Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Open Thread: If the Market Drops, What are You Buying/Selling?
Last buy of BAC stopped-out yesterday mid morning. Then, following quick 6% rise off 52-week low with speculative buy of CLF, it broke at open today on continued bad news. Day traders do not hold positions overnight. BRK and COP continue to do fairly well, while GE is sideways. Remain very long BAC, since May last year actually. Trust it will regain momentum. Want to be in position to tax as capital gain versus income if heads south.
Becoming more interested in ETFs. Moved some RNSIX to BOND, although remain happy with the former's performance, CEF aspect of its portfolio, and as proxy to Mr. Gundlach. Exchanged WBMIX for more AQRIX. Still appreciate Mr. Redleaf et al, but needed to scale back equity exposure with my experiment of 10 mo SMA allocation method on D&C holding. Currently, have 75% in DODGX and 25% in DODIX, because...
Reply to @scott: Reply to @scott: Scott bought FISV last week the day after you recommended it. Normally I am the last person to ever buy anything recommended on an investing or trading board but it's my kind of stock - in a tight rising channel with projected steadily rising earnings and revenues. It also should benefit from the rebound in bank stocks. Thanks.
Also added Walgreen's (WAG) as well as the compnay it made news with recently AmerisourceBergen (ABC) - another real tight channel. As a real speculative play added NPSP, a small drug stock. My other drug stocks - LGND and SNTS - have performed well the past month and NPSP has some fundamental similarities.
Charles, got out of my BAC (too all over the place for my tastes) and rolled it into another one of my bank stocks TCB.
Reply to @Hiyield007: I know. BAC weak lately, after reaching 52-week high. Perhaps JoeNoEskimo was right to cringe when Meredith Whitney made her recent call that BAC would reach $15-20. Hey, all things based on falsehood will eventually be proven wrong. Right now, my long bet on BAC motivates me to think Ms. Whitney is correct. Time will tell.
Why Walgreen's over CVS or RiteAid? Just curious. Don't all three face stiff competition from Walmart and Target?
Reply to @prinx: Ha! Yes, it is fun. But trust me, the stock bets are the very smallest portion of the portfolio. Honestly, they typically end in disaster. But having a small, self-inflicted stock portfolio helps me stay tuned-in to the market. At the very least, a better appreciation of my fund managers.
Reply to @prinx: I think it's difficult and there are definitely lessons - it has been a learning experience. Additionally, I've structured my holdings so that the single stock section provides a considerable yield with few exceptions (such as FISV and GTOMY.) Fiserv and Gemalto are to take advantage of what I believe is an evolution in financial technology and how people bank/transact - mobile banking, mobile payments and new programs like Amex/Wal-Mart's Bluebird, for example (which is - as of a couple of days ago - now FDIC insured). I think you're going to see less bank branches over time and an increasing amount of Bluebird-type programs attracting the "unbanked". From Visa:
"An estimated 2.5 billion adults lack access to formal financial services—representing over half of the world’s adult population.1" "In 2012, an estimated 1.7 billion people will have a mobile phone but not a bank account.8" http://corporate.visa.com/_media/financial-inclusion-fact-sheet.pdf
"Bank branch closings have outpaced openings by an average of 48% in every quarter since the first quarter of 2011, including the quarter to date. Banks have closed 3,839 branches in that time while opening 2,595 for a net loss of 1,244 branches. At an average range of 2,000 to 4,000 square feet of space per bank branch, that represents a loss of 2.5 million to 5 million square feet of retail absorption. William R. Koehler, president of both Key Community Bank and KeyBank added: "In the face of the present environment, we recognize the need to rationalize our branches while also repositioning them in a way that allows us to provide the right convenience for our customers where they are. "
"We expect banks to continue reducing their branch network footprint, moving away from a focus on traditional branches toward new touch points with customers," Fitch reported. "This new branch model is likely to reward banks that deploy technology innovatively to optimize customer interaction, while cutting personnel and facilities expenses in the process. Over the near and medium term, we expect banks to invest heavily in technology to facilitate the smooth downsizing of branch networks," the rating agency said. "Increased technology spend will offset many of the benefits of reduced branch operating costs during the transition period, but longer term savings will likely be driven by the development of a more flexible, technology-driven distribution system."
Reply to @Charles: Walgreens has turned things around after a couple of iffy years and is competing with CVS with a number of sizable moves lately, such as the merger with Alliance Boots that is going to create the largest health/beauty chain (I own the previous largest, AS Watson, which is a subsidiary of Asian conglomerate Hutchison Whampoa.)
RiteAid has muddled along for ages. I keep thinking someone buys them, but when Walgreens and CVS have the share they do, does buying something like RiteAid start regulatory issues? I dunno.
I think there is competition from Wal-Mart and Target (and Costco), but I still think - at this point - there's demand for the neighborhood pharmacy that people don't have to drive far to. Wal-Mart Express stores have also not made huge moves into cities yet, but I think they will over time.
Reply to @scott: CVS's direction in this small market w/ a moderately large contingent of retirees is interesting. They bought a toehold in a strip mall from RiteAid ~ 6-7 years ago, and are about to open a new, enormous, 24H location on a very large property at a major crossroads, a very expensive property where they had to do an extensive teardown, which is not cheap here - at 2x the usual landfill fees for construction waste. There's no Walgreen's here, but loads of pharmacies around town at WM, Target, Costco, Safeway, regional supermarkets, etc., etc.
It's hard to imagine they're spending that $ wisely unless there's some new calculus, say with the full implementation of the ACA next January ... which, if correct, could indicate there might be some opportunity in the stock of pharma-plus retailers, if they haven't already been bid up.
Comments
Last buy of BAC stopped-out yesterday mid morning. Then, following quick 6% rise off 52-week low with speculative buy of CLF, it broke at open today on continued bad news. Day traders do not hold positions overnight
Becoming more interested in ETFs. Moved some RNSIX to BOND, although remain happy with the former's performance, CEF aspect of its portfolio, and as proxy to Mr. Gundlach. Exchanged WBMIX for more AQRIX. Still appreciate Mr. Redleaf et al, but needed to scale back equity exposure with my experiment of 10 mo SMA allocation method on D&C holding. Currently, have 75% in DODGX and 25% in DODIX, because...
Also added Walgreen's (WAG) as well as the compnay it made news with recently AmerisourceBergen (ABC) - another real tight channel. As a real speculative play added NPSP, a small drug stock. My other drug stocks - LGND and SNTS - have performed well the past month and NPSP has some fundamental similarities.
Charles, got out of my BAC (too all over the place for my tastes) and rolled it into another one of my bank stocks TCB.
But go ahead have a lot of fun. I'm too near retirement age..... although I can still drink beer.
prinx
Why Walgreen's over CVS or RiteAid? Just curious. Don't all three face stiff competition from Walmart and Target?
"An estimated 2.5 billion adults lack access to formal financial services—representing over half of
the world’s adult population.1"
"In 2012, an estimated 1.7 billion people will have a mobile phone but not a bank account.8"
http://corporate.visa.com/_media/financial-inclusion-fact-sheet.pdf
"Bank branch closings have outpaced openings by an average of 48% in every quarter since the first quarter of 2011, including the quarter to date. Banks have closed 3,839 branches in that time while opening 2,595 for a net loss of 1,244 branches. At an average range of 2,000 to 4,000 square feet of space per bank branch, that represents a loss of 2.5 million to 5 million square feet of retail absorption. William R. Koehler, president of both Key Community Bank and KeyBank added: "In the face of the present environment, we recognize the need to rationalize our branches while also repositioning them in a way that allows us to provide the right convenience for our customers where they are. "
"We expect banks to continue reducing their branch network footprint, moving away from a focus on traditional branches toward new touch points with customers," Fitch reported. "This new branch model is likely to reward banks that deploy technology innovatively to optimize customer interaction, while cutting personnel and facilities expenses in the process. Over the near and medium term, we expect banks to invest heavily in technology to facilitate the smooth downsizing of branch networks," the rating agency said. "Increased technology spend will offset many of the benefits of reduced branch operating costs during the transition period, but longer term savings will likely be driven by the development of a more flexible, technology-driven distribution system."
http://www.costar.com/News/Article/Bucking-Historical-Trends-Bank-Branches-Disappearing-Rapidly/141624
Everything else provides a yield at least above 1.5% and a number yield above 4%.
RiteAid has muddled along for ages. I keep thinking someone buys them, but when Walgreens and CVS have the share they do, does buying something like RiteAid start regulatory issues? I dunno.
I think there is competition from Wal-Mart and Target (and Costco), but I still think - at this point - there's demand for the neighborhood pharmacy that people don't have to drive far to. Wal-Mart Express stores have also not made huge moves into cities yet, but I think they will over time.
It's hard to imagine they're spending that $ wisely unless there's some new calculus, say with the full implementation of the ACA next January ... which, if correct, could indicate there might be some opportunity in the stock of pharma-plus retailers, if they haven't already been bid up.