Jeffrey McLarty

Growing middle class, consuming more and more meat and processed foods…what do you think, get long SDA, or am I too late?

Fertilizers and Pesticides for agiculture…good. Lithium for mobile…good. Soda Ash for paper, glass, and detergents…good. What do you think, get long FMC?

No position…yet.

…seems like a pretty sharp man, and if Dan Conway likes him, so do I.

I just discovered this site, and I hope this picture updates dynamically, as time passes…I think it will…but look at what time frame he has been BUYING…pretty heavy buying, THIS year, if you ask me.

Just click this, to see his buys and filings…pretty cool, and some interesting ideas.

…and I wasn’t allowed to trade at all, it’d be TEX, and HEK. HEK is more risky, well actually really risky, but hence the upside. TEX, can’t figure it out, they just blew away the numbers tonight, I don’t know why the stock isn’t up 50% right now.

Long HEK from $8.27 and $9.95.

Long TEX from $44, $50 and $52.98.

That the pollution haze, alt. energy phase, banking craze, water ways, derivative maze, urbanization blaze, crop yields on maize and inflation daze…have given me too many ideas to throw money at, I just don’t know which ones are best.

Pollution and energy are two big problems, combine that with urbanization and CVA is likely to prosper. I think FAN, and TAN, are both good bets. Good banks will be fine, and it’s time to start buying value. Mind you, 300 out of the 8000 will fail, or more, but the rest will be ok and prosper on the new standards and previously failed bank clients. PHO has too many starting points to ideas for stocks…I still haven’t found the best ones. Combining the emerging growth with rising middle class, and world water problems HEK is likely to prosper. Urbanization has many vehicles, but right now I like TEX…can’t get enough cranes, etc. Crop yields are amongst the few things in the world that have risen nearly linearly for decades, that’s a good thing for planet earth and investors. Isn’t it ironic how every country in the world seems to have +5, 6, 7%, 2,2000,000% inflation…and the US is only just now starting to count it. Rising middle class in other parts of the world, SDA is likely to prosper. I also see CL doing well for the same reason. I like the new AFK/PMNA/FRN ETFs too, these are where tomorrows money will come from, get long these names and short the S&P, dollar for dollar.

This market has me second guessing myself, and every move I make. I’m not alone, that’s why it’s been volatile, and that’s why it’s will keep being volatile. Learn to Buy-Write. Short-to-Own.

Disclosure: I put my money where my blog is, when the timing is right.

I was listening to an audio version of the economist, when I had to drop what I was doing when I heard them mention Prediction Markets. A quick google search pointed me to intrade.com. Very cool. People bid on contracts that expire at either 100 or 0.  It’s a market for a betting pool as to the outcome of any event.

Check this out:

Now I’m no expert, but get long Obama, get long McCain that seems like a 3% yield arbitrage. One of them is going to win.

Stock Market participants are more likely to dig these insights:

I took the data from their “probability of a US recession in ‘08″, made a moving average, then took a derivative and smoothed that out too, then mapped it to the S&P.

It’s interesting to observe the causality get weaker as the contract gets closer to expiring.

Check out the earlier surges in the derivative, they appropriatly correlate, a bit at least, to the market then a reversal in the derivative means a local max or min - in some cases - in the S&P…it’s a stretch.

How do I get long Prediction Markets? I want to invest, in the actual exchange. What a cool system, I am enthusiastic about it’s growth and want to see it succeed.

After buying a condo in the center of Toronto, out of necessity, I got a little more curious about specifics in pricing and housing costs in different US cities.

I found the Trulia housing heat map helpful, which accompanied this list of average listing price of homes, for the entire STATE’s real estate listings:

Hawaii $935,452
Wyoming $859,654
New York $761,945
California $702,176
District Of Columbia $681,335
Connecticut $643,126
Colorado $569,900
New Jersey $521,040
Massachusetts $495,533
Nevada $489,991
Utah $489,021
Montana $487,482
Rhode Island $478,896
Washington $455,489
Maryland $450,270
Florida $425,327
Arizona $424,785
Oregon $413,585
Virginia $407,792
Vermont $402,066
Delaware $398,884
Idaho $388,361
New Mexico $387,137
New Hampshire $377,144
Illinois $367,713
South Carolina $355,848
North Carolina $351,462
Alaska $340,727
Maine $325,733
Georgia $319,859
Minnesota $309,031
Pennsylvania $294,639
Texas $285,073
Tennessee $272,868
Alabama $268,668
Louisiana $256,966
South Dakota $253,015
Wisconsin $249,835
Arkansas $232,074
Missouri $230,284
Mississippi $230,016
Michigan $228,748
West Virginia $227,085
Kansas $225,135
Kentucky $218,949
Indiana $204,482
Ohio $203,996
Oklahoma $197,696
Iowa $195,452
Nebraska $194,217
North Dakota $182,284

Average price for a home in Toronto (notice it’s a major city center as opposed to the prices above which are for entire states), was forecasted to average $394K for 2008 (written just a few months ago) in a report by the CHMC.  In the same report it is forcasted 2.5% YoY appreciation ‘08 to ‘09…the slowest appreciation since 1996.

For sake of reference.  Density of the entire district of columbia is about 3.6 people / m^2 where as Toronto, it’s 3.9 people / m^2.

But…we have our silly (yes that’s sarcasm) 25% down or mandatory insurance policy known as CMHC. The government just made it a little more strict by forcing 5% down and maximum amortization of 35 years.

AND…Here’s why Canada should be okay…

Canadian Cities
Average House Prices
November 2007

Canadian Provinces
Average House Prices
November 2007

 I also found this link to the NYTimes Real Estate listings search helpful, and american’s might find the MLS listings helpful.

Disclosure: Long Toronto & CANADA!

I am an equity/derivatives guy - I think I always will be, but, I KNOW I need to expand my knowledge of how the bond market works, and the signals it gives off. I’ve been reading one of Bill Gross’s book, you know the manager of PIMPCO, “The Peter Lynch of Bonds” according to the cover. He called Treasurys the “most over-valued asset class in the world, bar none” in April of this year. It’s sentiment like this that I’m pretty sure why ProShares created PST, and TBT; leveraged ETFs that short the 7-10 year, and 20+ year, US Treasury Indexes from Lehman brothers. I started learning about the bond market back in ECON 101, but have relatively ignored learning more. I have been smacked in the face with it over the last six months in the news, and ramped up during this recent GSE debacle. From what I can tell, the upside for TBT is much better than the downside, at this point in time. Do you concur, or disagree, why - or why not? Any insight from any expert macro / bond guys would help. I am new, and learning.

Speculation ramped up on Friday, as investors hypothesized that the GSCs would need help, thus hurting credit rating of the U.S. As such, TBT had nearly it’s second highest trading volume since it’s launch. PST actually did set a record for trading volume, since it’s launch.

Interest rates are bound to tick up…I mean, they almost have to.

I have to give a hat tip to Joe Dowling, for pointing these vehicles out on twitter, I didn’t even know they existed before Friday. I did something impulsive and after only an hour or so reading about TBT, Dan Conway can contest, I bought some…early in the day. Every conversation I’ve had with Joe, he has left me with nothing but a good impression of intelligence. Plus, I think he’s likely the second richest guy I’ve ever talked to. So yeah, I have no shame in cherry picking his ideas, making some money, and learning along the way. The way I see it, win or lose, I’ll either pay tuition to the market, or make some money. I’m young, and need to learn. I applied the exact same logic, that new derivative traders should use - you learn allot faster with skin in the game. Maybe this is reckless, I dunno. I know I learned really quick when my first derivative trade fell 100%, and my next one doubled, that was almost 4 years ago - I have no regrets over losing ALL the cash on that first trade.

Disclosure - like this matters…I AM short 20+ year Treasury Index via TBT.

Props to the people at the 3Tier Group for building a cool way to display the world wind data and american solar data.

They run a good blog too blogrolling NOW!

My sister and I, I can’t put my finger on it, see some fun form of value in the one laptop per child program. I remember mocking it a little at first…but…the smartest of people understand that they might not be right.

This post basically says out loud, that maybe, I might be wrong on the education thing I posted earlier today. I don’t know.

This TED talk is for her, and other extrapolators I know. Listen to it, read between the lines, and be inspired.

Yah, that’s right, I said Extrapolator. That’s my new word. It’s a leader + a thinker who extrapolates on ideas. Pretty sure it’s a real word already, but I’m positive i’m twisting the definition.

I consider myself one, my sister is one too.

…sort-of.

It’s on WALLSTRIP today, the explanation of the problem at least.

GOOD NEWS The problem has been solved! BAD NEWS is, Julie’s right that Bandwidth is finite. But who prospers when demand outstrips supply, I mean, beyond the obvious? I mean who wins? I’ll tell you, the guys selling the technology to make it seem less finite. Sandvine is that company. I hate being early. Stock chart gives me nightmares. But, the only reason I’m early is because Sandvine is in my backyard, I had an interview with them, a year ago…and they are hiring like mad and buying back stock NOW.

Did you see her offering $300M to the guy who can solve the problem? Well, the value is higher than that, much, But the solution is being offered by a $139M company. Quick math - uuughhh.

Not sure about the 95% vs 5% figure, it’s probably right. But she’s completely wrong about us catching up to the P2P group in usage anytime soon, like she hypothesizes. Our usage is growing, but so is theirs, Eg. Blu-Ray. But, that’s okay Julie, still love wallstrip!

Sandvine (AND CISCO) has said, last January, customers will push back purchasing technology for this solution, ‘because of the economy’. So Sandvine’s last 3 quarters have come up short, and revenue stopped going hyperbolic. But, my guess is, they understand their customers’ delaying the orders - and are going to surge when all the customers jump on it.

I went to a shareholder meeting in may, let me tell you, all systems are a GO baby!

Sincerly,
The bag holder

Americans got to solar & coal first.

Canadians invested in the oil sands & nuclear first.

Europeans invested in wind first.

BECAUSE…everybody sees the potential, in their own back-yards FIRST, then bids up PEs accordingly.  By the time the other markets catch on, well, they become the dumb money.

I was scared buying into Vestas a little bit ago, for this very reason, turns out it was smart - so far. But some people think wind stocks are something NEW.  Let me paint a picture; Vestas, a 15.3 Billion euro company has 23% of the global market share for installed capacity.  That’s - a big industry, a big company, it’s nothing new, and it’s the tip of the iceberg when you look at the maps of wind corridors in the United States compared to Europe.

I have my reasons why I think Americans are going to pay more than Europeans both for the stocks, and for the installations of wind farms (thus improving PEs and margins, for the already giant names like Vestas & Gamesa)

By no means, am I ahead of the Europeans.  But I feel ahead of the Americans, I mean, at least the average retail. Maybe I’m wrong. But 3 new ETFS JUST launched.  When it takes Boone to smack people upside the head,  you have to ask yourself, “am I the dumb money?”.  I sold UNG to somebody, at $62.30.  Case & Point.  Ahhhh don’t worry, I’m bidding these dips….more upside to come.

But here’s a sign I’m ahead of things on Wind.

Today, on BNN, one of the talking heads brings up Vestas.  A company that by no means was I first to get long.  He says “So who are they, what do they do? I’ve never heard of them…” …chances are, if you’ve heard of the stock, and already own it, you’re ahead of the game.  Normally this happens on small caps but WOW it hurts. ITS A  $24 B company. 35000 turbines installed.  marketshare LEADER!

He gets an explanation from a guest talking head, then asks “So how do I buy without an ADR?”

I think somebody told him backstage to ask that question, but for some reason it caught the other talking head off guard.

The other talking head says “Well,It’sAnOTC…TypeTrade’” almost in ONE syllable and continued more slowly “there is some liquidity, but to get access, a retail investor should buy our [lame mutual] fund”

In other lagging stories…the time to buy natural gas, was last December, it’s just going to get violent now…although should/will keep trending up.  It’s now time to short the companies who have to pay for Natural Gas…or buy the names selling equipment to the guys supplying Natty Gas, if I’m not already too late.

Anybody notice GTLS, Chart Industries? Did you see in the pictures of one of the slides on pickens plan, the NextGen Fueling station? Chart Industries owns NextGen Fueling.  Not sure what the OTC stock is doing, but GTLS is kicking all time highs…I’m liking that story, still digging around tho.

Yah…you know I keep getting more and more into the looming water problems for the world. Here is a July 3rd map of the droughts in the US.  Click it to see the entire thing

The monopolistic Bell & Telus, up in Canada, are going to start charging customers for incoming text messages. Not going to fly, unless Rogers does it too.

Look for yourself: http://tinyurl.com/5c5h7k

Learn & understand quality, not memorize & regurgitate quantity.

…this comes on the back of an 8 part video series with respect to the topic of miss-understood exponential growth, by the masses.

The series is presented by a prof, who lays out the simple arithmetic of the impossibility of infinite growth and then presents the corollaries and extrapolations with respect to demographics and energy.

It was nothing new to me, I’m sharing it with you, in case it’s new to you.

P2P file sharing still dominates bandwidth usage in North America, consuming 75% of the upload stream and 35.6% of the download stream. According to this short study/report on Trends in Broadband Traffic Demographics.

This study is done by a company, I own shares in, Sandvine. They are basically trying to help ISPs, prioritize packets and handle traffic on their networks, in the face of difficult bandwidth trends (Online video/media, P2P file sharing, etc.) The company’s revenue has been explosive quarter over quarter, with a stall in last two quarters. The stock chart is ugly, but I think it will be a great 10 year story. After buying this stock over a year ago, I went to my first annual share holder meeting, in May. I left the meeting more than doubling up my position.

They announce earnings early Tuesday A.M.

Long Sandvine.