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BITCOIN - WHAT YOU NEED TO KNOWHey there, Thank you for supporting this idea with likes and make sure you follow me here on TV. so I think everyone in this space saw what happend yesterday. The biggest percentage and point drop in Bitcoin in all of its history. A rounded 40%decline in 1 day. An incredible number for any trader. There are now some key questions to be asked: What really valuable asset is able to drop 40% in one day? What could have caused this spike and will it happen again? Is this the end of Bitcoin? To all of these questions, I sadly cannot anwser. You have to decide for yourself wether or not you still see value in Bitcoin. It is very significant that Bitcoin broke the bottom growth of curve of the data science models and has not yet managed to come back up to those. While I do think that this is the final capitulation some people like Tone Vays have been waiting for and that the bottom is now in, I too am troubled and have doubts in the real value of Bitcoin, if it is able to be manipulated by this degree. Of course no fundementals have changed and Bitcoin is still the same as yesterday and the day befor, I do have doubts, wether or not people will accept it as a store of value, if even after 10 years of existence, Bitcoin just now had its sharpest and steepest decline in 1 day. So there you go. Technicals are not really applying here imo, since this is beyond any comprehensible movement. Now is the time to BUY THE DIP. Even if I have doubts now, I have learned that it often is best to buy BTC when everyone is doubtful. Oh and btw, there is now a 3DAY 9 buy of the TI Indicator Sequential, so this could be your time to buy. Cheers, Konrad
COINBASE:BTCUSDLong
by EnlightenedTrading
Value Investment - BIDU - Improved Profitability After The VirusAll comments and likes are very appreciated. _________________________________________________________________________________________________________________ Fair Value and Profit Drivers | Our fair value estimate is $190 per share, with a 2020 P/E of 31 times and 2021 P/E of 25 times. We expect a 5% CAGR in online marketing revenue in the next five years, driven by recovery in the longer term. This is because weak macroeconomics (resulting in weaker demand and pricing for ads), substantial increase in ad inventory by Bytedance and Tencent, and moving customers’ landing pages to Baidu’s platform play an important role in the current weakness. We do not expect these headwinds to persist in the longer term, except Baidu’s competitor still have room to increase ad load. As the moving of landing pages is completed, the economy recovers, iQiyi’s in-feed revenue improves after cleaning up unhealthy ads, and video content can be approved more quickly after the 70th national day on Oct. 1, 2019, we expect Baidu and iQiyi’s advertising revenue to recover from a low base. We expect other revenue to grow at a 17% CAGR in the next five years, driven by strong growth at iQiyi. 49% of the others revenue was iQiyi’s membership revenue in 2019, which will see growth from increasing subscriber number and high-quality original and licensed content at iQiyi. Baidu will spend more marketing dollars up front for app installation and cultivating app usage, but revenue generated from the users will occur during the lifetime of the users. Hence, we expect to see revenue grow faster after initial investments. Should the return on investment be poor, Baidu will have no choice but to cut back on sales and marketing expenses, which will boost margin. DuerOS and cloud are also other areas of investments. We assume operating margin will rise back to 20.2% in 2024, compared with 5.9% in 2019. Excluding iQiyi, Baidu’s core operating margin is assumed to rise to 20.2% in 2024 from 19.1% in 2019. We think our assumptions of only a small-margin recovery for Baidu’s core operation have sufficiently incorporated the ever-increasing competitive environment in the Internet sector. This is particularly true in searching for general information, because it is still a necessity, and wide-moat Baidu has a dominant market share of over 70% in search. We are confident that Baidu resume growth for search. Our five-year net revenue and operating profit growth are 9% and 40% respectively. Wide-moat Baidu’s fourth-quarter 2019 results were largely within our expectations, and after fine-tuning our model, we are cutting our fair value estimate to $190 from $199. However, we think the shares are undervalued, as Baidu is on track for improved profitability after the coronavirus outbreak. Fourth-quarter 2019 year-over-year revenue growth was 6%, at the high end of the latest guidance range of 4% to 6% and its previous guidance of negative 1% to 6%. Meanwhile, Baidu core revenue in the quarter grew 6% year over year, excluding spin-offs, at the high end of the latest guidance of between 4% and 6% and the previous guidance of between 0% and 6%. Baidu’s net income was CNY 6.3 billion in the quarter compared with guidance of CNY 6.2 billion to CNY 6.7 billion. Net income of Baidu core rose 84% year over year, at the low end of the guidance of 83% to 90%. Management said it expects 2020 first-quarter revenue to decrease 5% to 13% year over year for Baidu and to drop 10% to 18% for Baidu core compared with advertising peer Weibo’s 15% to 20% drop. We assume an 18% year-over-year decline in the first quarter; a 3% decline in the second quarter; followed by a 9% increase in the second half of 2020; and no growth in the full year of 2020 for Baidu core revenue. Our non-GAAP operating expense plus cost of revenue for 2020 is 7% higher than the annualized level that is based on the more rational level in the fourth quarter of 2019. Our five-year revenue and operating profit CAGR are 9% and 40% (low base in 2019 due to record low margin of 6%), respectively, versus 9% and 11% previously. Risk and Uncertainty | We think Baidu faces high levels of risk, given intense competition along with questions as to whether its AI-related investment will generate satisfactory returns. Though Baidu is the largest search engine in China, it is competing with the other two Internet giants, Tencent and Alibaba, and Google’s potential return to Chinese search market is also a threat. Regarding the search engine business, Tencent invested in Sogou, and Alibaba acquired UC Web, which owns a mobile search engine, Shenma. Competition has extended to each key area of mobile Internet usage, such as navigation, O2O services, online video services and so on. Baidu’s margins have been significantly dragged down by aggressive spending in video content and O2O marketing but recovered to 18.5% in 2017 from 14.2% in 2016 as Baidu divested margin-dilutive businesses. The major Internet companies in China have been investing in AI-related business, such as cloud computing, voice and image recognition, and autonomously driven cars. At the current stage, it is difficult to predict whether Baidu will be the final winner in AI and whether the returns will reward its investment. In addition, regulatory risk is a concern. Following the Wei Zexi incident in early 2016, Chinese authorities launched new regulations for online search and advertising, which clearly defined paid search results as advertising. These regulations took effect Sept. 1, 2016. Given stricter standards for online advertisers, Baidu’s online marketing services revenue growth declined to 1% in 2016. If the local authorities release more policies regarding Internet business, such as online advertising and online finance, Baidu’s revenue could be negatively affected. Since 2017, Baidu has discontinued the disclosure of MAUs for its mobile search and mobile maps, which is possibly due to weaker numbers. I and/or others I advise hold a material investment in the issuer's securities. _________________________________________________________________________________________________________________ All comments and likes are very appreciated. Best Regards, I0_USD_of_Warren_Buffet
NASDAQ:BIDULong
by I0_USD_of_Warren_Buffett
4
Value Investment - ACB - Defensive Stock All comments and likes are very appreciated. _________________________________________________________________________________________________________________ Fair Value and Profit Drivers | Our fair value estimate for Aurora is $6 per share, assuming a 1.33 CAD to U.S. dollar exchange rate as of Feb. 13 and based on a DCF with a 10-year explicit forecast. We forecast Canadian medical volume to decline about 3% per year on average from fiscal year 2020 to 2029 as consumers shift to the recently legalized recreational market. We forecast recreational volume to rise about 15% per year on average as distribution expands, consumers convert from the black market, and non-consumers become consumers. We forecast prices will grow about 2% per year on average as capacity will rise adequately to meet demand. We forecast about 18% average annual volume growth for Aurora’s international medical business amid wider legalization and distribution. Our volume forecast is muted by the emergence of cheaper suppliers in lower cost labor countries; however, Aurora’s production expansion into some of these countries helps protect its share. We forecast prices will rise roughly 3.5% per year on average, as it will take time before lower cost producers can effectively compete. We expect the company’s operating margin excluding mark-to-market plant items will become positive by fiscal 2022. By 2029, we expect that margin to reach about 35%, due to the full-ramp up of production and fixed cost leverage against overhead expenses. We forecast Aurora to reach positive free cash flow generation in 2023, as capital expenditures remain high in the near-term to fund capacity expansion. On average, we forecast capital expenditures 23% of sales through our 10-year forecast period and falling to about 8% by 2029, as we think Aurora has frontloaded capacity expansion through investments and acquisition. This will allow capital expenditures to fall rapidly while still allowing Aurora to meet demand growth. We assume a cost of equity of 7.5%, reflecting the low cyclicality of revenue, our forecast 35% operating margin, and low operating and financial leverage. Risk and Uncertainty | As a cannabis producer, Aurora faces numerous risks, largely around regulation. However, it faces additional investing risk relative to its Canadian peers. The most important risk is the pace and status of legalization, which determines when and where cannabis can be legally sold. Aurora’s home market of Canada has already legalized recreational cannabis, so U.S. legalization remains uncertain. Aurora does not operate in the U.S. and is focusing on the Canadian and international markets instead. As such, the impact is minimal. However, peers with better U.S. exposure have more potential upside as a result. Current laws make it virtually impossible to operate a cannabis company in both the U.S. and Canada, excluding hemp-derived CBD. Although there is growing public support for legalization, it is politically divisive, with most Republican support coming only in the form of state’s rights. This poses a risk for federal legalization and adoption of recreational cannabis. Regulation around supply is also a risk. Businesses must be licensed by governments to operate cultivation and dispensaries, with licenses specifying production levels. However, governments have at times expanded too slowly or too quickly. Another risk is the black market. Years of government efforts have done little to stem illegal cannabis, but a change to the ease of accessing black market supply could impact pricing power and thus profitability. In addition to operational risks, Aurora also faces significant financial risk. The company has yet to generate positive free cash flow. Unlike its peers that have funding backstops through their deep-pocketed strategic investors, Aurora has higher dependence on capital markets. There is material risk that Aurora would need to issue incredibly dilutive equity to fund itself amid ongoing cash burn. For example, Aurora had to offer dilutive terms to satisfy convertible notes holders and issue stock at low prices through its at-the-market equity issuance program. I and/or others I advise hold a material investment in the issuer's securities. _________________________________________________________________________________________________________________ All comments and likes are very appreciated. Best Regards, I0_USD_of_Warren_Buffet
TSX:ACBLong
by I0_USD_of_Warren_Buffett
5
Value Investment - KHC - Company to Watch in 2020All comments and likes are very appreciated. _________________________________________________________________________________________________________________ Fair Value and Profit Drivers After reviewing results through the first nine months of 2019, we're holding the line on our $50 fair value estimate for Kraft Heinz. We continue to expect sluggish top-line performance near term (which management has attributed to reduced inventory levels at developed market retailers and unfavorable promotional spend), with our forecast calling for a more than 4% reported decline this year. Further, we still anticipate cost pressures in manufacturing, packaging, and logistics and elevated investments behind its brands will eat into profits, and expect operating margins to hover in the low-20s. Our valuation implies fiscal 2020 price/adjusted earnings of 18 times and an enterprise value/adjusted EBITDA multiple of 14 times. The question for Kraft Heinz Co. is whether new management can execute a turnaround. CEO Miguel Patricio has a marketing background; it remains to be seen if he can fix the company’s fundamentals in an industry struggling to reinvent iconic consumer brands to remain relevant. A key tenet of Kraft Heinz's strategic focus has been on driving cost saves--targeting more than $1.7 billion in savings the past few years. Up until now, the bulk of these savings resulted from corporate workforce reductions (affecting about 4,900 employees, or 12% of its total employee base), a rationalization of its North American manufacturing network (with a net of six plants closed), and enhancements to its supply chain. In line with our thinking, Patricio's early read on the business is that it's failed to pivot from one centered on intense cost-cutting (following the merger of the two businesses four years ago) to one anchored in rooting out inefficiencies and boosting brand investments. This aligns with our outlook, which calls for the firm to extract $2 billion by fiscal 2020 to fuel its brand spend in light of the intense competitive landscape; we anticipate 65% of its savings will drop to the bottom line, with the remaining 35% reinvested in marketing and research and development. In this context, we expect marketing and R&D will expand to nearly 6% of sales in the aggregate (versus less than 5% the last few years) over the course of our 10-year forecast. Further, we posit input cost inflation pressures are unlikely to subside (partly due to higher protein costs related to a reduction in the supply of hogs stemming from China's African Swine Fever and elevated transportation costs versus recent deflationary trends), which stand to eat into the firm’s margin trajectory. As such, we forecast operating margins will remain in the low-20s over our 10-year explicit forecast, generally in line with fiscal 2018 (but below its mid-20s peak in 2016 and 2017). _________________________________________________________________________________________________________________ While Kraft Heinz’s shares retreated at a high-single-digit clip following its fourth-quarter print, we don’t think there has been a material deterioration in the story over the past several months to merit such a pullback. Rather, we believe that under the direction of CEO Miguel Patricio (who joined the firm just more than six months ago from wide-moat Anheuser-Busch InBev) Kraft Heinz is stocking up on the ingredients necessary to strike up a more flavorful recipe for the long term (pivoting away from blindly rooting out costs, in favor of sustainable efficiencies, with the intent to funnel a portion of any savings realized to elevate the standing of its brands). We attribute a portion of the market’s disfavor to the slight delay in the time over which the firm intends to convey the details of its strategic direction, which is now set for early May as opposed to March prior. However, the underlying premise behind this shift (affording the recently appointed head of the U.S., Carlos Abrams-Rivera, who joined Feb. 3 from Campbell Soup, time to reflect on the tenets of its approach and interject his perspective) seems reasonable. And despite this extended horizon, we don’t think the drive to incite change is on hold. In the aggregate, we see little in the fourth-quarter results (a 2.2% decline in organic sales, a 20-basis-point shortfall in gross margins to 32.2%, and an 80-basis-point erosion in adjusted operating margins to 20.0%) or near-term guidance (suggesting pressure at the sales and profit lines is unlikely to subside in 2020, generally in line with our expectations) to warrant a material change in our $50 fair value estimate. Further, we’re holding the line on our long-term outlook, calling for 2%-3% annual organic sales growth long and operating margins remaining in the low-20s over our 10-year explicit forecast. We continue to posit patient investors should consider stocking up on this no-moat name, which trades 45% below our valuation. Risk and Uncertainty We think Kraft Heinz's intent focus on extracting significant costs (at the expense of brand spend) has resulted in the degradation of its brand intangible asset (eroding its brands and retail relationships). Further, attempts to extend the distribution of Kraft's products over Heinz's international network may continue to falter if efforts to tailor its mix to better align with local tastes and preferences prove insufficient. We also surmise that consumers perceive a few of the categories in which Kraft competes--namely, cheese and packaged meats, which in the aggregate account for around one third of total sales--as commodified, implying purchase decisions are more likely to be based on price rather than brand. In addition, Kraft generates just over 20% of its sales from Walmart, and its bargaining clout could diminish as the base of retail outlets continues to consolidate and market share shifts to mass merchants and warehouse clubs at the expense of traditional grocery stores. Bouts of unfavorable weather could place upward pressure on input prices for products such as dairy, coffee beans, meat, wheat, soybean, nuts, and sugar. In response to the rampant cost inflation in the cheese, meat, and coffee categories a few years ago, Kraft put through significantly higher prices, but was unable to fully offset the profit hit, given the lag in the benefit. Further, transportation and logistics costs have soared and show little sign of abating, which stands to crimp profit prospects across the industry. Finally, even with a new management team at the helm, it is unclear whether the firm will be able to orchestrate sufficient change to bolster its financial performance. We think this sizable task could prove more challenging given the intense competitive landscape in which it plays, as it consistently goes to bat against other leading branded operators, private-label fare, and smaller, niche foes (which have proven more agile in their response to evolving consumer trends). I and/or others I advise hold a material investment in the issuer's securities. _________________________________________________________________________________________________________________ All comments and likes are very appreciated. Best Regards, I0_USD_of_Warren_Buffet
NASDAQ:KHCLong
by I0_USD_of_Warren_Buffett
2
Value Investment - BATS - Defensive StockAll comments and likes are very appreciated. _________________________________________________________________________________________________________________ Fair Value and Profit Drivers Our fair value estimate for BAT’s ADRs is £46, which implies 2020 multiples of 15 times earnings, 12 times EV/EBITDA, a free cash flow yield of over 6%, and a dividend yield of 4%. These are roughly in line with historical valuations and are sandwiched between those of Philip Morris International, BAT’s closest comparable with slightly higher implied multiples, and Imperial Brands. This is appropriate, in our view, because it reflects the companies' relative positioning in the heated tobacco category. The key underpinnings of our valuation are the pricing power of the combustible business and the sustainability of operating margins. We assume a midcycle organic sales growth rate of 2%, below our 4% benchmark assumptions for consumer staples but roughly in line with that of Philip Morris. The growth rate is driven entirely by pricing power, boosted by BAT's wide economic moat. We forecast an annual volume decline of over 2% on average over the next five years, with price/mix of 5%, a touch below the levels of recent years. On an adjusted basis, and excluding equity income, we forecast a normalized EBIT margin of 43%. This is 5 percentage points above the margin achieved in 2018, boosted by the integration of and synergies from the higher-margin Reynolds business (it achieved a 45% EBIT margin in its final year of independence) and in line with our assumption for Philip Morris International. BAT has guided to synergies of $400 million per year within three years by management, and from BAT’s own cost-efficiency efforts. We assume a stage II EBI growth rate of 3.5% and a discount rate of 7.4%. ________________________________________________________________________________________________________________ There were few surprises in British American Tobacco's preliminary 2019 results, with volume and revenue roughly in line with our forecasts, although operating profit was a little light. We are reiterating our GBX 4,500 fair value estimate and wide moat rating. The stock is materially undervalued in our opinion, and we think the market is pricing in too pessimistic a scenario, but the realization of the upside to our fair value estimate may depend on an improvement in total nicotine volume trends, a factor that these results show remains uncertain. BAT's revenue grew 5.7% on a reported basis and by a similar amount on a constant currency, adjusted basis, slightly above our forecast. The modest beat was entirely due to strong price/mix, with volume in line with our expectations. Our expectations were not particularly ambitious, however, and we would like to see stabilization in the 4.4% decline in full year tobacco volume. Developed markets are the drag, with volume in both the U.S. and the Europe and North Africa segments down 6% in 2019. By category, combustibles declined at a rate slightly faster than 6% in both regions, mitigated by double-digit volume growth in vapour and triple-digit growth in modern oral and heated tobacco. These categories remain too small to move the needle in the top line, however, and the group volume decline of 4.4% is below BAT's recent historical average, and implies a contraction in the nicotine market as a whole. A continuation of that trend is what we think is being priced into the stock. The critical issue for investors is whether volumes can normalize. At present, very strong price/mix (of 10% in 2019) is supporting revenue and earnings growth, but we worry that sustained pricing at this level will eventually lead to increased price elasticity and slow revenue growth. Our valuation assumes a growth algorithm that is more balanced between volume and pricing. Business Strategy and Outlook The advent of e-cigarettes has created the most significant change in the industry since the 1960s. Early forms of e-cigarettes have existed for a generation, but with the consumer arguably less brand-loyal and more aware of health issues than ever before, the industry is on the cusp of a seismic shift to next-generation products. It seems likely that conventional tobacco will remain the driving force of the industry profit pool for at least the next decade, but Big Tobacco manufacturers are nevertheless placing their bets on the new categories most likely to win share of smokers. To date, British American Tobacco probably has the most hedged position across the emerging categories. Its Vype brand has gained some traction in the U.K., while the acquisition of Reynolds gives it access to Vuse. The company's total 2018 research and development spending of GBP 105 million is well below the $383 million (GBP 295 million) spent by PMI last year, and the $2 billion (GBP 1.6 billion) of capital expenditures its rival invested in its heated tobacco facility in Bologna, Italy. In heated tobacco, BAT's Glo has taken tobacco market share of around 5% in Japan in 2018, although it lags PMI's iQOS. We believe heated tobacco is the category most likely to successfully attract smokers, but we do not regard the first-mover advantage as being sustainable in the long term, and it is possible that BAT will regain share through next generation products over time. BAT has doubled down on the combustible business with its acquisition of Reynolds American. We see Reynolds as an incredibly strong asset in a market with plenty of remaining potential for raising prices, and we view the deal positively from a strategic standpoint. The Newport brand is experiencing volume declines at a much slower rate than the rest of the U.S. industry and retains very strong pricing power in the midsingle digits. Nevertheless, it is this aquisition and the increased exposure to the menthol category that is a key reason for the recent weakness in BAT's stock, and the overhang of potential menthol regulation is not likely to ease in the short term. I and/or others I advise hold a material investment in the issuer's securities. _________________________________________________________________________________________________________________ All comments and likes are very appreciated. Best Regards, I0_USD_of_Warren_Buffet
LSE:BATSLong
by I0_USD_of_Warren_Buffett
SF - The Best Value investing stock in 2020’s SET.“Value Investing does work, but not all the time. If it works all the time, it won’t works.” I want to show it to you with the monthly graph because we’re talking about the Fundamental today. SF or Siam Future development is the retail-shopping based. Despite the very bad market conditions, SF out performed every other stocks in its sector with the very high revenue increases! But the crazy thing is that “ it is the cheapest !” . Yes! The cheapest in its sector with P/BV of 0.85 and PE of 5.8! It also has a very low long-term debt with consistent growth. By comparing it with the rest of the sector. The price of it should at least be 12-15 Baht. The market can be absurd sometimes. All you have to do is grasp the opportunity. I can’t give you the buying point. It all depends to you. The price can sit here for years or it can breakout tomorrow. I also don’t know. But giving this pearl some attention won’t hurt you right?
SLong
by JirathB
1
Fertilizer Stocks look ready to bottom and Nutrien best pick.The promise of better weather this growing season (Farmer's Almanac) than terrible 2019, Locusts in Africa destroying crops and possible higher demand in China for agricultural products should improve sales for nutrients. Canada has the 2nd largest reserves of Potash in the world, and is the leader in terms of global production. One advantage for the price of potassium chloride is the fact that more than one producer has curtailed production of late. Low natural gas prices an advantage for Nutrien in Canada when it comes to Nitrogen fertilizer. They also have large retail network worldwide. At a P/E of 16X trailing earnings, a 4% dividend yield and substantial free cash flow, the stock seems good value here.
NYSE:NTRLong
by malvinspooner
1
The Secrets to Forex & Miller's Planet (pt.3)You must read the preceding parts first. This one is a real doozy. Watch your reading comprehension levels go up in realtime. ------------------------------ "Very, very few people could appreciate the bubble. That's the nature of bubbles – they're mass delusions." - Buffett Last time we talked about how people who speculate are inherently delusional and are all in the process of losing; usually just money. The only way to 'win at losing' is to survive the delusion game by understanding the players and their psychology; not by guessing if price will be higher or lower in 10 years. When you survive, you are rewarded; all the money from big losers goes to the remaining players at the table. That's the derivatives, near zero-sum market in a nutshell. Sometimes players take their winnings and walk away, sometimes new players join the table. But in the end, 'the bucks are all that matter, everything else is just conversation.' The charts, the econ news, the geopolitical shocks... they only matter insofar as they influence the psychology of the players at the table. This is why you have to align your trading philosophy with player psychology first, and at the same time, reduce your risk presence when you take 'bets' in the market. Think of 'reducing risk presence' as surviving or holding on and think of 'surviving' as taking a piece of the pie from the losers when they hit zero. Remember, markets existed long before Adam Smith 'invented' capitalism. The original merchants and traders achieved longterm profitability by two methods: collusion, or by navigating wars, famine, oppression... Things haven't changed as much as you might think. Chapter 1: The Margin of Psychology Now, after the 2 parts, you've probably had enough of this distilled pseudo-academic fluff and you're ready for the valuable details. Too bad chief, here's another fluffy paragraph. Again, get used to losing. In the last part, I ended it by questioning if disorder can be consistent enough to be orderly. Now, we don't have to assume an orderly interpretation of disorder. It's proven by the presence of profitable traders/investors. The household names like Buffett and Soros. They operated, to a degree, on something investors call a 'margin of safety.' Which is: 'the intrinsic value versus the current or last price offer.' This is similar to what I've been presenting all along, only I disregard this Plato-like intrinsic value notion; please refer to my part 2 sectioned 'Emergence of Estimation' and read through 'Fact, Fiction, & Forecast' if you want the full take on this. Using fair value, or the center of price gravity, or more simply: 'resilient value;' especially when we are talking about derivatives and forex, serves as a better frame of mind. Because.. value only exists in the mind in a near zero-sum game. But thanks to psychology, there is some element of order present in the otherwise disorderly markets. You can worry about the ethical issues of big zero-sum money games later, after you can afford to read Das Kapital on your yacht. Chapter 2: Counting Cost I have spent a long time trying to find reliable patterns or orderly events in derivative markets. I have used or tested over 3000 indicators, experts, or scripts. So many that my MT4 terminal stopped showing them and I had to start an indicator genocide worthy of a binding UN resolution. Countless all-nighters across both small and large forums evaluating both the popular and wildly unconventional strategies and theories of forex. Books, videos, etc. 4, 5, 6 years and on. The stranger and more contrarian the idea, the more interested I became. More interesting to me than the idea itself was the line of thinking that created the idea in the first place. Why did retail traders think this way? Why did commercial traders think this other way? I was able to both regard and disregard the most qualified, and do the same for the least qualified. It's not a surprising lesson, but you have to go out of your comfort zones and destroy your biases to learn valuable things. Peter Thiel's contrarian thinking runs on this kinda stuff. Think about what has happened in the past several years. Contrarian thinking can turn idiots into geniuses these days. Chapter 3: Hidden vs Too Close to See Eventually, I stopped looking for a hidden far-off solution and started looking closer. You ever search your house to find your lost car keys only to later realize it was in your jacket pocket all along? Too poor to have a house, a car, or a jacket? Well, then keep reading. So I started looking at the in-betweens. What's as close as possible to the decision making agent itself? The first finding is that charts rarely have clear patterns, but human minds often do. From then on, research became straightforward and fruitful. How do I turn that theory into something that makes money, or at least doesn't lose money? I found the major candidates, the independent variables that create these flashes of order, these predictable events or parameters. It's not perfectly rigid, but its the next best thing in the highly volatile world of forex. Chapter 4: Executing 66 Orders First off, it's not as simple as a single mind's biases resulting in huge moves on a chart. To use a basic military analogy, you have to think in terms of a chain of command. From a few big 'minds' to many small 'minds.' Or, you have to follow the killchain step by step. From psychological origination to execution. Obviously, execution is when the order is filled and liable to p&l. We have lots of charting and analytical tools for market movement and execution. But what is the origination? How do you properly connect them? Can you chart or summarize origination and its 'plane?' So far I've talked a lot about psychology, but not much about specific biases relevant to forex. Or how a collection of 'psychologies' in the 'real world' might constitute a broader social factor, which, as a unit of analysis, goes on to influence markets in predictable ways. Does a commercial fund have biases? Does a central bank have biases? Does Wall Street have different biases than the City? Four broad but related questions: What is psychological origination and why do social factors matter? Based on the above, how do you setup or build an 'orderly' chart to find that resilient value? How do you use that knowledge to better manage risk and reduce uncertainty? And by extension, how exactly does that make you a more profitable trader? These questions will be fully addressed across the next several parts (maybe 7 or 8 more). I'm going to skip a deep dive into the first question for now, so you don't get too bogged down on the abstract thinking stuff, and instead mix it a bit with something familiar and more visual in question 2. For the rest of this article, we gotta talk timeframes and contracts first. Chapter 5: Murph's Law Time matters in forex. It matters a lot, and in ways some of you probably have yet to consider. In markets and finance, time shapes the parameters of most contracts. I would use a long analogy from Interstellar and Miller's planet (just watch the movie), but the key here is that: SOME RISK IS NEARLY GUARANTEED (written into the contract) while SOME RISK IS TIED TO SPECULATION ONLY. It's the difference between limited risk that is insured by the past versus unlimited risk that exists only via the future (you can have both as well). Up until now, we have dealt with the second, and not the first. Forex standards and practices (de facto contract rules), give us the first. Let me introduce timeframes, and then return to this so everything connects neatly. There are many different approaches to categorizing timeframes. By the common candlebar duration (1h, 4h, D; in other words it's categorized specifically by the 24hr clock); group A , or by abstract accumulation (like renko or heatmaps or orderbook data); group B . Now, the latter is a loose fit for a timeframe concept, it can be discrete and confusing, but you can argue 'realtime' or 'all-time' as a timeframe in itself. I won't be discussing realtime very much, and I strongly recommend you read the disclaimer far below if you are a crypto trader or have access to prime data or level two data in general. IF you are a forex trader that fits into group B, let's say a Renko trader, then you need not worry about the indicators or models I present. However, I've only known one successful Renko trader, and he had custom designed analytics. So good luck with Renko, gentlemen. I will focus on the group A category of timeframes: OHLC, Henken, line, etc. Everything that follows will be based on those. Chapter 6: Don't Fail Science Class The more you think of markets by real life principles, the clearer everything becomes. Which is why I want to explain timeframes by analogy. You could argue that markets share some basic similarities, at least from a layman's impression, to classical and quantum mechanics. The smaller the timeframe, the more random and chaotic they appear. And vice-versa. The center of price gravity at higher timeframes is more resilient to chaotic bits of new information. It's more certain . To use Bohm's term, you could argue its 'enfolding' or 'enfolded.' That while the general state of things is a chaotic flowing river, whirlpools with a set of persistent parameters can still exist in those rivers. All this really means is that different timeframes/sessions/days require different indicators and/or applications of those indicators. In addition, a full risk management approach takes into account the pairs/currencies chosen as well since their behavior may vary (choosing the river), and the nature of the contract itself (does it have a waterfall or extend forever?). Simple summary: some things are more certain at long-term timeframes and some things are more uncertain at short-term timeframes . Most of you will already know this. Chapter 7: Slaves to the Timezones When I'm talking about short-term timeframes and long-term timeframes, I mean intra-day versus weekly or monthly. Technically you could trade something like the 4h or daily within a single day. (but to avoid confusion, I want to focus on timeframes as the periods from which you open and close positions, not the duration of the candlebar). In other words, opening and closing positions within the 24 hour period (from open to market close). Versus. Positions held across multiple days/weeks. This is very important because they are effectively different types of market contracts because of the risk of rollover. (unless you have an Islamic account) In general: IF YOU ARE HOLDING POSITIONS ACROSS MULTIPLE WEEKS, you need to have either a genius technical or fundamental system OR, you need to be designing your trades with carry conditions in mind. 99% of you will fit the latter. Inevitably, this means your long term risk management must be quite different than short term risk management; particularly in the weighting of seasonality models and interest rates. I'll explain this stuff in the next article, but for now, make a selection: Imagine owning a stock that pays you a dividend (😏), now imagine owning a stock that pays no dividend (😴), and now imagine owning a stock where you pay the company a dividend (😂). Keep your "obvious" selection in mind, because it's gonna upset retail paradigms when I tell you why you're trading the wrong pairs on the wrong timeframes. See you next time. ------------------------------------ DISCLAIMER: Now, I should've mentioned this earlier but IF you are a cryptocurrency trader, and some of you reading this may very well be, let this be clear: I did not design these articles for your consumption. Though crypto is arguably a currency, it's core mechanics are different, as is the psychology of the players involved and the market structure. The legal, tax, and broader financial components vary (the nature of the contracts, the timezone/session influences). Indeed, regulation is the main fundamental in cryptocurrency right now, making it a market potentially susceptible to a near-total collapse (at least for blocks of investors) depending on the providence of your broker or income tax obligations.
Education
by CountofCoins
$LB Is A Speculative BuyIt's hard to get overly bullish on $LB, but the chart has piqued our interest. The stock has very strong support at the $16 level and $LB looks to be on the verge of breaking out. With so many bearish on retail names, $LB could outperform quite easily with so many pessimists and shorts in the stock. With 8% of the float short, we could see a nice short covering rally. $LB is also a deep value play. $LB trades at just 7.9x this year's earnings, .037x sales, and 12.12x FCF. With the stock down from 52-week highs near $30, there's a lot of room $LB can run. While we wouldn't bet the farm on $LB, it looks to be a speculative buy at current levels. As always, use protective stops and trade with caution. Good luck to all!
NYSE:LBLong
by InsiderFinancial
Qudian an extremely sound value proposition, poised to break outChina stock Qudian is extremely undervalued at about 2.5 P/E, and today it got a roughly 25% earnings forecast upgrade for both 2019 and 2020. Earnings are expected to grow over the next two years. Really this is one of the best value propositions I've seen in quite a while. Hopefully the stock will hold above $5 so that hedge funds can legally invest in it. If so, then the stock could see a strong recovery this year.
NYSE:QDLong
by ChristopherCarrollSmith
4
INVESTING STRATEGIES IN THE GigEconomy: VALUE-RSP & MOMENTUM-SPYShort and well-detailed idea on Value vs Momentum investing? ; Series on investing- Dec 28th, 2019 What's the Equal-value weighted(RSP) vs Market-cap weighted, top heavy(SPY) ratio useful for? - Simply for discussing how two of the most well known investment strategies have performed in the recent years. There's many books written on this topic, but I will try to keep this post as short as possible. 1. First things first, here's the whole chart. As expected, in downturns, large caps should perform outperform small caps, simply because of the lower risk. People tend to park their money in safe well-diversified stocks, when the systematic risks become too high. Vice-versa, in normal cycles and economic expansions, due to the higher betas, small caps outperform large caps. This was understandable for the short liquidity cycles in 2011-2012, and 2015-2016, which I discuss in my previous idea on liquidity cycles, But what about post 2016? There was a few rate hikes, but at the same time both fiscal and monetary expansion, that gave an above average GDP growth. Interestingly enough, the RSP/SPY ratio, almost has perfect correlation with the treasuries spread(yield curve, US10Y-US03M). Nonetheless, momentum strategy kept outperforming value investing. The question is why? 2. One of the answers is of course, the rise in the gig-economy and automation. Small business, even listed small caps, simply can't compete anymore . Whenever a company has a competitive edge(i.e instagram) it gets acquired by the time it becomes too threatening . Unfortunately, the end product of this trend, I would argue has been overall lower market competitiveness. The second answer to the same question, is because of the rise of ETF's and ETF investing . In simple terms, ETF's magnify momentum outcomes . Buy high, sell higher. Greater up-trends, but at the same time greater down-trends! 3. Will the momentum outperforming trend continue in the future? As this trend has been going on for few years, it's very hard to tell how far the gig-economy will expand. Lately, there's been support for the idea to break up big-tech, but this will just takeaway the competitive edge that the U.S economy has over the world. Nevertheless, history has shown consistently, that trends typically revert to their mean, and as we head into the next decade there's a high probability that value investing will once again perform well. To sum up this idea, with all said, I am taking the contrarian view. I think that we are entering into a speculative bubble. Obviously, things are looking quite well right now. Every-time, there's a minor chance of a market sell-off, the FED steps in with more liquidity. At last, the market will wake up at some point after the 2020 election (perhaps 2021-2022), and finally realize that there's no growth and no fundamentals supporting these high valuations (P/E consistently above historical average). This is my view on value and momentum investing. If you are interested in a discussion, simply write a comment or send me a private message. Thanks for the continuous support! -Step_ahead_ofthemarket- ________________________________________________________________________________________ >>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>> However, if you'd like to support me and get informed in the greatest of details, every thumbs up and follow is greatly appreciated! For reference, fundamental investing is doing even worse than value investing. Disclosure: This is just an opinion, you decide what to do with your own money. For any further references or use of my content- contact me through any of my social media channels.
AMEX:RSPLong
by step_ahead_ofthemarket
7
Overlooked silver explorer-developer with no debtGolden Minerlas Company ($AUMN) This is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on advancing its El Quevar silver property in Argentina, as well as acquiring and advancing mining properties in Mexico, Nevada and Argentina. The following is not investment advice, but simply captures my personal observations: The market seems to have completely forgotten the stock; The most recent seeking alpha articles date back from 2014, for example. Current valuation reflects this, with a face-ripping 99% drawdown from its peak. Management, however, has invested in expanding the resource base during the depth of the PM bear market, and now just entered in a new JV agreement with the potential to broaden their resource base even further (see: www.marketwatch.com) That news seems to have sparked a break-out. Now we see this breakout being backtested. I don't see increased volume, and I suspect silver bugs are mostly overlooking this stock still. Its marketcap is tiny at only 30M, so it won't take much to start making waves and get noticed....
TSX:AUMNLong
by RvdH
‘Growth’ stocks are making a comeback versus ‘Value’The market saw a big shift in early September when money started pouring into “value” stocks, like banks and energy. Investors had neglected them for years and they were supposed to benefit from the U.S. and China ending their trade war. But that’s been fading in recent weeks, especially with Apple and Microsoft flying to new highs. This hourly chart compares two major ETFs tracking the two buckets of companies: The Vanguard Value ETF (VTV) and the Vanguard Growth ETF (VUG) . Notice how VTV initially surged ahead of VUG on September 5, right after Beijing confirmed it was holding trade talks with the White House. That strength continued until about two weeks ago. The first setback was President Trump talking down hopes of a trade deal with China. Then came some weaker economic news – especially industrial production on November 15. Those two catalysts have dragged interest rates back lower and undermined one of the basic arguments in favor of “value.” Meanwhile, GDP estimates from the Atlanta Federal Reserve have nosedived from 1.5 percent to under half a percent. Topping it off today, oil is breaking down. A backdrop like goes against the “value trade.” It could mean to watch out for a pullback in the banks because financials are the largest sector in the value index. But it could also help restore interest in the big Nasdaq companies that have led the market for years. USO XLE QQQ
AMEX:VTV
by TradeStation
DOW Dupont Chemical: Value play (6% yield)Graph says all. PE = NMF, they're losing money and stock's been in down channel for quite a while; but the dividend yield at $44 is 6.4%; analyst expectations estimates agree DOW is going to earn more next year in FY 2020 with resizing and trimming, efficiency improvements &tc. Revenue is growing; From $3.4 RPS FY 2019 is expected to go to $4.4 RPS next year and may become profitable again thereafter. Mean target price = $54 based on these estimates. Still paying the >6% dividend; they pay you to wait, and you can sell weekly or monthly calls every month forever. I did a buy-write on just 200 shares/2 Oct calls. Will add more if we get a full correction; support is around $40, so you can sleep at night holding these over long-term. It's a "Dogs of the Dow" theory value play! This is not investment advice, just a pretty darn good trade idea IMO; trade at your own risk and consult a certified financial advisor before you plunge in here; GLTA!
NYSE:DOWLong
by DaddySawbucks
6
SP-500/ Gold - How to Buy Shares 90% Off - ValueCyclesSP-500/ Gold - #ValueCycle Analysis *Note that the vertical price axis reflects the number of ounces of gold required to purchase 1 share of the SP-500 *I understand there is a lot going on with this chart, but bear with me as i walk you through it (see worked example below) Macro Analysis: Lower Chart - After the lunacy of the tech wreck in the late 90's into 2000 the ratio peaked at just shy of 5.5 oz to 1 share of the SP-500 (obviously this would be more pronounced if we were looking at the Nasdaq) - From the peak in 2000, the value of the SP-500 has plummeted largely unabated until 2009 - 2011, finally hitting a low of around 0.5 oz at the time of the financial crisis and the introduction of Central banking QE, - This means that had you utilized this pricing/ entry method you would have been able to sell your shares at 5.5 oz and buy them back for a 1/10 of the price (illustrated with the red arrow) - This eventual bottom also coincided with the 90% bubble fib retracement level (a useful level, few people utilize) 'Near-term Analysis: Upper Chart - As you can see the SP-500 has stalled at the 38.2% fib retracement (possibly a dead cat bounce on the way lower) - This, coupled with the broader macro economic outlooks (weaker economic data, weaker manufacturing and greater Geo-political tensions) makes a strong case for this to result in higher gold prices (thus a lower ratio of stocks to gold) - I think it quite likely that the Fed will have their hand forced and will resume QE or some other form of stimulus to prop these markets up, but the beauty of this system is that you are pricing the assets in a more stable, non-inflationary numeraire, one that under such QE/ central bank intervention would thrive (thus revealing the true depreciation in value of the underlying) Putting it all together: An example - E.g. Sell your 10 Shares of SPX at 5.5 oz (red arrow) = 55 oz ($250/ oz) = $13,750 - Re-enter stocks at the green arrow for 0.5 oz/ share = 110 share of SPX (55/ 0.5) = $104,500 (55 oz times $1900/ oz) - Convert your shares back to gold (2nd red arrow) at 2 oz / share = 110 shares times 2 oz/ share =220 oz = 220 oz times $1520/ oz = $334,400 Total return = 2432% But more importantly, you have been able to leverage your existing holdings to acquire a non-depreciating asset, in this case gold (but there are many, many different options available to those who can properly utilize this strategy). If you liked this idea, let me know, give me a follow, thumbs up and follow my Twitter so you never miss a trade/ investment idea a
SP:SPXLong
by Profit_Link
RCII forming pennant, likely to run againRCII has a 9.3/10 Equity StarMine Summary Score, has beaten analyst estimates on its last 5 earnings reports, and has grown earnings by 113% this year. Its P/E of 12.3 is quite attractive for a growing company. Here's S&P Capital IQ's analysis of the fundamentals, scored out of 100: Valuation: 99/100 (extremely undervalued) Quality: 98/100 (extremely high quality) Growth stability: 97/100 (extremely stable) Financial health: 95/100 (extremely healthy) Man. You don't see numbers like those every day. About the only thing RCII *doesn't* have going for it is that rentals aren't a very sexy sector. This isn't going to run like a Tesla or a Beyond Meat. Still, this is a very solid stock that should climb out of its pennant soon, in my opinion. Set a stop loss beneath the pennant bottom. Edit to add: 1) several directors added shares on September 6, which I assume was part of their compensation plan, 2) RCII's price stayed stable after its dividend, which is always a good sign, 3) RCII got upgraded by Recognia today after the algorithm detected a breakout. I think this was a false positive, but it could move the stock price up anyway.
RLong
by ChristopherCarrollSmith