ON leaving Australia for America, my boss said I would love the Americans. They were “just like me.” I asked, “How so?” He said “Just like you, they substitute enthusiasm for intelligence.” He meant it as a compliment. Enthusiasm got us to the moon. Just do it.
Take oil. In 2008, it hit $140 a barrel. Today it is below $90. Futures are $82. And there is talk of a barrel of oil dropping below $70.
When it was 2008, everybody and their mother got enthusiasm big-time and went looking for it. Suddenly now, six years later, the world is awash in oil. And our favorite oil stocks of only a few months ago are cratering, viz.
No one predicted, or could have predicted this devastation.
These charts would be very different were U.S. exporters allowed to export crude oil. (I don’t make this up.) But Washington, as they say, is eight square miles surrounded by reality.
The only lesson we can take as investors from this is to have faith in our Inviolate Stop Loss Rule. Had you owned these stocks and not sold them by now, you’d be feeling pretty stupid. These three are great companies, but not when oil is so out of favor. Using my Stop Loss rule, I sold EOG at $105.72, HAL at $67.03 and SLB at $106.67. I actually made a few bucks on balance with the three of them. But, most importantly, I averted huge losses.
This move from great domestic oil boom to great domestic oil bust has happened so quickly that the ONLY protection for an investor is an inviolate stop loss rule. I know there are investors out there who worship these three stocks. They aren’t fly-by-night wildcatters. They’re serious companies. But…
Stratfor has a neat piece called on oil in geopolitics.
Pick it up here.
The web is a dangerous place.
+ I’ve now changed all my bank passwords. I’ve also changed my userID and password on PayPal.
+ Last night I went to download Skype software for a new computer. The first Skype site that Google found for me was fraudulent. Norton Internet Security blocked the download and said it was “phishing” software. Norton allowed me to download the real software. Google was fooled. That’s how dangerous the web is.
+ I’ve recently had fake emails from PayPal, Visa and various banks. Their emails tell me I’ve spent $3,000 or so on something… They want me to call them in a panic… And give them my bank accounts and logon information and social security and and and. And they’ll reverse the $3,000 charge. (Which never happened in the first place.) It’s called “phishing.”
The bad guys got a lot of information about me by hacking into JPMorgan Chase’s computer. But it wasn’t enough to steal from me big-time. They now need to fish out of me enough information to clean me out. I’m not that stupid, though they’re getting more clever.
Cramer mentioned an Israeli security company called CyberArk Software (CYBR). I’ve been reading up on them. Their forte is protecting the privileged access ports which network and database managers use to get inside and fix a company’s computer system. If I were a hacker, I’d go after these administrator portals. If I can pass through them, I can steal and steal and steal. Edward Snowden had high privilege and used it to copy NSA docs. He was on the inside. But the bad guys stealing financial information are on the outside — in Russia or China. They need to come in through administrator access. The banks and retailers need CyberArk. Go to their web site and read up on them. You don’t have much time, however. They will release their third quarter financials after the close of business on Wednesday November 12 — four weeks from now. I bet the results will be good. They’re also having a conference at 5 PM.
CYBR recently went IPO. They’ve been coming down. I figure a little more and I’ll pounce.
Harry Newton wonders if the market is telling us it ain’t stopped going down. Read this from MarketWatch (part of the Wall Street Journal):
Shares of Johnson & Johnson (JNJ) rose 1.1% in premarket trade Tuesday, after the drug and health products company beat third-quarter profit expectations and raised its full-year outlook. Net profit came in at $4.75 billion, or $1.66 a share, up from $2.98 billion, or $1.04 a share, in the same period a year ago. Excluding non-recurring items, adjusted per-share earnings were $1.50, exceeding the average analyst estimate compiled by FactSet of $1.45. Sales rose 5.1% from last year to $18.47 billion, compared with analyst forecasts of $18.44 billion, as 11.6% growth in domestic sales helped offset a 0.3% decline in international sales. The company also raised its full-year earnings-per-share outlook to $5.92 to $5.97 from $5.85 to $5.92. JNJ’s stock, a component of the Dow industrials, had gained 8.2% in the year to date through Monday, compared with a 1.4% rise in the S&P 500.
Pretty good report, you’d say. Yet by the end of Tuesday (i.e. last night) JNJ shares had fallen $2.11 or 2.13%. Pretty sick.
When the market can’t respond positively to great earnings news, something is seriously awry.
I’ll have some jokes later this week. I don’t feel very funny at present.
You’re getting today’s column early because I have to catch an early Amtrak train back to New York.
“You substitute enthusiasm for intelligence.” Harry, you should have stayed in Australia, sounds like this guy knew you well.
Yeah…someone tried to charge 3,700.00 online through my account. Have to give Chase credit, they were quick to catch it.