Re: 'That' Paulson says buy real estate now!/ No argument here newSubmitted by 2nd_ave (5221 comments) on Thu, 02/03/2011 - 20:24 #78991 (in reply to #78976)
As this is the best time in 50 years to buy homes, Paulson advised his listeners, crowded into 3 separate dining rooms, to issue 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”
I agree. In fact, my wife and I have advised our two older kids to do just that as soon as possible after graduating.
The same advice has worked for generations.
Let's take a hypothetical family who purchased a home in San Francisco at the peak in 2007 with 20% down and an affordable 30-year-fixed mortgage. They're happy with the neighborhood and the schools, and the sight of their beautiful home as they turn into the driveway never fails to bring smiles to their faces. The house has declined in market value by maybe 20%. Is there a problem? Not in my opinion.
What Paulson's referring to is the opportunity for another family to have the same experience today at a discount- their good fortune. And for some families, what was once 'out of reach' is now 'affordable.'
There are no guarantees in life. But I wouldn't want to be in the position of talking someone out of what could truly be a generational opportunity.
Link:
http://blogs.forbes.com/robertlenzner/2010/09/27/john-paulson-sell-bonds-buy-stocks-double-digit-inflation-coming/
Well, I could sit here contemplating CSCO @ 21.94 for another 30 seconds, but that would be 30 seconds wasted.
ReplyDeleteInstead, I'll contemplate RAS @ 2.89...
All that matters is the next move.
ReplyDelete2nd - The more I think about my investments, the more I like what I'm holding: BTU and RAS. Should we experience significant inflation over the next 5 years or so, then real estate and commodities should do quite well.
ReplyDeleteBTU has a commodity that is in the midst of what their CEO calls a supercycle (and I totally agree with him even if he's biased)...a cycle that will last for years and years because of the exponential middle class growth across the world matched against a shrinking global supply of energy commodities.
RAS's assets, commercial real estate, are riskier but they should work very well in a period of above average inflation. The currently trades at a tiny 0.25 times their book value...its a risk, no doubt, because their is significant debate about the true value of their assets, but I think they will ultimately prosper and throw off nice dividends for investors at today's prices. I'm prepared for significant volatility in the stock price, though.
I don't mean to make it about my own investments, but I think the long term trends we need to focus on are:
ReplyDelete(1) exponential growth in middle class world wide > what are they going to be consuming?
(2) rising inflation due to (1) above and central banks across the world debasing their currencies
TOF- Do you have an article that talks about the asset value of RAS' properties?
ReplyDeleteThis has truly been a 'Dave Landry market.' The up trend is going into its 6th month.
ReplyDeleteI don't think they own properties unless their is a default. They are a finance company.
ReplyDeleteI'm watching the stanford Uof A game. How in the hell did they ruin basketball at atanford. Their new stadium sucks. No noise no rowdiness no homecourt advantage for stanford.
I just finished watching Japanese news, the University econ professor being interviewed said that in his view, developed economies are going to run into trouble trying to continue providing stimulus within about a year, because long term this kind of policy is unsustainable.
ReplyDeleteAt the end of the interview, he said that he believes as emerging markets continue on their path of growth, commodities scarcities will become more pronounced.
As if we didn't already know.
RB- If I'm pretty sure they own about 45ish properties with about 8K units.
ReplyDeleteTOF- Dmb acct. question. Looks like they could earn about $1 per share. How does on acct. for asset value. Aren't these taken as a one time charge, etc.
Reit's by law have to pay out 90% of their income. So dilution is the main way to raise cash for further investments.
Homes and houses are constructed using commodities such as wood, concrete, copper, steel, crude oil based materials and energy, etc.
ReplyDeleteCurrently interest rates are very low, I would guess home prices will remain low for some time until well after rates increase, which will make a home more expensive to own in and of itself.
Once rates stabilize, then home prices can begin rising.
Over the period of a typical home loan, a mortgagee actually pays as much on principle for the home as he does to service the mortgage, no?
This is why it's so important to obtain a low interest rate.
So, it's not simply the price of the home, it's both the price of the home and the cost of financing that make the difference.
REIT's - Mark, I think using the word dilution can be misrepresentative of what actually happens in the case of a REIT. You probably already understand the concept but the word should be prefaced with explanation. b/c the new capital raised goes directly into purchase of new assets, dilution translates directly into growth and so by definition, isn't dilutive.
ReplyDeleteIf it is dilutive, then there is a problem with the business model or write down on default of some sort.
NLY's business model is strong b/c all of their "assets" are Government agency guaranteed against default, inclusive of both interest and principle.
CP- Your right. I wasn't using dilution in a derogatory way.
ReplyDeleteproud papa Neil made the paper.
ReplyDeletehttp://azstarnet.com/sports/soccer/high-school-and-prep/article_8b53beee-6ad5-5b41-8417-11a644622a59.html
RAS - partial description: "In addition, RAIT Financial Trust owns and manages a portfolio of commercial real estate properties, and manages real estate-related assets for third parties."
ReplyDeleteWay to go Neil!!!
ReplyDeleteMark - Understood, and I knew you were aware of what you were attempting to say. It's very easy to call it dilution, which it isn't. Honestly, I'm not sure what the appropriate term is.
ReplyDeleteAnyway, since RAS isn't actually a straight up MREIT model like NLY is, I'm a little confused but my guess is that when times are good and the stars are aligned, the RAS model probably outperforms the NLY model?
I'm unclear on these details, I haven't actually read the RAS "prospectus", I pulled a "congressional" using my personal money.
To that I add, that I trust TOF's opinion, he is a tax wizard after all, for cryin' out loud!
CBG - That's as beautiful a one year chart as most any of them.
ReplyDeleteI have to agree with TOF, or I should say, I cannot disagree.
UNG - Good God, if even a 50 year blizzard trouncing 1/3 of the country with ice and snow can't budge UNG up, longs don't have a snowball's chance in hell.
ReplyDeleteEP has shut down their pipeline in town because it cannot meet demand. Many people are without heat. It was 25 degrees at 10:30 am the coldest day by far the 30 years I have live here.
ReplyDeleteGo figure, prolly should'a gone long natty today!
ReplyDeleteGuys...you put way too much faith in me...I don't want y'all to be relying on my take on RAS. The investment is definitely risky. No question about it. The majority of their income over the past year has come from buying back debt at reduced prices versus their carrying values. If you back out these debt transactions, I believe they're operating at break even.
ReplyDeleteIn the past 2 years, they have essentially defaulted on several properties, but rather than default they have taken over the properties and are now managing them. Their business model has changed substantially over the past couple of years. They are managing a lot more properties and focusing on increasing occupancy rates and improving the values of their assets.
So to me right now the company is a play on the value of their assets moreso than the cash flow it generates. Over time they will be able to generate more cash as occupancy rates rise. And they have definitely been rising. You can actually find info on each of their properties by doing research on them online...you can find out how their vacancy rates have been fluctuating by looking at each property's website.
If you assume a reduced level of loan losses (i.e., back to historical loan loss rates) then right now they could be making about $0.20 to $0.30/share in income. The upside is if the occupancy rates rise, which they have, then they can earn up to about $0.60 to $0.70/share.
As far as valuation goes:
In 2004-6 they were trading at about 12 times earnings. They were trading at about 1.3 times book value.
Currently, they have a book value of $9.30/share. Assuming a return to historical p/bv you could arrive at a price of about $11/share.
Assuming they earn about $0.30/share in profits and a historical p/e of 12.5 then they could trade at around $4/share. However, if you believe like I do that their occupancy rates will continue to rise and they can earn $0.60-$0.70/share and they return to a 12.5 p/e then they can trade up to around $8/share.
The kicker is that they are a REIT and are required to return 90% of their earnings to shareholders in the form of a dividend. They currently have a decent loss carryforward that is a hurdle they must pass before paying dividends. Up until last quarter, they were a good ways away from earning enough to pay a dividend because of this loss carryforward. However, the fact that they just returned to paying a dividend means to me that either their earnings have grown significantly or they are returning capital to shareholders. I obviously hope it is the former but we'll find out on the next conference call.
Anyway, if they earn $0.60/share and pay a dividend of 90% then they would pay a dividend of over $0.50/share. That's a yield of 19% on the current price (it was actually about 25% when I first bought the stock, which is what was so attractive to me).
That's my take and my hope!
I have not been able to justify for last three years buying a 700k, 3bed 2 bath, 50 yr old house (which i don't even like) in walnut creek, ca .....you are just trying to make the guys who bought in 2000 @300k and the real estate agents, who have a agenda to keep the prices inflated, rich and being a slave to the bank for the rest of your life....Are these cardboard houses really worth that kind of money in an area which is prone to earhquakes, droughts, wild fires, termites and extreme human vanity and greed.....make your money in silicon valley and move on....
ReplyDeleteThere are a couple of extra positives that make me bullish on RAS:
ReplyDelete(1) There has been a longer term shift in everyone's perspective about home ownership that works in favor of RAS's business model: people now prefer renting to owning more than they have in a while. Since a big part of RAS's business is managing properties, this is a good thing for them.
(2) If we do indeed have higher inflation then real estate should do well and the book value of RAS should continue to rise. It has been rising every quarter for a while now in spite of low inflation.
(3) If the economy continues to improve and the markets keep going up, people will be assigning higher values to REITs. We've already heard that the CMBS market is returning. The more we hear that the more people will be looking around at the undervalued CMBS REITs to invest in and the more in favor RAS will be.
The downside to all of this is if the economy doesn't continue to expand and inflation doesn't set in. If that happens then RAS, which is a leveraged play on an improving economy, will get hurt. But I'm thinking that at a p/bv of 0.25, it's already priced in. And if the economy worsens then there will be an even greater emphasis on renting which should play into RAS's business model. They significantly reduced their debt loads and changed their business model to take advantage of people's shifting perception toward home ownership.
We'll see, though. I'm not married to this stock so if things change I'll be ready to bail on it. I'm excited to hear the earnings call next week.
Annon- Interesting. I have a lot of friends that live in Danville/Walnut Creek. They would agree with your attitude assessment! I grew up in Marin Co. Ca. and left for the same reason. Very happy here in Sonoma Co. living with the wine makers and pig farmers!!
ReplyDeleteTOF- Sorry man, your on the hook for my retirement! Just kidding :). Fire your wedding photographer. I want photos!
I guess that should say 'pig ranchers'.
ReplyDeleteTeam good assessment.
ReplyDeleteI'm sure a lot of the future success of the company will depend on low interest rates and the ability to restructure debt. In the addition to successfully managing properties that they are underwater in if they bought before the real estate collapse. Apartments are a good investment. I rode a momentum stock ACC for a few weeks in August that specialized in college rentals that seemed like a good long term investment if i believed in long term investments. i have not traded Ras But technically it looks like it could breach $3.00. If it does it could go MOMO. Of coarse in October it lost 40% of its value in two days. Which was probably due to some kind of earnings voodoo.I think I will put a Buy Stop limit order above 3.00 to catch possible momo after earnings. Would be a safe way to play it.
I guess that should say 'pig ranchers'.
ReplyDeleteThat reminds me of a joke about SCotts and sheep herding.
Its late at night. Here it goes.
ReplyDeleteThis Scottish farmer walks into the neighborhood pub, and orders a whiskey.
"Ye see that fence over there?" he says to the bartender. "Ah built it with me own two hands! Dug up the holes with me shovel, chopped doon the trees for the posts by me ownself, laid every last rail! But do they call me 'McGregor the Fence-Builder?' No..."
He gulps down the whiskey and orders another. "Ye see that pier on the loch?" He continues, "Ah built it me ownself, too. Swam oot into the loch to lay the foondations, laid doon every single board! But do they call me 'McGregor the Pier-Builder?' No."
"But ye fuch ONE sheep ..."
RoBear - At this point I have absolutely no take on the stock going into earnings and I think it's highly risky to enter here if you're only looking to trade it. The odds of it dropping to $2.40 is just as good as it breaking out. That makes me really nervous to be honest, given how much money I have in it. However, I'm not afraid of taking on risk, because that's the only way to truly build one's wealth, and I'm thinking this could be a great 1+ year investment.
ReplyDeleteI do, however, have stops in place at $2.3.
Team thanks. I always trade bracket orders and never enter before earning announcement. There is only a slight short interest so the fuel needed for a true momo is probably not there for a huge pop. If this thing keeps creating a buck a share in earnings it is hard to see why it can't be a double digit stock with a fat divi.
ReplyDeleteRoBear > Earnings are clouded by buying back their debt at reduced prices...I wouldn't pay attention to EPS at this point. I believe this quarter will be the first in a while without the debt repurchases.
ReplyDeleteBy the way, I was just checking out the chart of PIR...this is exactly what I thought the S&P chart would look like a week ago when we crashed lower. Look at how it has found support right at the prior resistance points from April 2010 and Nov 2010. I think it trades between $9.50 and $11 for the next month or so before going higher. I still think there's a chance of the market doing this. It seems like the market is setting up more and more bulls for a disappointment by constantly disappointing the bears (and making the bulls more confident).
After thinking about this some more, I may actually take a little of my longs off the table in the next few days. If we get a gap higher tomorrow or just a really bullish day tomorrow, I think the odds of a pullback down to the 1,240 level should still stay on our radar.
RoBear, I get it: you make ONE large and wrong bet, and they ...
ReplyDeleteTeam. So they are claiming a credit by a reorganization of their debt? I thought only Ben and Timmy could do that.
ReplyDeleteIt's the American thing to do RB
ReplyDeleteYes David they cut your MOMO off.
ReplyDeleteHey David since i have been ribbing you I got a little confession. I was paying too much attention to the market. I noticed my port was all red early this morning. I had a mild panic attack. Fear and greed got the better of me and you know what i did? Sure you do. Like a stupid fuch I went long the VXX to hedge. It was unbeliveable how fast that thing dropped. I have never seen the spread so large on it. Dropping 10 cents a tick. I was down a $1.00 in about 20 min. Very expensive insurance. I promise to do my trades in real time so you guys can make some money.
RoBear, I have to admit that VXX is a completely screwed up ETF and I am glad that I got out of it with only a minor loss of 0.5% of my port. I bought it at $35 when VIX was at 17. Three weeks later, VIX jumped to 20 and VXX jumped to ... $32 (from $29.xx). Un-fucking believable. Boy will I short it if we get any kind of a market pullback...
ReplyDelete"'That' Paulson says buy real estate now!/ No argument"
ReplyDeleteI hope Paulson is right. And if he is, then I am definitely not gonna listen to him! If we get a double digit inflation soon, then the way to manage one's finances is to keep renting and instead of using all the money as a down payment on a house, allocate it 50-50 between ECU.TO and GDXJ, which will all go up N times in the case of a double digit inflation. And so instead of buying a townhouse in a crappy San Jose neighborhood (which I can do now FOR CASH), I'll be able to buy FOR CASH a nice house in Palo Alto and then I'll care less about mortgage rates being at 10% or 20% or whatever. GDXJ will respond to inflation MUCH SOONER than house prices, and there should be a nice time window between the time my portfolio goes up N times and the time when houses in Palo Alto start going up again by more than 5% per year...
8:33a
ReplyDeleteU.S. Jan nonfarm payroll up 36,000 vs 140,000 est.
Re: 8:33a U.S. Jan nonfarm payroll up 36,000 vs 140,000 est. newSubmitted by 2nd_ave (5223 comments) on Fri, 02/04/2011 - 08:41 #79014 (in reply to #79013)
ReplyDeleteBy Greg Robb WASHINGTON (MarketWatch) -- The U.S. unemployment rate fell unexpectedly to 9.0% in January, a 21-month low as nonfarm payrolls rose by 36,000, the Labor Department estimated Friday. The 36,000 increase in payrolls was much lower than market expectations of a 140,000 gain but the decline in the unemployment rate was unexpected. Economists had expected the jobless rate to tick higher to 9.5%. The rate was 9.4% in December. The data was impacted by winter weather and annual benchmark revisions. But the labor market is improving. Since the recent low point last February, nonfarm payroll employment has increased by 1 million.
Basically, I think it's good news. The less-than-expected increase in payrolls may later be attributed to the harsh weather.
Re: 8:33a U.S. Jan nonfarm payroll up 36,000 vs 140,000 est.
ReplyDeleteSubmitted by jack black (1157 comments) on Fri, 02/04/2011 - 08:49 #79015 (in reply to #79014)
The futures response is very muted (minimal gains).
Scenario A perhaps? http://lh5.ggpht.com/_APmrYvpA45s/TUslU-5a2EI/AAAA...
Re: 8:33a U.S. Jan nonfarm payroll up 36,000 vs 140,000 est. newSubmitted by 2nd_ave (5224 comments) on Fri, 02/04/2011 - 09:25 #79018 (in reply to #79015)
ReplyDeleteThanks, jack.
Landry-
ReplyDeleteRandom Thoughts:
I'm encouraged the market was able to recover from an earlier slide. This action keeps the indices hovering near multi-year highs. Ideally, I'd like to see the Quack and Russell break out decisively.
Once again, the big blue arrow continues to point higher. Most sectors remain in solid uptrends--like the market itself.
Gold and Silver still look poised to make another leg down. Be careful though, they can often have 9 lives. Yesterday was a good example of why you should wait for entries.
Re: Another bearish diversion in 15 min time frame in indexes newSubmitted by 2nd_ave (5225 comments) on Fri, 02/04/2011 - 09:53 #79023 (in reply to #79022)
ReplyDelete'Let prices come to you.'
One of many phrases I find helpful while sidelined.
Damn. Retail is still kicking ass.
ReplyDeleteFNSR- Great call RB!
ReplyDelete2nd getting his 1,320 today (with a Steelers win on Sunday)? If so, fantastic call there.
ReplyDeleteMind telling me where BTU and RAS will be by April?
Opening CSCO @ 21.92 As Cash Equivalent newSubmitted by 2nd_ave (5226 comments) on Fri, 02/04/2011 - 10:09 #79025
ReplyDeleteAll-in in the trading account. Parking the trading half in CSCO.
RAS moving on SPG earnings?
ReplyDeleteV looking good.
ReplyDeleteMark - I doubt there's much correlation between SPG and RAS...I guess you could make a read through on the CMBS market in general.
ReplyDeleteBTU/RAS- I have no take. But I think commercial RE will kick ass- it currently ranks in the Top Ten Least Likely Sectors To Recover in terms of sentiment, so naturally I would be a buyer.
ReplyDeleteEmployment - I suppose the bright spot was in manufacturing, 48K added.
ReplyDeleteReal Estate - It's always about where the pile of sticks is located. I've owned rental property and more often than not, the tenants don't care for the property. Some resent their landlord even though the rent is priced below market, they tend to believe they're buying a home for someone else.
You wanna see a home go down hill faster than you would think reasonably possible, be a landlord. Don't fall into the trap of pricing the rent low thinking this will provide incentive for the tenant to be a good caretaker.
Nice 100k buy on RAS just now.
ReplyDeleteTOF - On RAS - Dude, we all know the rules. And, we gather here to share ideas about opportunities we've been investigating.
ReplyDeleteI'm grateful you offered to share your knowledge of RAS even if it happened to tank from here and I was still long.
MTW - Wow, That's all I can say.
TEX - Another wow!
ReplyDeleteTrying to get the hell out of LEXVF. This was a BC pick I jumped into @ .95. It lost 25% in about 3 days and is illiquid as hell. I don't care if it goes to 2. Scares the chit out of me.
ReplyDeletePeople look at the broad range and aren't impressed. Well, you've actually got to look under the hood to locate the engine.
ReplyDeleteThat was an ugly 20 minute run for RASy...
ReplyDeleteDamn...quite a reversal for the energy names...dollar is bottoming. I sold out of my BTU at $63.90. Bought puts on OIH...Feb $158 puts at $5.28 avg.
ReplyDeleteCADC - David was serious about letting me have another whack at a $3.35 add! I was just kidding, but maybe I actually get what I didn't anticipate?
ReplyDeleteBidding Born @ 11.34.
ReplyDeleteThat was a $5K swing in my account just now. Yikes!
ReplyDeleteDamn...sold 1/4 of my RAS at $2.92. Can't risk ignoring this reversal. Market is signaling that it wants to take a breath. Look at how the leaders have been acting. IYT and IWM in particular.
ReplyDeleteGot to run. How come I suspect I'll come home to a sea of red?? :(
ReplyDeleteCADC - Added @ $4.40 for a trade, I'll off these on David once he wakes up.
ReplyDelete1/2 off
ReplyDeleteFNSR at 39.25 In 34
sfz 22.88 in 20.27
AMD is up .06 better get aboard before it rockets. LMAO
CK don't mention TEX and Bidu I got shaken out of both before their ramp up. Why does opportunity loss hurt more than actual losses?
OIH looks like it's setting up for a reversal day. IYT continues to act weakly. I think we need to be on alert here guys.
ReplyDeleteEGPT - wonder when the real pull back occurs?
ReplyDelete"Why does opportunity loss hurt more than actual losses?"
ReplyDeleteI think it's because it's human nature to think of what we would do with all of the money we missed making.
If it makes you feel any better RB, I had about $30k in BIDU at $75...pre-10:1 split. Watched it go to $120, then got scared out of it when it dropped to $100.
RB - I barely noticed your post of buying TEX, and at the time I considered joining but got side tracked.
ReplyDeleteThen I forgot all about it.
Hopefully you'll clue us in on your thoughts more often? I like discussing my positions, bouncing ideas off each other. We have to keep in kind we're just not always on the same page.
keep in mind
ReplyDeleteCADC - $4.70 sell order for those shares bought earlier. Come get 'em, first come first served!
ReplyDeletePCAR - I'm half expecting this one to turn green today, I'm interested and trying to watch.
ReplyDeleteReal Estate - Anyway, I do agree that there are some folks who really have no business owning real estate.
ReplyDeleteSLW looks like a good low risk short with the 50 DMA up above as the stop out.
ReplyDeletePM's - I'm still anticipating another upward push.
ReplyDeleteJust don't know when it's coming, short term moves in PM's and currencies are about the most difficult for me to get my arms around, probably for good reason.
No need to fight the big-kahuna supercomputers when the pickin's are easier elsewhere?
BTW, what do you get when cross-breeding an elephant with a rhino?
CK. I will let you know my trades, but I have a hard time discussing my stocks because often times i don't know anything about them. Example the company I have read the most on is RLD (RealD) but, I haven't even been to a 3-D movie and really know nothing about their finances other than they are losing money.
ReplyDeleteRB - RLD - Well, 3D is certainly a controversial subject. Personally, I don't get the attraction and have no desire based on what I hear. In other words, I'm not rushing out to see it, but then again I'm really way too old school for my own good. There's a lot of hoopla over the new format, with big money betting on it, right?
ReplyDeleteRLD chart doesn't light my fire, looks to be in a down trend until the gap fills?.
Oh wait, I guess you could make the case that the gap was filled in Jan...
ReplyDeleteMaybe if it can break out and close above $26 for a couple sessions?
Sold my OIH puts at $5.42 avg that I bought at $5.28 this morning. Looks like equities are going higher.
ReplyDeleteTRID - Trading at intrinsic value? These guys make 3d-TV chips for home entertainment.
ReplyDeleteCopper - Another new high this morning.
ReplyDeleteRLD
ReplyDeleteGood eye CK definately no trend. I am playing the range. Kind of like a David money pump. Because it is so thin it will bounce around with a high ATR.Yet it has solid support at 23.00. I buy around 24 on strength and sell around 27 on weakness. Been on three trips. Earnings made me sweat yesterday, but were pretty much ignored. At some point it will break out over 31 and I will add. The hard part will be adding if their is a huge gap up.Yet I am determined to hold my nose and chase it. My cost basis is 24.20 now. It is up 5% today. It will be down 5% tomorrow, but at some point it will hit my price target or I will be stopped below 23. Thats my plan and I am sticking to it. Say it over 3 times.
OPEN breaking out to new highs. Let's watch for a short squeeze that might free up some shares. How much more pain can the shorts take. 50% of the float is short.
ReplyDeleteCRM/RAX/APKT/AAPL/CMG all rocking today.
ReplyDeleteNFLX new high.
ReplyDeleteTook a flyer and bought about $1,500 worth of Calls that expire today on GOOG ($610 strike). One of these days this sucker is going to make a run and if its today that little gamble could turn into a big payout.
ReplyDeleteBought them at $1.29
ReplyDeleteHopped back into BBY at $35.09. There has been some heavy duty call buying of the $37 calls that expire on 2/19. P/E Buyout?
ReplyDeleteGuys - note that the stocks all negatively impacted by higher commodities prices are doing well today. Check out KFT, K, PG, KO, etc...
ReplyDeleteCorporate America is double taxed on money they bring home from overseas?
ReplyDeleteWonder who the genious' are that enacted that law?
I also went long PIR today...figuring the fears over inflation that seem to be at least temporarily subsiding will work well for PIR. Went long at $9.68.
ReplyDeleteI don't know guys -- what don't you like about the charts of GLD and SLV? I've seen plenty of charts when the security dropped a little below the previous support level, just enough to shake out all the weak hands, before rocketing straight up to a new high. We don't need to go too far for an example of that -- check out the May-July period in GLD and what happened after it...
ReplyDeleteBought 5 more GOOG Calls at $0.90. Avg $1.22. Let's see a push above $611.40 already. If it can somehow get above $614 there is an air pocket to $620. And then there's an air pocket above there to $627. If you can get it right on the timing then a small call option position could make nice change.
ReplyDeleteJust sold 10 March $7.50 puts on SORL for $0.65. The company has a positive operating cashflow, low debt, high ROE -- these are all the characteristics that Buffett likes to see in the stocks he buys. Its forward P/E is 6, so I would say that I am definitely buying value here for a low price.
ReplyDeleteCP What do you think about Bacon. I went long SFD yesterday because it broke resistance at 21. it has had a good two day run, but am wondering about costs feed ect is going to hurt the bottom line. do producers of Bacon have pricing power.
ReplyDeleteI heard a giant chicken house roof collapsed recently under the weight of ice and snow.
ReplyDeleteNo wonder I couldn't sleep last night!
I also think I had a dream that silver prices collapsed but price of SLW didn't follow.
Cotton is limit down today.
ReplyDeleteOMG!, 85,000 Chickens were killed!
ReplyDelete"85,000 Chickens Killed In Collapse Of Bozrah Coop"
http://hartford.cbslocal.com/2011/02/03/85000-chickens-killed-in-collapse-of-bozrah-coop/
CCME + 23%. Wild.
ReplyDeleteSFD - A 50yr storm wipes out part of a food supply.
ReplyDeleteNot sure if all of SFD's operations are in Va., but if so, I'd say the storm should boost their bottom line, maybe considerably.
P/E 10 could quickly become P/E 18?
Mark have you ever had that drink that BORN makes.
ReplyDeleteDEER - Strong support @ $11, how long does this keep going?
ReplyDeleteRB- No, but I heard Americans think it horrible. Means I'd probably like it!
ReplyDeleteSpeaking about drinking, for some reason this thought popped into my head driving to work.
When I was in high school, I got to play golf every day at a local private CC for $10/month. They had a special program for the best local youth players. We'd have these killer grilled ham and cheese sandos every day followed by a chocolate milk shake. Damn, those were the days. Nothing to worry about.
Now I worry about my current project, getting future projects, my kids/wife, trading, natty and oil prices, who the fuck is going to take over Egypt, are rental prices rising, on and on.
No wonder I drink too much...
PCX clears the 3 day rule on Monday.
ReplyDeleteCADC - Revised my sell order to $4.58 so that if MM wants to close near the high he'll have to buy them.
ReplyDeleteEgypt - The people will elect their ruler, which IMO, is precisely the way it should be. ;)
ReplyDeleteDEER- I don't think I've ever seen a chart like that before. Crazy.
ReplyDeleteAhhh...another lost cause with GOOG. I averaged down to $1.07 avg on about 20 calls and just sold them at $0.80. I have yet to make money on that stock. Very frustrating. I think the lesson I have learned on this is that I just need to wait for the stock to clear up above resistance, come down near that resistance point and then bounce againn. So for GOOG this area is $611.4 now. If on Monday there is a gap up to the $614 and then it comes down and bounces off the $611.4 level and goes higher above the gap up open, I'll go long the stock or perhaps deep in the money calls.
ReplyDeleteOr perhaps I'll just focus on BBY, which I think is going to make a move up to the $38.5 level, which would be a retracement of 50% of the gap down about 6 weeks ago.
Oh no, COCO :((
ReplyDeleteFFIV up over 5. Almost 5%.
ReplyDeleteTeam Just forget about Google and go with a winner like AMD. Thats what I do, play "Best in Breed."
ReplyDeleteRLD is having a "sure glad we are not Bankrupt yet." Rally.
ReplyDeleteCBG sure made a nice recovery.
ReplyDeleteCP- I once worked with a guy in St. Louis that was from Mississippi where his large chicken farm was wiped out in the heat of summer when the electricity went out and the fans could not cool.
ReplyDeleteImbalances favor the bulls. Of note:
ReplyDeleteBUY-APA
Sell-CBG.
RB - Best in breed killed me today: BTU. I stopped out at around $63.8 but I was thinking we would get some follow through. Bottom just fell out. Maybe BBY will get bought out or pull a CSCO and get some life to it...
ReplyDeleteSteelers By 4. Gap Up Monday. SPX 1320.
ReplyDeleteJust giving Vad my predictions.
OAKBX. newSubmitted by 2nd_ave (5230 comments) on Fri, 02/04/2011 - 16:00 #79078
ReplyDeleteCan't say I don't back up my predictions.
Team, Many coal names had bad earnings.The Coal Stock I trade. ICO has been taken to the Chickenshed. Lost 15% in three days. BTU,s relative performance to the sector proves it is BOB. I believe your overall thesis is right on coal. Just got to wait for a good entry point.
ReplyDeleteClosed out the day +1%, the week @ +8%.
ReplyDeleteAt the BAR!!!
Last minute trade before boarding my flight. Picked up SDS at the close. I see SOX extended and I see VIX coiling for another possible run. Since 2nd is right about 90% of the time, I hate to take the flip side, but I'll say that the S+P gaps down 5-10 points at the open on Monday.
ReplyDeleteI just see that the S+P has had a new 52 week closing high 3 times this week, and its not breaking out. Seems tired....
Oh my. Definition of a MOMO. Look at WNR. I went from 9 to 10.50 in this one and thought i was a hero. I think someone thinks this is going to get bought out.
ReplyDelete8% for the week? You're hired!
ReplyDeleteWell, I must've kept those CADC shares just to ensure I'm not left standing on the platform whistling to myself Monday morn.
ReplyDeleteI can't thank the MM enough!
PCAR - green!
What goes down must come out!
ReplyDeleteDoug Kass' latest...
ReplyDeletehttp://seabreezepartners.net/letters&id=888&catid=15
I decided to lighten up 1/4 of my shares in RAS today just for risk management purposes. Probably a bad idea, but I'm up 43% in the stock and I had a huge amount for me in it. Plus, I think there are a lot of big and mid cap names (BBY, TGT, PIR) that are pretty cheap here and I'd like to put some money into them on the hopes that I can get a 10-15% jump over the next couple of months.
ReplyDeleteI agree with Kass pertaining to the need for water, the remainder I don't find convincing.
ReplyDeleteBernanke didn't invent the sin of currency manipulation. We're witnessing the result of global governments that have for decades been hoarding the U$D on the backs of their people, in opposition of free trade.
There are two parties involved in every transaction, why did they insist on continuing to buy US government debt?
RAS was considerably stronger today than I had anticipated, for a while there it sure looked like it was on the verge of breaking out...
ReplyDeleteCADC - I think I'll keep those shares I bought today at least through next week.
ReplyDeleteGMO - I didn't add this week, so that means it's the only one in my portfolio that has a chance of moving up.
ReplyDeleteChinese equities: Sounds like Bill is dipping his toe into muddy waters. This should be entertaining, I thought he had boots on the ground who could check these companies out...
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