Time to short Stocks!

[KissMy]

I'm a stock guy, have been for 25 yrs. Oil stocks look fantastic to me for many reasons, not the least of which is China buys more cars than we do and has to import oil.
Mobil tech looks fantastic

What do you think about Core Labs (CLB) as an oil play?

 

[KissMy]

Much of that cash is overblown, since its sitting outside the United States and won't be repatriated because of the 35% tax rate. Most of the debt that has been raised has been to extend existing debt or lower interest payments or to just take advantage of the lowest rates in a lifetime that will probably be recycled back to shareholders. The change of government will improve moods but the problems in the economy are structural and there is too much capacity. Lowering taxes or being more business friendly won't change that.

You are right about that. A lot of these guys are pushing for a Tax Holiday in order to repatriate those dollars sitting outside the USA. Do you think the republicans will pass a Tax Holiday & let this cash rush into the USA? I vote for a Low Tax Holiday that is competitave with all other countries. Even if these companies repatriated low tax money gets paid to share holders as dividends, these share holders will have to pay tax on it in the USA & that money will get spent or invested in the USA.

FT - Companies in appeal for US tax amnesty

The treatment of “cash on the sidelines” is becoming an increasingly pointed political and economic issue in the sluggish recovery, with Republicans blaming uncertainty created by Democratic healthcare and financial reforms for companies’ reluctance to invest and create jobs.

But some large groups say that US tax rules are a more important barrier. JPMorgan estimated that for some companies, so-called trapped cash amounts to more than 75 per cent of cash balances. To use the cash domestically, they would have to pay tax, typically of 25-35 per cent.

“We do have overseas cash and we would be very supportive of a repatriation holiday,” said Keith Sherin, chief financial officer of General Electric. “If you think about it, there is a lot of cash trapped overseas. If companies could bring that back at more competitive tax rates, I think it would be good for the US economy.”

Sceptics, including in the administration, say the cash level alone is not a good guide to investment firepower as it ignores corporate debt levels. They also warn that Congress could raise hopes of more tax holidays; that repatriated cash might well be paid to shareholders rather than lead to job creation; and that a lack of investment is not the most pressing economic problem. The Treasury declined to comment.

 

[topspin]

I'm a stock guy, have been for 25 yrs. Oil stocks look fantastic to me for many reasons, not the least of which is China buys more cars than we do and has to import oil.
Mobil tech looks fantastic

What do you think about Core Labs (CLB) as an oil play?

sorry, I only do the big integrated majors

 

[The Rabbi]

Much of that cash is overblown, since its sitting outside the United States and won't be repatriated because of the 35% tax rate. Most of the debt that has been raised has been to extend existing debt or lower interest payments or to just take advantage of the lowest rates in a lifetime that will probably be recycled back to shareholders. The change of government will improve moods but the problems in the economy are structural and there is too much capacity. Lowering taxes or being more business friendly won't change that.

And THAT is why I disagree with the efficient market theory. Yes, all facts might be known. But how we interpret them is going to vary person to person.
I naturally think I am right. Either the money is sitting here waiting to be invested, or the money overseas will get repatriated under a special tax deal (I think there was one earlier under BUsh). Either way it will lead to new investment and greater returns, making stocks a reasonable value now.
You obviously disagree. I guess one of us will be right. Maybe both of us will be wrong.

 

[Toro]

I think EMH is incorrect as well. I'm just skeptical of QE2 doing anything other than inflating asset prices and maybe adding 0.5% to GDP. We are working through some of our problems which is good but I see too many imbalances to really take off. So I think 1%-2% is what we will get over the next few years then resume trenfline growth thereafter. But like you said maybe I'm wrong.

 

[Toro]

I agree with the tax amnesty BTW. Rather, I think it would be better to lower corporate taxes and close some loopholes such as transfer pricing. There was an article on Bloomberg i will post later detailing how Google paid a tax rate of 2.8%. Maybe lower taxes to 20% but close stuff like that.

 

[topspin]

I think efficient market theory works for me for sure!!!
Long term that is, I don't worry about short term fluctuations.
I do trade, but not sophisticated at all. If the market is down a couple hundred points I buy great companies and sell them when the market is up a couple hundred.
that usually beats the market, but I'm only doing that with about $100,000 the bulk is invested in buy and hold big oil, and mid/small cap growth funds and the S&P 500 50% oil and equally distributed with the rest.

 

[KissMy]

I agree with the tax amnesty BTW. Rather, I think it would be better to lower corporate taxes and close some loopholes such as transfer pricing. There was an article on Bloomberg i will post later detailing how Google paid a tax rate of 2.8%. Maybe lower taxes to 20% but close stuff like that.

Ditto - On the lower the corporate tax rate & close the loopholes so we can compete.

 

[topspin]

We should have the lowest corp tax rate, not the highest.

 

[The Rabbi]

I agree with the tax amnesty BTW. Rather, I think it would be better to lower corporate taxes and close some loopholes such as transfer pricing. There was an article on Bloomberg i will post later detailing how Google paid a tax rate of 2.8%. Maybe lower taxes to 20% but close stuff like that.

I agree a permanent solution would be better. Could it be done politically? Dunno.

 

[william the wie]

I think the key question for the stock market are the size and timing of the writedowns from foreclosuregate. Local and state officials are seeing this mess as a source of revenues in the form of fines for poor maintenance, bad filings, special taxes/fines on unoccupied homes, takings clause lawsuits against federal agencies carrying the properties and no doubt other revenue enhancers.

 

[Zander]

A quick update - I doubled my short position today - now have a cost basis of $27.60 /share.

 

[The Rabbi]

A quick update - I doubled my short position today - now have a cost basis of $27.60 /share.

"Markets can remain irrational a lot longer than you can remain solvent." -Keynes.

Remind us what you shorted again.

 

[Zander]

A quick update - I doubled my short position today - now have a cost basis of $27.60 /share.

"Markets can remain irrational a lot longer than you can remain solvent." -Keynes.

Remind us what you shorted again.

I shorted the S&P 500 using an inverse ETF.

Any good news is already baked into the cake, bad news, of any sort, should send the market tumbling..........

 

[The Rabbi]

That's possible short term. But longer term I wouldn't be surprised to see the Dow go to 15k.

 

[Douger]

That's possible short term. But longer term I wouldn't be surprised to see the Dow go to 15k.

There's no doubt it will.
As companies continue to go overseas their profits skyrocket.
The investors in murka make damn good profits. Those who work have their food stamps.

I just refuse to be a part of that corrupt system.
I invest in countries that actually give a fuck about their citizenry.

 

[topspin]

Acting like you can predict short term market direction is worse than picking football games.

Earnings are coming in good, if the pe of the market was a lot higher I'd agree on shorting. Good luck though, I'd rather wish people make money than lose it. 15,000 wow if it got there in less than a couple years I could retire on that gain.

 

[The Rabbi]

That's possible short term. But longer term I wouldn't be surprised to see the Dow go to 15k.

There's no doubt it will.
As companies continue to go overseas their profits skyrocket.
The investors in murka make damn good profits. Those who work have their food stamps.

I just refuse to be a part of that corrupt system.
I invest in countries that actually give a fuck about their citizenry.

Like China? France?

 

[Toro]

The market is selling off because QEII was underwhelming.

There are two big issues next week, the Fed and the election. The Fed is telegraphing that QEII will be less than the market is expecting. The market is expecting a Republican victory in the House. That is what I'm expecting. What if the Dems win instead? That's a negative. What if the GOP wins the Senate? That is a positive. But if it is anything other than the GOP winning both chambers, I would expect a sell the news reaction, which may be kicking in now.

 

[The Rabbi]

The market is selling off because QEII was underwhelming.

There are two big issues next week, the Fed and the election. The Fed is telegraphing that QEII will be less than the market is expecting. The market is expecting a Republican victory in the House. That is what I'm expecting. What if the Dems win instead? That's a negative. What if the GOP wins the Senate? That is a positive. But if it is anything other than the GOP winning both chambers, I would expect a sell the news reaction, which may be kicking in now.

Short term you're probably right. Markets rose anticipating a GOP victory. All that news is out and discounted.