Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Applied Materials Advances Ahead Of Price Target
Since closing at a 6 month low of $10.15 on November 16th, shares of Applied Materials, Inc. (AMAT) have been on a tear, rising 34%, as the Finviz chart below shows.
Fidelity Clients Are Net Buyers As Nuance Drops
Shares of Nuance Communications, Inc. (NUAN) plunged
18.53% Friday after the company lowered its full-year sales and
earnings forecasts. Surprisingly, though, as the screen capture from
Fidelity's website shows, there were more net buy orders from Fidelity clients for Nuance on Friday than for any other stock.
According to Fidelity, 79% of NUAN orders placed by its customers on Friday were buy orders.
Warning Flags For High Yield
In a Slope post Wednesday morning (“An Interesting Divergence“), Tim highlighted a comment by Dollar, citing a market technician who warned that the price action of the junk bond ETFs HYG and JNK, relative to SPY, could signal a stock selloff ahead. Also on Wednesday, over at the CFA Institute website, fixed income manager David Schawel argued, essentially, that high yield bond price action offered warnings of its own for high yield investors. Schawel focused on two specific risks for high yield:
– Valuation Risk. Schawel quoted Loomis Sayles Bond Fund manager Dan Fuss on the state of high yield:
High yield is as overbought as I have ever seen it. This is absolutely, from a valuation point, ridiculous.
Incidentally, Fuss made a similar point about the bond market in general to Bloomberg recently, saying that bonds were more overbought than any time in the last 55 years (Fuss has been in the industry for 55 years).
A reader recently emailed me, asking how he could hedge a "typical $500k
mutual fund portfolio". I'm going to walk through a step-by-step
example of doing that in this post.
Step One: Choose A Proxy Exchange-Traded Fund
If you own a portfolio of
stocks or stock funds, you can hedge that portfolio against market risk
by buying optimal puts* on a suitable exchange-traded fund, or ETF. The
first consideration is that the ETF will need to have options traded on
it, but most of the most widely-traded ETFs do. The second
consideration is that the ETF be invested in same asset class as your
portfolio. Let's assume your portfolio consists primarily of blue chip
U.S. stocks. An ETF you could use as a proxy would be the SPDR Dow Jones
Industrial Average (DIA), which, as its name suggests, tracks the Dow
Jones Industrial Average. You could then enter its ticker symbol, DIA,
in "Ticker Symbol" field in the Portfolio Armor app, as in the screen
capture below.
