Mr. Sensitive

September 6, 2013

FSX Friday Update

Filed under: Uncategorized — lbej @ 18:36

The market was getting roughed up this morning after a lackluster monthly jobs report (is it just me, or does it seem like there’s monthly jobs report every ten days or so?) and more hawkish talk from President Obama at the G-20 threatened to torpedo what had been a decent first week of the month.  Who turned things around for U.S. equities?  This guy:

putin_horse

Tsar Vladimir I, Emperor and Autocrat of All the Russias, followed Obama’s speech by declaring that his country would assist Syria in the event of external attack.  Why would he say that?  Well, for one thing, I guarantee you that most of the Assad regime’s chemical weapons came from Russia, and the Tsar presumably doesn’t want that to be confirmed in the event of the regime’s collapse.  Most importantly, though:

fuwhy3

Is it wrong for me to enjoy Russia being Russia again?  If I’m wrong, the market is, too, because it rallied back to flat after digesting the Tsar’s remarks.  The market doesn’t care about Syria—believe me—but it definitely cares about Russia and China.  In the end, I believe the Syrian people will be indirect casualties of Bush’s disastrous Iraq War; we simply don’t have the will to wade into yet another open-ended conflict in the Middle East, and the very real concerns we have—moral and long-term strategic—won’t be enough.

And in case you forgot:

putinangry1

August was a horrible month for the Family Stock Index.  Between August 2 and August 30, the FSX shed 8.7% (nearly twice the 4.4% decline on the S&P 500) and every single FSX member was negative—that had never happened before.  Wilson was the ‘best’ performer, down only 1.5%, and Zondro was the worst, down 24% (which makes me wonder what goes on in the backyard during the day, that’s for sure), but eight FSX members other than Zondro dropped by ten percent or more.  So this week’s strong rally (+2.9% vs. +1.4% for the S&P) may be nothing more than a relief rally.  Even after gaining more than 400 points this week to close at 15,597, the FSX is still more than 1,000 points below where it was trading just five weeks ago.  I like what I saw this week, but we have a lot of work to do to repair the technical damage from August’s beatdown.  The fact is that there are a lot of spiders between the first week of September and the first frost.

Advancers

  • Zondro (ZQK) +38%.  You read that right—Zondro’s stock rocketed from $4.95 last Friday to a closing level of $6.85, a gain of nearly 40%.  Most of that jump came on Friday after ZQK reported earnings that—while down 83% from the prior year quarter—weren’t as bad as feared.  This is the biggest one-week gain in any component in the history of the FSX (excluding pops associated with takeover bids or other recapitalizations).  Think about that: in the three-and-a-half-year history of the FSX, no stock has done what Zondro did this week, and why?—because his awfulness wasn’t as awful as it could have been.  The market was just way too pessimistic.  I mean, he’s stupid, yes, but is he more than 83% stupider than he was last year?  No.  A lot of shorts got killed on this one, and it serves them right.  Zondro’s not a bad dog at all, and I’ve definitely had worse.  I have worse right now, in fact.
  • Lucas (LEI) +11%.  I’m still 90% certain I’ll dump LEI next year, but if the stock can get back to $2 and hold that level, I may reconsider.  The fact that LEI has closed above $1.50 only once in the last eight months—in the midst of the broadest, most resilient bull market of the century—suggests that I’ll be in the market for a new trading vehicle for Lucas  later this year.  Any theme suggestions from the Blacksburg crew would be welcomed.
  • Reagan (REGN) +10%.  During the month of August, Reagan lost more than $40 off her stock price amidst perennial worries that her teachers wouldn’t like her or that’s they’d be—in her words—‘strict’.  Reagan believes everything bad other kids say about teachers she hasn’t had, despite the fact that she likes every teacher she’s ever had and thinks every kid she knows is an idiot.  REGN started the recovery last week—the only positive stock in a sea of red—and added to it this week.  I think Reagan—at age 9, after all—is fully valued at these levels, but thought the same thing 200 points ago.  If she trades at $500 this time next year it wouldn’t shock me a bit.
  • Icarus (FAST) +8.9%.  Icarus experienced a relief rally of his own this week, as the White House was compelled to walk back some of its most aggressive rhetoric on unilateral punishment for use of weaponized gas.  If you’ve spent more than thirty minutes in a room with Icarus, you’ll understand why there was probably an F-16 already en route to Long Island.
  • Jodi Ann (JOY +3.8%) and Marcus (MCS +5.0%).  Jodi Ann appears to be putting in a bottom (I’m talking about a chart formation, of course—I would never post make pregnancy jokes like that), and Marcus is along for the ride.  The other day I was thinking it was time to double Jodi Ann’s weight (in the FSX—these jokes I would never make aren’t funny, so stop laughing), which is what I did with Katie during the last half of 2010.  (Given how big Brinky turned out to be, I probably should have tripled it.)  Then I checked the spreadsheet, and it seems I already doubled the amount of JOY in the index.  Unfortunately, there’s been a bear market in JOY ever since (-22%) and the FSX has suffered as a result.  That makes me wonder…are Marcus and Jodi Ann absolutely sure the baby is a girl?  If there’s a secret DaMarcus in there, this market reaction would make a lot more sense.  Little boys are terrible, terrible, monsters.

Decliners

  • Nami & Lita (NL) -1.2%.  Charlotte’s cats just can’t seem to go anywhere this year, with YTD and QTD returns of -1.3% and -0.8%, respectively.  Maybe it’s because cats can’t drive.
  • Jenny (JNY) -1.9%.  Jenny had to dress out in PE for the first time this week.  I hated dressing out in middle school, and I hated that it was called ‘dressing out.’  Of course, I hated everything about PE, and school, and life, between the ages of 12 and 15, so maybe I’m unfairly scapegoating my gym uniform.  Clearly the universe itself was to blame, and one day, believe me, the universe and I are going to throw down for real.
  • Mario the Elder (MGEE) -2.9%.  The proximate cause of the selloff in utilities and other bond proxies is the rise in long-term interest rates; the yield on the 10-year Treasury hit 3% this week for the first time since July 2011.  In recent years, the Federal Reserve’s bond-buying program forced long-term rates down to levels below the rate of inflation—the 10-year rate was 1.64% just three months ago—and drove income-seeking investors like pension funds and retirees into dividend-paying stocks.  Rising rates make bonds and other fixed-income investments more attractive to investors seeking current income, and many who were forced out of bonds and into stocks are now dumping utilities and other high-yielding equities.  ED (-1.1%) was down as well; like MGEE, he is technically a utility, but truthfully, I can’t think of anything he’s useful for.

 

Name Ticker 9/6/2013 Change
Brinkley BCO $25.82 -0.01
Charlotte ICE $179.39 -0.36
Dustin DST $71.98 +0.61
Ghost Marisa MOLXA $24.70 +0.15
Icarus FAST $47.89 +3.90
Jenny JNY $14.45 -0.28
Jodi Ann JOY $51.00 +1.88
Justin SCI $18.12 +0.04
Katie CATY $22.01 -0.01
Lee TGI $73.83 +1.86
Lisa LNCE $27.40 +0.50
Lucas LEI $1.37 +0.14
Lulu LULU $69.49 -1.35
Marcus MCS $12.92 +0.62
Mario T.E. MGEE $50.61 -1.50
Mario T.Y. MAR $40.62 +0.63
Namilita NL $10.75 -0.18
Nicole E. NICE $38.63 +0.63
Nicole M. COLM $58.63 +2.04
Reagan REGN $267.57 +25.26
Ruby RJET $11.39 +0.22
Wilson WILC $7.01 -0.05
Winston ED $55.59 -0.64
Zero ZAGG $4.59 +0.14
Zondro ZQK $6.85 +1.90

 

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