My friend couldn’t take the pain and dumped a bunch of his favorite stocks. His MO (modus operandi) — Sell in May and Go Away. His email to me:
That crunch sound is my tight stop loss orders automatically executing. Goodbye Coke, goodbye McDonalds, goodbye Philip Morris. That jingle is the retained profits hitting my money market. Bundles of cash are a good thing. For a short while. Good grief! Now what?
Now what? Talk to his bank and local brokers for cheap properties. Search for bargain stocks. Sit in cash until the Fall. Not easy. What else?
There are sound reasons to dump some stocks (like WFM), not only because they hit your stop loss limits.
Europe is weak today. We will also. Watch your stops.
I dumped Whole Foods a while back for three reasons: It was going down. It was overpriced — P/E was too high. And everybody and their uncle was selling healthy, organic food — often at prices below Whole Foods.
Whole Foods is a damaged stock and a damaged company. WFM has had its day in the sun. Its P/E is still no bargain at 26.1.
But there are reasons to stay with stocks.
This morning MasterCard reported better than expected results. It’s one of my picks.
Gambles are only good if you get in early and stay the course.
HeartWare makes less invasive, miniaturized circulatory support technologies that are improving the treatment of advanced heart failure. Second quarter’s revenue of $70.1 million was 38% higher than the same period of 2013.
Gross margins are up to 67.3% versus 62.9% in the second quarter of 2013. Net income for the second quarter of 2014 was $8.4 million,compared to a net loss of $12.9 million in the second quarter of 2013. At June 30, 2014, HeartWare had $184 million of cash, cash equivalents and investments, an increase from $181 million at the end of the first quarter on March 31, 2014.
Nice positive charts on the latest goods economic news (from today’s New York Times):
Another reason stay away from banks: BNP Paribas reported a record quarterly loss after pleading guilty to violating U.S. sanctions against Sudan, Iran and other countries, and said it was taking major steps to beef up internal compliance. The French lender said a provision of 5.75 billion euros ($7.7 billion) set aside to help cover a nearly $9 billion U.S. fine, the largest-ever paid by a bank in a sanctions case, had pushed the group deep into the red in the second quarter. BNP Paribas does a good job, however, sponsoring tennis tournaments.
Russian equities are finishing off their worst month in more than a year, falling 29%. I should have sold them short. But I’m not good with overseas stocks (except HeartWare, which is basically an Australian company. Thank you, Andrew.)
The Middle East is an even worse mess.
Front page story in today’s New York Times:
You can read the entire story here.
I watched Charlie Rose’s interview with the political leader of Hamas, Khaled Meshaal. Meshaal offered basically no hope for peace, blaming all his ills on Israel. He forgot that Egypt closed its tunnels and brought on Gaza/Hamas’ financial crisis. Meshaal doesn’t even live in Gaza with his people. He lives in Qatar, in safety. Click here.
Twice in the past couple of weeks, Iranian Supreme Leader Ali Khamenei has called for the annihilation of the State of Israel. In a July 23, 2014 public address marking the upcoming Qods (Jerusalem) Day, which this year fell on July 25, he said that the “only solution” for Israel’s “wolf-like and child-killer regime” was “its annihilation and liquidation.”
Islamist militants attacks on cultural and historical treasures in Mosul (Iraq) — including a revered tomb — have outraged many Muslim residents and stirred what appears to be the first spark of rebellion against the extremists’ hard rule.
Iraqis inspected the wrecked grave site of the biblical prophet Jonah in Mosul, Iraq, last week. Extremists with the Islamic State in Iraq and Syria have demolished many historic sites there. Credit European Pressphoto Agency
For the full sad story, click here.
+ Fidelity’s new Active Trader Pro is really good and their people are really helpful. But I’ve said that before.
+ I tried Canon’s new fancy G1X Mark II. It has one benefit over my beloved G15 (see column on right). The G1X’s processor is six times the size of the G15. That means it makes better photos — but not six times as good. Meantime, the G1X Mark II is heavy, large and not pocketable. Don’t be tempted.
+ Running for less than 10 minutes a day can boost your health just as much as going for longer runs, a new study suggests.
The findings, published in the Journal of the American College of Cardiology, suggest that running can add three years to your life, and it doesn’t matter whether you clock 50 minutes per week or 180 minutes per week. Going slow didn’t matter either; runners who ran at less than 6 m.p.h. still experienced the same benefit. According to the research, runners have a 45% lower risk of dying from heart disease and a 30% lower risk of early death compared to nonrunners. Even as little exercise as a 15-minute walk could add three extra years to a person’s life.
+ WordPress is great software to run your web site with. And it’s only getting better.
Dennis is in Scotland, playing tourist. He found another great Scottish pub sign:
Harry Newton who last night saw the brilliant Philip Seymour Hoffman in the John le Carre movie A Most Wanted Man. The key to figuring the plot is the discussion about using minnows to catch fish, then barracudas to catch sharks. In other words, keep going up the chain until you find The Big Boss. Sadly, they don’t. You’ll see why.