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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (55098)	3/21/2015 5:33:08 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78748

Upon reflection, I want to alter and add these statements: Yes, could be a worrisome time to buying into the oil services sector. With several stock market indices near all-time highs, to me it's a time to be worried about buying almost anything . I'm not much worried about buying a few shares of HOS. What'll hurt me if the stock goes down 25% or more isn't the dollar loss of it, but rather the loss I could incur with all the other e&p and e&p-related stocks I have in the sector(s) that might be going down with it as well. With several stock market indices near all-time highs, I shouldn't need to fret about committing some money to a stock. What I believe I should be worried about is holding on to all the stocks I already own. To that end, I've reduced positions in many and sold some, and my cash position is the highest it's ever been. I'm still worried, and am still messing about trying to raise even more cash.

To: Paul Senior who wrote (55098)	3/22/2015 2:43:19 AM
From: Woody_Nickels	Read Replies (1) \| Respond to of 78748

Worrisome, yes. But options premiums are providing some good income.

To: Paul Senior who wrote (55098)	3/25/2015 9:38:52 PM
From: Graham Osborn	Read Replies (1) \| Respond to of 78748

I agree 100%. Valuations are way above Graham and generally Buffett levels, but they are for the most part not insane. The greatest systemic exception is healthcare and especially biotech. Witness the AbbVie buyout of Pharmacyclics for 30 times sales or the record Actavis debt financing over the past 5 weeks. This has been a long build since the mid 2000s when healthcare was apparently viewed as a safe bet amidst the financial turmoil. The leading biotech hedge funds have been achieving 30%+ annual returns the past 5 years or so. In my opinion such consistent high returns are possible only by some form of front running (beating the institutions to the analysis, utilizing trade execution inefficiencies like Renaissance Technologies, or illegal insider transactions) or by riding a bubble. These are very difficult stocks to short given the buyout risk which just magnifies the problem. We saw that even with a relatively isolated event like the AbbVie/ Shire deal blowup last year that if holdings are substantially leveraged we can see dumping across sectors to raise cash. So I worry how the broader market will be affected by a larger scale replay. I noted some institutional profit taking in the IYH/ IBB growth favorites last Friday and a bigger selloff today. Definitely concerned and watching closely.