Buzz on the Street: All News Is Good News for This Market
A look back at the happenings on Wall Street this week, as seen by Minyanville's Buzz & Banter.
Tesla May Be About to Move
Quick FYI -- Tesla's (NASDAQ:TSLA) Elon Musk's interview at the NY Times Dealbook conference will be broadcast on CNBC very soon.
The stock is down 5% on rumors of a Model S recall. I would not be surprised to see this rumor denied by Musk, which would presumably cause a pop on the stock. (it's already ticked off the lows).
Note that CNBC is already citing a source saying there will be no recall, but there will be much more weight if it comes straight from Lord Musk.
Position Update -- Organovo Holdings
Back on September 5, Duncan Parker posted a buzz on Organovo Holdings (NASDAQ:ONVO). It piqued my interest. On September 9, Duncan asked me about the fundamentals, and I bought it. I have buzzed about it a couple of times. Boy has it been a good run! Sometimes you have to take profits just for the sake of taking profits.
I am selling one-half here above 10.00 for a 70% gain in three months. This is what I always loved about the buzz; guys that are smarter than me sharing ideas that I can evaluate on my own and see if they are a fit. I love this stock for the long-term (hence a one-half position sales here), but I also believe in trading around core positions.
I like getting lighter into parabolic moves and buying against quality moving averages. I will look to buy against the 50-day moving average the next time I see it.
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Hello Minyans -- nothing really new in the world of corporate credit other than it continues to be white-hot. Of course, if an asset class is successful, you can count on Wall Street engineers to repackage it, add some steroids, and resell it; and that's what is happening with Collateralized Debt Obligations (CDOs) i.e. sausages of various debt instruments, which after lagging badly behind its Asset Backed Securities brethren for the last several years, are coming on strong once again.
SIFMA reports that through October, $68B of CDOs were sold vs. $45B in 2012, $11B in 2011, and $3B in 2010. Bubble you say? Maybe not. ABS issuance is clocking at about $180B for 2013, a far cry from the 2007 peak of $290B. (Thanks Prof. Atwater for flagging the site - very handy)
The bottom line is that if you think that demand for corporate credit must be exhausting itself, it just may be the opposite. What's holding it back (if such a description applies) is a LACK OF SUPPLY and of high enough yields. And so buyers are once again flocking to structured products to find both.
Yes, it will end horribly badly once again, worse than '07-'08 (much much worse if you ask me) but, by all evidence, not now, not next month, not next quarter, and probably not for the next few years.
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