FB ---- SHORT IT AND KEEP SHORTING IT!

I've been quite open about my dislike of Facebook and how they and their investment bankers ripped off their IPO investors.  I've also been upfront about how I don't believe that FB is going to be a lasting and viable company as we've already seen its popularity with younger folks wane.

A BILLION USERS?
Yes, they have a billion users, which love to waste time and share their fake (made up) lives online.  I've also been quite frank noting that FB lives are the ones we wish we had where everything is great, we are successful, and our kids aren't spoiled, and we earn 10 times what we really do.  (Ok, I'm being sarcastic, but I think there is some truth to what I type!).

Anyway, Tim at Slope of Hope put up a  marvelous short idea today about LinkedIn and the chart looks really ready for a fall.  I do believe that LNKD is actually one of the only good social medial/tech companies out there, but I think I fall into Tim's camp that it has an obscene valuation and needs to be corrected.   Noting his short, I went back to my charts and looked up my old buddy FB that simply continues to disappoint and muddle along while others like LNKD, GOOG, and even NFLX have shot higher.
Tim's post -

LNKD chart -

SHORT AND GETTING SHORTER
As I look at the chart of FB, I see a $19 handle in its future.  Once again, those that got creamed in the IPO just keep on getting bad news. FB chart link -

ADVERTISERS DON'T LIKE WHAT THE BOTS ARE DOING
Finally, the fundamental news looks poor for FB as well as advertisers are not liking the placement of their ads next to questionable or even offensive Facebook posts by users.  As we know, social media and targeted advertising bots read and follow your online activities and then "show" you ads based on what you have previously looked at or what advertisers hope that you'll buy.  The funny thing though is that you might be surfing the social media pages or the web and looking at "bad stuff" and right next to that material you'll get an advertisement for diapers, or a McDonald's burger, or even a generator (if you've been searching online for them).  In the attached story from ThinkProgress we find that advertisers don't like the idea of you looking at posts of domestic violence or some sort of assault and seeing their images and logos!  I thought we heard that FB had figured everything out regarding advertising and mobile advertising?!!   By the way, I have never, ever, ever purposefully clicked on an advertisement on mobile.  I unfortunately fat-finger those stupid ads daily when on my mobile phone.  Mobile advertising is simply a total waste in my book, and guess what, that is what FB has tied itself to.

Good luck with that.  Short till $19.50 on FB.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

RETURN OF REALITY? (US BOND MARKET UPDATE)

NIRVANA IS SHUTTING ITS DOORS?
In the past four years we've all lived in a sort of Nirvana-like state where equities go up everyday and somehow government bond yields go lower too.  For sometime, I've been troubled by the weird relationship many markets have maintained because the activity of the "new-normal" period we've had just doesn't conform to historical norms.

We've had strange intra-market relationships between US government bonds and equity markets, US currency and the stock and bond markets, and even odd performance relative to emerging markets.  In the past week or two though, some interesting developments have occurred which probably tie closely to the Fed hinting that they may taper or begin to taper purchases of bonds and mortgage backed securities.

SELL EM IF YOU'VE GOT EM!
To get the work week started, please take a look at the following screenshots of the government bond price action this morning.  While stock markets are moving up (as they should) when government prices are going down (yields are up), I'm a bit alarmed as these are HUGE moves.  The ten year treasury moving 5% in any direction is massive and can't be good for those hedge funds and insurance companies that are leveraged and positioned the wrong way.

Not to be out done, Japanese bonds are also getting clobbered.  I wonder if the Japanese Central Bank has unlimited QE ready, it looks like they are going to need it.

US Tips (Treasury Inflation Protected Securities) are also getting smacked around too, so it would seem there is nowhere to hide in government bonds today.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

FALLOUT (HFT DEBACLE in AEP)

THE SCAM CONTINUES
Obviously US equity exchanges have not terminated their relationships with high frequency traders as we continue to see the evidence of "flash crashes" where in an instant (or less) specific stocks are taken to the woodshed and destroyed, only to have much of their value returned a moment or two later.

The problem of course is that if you were unlucky enough to enter in a market order to sell at that instant, you would be crushed and lose significantly.  Additionally, if you were smart enough to have a stop in place, you got crushed unless you entered in a stop-limit order (although it probably gets executed as the stock recovers).  Ultimately, the loser here is the smaller consumer-type retail investor and we continue to see nothing done to lessen the power and control these automated systems have in our stock marketplace.  It is even more of a joke to hear that these connected and wealthy firms have a physical presence in exchanges where they get an advantage in terms of communication time and speed.

WATCH OUT BELOW
Here is a great example of how wonderfully these can impact a simple dull little stock like a utility!  Check out AEP on a 2 minute chart and also a Daily Chart.

2 MIN - AMERICAN ELECTRIC POWER 
Wouldn't it feel nice to leave your computer for a second and return having sold your position $10 less than where it is trading?

DAILY CHART - AEP

Technology helps provide liquidity doesn't it?  If that is the benefit from all this technology, I'll pass.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

MACRO UPDATE - Sotheby's (BID)

Over the years I've highlighted a few of the major "turning point" indicators I've watched over the course of my involvement with the equity markets.  One of those that I found years back was the relationship that has held between the overall markets and that of Sotheby's.  I guess Sotheby's is a perfect example of disposable income at its best sort of like a Tiffany's or other high end retailer.

The redish line is (BID), while I've added the SPX behind in black.  BID seems to be an early turn indicator in the last two major swoons in early 1999 and also in late 2007, I've marked those in blue.  Late in 2012 again has presented us with a major turn signal where BID certainly has fallen, yet in this Fed stimulated world.... SPX continues to fly (marked in red at the far right of the chart).

While the overall markets "should" according to this two instance example begin to turn, it might just be a safer bet to short BID and just forget about shorting the overall market.  Are we even allowed to short anything?  Tomorrow's employment report will be interesting as we've heard from the Fed that they are willing and able to pump to the moon, as labor participation rates continue to decline, unemployment figures seem to improve as well.  I'm very interested to see what happens when the unemployment trap is set and the Fed needs to restate that they didn't really mean that they would really stop stimulating when the unemployment rate actually gets in the high 6% range.

 As with everything, I'm sure we'll just have a new set of rules or a new boogey man that will require unlimited printing and liquidity-less liquidity.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/