Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.


My Takeaways and Observations

Originally published at 3:46 PM EDT on April 19, 2016

I started the day asking the meaning of our investment life and ended the day closing a chapter on the life of Seth Glickenhaus.

Some divergences and concerns emerged today, though at 3:30 p.m. ET the markets were seeing the glass, again, half full. Reflecting these conditions, I bought a lottery ticket on some SPDR S&P 500 ETF (SPY - Get Report) weekly puts early in the day.

  • The U.S. dollar weakened.
  • Crude oil rose by $1.22, to $41. Nat gas was up by 16 cents.
  • Gold rose by $18.70, to $1,253. Silver was up by 70 cents.
  • More upside action in agricultural chemicals, with Potash (POT) up $1.20. Wheat +11.50, corn +3.50, soybeans +28.50 and oats +5.25.
  • Lumber was +6.40.
  • Bonds dropped a bit in price, and were slightly higher in yield.
  • The 10-year U.S. note yield rose by one basis point to 1.78% and the long bond by a similar amount and yields 2.59%.
  • Municipals down slightly; closed-end muni funds' rapid advance dissipated late in the day ... finally!
  • High yield was well-bid. iShares iBoxx High Yield Corporate Bond ETF (HYG - Get Report) was up 36 cents and SPDR Barclays High Yield Bond ETF (JNK - Get Report) was up 15 cents.
  • Blackstone/GSO Strategic Credit Fund (BGB - Get Report) was three cents lower; I am out of the name now.
  • Banks exploded to the upside, led by JPMorgan Chase (JPM - Get Report) , Wells Fargo (WFC - Get Report) and Comerica (CMA - Get Report) , all up by over a beaner.
  • Life insurance advanced again, though my long Hartford Financial Services Group (HIG - Get Report) lagged.
  • Brokerages were up, led by Morgan Stanley (MS - Get Report) , up 64 cents, and Goldman Sachs (GS - Get Report) , up $3.65.
  • Retail was quiet. Home Depot (HD - Get Report) was a downside leader, off $1.50. Lowe's (LOW - Get Report) was weak, too.
  • Old tech got IBM'd, with IBM (IBM - Get Report) down $8.50.
  • Staples were broadly higher, led by long Procter & Gamble (PG - Get Report) , up 50 cents.
  • Old media was mixed. Comcast (CMCSA - Get Report) was lower but Disney (DIS - Get Report) led the parade.
  • Autos were strong, continuing the Barron's push over the past weekend. Ford (F - Get Report) was up 15 cents and General Motors (GM - Get Report) up 65 cents.
  • Oils responded to better commodity pricing. Schlumberger (SLB - Get Report) was the league leader, up $1.70.
  • Biotech and the rest of the Nasdaq were conspicuously to the downside. iShares Nasdaq Biotechnology ETF (IBB - Get Report) was down 1.66%.
  • Allergan (AGN - Get Report) is still recovering (up $4.50) and my former biotech basket got hit, but not materially so.
  • (T)FANG weakness was also obvious, though Facebook (FB - Get Report) had a late-day kick save.
  • NOSH was mixed.
  • So was CRABBY.
  • In individual stocks, Twitter (TWTR - Get Report) was a poor actor. On the other hand, fav long DuPont (DD) was strong, up $1.15.

Here are some great posts on RealMoneyPro today:

  1. Some oil vey from Jim "El Capitan" Cramer.
  2. Tim "Not Phil or Judy" Collins on some overnight trade ideas. And also from Tim, some SPY-ing.
  3. RevShark on bears and the markets and why it's not time to be too clever.
  4. Paul "The" Price "Is Right" on the Barron's bounce in autos. (I think he missed my column on Monday!)
  5. Tony Owusu on bank earnings.
Position: Long PG, SDS large, DD, HIG, SPY puts; short SPY, QQQ, NFLX small, TSLA small, JWN small, CMCSA small, DIS small, LNC small, MET small, GM small, F small, XOM small, SLB small

Observation of the Week

Originally published at 1:06 PM EDT on April 22, 2016

This is my most important take of the week: "Growth isn't growing"-- at least relative to expectations.

Examples of this include Alphabet (GOOG - Get Report) , (GOOGL - Get Report) , EMC (EMC) , IBM (IBM - Get Report) , Intel (INTC - Get Report) , Juniper Networks (JNPR - Get Report) , Microsoft (MSFT - Get Report) , Netflix (NFLX - Get Report) , Qualcomm (QCOM - Get Report) , Seagate Technology (STX - Get Report) , Visa (V - Get Report) , etc.

Position: Short MSFT (small), NFLX (small)

Ag Commodities Get Chewed Up

Originally published at 2:42 PM EDT on April 22, 2016

"Just one more thing."

--Lt. Columbo

Be careful if you are long farm equipment or fertilizer stocks, as agricultural commodities are getting whacked almost beyond imagination: wheat -30.75, corn -14.25, soybeans -34.25 and oats -5.50.

Perhaps we will see a delayed reaction (lower in price) on Monday as the commodities' schmeissing is digested.

Position: Short CAT small

'Risk': A Tribute to Prince

Originally published at 8:29 AM EDT on April 22, 2016

Prince was given three names at birth -- Prince Rogers Nelson -- but the music legend really had just one name at the time of his death yesterday.

He was prolific, producing 39 solo albums and selling more than 30 million records during the course of his pioneering and flamboyant career. I thought Prince's 2007 Super Bowl half-time show (performed in the rain) was the greatest of all time, and I've often used his lyric "Tonight I'm gonna party like it's 1999" to describe the investment backdrop.

So, with apologies to Prince, here's my tribute: An investment rendition of my favorite Prince song, Kiss.

Not wanting to be boxed into a musical stereotype, Prince surprised a lot of people with this falsetto-sung, synthesizer-heavy tune -- which sounded nothing like his previous songs. The gamble paid off, and Kiss (the first single from his 1986 album Parade) became one of Prince's No. 1 hits on the Billboard Hot 100 chart.

Here's my version, which I call Risk:

"You don't have to be long,
To turn your portfolio on.
You just need to be analytical
From dusk till dawn.

You need perspective and experience,
To turn your portfolio on.
Just leave it all up to us on Real Money Pro
We're gonna show you what it's all about.

You don't have to be long
To deliver good returns.
You don't have to be leveraged
To rule your investment world.
Ain't no particular style (fundamental or technical)
You should be more comfortable with.
We just want you to be prudent with ...
Risk.

You got to work hard and be rigorous
If you want your portfolio to shine.
You gotta put in the time,
We know how to analyze.
We want to be your own best ally,
Maybe you could be ours.
You just leave it all up to us,
We can have a profitable time.

You don't have to be long
To turn your portfolio on.
You don't have to be risky
To deliver good returns.
Ain't no particular style
You should be more comfortable with.
We just want you to be prudent with ...
Risk.

Yes I think we should trade.
Gotta, Gotta.
At Jimmy Cramer's parade.
Gotta, gotta, invest.

Thoughtful investors rule our world,
I said they rule our world.
Use your intellect (read our columns)
Question our analyses.
Maybe we should do the twirl.

You don't have to Tweet
To have an attitude.
You just have to educate yourself,
The gift will be your returns.

You don't have to be risky
To deliver good returns.
You don't have to be cool
To rule your investment world.
Ain't no particular style
You should be most comfortable with.
We just want some of your time and attention
To help you manage ...
Risk."

Position: None

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.