Market Correction

After first quarter earnings came in the Investment Advisers here at the PBR have taken their time parsing through these balance sheets in order to make sense of what has been an extremely volatile Royals baseball market early in the year. The way too promising start, followed immediately by a correction back to .500 and then free fall all the way down to Dead F-ing last behind the Twins. The market has come full circle and we are yet again left with what we know very well here in the KC Jones Industrial market. As a fan we were hopeful this might be something of a fun year watching the team hang around .500, as market analysts their hot start wasn't enough to get us going all in. Now we have to take a look a the pieces of the puzzle, and decide what needs to go and what needs to stay. This is when the true Royals market analyst wants to move to another trading floor, but unfortunately your friendly PBR investment analysts are still here and today we're talking package deals:

Jeff Francouer-Chris Getz Small Cap Growth Fund: We're going to spend very little time on these two because they are symptoms not the root of the problem. We feel like the PBR investment strategists have wasted entirely too much time trying to explain just how little value there is in these two stocks. We've hated on them so much, that we briefly have looked into buying a few shares based on the belief that no stock could still be listed on the MLB Stock Exchange and under perform to this degree. It turns out the problem is that the managers of the Royals hedge fund ignore all of the evidence which points to the fact that they are the only one's selling their scrappy, gritty, veteran leadering, defense first, BS mutual fund. They are junk bonds, penny stocks, Greek banks, default credit swaps all wrapped up in one offense destroying mutual fund. But they aren't the real problem...

Eric Hosmer-Mike Moustakas Core Value Fund: It's obvious why these two are a package deal. The head of the Royals hedge fund has literally staked his claim to the value lying somewhere deep down in that early rookie season promise and those minor league earnings reports. Unfortunately, they've hit rock bottom. Believers are still selling hard, they bought way too much and are trying to artificially inflate the value of these two stocks in order to recoup massive losses. The problem is that at this point, as a Royals fan, the only thing you can do is not look at the box score every night hoping to see signs of life, you'll inevitably read too much into any random 2-hit night. The only way to make sense of this is to remember way back when the Dow Jones was at 6,000, it's now over 15,000. These things sometimes get worse before they get better, but if you're an impatient earnings hound, we can't blame you for passing on these two. When hedge fund manger Ned Yost was asked to compare the struggles of these two to former players and offer a bit of hope, he brought up the names of Scott Posednik and JJ Hardy (listen here for more) . Not Prince Fielder and Ryan Braun. Unfortunately, in all seriousness, that might be the realistic upside for these two they way they're heading. What should we tell you? Be patient, look at Alex Gordon, they'll come around, don't worry, keep your chin up, this takes time, etc.? The PBR might now be moving from a moderate Hold recommendation to a strong Sell. We've lost patience, they've got so far to go to even be average major league players that we're not sticking around for JJ Hardy upside.

Ervin Santana-James Shields-Wade Davis-Jeremy Guthrie Value Advantage Fund: All in all, not a bad little starting pitcher mutual fund. The fee to buy-in wasn't cheap, but as a group you have to be happy with the earnings they've given you in the first quarter. We've now seen all of them start to shed their early gains, but with no injuries and three out of four with ERAs under 4.00, we'll take it. The PBR was fairly skeptical of the Santana and Guthrie portfolio additions and high on the James Shields stock option, but time will tell on this one. The only problem is that ugly Wade Davis index fund dragging down the earnings on this otherwise solid investment. This stock is a super duper HOLD; these are the Royals and things go sour too quickly to think about putting your retirement fund into these four right arms. At this point, no long time Royals fan would even blink if they were all four on the DL by August.

Bullpen High Yield Bond Fund: this mutual fund is classic Royal's market share. The first guy to be demoted on the entire teamed looked like Aroldis Chapman for the second half of last year and the first few games of this season. Then he basically gave up at least one home run every game since then while manager Ned continued to try to will it into working. Our closer's has surprisingly good number, but the surprising part is how they can be so good when I've seen him blow so many games. Obvioulsy, it has just been a select few very noticable losses, but this chink in his armer doesn´t inspire confidence going forward. The rest have been, somwhat predictable; Hoch has worked well anytime it hasn't been important, Crow has been irrelevant, Collins looks like the best one day and the wort the very next, Chen is Chen and the rest don´t really matter. As a package this is the only mutual fund I am actually buying, but that's because we recommended selling when they peaked in value. Now that they have lost most of their value a stock buy back approach might net you a few dollars at some point. That had so much valut at one point, it seems hard to imagine that they weren't worth something. Would you have missed them if they were part of the James Shields package? Probably not, but I'm also not going to claim I told you so and that we could have traded them for Justin Upton (I have no idea what Holland or Herrera would have gotten you, but Mark Melancon for Jed Lorwie seems like a good comp).

Royals Fund Managers: I've been pretty much hating on Ned Yost since the first time he opened his mouth, and have vacillated heavily on Moore. I would be the 700,000th Royals blogger to suggest that the Yost needs to go, but misery loves company so Ned goes now and Dayton goes at the end of the year if firing him doesn't fix it. They have literally driven the Royals portfolio into the ground.