timing is everything

January 8, 2016January 8, 2016

What You Ought To Know About Shorting Facebook & Getting Rich

1/8/2016 – Another down day with the Dow Jones down 168 points (-1.02%) and the Nasdaq down 46 points (-0.98%)

I have to admit something. I hate Facebook with passion. First, it is a cesspool of pointless narcissistic activity. Not for everyone, but the % is high enough. Now, I have learned a long time ago not to make “emotional” investment decision. That is why it warms my heart to see Facebook (FB) at such dizzying valuation levels.

Here is why I believe short sellers should drool all over Facebook (FB)

When Twitter (TWTR) was selling at $48, I wrote this….Why Twitter (TWTR) Should Go On Your “Stocks To Short” List Less than a year later it is trading 60% lower. With that in mind, I continue to maintain that the worst is yet to come for the company. By the time upcoming bear market ends, Twitter should be below $10.

With that in mind, I believe Facebook (FB) presents us with even a better shorting opportunity. In fact, I continue to believe that Facebook is one of the best shorts out there.

And while most investors today will laugh at me when I suggest that Facebook (FB) will see $20 a share over the next 3 years, I will laugh back when it does. I promise. Here is why……

As discussed over the last few days, Facebook is massively overpriced. At its $275 Billion market cap, the company is now worth more than GE. At 10th the revenue base and a P/E of 95. I guarantee you, investors in Facebook today will look back in 2-3 years and wonder “What the hell were we thinking?”.
I am beginning to notice quite a bit of fraudulent activity on Facebook when it comes to likes, promotions, paid advertising, etc… That is firsthand knowledge, but you can Google the same and do your own research. That suggests the Facebook is running out of growth and its multiple is not justified. By a long shot. I wrote about it here Why Facebook Remains An Amazing Short Opportunity
See those massive gaps all the way down to $20 a share? Yep, they will have to be closed at some point.
We are on a verge of a multi-year substantial bear market. Click Here. When such bear markets develop, if past is any history, such overvalued and over hyped stocks tend to lose 80-90% of their value. Just as the gaps above suggest. I don’t know why this time would be any different.
Short interest is low.

Finally, even at $20 a share, Facebook will be extremely overpriced. In other words, I just gave you a 80% gainer, but its up to you what you do with it. As always, TIMING is the key here.

Have a great weekend everyone.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update.January 8th, 2016 InvestWithAlex.com

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What You Ought To Know About Shorting Facebook & Getting Rich Google

January 8, 2016January 8, 2016

Investment Wisdom Of The Day

investment wisdom of the day13 investwithalex

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January 6, 2016

Investment Grin Of The Day

investment grin of the day 37

November 24, 2015

Year End #3 – What You Ought To Know About This Shocking Carl Icahn Video

Daily Chart ANovember 24 InvestWithAlex

11/24/2015 – A mixed day with the Dow Jones up 19 points (+0.11%) and the Nasdaq flat at 0 points (+0.01%)

I don’t know about you, but I am absolutely fed up with the US Government and Media. It is nice to see someone of Carl Icahn’s statue to come out and put them on the spot. Directly. And wait till you hear what he has to say about our financial markets.

“God knows where this is going. It’s very dangerous and could be disastrous. It’s like a movie theater and somebody yells fire. There is only one little exit door. The exit door is fine when things are OK, but when they yell fire, they can’t get through the exit door…and there’s nobody to buy those junk bonds. Stocks are way overpriced.

I found myself agreeing with 95% of what he had to say and I command him for coming out and speaking his mind. If you participate in financial markets and/or care about what happens in the US, the video below is a MUST watch.

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Year End #3 – What You Ought To Know About This Shocking Carl Icahn Video Google

November 19, 2015November 19, 2015

Year End #9 – Smart Money Is Still Distributing Apple (AAPL) To Fools

Daily Chart ANovember 19 InvestWithAlex

11/19/2015 – A flat day with the Dow Jones down 4 points (-0.02%) and the Nasdaq down 2 points (-0.03%)

The original post was published on May 21st, when Apple’s (AAPL) stock price was putting in an important all time high (double top). At that time I have suggested that smart money was distributing the stock. Apple’s stock price is down about 10% since then.

It appears nothing has changed. If anything, big guys are trying to unload at a faster pace. This Goldman Sachs analysis was released just a few days ago. Apple’s shares are going to soar 43% Sure, and I am nominated for a Nobel Prize in literature.

That is to say, don’t be a pawn in their game. My view on Apple hasn’t changed.

A few weeks ago Apple (AAPL) has reported yet another great quarter. Yet, despite the outperformance, Apple’s stock price is barely up. So much so that most investors, market pundits and money managers are dumbfounded by company’s recent decline. After all, it was not supposed to happen. Apple is the best performing company in the world (which is technically true) with like a zillion dollars in cash on their balance sheet.

What gives? I will simply repeat here what I first said on May 21st. When AAPL was putting in its top.

May 21st Update: Alert: Smart Money Is Trying To Distribute Apple (AAPL) To Fools

I firmly believe that the overall market and Apple (AAPL) will crack at the same time. Hence, overwhelmingly bullish coverage of the company and recent analyst upgrades should cause some concern. For instance…..

CARL ICAHN: Apple is worth $240 per share
Morgan Stanley says Apple shares could rise 50%
Here’s the top stock pick from each of 50 biggest hedge funds – Quite a few of these hedge funds have a massive long Apple position.

There is another name for all of the above. Distribution. The smart money is trying to unload their massive positions to unsuspecting retail investors in an illiquid market. A game that is as old as the stock market itself.

Listen, I don’t have anything against Apple. It is one of the best performing companies out there. Yes, it is overvalued, but its valuation is not as bad as some of the junk floating in the market today.

I am merely pointing out that retail investors shouldn’t be sucked into a game that they cannot win. Make no mistake, once Icahn, Morgan Stanley and the rest of the big guys unload their long positions (if they are smart), Apple’s stock will fall like a brick. Just as the market will. That is to say, the opportunity with AAPL might be on the short side of the trade, not the long.

Year End #9 – Smart Money Is Still Distributing Apple (AAPL) To Fools Google

November 13, 2015November 16, 2015

Was Victory Just Snatched Away From The Bulls?

Daily Chart ANovember 13 InvestWithAlex

11/13/2015 – Another down day with the Dow Jones down 203 points (-1.16%) and the Nasdaq down 77 points (-1.54%)

At the end of last week most bulls were celebrating. The market was pushing close to previous highs and the Dow 20K was just a few weeks away. That is, if you listen to CNBC. Around that time I published the following article Why I Am More Bearish Today Than Ever. Today, most primary indices, except the Nasdaq, are negative YTD.

But don’t worry…….right? According to most investors, this is just a healthy correction. Maybe. At the same time, very few people have considered the fact that this might be the next leg down. As outlined here yesterday. Just A “Healthy” Correction Or Something More?

Quite a few things to get through as we head into the weekend.

Fears behind Aug sell-off returning in Nov: Analysts

“There is remaining concern about global growth, and it does seem to be slow and, if anything, heading slower,” Keon told CNBC’s “Squawk Box.” “Right now it seems to me the market is still very nervous about growth and also very nervous that the Fed may move and that may have a negative impact.”

I have said it many times before and I will say it again. August 24th low was untradable. Meaning, the stock market is likely to revisit those levels sooner rather than later.

Weak retail sales suggest moderate fourth-quarter economic growth

U.S. retail sales rose less than expected in October amid a surprise decline in automobile purchases, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in fourth-quarter economic growth.

This should not come as a surprise to readers of this blog. At the same time, I am having a very difficult time reconciling where the FED and other investors see this “proposed growth” coming from. Not a good sign when the Shiller’s S&P P/E is at 26.

China reins in lending for stock trading

The maximum size of such “margin lending” will be cut by half to the equivalent of the amount of cash an investor puts up to buy stocks, down from the previous level of double that amount, the China Securities Regulatory Commission announced.

How is that supposed to be good for the stock market?

Official figures on Friday showed the 19-country eurozone only expanded 0.3 percent in the July-September period from the previous quarter. That was below market expectations for a second straight 0.4 percent rise and piles further pressure on the European Central Bank to offer more stimulus.

Europe is a basket case and it’s getting worse. No surprise there. Mr. Draghi has gone all in with his overbearing stimulus and negative interest rate insanity. The next step, if they ever get there, is an outright monetization.

Considering all of the above, let me ask you something. How can the stock market rally here when the worldwide growth is collapsing, centrals banks have already went all in and the stock market is sitting at bubble level valuations?

Sure, stranger things have happened, but HOPE cannot be an investment strategy. If you would like to find out what happens next, please Click Here.

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Was Victory Just Snatched Away From The Bulls? Google

November 12, 2015November 12, 2015

Something Interesting

I love historic pictures. This car crash is form 1921 New York. As a reference point, the Dow Jones bottomed in August of 1921 at 63.9. That was just 10% higher than an important top 22 years earlier. The Dow would go on to surge to 390 by 1929. At 1932 bottom the Dow was selling 40.56. Price first achieved in 1872. In other words, 1929-1932 collapse wiped out 60 years worth of market gains. historic picture investwithalex

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November 6, 2015November 10, 2015

COT Reports & Weekly Market Calendar – November 6th, 2015

COT Reports: If you are not familiar, the Commitments of Traders (COT) reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions. In other words, it gives us a preview of what commercial interests are buying or selling. As the theory goes, we want to be on the same side of the trade as the big guys.

While not a good timing tool, currencies, commodities and the stock market (to a lesser extent) tend to move in the direction of the bets made by the commercial players. Not always, but often enough.

Latest data, as of November 4th, 2015

Currencies:

USD: 3K Long Vs. 56K Short – No changes. Substantial short interest remains.
Canadian Dollar: 43K Long Vs. 18K Short – Slight decrease in short interest. Significant long interest remains.
British Pound: 57K Long Vs. 16K Short – Slight decrease in net short interest. British pound remains bullish.
Japanese Yen: 96K Long Vs. 2K Short – Slight increase in net long exposure. Japanese Yen is now very bullish.
Euro: 127K Long Vs. 48K Short – Slight increase in net long exposure. Euro is now bullish.
Australian Dollar: 107K Long Vs. 12K Short – Slight increase in net long exposure. Significant long position remains.

Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, British Pound, Euro Japanese Yen and Australian Dollar rally. This is consistent with our view that the FED won’t raise rates.

Markets/Commodities/Volatility:

E-Mini S&P 500: 489K Long Vs. 382K Short – Net neutral position remains.
Nasdaq 100-Mini: 25K Long Vs. 195K Short – Sizable short position.
VIX: 47K Long Vs. 75K Short – Slight decrease in net short exposure.
Gold: 57 Long Vs. 89K Short – Descrease in net short exposure. Gold is back to being neutral.

Conclusion: Based on the information above, commercial interests are now net neutral the S&P, VIX and gold. We have also witnessed a decline in net short exposure in VIX. At the same time, commercials now have a very large short position on the Nasdaq. That is important.

Next Week’s Market Calendar: