previous day. The 0.62% gain caused my option position to increase 5.56% - the equivalent of $5.00.

AMD on the other hand closed today $12.71 which was down 4 cents. The -0.31% loss is equal to a -0.46% loss in my call position. Much closer to 1 to 1 relationship. On slower days this week I will go into more depth as to why I made these purchases.

In other portfolio news it was actually a good day, overall. I think the idea of the Trump Administration tax corporate tax cuts helped Disney. MarketWatch posted a piece this morning listing a handful of companies effective tax rate and Disney was right up there around 35%. Cutting that down to the planned 20% would directly benefit Disney's bottom line, thus justifying the 1.32% gain during trading hours - the equivalent of an $18.32 gain to my Disney position.

The other "big" gainer for myself today was Cara Therapeutics. If you look through my post history and tweet history you'll see my love for this company. I won't get into it here. Cara finished trading up 2.85% from open gaining me an extra $31.98.

The Week of September 24th

I have wanted to start something like this for a while now. The reason I haven't lies in the fact that I didn't have enough money to start actively investing. I have a tiny portfolio, but I wanted something that I would be able to write about every week. Meaning that I would change something, or come up with a new idea, or make a trade that would actually be worthwhile writing about. If we are being very honest, I don't know what to do with my current portfolio. I bought these things without doing the necessary research, or basically any relevant research. It's down. I have been having an internal battle with myself as to whether I wait it out, or if I bite the bullet and just completely burn the portfolio.

Maybe I'm not nearly as smart as I like to think and I would continue to make these bad decisions. In summary, there has been very little movement in my portfolio and writing about it week in and week out would be a snooze fest. But now. NOW. I have finally been approved to buy calls.

I figured now would be as good a time as ever to get something started. I made a few moves this week and want to write it out. Personally, I am very interested in how people make their money. I want you to understand that this isn't my main source of income. I'm sure you all think you're smarter than me. I bet a lot of you are. But here I am and here you are. So I'll take it for what it is. Curiosity.

ACHC Brokeout

Acadia Healthcare was pushing against fairly strong resistance and as of late has been touching up on it. At some point in March, April, May, and June, the stock as touched the resistance at roughly $46.50. Healthcare performed beautifully last week and on Thursday we saw ACHC break through the resistance and continue gaining on Friday. Currently the stock sits at $48.03 and in a seemingly good position.

Kroger BOMBED [KR]

Pretty easy to see on Thursday that Kroger kind of sucked. They released their last quarters earnings and while they met analysts predictions, they lowered their expectations for the next year. On that news - along with their wishy washy earnings call language - their stock plummeted. Fell off a cliff, if you will. It opened Thursday morning down roughly -13% from the previous days close and it got worse from there. Kroger's management started the earnings call close to 10:00am. The prepared statements in summary were basically not to expect too much from them in 2017 and they readjusted their eps estimates lower from their last ones. In total, KR's share price went from $30.26 down to $24.56 just on Thursday. A grand total of -18.84%.

"What more could go wrong for them this week? They already lost billions of dollars in market cap and are going to make less money this year than previously thought....maybe this is the bottom. Kroger is a value stock that has been struggling lately and, who knows, maybe it's time for me to be contrarian. Everyone thinks it will be bad so I'll buy into it. They could do better than they think! That would give a great boost to their stock price. It's so cheap right now. I think I'll invest!" 

If I Bought Everything I've Analyzed...

I figure now is as good a time as ever to go through my track record and see how I have been doing. I started posting last October and the stocks that I have analyzed have done pretty well since then. I will start from the beginning and go from there, looking at all the stocks I have analyzed and presenting the return of each since the post date.

1. Chipotle analysis on October 20, 2016. The stock price at the time was $405.10 and I said it represented a "beautiful buy point." Before market open today (6/15/17) the price is $459.69. The total return over this time has been 13.43%.

2. SolarCity analysis on October 21, 2016. The stock price at the time was $20.15. It was bought by Tesla and since converted into Tesla shares. At the time of the conversion, shares of SolarCity reached $20.34 and were converted to 0.11 shares of Tesla - which was $184.52. The conversion happened on November 21, 2016. Lets say you have $987.35 invested in SolarCity at $20.15. That'd buy 49 full shares. Those 49 shares would be converted into 5.39 shares of Tesla. Since the merger, Tesla has gone from the $184.52 price mentioned earlier to $380.66 before market open today (6/15/17). That would mean your position as appreciated by 105.74%.

Cara Therapeutics

Cara Therapeutics [CARA]

Cara is trying to do big things to combat the opioid epidemic that has been a problem in the United States for quite some time. Opiates are considered an analgesic drug - or one that relieves pain. The most common are in the forms of morphines and heroin. Then there are the synthetic and semi-synthetic opiate drugs being Percocet, Vicodin, OxyContin, and fentanyl. From the Wikipedia page Opioid epidemic, there were 52,000 drug overdose related deaths in the United States. Of those overdose related deaths, 33,000 were from opioids. Clearly there is an opioid problem.

Nu Skin Enterprises - [NUS]

This is the first time I have heard of Nu Skin and to be honest I am a fan.

"Nu Skin Enterprises is a $2.0 billion plus direct selling company that markets premium quality personal care, nutrition, and technology products through a global network of approximately 1 million Actives and Sales Leaders." -Investor Relations on Nu Skin Website

First things first is their fairly consistent dividend since the beginning of 2001. They missed a few quarters here and there, but it has grown at a steady pace to reward their investors. However, besides the dividend I don't know if I would plan on investing in them long term because I have only been watching it for a couple days. Though they've been in business since 1984 and traded publicly since late 1996, I haven't looked into their business and how they stack up to competitors yet. So why don't we look!

Reinvest Your Dividends

If you find yourself in a position where you have time and financial security then good job. You're doing something right. Also, investing some of that extra money is a well managed company with a consistent dividend payment it could behoove you. Even better would be to find a company that allows you to reinvest the dividend immediately into more shares. My grandpa sent me a book that speaks on it and, though the book outdated, provides some very valid arguments for reinvesting dividends.


My strongest take-aways regarding the positives of the reinvestment the purchase of shares automatically dollar cost averages for you. Also, there is a pretty good case of making more money* than just receiving the cash dividends and doing it yourself or just keeping it.

Buy Low, Sell High

The most basic and well known investing phrase. It seems so simple. You want to buy the stuff at the low point and sell at the high point so you can cement your returns and make money. It's basic and makes sense. Ya know, the goal of investing.

The problem is that most people aren't exceptional investors.

Part 3: True Costs of Trading

As stated in the book "Investment Philosophies" by: Aswath Damodaran (recommend), there are three main sources that contribute to trading costs. 
1. The bid-ask spread
2. The price impact
3. The opportunity cost of waiting

the source of the following information is from the book listed above. 

Part 2: True Costs of Trading

As stated in the book "Investment Philosophies" by: Aswath Damodaran (recommend), there are three main sources that contribute to trading costs. 
1. The bid-ask spread
2. The price impact
3. The opportunity cost of waiting. 

the source of the following information is from the book listed above. 

Part 1: True Costs of Trading

This blog is meant to provide you with more information on trading costs. Most retail investors don't understand what goes into trading costs. When I first started, the only cost to me was the commission set by the broker to buy the number of shares. $4.95. This is the only cost you'll explicitly pay, but there are more that come up over time. The more I do this and the more I learn, the more I realize how uninformed I really was.

Active vs. Robo Advisors

Almost everyone at some point has worried about money. Where to get it, what to do with it when you have it, how not to lose all of it. The basics. For most people, they don't know enough about the stock market or economics to feel comfortable investing their money on their own, so they turn to money managers. This is where you can get ripped off by the smaller money institutions wit loaded funds and high expense ratios. With the bigger firms there is more to be offered for much less. Below we'll get into what active investing is and the alternative to it if you like it but can't do it yourself. Then we'll try and scrape the surface on the recent financial innovation in robo advisors.

Enjoy the read.

BUD tracking the 50 day moving average

Anheuser-Busch InBev SA/NV  [BUD]    

Slow and steady wins the race. Since their rapid drop in stock price back in October/November of 2016 it has been tracking upward, slowly but surely. It has bounced off the 50 day moving average twice now and is creating a pattern.

Ever Hear of NQ Mobile?

NQ Mobile [NQ]  - all numbers and information about company come from finviz.com

I'm sure you haven't. If you have, then you are better than me. NQ Mobile - used to be NetQin Mobile - is headquartered in Beijing making it a Chinese stock. The basis of their business is supplying mobile internet services to the people of China. They have products under their umbrella in the fields of mobile security, privacy, optimization, cloud stuff, and family protection. 

Interest Rates, Among Other Things

If you are familiar with interest rates then you'll probably understand everything I am about to say. If you do not, then this may be helpful to understanding them a little further.

The reason I want to try and explain this in a more basic way is because for the longest time I had no idea what people meant or were talking about when they said, "the Fed is going to raise interest rates" and "I wonder if Yellen will increase interest rates during the next meeting." 

Bill Ackman out of VRX

     Word on the street earlier today was that Bill Ackman was selling out of Valeant Pharmaceuticals [VRX] and stepping down from the board of directors. Turns out those reports are right as it has been confirmed by many that the huge block trade made just after 4:00pm was the sale of all of Pershing Square's shares. Ackman sold 27.2 million shares for $11.00 per.

SNAP Stinks

A couple things I learned and then some of my own thoughts as to why Snap stinks.  

     25% of all stock issued at IPO was promised to be held for one year. Snap and the underwriters - Morgan Stanley and Goldman Sachs - were able to convince individuals/institutions to agree to buy the stock and hold onto it for at least one year. It's very rare that companies are able to accomplish this and those companies are actually turning a revenue. These shares that are held for a year are going to help legitimize the company, which is useful since they lost $514.6 million dollars last year. 

CMG Moving Averages Cross

Chipotle  [CMG]     

     After a couple days into a down week I was scrolling through the charts I usually do. Today I noticed that Chipotle is showing a bullish signal which I find surprising amidst all the bad news surrounding them recently. The front cover of Barron's was promoting an article they wrote saying Chipotle could have a 20%-30% downside 2 or 3 weeks ago. And today it fell 1.65%, the equivalent of $6.78 and broke below any support from the 50 or 200 day moving average. 

Falling Forty

In an effort to keep you readers engaged while I study for midterms I wanted to post a brief analysis on the two companies that fell greater than 40% today based on finviz.com.

1. [RTK]

Valeant [VRX] Reversing Trend

Valeant Pharmaceuticals International, Inc     [VRX]


I wish I had been able to post this on Monday when I saw this. Before the subsequent 12% trip up. Valeant had formed a reverse head and shoulders. 

Down 40%!? [LNKD example]

     Aha, misleading title. This isn't about a specific stock that's down 40%. You didn't miss any huge news. No worries. I wanted to talk about losing 40% as a short term buying opportunity. If a stock falls 40% in one trading day, wouldn't that seem like a great opportunity to buy? Sometimes. To buy that stock there would have to be certain things you believe in and certain things you look for. 

Strategy? [TGT]

     There has been a lot of news and prominent investors coming out and saying a load of different things. Some argue that all of Trump's plans will encourage growth and the stock market will continue its bull trend for the foreseeable future. Others are saying that a tax cut could increase the debt dramatically and lead to a market correction. It has been very frothy lately, not wanted to move too much higher of lower since mid December. Seth Klarman in his note to his investors wrote that he is moving toward a larger percentage of cash in his portfolio because he believes there is more downside potential. 

Does Apple Have What It Takes?

Apple  [AAPL]

     There comes a point in time when the greats fall. The Ottoman Empire, The Roman Empire, Yahoo, and Apple? They have a market cap of $639.51 billion dollars which makes them the largest publicly traded company. They have had mounds of success thanks to Steve Jobs development and new ideas. Since Jobs died of cancer Apple hasn't come out with any great, new ideas. Items that would blow your sock off like the iPod, or the iPhone, or even the iPad. But things seems to changing.

Strong Doesn't Always Mean Better

     There has been a ton of talk about the strength of the dollar recently. Some people who don't know so much about it might automatically think that strong would be good. The dollar must be doing great and everything is coming up roses for America. That's how I was a little bit ago before I finally understood the basics of the foreign exchange. I'm just going to provide a very basic example of why the strong dollar isn't necessarily a good thing for some aspects of the United States.

Is Panera [PNRA] Forming Cup & Handle?

Panera   [PNRA]


     If they are, it's a smaller one. However, it's a bullish pattern nonetheless. For those of you unfamiliar with the term cup and handle there is an explanation on Investopedia I would recommend looking up. Here is the screenshot I took of the chart. I finally figured out how to draw on them. Lucky you.

Kroger [KR] 50 Day Breach

Kroger   [KR]

     Kroger is a prominent grocery store chain headquartered in Cincinnati, Ohio. In it's 2016 year, the company lost about -18% off the value of their stock. It was a down year for the company in that respect. Over the last 5 year period, they have gained 184.97% while the S&P gained 72.37%. Not only has it outperformed the market, but it has offered up a consistent dividend in between 1-1.5% yield. It was uncharacteristic for the stock to plunge almost -20% in one year after continual growth and expansion. That doesn't make a whole lot of sense when you pin it up next to them meeting or beating every quarterly estimate for Kroger's 2016 fiscal year. 

Caterpillar [CAT] - Last Infrastructure Stock

Caterpillar Inc.    [CAT]

     Caterpillar will be the last infrastructure stock I look at. At least for the time being and with the purpose of Trumps infrastructure spending boost. On Saturday the 14th, an article was posted on TheStreet along with a video from Cramer saying "Trump Could Make Caterpillar Great Again." 

United Rentals, Inc [URI]

United Rentals, Inc.   [URI]

     Coming from a little bit of a different direction with this one. It it still related to the other two, but they don't produce any materials or consult with any construction. Probably guessed it based on the company name, but they are as simple as an equipment rental company. They have general rentals which go towards the construction and industrial industry and a Trench, Power, and Pump segment. That one targets more of the underground work. Pretty self explanatory stuff based on names with this one. They have just under 900 rental locations in North America.

Vulcan Materials Company [VMC]

Vulcan Materials Company   [VMC]

     Vulcan Materials Company produces and sells construction materials, asphalt mix, and ready-mixed concrete to companies primarily in the United States. Those segments account for three of the four company segments with the fourth being calcium. These different parts of the company are used in the public sector to supply for the construction of highways, airports, and government buildings.

Infrastructure Stocks for 2017 - Aecom [ACM]

Aecom  [ACM]

     The infrastructure industry is a hot topic as we roll into 2017. The Trump administration has said part of the plan to 'Make America Great Again' is to fix the crumbling infrastructure. That being roads, bridges, water structures, and things of that nature. Estimates have placed the total cost to fix all the roads and bridges to be in the trillions of dollars. Trumps believes his plan will pay for itself. He'd offer 137 billion in tax credits to private companies hired to fix the problems. The money the private companies save from the tax credits is assumed to be made back in tax revenue from the increased wages paid out to the employees and the profits to the contractors. Whether that is true and capable of happening, it's clear that Trump and wants to spend some money on building some things. (Some info gathered from article here) 

Barnes and Noble Stinks...

Barnes and Noble    [BKS]

     Barnes and Noble has cut forecasts because they had a terrible holiday season. The same store sales were considerably lower this holiday season and causing B&N to become reactive and cut its outlook for the fiscal year. In the 9 weeks leading up to the last of the year, B&N reported a decrease in same store sales of 9.1%. This news came out this morning and today along with most other retail stocks taking a big hit as well. Over the last 5 days, the stock is down 8.73% and 5.58% of that is just from today.