Guy with a “Whites Only” sign in his conference room tells others not to discriminate

Friends on Facebook have been linking to Tim Cook’s editorial in the Washington Post. Apparently it makes people feel good to “click up” and say “I too oppose discrimination.” This is an act that Mr. Cook says “takes courage.”

Whom is Tim Cook fighting? The ignorant masses in Indiana and Arkansas (and 18 other states), whom he claims are likely to put up “Whites Only” signs on their shop doors. Why is this so upsetting? Cook apparently strongly believes that “Whites Only” signs (Helvetica font) should be restricted to Apple’s executive offices (check out the faces of the folks in operational roles).

Philip Greenspun’s Weblog

A clear way to trade Fairway

Written By: DragonFly Capital

sns-bananas

Grocery stocks gathered some strength towards the end of 2014, but as the holidays ended so did the strength. Many are just stagnating. You might think the better word for a grocery store would be rotting. But that is not the case. These stocks are not falling fast. Some minor pullbacks, or sideways consolidation of the latest move up. The favored term is a ‘healthy pause.’ But who wants to own a pause?

There is one stock in this space that is showing some sings of a Spring awakening though. Fairway Group ($ FWM) has been that younger sibling in the grocery space. Following the others, with a bit of a lag. But the chart below suggests it is ready to come out of the shadows.

fwm

Fairway started 2015 with a move higher but then consolidated the move beginning in mid February. The difference between it and Whole Foods ($ WFM), The Fresh Market ($ TFM) and Natural Grocers by Vitamin Cottage ($ NGVC) though is that it is breaking the consolidation to the upside. Time to get on board! The rising RSI in the bullish zone and the MACD crossed up and rising support the breakout continuing.

The break of the channel targets a Measured Move higher to 8.65. That is a lot of bananas. Using a stop under 6 gives a really good reward to risk ratio going forward. No coupons needed.

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Ellen Pao v. Kleiner Perkins wrap-up

The jury has returned and Kleiner Perkins is not guilty of sex discrimination.

How is it possible to lose a lawsuit like this in one of the most plaintiff-friendly jurisdictions in the world? As noted in my previous postings (first; second), it was hard to explain why the partners of Kleiner Perkins wanted to make themselves poorer by promoting an unqualified man in favor of a qualified woman. Discrimination of any kind might make sense for a manager at a government agency. His or her salary won’t change if less qualified or productive people are hired to fill jobs. His or her customers cannot be wooed away by a more efficient competitor. In addition, Pao had the “bad fact” of the affair with the married co-worker, a circumstance that most people can understand might lead to on-the-job problems.

Why did people think that this case was strong? My theory is that American journalists and pundits, nearly all of whom have no technical education or experience with industry that depends on engineering, simply wanted to write about gender discrimination. Here’s an example from Forbes: “Cracking The Boys Club: Jenny Lee On What It Means To Be The Top Woman In Venture Capital” (March 25, 2015). Forbes talks about VC being a “boys club” (headline) and implies that the U.S. VC world is not “open to female venture capitalists”. These statements are directly contradicted by the woman who is supposedly the subject of the piece. The interviewee, who actually some experience with venture capital and engineering, says that VC “is capitalism at its ultimate. To do well you have to understand this point. No one is going to be nice to you because of your age, or where you come from or your gender. The VC industry is about survival of the fittest, and that’s the same mindset we give to our entrepreneurs.” When pressed as to why there are few female VCs she points out that less than 10 percent of her engineering class at Cornell were female.

Plainly Ms. Pao would be close to $ 200 million richer today if the jury had been 12 journalists from the New York Times and other publications that reported on the case as though the guilt of Kleiner Perkins had been established prior to trial. Denied a place in the jury box, what are these folks writing now? That this lawsuit was somehow useful in “starting a conversation.” None of the articles about how great this is for the nation mention the fact that it had to cost Kleiner Perkins at least $ 10 million in legal fees and distraction/time. That would have been enough to fully fund 100 women to get engineering bachelor’s degrees and join the STEM workforce that Barack Obama and the New York Times editorial board say is a good place for people other than themselves (previous posting). Which advances the cause of women in engineering more, 100 women with engineering degrees or a conversation that starts “So the flight attendant on the $ 65 million Gulfstream was pouring Champagne for me but I couldn’t enjoy it because some douchebag on the far end of the cabin was talking about the Playboy Mansion…”?

The story that did not seem to capture the media’s or the public’s attention was “Just how much litigation can one couple generate here in the U.S.?” According to this this summary article and this WSJ piece, Pao and her husband, Buddy Fletcher, have put lawyers to work on at least the following matters:

  • should Buddy Fletcher’s race discrimination case against Kidder Peabody be heard in court or in arbitration?
  • how much cash should Buddy Fletcher get from Kidder Peabody as a result of having been black?
  • how much investor cash did Buddy Fletcher steal from his hedge fund?
  • did fellow co-op owners at The Dakota refuse to approve his acquisition of an apartment because they thought that he was black or thought that he would soon have no money? (2011 lawsuit)
  • should Buddy Fletcher be fined or imprisoned by the government? (taxpayer-funded Justice Department and SEC investigations)
  • should some of Buddy Fletcher’s, uh, “buddies” (affiliated companies/shells/etc.) have to repay various investors, including some state pension funds?
  • how annoying do your fellow passengers on a private jet have to be before you can say that you would rather have flown JetBlue?
  • if you sue your partners do they still have to greet you enthusiastically every morning when you show up to the office? (the retaliation claim of the lawsuit, which I am surprised that Pao did not prevail on)

The New York Post says that the overdue fees in just one of Fletcher’s cases are $ 2.7 million. Let’s assume that the Dakota case is the simplest, $ 1 million in total fees. Let’s assume the Kidder Peabody case ran up fees on both sides slightly larger than the ultimate payout to Fletcher: another $ 2 million. The hedge fund debacle, including what the taxpayers are incurring, maybe $ 20 million in fees? Then count both sides of the Pao case against Kleiner at $ 15 million? That’s a total of roughly $ 40 million in legal fees…. for the cases we actually have heard about. How much litigation is that if you go to a country with a more streamlined legal system? We just finished interviewing a Germany divorce litigator. She told us that fees in a custody lawsuit come from a table published by the court. Each side’s attorney can charge 773.50 euro. That’s $ 842 per side or $ 1684 in total to decide a case. So Pao and Fletcher have personally generated as much work for attorneys as 23,753 German couples who fight over custody. Germany has a divorce rate of about 2/1000 and a population of 80 million. That works out to 160,000 divorces per year. If we assume that half of those involve minor children and that a third of the couples with children actually fight over custody. Thus Pao and Fletcher have generated more work for attorneys than the entire divorcing-with-children population of Germany, a country in which it is impossible to get divorced without lawyers and courts (i.e., they don’t have an administrative process as might be used by Danes or Swedes).

[You might ask why it is reasonable to assume that only a third of divorcing German couples with children would have a custody fight. First, the potential cash profit from obtaining custody of a child in Germany is limited to about $ 6000/year (compare to $ 72,000/year for the top of the Utah guidelines, for example, or the unlimited amounts available in California, Wisconsin, etc.). The government doesn’t hold out the same financial incentives to fight as most U.S. states. Second, the outcome is pretty easy to predict. The attorney that we interviewed said that she, after practicing for 12 years, has never been involved in a contested custody case in which the father prevailed. Very likely the percentage is smaller, in which case Pao and Fletcher have driven enough legal fees to pay for all of the custody lawsuits in Germany plus a lot more!]

Note that the couple managed to run up all of these legal bills without ever (1) investing money productively for investors, (2) delivering a service to consumers, or (3) designing or engineering a product.

What do readers think? What will be the long-term effect, if any, of this lawsuit? And what happens to Ellen Pao now? Does she (a) pull a Judy Faulkner by starting her own company and getting crazy rich by doing a better job than competitors? (okay, and also getting the federal government to force customers to buy the product; sometimes it is fun to ask “Imagine how much richer and more successful Faulkner would have been if she had been a white man.”), (b) become a generic litigious celebrity like Kim Kardashian?, or (c) something else?

Philip Greenspun’s Weblog

Wake Me Up When The Range Day Ends Market Update and Stock Scan March 27

Wait – was the market open today?  So far nothing’s happened.

I’m kidding but that’s not far from the truth as today has devolved into a low volatility tight range day.

Let’s dive inside the sector and stock action and get away from this boring price action in the S&P 500 index.

There’s not much to say about the sideways action which has taken the form of a triangle.

Don’t guess in which direction price will break; instead note the level and join the buyers/bulls on an upside break above 2,060 or the bears on a breakdown under 2,057.

Let’s see what our Breadth Chart reveals about current market strength (or weakness):

There are pockets of strength… but unfortunately they send a general bearish message.

Relative Sector Strength today comes from Staples, Health Care, and Utilities (defensive names).

Weakness occurs in Financials and Energy.

It’s a sign of defensiveness – at least in terms of money flow – when money focuses on the ‘bearish’ sectors.

We have potential bullish trend continuation plays in the following stocks from our scan:

Olin (OLN), Carnival (CCL), Biomarin (BMRN), and Royal Caribbean (RCL).

Potential downtrending candidates exist in stocks showing relative weakness today:

Starwood (STWD), Toronto-Dominion (TD), Valero Energy (VLO), and Tesla Motors (TSLA)

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

SPY Trends and Influencers March 28, 2015

Written By: DragonFly Capital

A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators suggested, heading into Spring, College Basketball’s March Madness, the April options cycle and the last full week of March, that the equity markets were looking strong. Elsewhere looked for Gold ($ GLD) to bounce higher in its downtrend while Crude Oil ($ USO) consolidated in its downtrend.

The US Dollar Index ($ UUP) was consolidating the move up and US Treasuries ($ TLT) were looking strong. The Shanghai Composite ($ ASHR) was also strong and looked to move higher while Emerging Markets ($ EEM) were biased to the upside in the short run but not looking really strong.

Volatility ($ VXX) looked to remain subdued and drifting lower keeping the bias higher for the equity index ETF’s $ SPY, $ IWM and $ QQQ. Their charts also looked good for more upside with the IWM the strongest even at all-time highs, and the SPY and QQQ showed signs of a possible short term pause before another move up.

The week played out with Gold continuing higher to end the week up while Crude Oil started started higher and continued until giving back a lot late in the week. The US Dollar found support in its pullback while Treasuries ended their run higher, retreating on the week. The Shanghai Composite consolidated sideways at highs while Emerging Markets continue to flounder like a torn flag in the wind.

Volatility ha a small spike but quickly fell back. The Equity Index ETF’s started the week leaking lower before a big mid week drop and then consolidation, ending the week lower. All holding near the early March lows. What does this mean for the coming week? Lets look at some charts.

SPY Daily, $ SPY
spy d

The SPY started the week consolidating at the top of a long candle, where it ended last week. But by Tuesday it was moving lower, accelerating down with a near Marubozu candle Wednesday. Thursday saw a Spinning Top Doji, a possible reversal candle, and it confirmed higher Friday, but not in a very strong way. The SPY ended the week 2.2% lower. The RSI on the daily chart is is turning as it touches the bottom of the bullish range at 40, while the MACD continues to fall. The Bollinger Bands® on this timeframe are pointing slightly down as well. A bearish tone on the daily with some hope for a reversal from the candle sticks and the RSI.

On the weekly chart the SPY almost printed a bearish engulfing candle. It was just shy on the upper wick, but none the less last week’s gains are gone. The RSI is still over the mid line in the bullish range, while the MACD is pointing and crossed down. The price goes into next week at the early March bottom. Will this make a double bottom and head to new highs? Or is this a pause enroute to another test at 198? There is resistance at 206.40 and 209 followed by 210.25 and 212.25. Support lower comes at 204.40 and 203 followed by 202 and 200 before 198.60. Consolidation in the Uptrend with a Downward Short Term Bias.

SPY Weekly, $ SPY
spy w

Heading into Quarter end and a holiday shortened week the Equity markets look short term vulnerable in their long term uptrends. Elsewhere look for Gold to try higher in its short term uptrend but with trepidation while Crude Oil consolidates back in a channel. The US Dollar Index may continue to consolidate in its uptrend with a bias higher while US Treasuries are biased lower as they consolidate. The Shanghai Composite looks better to the upside in its consolidation and Emerging Markets are biased to the downside in their broad consolidation.

Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts show a mixed bag with consolidation in the uptrends ion the longer timescale, with the IWM the strongest, while on the shorter timeframe the IWM and QQQ may reverse higher with the SPY still looking vulnerable.

Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview March 27, 2015

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Container Ship Stocks are Sailing Higher

Written By: DragonFly Capital

agnes_rickmers-9289972-container_ship-8-163734

Whether it is because they are being used to store oil out at sea or move stuff around the globe, container ships are a hot topic. But they are also making for hot stocks. Last week Nordic American Tanker Shipping (a premium Top 10 pick) rose over 10% and it is still going. But this blog is not about what happened, rather about what could be. And there is another container ship stock ready to break out to the upside.

dac

The chart of Danaos ($ DAC) above tells the story. The area from 6.22 to 6.45 has been important as resistance since April last year. And now after making a low in October it is addressing that resistance for the 4th time, each for a higher low. That creates an ascending triangle pattern, which for technicians points to a move to 8.90 should the price move above it to the upside.

The momentum indicators are mixed currently. The RSI is bullish and rising, supporting a break higher. But the MACD is not as bullish. It has pulled back in a shallow arc and is starting to turn higher. If it should cross the trigger line then it too would be bullish. The Bollinger Bands® have squeezed, which is often a precursor to a move, so the timing may be right as well. Look for a break over 6.45 to ride the high seas in this stock.

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Sheryl Sandberg sweeps away sex discrimination at Facebook

A friend on Facebook who also happens to work at Facebook posted the following:

?#?ellenpao? fired despite her results & despite them being credited to less competent men. ?#?whendoesitend? I am so happy to be at Facebook now where Sheryl Sandberg leads on culture. The stories I could tell about other places.

She linked to a story on Business Insider about the trial in Ellen Pao’s lawsuit against Kleiner Perkins.  Right next to the story that she referenced was a link to “A woman has hired Ellen Pao’s lawyers to sue her former employer Facebook for sex discrimination and harassment.”

Philip Greenspun’s Weblog

Help! This Isolation is Killing My Trading!

Dear Mike,

I am almost through reading your book One Good Trade. It’s phenomenal! Now one of my favorite books about trading, it really altered the way I think – helping me purge the psychological demons and reinforce good habits.

I completely agree with your viewpoint that trading as part of a team compounds the learning process. I have been day trading since the beginning of 2014. I have tried out chatroom communities like (deleted) and (deleted) and made friends with great traders whom I think of as my mentors, but I still feel isolated. I live in Indianapolis and work from home. Chatrooms are just not the same Read more […]
SMB Capital – Trading Education

Macro Week in Review/Preview March 20, 2015

Written By: DragonFly Capital

Last week’s review of the macro market indicators suggested, heading into the March Options Expiration week that the equity markets were a bit mixed, mostly better looking to the downside. Elsewhere looked for Gold to continue lower along with Crude Oil for the week. The US Dollar Index might consolidate in the uptrend but had a clear bias higher while US Treasuries were biased lower. The Shanghai Composite was trying to break consolidation to resume the uptrend while Emerging Markets were biased to the downside still. Volatility looked to remain subdued but above the low range of the early 2014 keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, but with the wind easing at their backs. Their charts all were consolidating in the short run with the bias to the upside for the IWM while to the downside for the SPY and QQQ. The long term uptrend remained in tact for each though.

The week played out with Gold probing lower before finding support and rebounding to end the week up while Crude Oil also started lower but rebounded late in the week. The US Dollar moved over 100 and then pulled back while Treasuries moved to the upside through resistance. The Shanghai Composite continued higher to 7 year highs while Emerging Markets bounced modestly. Volatility settled and moved to a 3 month low. The Equity Index ETF’s responded by moving higher, with the IWM reaching a new all-time high. What does this mean for the coming week? Lets look at some charts.

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

The post Macro Week in Review/Preview March 20, 2015 appeared first on Dragonfly Capital.

Dragonfly Capital

The Second Week of More Mindful Trading

The Second Week of More Mindful Trading
In this post, I will continue my eight week experiment with cultivating mindfulness and trading. The first post in the series can be found in the post Eight Weeks to More Mindful Trading.

Just in case you missed that post, I will provide a brief refresher on mindfulness. The topic is all the rage right now because people want to take back control of their attention span and to beat back the numerous distractions in everyday life. Mindfulness is about learning to control your attention and your focus, so that you can observe your thoughts and feelings without necessarily acting on them.

When Read more […]
SMB Capital – Trading Education

The Indian market remains rather Nifty

Written By: DragonFly Capital

india-145955

The news the last 18 months has been littered with global financial debacles. The Euro is collapsing, the Yen too. China’s economy is being managed to a lower level and rates falling. The US had its share as well. All of this bad news has led to higher markets across the board, albeit with some trepidation along the way.

nifty

Kind of lost in the shuffle has been the Indian Nifty Index. The chart above shows that it went through a change of character in early 2014. Moving from a consolidation range to a rising market. Since then it has not looked back. Up over 38% at is peak a couple of weeks ago it is pulling back. But pulling back for the Nifty has meant about a 500 point move on an index holding around 8700. Far less than 10%. This has made for a very tight channel running higher.

How high will it go? Perhaps it hit the top two weeks ago at 9000, the round number. Or maybe it bounces off of the bottom of the channel again, roaring to a new high. I cannot tell you. But I can tell you that from the price action of the last 15 months with the Nifty at the bottom of the channel, it is a good reward to risk area to gain exposure to India. Should it break the channel to the down side then stop the trade out.

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Dragonfly Capital

Free-range Parenting and Rear-Facing Car Seats Related?

Free-range parenting, and by implication the opposite (helicopter parenting), seems to be in the news all the time (example from today’s New York Times that talks about the “narrowing of the child’s world has happened across the developed world”).

At the same time I have been poking around to find a new car seat for our son (will be 16 months old when the seat arrives). I’m discovering that the goal of safety advocates is to keep children rear-facing until they are age 4 or 5. All of the articles talk about how this makes children 50 or 75 percent “safer” but there is no mention of the actual statistical risk. Is the risk of injury in an accident being reduced from 10%/year or from 0.0001%/year? None of the articles include this information. Nor do any say “You could cut your child’s risk to zero by leaving him or her at home, buying a house that is walking distance to school (and where no streets need to be crossed), not signing up for Russian Math or Kumon unless those are offered within walking distance from your house, etc. You could also cut the risk in half by getting a minivan instead of a compact sedan. You could cut the risk by at least another fact of two avoiding driving at night, in the rain, or when you’re tired.”

Personally I try to avoid schlepping children around in cars because it seems like a second-rate environment for a child to learn/develop.  But to the extent that they must travel in a car with me I try to use the time to point out stuff that we can see out the window. I’d be interested to hear from readers, e.g., in Scandinavian countries where supposedly rear-facing until older ages is common, how in-car conversations about the scenery work when a child can’t see the same things as the adults in the car.

Parents spend so much time these days trying to make sure that every possible moment is spent on some sort of enrichment activity. Could it be that the rear-facing idea reduces the child’s mental enrichment to the point that the reduction in injury risk is not worth it? (“There is no level of acceptable risk” is not a sensible answer because if a parent truly felt that way the child would almost never be in a car at all (see above).)

[Separately, I recently got a letter from the school superintendent here in our (rich) suburb of Boston. This lists a lot of hazards facing children but car accidents are not among them. Here’s an excerpt:

“If you are a parent, at some point it is likely that your child or someone they know will face one or more of these issues…

  • Mental Health
  • Substance Use/Abuse
  • Domestic Violence
  • Learning Differences
  • Bullying
  • Stress
  • Suicide Prevention
  • Eating Disorders
  • Sexual Health
  • Autism Spectrum
  • Resiliency

… Don’t wait until your child is facing an issue to become educated. Prepare yourself now. Early awareness and intervention are the best methods of prevention.”]

Philip Greenspun’s Weblog

What do iOS gamers think of Patchmania?

Folks:

Today marks the release of Patchmania for the iPad/iPhone. It is a free download with in-app purchases. So I would be interested to hear from game-loving iOS users what they think of the puzzle game. I love it (on an iPad 3), but I’m wondering if that is because I know the developers.

Thanks in advance for any feedback.

Related:

Philip Greenspun’s Weblog