Out Fox The $treet

Good video from John Ryding, chief economist at RDQ Economics and CNBC's Steve Liesman. Great discussion about the huge inventory liquidation the economy has seen in the first half of '09 and the positive impacts it will likely have on Q3 and Q4 GDP numbers. Anybody against the V shaped recovery just isn't paying attention to the numbers. I agree though that the economy still has structural issues and the Obama administration to deal with to have a robust economy going into 2010. The long term play is still BRIIC markets, but for the rest of the year domestic plays should bounce back nicely.

Not sure their is much news today other then a technical breakout. Competitor SVVS had better then expected earnings today so maybe this move is just follow thru combined with a great market today. TMRK continues to be a favorite of StoneFox with there strong ties to this govt that is making a huge push to the internet. Wouldn't chase here, but we definitely aren't selling anytime soon.

The current consensus estimates for the Q2 report to be reported by Hartford Insurance (HIG) after the close today is for $1.16. This estimate is pretty much in line with what HIG guided for after the Q1 report. Currently trading only above $15 today suggests that the market gives little value to those estimates. At a run rate above $4, HIG has a PE of just 4. Also with a book value above $40, HIG has two valuation metrics that suggest a much, much higher price. Why isn't it trading higher? Mainly because the market in general expects HIG to warn yet again. They've had a tough year or so and the market is typically slow to change opinions usually requiring a company to prove it first. Take Canseco (CNO) today. They are up 50% based on what appears to be in line results for them. After that, they still only trade at a PE of 3. With the huge rebound in the stock market, it's puzzling why Hartford is being so ignored. So much of their troubles came from investments tied to the...

The Richmond Fed Manufacturing Survey provides one the initial looks into economic data for July and so far it looks very promising. The survey showed a big jump to 14 from 6 and continues the trend of growth in this district. Unfortunately Richmond isn't as important as the Chicago or Empire indexes, but the trend is the key. Just about all activity was better then in June. Orders grew as the fastest rate since March 2004. This should all lead to a much better ISM Manufacturing Index. The Chicago PMI to be reported on Friday is expected to jump to 43 from a 39.9 reading last month. The Richmond report helps support that increase and even though it's still expected to be negative its a huge improvement over June. Looking at the chart of the Richmond Manufacturing Activity it shows what looks like a huge V. And some people still think we won't see a v shaped recovery. Just makes me wonder what charts they are looking at.

Just wanted to make a quick note that our first year of tracking this portfolio online is coming to a close at the end of this month. The performance has been just as good online as when StoneFox Capital tracked internally for the previous 1.5 years. With just a few days left, the Net Payout Yield Portfolio has outperformed the SP500 by roughly 6.5% points. It has solidly beaten this index in 2007, 2008, and so far in 2009. RETURNS Last Week 3.99% Last Month 8.29% Last 3 Months 20.65% Last 6 Months 21.11% Last 12 Months N/A Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception -14.44% (Annualized) -14.59% S&P500 RETURNS Last Week 3.29% Last Month 7.02% Last 3 Months 15.52% Last 6 Months 13.86% Last 12...

Last Thursday night, Rigel Pharma (RIGL) released disappointing results on its TASKi3 Phase 2b study on Rheumatoid Arthritis (RA). The results showed that the placebo worked basically as well as the R788 pill. Now here is where you need to understand the stock and what was being tested or otherwise you'll be forced into a trading decision by the market and not knowledge. First, this test was only to determine whether the R788 drug worked on RA patients that failed to respond to at least one biologic treatment. Therefore, this result was much less material to the company then the TASKi2 results on July 9th that showed the drug was as effective or more so then existing medicines that typically require shots. "Our objective with R788 in RA is to position the product after methotrexate and before biological therapies are used. We have shown excellent results in that patient population in our earlier TASKi1 and TASKi2 studies, and we believe that patient population represents the...

This fancy chart was picked up from CNBC showing what appears to be a huge run up to the 11,600 range on the DOW. It was just 2 weeks ago that people were calling for a H & S formation on the major averages to lead to this huge downfall. Instead we've gotten the reverse. At Stone Fox Capital, we've become bigger users of technical analysis to guide trade decisions. The big Hedge Fund community uses charts for a big portion of their trades making it impossible to ignore. Typically we use them for verification of a trade we've decided to place based on fundamental analysis. Using the chart for entry/exit points has allowed us to make several profitable trades on stocks that we own and limited our downside exposure. For the last few months we've been very bullish on the markets with the hopes of a V shaped recovery. Too many of the analysts and economists proclaiming that such a recovery isn't possible still don't grasp the impacts of a market that will make th...