Did anyone buy GM at 2.85? I did. Did anyone "accidentally" place a stop order at 2.10? I did.
I propose changing our blog's name to: "Too big to fail."
Wednesday, November 26, 2008
Tuesday, November 25, 2008
GGP @ $1.50!!!! Activist Investor Bill Ackman
Did anyone buy last week when I recommended the stock at $.50 a share? You'd be sitting with a pretty 300% gain right now. Woulda, coulda, shoulda.....
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6uFaQ4pPn4M&refer=home
Friday, November 21, 2008
FLOOR TALK - Still a skittish market
It was another treacherous open for the market, marked by the kind of immediate fade of the opening rally that we've seen so many times before over the past several weeks. Given all of the crosscurrents investors have been dealing with this week, here's how we break down the current sentiment:
The Backdrop: The major averages, and literally thousands of individual stocks, are incredibly oversold, and have been since mid-October. Valuations are dirt cheap (although no one in their right mind would trust the forward estimates) and high quality companies are sporting very attractive dividend yields.
The Here and Now: Ever since the Nov 4 election there has been an almost total buyers strike, with the longs essentially ceding the market to the shorts. And once the major averages breached the key support level marked by the Oct-Nov lows two days ago, we immediately started to see a whole new round of forced selling by funds and market risk-reduction efforts by insurance co's. Hartford (HIG) essentially confirmed that insurance co's have been major sellers last night, when it stated that "The company's investment management team is taking a series of actions aimed at repositioning the portfolio in light of current economic outlooks, with plans to enhance the overall credit quality of the general account. The company is currently investing in treasuries and other high-quality securities, and maintaining higher levels of liquidity than it has in recent quarters."
In an ominous turn, the financials are back driving the market again. The plunge in Citigroup (C) this past week has created another round of uncertainty in the Financials. And earlier in the week a major story emerged -- but has surprisingly flown under the radar -- that kicked out the one remaining leg of the stool that the financials were sitting on: There was an announcement that two separate operators, a shopping mall and a hotel, were past due on their payments to their creditors. The commercial property space (as opposed to residential) had been the one remaining "safe" area in real estate, so this announcement caused a rush by lenders to insure themselves in case of default, thus causing the CMBS market to rocket higher, which in this environment is a recipe for panic (we saw an identical panic develop with LIBOR rates a few months ago when FNM, FRE, and LEH were on the brink). As a result, all financial stocks and REITs are getting thrown overboard, the former on concerns of additional portfolio writes-downs and the latter due to concerns that REITs will have extreme difficulty rolling over debt.
Tying these together, since the election the path of least resistance for the mkt has been down, and there really is no way to know when this latest round of forced selling will end. But especially given the oversold nature of this market, the dirt-cheap valuations on high-quality stocks, and the fact that "shorting every rally" has become a far too obvious tactic by now, this suggests that the potential is great for a significant short-covering rally at any time. This is why, despite their recent success, even the shorts are skittish down here
The Backdrop: The major averages, and literally thousands of individual stocks, are incredibly oversold, and have been since mid-October. Valuations are dirt cheap (although no one in their right mind would trust the forward estimates) and high quality companies are sporting very attractive dividend yields.
The Here and Now: Ever since the Nov 4 election there has been an almost total buyers strike, with the longs essentially ceding the market to the shorts. And once the major averages breached the key support level marked by the Oct-Nov lows two days ago, we immediately started to see a whole new round of forced selling by funds and market risk-reduction efforts by insurance co's. Hartford (HIG) essentially confirmed that insurance co's have been major sellers last night, when it stated that "The company's investment management team is taking a series of actions aimed at repositioning the portfolio in light of current economic outlooks, with plans to enhance the overall credit quality of the general account. The company is currently investing in treasuries and other high-quality securities, and maintaining higher levels of liquidity than it has in recent quarters."
In an ominous turn, the financials are back driving the market again. The plunge in Citigroup (C) this past week has created another round of uncertainty in the Financials. And earlier in the week a major story emerged -- but has surprisingly flown under the radar -- that kicked out the one remaining leg of the stool that the financials were sitting on: There was an announcement that two separate operators, a shopping mall and a hotel, were past due on their payments to their creditors. The commercial property space (as opposed to residential) had been the one remaining "safe" area in real estate, so this announcement caused a rush by lenders to insure themselves in case of default, thus causing the CMBS market to rocket higher, which in this environment is a recipe for panic (we saw an identical panic develop with LIBOR rates a few months ago when FNM, FRE, and LEH were on the brink). As a result, all financial stocks and REITs are getting thrown overboard, the former on concerns of additional portfolio writes-downs and the latter due to concerns that REITs will have extreme difficulty rolling over debt.
Tying these together, since the election the path of least resistance for the mkt has been down, and there really is no way to know when this latest round of forced selling will end. But especially given the oversold nature of this market, the dirt-cheap valuations on high-quality stocks, and the fact that "shorting every rally" has become a far too obvious tactic by now, this suggests that the potential is great for a significant short-covering rally at any time. This is why, despite their recent success, even the shorts are skittish down here
Wednesday, November 19, 2008
Bull!
S&P is at 822. Mark my words, I just turned bullish on the S&P today will be the low. If I had not lost most of my cash in the downturn, I would be buying big today. S&P, Bank of America, most of the REITs and maybe even Citi.
FLOOR TALK - No one has an edge right now
There are a few key things that traders and investors need to keep in mind as they try to navigate this very difficult market. Broadly speaking, we're in sort of a no-man's land right now. Buyers, while "nibbling" on their favored stocks each time we test the October lows, refuse to chase prices higher (instead preferring to let them "come in" to their levels). For all intents and purposes, this is a buyer's strike occurring right at the level (the October lows) where you would expect value buyers to step up. In turn this refusal to buy as prices climb has made it impossible to build on any intraday rallies we've seen over the past several weeks.On the other hand, short sellers have been in control of this market ever since the election, and have been making consistent money fading each rally. However, while the repeated tests of the October lows and the complete inability to sustain rallies suggest that the path of least resistance is a break to new 52-week lows, the market is still very oversold and prone to sudden and intense short-covering rallies -- which makes it very difficult to have a high level of conviction in putting on new shorts at these levels.What this adds up to is that both bulls and bears are showing extremely tentative behavior here as they wait for the other side to blink. More than anything this explains the seemingly "random" intraday movements of the market. In fact these aren't random at all, but represent the fierce tug-of-war going on between two teams that are equally weak and indecisive. The key thing for investors to remember is that the market is not trading on fundamental factors right now. On any given day, declines are not due to some new datapoint that sparks "renewed worries over global economic weakness" but are rather due to the simple unwillingness of buyers to commit in any meaningful way at current levels (i.e. a buyer's strike). Conversely, rallies are being fueled by short-covering rather than real buying, making them very fleeting and unstable events. This is a market where no one has an edge
Yahoooooooooooooooooo for Yang
BELLEVUE, Wash. (AP) -- Microsoft says it is still interested in some sort of Web search deal with Yahoo.
The software maker's chief executive, Steve Ballmer, says Microsoft Corp. is no longer interested in buying all of Yahoo Inc. But he told shareholders Wednesday that the company would be "very open" to a search collaboration.
Yahoo spurned Microsoft's $47.5 billion takeover offer in May. It also later rejected Microsoft's bid to buy only its search engine. But co-founder Jerry Yang, who resisted those overtures, is now stepping down as Yahoo's CEO.
"Let me be clear," Ballmer told shareholders. "We are done with all acquisition discussions with Yahoo." Ballmer says the companies are not currently talking about a search deal, either.
The software maker's chief executive, Steve Ballmer, says Microsoft Corp. is no longer interested in buying all of Yahoo Inc. But he told shareholders Wednesday that the company would be "very open" to a search collaboration.
Yahoo spurned Microsoft's $47.5 billion takeover offer in May. It also later rejected Microsoft's bid to buy only its search engine. But co-founder Jerry Yang, who resisted those overtures, is now stepping down as Yahoo's CEO.
"Let me be clear," Ballmer told shareholders. "We are done with all acquisition discussions with Yahoo." Ballmer says the companies are not currently talking about a search deal, either.
GM Needs Your Support
When any of you have the opportunity, please say a prayer for GM. Stop order has been placed...
Tuesday, November 18, 2008
JP Morgan
Crazy about Mark Cuban, how embarrassing for the SEC. Who's taking bets on how soon that dumb ass lawyer at the SEC gets fired?
BD - Isn't moral hazard grounds for dismissal?
JP Morgan could be a great short candidate. I think they are going to have a huge earnings loss in the 4th quarter as they expend cash to consolidate WAMU and see a huge fall off in investment banking income/transactional fee related income. Their stock is still trading relatively high.
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