Updating The Stocks I Follow

By: ispeculatornew
Date posted: 12.01.2016 (7:01 am) | Write a Comment

twilio_logo_01Today I’m (finally!) updating the list of stocks that I follow. There have been a few different changes so today I’ll discuss stocks that I’m removing, adding and ones that will be added in the near future if all goes well.

Youku Tudou Inc (YOKU) was taken over by Alibaba (BABA) earlier this year which in a way was not a big issue because I’ve mostly stayed away from trading Chinese tech stocks but I did like the idea of being able to eventually trade a pure video play.

Monster Worldwide (MWW) was acquired by Randstad Holding. MWW was a stock I had consistently shorted as I see it mostly as a company that failed to adapt to a changing internet and will continue to struggle with the likes of LinkedIn and even

Rackspace Hosting (RAX) was acquired by a group led by Apollo Global Management LLC and Searchlight Capital Partners UK LLP. It was a stock that I had shorted despite being a very interesting company but remained overvalued in my opinion.

Demand Media (DMD) was acquired by Leaf Group Ltd, it was a stock I had mostly stayed away from because of the challenge in trying to value it. DMD owns a lot of different sites such as eHow.com which probably are seeing a slow steady traffic decline and I doubt that will change. It was a bit of an IAC Interactive (IAC) style of company but with less growth and not as much in terms of interesting divisions.

Stocks That I’m Adding:

Twilio Inc (TWLO): Twilio is a company that went public this summer and that I would not be trading right now because I want to better understand its business. the company develops and publishes internet infrastructure solutions that allow web developers to integrate phone calls, IP calls, text messages and more. Its customers include Uber, Airbnb, Netflix (NFLX), Coca-Cola (KO), Salesforce (CRM) and more. Not a bad list right? The other reason why I’m waiting is that I try to wait a few quarters of earnings, calls, etc to better judge a company. That is probably even more important when discussing a company that has fast-growing revenues but is losing money. If you look at these charts of revenues and EPS you will see exactly what I mean:

twlo_chart

twlo_chart-1

Trivago (TRVO): Trivago will be a newly listed company, that is being “spun out” of Expedia that will be added to the stocks I follow as soon as it launches.

Snapchat Inc (SNAP): Snapchat will be the most fascinating tech IPO (it filed a confidential IPO) in a long time and I’m very much looking forward to the stock listing. Why? So many reasons:

-A Pure “Social” play that can be compared with Facebook, Twitter, etc

-I’d love to see revenues and EPS be “disappointing”. increasing opportunities for profit

-The company has been executing tremendously well on a longer term strategy

A New World Order Will Generate Opportunities

By: ispeculatornew
Date posted: 11.27.2016 (7:50 pm) | Write a Comment

The past few months have been signs that things are changing quickly in geopolitics and this will certainly continue to provide massive opportunities. Take the surprise Brexit vote where a majority of the population voted to “exit” the European Union. This vote generated massive swings in currencies, equities around the world not only in the following hours but also since then as announces are made. Recently, an announcement that the Brexit might actually not happen ended up moving the British pound significantly. Of course, if you think about the British people you might certainly have sympathy. Will traveling around Europe become harder with Brexit? Possibly, but there will continue to be many ways to get around it. I think the main takeaway from my perspective is that while some of these moves might not be good over the long term, they will generate more volatility and wild swings where you and I will be able to come in and profit from significant trading opportunities.

Another trade I had personally made was buying a Russian ETF when the Obama administration went ahead with some major financial sanctions. It’s always extremely difficult to time such moves and for a short time period it did look like I might lose money but over time the Russian market (and mostly the Ruble) recovered making me a nice profit.

eww_chartAnd Then There’s Trump

If you’re looking for these kind of opportunities, it’s fair to say those might happen under newly elected soon-to-be US President Donald J Trump. He’s been willing to take bold positions and has been going back and forth on several of them. Given the importance of a US President, he’s likely to not only impact single countries (just look at the chart for EWW – iShares Mexico) but also sectors depending on decisions he’ll make on the environment, on policy towards moving jobs abroad, etc. We’ve already seen some stocks do very well (Caterpillar, pharmaceuticals, etc) and are likely to see a lot more of that over Trump’s 4-year term.

There Is Risk Involved

Of course, there is significant risk involved but the way I try to play these in general is to bet on the market overreacting in the short term over moves that will not have a lasting impact. The has played out time and time again and I would bet we will continue to see more great opportunities in the coming months.

Closing Trade ($FB, $NILE)

By: ispeculatornew
Date posted: 11.08.2016 (6:59 am) | Write a Comment

nileIt is certainly fit that in what has been a tough year in terms of long & short tech stock trading, the one stock that has consistently been a good short finally ended up making me pay, and it was painful. Yesterday, as Blue Nile was in the news to release its quarterly earnings, it announced it had received and accepted an offer by a group led by Bain which was 33% over NILE’s stock value. No need to tell you that sent the stock way higher and crushed my FB-NILE trade:

 

nile_chart

As of today, that trade stands at -52.14% and will be closed on the opening today. As is always the case, you can see this year (and past years) long & short trades here:

http://www.intelligentspeculator.net/livetrades

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Closing Trade (AMZN-NFLX)

By: ispeculatornew
Date posted: 10.27.2016 (5:58 am) | Write a Comment

nflxIn what has been a difficult year of trading for the long & short tech stock picks, there have been a few ups and downs and I did of course know that shorting Netflix carried a decent amount of risk but I was willing to go for it. I’m not 100% convinced of AMZN’s threat to NFLX but I do think there is potential for AMZN to have an impact on Netflix’s membership growth but also its pricing power. As you can imagine, Netflix’s most recent earnings report, a big surprise in terms of international user growth sent the stock way higher:

nflx_chart

As of today, that trade stands at -32.48% and will be closed on the opening today. As is always the case, you can see this year (and past years) long & short trades here:

http://www.intelligentspeculator.net/livetrades

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4 Vital Financial Management Tips to Keep Your Business Successful

By: IS
Date posted: 10.24.2016 (12:42 pm) | Write a Comment

Running a business, whether big or small, is never simple. There are unlimited issues and problems along the way that you have to overcome. Be that as it may, if you are serious about it and determined, then you will beat every one of the difficulties coming your direction.

 

One thing you have to keep an eye of the most in your business is your finances. All entrepreneurs ought to put more consideration regarding their records to track everything that includes cash. This part may thoroughly be extreme, particularly in the event that you don’t have extensive experience with bookkeeping. However, it is fundamental that you need to learn it all together for your business to become successful or ask some assistance from the experts, like Kikka.

 

In any case, funds are a fundamental part of maintaining a business. Regardless of how hard it is to deal with your expenses, still you have to commit to keep your business off the ground. You need to guarantee that you track your funds every once in a while, so you can get ready for a few possibilities that may happen unexpectedly.

 

Thus, here are some valuable financial management tips to aid you in taking care of precarious money-related matters:

 

Oversee debts efficiently

Debts are a part of maintaining a business. Nevertheless, you need to know how to oversee them legitimately. You have to learn business debt management, so you will have enough information of the different finance choices that you can swing to from time to time.

 

Know your regular income

A standout amongst the most imperative things that you need to consider when maintaining a business is understanding your regular income. It is no surprise that not at all times your business’ deals hit high sales. You simply have to observe the slow months and ensure that you have no less than three or four months of money cushion to keep your company operating, regardless of the inactive periods.

 

Guarantee a lean business operation

As a business owner, you need to keep away from various capital consumptions. Make it a point to think ahead of time and decide extremely well before spending on something that you will lament later on. It is about organizing the vital things first to keep your business running easily. In addition, adaptability is expected to handle things, on the off chance that startling circumstance happens.

 

Set apart business accounts from personal ones

Regardless of the possibility that you deal with your own business, it is still important to keep up isolated records for business and personal use. Be sure to keep records of your business funds all the time and never mistake it for your own expenses. Hence, you can avoid any issues that will emerge and things will be less demanding and more straightforward to handle.

 

These useful financial management tips mentioned above will help you organize your business’ expenses. It will be easier for you, as an entrepreneur, to manage your money matters if you follow these things. So, keep all your finances orderly and make your company grow.

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CFDs Explained

By: IS
Date posted: 09.21.2016 (1:50 pm) | Write a Comment

The next Federal Open Market Committee (FOMC) meeting will occur in late September 2016. There have been many arguments both for and against an interest rate hike in September. Now, whether the Federal Reserve decides to raise or leave the Fed funds rate, major market indices should be affected. The Standard & Poor’s 500 Index (S&P 500), Nasdaq-100 Index and Dow Jones Industrial Average should react to the Fed’s decision in September. Now, instead of trading options, futures or exchange-traded funds (ETFs), some market participants may want to consider contracts for difference (CFDs). Now, some may be wondering what CFDs are and how these products function.

CFDs Explained in Brief

A CFD is a tradable financial instrument that seeks to mirror its underlying asset’s movements. Now CFD trading is less costly than trading options, futures or ETFs, since CFD investors and traders do not have to own the underlying asset and are not obligated to do so.

CFDs allow market participants to speculate on market prices, regardless of the direction of the underlying asset. For example, if an investor is bullish on the S&P 500 Index, the investor could purchase CFDs tied to the index. Consequently, the investor would benefit from a rise in the S&P 500 Index. Conversely, if an investor is bearish on the S&P 500 Index, the investor could sell short CFDs tied to S&P 500 Index, therefore, the investor would benefit from a fall in market prices. Therefore, risk tolerant investors who understand the product could use CFDs during the next September FOMC policy meeting.

Arguments for Fed Funds Rate Hike

Goldman Sachs’ Chief Economist Jan Hatzius is one of the few economists who believe the Fed will raise interest rates during the FOMC’s September meeting. Jan Hatzius argues that the U.S. economy is adding jobs at a pace that is satisfactory for many members of the FOMC to vote for an interest rate hike in late September. Although the August U.S. Employment Situation report came in weaker than expected, one month’s disappointing numbers does not reflect the overall trend.

Federal Reserve Chairwoman said, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” at the Jackson Hole, Wyoming annual summit.

Moreover, Hatzius stated, “Growth in nonfarm payrolls was weaker than consensus estimates at +151k, but above the pace Fed officials typically consider sufficient to hold the unemployment rate steady over time—the so called ‘breakeven rate … we therefore see this report as just enough for a large majority of officials to support a September rate increase. We have therefore raised our subjective odds of a hike this month to 55% from 40%.”

Although the U.S. economy only added 151,000 jobs in August, which was well below consensus estimates, the moving average over the past three months is an average addition of 232,000 jobs. Consequently, the risk of a recession occurring over the short term is low and the Fed could raise rates.

Arguments Against Fed Funds Rate Hike

Conversely, there are economists who believe that the Fed is unlikely to raise rates in September. Canaccord Genuity’s chief market strategist said, “I don’t think they’ll hike in September … the economic cycle is not about duration. The economic cycle is driven by Fed policy, short-term interest rates, which create strength in the long-end of the curve.” With all this chatter regarding interest rates, it’s difficult to discern whose arguments are stronger. Either way, investors should be gearing up for the potential Fed rate hike.

As stated previously, it is expensive for some investors to purchase options and futures on the overall market. Investors who wish to place a trade on whether the market will go up or down could place trades on CFDs related to the Dow Jones Industrial Average, S&P 500 Index or Nasdaq-100.

 

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2 New Trades ($TRIP, $TWTR, $AMZN, $NFLX)

By: ispeculatornew
Date posted: 09.19.2016 (3:00 am) | Write a Comment

Today I am opening my 18th and 19th trades of the year which will be my last 2 ones for the year (for tech long & short). It’s been a rocky year, my worst on record, hopefully these 2 help start a turnaround. As is always the case, you can see past 2016 (and previous years) trades here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaEarningsRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
TRIPTripAdvisor Inc61.2972.729.78-27.4819.743.0810.331.4111/3/201610.3618.9-8.13
TWTRTwitter Inc19.11N/A31.44-20.9258.093.056.451.3410/25/20163.35107.43N/A
AMZNAmazon.com Inc778.52191.1347.2613.8820.254.734.891.0210/20/2016229.1325.2N/A
NFLXNetflix Inc99.48304.1989.38-14.923.163.735.631.5310/17/201615.9221.8181.15

And the usual chart that I like to bring up:

Long Tripadvisor (TRIP) & Short Twitter (TWTR)

Being long Tripadvisor has certainly been a difficult position to hold in the past few months but I think it’s getting closer to its bottom. On the other hand, Twitter has been a big story in the past few months. There are some rumours that it will be acquired and that is clearly a risk but the company seems to be determined to find a better way out. The NFL deal has been perceived as a bid win for Twitter and in many ways it is. It got the rights for extremely cheap, was able to deliver a very solid broadcast in the first game, and got a lot of eyeballs. That being said, it remains unclear to me how this fits into the company’s longer term goals, how it will help deliver more visitors to its site or more money. I think the stock gains are clearly unjustified.

 

 

Long Amazon (AMZN) & Short Netflix (NFLX)

I will be writing more in-depth very soon about these two companies but I think one clear opinion is that Amazon is starting to create issues for Netflix, pressure on its growth and while I do remain optimistic about Netflix’s long term future, I think Amazon will put more pressure on NFLX’s margins and at these high valuations, I prefer the upside/downside risk of Amazon in this trade.

 

 

Disclaimer: Prior to opening this trade, I have a long position on $TRIP

Learn Lessons the Current Retired People Learnt the Hard Way

By: IS
Date posted: 09.07.2016 (3:01 pm) | Write a Comment

 

 

Learn Lessons the Current Retired People Learnt the Hard Way

There is little room for maneuver as you get older. As retirement looms you may begin to realize that you have not made sufficient preparations. More and more people are continuing to work past retirement age but it is not always an option, certainly with an existing employer. Your Social Security benefits are available at 62 but the figure you will receive is only 75% of what you would receive at the standard retirement age some time during your 67th year. Even then the average monthly figure based on the best 35 earning years you have will go nowhere near providing for comfortable retirement.

There is a bonus of around a further 30% for delaying your benefits until your 70th birthday but that will not be an option for those who have to finish working.

It is worth looking at what retired people are saying about their regrets after finding life difficult once their regular monthly pay check stopped.

  • They retired too early.
  • They were too optimistic
  • They took Social Security benefits too early.
  • They simply didn’t prepare properly then found they were spending too much after they retired

Early

Sometimes people have retired without using logic. N apparently significant fund may actually diminish far more quickly than they expect even if there is no apparent waste.

Optimism

It is important not to take risks with finance in your retirement. Your fund will still earn interest by you have little scope for recovering from a setback. That means your investment strategy has to chance to more conservative products. It means some of your calculations are based on optimistic returns. The recession struck a fatal blow to portfolios that included anything that did not guarantee returns.

Social Security

The temptation to take benefits at 62 is real. If it is out of necessity then they had no real strategy for the future; it was about living for the present. As retirees live longer problems were inevitable.

Preparations and Spending

It is difficult to resist the temptation to spend as soon as you retire. You now have plenty of free time on your hands. It can seem like a permanent holiday and many people spend more money on holiday than during a normal working week. There are obvious consequences for doing that.

Easy Answers?

Frankly there is no easy answer for people who have not prepared for their retirement beyond looking for ways to earn money and that means part time or even returning to full time employment. That is not always possible for health and practical reasons. Even when it is in the short term there will come a day when they are simply unable to work.

If you are reading this article and starting to worry then so you should worry. Whatever your age you should sit down and start to analyze your finances in detail. The younger you are the more chance you have of saving to create a significant retirement fund. In order to do that you should pay off expensive debt like that on credit cards. You are wasting money paying a high rate of interest on any balances you are carrying forward. You should negotiate a realistic credit loans which in today’s market will be at a much more competitive interest rate. Bad credit Loans are readily available for those in employment with a regular monthly pay check with the debt divided into equal monthly instalments over the term of the loan. At the same time you should prepare a proper budget and even do some research to see if you can save money on some of your regular bills such as utilities, telephone and insurance. There are comparative websites that will do many of the basic research for you.

A budget will not work without self-discipline and that means using a credit card only when you can pay off the transaction in full when the monthly end statement comes in. The incentive for doing this is clear in the stories that retired people have made about the mistakes they made leading up to and in the early years of retirement. After all you do not want to find yourself in the same situation do you?

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New Trade: Long Alphabet (GOOG) & Short eBay (EBAY)

By: ispeculatornew
Date posted: 08.22.2016 (3:00 am) | Write a Comment

Today I am opening my 17th trade of the year between between 2 names that I have traded quite a bit over the years, which will hopefully help me rebound from a few rocky weeks of long & short trading. As is always the case, you can see past 2016 (and previous years) trades here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
EBAYeBay Inc30.6319.0214.7111.06-2.253.55.70.997.110.03100.44
GOOGAlphabet Inc775.42N/A19.312.4513.624.64N/A1.21N/A19.1913.78

Long Alphabet (GOOG)

Alphabet is a company I’ve traded less than you’d expect, mostly because as much as I love Google as a consumer, it’s not as straight forward in terms of investments. Why? Lack of discipline and transparency, but also the moonshots. While all of those issues still exist to some extent, I’d say they’re all getting better (with the hire of a new CFO, the new Alphabet structure, etc) so I do feel more confident in going long Google in a “short term” trade like this one.

GOOG_chart

 

Next earnings: October 13th 2016

Short eBay (EBAY)

While this could certainly look like I’m taking a negative view on eBay (in a way it is of course), this is more of a play on my strongs doubts about eBay being able to turn things around and/or come up with spectacular numbers. Ebay’s P/E and forward P/E ratio are not way off but do still point to more growth than what I think the company can pull off, especially in the face of Amazon, Walmart and others competing.

EBAY_chart

 

Next earnings: October 12th 2016

Disclaimer: Prior to opening this trade, I do not have a position on GOOG or EBAY
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New Trade: Long Facebook ($FB) & Short Blue Nile ($NILE)

By: ispeculatornew
Date posted: 08.15.2016 (3:00 am) | Write a Comment

Today I am opening my 16th trade of the year between between 2 names that I have traded quite a bit over the years, which will hopefully help me rebound from a few rocky weeks of long & short trading. As is always the case, you can see past 2016 (and previous years) trades here:

http://www.intelligentspeculator.net/livetrades

Let’s start off by looking at the numbers:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
FBFacebook Inc124.8860.0524.5919.3443.824.617.560.986.448.81N/A
NILEBlue Nile Inc30.6634.6929.02-16.541.3831.291.0841.147.434.53

$FBLong Facebook (FB)

No surprise in me picking Facebook which has done great things for me personally. I continues to be my largest single position and Facebook continues to execute extremely well. I do have a bit more worries when I look at the landscape for Facebook, especially about its ability to position itself against Snapchat but for that I reason I did very much like the most recent Instagram move of launching stories. Facebook continues to deliver on the top and bottom lines and it’s crazy to me to see it trading at a comparable forward valuation as Blue Nile. In many ways Facebook qualifies as a “platform” and I continue to think those will be long term winners. Just think of a recent phenomenon Pokemon-Go. You could argue that Apple is making as much as any of the parties that are actually involved in creating and licensing the game. This is playing over and over and the platform players are getting their “tax” on each transaction.

FB_chart

Next earnings: November 2nd 2016

$NILEShort Blue Nile (NILE)

Long term readers of this blog know that I’ve been bearish regarding this stock for a very long time and have shorted it quite a bit over the years. For some reason this stock has traded at very high valuations over the years with very little to justify it. NILE has continued to show very little ability to generate growth and I continue to expect increased competition, eventually from the likes of Amazon which will certainly send the stock much lower.

NILE_chart

 

Next earnings: November 3rd 2016

Disclaimer: This trade on FB-NILE will be done on today’s opening, but i am already long Facebook (FB) as a consequence of my long term speculative pick.
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