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It is crazy, but I think inflation will ultimately be what ends this. Inflation is probably the only thing that can halt the central banks from printing money. I think there are a lot of inflationary influences that are converging. Central bank printing presses, supply change realignment, protectionism, covid costs, China's mission to become the reserve currency of the world are all inflationary forces.
Interestingly, the only developed economy that hasn't flooded their economy with stimulus and QE is China. I believe China is a serious threat to America's reserve currency status. If we lose that status, I think we will experience the downside to the stimulus and QE that we've been injecting.
MXC - Oil stocks have been flying. Will the low float crowd make a run at MXC?
hweb it reminds me of the new paradigm argument in 1999 and early 2000. The idea that historic valuations no longer applied in the dot.com era. This time it is that valuations don't matter in the QE era. I guess time will tell.
I agree.
This has the feel of panic buying.
nelson re: MHH
I'm not hweb, but I'm still short. It has proven to be painful at this point. The CEO who holds zero shares continues to exercise his options and immediately sell those shares. As of today, my current plan is to remain short into the 2nd quarter earnings announcement.
China's new proposed laws regarding Hong Kong as well as them dropping their growth targets appears to me to be a signal that they've abandoned trying to negotiate with the Trump administration. It could get rough for United States companies that have significant operations and/or dependence on Chinese supply chains.
Thats funny hweb. I saw that report as well. It was a great q.
RELV is another low float play showing some action in the after hours. They have a float of 1.21m and 1.75m total shares.
Zombies or trillions of liquidity that has virtually no where to go but the stock market. The fed has perfected the ability to pump up the market.
It has been a great trading market. The disconnect between fundamentals and market valuations makes it feel like your playing Russian roulette with your money.
That is definitely possible depending on their production capacity.
I didn't interpret it that way. I think the CEO prepared his remarks and he was excited to demonstrate the diversity of industries and countries that are ordering their product. He needed someone to edit him. I it see more as a small company experiencing explosive growth and an overly excited CEO. He welcomed anyone to call the company with their questions. I saw nothing to fear.
The have 8.8m in orders in the 1st six weeks of the quarter. They've booked 5.4m in revenues.
Wade what I heard was that they've recognized 5.4m in revenue through the first six weeks with 3.4m in additional backlog of orders. Through the first six weeks of the quarter they've booked 8.8m in orders. If that run rate continues they will book 17.6m in orders for the 2nd qtr. The 2nd quarter revenues may be constrained by capacity, but since there was no Q&A who knows whether that is the case.
TOMZ CC What a cluster. The CEO rambled on for so long that they had no time for Q & A despite a full roster of people on the call. The world of small caps. There were a couple of items in the call that I found intriguing for the long haul potential. A robotic sterilization unit is in development, and this pandemic has very likely changed the sterilization protocols from manual to systems like tomz offers.
For the short term, the 2nd qtr will be strong.
TOMZ this might be the first time I've listened to a cc where the CEO is in the process of detailing virtually every order in a quarter. Promising technology, but painful minutia.
re: TOMZ
The company is clearly benefiting from the outbreak of the pandemic, but their technology may have some longer term benefits and adoption. The need for sterilization will not end with the end of this pandemic, and if this technology proves to be more efficient and effective then other alternatives, then this could be a longer term success story.
Wow on SVT. With a 1m float it could have a big day tomorrow. I picked up a few.
I agree.
The justification that all forms of response are justified because this was forced on the economy by the government ignores the fact that this was going to severely impact the economy regardless of government mandated shut downs. People were going to modify their behaviors once they recognized there was a measurable risk of serious illness or death when participating in social gatherings.
The world wouldn't end without the central bank, but they will try to convince you of that. The credit markets may have frozen temporarily, but that doesn't mean they would never thaw. There undoubtedly would have been pain and disruption, but we would emerge from that structurally healthier with renewed potential for growth.
We aren't fixing structural issues with central bank intervention. Were just making them bigger. It is a Pandora's box that can't be escaped. Every successive recession will require greater intervention as the debt bubble and its corresponding risks expand with it.
One of the benefits of free market capitalism is that it forces structurally flawed companies to either correct or go out of business. That process may be painful to investors in the short term, but it leads to capital being allocated to healthy companies with the potential for growth.
When the government intervenes in this process capital is misallocated. Structural failings are enabled. The end result is weaker companies with an expanded debt servicing burden and limited potential for growth. See Japan and western Europe.
An exponential expansion of an already dangerous debt bubble may provide a short term benefit, but their will be long term consequences. Central bankers are not omniscient, and they will ultimately fail in attempting to prevent economic cycles. It will be far more painful then because the debt bubble will be even bigger then today.
hweb I was surprised by the strength of mhh on Friday. To me it is a reflection of how much complacency remains in this market. This is going to be a tough environment for staffing & outsourcing. It may require some patience, but I won't be surprised to see this one well below 10 over the next couple of quarters.
larrybaz I've sold most of my shares as well. They will probably have a good quarter, but the upcoming quarter will probably suffer due to the decline in traffic due to the corona virus.
Bmrboy it is hard to argue with that logic. It has worked for the last 12 years. It does require ignoring a growing disconnect between fundamentals and valuations.
After listening to Powell, I can't help but wonder when the Federal Reserve will move to negative interest rates and start buying stocks? It is pretty clear that they will justify any action necessary.
I should have a held off a bit on initiating a short, but timing has never been my strength.
mhh @ 13.9 I shorted a few shares.
They posted a good quarter(assisted by a low tax rate), but I think they will be facing some stiff headwinds going forward. With the uptick in unemployment coupled with capital spending cuts. I expect a pullback from these levels.
re: COHN Low float stocks have remained in vogue, so it definitely has the potential to make a big move. I have a small position.
You nailed it. Good post.
RNsidersbuying I don't follow PEN, but on the surface I can see the short appeal based on fundamentals and the chart.
The healthcare sector has been in favor, so that would be one reservation regarding a short position. With that said, it definitely looks like it is due for a pullback to the 160s.
The market doesn't care about fundamentals as long the government continues to carpet bomb the economy with new money and more debt. Beware of the day when the market stops responding positively to government intervention.
Interesting. ORLY has a terrible balance sheet which will deteriorate further as a result of this crisis. What analysts are probably forecasting is that people may keep their cars longer and part sales will benefit. I'm not expecting the stock to tank, but I also didn't think the quarter should have led to a spike in the after market.
RNsidersbuying- I shorted ORLY @ 387 in the after hours as well.
I've done well with GOLD and DRD. I took profits last week. The stocks have made big moves, and I will be watching for pullbacks.
No worries because I might be :).
I qualified to file for a handout under the cares act, but I didn't because it didn't affect my business. I guess that makes me full retard.
I guess I'm old school, but hell yes I can.
This is part of what is so maddening about this legislation. There should have been a means test or revenue impact test against the forgiveness portion. I also view their management as unethical for pursing it if their business wasn't impacted. That is a sad testament to our culture.
KIK I tried, but I couldn't find any borrowers.