Its really hard for my intuitive brain to take that seriously at all. It makes me laugh to think that someone might take data from the 1800's and try to apply it to present day. But maybe I shouldnt be laughing....

So here's a question for everyone then:

If we all agree that stock prices are inflated (whatever that *really* means) at the moment, at what point would they be fairly valued? Could everyone come to a consensus on that?

For the vets, was there ever a time where you lived through an extended period where everyone agreed that stocks were fairly priced in general?

It's a NYSE order that goes through a floorbrokers handheld. I believe IB has a route but I find it hard to imagine one guy manually inputting all of ib's orders. They can be used for on close/open but they get priority over all other orders except for the specialist, and they are usually hidden.

Also the floorbrokers can see all of the hidden size on NYSE, which we've found pretty helpful for some trades.

wtf?

I know the *Fab Four* dominate this thread,but there is some horrible information being strewn about ITT

LOL

Fwiw writing naked calls isn't really a way to hedge risk. It's immensely risky, but also very profitable if done well. It's also not cheap given it requires an enormous amount of margin to put on. Writing covered calls would be a more appropriate way to describe hedging risk and being a cheap way to make extra money (or writing puts when you short stocks - again limits your downside as well as your upside.) You also need to really understand what you're getting into here, it's not as simple as selling a call for a week and letting it expire so you collect your premium. You need to be very good at managing your risk and exposure on a day to day basis, sometimes its wise to close them out early as brianthemick mentioned doing so today. Point being naked options writing may seem "easy" as you just turn yourself into an insurance broker at its most basic summary, but in fact it is very complicated and shouldn't be thought of purely in that way. Read, study, learn, practice, then execute, and start small when you do, big mistakes will cost you vast sums in the options writing game.

It's not all of ib's orders obviously. Yes there's an order type we use time to time that's sent to a floor brokers hhd and he manually inputs it.

You'd rather limit the data? The reason to look at as much as you can is to make sure you don't make hasty decisions based on extremely limited knowledge.

The only look overvalued by certain measures and models and not by others. That is almost always true.

No chance of the market coming to a consensus that things are fairly valued(unless you mean that today's prices are the weighted consensus, which is just silly to say out loud).

You are never going to read a headline of "There was no trading today on Wall Street. Everyone is satisfied with their positions."

So in my search for "long " plays, i will also add to my list MELI , its around 85 , good growth market as it can still grow in other latin american countries, some call it the ebay of south america, but its not really correct, I like it around this valuation though (can go much lower though so I would not buy till right before earnings ) , and would probably go long it , if i had to go long .. (not now though , even though i missed my entry on kndi today by 10 cents.


still, all short right now though..

MELI is tricky, something that has been on my radar for a long time. It's tricky to value that one and everyone will throw their own metrics for it since its both latam and a growth name. I am almost all long in my core portfolio except for being short CSLT. I took the last 2 days off from trading after getting killed on the CL squeeze tuesday morning that I texted you about and kind of regret that I didn't trade today given how easy some of the setups both in CL and NQ were. I concentrated some of my holdings as of late by exiting some that I didn't care to analyze daily anymore to give me more room to focus on and increase my positions in my energy plays and YHOO/AOL.

I have to say, all of the small cap tech names being sold off to much lower valuations bodes pretty well for a company who may be coming into a large chunk of cash pretty soon and aggressively wants growth itself. Just sayin...

Thanks will keep an eye on these! Been watching yelp for a little bit. But looking at entering in mid upper 40s

Negative aapl reports coming out again. I'm happy I bought at 450 but I've had to hold it a long time

Where do you see these negative reports? I just see hedge funds releasing their 13-F's that they're increasing positions.

Super tricky. Currency stuff + anti-capitalistic governments + I don't know any Brazilian strippers to help me gauge local sentiment + I don't know whether we have worked off the negative sentiment in Latin American stocks + the valuation isn't great (yet) + general tendency for Latin America to implode periodically.

It does look really interesting though. (Thanks, Myrna)

life leak IMO .

obviously brazil is their number one market, and they do have exposure to venezuela , hopefully they hired a good trader to manage their currency risk (looks like they netted a couple million last qrt on that )

Just seems based on valuations , if things dont implode, it could carry some good upside.. it has a lot of downside risk too obviously..

I'm sure they hedge their currency risk for international revenue, but there is more currency risk that they can't necessarily hedge. Think worker pay, cost of tangible goods, etc. Their business model doesn't exist in one country nor with one revenue source. For example, if venezuela's currency devalues to which they are hedged against for revenue purposes, while brazilian currency increases in value, their operating costs have now increased in relativity against other markets. Additionally venezuelans now have less money to spend on brazilian goods. This is greatly oversimplified but you get my point which is just that there's a lot of risks that are hard to hedge against fully. It's hardly as critical to their bottom line overall in comparison to political risks and/or economic risks in the economies they operate. Thus it's just really tricky to value this one.

its ok to take a day or two off.. i actually under trade.. if im not feeling it , i stop trading until i do .. better off not losing money instead of trading on tilt.

im still down for the meet up, heading to maryland for the preakness tomorrow most likely, but ill be back next week.

from me surfing their site the past couple days , each country has its website/marketplace with it being split further into the bigger cities (think craigslist) . they are based in argentina.

Same time and place for next tuesday should be good if it works for you. We'll stay in touch to decide and see if any other 2p2ers in nyc want to join then as well.

Yeah I actually know a decent bit about their business model and where they operate, I'm not advocating for or against the position as it's not something I tend to aim for in my longer term core strategies which tend to be turnarounds in the sectors I understand well, or outside the box catalysts the market may not see coming/underestimate. Remember I'm an intermediate/swing trader for equities, and stick to day trading futures (for the most part.) This was a name I was analyzing heavy back in septemberish to fit into my strategy but couldn't seem to figure out where it would head. I'm just pointing out some things that may or may not be obvious to stay on top of in terms of analysis as you manage the position going forward. I'm sure you've done your DD, I hope the play bodes well for you.

What are you seeing good in valuation, Myrna? The only big positive as far as valuation ratios I am seeing (at first glance) is PEG ratio.

Raine, they talked about hedging currency risk by buying real estate in the countries (maybe just one?!?) they operate in a little bit in the last conference call. I only skimmed the transcript and haven't thought too much about it yet, so if you have looked deeper please share! Off the top of my head I think with what they actually do, the big issue we really have to worry as far as FX goes is how the currencies convert to USD. I am guessing (one of us should check) that their revenues and costs are in line with where they are doing business.

In before Myrna and Raine sitting in a tree jokes.

Nothing wrong with you two dating of course.

EU level.

Its country by country revenues are still pretty fragmented (outside of brazil/argentina) , with a good percentage going to Brazil (52 million out of 115 last quarter), meaning there is room to grow in some countries which is has not penetrated yet.

Peru, Chile, Portugal, Spain . Uruguay make up around 5% of its revenue .

mercadopago (think paypal) is something that can also grow as buying over the net becomes more acceptable over there .

its valuation is not too crazy , dont get wrong now, if there is a stock market crash , this stock will trade under 50 , but overall , i like its risk/reward .

Again, i am not long this stock right now, i was just replying to savant's question of which stocks I would go long with possible good growth behind it ..

Ok, so why do people keep saying these things like they matter?

As for the data, yes i would prefer less, if its the wrong data or useless.

Meli looks like decent value on 2015-2016 estimates too. It also looks like it might have some short squeeze potential. Impressive ROE too. I'll look into this one more too. Thanks man...I followed it in 2012 and some of 2013. but it fell off my radar at some point. I don't think I ever actually traded it though. Thanks for the rec!

Adding TNET and WWWW to the list of stocks I want to check out too if anyone is interested.

Because history keeps repeating. Also, just human nature is to do our best to predict the future. If you aren't going to worry about valuations, how do you pick what to invest in?!? Why not go all-in on cow dung futures at $2300 per ounce? Might be the next gold or silver.

More data isn't useless. Do you think that supply and demand, or gravity are recent developments?

Some data is useless to general market direction. Japan put up a big GDP # yesterday. Last year that would have been a key piece of data...this year meh (unless your trading japan or have stocks w of heavy japan exposure).

What numbers are relevant depend on the market dynamics at a given time.
To Brian's point, Currently historic valuations seem pretty freaking relevant as traders are selling the tech, biotech, and small caps on a valuation basis.

If we know what multiples these stocks normally trade at we can predict we have actionable information on when value oriented players may step back in.