Hate to say I told you so

But I told you so. It just took way longer than I thought it would.

zvzd

Should you buy now? No. The resistance levels are at 4000 and 4500. With the price being at just around 4000, it will most likely stagnate or fall, probably towards 3500 or 3000. Long term, it will likely go to 9000 after this one, so if you hadn’t bought your stash yet, keep a cool head and you’ll likely still have an opportunity to do so.

The reason for that is that if we look at the fundamentals, it’s still a good buy in the long term, nothing really changed in the last year or so. That’s why I haven’t been writing in a last year or so. Some people feel the need to reiterate their opinions over and over again. I find that to be somewhat over the top, especially since it doesn’t make me any direct profit and I’m not that interested in self-marketing.

Bad times ahead…

S&P seems to have broken a 5 year long uptrend. I’ve noticed this a few weeks ago, but it looks as it’s now confirmed:

index

What’s really bad news is that the central banks have really used up all their ammo, and they can’t inflate the bubble anymore. Also, there’s a very interesting indicator, called “total market cap to GDP ratio”, which pretty much shows whether the economy is overbought or oversold. Currently we are at near 120% of what it’s realistically worth. A strong drop is to be expected. I wouldn’t be surprised to see the S&P at 1400, or even 1200 in the near future.

http://www.gurufocus.com/stock-market-valuations.php

I believe Europe will not suffer as much, since the markets are in a pretty bad shape already, and local QE is just starting. Still, I’d rather stay in gold and bitcoin nowadays. Gold is getting close to its 1000$ resistance line, while bitcoin is currently quite a good buying opportunity thanks to forking issue which is imho overblown. Whichever blockchain bitcoin ends up on, it’s going to work just as it did before, with possible minor glitches at worst.

Though the most secure course of action may be shorting S&P.

Crobex

I haven’t written in a long time because, really, there wasn’t much to write about. One thing I’ve learned, though, is that prolonged periods of boredom are often followed by pretty wild turmoil.

What caught my eye is the following chart here:

crobex

It’s a picture of Crobex dating all the way back to 1998. What is quite stunning is that there is a support line that has been holding steady ever since then. We’ve hit that trend line once again, which means that some pretty wild swings could be up ahead. My opinion is that it is more likely to go up than down, because of two things. First is the EU QE which is likely to increase even further. The second is the fact that Croatia is slowly moving out of the recession phase.

Now, although I’m not a great fan of the economy’s overall health, EU and USA’s as well as Croatia’s, but we have already seen what massive amount of printed money can do to the stock market. My prediction is that similar thing will happen in the EU, and Croatia as well.

Alternatively, the index could actually penetrate the support in case Greece talks fail and all hell breaks loose. But as things stand now, it looks as if the deal will be reached.

Greece [GREK]

It looks as if the crisis in Greece may be near its end. There is quite an interesting W pattern which formed over the last 2 months regarding GREK, the index fund that tracks Athens stock exchange. Without further ado, here’s the chart:

grek

We have broken through the resistance line, and are on the way to approximately 14.5$. This means that the stock has the potential to go upwards some 20-ish % in the next month or so. Not bad at all. I also believe it may give a boost to other southern EU indexes as the ones I’ve already mentioned earlier (EWI, EWP, PGAL).

Annual and Quarterly Reports

So I haven’t written anything in a while, because really, there wasn’t anything to write about. I still don’t have much remarkable to say that I didn’t say already, but I’ll go over the freshly released results for the companies that I find interesting or that I’ve written about before in order to compare how my expectations aligned with reality. So let’s go.

ZVZD – A barely negative result in a quarter that is usually negative. Nothing great, nothing horrible, still boring and cheap.

KOES – Mild downsizing, but improved profitability. My guess is that the downsizing is a fairly temporary transition from CEFTA to EU markets. I believe the overall sales volume will increase in the future as new deals are made with EU grocery chains. Fundamentals are simply amazing – P/E 7, P/B and P/S below 1, debt 75%, EV/EBITDA 4.5…

SNBA – Still the cheapest bank on the Croatian market, but profitability is still low. At least it’s not negative, so I still consider it to be a good buy.

VPIK – A bit of disappointment here, getting to profitability may take longer than expected.

PTKM – A surprisingly good report (considering that mildly negative earnings are really good when measured by the standards of this company). What stands out is that their core business could actually be profitable if they weren’t stuck under a big pile of debt. Perhaps through some restructuring they could actually turn profitable, but that profitability will likely stay low for years to come considering the fact that their debt is huge.

RIVP – It looks as this year they may earn enough money to actually be forced to share some with their shareholders. I wouldn’t count on it, however, considering their good skills in hiding actual profits.

SAPN – C/P Koestlin, except with marginally worse stats, primarily in the form of higher debt.

BLKL – One of the best buys on the market IMHO. The stats are great. No debt whatsoever, good profitability, dirt cheap..what more to ask for?

RIZO – Starting to show some profitability, but not nearly as cheap as last time I mentioned them.

(The rest to come)

Bitcoin

Some will say it’s dead and buried. It most certainly isn’t the hot thing in the news right now. The technicals, however, paint a different picture.

btc

What does this mean? While it doesn’t imply the old high of 1200$ or so will ever be reached again, it does imply the price drop is now pretty much over. I believe bitcoin is here to stay, whatever its final price may be.

[EDIT] This does not show on the log scale yet, so take this whole article with a grain of salt.