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DAILY DIARY

Doug Kass

Adding to a Short

  • Prompted by weak guidance.

I'm adding to small short in Starbucks (SBUX) after its weak guidance.

Position: Short SBUX

Earnings Update

  • A lot of earnings action after the close.

Here's a look:

Most Up

Source: Bloomberg

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Most Down

Source: Bloomberg

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Position: None

Qlik Beats!

  • As expected.

Qlik Technologies (QLIK) beats.

Position: None

Chubb Beats

  • Huge!

Break in: Huge beat by Chubb (CB).

Position: Long CB

Market on Close Imbalances

  • How much to sell?

My mavens on the floor of the exchange see about $170 million to sell on the close.

Sectors to buy include consumer staples at $55 million and utilities at $25 million. Financials have $200 million to sell, and energy has $55 million to sell.

ExxonMobil (XOM) has $25 million to buy, Procter & Gamble (PG) has $15 million to buy, and Johnson & Johnson (JNJ) has $12.5 million to buy. Sales include Anadarko (APC) at $60 million and Prologis (PLD) at $55 million.

Position: Long XOM and PG

AAMC Amplified!

  • The stock is up big time!

Altisource Asset Management (AAMC) is now trading at $206, up $55!

I am offering out some more stock in line now.

Position: Long AAMC

Why the Weakness?

  • A report is out stating that the Deutsche Bundesbank rejects outright monetary transactions.

Proximate cause for market weakness in last few minutes: The Deutsche Bundesbank rejects outright monetary transactions in opinion for top court, according to Handelsblatt.

Position: None

I SPY a Pattern

  • Too good to be true.

This is too good to be true (from the standpoint of my ursine market view), but I would observe a similar pattern has developed in the S&P 500.

SPY

Source: Bloomberg

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Position: Short SPY

From the Street of Dreams (Part Deux)

  • Posco lowered to Neutral at Credit Suisse.

Break in: Credit Suisse is lowering Posco (PKX) to Neutral now.

Position: None

For Apple Heads

  • Who wants tickets?

As of 1:00 p.m. EDT, Apple (AAPL) is now selling tickets to its June 10-14 conference, during which developers will get a new look at the company's mobile software platform.

Position: None

Covered Mr. Softee Short

  • I am no longer in the name.

Houskeeping item: I am out of Microsoft (MSFT) short.

Position: None

Added to Three Shorts

  • Namely, IWM, Danaher and Yahoo!.

I added to shorts in iShares Russell 2000 Index Fund (IWM), Danaher (DHR) and Yahoo! (YHOO) today.

Position: Short IWM, DHR and YHOO

Altisource Gains Altitude

  • The earnings call is going well.

Altisource Portfolio Solutions (ASPS) is getting jiggy.

I am still on the earnings conference call, which is going well.

Position: Long ASPS

Oil Vey!

  • Crude is up nearly 8% over the past week.

The price of crude oil has risen by almost 8% over the past week.

Position: None

Lone Tech Holding

  • It's eBay.

With the exception of eBay (EBAY), which i have owned since it was $11.60 four years ago, I don't own a single technology stock.

Position: Long EBAY

Adding to Two Longs

  • Namely, Northwest Bancshares and Monitise.

I am still adding to my Northwest Bancshares (NWBI) and Monitise (MONI.L) longs.

Position: Long NWBI and MONI.L

Where It Stops

  • The stop level on my Microsoft short is $32.55.

I am putting in a stop on my Microsoft (MSFT) short at $32.55.

Position: Short MSFT

Shorting Mr. Softee

  • I shorted some shares at $32.78.

I just took a short rental in Microsoft (MSFT) at $32.78.

Position: Short MSFT

From the Street of Dreams

  • Barclays upgrades Colgate-Palmolive to Equal Weight.

Break in: Colgate-Palmolive (CL) was just raised to Equal Weight at Barclays.

Position: Long CL

AAMC Hits a New High

  • Shares hit $164.

We have a new all-time high for Altisource Asset Management (AAMC) at $164, more than $90 above my original purchase late last year.

Position: Long AAMC

Charting a Correlation

  • Namely, between the S&P 500 and the yield on the 10-year U.S. note.

Below is a good chart that demonstrates the relationship between the S&P 500 and the yield on the 10-year U.S. note.

S&P 500 vs. 10-Year Yield

Source: Bloomberg

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Position: Long TBT; short SPY

It Can Happen

  • It's happened before, and it can happen again.

The most often question I am asked by subscribers is whether bond prices can drop (and yields rise) when stock prices correct.

To that I say, adamantly, yes!

Again, see my presentation on shorting bonds back last may at the value investing congress in Omaha.

Position: Long TBT; short SPY

In Line at ASPS

  • The company's reported EPS met expectations.

Altisource Portfolio Solutions (ASPS) reports in-line earnings at $1.10 a share.

Position: Long ASPS

Initial Jobless Claims Data

  • Stock futures are unchanged, but bond yields are floating up a bit.

The claims number was good at 339,000 vs. the 350,000 consensus.

Stock futures are unchanged (+7) from the release, but bond yields are floating up a bit.

Position: Long TBT; short SPY

Recommended Reading

  • Run, don't walk, to read "The Mysterious World of Bitcoin: Does It Have Staying Power?" in this week's Knowledge@Wharton.

"The Mysterious World of Bitcoin: Does It Have Staying Power?" is an an interesting column in this week's Knowledge@Wharton.

Position: None

Early-Morning Market Look

  • Let's take a peek at the overnight/morning markets.

Here's how things look as we start our day.

  • S&P futures up 6;
  • European markets up;
  • euro up;
  • crude up 0.3;
  • gold up 22; and
  • 10-year U.S. note yields 1.71%.

The most important news overnight was a Bloombergreport that central banks are exposing their balance sheets to ownership (and volatility) of equities.

Central banks, guardians of the world's $11 trillion in foreign-exchange reserves, are buying stocks in record amounts as falling bond yields push even risk- averse investors toward equities.

In a survey of 60 central bankers this month by Central Banking Publications and Royal Bank of Scotland Group Plc, 23 percent said they own shares or plan to buy them. The Bank of Japan, holder of the second-biggest reserves, said April 4 it will more than double investments in equity exchange-traded funds to 3.5 trillion yen ($35.2 billion) by 2014. The Bank of Israel bought stocks for the first time last year while the Swiss National Bank and the Czech National Bank have boosted their holdings to at least 10 percent of reserves.

"In the last year or so, I have spoken with 103 central banks on diversification," Gary Smith, London-based global head of official institutions at BNP Paribas Investment Partners, which oversees about $649 billion, said in a phone interview. "If reserves are growing, so are diversification pressures. Equities are not for every bank tomorrow, but more are continuing down this path."

Managers of banks' assets are looking for alternatives to holding government bonds after efforts to stimulate growth from the Federal Reserve, the Bank of Japan and the Bank of England helped send yields near to record lows. Central banks' foreign- exchange holdings have increased by about $8.5 trillion globally in the past decade, exceeding levels needed for day-to-day currency administration.

From the Street of dreams:

  • Barclays is reemphasizing its Buy of Berkshire Hathaway (BRK.A/BRK.B);
  • SunTrust ups Procter & Gamble (PG); and
  • Wells Fargo drops T. Rowe Price (TROW).

Below is a list of my portfolio positions' scheduled earnings reports and consensus estimates.

Earnings Calendar

Source: Bloomberg

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And here is an economic calendar for today.

Economic Calendar

Source: Bloomberg

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Position: Long TBT and PG; Short SPY and BRK.B
Doug Kass - Watchlist (Longs)
ContributorSymbolInitial DateReturn
Doug KassVKTX4/2/24-26.73%
Doug KassOXY12/6/23-11.26%
Doug KassCVX12/6/23+14.24%
Doug KassXOM12/6/23+18.09%
Doug KassMSOS11/1/23-15.33%
Doug KassJOE9/19/23-10.23%
Doug KassOXY9/19/23-23.14%
Doug KassELAN3/22/23+40.53%
Doug KassVTV10/20/20+68.93%
Doug KassVBR10/20/20+80.53%