Sunday, February 22, 2009

Random Thoughts and Observations for a Sunday Morning

* Not So Preferred - I talked with a Dow Jones Newswire reporter on Friday about investor fears regarding bank nationalization. One psychological indicator of those fears is PGF, the ETF specific to preferred shares of financial institutions. As we can see from the chart above, PGF has been cut in half since the start of the year, as fears mount that preferred shareholders may recover little in any government assumption of equity.

* StockTwits - I recently began participating in the StockTwits site, which features conversations among traders who communicate via Twitter. One feature I like is the ability to filter "tweets" by stock symbol, so see what the chatter is regarding specific names.

* Trade Signals - I continue to follow Henry Carstens' mechanical trading signals via Twitter; it's interesting to see which signals do and don't fit with my own market judgments. One more piece of data for discretionary traders to integrate into their market views.

* Frugality - I found the N.Y. Times article on consumer retrenchment in Japan to be quite interesting; Iceland is seeing similar frugality, and the relative outperformance of WMT and MCD suggest that the meme has taken hold in the U.S. as well. Given that this represents a sea change in sentiment and behavior, not a fad, a number of pairs trades might follow from the theme: long the company that offers perceived value, short the company that offers perceived cachet.

* Ideal Coaching Service for Traders - The last few days I've been pondering the question of what an ideal coaching service for individual, developing traders might look like and how that might be delivered in a highly affordable way. I'll be posting ideas on the blog this coming week.

* Where Value Might Be Found - I recently posted a review of Janet Tavakoli's book that dealt with Warren Buffett's value investing. Here's a post that reviews Buffett's positions: where he is finding value in the current market.