Greetings. I will be starting a new blog on WSO where I will focus on putting together quality equity research pieces. My goal is to get practice at writing ER and to hopefully generate some investing discussion on the boards in the process. I'll be starting a sister blog here: (http://seekingalpha.com/user/13500742/profile) where I will post more detailed versions of these articles. I will do my best here to be concise while still providing key details. I am hoping for some discussion/constructive criticism.
Company: Calgon Carbon Corporation
Stock Price: $16.44
Market Cap: $903 million
Debt: $50 million
As a trader, one of the things I like to do is take notes on trading observations, both trade specific and trader specific. I was flipping through some of my notes and wanted to share some of the rules I have followed which generally apply to all traders.
Develop your own philosophy and guiding principles
Never trade on other's advice
Define your trades before entering them and constantly reiterate your reasons
Keep a record of your market observations
Do not be afraid of taking risks (or losses)
Make a risk control plan and follow it
Accept failure and persevere
I will go into detail below, Let me know if you have any more tips that you would like to contribute.
In today’s volatile market, being long and neutral in your portfolio can deliver returns in uncertain markets. Today, I will present two options strategies, one conservative and one speculative, and then ask WSO if you would be on the other side of these trades.
I will propose a covered call on Microsoft (MSFT) and a bull call spread on Starbucks (SBUX).
Last Monday, Patriot Coal (PCX) filed for Chapter 11 bankruptcy protection and was the first ship to go down in the declining coal industry. This bankruptcy and the current rock-bottom valuations of the US coal stocks (ACI, ANR, WLT, BTU, ect.) are a sign of the shifting sands in the energy sector as natural gas rises in importance and developing countries rely less on energy imports.
“The coal industry is undergoing a major transformation and Patriot’s existing capital structure prevents it from making the necessary adjustments to achieve long-term success,” Irl F. Engelhardt, Patriot’s chairman and chief executive, said in a statement. “Our objective is to use the reorganization process to address important issues in an orderly way and make the company stronger and more competitive.”
Patriot may have secured some $802 million in restructuring financing, but it may just be delaying the inevitable as the coal industry is experiencing both a cyclical and structural decline.
This is a big week for markets in terms of economic data. Yesterday we had a data dump of mammoth proportions and the data wasn’t very promising.
A glance, we saw Australian, Korean, Spanish, Italian, French, German, UK, and Brazilian Purchasing Managers Index (PMI) all print sub-50 (contractionary) numbers. US PMI fell to 52.5 and Chinese PMI fell to 50.2 (lowest in three years. In addition, Eurozone unemployment rose to a record 11.1%, Brazilian consumer default rates spiked higher, and the US Institute for Supply Management survey (ISM) came in at a contractionary 48.7 (another three year low).
OK, you get it. The data was bad yesterday, but markets still rallied? What can we learn from the market reaction?
So you are fascinated by the financial markets and maybe even interested in trading? Great, but access to information doesn't come cheap and can be a real differentiator. After all, how can you possibly get an edge on what is going on if you don't even have a fraction of the information at your disposal that market professionals have without paying a pretty penny?
Ten or Fifteen years ago it would have been nearly impossible to come even close to replicating what big firms have access to when it comes to data and information. These days, you still can't get there, but you can arguably get three quarters there in terms of what the fundamental managers are looking at.
I will go into detail below. Let me know if you have any cool free resources or tricks to getting useful market information.
Last week after the Chinese central bank (PBOC) announced a 25 basis point rate cut, I gained enough conviction to take a long position on Baidu which has sold off greatly along with most other Chinese equity flotations this year.
The PBOC move made me believe that Chinese policy makers may engineer a bottom in their equity markets through a wave of easing. I decided to go shopping for the higher quality Chinese names which are on sale, BIDU being amongst the first that I am adding.
Why do we constantly set ourselves up for disappointment by dreaming up the possibilities how much better our lives would be if only we were doing something else?
Too many times I have heard friends say "things would be so much better if only I worked for x group in y bank". Or another thing you might hear, "I like what I am doing now, but I think a job at fund z would pay a lot more".
If there are any monkeys out there with this mentality, please keep this old cliche in mind: the grass is always greener on the other side.
The book “Unintended Consequences: Why Everything You’ve Been Told About the Economy is Wrong” by Edward Conrad has created a shit storm in its wake as it seeks to defend the 1% and makes the argument that inequality benefits modern society. The book's main argument is that the rich provide capital and take risks which generally helps society innovate and create jobs.
While the book is not directly associated with any of the presidential campaigns, it has been at the forefront of the war on finance and private equity. It seems to me that it has become very trendy for people to trash private equity while having just learned about what it was a couple months ago.
It could be said that recruiting for competitive jobs in business is a game. However, recruiting is a poorly designed game with blurred rules that doesn't necessarily award the best candidates all of the time.
We have all long known about the shortcomings of the current model recruiting, and a start-up founded by Guy Halfteck called Knack.it is trying to address the issues through the use of video games. Knack.it is partnering with companies to develop games that test specific skills desired for particular job positions.
<em>Mod Note: Throwback Thursday: this post originally went up on 8/1/13.</em>
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Which order would you guys recommend studying the following:
-<span class='keyword_link'><a href="http://tinyurl.com/3rebxvt" target="_blank">Rosenbaum</a></span>
-BIWS modeling basics