I have seen a lot in a career centered around Wall Street, and while I burned out on that game 10 years ago, my experience allows me to see all through a cautious. I’m especially skeptical about public companies with market-moving announcements.
Moderna is one of a score of companies testing drugs and vaccines. Yes, Moderna got off to a quick start, but yesterday I was shocked to hear the CEO touting the results of a phase 1 test created to discover a Covid-19 vaccine.
It is unusual and abnormal to hear a company make a promising announcement about something like a vaccine to save the world when the announcement is based on the results of 8 patients. Worse, no formal data was released. No scientific evidence, per se, to back up the claims. Any way you look at this, it was a premature announcement that juiced the stock another 10 points boasting this company to $80 a share from just $18 a few months ago.
I’m not saying these guys don’t have a potential vaccine. When I heard last night, however, that the company was raising another $1.8 billion in a stock offering, the premature announcement made sense. Unethical, unusual – and when a CEO does something like that? Any potential investor ought to look extra hard at the reality behind any other announcement. Personally, it makes me question whether the right man is in the driver’s seat – but to each his or her own!
Investors – professionals and non-professionals alike – are out of their minds if they believe we are on our way to what is being referred to as a “V” recovery. Today alone I’ve heard 3 or 4 references to such a recovery.
Recoveries come in many letters that are used to describe a stock and economic rebound from all things bad. The “bad” represents a shock of some sort that leads to a sharp leg down (the left side of the “V” in this case). The “good” leads to a recovery, the best type of which is “V” shaped (and represents the right side of the letter).
You may suffer a violent shock to the downside, but the forces of good (in this case that would be the trillions of Fed dollars to the rescue) allow the rebound to bring you right back to where you were before the downturn. Really? Are we really to believe that after the world effectively closed down as totally as it ever has in history, that we are just going to ride a wave of Fed money up to land where all this began in February? Was all the drama and angst for naught? Not likely.
The other recovery letters exist for a reason. Recoveries can also occur in the shape of a “U”, where the stock market and economy don’t turn around on a dime, but rather take some time to head back up. The “W” describes a much more choppy recovery – one that has fits and starts, falls again, heads back up again, etc. The dreaded “L” clearly shows the shock and the fall, but as you would suspect, no type of recovery begins anytime soon.
Call me a naysayer, but you’d have me wrong. I’d like to think I am a realist. I am afraid that the cover story thus far is fairly simple: We were caught flat-footed faced with a frightening pandemic, and our country essentially shut down to protect itself. Open your eyes slightly wider, and you will see that most of the developed world was in shock and fought the pandemic with the only tool at hand – isolation.
When Volkswagen – one of the largest auto manufacturing plants on the planet closed its doors on March 18th, all 44 auto manufacturers on earth were closed. Not a single automobile was being manufactured for the very first time since the advent of the car. Consider how many people are attached in one way or another to the automobile industry, and the ramifications should be clear.
The auto plants all being idle at one moment is what drives home the drama for me of closing down the world (never mind the USA). We are not going to get over this in a month or two, and all these “surprise” earnings coming in right now only include one month of disruption (March), if that. I feel like some people are starting to party due to optimism and denial. The trillions of dollars of cash disbursed to partygoers may represent the aspirin or pain pills that enabled some to forget that a blackout hangover has yet to be dealt with.
I can’t see this event as anything but far less than half over, contrary to what the stock market’s trip up the right side of the “V” would indicate as of today. This is not a time to buy the dips. I am certain that there is another shoe to drop, yet. It is time to think, watch, and let this play out some more. Hell, we have not even been let out of our cages, for the most part!
I think that cautious optimism is warranted, with the emphasis on cautious. We will all party again, no doubt, but it’s not time to pull out our kazoos just yet.
I did the research about this new Coronavirus at least 3 weeks ago, well before these crazy conspiracy theories were polluting the headlines. My inspiration came from a deep desire to question everything we were reading and hearing in those early days. I was then and am today even more skeptical about where this insidious virus originated.
I will give you the facts that I discovered and links to the TRUE information upon which I have based my thoughts, and then you can decide for yourself what YOU think is a reasonable explanation about the origin. What was my motivation for doing the research? It was not for altruistic reasons, I’ll admit – but for more selfish reasons. These play into my zeal to understand Covid-19.
Why I’ve Been Driven to Get the Facts About The “New” Coronavirus: No Spleen – I Die
I had an accident several years ago that resulted in an “emergency trauma splenectomy”. You win one of these nifty operations if your spleen gets ruptured. The ER surgeon must get to your spleen which has been ripped from under your heart and is near your spine. He moves your intestines and other various organs aside so that he can remove the spleen and reattach the splenic arteries. Non-traumatic splenectomies can be much less invasive, but a trauma splenectomy aorta off the heartand sew that may be in his way in order to remove the spleenget to your heart to sew everything back together (sans spleen, obviously). They lost me twice on the operating table, and pumped 9 litres of blood into me to “stabilize’ my inner cavity in order to operate.
The spleen filters your blood and importantly it regenerates red-blood cells when you are fighting an infection or disease, etc. It is by far the organ recognized as our front line of defense against cases of pneumonia, upper respiratory infections, and meningitis. Without a spleen, I am vaccinated to protect me from 23 strains of pneumonia, and I am 4 times more likely to develop a Septic infection than you . My primary doctor warned me quite early – while the virus was sweeping China – that my age, diabetes, and no spleen, resulted in a potential 90% mortality rate should I get infected. That happy news would inspire anyone, I think, to want to know all they could about this Covid-19.
This virus did not act like most others due to the insidious way it could infect hosts who may not present symptoms, and thus result in carriers who could infect countless others unwittingly. This stealth aspect of the virus and other qualities about it certainly seemed unusual and different than previous coronaviruses.
Early rumors related to the virus having been engineered, and these were quickly dispelled by scientists. Was China even capable of advanced experimentation with such a deadly virus, I wondered? Here is what I discovered about Research and Experimental Labs – which I found quite unbelievable.
The Shocking Truth About Which Countries Experiment With Deadly Viruses, and WHY
TBD _ Breaking for Stock Market News 4/29 at 1:30pm EST
It does not matter whether you are an investor, or a trader, or neither. I promise that as content on TikTok expands, there will be plenty of stories that will interest a variety of different readers.
Below I explain briefly why I put on such a heavy load of one-sided trades. ‘One-sided’ positions, to a professional trader, by the way, are amateur and tantamount to ‘stupid’. One’s goal as a trader is to return to fight (trade) again another day. I am sharing what I did in my trading account today (and admitting it’s a riskier move for me than usual) because it ties into a really serious concern that I will elaborate about in detail over the weekend.
What we are doing as a country needs to be discussed in the open – right now! I am seeing and hearing ‘the powers that be’ experimenting in different ways in an attempt to keep us afloat through a period of time that these same people are assuming will end at a finite, if not definite, date in the near term!
What is so fascinating about our stock and bond markets, put simply, is their spooky ability to ‘see the future’ in such efficient ways. I have observed this time and again over the course of my career. Never, however, have I seen these markets telegraphing THIS message – which I will share over the weekend.
As far as my trading account, I have to fully disclose that the bulk of my money and what I earned in life is handled by a broker who I trained and became my partner – who I trust and do not try to micromanage.
I have always enjoyed trading – and once in a while I can take a bigger risk than normal. In this case, I started trading after 6 years dormant, and have managed to double $80k in less than 6 months. I wanted to hold this position into Monday, but right now the Dow is headed back up and the discipline if one trades is to be able to admit when you are wrong. If it is looking wrong at day’s end, I will liquidate 50% or more of this short.
I will share more specific tricks and trading strategies in a special section here that we will create on TokTik. Anyone will be able to use it and take advantage of same. My promise to try and help readers stay “ahead of the curve” refers to the knowledge curve. It will then be yours to use the information as you would and make what you can of it.
We will also be building a forum at TokTik centered around subjects where members can share thoughts and ideas. We all need each other’s help now and can come together in ways like those encouraged by this site.
This site is important because all of us can strive to help others. I believe the Covid-19 virus is going to be with us for longer than most people care to even consider – and we had better adjust to a new way of life!
I have not talked much about myself or even provided a Bio at this early stage – but that hardly matters. Suffice it to say when I jumped from Corporate Advertising to Wall Street in 1986, I was driven and excited about the business.
I opened my own firm, had a successful career, and offered my opinions on a popular radio show for over 20 years that I was in the business. Am I telling you this to brag? Absolutely not. I am actually sharing this for exactly the opposite reason!
On TV, radio, and the internet, you see and hear people daily who are mostly in important positions and generally they have been successful in whatever field they are being interviewed about. You will notice during times of uncertainty you’ll tend to hear much more from these people during times of chaos. Please do not misinterpret what I am about to say, because some of these people are indeed very smart but here’s the thing:
Not a single one of them can tell you what is going to happen tomorrow, next week, next month, or next year. They are simply sharing their best guess, and some will be right, and some will inevitably be wrong.
What concerns me most right now, on Tuesday morning, April 21 2020, have been the number of prognosticators who are positive right now, and I do NOT want people to get sucked into thinking that the market caved in, and is in a state of recovery. Perhaps you have heard the term “FOMO”that many of these experts use. rarely do they explain that this is “Fear Of Missing Out”.
With the general theme in the past several years having been “buy the dips”, that would have served you well over the last 6 weeks – but please do not feel you are “missing out” on the market right this second.
if you listen carefully right now, any person who is expressing positive opinions and saying we are in a Vmarket recovery (the market bottomed fast and will come back just as fast have NEVER been in a situation remotely like the really confusing markets of today. NEVER has the Federal Reserve jumped into the market, thrown so much many at stocks and bonds and businesses and people as they have recently.
All this has created hope, BUT HOPE IS NO BASIS FOR INVESTING! I will explain this in detail within the next day or two so that at least you can see both sides of what is occuring today.
In short, this quick entry is to say keep your head. Do not feel you are missing something today or tomorrow, because you will have time to take advantage of this insanity. What i have said here does not apply to all stocks as there are some situations. I am just trying to even out your perspective on the market in general, saying take a breath, and let’s analye where we are REALLY at – and not to fall victim to the “Hope” opinion (which is not described as such, obviously!)
Several weeks ago I was trying to describe to an assistant how significant an oil collapse might be, and why it appeared inevitable to me.
As I sit here tonight in a state of disbelief, oil has indeed collopsed in price to the extent it is anding at minus $37.76 a barrel. That does not mean oil is down $37 – it means that a barrel of oil is trading at MINUS $37.76. This is the kind of thing that rattles your cage and makes you wonder if all is well (no pun intended – because never in history has oil closed at a minus number – never mind such a deep one!
Negative Oil Prices In The Real World.. What?
Translating a negative price of oil into the real world, means technically that if you had a million barrels of oil on a tanker that you needed to unload tonight, not only could you not sell that oil for any price, you would have to pay $37.63 to whoever could take it (though when the futures open later I think the number will be less extreme less). But still, this is a wild situation, and it took the stock market down as well. Here is technically what has happened by way of an example:
If you translated this incredibly upside-down situation right through to a gas pump, imagine pulling into your gas station, where you would be paid $2.50 for every gallon of gas you could take.
If this were the case, we would all probably get pretty creative about figuring out ways to take as much gas as we could – and store it however we could until we could sell it for a profit in the future. Where would you store it? 40,000 gallons in your swimming pool would bring you over $100,000. Would you convert your swimming pool?
Probably a Technical Aberration – But With Dramatic, Real Consequences
This weird aberration (and I hesitate to call it such because this event has likely completely busted some real oil traders and/or firms that trade oil) is due to how futures contracts trade.
The price of oil is determined and quoted by way of the near term futures contract, in this case the May contract, which expires tomorrow afternoon, April 20th. Put simply, owning a futures contract in crude oil guarantees that you will buy 1000 barrels of oil at a given price. If you own that contract through the day it expires, you are guaranteeing that you will buy the oil at a certain price – and that you will take physical delivery of that oil. That last part is the sticky part.
ETFs (funds) or trading operations or commodities traders do not plan on keeping their oil contracts through expiration and taking physical delivery of oil. They have bought and sold tens of thousands of contracts before and never had a problem like this – until today!
How Did Oil Prices get to a minus dollar mount?
Today, a combination of events has led to the negative prices, which tonight are being called a technical aberration. Overproduction, a total ‘coronavirus’ collapse in demand, and a steady collapse in prices in past weeks led to everyone wanting to dump the May contract at the same time before it expires tomorrow afternoon. You cannot just toss it in the garbage — you must sell that contract to get rid of it.
That “dump” was probably a panic, where quite simply with no room to store oil, NOBODY wanted to keep their contracts, and you couldn’t even GIVE money to somebodytobuy it from you (unless you gave them $37!
A recovery in the May contract price will likely occur tomorrow, and perhaps end positive, but you must understand that this could feasibly happen again next month with the June contract. The June contract for oil was trading around $20. The US came out an hour ago, also, to say we would be topping off our national reserves, and with a return to sanity tomorrow, we should see prices turn positive again.
Where Will Oil Prices Go From Here?
Oversupply and a collapse in demand creates a perfect storm for any commodity. The tip-off to oil’s future prices can be tracked in the June WTI contract. The real problem is that there is nowhere to store all the excess oil. Like the example of people trying to store gas in their pools were they paid to take gasoline at the pump, however, I am certain we will see some creative conversions related to oil storage take place this month. This should soak up some of the cheap, excess oil out there.
Producing wells cannot simply be “turned off”. It takes time and money to shut in a well, but “Keep your oil for a better day” will be the name of the game in the field. Any way you want to look at it, however, this ‘technical’ price shock will reverberate outwards and dramatically affect ‘real’ people who work in all areas of the oil business.
More importantly, this should be telling you that NOBODY but NOBODY has a handle on what or how this market – and most other markets – can react in the face of our economic slowdow. Try to keep that notion in the back of your mind as you look at other investment opportunities.
The Covid-19 pandemic has plagued the world and forced governments to shut everything down. People have been asked to take action in a manner that goes against everything we know as social beings with the command “Stay away from one another!”. As difficult as that request has been, most of us have complied out of fear. We may have varying degrees of concern about becoming sick ourselves. A far worse outcome any way you look at it, is bringing the illness to loved ones, be they family or friends. Many of us have thus been left to our own thoughts and devices in a world that can only be described as pretty weird. As of this writing, states are beginning to open slowly and tentatively.This moment will be recalled in history as an incredibly momentous occasion, and here at TokTik we can come together and share our thoughts and ideas about all things strange and new. We can share insights, also, because out of times of confusion and chaos there is a very cool constant: great, new ideas have been born.
My hope is that this site brings a sense of hope and security to all who visit. One thing that is also a well-known fact, and at the risk of sounding like a cornball – it is that we do better together. In a world that has been pretty divided for too long, I think most would agree that there probably won’t be another time in any of our lifetimes where we come up against such a threat to our way of life as the one we now face. If ever there was a time to put our heads together – it is now.