Tag Archive for NCAV

Investment Ideas For This Crazy Trading Environment

So, we have been pretty accurate recently suggesting investors go long Gold and short overvalued stocks. Right now, I feel the long PM’s short stock trade should continue to outperform. CNBC had quite a few silver bears on the air today and the metal even sold off a bit before FED speak came on the air declaring that, as Hedgephone readers already know, America owes a TON of money to seniors via Medicare and Social Security. I view Silver and Gold as your best hedge against this debt dilemma and also against more Quantitative Easing. Commodities have been weak recently other than Gold, but I think Agriculture is likely a good long term buy at these prices. Likewise, Silver is not in backwardization which should put a tailwind behind rising prices for the metal.

On the short side, I would want to be short calls or long calendar put spreads on the IWM or QQQ or select overvalued equities. I would be very aware of the technical levels in the market, including $1300 and $1310 on the S&P 500 as well as $56 and $57 on the QQQ… $2700 is a must hold level for the Nasdaq, as is $80 on the IWM… I am a bit suprised that the markets have been this resilient but I do feel we are overvalued here in general and would not want to recommend buying a long term index fund position as much as finding cheap stocks to own over the long term. KO, MCD, PEP, JNJ, RIMM, GOOG, etc… all look like good values and I will continue to update readers on my favorite longer term large cap ideas, but remember that each investor much make up his or her own mind based on their own due diligence. This site is clearly a research and idea generation hub and not a “tip” generator.

Select “cheap” and undervalued issues also look interesting and to find stocks trading below Net Current assets, investors may want to check our “Values” page as well as Oldschoolvalue.com, Cheapstocks.net, Greenbackd.com, etc… — essentially there are several companies which are now trading at prices far below their Net Current Assets minus total liabilities…

A brief list of them includes, Voxx, HAST, VII, GBR, HWG, TBAC, and several others… For disclosure, at Hedgephone we put our money where our mouth is and will be long most of the names we talk about here, including these “cigar butt” stocks…

In essence, the short side is looking decent but we would prefer selling naked At the money or above the money call options on overvalued issues such as LNKD, NFLX, YOKU, etc… etc… while investing our cash in names that trade significantly below liquidation values here… Also, stocks trading at 5X earnings are always interesting to look at and often make good longer term investments… So, keep an eye on stocks that are unreasonably cheap as valuations are incredibly bifurcated here, with leading stocks such as AMZN, OPEN, LULU, CRM, etc… trading for bubble-like multiples while several quality businesses can be purchased for 5-8X earnings and even lower multiples on free cash flows.

All the best Hedgephones and remember to do your own Due Diligence!