Business
Bakes’ Takes Podcast Show Notes –Saturday June 6, 2020 :28 1) I am wrong on stocks for now, but did not lose money.2) I am overweight. Covid-19 beating MARSOC. Neither 1 nor 2 are permanent.https://www.youtube.com/watch?v=IGgBHRRtz38My MARSOC video. Epileptic water buffalo.3) It will be tough to make money in bonds from here. 1:10 60/40 Up 1.1% YTD, SPX -.80%, AGG +4.0% 1:56 50/30/10/10 Up 1.9% YTD, SPX -.80%, AGG +4.0%, GLD +10.9%, Cash 0% 3:26 You vs. Pros. You want to make money most years and compound. Pros focus on outperforming vs. an index. They are likely focusing on looking as good as possible when the show eoq and write investor letter. I am going to find something to invest in, up 1.9% with less risk while we research before pounce not too bad. 5:35 I’m wrong for now, focused too much on volume. Usually works, didn’t this time. Friday first time up day on above average (25%) volume. Price is what you cash in. I dislike watching economic reports but the jobs report is clearly impactful. SPY yield 2.3% down to 1.96%.9:11 10-year Treasury yield surges above 0.9% after better-than-expected jobs report2.5 million jobs, 70 bps to 90 bps +. 9:48 Widest spread in 10 years. Just starting to narrow. 10:09 Last 50 years bonds almost always yield more than stocks. 38 years bond yields > SPX yield. Parts of last 12 years it flipped. TINA effect bigger than I thought. 11:24 Last 40 years, 54 bps is the low, now 90 bps+. Tough to make money in bonds, rise to 137 bps resistance appears reasonable.Bakes’ Take—Bonds are ballast for asset allocation, future capital gains will be elusive. 12:19 SPY—Close above 303, volume below average. Mischievous bastard. 13:01 David J. Bucknell—Set for readjustment? Re-examine target? Sell original investment? Let the rest ride. My sell discipline, long way from moving averages. 14:53 24 down revisions! Likely every sell-side analyst. Then beat and raise. Markets love that. 16:15 Stock is expensive, always has been. 74 P/E, 10x sales leaves little room for missteps. 16:20 Net margins 16% great, ROE 38% also great. 19% top line growth, 36% bottom line growth coveted in this market. 17:01 2.5 days short not much, rising shorts show still skepticism. Balance sheet, free cash flow in good shape.Bakes’ Take—Take the initial investment off the table. Let the rest ride. Follow my sell discipline. 18:19 VIXM—picking up on day market up big, not sure why. Volume impressive, 5x normal. 19:18 I know it’s different this time, but… 19:32 Small caps overvalued, but not yet shorts, there is a difference. 19:54 We’re going to need a bigger chart! Extreme bulls/call buyers. Please subscribe, review and share my Bakes’ Takes Podcast on Apple, Spotify or your preferred platform. Please also subscribe to my Bakes’ Takes YouTube Channel, the audio is the same but the charts that I reference are on the screen. Follow us on Twitter @BakesTakes_ and other social media. Please use your voice memo app, tape your question(s) and email to bakes@bakestakespodcast.com or write if you prefer. I will also keep you anonymous is you’d like.Thank you for listening, Mike Wilson is my producer. Have a great week. Bakes 21:05 Much needed levity—Gary Gulman, College Professor Role Play, reminded after watching Jokerhttps://www.youtube.com/watch?v=XMOKMS1MURk