Slope of Hope Blog Posts
This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.
If you need any indication of just how dull and un-bear-ish this market has become, look no farther than our friends at ZH. During market mayhem, they have an absolute ball dissecting it. When markets basically go up 1% a day without fail, they turn their attention to any other bad news they can find and stick to it for a while. Years ago, it was the Fukushima nuclear reactor. These days it’s Tesla cars that are crashing or bursting into flames. When the market isn’t blowing up, something else always is.
For myself, I can’t really get interested in writing articles about the cars of minor celebrities bursting into flames, so I’ll just turn my attention to the most important driver of global equity markets, which is FANG. Some people say FAANG, so as to include Apple, but, meh, I’ll keep it to four – – plus a bonus mention of another stock.
We begin with Facebook, which managed on Thursday to push to a lifetime high, having utterly recovered from its embarrassing privacy scandal earlier this year (and I must say again, published reports about 10% of Facebook’s user base terminating their accounts in protest was simply irresponsible journalism).
Another day, another NASDAQ lifetime high. And what’s the driver? It used to be QE, but the central banks around the world have already turned off that spigot. The explanation is easier had by one acronym: FANG. Let’s take a look at the four components:
First there is Facebook, which got smacked down hard by the whole privacy scandal earlier this year, but now it just pennies away from its own lifetime high (or double top, depending on which way the wind blows).
Just got back from the Incredibles 2 show at Pixar; great fun!
Anyway, before I slump off to bed – – if there’s anything you need to see to convince you the excitement of early 2018 has been smothered to death, look no farther than the VIX chart. It’s just…………….sad:
Polaritite, Inc. (COOL) jumped $3.90 to $30.95 on 1 million shares Wednesday. The biotech and regenerative biomaterials company announced on June 4 a public offering of common stock. The stock has nearly doubled from a mid-April low below $16, and recently broke out of a 2-week consolidation pattern, suggesting it is ready to continue the run. Wednesday’s close was the highest since late August, and a break through that level ($31.68), its highest close ever, could take the stock to the mid-to-high $30’s next.
Whenever someone argues against short-selling, they often bring up two very scary words: Infinite Risk. In other words, the most you could lose on a long position is 100%. But there is no mathematical limit to short losses. You could short a stock at $10 and it opens the next day at – – what – – let’s say $500,000. Shriek, right?
Well, yeah, but that doesn’t happen. I think the most horrendous wipeout I ever suffered was a 50% gap up, and since my positions are typically 1% of my portfolio, it wasn’t devastating. If someone is going to argue against short selling, I think a far better and more realistic argument is not that losses are unlimited but that profits are limited.
In other words, the most you can possibly make on a short is 100% and, let’s face it, stocks never go to zero. Hell, I think even Lehman Brothers is still trading in some form to this day. A gain or 20% or 30% – – maybe 50% once in a blue moon – – is a terrific success.
However, the profits on long positions are unlimited. Making more than 100% – – be it 500%, 1000%, 5000%, or even 100,000% – – is absolutely possible, and it’s been done by people all over the world. The main ingredient is timing and patience.
I’ve used SlopeCharts to create some percentage charts below, to illustrate some long-term winners as Intel……
There are some stocks which are simply impervious to pain. Yesterday, for example (which feels like about a decade ago at this point) was a big down day, but if for some reason you were only looking at Amazon or Netflix, you would have had zero idea. None. They just keep going up or, at worst, go down a few pennies.
The same can be said for Apple. The world’s most crowded trade hasn’t suffered any negative effects from its crowded-ness. I mean, just LOOK at this: