SWHC opportunity

There could be an opportunity opening up in SWHC. Our main man, flippe-floppe-flye has taken a shellacking in the stock, but the longer term chart [1 year] shows some support around the $7.oo mark and on the 2 year chart at around $4.oo

I literally had a mini client revolt this morning, with my larger share holders demanding immediate sale of SWHC. What could my rebuttal have been? “Wait until this whole thing blows over, SWHC will be hitting new highs in no time at all?”
Shit, I couldn’t muster up the arrogance to explain that SWHC is likely 100% undervalued. It doesn’t matter.

They don’t want to make money in the stock. I imagine a lot of people are facing a similar dilemma today and will continue to ponder the meaning of being long a gun maker, post Newtown. Truth be told, I am happy to be done with it, even though it resulted in a massive, stinging, loss of more than 20%.
The only thing left to do is to move on and pick up the pieces.

Of course much of the reaction is due to the shooting and the political burblings with regard to legislation and gun control.

This is “keep an eye on the story” and watch the stock price. I’m interested at $7.oo and may open a position. Watch this space.

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Spain [Valencia]

This is interesting for us as Spain is a possible destination for us. Obviously if we could time a move back to Europe, and Spain specifically, with a massive drop in housing prices, well, that would suit me down-to-the-ground.

Bearish on Spain? Don’t worry. MarketBeat is here to tell you: You are not alone.

Jonathan Carmel, portfolio manager at $50 million global macro fund Carmel Asset Management in New York, has been fixated on the Kingdom of Spain for the past year, and over the weekend produced a 54-slide presentation whose apocalyptic tones have captured a fair amount of attention on Wall Street.

The centerpiece of Mr. Carmel’s dire prophecy is that Spain’s housing bubble has yet to really burst. And Spain’s housing bubble, he says, puts the U.S.’s to shame. MarketBeat caught up with him briefly today.

And get this: At the peak of the bubble, Mr. Carmel finds, about one in 22 members of the U.S. workforce worked in the construction industry. At the peak in Spain? One in seven workers.

“Spain is a country where the economy is really built on construction,” Mr. Carmel says. Now, he argues, “Spain’s economy is broken.”

Historically, Spanish housing prices have moved in line with wages, but around 2000, home prices began to soar way out of step with wage growth. After more than doubling between 2002 and 2008, Spain’s home prices have fallen about 20% off their peaks. But Mr. Carmel says home prices need to fall at least another 35% (and probably closer to 50%) for them to come back in line with wages. Even after the recent declines in home prices, Spanish housing is still more expensive than the U.S. at its bubble peak in 2006.

 

Head scratch?

From ArmoTrader,

I love trading equity. One of the things I love about trading stocks is that there is always a “Bull or Bear market” somewhere. There is always a stock that is moving or what I like to call ”in-play“. Nothing against Futures trades, but I think trading equity gives me a big advantage when it comes to having more great risk/reward trades. There is always a stock setting up somewhere. Compare that to futures (Speaking mainly indices here) where you are limited to one instrument- the market. Yes there is the $ES_F, $NQ_F, $TF_F, and $DJ_F , but ultimately they are the same thing, the market.

Come on.

What about trading coffee futures, or interest rate futures, or platinum futures, or heating oil futures, or live hogs futures, or Canadian dollar futures, or lumber futures?

Futures offer the true definition of trading ‘different’ markets. There are risks, leverage is generally higher for futures, however if you trade ‘stocks’ for a prop firm, that categorically is not the case, you can easily trade 20X for a prop firm. Futures can also go into ‘lock’ which if you are on the wrong side of a trade, would be pretty stressful.

The main point however is that futures provide the opportunity to truly diversify your ‘market’. Stocks are ultimately all part of the stockmarket, or equity. Sure you can trade different stocks, sectors, industries, but, technically, they are all still the same market.

 

Now this is very interesting

Ever wanted your own Hedge Fund, but were put off by the costs? Now potentially, here is a way for it to happen:

On November 3rd, the U.S. House of Representatives passed H.R. 2930 (the “Entrepreneur Access to Capital Act”), a crowdfunding bill that will allow startups to offer and sell securities via crowdfunding sites like Kickstarter and social networking sites like Facebook and Twitter. As I discussed in my post, “FAQ: What the new U.S. crowdfunding bill means for entrepreneurs,” this is a game-changer for startups and lifts certain securities law prohibitions that have been on the books since the 1930’s. Since I wrote that post, I have received numerous emails and phone calls regarding the House bill, which I will address below.

Has the House Bill Been Signed Into Law?

No, not yet. First the U.S. Senate must pass a crowdfunding bill. Then the House bill and the Senate bill must be reconciled in conference. The White House supports the House bill; thus, upon reconciliation, it will presumably be signed into law by President Obama.

Has a Crowdfunding Bill Been Introduced in the Senate?

Yes, on November 2nd, Senator Scott Brown of Massachusetts introduced S.1791 (the “Democratizing Access to Capital Act of 2011”), which was referred to the Committee on Banking, Housing, and Urban Affairs. A hearing was actually held by such Committee this morning with respect to a number of pieces of capital formation legislation, including crowdfunding.

Are There Any Differences Between the House Bill and the Senate Bill?

Yes, there are four significant differences:

The Senate bill only permits the issuance of securities “through a crowdfunding intermediary” (like Kickstarter). Accordingly, startups would not be permitted to raise funds via social media sites like Facebook, Twitter or LinkedIn (as permitted under the House bill).
Under the Senate bill, each investor is limited to investing up to $1,000 per year per company; the House bill permits an amount equal to the lesser of (i) $10,000 or (ii) 10% of the investor’s annual income.
Similar to the House bill, the Senate bill caps the total amount of capital that may be raised during any twelve-month period at $1 million; the House bill, however, raises the cap to $2 million if the issuer provides potential investors with audited financial statements.
Finally, the Senate bill permits some form of registration by the State in which the company is organized and/or “any State in which purchasers of 50 percent or greater of the aggregate amount of the issue are…residents.” The House bill preempts State law and, accordingly, there is no State registration requirement.
Has There Been Any Pushback to Crowdfunding?

Yes, the North American Securities Administrators Association (NASAA), a trade group for state regulators, has been lobbying very hard against the House Bill to prevent the preemption of State law and to reduce the maximum investment amount per investor. As NASAA President Jack Herstein wrote in a letter to House members: “Any effort to remove or weaken the up-front registration and disclosure process should not happen without adequate alternative safeguards….H.R. 2930 will create an exemption that will expose many more American families to potentially catastrophic financial harm.”

What Should Startups Do?

Until the crowdfunding bill becomes law, startups should avoid selling stock or other securities via crowdfunding sites or social networking sites. Why? Because such sales are in violation of applicable securities laws and thus could lead to severe consequences, including a right of rescission for the stockholders (i.e., the right to get their money back, plus interest), injunctive relief, fines and penalties, and possible criminal prosecution.

For example, as a recent Wall Street Journal article pointed out, the crowdfunding site Profounder “drew scrutiny from California securities regulators and was recently forced to abandon its original mission of providing online sales of equity stakes in small businesses.” Indeed, in August, the California Department of Corporations issued a formal consent order against ProFounder to “desist and refrain” from engaging in securities transactions without registering as a “broker dealer.”

Any company that raised funds via Profounder now runs the risk of having violated applicable federal and state securities laws by utilizing an unregistered broker-dealer

 

Microsoft blows it.

Looks as if Microsoft for the first time in about 15yrs had actually come up with something innovative. Ballmer and Gates blew it.

 

Emerging Markets: Africa

 

Ever wanted to write a book?

Ever wanted to write a book? Not quite sure where to start? Well Rhodytrader is writing another book for novice traders, and is accepting submissions in the following areas.

Staring Points

How is trading different from investing?
Why should I trade rather than just invest?

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The Biggies

How much money can I make trading?
When do I know I’m ready to start live trading?
What books should a new trader read?
Should I quit my job and trade full-time?
Only professional traders make money, right?
Do I have to accept some big losses in the beginning?
How long does it take to make a stable income from trading?
How do I start trading?
How difficult is it to trade?
What is the percentage of people who succeed in trading?

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Trading Education

Is it worth spending money on educational resources when there’s so much free stuff available?
If you know so much, why don’t you just trade?
How do I avoid scammers?

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Markets & Instruments

What is the best market to trade?
What’s the safest market?
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Is forex trading a scam?
Is it better to trade spot forex or currency futures?
Should I avoid trading over the holidays?

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Mechanics

What is leverage and margin in trading?
How much money do I need to start trading?
Is live trading different than demo trading?
What’s the difference between a stop and a limit order?
Where does the money I make in the market come from?
Do I have to pay taxes on my trading gains?

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Analysis

What’s the best indicator?
Which type of market analysis is better?
What is technical and fundamental analysis?
Why didn’t the market rise on the positive news?
What is Support and Resistance?
What are the differences between discretionary and system traders?
What timeframe charts should I look at?
What charting package and/or data feed should I use?

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Trading Systems

How can I create a good trading plan?
How do you backtest a system?
Where should I put my stop?
Should I buy this system?

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Trader Psychology

How important is psychology in trading success?
How can I overcome my fear when trying to pull the trigger on a trade?
Why can’t I follow my trading system?

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Brokers

What’s the best broker?
How should I select a good broker?
Is my broker trading against me?
Is my broker running my stops?

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Jobs

How do I get a job trading?
What types of trading jobs are there?
What’s better, an MBA or a CFA?
What kind of program should I do at school to get a trading job?