If People Won’t Die, Will Bulls…? (KOL,FXI)

If People Won’t Die, Will Bulls…? (KOL,FXI)   We were intrigued by a recent NBC News piece that pushed the notion that eternal life was actually available in the here and now world as we know it.  Or, rather, that it soon will be.  You can read the article yourself here, but the kernel of the piece is that technologies currently under development, including those that involve artificial intelligence and prosthetic bodies, will somehow, eventually, be able to absorb our finite human selves and allow us to be perpetuated in perpetuity!   There’s even one fellow named Kurzweil who claims the process, which he terms ‘singularity’, is already underway and should be near completion by 2029.   Whew!   Will that make us better stock pickers, we ask?  Will it allow us the better to pull a dust speck out of our eye, or scratch an arse-itch?   Those are the kinds of probing questions we’re asking here at Normandy Research. OUCH!  Bruno!  You’re so rough!   Well, eternal life in a chipped-out body with synthetic skin is not exactly our idea of heaven.  We’re more inclined toward the old fashioned world of flesh and blood, even if it does…

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Inaugurating the Profit Search (GOOGL,FXI,KOL,XLP,XLF)

With the New Year under way, we find ourselves with a raft of trades to report.   So pour yourself a tall mug of mead and light up a Camel… Why the goat?   Our first trade was launched in a letter called China at New Highs; Buy China! back on the 1st of June, 2015.  It was a very long dated affair that didn’t prove itself in the end.  We urged you at the time to trade the Chinese market in bullish fashion, specifically recommending you purchase the FXI January (2017) 51 CALL for $5.20 and sell the FXI June 44 PUT for $0.22, the July 44 PUT for $0.48, the August 44 PUT for $0.81, and the November 44 PUT for $1.56.  Total debit on the trade was $2.13   And when all was said and done, we owned the shares and took on quite a bit of water, as we summarized in our March 29th, 2016 letter called The Urban Banking Reversal.  See there for details.   As for today, suffice to say that we now bury the hope contained in the 51 CALLs that expired with the inauguration last Friday.   On a related matter, we…

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Commodity Resurrection (KOL,GLD,GS,XLP,XLF)

Commodity Resurrection (KOL,GLD,GS,XLP,XLF)   The process has taken a while to unfold and may require another few weeks to gather momentum, but there’s no longer any doubt.   Grab some more popcorn and licorice.  The commodity horror show is winding to a close. Before we get there, however, we have three trades to close out, with a nice, net take-home for the trio.   Let’s start with our October 11th initiative from a letter called Multiples, Expanding Multiples and the Energy Spectrum.  In that missive we recommended you buy one KOL January 12 PUT for $0.90 and sell one KOL January 12 CALL for $0.85.  Total debit on the trade was $0.05.   Unfortunately, the dang thing is not moving according to the ‘Normandy Will’ and we’re therefore forced to close it out for what may end up being a loss.  We emphasize the ‘may’, because anything can happen in a week in this market, and by Friday’s expiry we could, in fact, see a profit.   That being said, the short CALL is now trading for $1.25, and we’re forced to buy it back in case the stock moves any higher and puts us into a willy of a…

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Multiples, Expanding Multiples and the Energy Spectrum (KOL)

We want to take a minute to discuss a topic we’ve broached several times over the past few years and again bears repeating.   The idea is de rigeur on Wall Street, but not so much beyond those precincts.   It’s called ‘multiple expansion’.   But you may as well refer to it as monetary sorcery. Consider an example –   Caterpillar stock (NYSE:CAT) is trading at $10 in year X and has earnings of a dollar a share.  Its Price/Earnings ratio is therefore 10.   Then, in years X+1, X+2, and X+3, the company earns… the exact same amount!  No change at all.  If it’s still trading at $10, it will carry the selfsame earnings multiple of 10.   Fine and dandy.   But what should happen to the price of a stock whose earnings remain, shall we say ‘stagnant’, for four years running!?   According to you and I, perhaps the shares should fall, even slightly, to account for the company’s inability to grow its profits.   But not according to Wall Street.   No, no.  Wall Street has a different calculus, the most important part of which relates to its own quarterly earnings (and bonuses). What Wall…

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Keel-Haul the President! (FB,TSLA,KOL,SPY)

Truth is, we get a little P’d-off every time this quadrennial drama of presidentiality falls upon us.   The reason for the ire is part philosophy, part real life, and we’re going to take a moment to explain it to you.   For starters, know it well – any time someone appeals to you about the need for all of us to be ‘brothers’ or to ‘stand united’ or any other such drivel, they’re almost always looking for someone to take orders.   Their ideas, their orthodoxy, and your backside … to take the whip.   It’s an iron rule, and you should run as fast and as far from these people as you can.  Very often, they’re people who talk a lot, too – another quality that should trip your hair-triggers and make you flee to Appalachia.  Quiet people are almost always more trustworthy.  Not to a man.  But on the whole, they’re a much safer bet, in our experience. What gets under our skin is the increasingly meddlesome nature of the state and the incomprehensible tolerance of so much of the voting public to put up with it.  We won’t delve much deeper than that, except to ask,…

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Commodity Revolution (KOL,TSLA)

There’s something happening in the commodities, and the time is ripe to address it.   But first, we close a trade.   On July 12th we recommended you sell the TSLA July 29th 215 PUT for $5.25.  The letter was called Smoke, Fire and Mirrors, and a right blaze of a trade it was!  Today, the same option can be repurchased for $1.79.  Do it and you come away with $346 net.  That’s 193% in two weeks.   BALD COOL!   Now back to the commodities.   We’ll start with oil, where a great deal of action, first bearish, then bullish, has been occurring for roughly two years.  Here’s a chart of the yucky stuff to give you an idea of the types of swings it has been experiencing in just the last half year. After falling from close to $100 a barrel to $35, crude recently sprung north by 50% to close at better than $53.   Them’s moves, baby.   Now, oil comprises a great part of the broader commodity complex and affects the general level of prices for goods globally.  So much of our world moves, works and wars over the stuff, that it’s natural that changes…

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World is Burning; Stocks are Up; Film at 11 (QQQ,KOL)

There are times for holding fast to what you believe and … times for buying insurance.   Now, we haven’t given up on our bullish story.  We frankly believe that the major market indexes have a ways to go before they top out, and that the all-time high number they ultimately post will surprise everyone.   That said, there’s a place in the game for caution, too, and we believe that moment may be upon us.  Not a moment to pack up the woodie and head off to bug-out island.  That day will come, to be sure.  No need to rush it.   What we’re talking about is a simple matter of insurance.  If we’re on the cusp of a drag lower, then let it be a profitable one.  And if it ends up being just a dip before we continue on our way toward Shangri-La, then we’ve lost nothing by preparing for a possible worst case scenario. No, no, Mandy.  We’re not perma-bulls.  We’re right.  And we’ve been right since the beginning, in the face of all the naysayers and doomsayers, haymakers and muckrakers.  And we’re not finished yet, dearie!   As our fellow Normandy scribbler, Hugh L. O’Haynew,…

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Organ Meat Fest (KOL)

We’re going to open with a look back at the top of the silver market in 2011.   Why?   Well, not just because we nailed it with our superior technical eye, with our ear for the subtlest market harmonics and our insouciant visage. More than that.   The truth is we want to show you a perfect, technical mirror-image of what we saw in the charts for silver exactly five years ago.   And on the way, not to worry, we’ll refrain from boring you with reminders of the exactitude of our ongoing bearish calls on the precious metals, or how we’ve been oh-so right despite the cat-calls and caterwauls from the gold-buggery crowd. Oh, we weathered quite a few tomatoes (and not a few raspberries) from that crowd on our way to anti-precious metals riches. But that’s for another time.   We did what we did – and still do – solely for the edification and further wealth generation of our loyal readership.   And with that in mind, have a look here – In April of 2011, precisely as silver was blowing its top, we wrote a piece called Buying Long Dated Silver Insurance, in which we…

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