WASHINGTON, February 10 2015 – Will they or won’t they compromise? The Greeks, that is. With that country’s not-so-lovable Communists now in charge, we know the drill. Intransigence, belligerence, and math-challenged leadership is part and parcel of the modern Communist mind, as perhaps best exemplified in today’s Venezuela, truly the basket-case of South America.
Communists want to have it both ways. They want to kill all the rich guys. But they need them around for awhile, because they live on the lifeblood of the capitalism they profess to hate. So they generally proceed to bleed existing, nominally capitalist economies to keep their fans and voting constituents happy to the point where the rich no longer have much wealth to give.
No matter. The Commies just keep spending anyway to the point where everything dries up and necessary products and services dry up. At which point, it’s all blamed on the capitalists again. Meanwhile, business and the economy are destroyed, the people get restless again and the Commies, somehow, now live in mansions.
Basically, today’s faux Marxists demagogue just like the old ones but they can’t do math. So they end up flattening the system and killing off the geese that lay the golden eggs. At which point they blame it on all the rotting goose carcasses carelessly strewn about the countryside.
We’d be more irritated at the current Greek regime if the thoroughly corrupt previous regimes worked to end the graft, extortion, bribery and lack of revenue that brought that hapless country to its knees to begin with. Not to mention the usual Eurozone public employee union graft and crap.
But when the wealthy and the politicians they own are on the take, why put an end to a good thing? So now we have this: a small country that’s a small part of the European monetary union threatening to potentially destroy that monetary union by walking out of it.
On a day to day basis, the headlines regard this whole charade either of vital importance or of little importance at all. Today, the latter camp seems to be ascendant, based on the premise that everyone is really going to “compromise” (i.e., cave to the Greek commies), and everything will soon be hunky-dory in the Eurozone as they finally and belatedly pick up QE where the U.S. has apparently left off.
At least this is the way the algos and HFTs are leading the market, blissfully unperturbed that oil took a nasty price hit today after several days in a row of $50 and above nirvana.
It’s all nonsense, meant, in the end, to frustrate genuine value-hunting, dividend-hunting investors while making day traders ecstatic. At least if they’re on the right side of the HFT trade. A more stupid, dysfunctional market we’ve never seen. But don’t look for a solution in this administration, unless it means punishing some big company and extracting “fines” from the alleged miscreants.
(BTW, where do these big fines actually end up? Good question, eh?)
Travel at your own risk. We’ll likely be told entirely different stories tomorrow, featuring something else to make us very afraid. That’s the best advice we can give at this point, as each day or two seems to negate the previous day or two.
Today’s trading tips
We’ve been watching our few remaining REITs bleed out a bit this week, as the high-yield trade seems to have played itself out, at least temporarily. We still think that it might be time to tiptoe back into the oil patch, albeit carefully.
We’re already in a bit of Royal Dutch Shell (RDS/A or RDSA) and are down only slightly at the moment. If the stock would take another nasty hit, we’d be inclined to buy some more.
We’ve also tiptoed back into shares of AMLP, an ETF that holds a basket of the best-yielding master limited partnerships (MLPs) that primarily invest in midstream (pipeline) and downstream (refinery) assets.
We find that whenever this ETF is priced in the low $17 range or in the $16 dollar range (which we missed), it’s a good buy, currently yielding nearly 7 percent. This is not a safe bet, but the yield is still good and, we think, it’s safer than it was about 30 days ago. We shall see.
A pair of IPOs is also on the way, at least for Schwab traders like the Maven. First up and being priced tonight is Sol-Wind Renewable (proposed symbol: SLWD) a renewable energy-fueled entity that’s almost impossible to describe, given potential tax legislation that may influence it after it goes public. This is basically an “entity” that should function like an MLP, providing decent income derived from renewable energy products it owns and/or manages.
Yield is reputed to be good, even though there is none at the moment, so this is a spec investment. That said, similar entities, dubbed “yieldcos,” seem to have done well in the market. So far. If the price is right tonight, we’ll take a chance.
Possibly better, and possibly hot is a locally-based IPO, Inovalon Holdings (proposed symbol: INOV) another of many new-ish cloud-computing platforms, this one based in Bowie, Maryland. But INOV has an especially attractive twist, as language in its prospective points out:
INOV is a leading technology company that combines advanced cloud-based data analytics and data-driven intervention platforms to achieve meaningful insight and improvement in clinical and quality outcomes, utilization, and financial performance across the healthcare landscape.
Yep. Medical stuff. As usual, there’s no profit here, as there generally is not in the realm of tech and tech-style IPOs. This one gets priced Wednesday evening, and once again, if the price is right (and if the rich guys don’t take all the shares) we might get into some of this as well.
Otherwise, we’re sneaking into various Schwab ETFs with little tiny bites, taking advantage of commission-free trades to add incrementally to our positions. Right now, we still favor dividend-based ETFs (like Schwab’s SCHD) and are also looking into adding to tiny positions in SCHB (similar characteristics to the S&P 500) and SCHX (vaguely similar to the DJIA ETF, symbol DIA).
Otherwise, we still find it hard to get excited, given that an up day as today seems destined to be is often followed by a worse down day. We tend to be optimists. But thus far, 2015 has sorely taxed our patience. And our returns, which are slightly negative thus far.