WASHINGTON, July 20, 2016 – The Maven needs to head out to his secret bunker in West Virginia in a few minutes, so this report will be a short one. Really. And no, our bunker is neither underground nor as fancy as Mark Levin’s. But it’s a good place to get away from the political din, both in Washington and, for this week at least, from GOP politics up in our old home town of Cleveland, which is hosting this year’s GOP Convention.
After the government owned media’s 24/7 trivial pursuit of the Melania Trump “plagiarism scandal” (as distinct from the plagiarism scandals of Joe Biden and other Democrats in the past) began to wind down—having accomplished its objective of robbing the Convention of oxygen for an entire day—Chris Christie remedied the situation Tuesday night by “trying” and “convicting” Hillary Clinton of high crimes and misdemeanors, involving the absolutely delighted convention-floor delegates as members of the jury.
Christie’s antics were the right answer to kick up the decibel level on the convention floor and, perhaps, gin up some of the enthusiasm the GOP needs to push their unlikely nominee (it was made official last night) over the top. This despite sulking clowns like Ohio Governor John Kasich and many others who seem to have forgotten their pledge to support the eventual GOP Presidential nominee—after having publicly forced Trump to sign the same declaration. How easy we forget when we lose, eh?
The revival of Glass-Steagall revival talk likely unsettled yesterday’s market a bit. That said, we’ve been endorsing this policy ever since Glass-Steagall was finished off in 1999. The result of that stupid move was the Great Recession, ample demonstration as to how stupid the repeal of this key Depression Era regulation actually was.
Glass-Steagall was originally implemented to keep the nation’s banking system OUT of the businesses it had run into the ground in the late 1920s, laying the groundwork for the Great Depression. Why anyone in his or her right mind would have ever allowed the banks to do that again is a mystery known only to the banking lobbyists who probably got large enough bonus checks for their success in this matter that they now own majority interests in several small countries.
Anyhow, politics or no, things seem a bit sunnier today. Beaten down biotechs are getting a bid as is West Texas Intermediate (WTI) crude oil, as surprisingly better-than-expected Q2 earnings reports begin to roll out. Let’s all agree to smile while it lasts.
We decided to take a pass on the secondary offering for NCI Building Systems (symbol: NCS) after it priced last night. Not enough of a discount to tempt us, even though the stock itself is improving on its own merits. Technically, it’s up from its offering price, but down on the day and the week. Despite July’s stock price adrenalin-rush, we still think something nasty will happen soon, just because. So there’s no point in picking up an investment like NCS that could tank over the next 30 days while our brokerage more or less requires us to hold it, and that’s what we worried about here.
Meanwhile, we await pricing this evening of Netherlands IPO Patheon (proposed symbol: PTHN) which is supposed to price tonight. We would be looking to either get a nice discount on the current expected pricing range ($19-22), or discover that the issue is oversubscribed and prices up a couple of bucks, meaning it will have a good pop when it opens for trading Thursday.
Of course, when an IPO goes “hot” and prices above range, that means that the Big Boyz will get all or most of it, leaving our request in the dust along with all the other little guys bidding for shares. But that’s the way it works, another example, as we noted here yesterday, as to exactly how the rich keep getting richer.
Other than this, we’re going to make an attempt today to buy some Pfizer (PFE) and maybe a bit of Allergan common (AGN). We already own a good chunk of Allergan’s preferred (AGN/PRE—your symbol may vary), but there could be some good pharma capital gains in the second half of 2016 in both these companies which once were attempting to merge.
Additionally, we are currently underrepresented in large cap and are trying to re-diversify out portfolios for the second half of this trading year.
Gotta run. Stay tuned.
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