Slope of Hope Blog Posts

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.

Regret (by Fayssoux)

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Sensing a bottom in December 2008, I ran a screen of small cap, debt-laden firms that had been beaten down more than the market on average, and then selected a subset I thought worth looking into individually.  At one point in early 2009, this portfolio was down 40%.  It has skyrocketed since, up 300% since 12/09/08 when I ran the screen and started tracking the stocks (look at ZQK recently!).  So much for the death of buy and hold.  If only I had held on…

No. Ticker Company Price Change% Volume Transaction Date Shares Cost Market Value Gain$ Gain% Change$
1. ZQK Quiksilver Inc. 5.55 -2.46% 1,816,506 Buy 12-09-08 1 1.35 5.55 4.20 311.11% -0.14
2. PSUN Pacific Sunwear of California Inc. 5.92 4.96% 1,114,473 Buy 12-09-08 1 2 5.92 3.92 196.00% 0.28
3. ABD ACCO Brands Corporation 7.89 -2.83% 100,461 Buy 12-09-08 1 2.1 7.89 5.79 275.71% -0.23
4. GBE Grubb & Ellis Company 2.20 -3.08% 465,213 Buy 12-09-08 1 1.15 2.20 1.05 91.30% -0.07
5. CMLS Cumulus Media Inc. 3.43 -0.58% 64,177 Buy 12-09-08 1 1.22 3.43 2.21 181.15% -0.02
6. VETS Pet DRx Corporation 0.30 -9.09% 2,000 Buy 12-09-08 1 0.37 0.30 -0.07 -18.92% -0.03
7. BNHN Benihana Inc. 6.42 1.26% 8,750 Buy 12-09-08 1 1.72 6.42 4.70 273.26% 0.08
8. DXCM DexCom, Inc. 9.65 -2.23% 336,820 Buy 12-09-08 1 2.24 9.65 7.41 330.80% -0.22
9. KONA Kona Grill Inc. 4.38 7.35% 29,693 Buy 12-23-08 1 1.35 4.38 3.03 224.44% 0.30
10. RAMR RAM Holdings Ltd. 0.70 0.00% 0 Buy 12-23-08 1 0.32 0.70 0.38 118.75% 0.00
11. DDS Dillard’s Inc. 25.97 1.29% 924,605 Buy 12-23-08 1 3.54 25.97 22.43 633.62% 0.33
12. UIS Unisys Corporation 36.85 -1.56% 405,869 Buy 12-31-08 1 10.1 36.85 26.75 264.80% -0.58
Total 12 Stocks -0.28% 109.25 81.79 297.87% -0.3



On March 13, a few days after the demonic low of 666, Tim posted a list of lottery picks.  I tracked the portfolio.  As of today, a little more than a year later, it is up 260%.

No. Ticker Company Price Change% Volume Transaction Date Shares Cost Market Value Gain$ Gain% Change$
1. CAVM Cavium Networks, Inc. 25.63 -0.50% 297,079 Buy 03-13-09 413 12.12 10573.43 5573.43 111.47% -53.63
2. CDNS Cadence Design Systems Inc. 6.81 0.74% 1,478,196 Buy 03-13-09 1,220 4.1 8304.88 3304.88 66.10% 60.98
3. FITB Fifth Third Bancorp 14.24 -0.77% 13,640,777 Buy 03-13-09 2,874 1.74 40919.54 35919.54 718.39% -316.09
4. HBAN Huntington Bancshares Inc. 5.88 0.51% 31,600,404 Buy 03-13-09 3,205 1.56 18846.15 13846.15 276.92% 96.15
5. GLG GLG Partners, Inc. 3.11 -2.51% 1,003,102 Buy 03-13-09 2,083 2.4 6479.17 1479.17 29.58% -166.67
6. KLAC KLA-Tencor Corporation 31.61 -1.03% 2,745,672 Buy 03-13-09 274 18.25 8660.27 3660.27 73.21% -90.41
7. KWK Quicksilver Resources Inc. 14.93 -2.74% 1,726,524 Buy 03-13-09 1,044 4.79 15584.55 10584.55 211.69% -438.41
8. LINE Linn Energy, LLC 25.98 -0.61% 960,598 Buy 03-13-09 352 14.21 9141.45 4141.45 82.83% -56.30
9. LNG Cheniere Energy, Inc. 4.89 4.94% 3,587,915 Buy 03-13-09 1,188 4.21 5807.60 807.60 16.15% 273.16
10. LVLT Level 3 Communications Inc. 1.63 -1.21% 2,257,214 Buy 03-13-09 7,813 0.64 12734.37 7734.37 154.69% -156.25
11. LNET LodgeNet Interactive Corporation 7.20 -0.14% 140,981 Buy 03-13-09 7,813 0.64 56250.00 51250.00 1025.00% -78.13
12. MTL Mechel OAO 29.35 -3.68% 2,372,832 Buy 03-13-09 1,377 3.63 40427.00 35427.00 708.54% -1542.70
13. OZM Och-Ziff Capital Management Group LLC 17.59 3.71% 955,604 Buy 03-13-09 791 6.32 13916.14 8916.14 178.32% 498.42
14. SFD Smithfield Foods Inc. 20.85 -2.34% 1,759,318 Buy 03-13-09 642 7.79 13382.54 8382.54 167.65% -320.92
15. WFMI Whole Foods Market, Inc. 37.19 -2.26% 1,407,526 Buy 03-13-09 350 14.3 13003.50 8003.50 160.07% -300.70
16. WIN Windstream Corporation 10.99 -0.48% 2,461,238 Buy 03-13-09 705 7.09 7748.24 2748.24 54.96% -37.38
17. WYN Wyndham Worldwide Corporation 26.37 -1.75% 1,454,318 Buy 03-13-09 1,214 4.12 32002.43 27002.43 540.05% -570.39
18. XL XL Capital Ltd. 19.41 -0.77% 2,834,133 Buy 03-13-09 1,344 3.72 26088.71 21088.71 421.77% -201.61
19. CCRT CompuCredit Holdings Corp. 5.35 -1.11% 58,635 Buy 03-13-09 5,000 2.28 26750.00 15350.00 134.65% -300.00
Total 19 Stocks -1.00% 366619.97 265219.97 261.56% -3700.8

Hindsight is of course 20-20 but I guess I offer this up to the trading gods as admittance of defeat and a form of emotional capitulation that might bring on at least some measure of downside correction.  What a rally it has been in the lottery picks, wow.

That Time of the Month

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First off, while I'm thinking about it, plans are slowly coming together for Slopefest in Las Vegas. I won't go into all the details now, but it's shaping up to be held on the night of Sunday, May 9th. If you haven't expressed your interest yet, you can do so here. 

As for the quarter which (thank God) just ended – – on the one hand, the bulls seem utterly, totally, and absolutely in control. Look at this monthly graph of the Russell 2000:

0331-rutmonthly 

 

For the past thirteen months, only two of them yielded a black candle, and March's candle was hugely up.

The daily chart, on the other hand, suggests a tired market. But the synonyms that have been used to describe the equity markets for so many months, such as tired, overbought, overextended, exhausted, or God-knows-what-else haven't done the bears any good. Tired or not, it keeps going higher.

0331-rutdaily 

 

Today was weird enough, but tomorrow should be an extra-spicy version of weird since (a) it's the first day of a new quarter (b) it's the last day of the shortened trading week (c) the hugely-important jobs report is coming out on Friday, a market holiday.

The New Age of One-Decision Stocks

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I think that in the late 1960s, the term "one-decision stock" was coined by the investment industry to suggest ostensible blue-chip performers (like – oh, say – Polaroid) that could simply be bought and held for perpetual growth.

It seems we're living another mini-era of this kind of thing. For instance, Ford – – yes, Ford, the American maker of cars – – hardly thrilling stuff – – is up nearly 900% over the past year.

0316-f 

And, more recently, real estate – yes, real estate! – has been the barn-burner. Take a look at triple-bullish DRN, up about 80% is just the past month! It's enough to make you sick (unless you own it).

0316-drn 

For someone like me, the past six months have been terribly discouraging. Witnessing phenomena like the above is hard to swallow, but it is reality.

What Have We Learned?

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One solid year of an up market, and one solid month of the most agonizing trading time I've had in my entire life, have put me in a deeply reflective mood. Even though the January 19th high has not been violated (yet), I am having deep doubts as to my long-term outlook on the market. It seems to head higher, regardless of external news or realities.

So what has the past year taught us? I have some thoughts on this; and although these thoughts may seem grumpy, snarky, or even whiney, I promise you, they are not intended to be. Cynical? Yes. Despairing? Sure. But complaining? No. Complaining about reality is pointless. So here's what I think the world has learned:

1. Investment banks can, with few exceptions, act with impunity. Yes, Lehman and Bear are gone, but that's just a sliver of the investing banking world. By and large, investment banks entered into the crisis as winners and exited the crisis as even bigger winners. They now know there really is no consequence for negative outcomes. If they win, they keep the profits; if they lose, they will be bailed out. End of story. So I think that, far from being chastened, banks have been emboldened to act in a manner that makes 2007 look like doe-eyed innocence.

2. Financial reform isn't going to happen. Whatever gets passed is going to be feeble. Maybe they'll pass a bill demanding that disclosure statements on credit card applications be in a font size two points larger than before, but that's about it. All this Volcker rule hub-bub is only going to compel the Goldmans of the world to dispose of their classification as bank holding companies, now that the need to be in that category (with its benefits) has passed. The panic is gone, so the motivation for real change is dead.

3. Real estate is doing just fine. Think real estate is in trouble? Ask the holders of SRS how their investment is doing. Real estate isn't going to be permitted to fail.

4. The financial industry is doing fine. Disagree? Check in with holders of SKF. They, as with SRS holders, are holding on to securities at lows never before seen in history.

5. Keynesian "economics" works. On the rare occasions a government faces a crisis, they just have to "print" (well, electronically create) trillions of dollars in "money." Bang! Problem solved.

6. Buying as many stocks as you can during times of panic is like legally stealing money. Gobbling up stocks – any stocks! – a year ago was a brilliant move for those who did it. The old saw about buying when there is blood running in the streets surely has held true.

7. It's much easier being a bull than a bear. The reason is simple – – pretty much all the vested interests in the world are on your side. You don't have to fight the tide all the time. Nine years out of ten, you're going to be right.

8. The unemployment rate doesn't matter. About 10% of the public has no income, and about 20% is underemployed. Obviously it doesn't matter to equities. The government will just keep printing up unemployment checks (no matter how many extensions are required) to keep things civil.

9. The US dollar is a one-edged sword. If the dollar is weak, equities will explode higher. If the dollar goes down, it doesn't matter.

10. The citizens of the U.S. love buying stuff. It doesn't matter if they need it, or if they have the cash on hand to afford it. This is the national pastime, and it's never going to end.

To a person like me, who is rational to a fault, and who loves free markets, these cold realities are depressing beyond imagination. But I'm not an idiot; I can see what's going on, and it's time to face the facts.

Have a nice day.