Picks for 2012

[Grieve]

Techs and financials on fire today - did you hold onto your FAZ? Difficult to say if this rally has legs, or we're getting to a top. May just need one bad miss (e.g. GOOG or AAPL) to spur a big reversal.

I'm actually waiting for a beefy pullback so I can buy some more call spreads. I'm up 25% for the year already, but I'm been selling a bunch of stuff today.

[Breand]

I certainly didn't see a rally this size coming, so obviously Im scared about my TZA buy now. But watching every other investment jumping up is a nice antidote.

[Vanraw]

Still have FAZ. Its now down .89% so not freaking out. Tomorrow will be curious. I don't think I will hold through the weekend.

One note, is that I'm reading more and more that Greece is likely to default. Its really odd that the market is just ignoring this now. My understanding is if the do default, the American private banks as well as some very large Euro banks have significant exposure.

[Grieve]

One thing I've noticed is that markets really panic at the first hint of some of these major events (like downgrades, countries defaulting, failure to address the deficit, etc), but as more time goes by and it becomes almost "old news", they eventually take it in stride. Which is one reason I think governments work hard to delay things and kick them down the road.

Most observers seem to be saying that any default would be an "orderly" one, and let's face it...a lot of bad news is already baked into the financials. BAC was $15 a year ago, and around $20 two years ago. Now it's $6.80, and was below $5 not long ago. Investors are already assuming a lot of bad stuff! Now it's almost like anything bad that DOESN'T happen is going to shoot the stock up. Which it's one reason I'm long financials this year.

As far as the general markets are concerned, if GOOG, AAPL, MSFT, IBM, and INTC all have good results, we could really soar higher...

[Grieve]

Well...

GOOG missed big, and is down about 10%
IBM missed on rev, but is up about 3% anyway
MSFT beat and is up about 2%
INTC beat and is up about 1%

So mixed bag - futures are down a bit. Have to see what happens tomorrow. I'll probably pick up some GOOG if it opens down this much tomorrow.

[Vanraw]

yea, Im still holding FAZ. Its interesting to see the market want to go high, and then just milk back down to flatness. Im not sure if there is any great news out there that is going to drive it higher in the short term. We are at 12.6k DOW right now. I just dont see it moving to 13k.

By the way Apple is doing well. I made 20% on it before I sold, but $430 would have been nice.

[Grieve]

Yeah, it's funny...I bought lots of Apple call spreads last year, some almost a year ago, and most expiring tomorrow. Several had an upper range of $430. I got scared and sold a lot early, for a good profit, but I should have held out til expiration...

[Grieve]

I'm getting more and more bullish on AAPL. The news just keeps getting better and better - they are making crazy inroads in the enterprise, which is expected to account for $19b in sales this year and $28b next year. Factor in China growth and new products this year, and everything is looking really really rosy. I know I'm a lone Apple fan around here, but I really think you could make some money with some calls or call spreads. Just have to time it right (might be some profit taking after hitting the new high today). I'm buying February call spreads, so I capitalize earnings on the 23rd.

Wow, they blew past even what I expected. They even raised guidance for next quarter above the street (and they ALWAYS lowball). Most impressive of all, earnings are up 118% from last year. Wasn't their growth supposed to be slowing down?

The stock is going to be $500 after this...

Revenue: $46.33 Billion versus $38.76 billion expected
EPS: $13.87 versus $10.07 expected
iPhone units: 37.04 million versus 30.2 million expected (34 million whisper)
iPad units: 15.4 million 13.2 million expected (13 million whisper)
Mac units: 5.2 million versus 5 million expected (4.8 million whisper)
iPod: 15.4 million versus 13.9 million expected, according to Bloomberg
Gross Margin: 44.7% versus 41.8% expected
March quarter revenue: $32.5 billion versus $31.9 billion expected
March quarter EPS: $8.50 versus $8.00 expected
Apple now has $97 billion in cash, short term, and long term securities

[Breand]

I got in AAPL at 382.22 so yeah consider me a happy camper. And to think I owned the stock at one point when it was $85....

[Vanraw]

Im still sitting on faz. Watching the market is interesting. Today we hit the highest DOW since 2008 prior to the meltdown.

I dont know about you, but there has to be a profit taking selloff comming. Im a little nervious because it feels like the market could go either way, but my gut is when you hit a 3 year high, theres a correction comming.

Well I hope anyway. I will say that Im glad I bought FAZ instead of TZA. It seems to have performed better with the current up ticks in the DOW.

[Vanraw]

Man, the bull is kicking my bear assets. I still hold Faz and kicking my self for not putting in my bracket limit.....

[Breand]

my TZA has just become the "I guess Im waiting long term for the next crash" holding. =) But when everything else I have is up big time, I can hardly complain.

[Grieve]

I was home all day Friday painting the kitchen, so I got to watch CNBC most of the day. I was thinking of you guys as I watched everything (especially financials) zoom up, and wondering if you still had your shorts...

Things are looking MUCH better for the US economy now (that was an outstanding jobs report), so I expect the bias still to be upwards. But...the market has been on a tear for a while, so I have to believe a profit-taking pullback is on the cards soon. Nasdaq is at an 11 year high! I sold some stuff on Friday. And there's always the twin bugbears of Europe and Iran (which could be a REAL market killer) on the horizon)...

Up 47% so far this year, almost as much as after an entire year in 2011. Makes me nervous - maybe I should just sell now and sit in cash for the rest of the year.

[Vanraw]

Yea, you know the market is at highest levels since the 2008 bubble pop. While the results of jobs looks good, and I bet we see 7.x in a couple months.

But I think its odd that over all the economy isn't great, yet market levels are at bubble busting levels. If there is no bad news, I'm thinking there is still going to be be some sort of a sell off. If for no other reason then taking profit. However we might see people jump into the market as well. A lot of money on the sidelines still. Which is even more strange when you try to understand the market levels.Are

I think Greece will fold out of the euro, but I also think that is priced in.

Iran might be the next bad news. They are getting verbal.

There the that I don't see what the next bad news might be?????

It Still bothers me though that the market is not reflecting the overall economy?

[Zouji]

Yea, you know the market is at highest levels since the 2008 bubble pop. While the results of jobs looks good, and I bet we see 7.x in a couple months.

But I think its odd that over all the economy isn't great, yet market levels are at bubble busting levels. If there is no bad news, I'm thinking there is still going to be be some sort of a sell off. If for no other reason then taking profit. However we might see people jump into the market as well. A lot of money on the sidelines still. Which is even more strange when you try to understand the market levels.Are

I think Greece will fold out of the euro, but I also think that is priced in.

Iran might be the next bad news. They are getting verbal.

There the that I don't see what the next bad news might be?????

It Still bothers me though that the market is not reflecting the overall economy?

The student loan bubble will burst soon. Education is way overpriced in this country. A lot of graduating students can't pay their $100,000+ student loans. Unlike a home though, they can't just default and remove the debt.

That and the EU is having a job imbalance. Germany is hiring more workers while the workforce and the jobs available in other EU countries (Spain & Italy) are shrinking. High debt + shrinking jobs/wages = bad stuff. The EU might dissolve. Or it might come out of this mess unified and stronger. I highly doubt that they will emerge stronger though. Either way the EU is far from being economically stable as a whole. They might get some giant loans from China, but that won't solve their problems.

A lot of corporations have been showing strong profits though. I honestly think the Dow and NASDAQ are just gonna bounce around, but grow some throughout the year. That is as long as corporate profits remain high. If they drop then the market is fucked.

[Vanraw]

I agree the student loan issue is massive, but I dont think a bubble that would shake the foundations if it popped. Estimates are between 500 and 750 billion in student loans across the country. As I understand it, most of this is held by and or guaranteed by the federal government. Here is why I dont think its a risk tot he economy.

1. A bubble pop would not directly impact employment as the housing or internet bubble did.
2. A pop would not create any sort of massive inventory glut like most bubble pops do.
3. Banks have little risk. in 2009 most of the risk was pulled into the federal government.
4. I doubt we would have a pop, because there will be no coordinated / synchronized crash. Meaning everyone witha student loan will not all of a sudden say "Im not paying"
5. When people decide to not pay a student loan, there is no collateral loss, such as losing your home....



If there was going to be any sort of a coordinated or massive default on student loans, I think it would have happened after the 2008 crash. If there was a huge default across the board, it would be a like a tax cut tot he fed, meaning its only realy impact would be in yearly revenue. Keep in mind that the 500 to 750 billion outstanding is to be paid over like a 20 year period. So if we average to 600 billion debt across 20 years its a 30 billion a year impact to revenue (this is back of the napkin crap calculations but you get the point). 30 billion in our economy, even at current levels isn't anything that will shake the foundation.

I will however add this, and it might force this topic to the political forums...... If the federal government wanted to stimulate the economy directly, one way they could do this is to simply forgive all 750 billion. This would in effect be a large tax cut to young people who want and would spend the money into the economy.

[Grieve]

Even though I think we're due for a pullback, I bought a bunch more call options and call spreads today.

I think oil is going to do well regardless - either Iran will close Hormuz and send it through the roof, or the economy will continue to improve and so oil demand will increase. Also, if you look at the 2 year chart of USO, it tends to peak around April, as we build up to the summer driving season. So I bought some straight up USO $39 April calls, and also a bunch of $40/$41 April call spreads (cost $22 and pay $100 each). Also bought Haliburton $39/$40 April call spreads (cost $36, pay out $100 each).

http://finance.yahoo.com/echarts?s=USO+I...=undefined

Goldman Sachs also had a good write up on how Apple should be over $600 in a year, so as a way out bet I bought AAPL Jan 2013 $595/$600 call spreads (cost $65, pay out $500 each - a 769% return). That's why I like call spreads - very small downside risk, but big upside. Bought some spreads around $500 as well.

[Grieve]

Apple may hit $500 today - up over 4% as I write this. Don't let your distain for Apple the company stop you from making money from the AAPL the stock. I think it could hit $600 before the year is out...maybe even $700. I think it will hit $1000 and be the world's first trillon dollar company sometime in the next few years. Make some cash with them, then use it to buy an Android phone or tablet as a protest against Apple the evil company...

[Vanraw]

FYI, I could cause a pull back. All I have to do is sell my FAZ and the market will pull back 300 points and FAZ will go up 15%. I have that kind of power. Its like washing the car when you need rain.

On Apple. I made some money on them. I might play some options, but dont think I will buy into the stock again anytime soon.

[Vanraw]

Little pull pack today. Lets see if Greece riots all weekend.

I will say that over all I am bullish right now, for the first qtr at least. I think we will see a bump here, and then there will be a buying opportunity. but the trading band is going to be tight. If we reach 14k on the dow, it will be time to get out IMHO.

[Grieve]

My picks YTD performance so far:

1) Apple. +47.17%
2) JP Morgan (JPM). +35.82%
3) Netflix. +73.45%
4) Oracle. +11.31%
5) F5 Networks (FFIV). +24.51%

Not bad! S&P is up 10.75%. I'm up 74%, thinking about trimming some back...