Weekend Update – June 30, 2013

The hard part about looking for new positions this week is that memories are still fresh of barely a week ago when we got a glimpse of where prices could be.

When it comes to short term memory the part that specializes in stock prices is still functioning and it doesn’t allow me to forget that the concept of lower does still exist.

The salivating that I recall doing a week ago was not related to the maladies that accompany my short term memory deficits. Instead it was due to the significantly lower share prices.

For the briefest of moments the market was down about 6% from its May 2013 high, but just as quickly those bargains disappeared.

I continue to beat a dead horse, that is that the behavior of our current market is eerily reminiscent of 2012. Certainly we saw the same kind of quick recovery from a quick, but relatively small drop last year.

What would be much more eerie is if following the recovery the market replicated the one meaningful correction for that year which came fresh off the hooves of the recovery.

I promise to make no more horse references.

Although, there is always that possibility that we are seeing a market reminiscent of 1982, except that a similar stimulus as seen in 1982 is either lacking or has neigh been identified yet. In that case the market just keeps going higher.

I listened to a trader today or was foaming at the mouth stating how our markets can only go higher from here. He based his opinion on “multiples” saying that our current market multiple is well below the 25 times we saw back when Soviet missiles were being pointed at us.

I’ll bet you that he misses “The Gipper,” but I’ll also bet that he didn’t consider the possibility that perhaps the 25 multiple was the irrational one and that perhaps our current market multiple is appropriate, maybe even over-valued.

But even if I continue to harbor thoughts of a lower moving market, there’s always got to be some life to be found. Maybe it’s just an involuntary twitch, but it doesn’t take much to raise hope.

As usual, the week’s potential stock selections are classified as being in Traditional, Double Dip Dividend or Momentum categories. With earnings season set to begin July 8, 0213, there are only a handful of laggards reporting this coming week, none of which appear risk worthy (see details).

I wrote an article last week, Wintel for the Win, focusing on Intel (INTC) and Microsoft (MSFT). This week I’m again in a position to add more shares of Intel, as my most recent lots were assigned last week. Despite its price having gone up during the past week, I think that there is still more upside potential and even in a declining market it will continue to out-perform. While I rarely like to repurchase at higher prices, this is one position that warrants a little bit of chasing.

While Intel is finally positioning itself to make a move into mobile and tablets and ready to vanquish an entire new list of competitors, Texas Instruments (TXN) is a consistent performer. My only hesitancy would be related to earnings, which are scheduled to be announced on the first day of the August 2013 cycle. Texas Instruments has a habit of making large downward moves on earnings, as the market always seems to be disappointed. With the return of the availability of weekly options I may be more inclined to consider that route, although I may also consider the August options in order to capitalize somewhat on premiums enhanced by earnings anticipation.

Already owning shares of Pfizer (PFE) and Merck (MRK), I don’t often own more than one pharmaceutical company at a time. However, this week both Eli Lilly (LLY) and Abbott Labs (ABT) may join the portfolio. Their recent charts are similar, having shown some weakness, particularly in the case of Lilly. While Abbott carries some additional risk during the July 2013 option cycle because it will report earnings, it also will go ex-dividend during the cycle. However, Lilly’s larger share drop makes it more appealing to me if only considering a single purchase, although I might also consider selling an August 2013 option even though weekly contracts are available.

I always seem to find myself somewhat apologetic when considering a purchase of shares like Phillip Morris (PM). I learned to segregate business from personal considerations a long time ago, but I still have occasional qualms. But it is the continued ability of people to disregard that which is harmful that allows companies like Phillip Morris and Lorillard (LO), which I also currently own, to be the cockroaches of the market. They will survive any k
ind of calamity. It’s recent under-performance makes it an attractive addition to a portfolio, particularly if the market loses some ground, thereby encouraging all of those nervous smokers to sadly rekindle their habits.

The last time I purchased Walgreens (WAG) was one of the very few times in the past year or two that I didn’t immediately sell a call to cover the shares. Then, as now, shares took, what I believed to be an unwarranted large drop following the release of earnings, which I believed offered an opportunity to capture both capital gains and option premiums during a short course of share ownership. It looks as if that kind of opportunity has replicated itself after the most recent earnings release.

Among the sectors that took a little bit of a beating last week were the financials. The opportunity that I had been looking for to re-purchase shares of JP Morgan Chase (JPM) disappeared quickly and did so before I was ready to commit additional cash reserves stored up just for the occasion. While shares have recovered they are still below their recent highs. If JP Morgan was not going ex-dividend this trade shortened week, I don’t believe that I would be considering purchasing shares. However, it may offer an excellent opportunity to take advantage of some option pricing discrepancies.

I rarely use anecdotal experience as a reason to consider purchasing shares, but an upcoming ex-dividend date on Darden Restaurants (DRI) has me taking another look. I was recently in a “Seasons 52” restaurant, which was packed on a Saturday evening. I was surprised when I learned that it was owned by Darden. It was no Red Lobster. It was subsequently packed again on a Sunday evening. WHile clearly a small portion of Darden’s chains the volume of cars in their parking lots near my home is always impressive. While my channel check isn’t terribly scientific it’s recent share drop following earnings gives me reason to believe that much of the excess has already been removed from shares and that the downside risk is minimized enough for an entry at this level.

While I did consider purchasing shares of Conoco Phillips (COP) last week, I didn’t make that purchase. Instead, this week I’ve turned my attention back to its more volatile namesake, Phillips 66 (PSX) which it had spun off just a bit more than a year ago. It has been a stellar performer in that time, despite having fallen nearly 15% since its March high and 10% since the market’s own high. It fulfills my need to find those companies that have fared more poorly than the overall market but that have a demonstrated ability to withstand some short term adverse price movements.

Finally, I haven’t recommended the highly volatile silver ETN products for quite a while, even though I continue to trade them for my personal accounts. However, with the sustained movement of silver downward, I think it is time for the cycle to reverse, much as it had done earlier this year. The divergence between the performance of the two leveraged funds, ProShares UltraShort Silver ETN (ZSL) and the ProShares Ultra Silver ETN (AGQ) are as great as I have seen in recent years. I don’t think that divergence is sustainable an would consider either the sale of puts on AGQ or outright purchase of the shares and the sale of calls, but only for the very adventurous.

Traditional Stocks: Abbott Labs, Eli Lilly, Intel, Mosaic, Phillip Morris, Texas Instruments, Walgreens

Momentum Stocks: Phillips 66, ProShares UltraSilver ETN

Double Dip Dividend: Darden Restaurants (ex-div 7/8), JP Morgan (ex-div 7/2)

Premiums Enhanced by Earnings: none

Remember, these are just guidelines for the coming week. Some of the above selections may be sent to Option to Profit subscribers as actionable Trading Alerts, most often coupling a share purchase with call option sales or the sale of covered put contracts. Alerts are sent in adjustment to and consideration of market movements, in an attempt to create a healthy income stream for the week with reduction of trading risk.


Wintel for the Win

There was a time that most everyone who had a computer knew exactly what the word “Wintel” meant.

The combination of Microsoft (MSFT) and Intel (INTC) vanquished the competitors. You don’t hear or see too many Commodore, Tandy or Kaypro computers these days running on their own operating systems, or at all, for that matter. The combination became especially potent after MS-DOS became simply the shell for the graphic user interface that Microsoft was luckily able to render from Apple (AAPL) for nothing more than the cost of a legal defense. Although Advanced Microdevices (AMD) computer chips are still finding their way into lower priced computer systems, others, such as Cyrix and Zilog have long since ceded the computer microprocessor space to Intel.

The timing couldn’t have been better. If you’re going to be at the top of the competitive heap what better time than during a phase of tremendous marketplace growth? The real heyday of “Wintel” began with the introduction of the Windows 95 operating system and the mass production of cheaper hardware by the likes of assemblers like Dell (DELL) and Gateway, who back during that era never manufactured a machine with anything other than a Microsoft operating system and an Intel chip.

Wintel. Windows and Intel.

While Apple and its operating system powered by varied IBM (IBM) and Motorola (MSI) chips may have been, according to devotees, a far superior consumer product, it’s market penetration was no more than a nuisance to the Wintel alliance.

But as so often happens with size comes complacency and perhaps losing sight of events going on where your toes used to be. Add to that an occasionally less than inspired leadership and supremacy can devolve into mediocrity.

Not seeing or not being adequately nimble enough to recognize and react to the revolution in personal computing, beginning with the smartphone and then the tablet, Microsoft and Intel both ceded ground to Apple and smaller chip manufacturers in markets that hadn’t previously existed. Those new markets also had the ability to cannibalize existing markets, particularly for personal computers.

Whether Qualcomm (QCOM), ARM Holdings (ARMH) or others, the mobile and tablet markets erupted with neither a “win” nor a “tel” along for the ride.

The past decade has been a veritable wasteland for both Microsoft and Intel with regard to their perceived place in consumer technology. Although Apple Computer successfully transitioned to Intel processors, they didn’t look to Intel for its explosive growth in the mobile market and for the new tablet market. When you’re the size of Intel, the addition of Apple computers to your stable isn’t the kind of stimulus that’s going to push the needle very much. It certainly wasn’t enough to fuel growth.

That’s not to say that neither Microsoft nor Intel have stood still in their own technological and product advances or taken the opportunity to expand into new areas, such as gaming consoles. But their stranglehold on households has diminished during an era when “eco-system” has become the new buzzword replacing “Wintel.”

But faster than you can say “Moore’s Law,” the landscape is changing, yet again, as it appears that Apple is now the one having some difficulty remembering where its toes are located. For more than a decade the very essence of engineering marvels that also captured the consumer’s fancy, Apple has slowed down and has become susceptible to competition.

Unless you have been hiding in a cave you haven’t seen the onslaught of Microsoft ads on television and in movie theaters. They are now pushing their own eco-system in tablets, smartphones and computers, as well as in the gaming world. Less well seen are the acquisition of data centers and ventures to move software into the cloud, including an impending partnership with Oracle (ORCL).

It was once a Windows world and Microsoft is addressing the convergence of the PC, laptop, tablet and communication devices through a singular operating system in order to ensure that it remains a Windows world, with or without Intel. Retaining control of that niche is far more important than capturing a nascent mp3-player market. Success of the Zune wasn’t necessary for continued sales of the Office Suite, but maintaining supremacy of the personal computing and tablet market is required in order for that cash cow to keep the enterprise afloat. It is far more important to get this battle won than some earlier generation diversions.

Even more of a signal of commitment toward the futu
is the rumored restructuring of Microsoft that will place greater emphasis on hardware as Microsoft takes control of its own destiny in support of vehicles to propagate its software platforms.

Borrowing a page from Ron Johnson, who was credited with the success of the Apple stores, and who didn’t survive his tenure as CEO at JC Penney (JCP) to see the store within a store concept play out, Microsoft, along with Samsung (SSLNF.PK) is employing the concept within a resurgent and re-energized Best Buy (BBY), putting itself directly in the eyes and into the hands of the buying public.

While Intel is no longer Microsoft’s sole and unqualified partner in their new ventures, their future is increasingly looking brighter than it has in years.

Intel is now under the new leadership of an individual who breathes operations, following a period of listless direction that was in sharp contrast to the great vision and leadership that had previously marked Intel’s executive offices. The announcement earlier in the year that Samsung, the very same company that has been eating away at Apple’s place in consumer’s hearts, had selected Intel for its new line of tablets should serve notice that Intel is back.

Add to that the growing presence of Intel chips in smartphones, including those made by Motorola Mobility, which is now owned by Google (GOOG), and you have the largest of the mobile phone operating systems able to be run by a new generation of Intel chips and easily transferred into Android tablets, as well.

Take that ARM.

Thus far both Intel and Microsoft have outperformed the S&P 500 in 2013.

In 2012 Microsoft continued to receive its share of disparaging comments by analysts taking delight in referring to it as “dead money.” Those jeers ended when shares surpassed $30 at which point everyone seemed to climb aboard. Of course that heralded the end of the upward climb. In 2013 very much the same phenomenon was repeated when shares again broke through the $30 barrier and it again became acceptable to admit that Microsoft was part of your portfolio.

I do not currently own shares but am anxious to purchase them once again if share price returns to the $30 level, as I have used Microsoft as an annuity for years, collecting dividends and premiums from having sold options.

Intel is a bit of a different story. While it too has traded in a fairly narrow range and hasn’t been terribly exciting unless collecting dividends and option premiums, I think that it is fair priced at current levels and would add additional shares below $25.

While the world may no longer be quite the Wintel world it was 10 years ago, as a stock investor, Wintel is a winning combination even if they are going increasingly their own separate ways in the consumer marketplace.

Individually or together, Microsoft and Intel can serve as linchpins of a portfolio, if you’re ready to go for the win.


Why Raising the Retirement Age is a Bad Idea

Retirement LineThe recent suggestion to increase the minimum wage to $15 has received some spirited and predictable reactions on both sides of the issue.

I read Felix Salmon’s Seeking Alpha article that offers a reasoned analysis of why doing so should be cause for back slapping all around. other than the fact that the lack of legislative backbone would preclude it from ever happening.

Now that I’m no longer in the business of paying employees, I wholeheartedly agree with the need to provide higher levels of pay for those at the bottom of the economic ladder. Perhaps legislating a minimum wage is an entitlement of sorts, but it is also a means of introducing some justice into what can devolve into a merciless system of indenture.

While we’ve been hearing about trickle down economics for nearly 30 years, the raising of the minimum wage would likely create a “trickle up” phenomenon, as it seems fairly logical that the same amount of money in the hands of people that have basic unmet needs is more likely to be spent on goods and services than is money in the hands of the most wealthy.

Certainly investing newly found money in stocks does nothing to propel the economy forward unless you continue to believe that money will generate dividends and capital gains that themselves find their way into the economy, rather than simply being re-invested.

But we all know that on the whole, that just isn’t the case. The money essentially disappears from circulation and adds nothing to economic growth. It often just adds to the tally in the game of “who can die with the most to his name.”

Surely the argument that trickle down would create jobs has by now been dismissed. The US population has grown nearly 35% in the past 30 years since the start of the 1982 bull market and the implementation of supply side economic theory. According to the Bureau of Labor Statistics, based upon preliminary May 2013 data, approximately 34% more jobs have been created in that same time span.

Most everyone will agree that the creation of jobs has by and large been in service sectors and increasingly entry level wages have replaced higher wages of many in the workforce, particularly after “right sizing.”

As an investor and avid capitalist, I can live with reduced profit margins by the likes of Wal-Mart (WMT), McDonald’s (MCD), Disney (DIS) and others. Investors and a market that clings to the gospel of Price/Earnings ratios can learn to re-acclimate, as we get used to the new normal for corporate profit margins and realize that there’s really no need to see stock prices adjusted accordingly. How in the world Apple (AAPL) can call it’s store employees “Geniuses” and pay them minimum wage is a curious thing. Maybe that’s why Einstein couldn’t afford a new sweater or a haircut.

But the capitalist in me takes a little different view when it comes to changing the retirement age. Is it really an entitlement if you have paid for it and have further had limitations placed upon how the funds could be invested while you waited some 40 years for their disbursement in tiny aliquots?

Look, to start, I’m already biased on this issue. Not that I’ve been objective ever before, but for some reason this time I feel compelled to make full disclosure.

I’m 59 and work about zero days a year, down from about 10 days just 2 years ago. My “Sugar Momma,” who coincidentally has increased her time away from home as I’ve devoted my life to staying at home doesn’t like it when I refer to myself as being “semi-retired”. I just enjoy having moved the retirement age border closer and closer to my current age. Mentally, I retired about 30 years ago, but in some form of transfigurative migration, I had left my soul behind as I dutifully trudged off to work in places past.

Over the past few years we’ve heard various economists turned social engineers deign to suggest that our society can’t afford retirement at its current age levels. They want to raise the age at which workers can retire and collect benefits.

What are they possibly thinking?

The same story has already made its round on the European continent, where citizens are far more capable of genteelly indicating their displeasure with changes in government policy by letting their Molotov cocktails do the talking for them.

In Athens, the cradle of democracy, a nation that arguably, per capita, has contributed more to mankind throughout civilization’s history, has sadly been in great turmoil for the past two years. The last thing anyone there wants to do is to keep working longer at a job that they’ve barely worked on during the span of their lives.

The economic and financial engines in Greece are a mess, but certainly not the only mess in the world. Protesters tossing Molotov cocktails, police firing tear gas, all while in the shadow of the great wonders of the world, are sad. In some other places those events may pass for national reconciliation day activities, but in the civilized world, people take notice and wonder if the same thing could overcome their basic civility.

The idea of significantly raising taxes, dropping social and government services and increasing the retirement age is a hard one
to swallow, especially if, as a citizen, you blame external forces for your economic crisis, just as the today’s initial market decline was being blamed on China or Ben Bernanke was blamed for the recent precipitous market decline.

I really don’t have the motivation to look up the details, but Greek citizens can retire far younger than can the typical American and they certainly have figured out a mechanism to avoid paying taxes. While some pseudo-economists distort the American story and claim that 50% of US citizens pay no income taxes, it isn’t quite that skewed.

While I do understand the need to raise revenues and decrease services, as a general strategy during difficult times, it’s the retirement issue that bothers me.

I actually have not been effected by the gradual increase in our own social security age eligibility, although my Sugar Momma is effected.

But besides the fact that I didn’t really want to work any longer, there are some very pragmatic reasons why increasing the US retirement age may not be the way to go, at least not with the direction that the economy has been headed these past few years. While the markets were wildly enthusiastic about the June 2013 Employment situation Report, if you listened to Ben Bernanke, the growth in employment is not yet sufficient to cause a tapering of the current level of Quantitative Easing.

We simply don’t have a sufficient number of jobs for our current population.

Unless you’ve been hiding away someplace for the past 20 years, certain jobs are disappearing from the United States. The jobs and industries that were created to replace those missing sectors of our economy are now disappearing, as well. I’m also now old enough to remember when unions were decried and criticized for acting like Chicken Little when suggesting that technology and automation would replace humans in the equation.

Nonsense, was the polite response to that uncanny ability to see into the future of the American workplace.

Have you seen the unemployment rate lately? Everyone seems to agree that number is under-stated due to the people that have simply given up even looking for employment.

It’s hard to believe that anyone would actually give up on the search unless they were already within sight of retirement. Push that age higher and the unemployment rate goes with it.

As our population grows, albeit, it is now growing slowly, newly minted adults will need jobs. But where are those jobs coming from? Increasing the retirement age, coupled with decreasing standards of living simply dry up the existing pool of available jobs, as the now elderly won’t even be able to afford to retire.

Of course, from an employer’s short-term perspective, given the expense of a codger like employee pool and their attendant medical needs, a cheaper and healthier alternative may be irresistibly beckoning toward them to fire those highly experienced leeches.

Disequilibrium in immigration, birth rates, death rates and retirement rates can have drastic effects on our society.

Instead of listening to annual summertime stories of how inner city youth are unable to find summer employment and how that bodes poorly for street crime statistics, lets transport that model to every population around the entire country.

Take your choice. Marauding gangs of unemployed and disaffected youth or hobbling throngs of terminated geezers eating away at the fabric of American society, all clawing for the few jobs left in the United States.

So where will the job-seeking migration send Americans? It’s not like the south or southwest are going to be booming anytime soon. It’s also not very likely that China will find itself with a shortage in its labor pool. Libya’s burgeoning domain shortening industry is mostly run by an savant in a basement somewhere in Detroit, so that’s not going to be the solution, either.

Right now we look at Greece. Not long ago we looked at Tunisia. Well educated, yet high unemployment.

That turned out to be a good combination for civil unrest.

I’m just trying to do my part as a citizen who cares about our youth’s future livelihood and don’t want to see generational warfare in the streets.

I’m more than happy to stay at home, especially on those days that I can make more money by just tapping a few keyboard entries.

So I’m trying to do my part. I’m staying away from the employment market, despite Sugar Momma’s recent exhortations.

What can I say. I’m just a patriot who doesn’t want to see fellow citizens rioting in the streets.

You’re welcome.


Weekend Update – June 23, 2013

Spoiler Alert.

When it comes to your stocks, there’s never a time to panic, unless it’s your intention to provide bargain priced stocks to some unknown and unseen buyer.

Like many, I’m still scratching my head trying to understand what it is that Federal Reserve Chairman Ben Bernanke said that caused so much market discomfort this week. Despite the reaction, you do have to give credit to our own markets for at least being orderly in what seemed to be a somewhat irrational reaction. While individual traders may have demonstrated some panic upon seeing a 350 point loss, the market itself did nothing to exhort them to do so.

Bernanke himself went to some length to be crystal clear, knowing that the market had already shown how nervous it was about anything related to Quantitative Easing. Although he said nothing inflammatory, that didn’t stop many from placing blame at his feet for a subsequent 2.5% market drop. Doing so completely ignored how tightly coiled the spring had already been, as demonstrated by the sudden rise in volatility and the back and forth triple digit moves that we had not seen since the last year, coincidentally just prior to the market giving up significant gains.

Had no one noticed that we were trading an entirely different market the past 3 weeks?

While it didn’t appear that Bernanke unveiled any new information and simply described, once again, those data driven parameters that would be used to decide when it might be appropriate to diminish injections of liquidity, the market found reason to see gloom.

Imagine if you started screaming in terror every time you realized that someday you would die.

Of course concurrent events, such as the sudden bear market in Japan or the tightening of credit in China may be part of the equation, as can confusion about the bond markets and the crumbling of precious metals support. But when all reason fails, we should always lay blame at the feet of China. In this case the suggestion was that a Chinese credit crisis was brewing, as if China was unable to borrow from the western world’s playbook and show us the real meaning of Quantitative Easing.

In hindsight, there’s never a shortage of explanations for events. It reminds me of the time that I told my mother that the lamp must have jumped by itself onto the floor. That seemed as logical as the fact that I had accidentally knocked it off with a stickball bat. There were actually any number of plausible and implausible explanations, once you realized that proof was elusive. I probably should have considered blaming China.

After Thursday’s close, the single worst day of the year, the S&P 500 was down a shade above 5% from its intra-day high a few short weeks ago. Considering that half of that drop came on a single day, 5% isn’t very significant. Perhaps that’s why there was no real institutional panic.

But panic can take on various forms. It’s the other form that has me concerned at the moment.

To some degree the buying that resulted during previous half-hearted attempts of the market to stall its unbridled charge higher was a form of panic from among those who were afraid to miss out on the next run higher. Time and time again in 2013 we’ve heard that every dip was a buying opportunity as “FOMO,” the “fear of missing out,” reared its ugly head.

As someone who has been raising cash in anticipation of a correction since the end of February, I’m now at my target level, but that brings a challenge.

The challenge is in deciding when to start investing that money and deciding what’s a value and what may be a value trap, as prices come down. If we’re to believe conventional wisdom that called for a continued market rise, there’s still lots of money sitting on the sidelines from 2009 still wondering whether it’s all just another trap. That may be an entirely different kind of panic, the “fear of commitment.”

With the market down by 5% as of Thursday’s close, it’s probably as likely that the market can go down an additional 5% as it is that a rebound will erase the losses, but perhaps only temporarily.

Rules are a good thing to have and to fall back upon when there is a tendency to want to panic. As a general rule, when the market is down about 5% and I have cash available, I tend not to think in terms of more than an additional 5% move in either direction. Rather than guessing which way things will go, I consider investing 20% of my remaining cash with each 1% move of the market. If the market moves higher I tepidly satisfy my need to not miss out while not entirely abandoning my skepticism that a rally may be simply a “head fake” in advance of another leg downward. If the market, however, heads lower I’m picking up some values that hopefully won’t become value traps.

As usual, the week’s potential stock selections are classified as being in Traditional, Double Dip Dividend or Momentum categories. Although some high profile companies are reporting earnings in the coming week, there are no selections in the “PEE” category, while we await the beginning of the next earnings season in two weeks (see details).

With a handful of assignments as the June 2013 option cycle ended, but fewer than I had expected, thanks to that 2.5% drop, I do have more cash than I think is warranted, so I will be looking for entry points this coming week, however, courting risk is not something that I’m particularly interested in doing, so the list is skewed toward “Traditional” and dividend paying positions, especially those that have already paid their dues in terms of recent price drops.

Amgen (AMGN) started its market descent before the overall market decided to take its long overdue break. To its detriment, it is about 3% higher than its recent low during that period, but it is still nearly 15% below its recent high and still 8% below its level after having fallen following its most recent earnings release. With some support at both $91 and $94 and having
already experienced its own personal bear market, I think that shares can withstand any macro-economic headwinds or further market volatility.

Morgan Stanley (MS) received regulatory approval to purchase the final 25% piece of the Smith Barney brokerage from Citigroup (C), fulfilling a strategic priority for Morgan Stanley. Presumably months from now when earnings are reported investors will have already discounted the news that negative adjustments made to capital will adversely impact those earnings reports. I doubt it, but as usual, I hope to purchase shares, sell calls and then see them assigned long before short term memories prove themselves to be deficient. Morgan Stanley is consistently said to be at greater risk than many due to its European exposure, but while things are reasonably quiet on that front I don’t perceive that as a near term issue.

Coach (COH) is my lone “Momentum” category pick this week, although it may no longer belong in that category. Although it often exhibits explosive earnings related moves, shares do have a tendency to trade within a well defined range and do not often trade wildly in the absence of news. The recent addition of weekly call options makes me consider its purchase more frequently than simply in advance of its ex-dividend date, as I had frequently done in the past.

I always enjoy listening to those who posit on the relative merits of Hone Depot (HD) versus Lowes (LOW) and who then opine on the role of the housing market on the health of these home improvement centers. There’s often not much consistency in the opinions and the rationale for those opinions. Over the years the companies have jockeyed with one other for analyst and investor attention and favor. I prefer Lowes because it offers a very nice option premium, far superior to Home Depot, yet both have nearly identical trading volatility.

Cypress Semiconductor (CY) is simply a low key company whose products are ubiquitous. It tends to trade in a narrow range although it can have sharp daily moves. Going ex-dividend this week and always offering an attractive premium thanks to that volatility it is a position that I don’t own as frequently as I should. I do prefer, however, buying shares when they are somewhat closer to a strike level, as opposed to its current price in-between strikes. Even though that may mean paying more for shares it may make assignment of shares more likely, which is usually my goal.

Ever since spinning off Phillips 66 (PSX), I haven’t owned shares of its parent Conoco Phillips (COP). Having under-performed the S&P 500 since the market high, I now see Conoco as offering an attractive alternative to the more volatile Phillips 66 and still offering an option premium that warrants attention.

Intel (INTC) may not be as ubiquitous as it once was, but it is working hard to change that with mobile and tablet strategies. I had owned non-performing shares for quite a while waiting for an opportunity to finally sell calls upon them. That opportunity only came recently, but I believe that its recent stock decline is just a respite and shares will go higher from here. Fortunately, if not, there is a dividend to help the time go by faster.

DuPont (DD) and Dow Chemical (DOW) are, for me, stalwarts in implementing a covered call strategy. While I currently own shares of Dow Chemical, I’m not averse to adding more as it goes ex-dividend this week. I haven’t owned DuPont, on the other hand, for several months and following its recent 7% drop since the market peak I think this may be a time to pick up shares. Although it may have another 10% downside it has shown an ability to recover from abrupt losses. Both Dow Chemical and DuPont report earnings during the first week of the August 2013 cycle.

Finally, As long as considering shares of Dow Chemical and DuPont it may only seem natural to also consider another stalwart, Deere (DE). Also lower from its recent high, Deere shares are ex-dividend this week. As with Cypress Semiconductor, I prefer when Deere trades near a strike level before making new purchases in order to enhance likelihood of assignment.

Traditional Stocks: Amgen, Conoco Phillips, Intel, DuPont, Lowes, Morgan Stanley

Momentum Stocks: Coach

Double Dip Dividend: Cypress Semiconductor (ex-div 6/25), Deere (ex-div 6/26), Dow Chemical (ex-div 6/26)

Premiums Enhanced by Earnings: none

Remember, these are just guidelines for the coming week. Some of the above selections may be sent to Option to Profit subscribers as actionable Trading Alerts, most often coupling a share purchase with call option sales or the sale of covered put contracts. Alerts are sent in adjustment to and consideration of market movements, in an attempt to create a healthy income stream for the individual investor.


A Final Thought About the Pfizer Tender Offer

In the weeks since Pfizer’s (PFE) announcement that it was offering the remainder of its 400+ million holding in Zoetis (ZTS) in exchange for Pfizer shares many opinions have been offered regarding the relative merits of the tender offer.

My own opinion, previously cast some skepticism regarding what appeared to be a very favorable offer that might provide as much as a 7.52% premium for individuals offering their shares of Pfizer in exchange for Zoetis shares.

I did not offer my shares for tender, with the deadline for having done so, passing on Monday, June 17, 2013.

However, Pfizer has announced that its tender offer for exchange of its shares for Zoetis shares has been over-subscribed and that the offer has been automatically extended, as provided by the terms of the tender offer.

“The final exchange ratio is 0.9898 because the upper limit is in effect. Accordingly, the exchange offer has been automatically extended by its terms until 12:00 midnight, New York City time, on June 21, 2013”

That simple phrase means one very important thing for those that had believed a quick pay day by selling their new shares of Zoetis..

As explained in the prospectus, plainly in sight on the cover page, although the exchange premium was 7.52%, it was subject to an “upper limit” of 0.9898 shares of Zoetis for each share of Pfizer exchanged. The prospectus warned that the actual amount of in-kind value received could end up being substantially less if the “upper limit” was reached.

And it was.

At the conclusion of the initial phase of the tender offer, more than 800 million shares of Pfizer had been tendered for about 400 million shares of Zoetis.

That means that on a pro-rated basis an individual will have less than half of their tendered Pfizer shares accepted for exchange. The potential impact and costs associated with small share lots was discussed in my previous article that included the impact of transaction administrative fees that could wipe out any potential profit for those seeking to immediately sell shares in order to capitalize on any exchange premium.

While the final exchange rate is known, 0.9898 shares of Zoetis for each share of Pfizer tendered and accepted, it isn’t yet known what the pro-rated figure will be. In other words, what proportion of each 100 shares of Pfizer tendered will be accepted. It will likely be less than the current ratio. The greater the additional number of shares tendered the greater the adverse impact on small share holders.

For those still considering tendering shares, you have until midnight, Friday, June 22, 2013 to do so.

The following may be helpful:

At Zoetis’ current price of $30.19 after the close of trading on Thursday, June 20, 2013, each share of Pfizer that is accepted for tender will be worth $29.88, as compared to the Pfizer actual closing price of $28.64 on Thursday. That represents a 4.32% premium, which is substantially below the initial 7.52% premium.

Since the tender offer was made public Zoetis shares have subsequently fallen more on a percentage basis than have Pfizer shares and the premium has contracted. The Zoetis share price may or may not be maintained at that level when trading begins, so even that reduced premium may or may not be realized for those seeking to sell their new Zoetis shares.

For those that decide to accept the extended offer and had sold June 22, 2013 call options on their shares, you must be certain that your shares were not assigned. Strictly speaking, option contracts that expire at the end of a monthly cycle, do not expire until Saturday, which is after the extended deadline to tender shares.

If you accept the tender offer and your Pfizer shares were subsequently discovered to have been assigned you would still be obligated to deliver Pfizer shares in exchange for Zoetis shares and could do so by purchasing them in the after-market. That has additional risk if the price of Pfizer shares increase while the price of Zoetis shares decrease.

What to do?

Stick with Pfizer. If and when there is a time to own Zoetis shares you can always do so based on its own merits and without a clock ticking away in the background.

Weekend Update – June 16, 2013

I’ve been waiting for a decline for so long that sooner or later I’m bound to be right.

What gives me cause for concern that I might be wrong, at least in the near term, is the increasingly vocal sentiment that we are ready for a significant market decline. It doesn’t take much of a contrarian to realize that when it seems that everyone is on board it is the time to get off.

Maybe that’s what explains Thursday’s really irrational market joy ride coming off the heels of a 5% decline in the Nikkei and an early 100 point loss in the pre-opening US futures markets. All of the naysayers came out at once ready to take credit for their impeccable timing in calling the correction.

But a bit more confusing is When omni-present personalities express sentiments that are either to the extreme or counter to their historical sentiment. Especially when bulls become bears and bears become bulls. When that begins to happen it may be time to literally and figuratively “take stock.”

When perma-bear Nouriel Roubini expresses a bullish tone or when Dennis Gartman proclaims that he is “worried” there are direct messages conveyed that can elicit direct responses, but just as easily elicit contrary responses.

I have been convinced that the melt-up higher in 2013 was going to be a repeat of that seen in 2012 in scope, time and velocity.

But over the past month the coincident time frame has slipped away, as this time last year we were already on the way to a recovery from an abrupt 9% drop after 4 months or higher markets.

While the time frame has been shifted, as the 2013 rally has thus far exceeded that of 2012, my belief that the rallies from the market’s recent drop is simply the same kind of “head fake” that was seen in April 2012, when the market recovered from a 2 week loss. The recovery also recovered everyone’s confidence that the market could now only continue on its upward path.

In that case, the proverbial “testing of the highs” resulted in a failing grade.

Back then, the reality was different and sudden. When balloons pop, it’s sudden. The first few months of 2012 was a balloon.

Certainly the sudden spate of triple digit days and ever widening intra-day trading ranges is sending some kind of message. In 2012 triple digit gains were rare, but started increasing right before the plunge. Now, not only are triple digit days a recent common occurrence, but the intra-day trading range, from daily low to high, has nearly doubled, since the market topped on May 21, 2013.

To add some fuel to the mix, this coming week features a Quadruple Witching, which granted is not the big deal that it was a decade or two ago, but also features release of FOMC minutes and a press conference by Federal Reserve Chairman Ben Bernanke.

The constellation of events may have the markets reaching a threshold at which point it may not be able to contain its behavior. Certainly closing the week with another triple digit loss, unable to follow through on Thursday’s nearly 200 point gain doesn’t inspire confidence.

But do balloons under mounting pressure only pop, or is there another path?

I’ve been busily amassing cash in anticipation of a pop and have missed out on a portion of the rally. Instead of making approximately 10 new trades each week, for the past two months there have typically been only five new trades. Additionally, instead of looking for weekly option opportunities, increasingly the search has been for the safety seen in monthly option writing. I simply didn’t want to be shocked by the pop.

But after waiting so long each day begs the question. Is it time to change? What if the decline either doesn’t come or instead is an insidious leaking of value as a result of increased volatility with an overall net decline characterized by alternating large moves in both directions? While the climb higher was slow and steady, could the descent downward be slow and erratic?

Unlike the frog in a slowly heated kettle who never realizes he’s about to be boiled, a slowly depreciating market may still be compatible with continued investing vitality. That kind of market may be best approached by employing more cash from the sidelines and greater use of short term hedging vehicles.

Which is it going to be? As with most things I try not to make abrupt changes, but rather attempt to transition, as long as events allow a methodical approach. The significance of preparing for the possibility of a slow leak is that I may give some more consideration to Momentum stocks and shorter option contract durations, but still looking for positions that have under-performed the S&P 500 since the market top.

As usual, the week’s potential stock selections are classified as being in Traditional, Double Dip Dividend, Momentum or the “PEE” category (see details).

The first stock of the week is emblematic of the excesses of an earlier period and reminiscent of a market top in the making. That was a balloon popping, in case you needed an example. Those remembering the frenzy associated with the Blackstone Group IPO (BX) will remember that there were disappointing IPOs long before Facebook (FB) came on the trading scene. Its shares are still far away from its IPO price, in fact, further away than is Facebook and they have had much more time to recover. Granted, along the way there’s been dividends to accrue, but all in all, a disappointing few years. Most recently, its public profile has been raised,as its been increasingly involved in prospective buyouts and has developed a stable of well run companies. The caveat to this position is that earnings are reported just prior to the July 2013 option cycle expiration

Abercrombie and Fitch (ANF) is just one of those companies that people like to hate. Whether it’s the image it portrays or whether it’s the public face of its CEO, it’s just difficult to get a warm and fuzzy feeling about the culture. But when it comes to a reliable and consistent vehicle for generating option premium income, it is always high on my list. Always volatile, especially in the weeks before earnings, when it pre-announces European sales and its currency woes, it can be rewarding as a short term tool, but you have to be prepared for unexpected rides and longer term commitments.

Oracle (ORCL) reports earnings this week. For those that remember the last earnings report, its CEO, Larry Ellison pointedly blamed his sales staff on the very disappointing numbers. There may have been something to that, uncomfortable as it was to hear the vitriol directed toward his employees, as competitors fared very well during the quarter and have continued doing so. It seems very unlikely to me that Ellison would put himself in a position to trail the pack again and for Oracle to be thought of as an industry laggard. Whereas I prefer to consider the sale of puts for most earnings related plays, in this case I’m more likely to consider the purchase of shares and the sale of calls.

Las Vegas Sands (LVS) has certainly had a nice run lately and I’ve been wanting to buy shares back since March, but it hasn’t even given the slightest indication that it was ready to return to the low $50s level. Down nearly 6% from its recent high and going ex-dividend this week may be a good enough combination to entice me this week to purchase shares, but my preference would be for a very short holding period because of over-riding market concerns.

Coach (COH), too, is higher than I would like, but I do want to repurchase shares. I’ve been a serial buyer for the past year and have and now that it offers weekly options it has additional appeal, even at share prices that are at the high end of my comfort level.

Transocean (RIG) was a stock that I had also considered purchasing last week. WIth it’s price decline in the absence of any substantive company or sector specific news, it now looks even more appealing. In the 2013 market, much of the time a stock in the crosshairs that was subsequently not purchased has gone on to create some regret as prices have generally gone higher. There haven’t been as many opportunities for a second chance as in markets that typically alternate moves higher and lower.

Barclays (BCS), like many in the financial sector, had gone up just too much and too fast. It’s now down about 7% since both its peak and the market peak. Although it still may have another few percent on the downside before it hits some support, I don’t believe that there will be any near term events to put it uniquely at risk. As with many positions that offer only monthly options, I am more inclined to consider adding them during the final week of a monthly cycle.

With or without the purchase of Oracle, I’m already over-invested in the technology sector, so I would look cautiously at adding additional technology positions. However, Texas Instruments (TXN) started lagging the market a few weeks before the current lull and has also under-performed since the market top, making it a candidate for consideration. Following its most recent drop in response to guidance last week, I believe it offers some value in return for the risk of about a 4% downside in the event of some market tumult.

Caterpillar (CAT), despite having had a strong week this past week, appears to be a relatively low risk position at these levels, having very successfully defended the $80 level for the past year. Its ability to consistently bounce back and maintain its price levels despite any positive news in quite some time attests to its strength and makes it an ideal covered option position over the longer term. With its announcement of an increased dividend, payable during the July 2013 option cycle, it adds to its appeal. Although increasing a dividend is usually greeted in a positive manner, there were choruses of those finding fault, claiming that it reflects the inability to invest in the growth of the business. My guess is that very few investors will be frightened away by a competitive dividend.

Although Caterpillar reports its earnings during the first week of the August 2013 cycle, which should not effect its price action significantly during the July 2013 cycle, my one concern is that Cummins Engine (CMI) reports earnings on July 30, 2013. Although that, too, is during the August cycle, Cummins frequently provides guidance two to three weeks before its earnings are released. If recent past history is any guide, disappointing guidance from Cummins adversely impacts a number of other stocks, which do have a tendency, however to recover relatively quickly.

Finally, I identified Safeway (SWY) as a possible Double Dip Dividend selection earlier in the week and then expected to toss it into the wastebasket after it announced the sale of its Canadian assets and its shares went up by nearly 40% in the after-hours. Somehow, despite a market that traded up nearly 1.5%, Safeway gave up the vast majority of its gains, still finishing the day at a very respectable 7%. Even after a jump higher, Safeway shares are still about 12% lower than its April 2013 peak.

Traditional Stocks: Barclays, Caterpillar, Texas Instruments, Transocean

Momentum Stocks: Abercrombie and Fitch, Blackstone Group, Coach

Double Dip Dividend: Safeway (ex-div 6/18), Las Vegas Sands (ex-div 6/18)

Premiums Enhanced by Earnings: Oracle (6/20 PM)

Remember, these are just guidelines for the coming week. Some of the above selections may be sent to Option to Profit subscribers as actionable Trading Alerts, most often coupling a share purchase with call option sales or the sale of covered put contracts. Alerts are sent in adjustment to and consideration of market movements, in an attempt to create a healthy income stream for the week with reduction of trading risk.


Weekend Update – June 9, 2013

Somehow you find the strength.

Having spent many years working with children and in children’s hospitals, I often wondered how parents of children with significant medical or developmental disabilities found the strength to go from one day to the next.

When faced with what appear to be insurmountable challenges some people can simply face down the insurmountable and move forward when even treading water seems impossible.

Doubly difficult must be dealing with brief glimmers of hope that can dissolve away. The ascent to emotional highs quickly followed by emotional lows certainly has to take its toll.

My wife has told me on many occasions “you just find the strength.” Ordinary people rise to the occasion to accomplish extraordinary things. Even at its bleakest such people could see positive value from their efforts and see justification in optimism and resolve.

To suggest that the stock market presents challenges similar to those faced by parents faced the most difficult of circumstances trivializes the amazing dedication that people can summon.

But that doesn’t stop me for making the suggestion.

With the market having considerably changed its behavior it’s difficult to know what actions to take and when to temper optimism with remembrances of earlier setbacks. It’s easy to get paralyzed with fear and uncertainty, just as it’s easy to get elated about unexpected good news. But somehow you have to go on as dispassionately as possible even in the face of what may be a relative meltdown, which a month ago might have meant a week where the market only advanced by 1%.

I’m not really certain what the “7 Signs of the Apocalypse” are, but I feel fairly certain that the sudden onset of alternating triple digit gains and losses, in addition to the large intra-day reversals are among the signs of darkness ahead. The trend line may say differently, but that is the perennial battle between darkness and light.

The reaction to today’s Employment Situation Report was fascinating in that the fear of a related market plummet was so prevalent that even the release of numbers that simply met expectations was viewed as incredibly hopeful that the fully anticipated Federal Reserve tapering wouldn’t be coming as soon as some thought. As reviled as Quantitative Easing has been among some circles, the very thought of its withdrawal from the credit markets created seizure like activity in the markets. Once addicted, it’s difficult to accept that fact and you always want more.

As the market began its mid-day ascent on Thursday, reversing a large fall at that point that the cumulative drop from the recent intra-day high on May 21, 2013 was nearly 5%, it had recovered 62% of that fall on an intra-day basis. Is that the same quick head fake that we saw in April 2012 just prior to the market losing 9%?

I will know in hindsight, but whatever awaits, somehow you still have to go on, recognizing that the stock market continues to be the best place to put your faith when it comes to advancing wealth creation. Of course, the across the board rally in prices on Friday increases the difficulty of selecting stocks that may have some unreleased energy within.

As usual, the week’s potential stock selections are classified as being in Traditional, Double Dip Dividend, Momentum or the “PEE” category (see details). As opposed to previous week’s I have more “Momentum” possibilities and fewer dividend selections. I’m not entirely comfortable with that breakdown.

Less than a day before the market’s wild ride in response to the Employment Situation Report, a barely 3 days after the disappointing ISM Manufacturing Index report, Fastenal (FAST), a company whose fortunes many consider to be a very basic reflection of manufacturing health, reported some disappointing data, which seemed suggestive of a manufacturing slowdown and certainly a confirmation of the ISM statistics. It’s fall was drastic, but it recovered along with everyone else on Friday. As long as disbelief may be suspended, or at least data may be denied, Fastenal remains a company that has been reliable in maintaining value or returning to it.

With Merck’s (MRK) recent rise higher following the ASCO meeting and speculation that it may split off component pieces, it’s shares don’t fit my recent pattern of looking for companies that have under-performed the S&P 500 since its recent top. It does, however, go ex-dividend this week and the combination of premium and dividend may offer enough of a cushion in the event of some interim correction, particularly if selling monthly options. For those that like to think longer term than I am capable of doing, Merck probably has the best pipeline of all of the major pharmaceutical companies, although my horizon doesn’t usually go much beyond a month.

Certainly not for the faint-hearted, especially at a time that the market itself may be somewhat tenuous, is Apple (AAPL), which hosts the Worldwide Developer’s Conference next week. As it is, this past week was already a busy one for Apple, already fresh off the congressional testimony victory tour over its tax related strategies. Whether it caught attention because of its ongoing e-book publishing battles, its potential entry into the internet radio space, its plan to accept iPhone trade-ins, its patent for electronic payments or its proposed use of advertising on various platforms, it was hard to escape Apple-centric news. As it is, lots more eyes will be on Apple this week. There’s not too much to be gained by adding to the speculation over what will be presented, but I think that it’s very likely shares will out-perform the market for the week. The options market is expecting a nearly 4% move in shares, which to me indicates expectations of a surprise or disappointment. Either way, at a very rich option premium and some
resistance at about $395, this seems like a good time to add or buy shares.

Marathon Oil (MRO) requires much less of the ability to withstand outrageous and frequent moves in share price. as with many of the stocks that I’m considering for the coming week, their price movement on Friday made them a little less appealing; sometimes a lot less appealing. In Marathon Oil’s case the move higher still lefty it in the range that still leaves me with some comfort.

Transocean (RIG) is a little more of a nail biter stock on some occasions and is currently among the increasing number of companies that have caught Carl Icahn’s attention. It recently re-instituted its dividend after having gotten out from under the Deepwater Horizon liabilities and has traded well even when eliminating the dividend. It no longer offers weekly contracts so I haven’t been looking toward it quite as much as a potential choice. However, as I’ve been looking increasingly to position myself defensively, the longer term contracts have greater utility during a brief market downturn.

Dow Chemical (DOW) was one of the stocks I was prepared to buy last week, but eventually as the week came to its end, I only followed through on two of the list’s stocks. Following some sector news last week shares fell a bit and that should have been the invitation to add shares, but overall caution was my prevailing theme. Although the caution still continues, I’m more inclined to add shares in reliably performing companies. FOr Dow Chemical, if shares are not assigned, it does go ex-dividend in the first week of the July2013 cycle, which adds some further appeal.

Both Caterpillar (CAT) and Joy Global (JOY) have had their recent ups and downs. Both have also been excellent choices when beginning to test their bottoms. Both levered to some degree to Chinese economic expansion, Joy Global recently gave some reason to believe that its business could do well even if frank expansion didn’t occur, as miners were looking to retire older and more expensive mines while developing newer, more cost efficient ones, thereby requiring heavy machinery products. As much as you can count on any guidance and any interpretation of events that are not within your control both Caterpillar and Joy Global have the ability to withstand economic cycle blips.

Motorola Solutions (MSI) certainly fits within the theme of looking for recent under-performers. In this case, it’s thanks to its large drop following its most recent earnings report in April. While it goes ex-dividend this week it won’t report its next earnings until the August 2013 option cycle and although I’m most likely to sell a June 2013 option, I may also consider looking at the July 2013 option premiums.

LuLu Lemon (LULU) reports earnings this week and certainly will serve as a future case study at business schools around the country for how to effectively deal with a crisis that could potentially imperil brand integrity. The shares are no stranger to big moves in response to news and have appreciated nearly 30% since the product news became known. That’s probably a bit too much for anything other than a speculative kind of trade in advance of earnings, but at the moment anything less than an 8% drop in share price could result in obtaining a 1% ROI if puts are sold.

I’ve never invested in ULTA Salon (ULTA) before, but have begrudgingly gone into its stores. The options market is implying about a 9% move as earnings are due to be announced this week. That certainly wouldn’t be the first time its shares have responded to that degree. The reward profile for selling puts on these shares is marginally within the range that I consider, with the ability to obtain a 1% return in exchange for accepting anything less than a 12% share drop, but unlike the LuLu Lemon case, that return is over a two week period of exposure, as opposed to just one. While there is a possibility of following this trade, I would be much more likely to do so if shares have some significant dips before earnings are released.

Finally, TIVO (TIVO) which was scheduled to start jury selection in its patent infringement case this coming week spiked more than 10% in the final 30 minutes of trading on Thursday, in the absence of any publicly available news. By Friday morning it’s shares fell nearly 20% on the news that it had reached a settlement. Perhaps the amount was less than anticipated, but I interpreted the remainder of the press release as short term bullish for shares which included a doubling of the share buyback and news of continued partner relationships. The money and the contracts may come in handy for a company that is proof that a lost subscriber here and a lost subscriber there begins to add up.

Traditional Stocks: Caterpillar, Dow Chemical, Transocean

Momentum Stocks: Apple, Joy Global, TIVO

Double Dip Dividend: Merck (6/13), Motorola Solutions (6/12)

Premiums Enhanced by Earnings: LuLu Lemon (6/10 PM), Ulta (6/11 PM)

Remember, these are just guidelines for the coming week. Some of the above selections may be sent to Option to Profit subscribers as actionable Trading Alerts, most often coupling a share purchase with call option sales or the sale of covered put contracts. Alerts are sent in adjustment to and consideration of market movements, in an attempt to create a healthy income stream for the week with reduction of trading risk.


Who’s Wagging Who?

Anytime a major market goes down 7% it has to get your attention, but what seemed to set Japan off? Maybe it was just coincidental that earlier in the day across an ocean, the United States markets had just finished a trading session that was marked by a “Key Reversal,” ostensibly in response to some nuanced wording or interpretation of Federal Reserve Chairman Ben Bernanke’s words in testimony to a congressional committee.

The very next day we showed recovery, but since then it’s been an alternating current of ups and downs, with triple digit moves back in fashion. Intra-day reversals, as in their May 22, 2013 “Key Reversal” extreme have been commonplace in the past week after a long absence

 Finish reading this article on Seeking Alpha