Tuesday, March 15, 2011
3/15/11 Mr. Lucky
'You was born for good luck, Johnny'
'Bad luck can't do you no harm'
'You was born for good luck'
'Bad luck can't do you no harm'
'I guarantee you'll never go wrong'
That's why they call me, Mr. Lucky
Bad luck don't follow me
That's why they call me, Mr. Lucky
Bad luck don't follow me
Everything I touches turn to gold
Guys- If everything is selling off, not a good time to be long small caps. JMO.
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David - I hear ya about the Buffett comment. I'm actually not down that much - with today's drop i'm only 5% below my all time highs...i'm more just annoyed with myself that I was not planning on buying the dip, then saw what I thought was an opportunity to buy a dip and in taking advantage of it I ignore my own rule that in dips the strong ones should be bought. I saw F and PIR turn green and yet I figured they already made their move so I focused on the laggers. In the end I guess I got some good experience on what works in sharp pullbacks and what doesn't.
ReplyDeleteNow I just hope I don't wake up to a blood bath in my stocks tomorrow. I'm still about 20% in cash but my conviction is pretty weak at this point.
ReplyDeleteNikkei +316.
ReplyDelete+556
ReplyDeleteRBY finally hit strong support in the $4.25 range. I might look to add on a move above the 200 with volume. Likely to chop around this area for awhile.
ReplyDeleteJust got back.
ReplyDeleteTOF- Here it is. Seems like a LOT of people knew the pricing...
PHILADELPHIA--(BUSINESS WIRE)-- RAIT Financial Trust (“RAIT”) (NYSE: RAS) today announced that it has agreed to sell $100 million aggregate principal amount of its 7.00% Convertible Senior Notes due 2031 (the “Notes”) in an underwritten public offering. The conversion rate will initially be 390.1677 RAIT common shares per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $2.56 per common share). The company granted the underwriters an option to purchase up to an additional $15 million aggregate principal amount of the Notes solely to cover overallotments. BofA Merrill Lynch is acting as sole book-running manager for the offering. The company expects that the offering will be completed, subject to customary closing conditions, on March 21, 2011.
RAIT intends to use approximately $75 million of the net proceeds from the Notes offering to repurchase a portion of its outstanding 6.875% Convertible Senior Notes due 2027, and the remainder of the net proceeds to repay indebtedness and for general trust purposes, including working capital.
CADC's new audit accountant announces their Beijing office opening 3/11/11:
ReplyDeletehttp://www.accountingtoday.com/news/Friedman-LLP-Opens-Beijing-Office-57597-1.html
RAS - Oh, BACMLeech is involved?
ReplyDeleteThey don't offer a rating on RAS.
OP-EX 3/19 MP target is $3, FWIW...
RAS- I spent an hour on this. After listening to the CC, I don't like it.
ReplyDeleteI think I've heard this story before. A buddy of mine refinances his 75K home loan with a 100K home loan. Pays off the 75K loan and uses the remaining 25K for household expenses. Longer loan term at a higher rate. Sound familiar?
TOF- What am I missing? Yes, I can see a million little things that could be hard to figure out in this offering, but it looks like a shaft to the common....again.
Today's volume in RAS was the highest I can ever find.
ReplyDeleteRB- I didn't know you were in RBY. What price?
ReplyDeleteRB- Do you look at VWAP? RBY is on the wrong side of the curve.
ReplyDeletePlacing a sell limit order at $1.00 for 5000 shares of ECUXF that I purchased this morning at $0.86.
ReplyDeleteMark, what is VWAP? I have 4K shares of RBY now...
ReplyDeleteSorry instead of ADD I should of said open on RBY. I am 100% cash.
ReplyDeleteRAS' weakness could be due to some ARB play that Team was alluding too between senior and common. Also don't discount FED speak in this. didn't the spike down happen after the FED? THe low interest rate environmental is crucial for these RITs. Heck you could throw in the junior miners and the junior oil into that basket. Oil, silver and real estate can sky rocket, but a move to tighten will hit them all hard!
Yep commoners get the shaft...per filing conversion price is no less than 1.3 times offering price (2.56) so about 3.3 is the price at which conversion occurs. Throw in $100 million divided by $3.3 and ya get 30 million shs or 30% dilution. After incorporating the 30% dilution into the value of the shs you get a book value of about $7 per share. Assuming it gets to no greater than 0.5 times book then I get a max price of $3.5 or right around the conversion price.
ReplyDeleteAnyway I will be looking to sell on strength. Fn a man
The news is not good at the reactors. This is horrible.I was confident it was going to be contained. I was wrong. This is going to be the worst EV disaster ever.The oil spill was bad, but we are talking radiation here. I'm depressed and I never get depressed. I saw a scientist on TV say that this will be more harmful on the environment than Chernobyl because Chernobyl detonated like an A bomb and blew the radiation way out in the atmosphere and dispersed it. The Japanese one is going to create low clouds of concentrated radiation that can not only effect population centers, but enter the food chain. After hearing this I thought to my self that there may be a time where they are going to actually have to hit the reactors with a nuclear bomb to stop it. Am I the only one to think of this. Were they not proposing the same thing with the BP spill?
ReplyDeleteTOF- Thanks. That was close to my lame take also.
ReplyDeleteI'll catch you guys at at the open.
RB - I can see something like that happening with the rods sitting in the spent fuel pool, they seem to be catching fire and there's really no containment for them other than the cheesy pool container.
ReplyDeleteReactors - My understanding is once the water is burned away, the fuel meltdown inside the reactors will just sit there in molten form on top of a large graphite block until it's finally cooled. Right now they're forced to vent the vaporized water inside the reactor in order to avoid over pressurizing the vessel, so once the water is burned away, the chamber will be sealed and radiation contained within.
This assumes the bottom of the reactors are undamaged.
I'm just glad all the ones that failed were GE's designs, not my Dad's (he had many of the patents on the Westinghouse reactor and safety system designs). He always used to tell me GE was putting their efforts into the creative financing of their systems rather than the quality of the systems themselves.
ReplyDeleteSinking fast...
ReplyDeleteINTC about to hit a 19-handle..
ReplyDeleteMy inclination is we see a bounce to 1,295, which was prior support.
ReplyDeleteGood morning, CP here!
ReplyDeleteRBY - Hopefully she recaptures the 200SMA today...
GMO - Now trading below the $5 level. I don't anticipate immediate upside there, there needs to be a washout.
CADC - Recaptured the 200SMA, but for how long?
Took my lump on RAS...sold out between $2.21 and $2.27. I'm done with that stock...off the watch list.
ReplyDeleteBought some CRM at $127.5 and DECK at $81.8
ReplyDeleteCSCO @ 17.55 newSubmitted by 2nd_ave (5327 comments) on Wed, 03/16/2011 - 10:13 #81689
ReplyDeleteBasically, just to bug Earl.
Fuch RAS, Stick with the degenerate momo stocks.
ReplyDeleteCSCO - The chart definitely looks different this quarter. It's no longer dancing it's own dance, it's doing the market Limbo now?
ReplyDeleteRAS - I can certainly understand the concern, just another POS? $2.23 looks like a strong support level, will it fail?
All right guys. Find me something to do here. I'm out of ideas/stocks.
ReplyDeleteRoBear > Ha...good point.
ReplyDeleteMark > REDF is strong here today for what its worth. I have a pretty big position in the stock from yesterday...helping easing the pain of my RAS losses.
T'-Rates - Sure looks like they've been moving down, no better way to lock in your losses and keep your currency weak than sell into falling T' rates...
ReplyDeleteT'-Rates - Sure looks like they've been moving down, no better way to lock in your losses and keep your currency weak than sell into falling T' rates...
ReplyDeleteRBY - I like the way it's acting this morning, therefore it's about to crater.
ReplyDeleteBuying opportunity coming?
HIT - Really got whacked hard, I just noticed.
ReplyDeleteGot to run...
ReplyDeleteDavid- VWAP...volume weighted average price.
Re: CSCO @ 17.55/ ADD 17.29 newSubmitted by 2nd_ave (5328 comments) on Wed, 03/16/2011 - 11:04 #81695 (in reply to #81689)
ReplyDeleteMarket is off, are there two or just one full-blown nuclear meltdowns going on somewhere?
ReplyDeleteSNE - Mark, here's an idea...
ReplyDeleteI would think that if this panic was real the TED spread would be spiking....
ReplyDeletehttp://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND
KT - Might be another one?
ReplyDeleteIt's good knowing the TED spread isn't moving against us.
ReplyDeleteCopper is also up...that plus a lack of a spike in the TED spread tells me this is just fear trading and not indicative of a legit selloff.
ReplyDeleteCopper is up and looking pretty strong to me...
ReplyDeletehttp://finance.yahoo.com/q?s=%5EDJUBSHG+&ql=1
Copper - Actually, a quick look at chart reveals it gaped up and is selling off.
ReplyDeleteCopper lifted a little off the low there...
ReplyDeleteI am moving all in here. The VIX is up almost 100% from the lows. This is a buying opp.
ReplyDeleteLong EBAY at $30.15, long more CRM at $126.3, long more DECK at $80.9. going to go long SPY index fund if we close in the 1270s
Good point about VIX, TOF. I just bought 2 May $40 puts on VXX at $6.95 each. Will keep buying puts if VXX keeps moving up.
ReplyDeleteInterday double bottom on Spy or break of support. 5 MIN.
ReplyDelete3/19 - Extreme Super Moon
ReplyDeleteMoving 100% of my long only from cash to SPY index fund at the close. I think we rip higher to 1,300ish within the next week.
ReplyDeleteSupport broken. 126.00 is the last before 124 on spy which will bring us back to mid Dec highs.
ReplyDeleteIt's interesting that Russell 2000 is down less than all other major indices. I suppose that's because it has a greater fraction of US-only companies, as opposed to the major indices that have a larger exposure to Japan...
ReplyDeleteSPY held S2 to the penny. (125.29). Bulls better hope that's it for the day.
ReplyDeleteThat wiped out all of 2011 gains, right?
ReplyDeleteLiking the negativity
ReplyDeleteSubmitted by 2nd_ave (5331 comments) on Wed, 03/16/2011 - 14:27 #81738
Not quite Juarez. Just over the hill, maybe.
this dip should be bought is my thought throughout this...its what we were waiting for.
ReplyDeleteTof, If you are looking at REDF, you should also look at SIFY, it has acted very strong in the meltdown and particularly after they brought in David Nishball as CSO....
ReplyDeleteOh Jeese, so each reactor has a pool that contains up to 5 years worth(3 loads) of fuel rods soaking while cooling! Wonder why they don't just quench these things with boron immediately once they've been removed?
ReplyDeleteI had no idea this was the case. It really seems like a dumb design issue, these guys are probably screwed forever now for such a stupid mistake, I would never have dreamed we were accepting that much risk.
tof- I plan to move the buy-and-hold into OAKBX at the close.
ReplyDeleteWednesday - Today is hump day, right?
ReplyDeleteI just spoke on the phone with an investor rep from GMO. Here are the notes I took:
ReplyDeleteThey can't control how quickly the permits come. They hope to get permits in late 2011, but they can be delayed until 2012. After getting the permits, they will start constructing the mine. It takes 20 month to build the mine. They eat through cash at about $3M/year (so if permits are delayed until late 2012, they may need to raise a few more $M, which is not that significant). They will have 111M shares outstanding once all loans from Hanlong are received.
Once the mine is constructed, all-inclusive cost of moly sold will be $6.25/lb on average for the first 5 years. They plan to produce 40M lb/year on average for the first 5 years. GMO owns 80% of that production. Life of mine – 40 years. After 5 years, cost starts going slightly up, and production starts going slightly down. After 40 years, cost goes up to $8 and $9, and production goes down to 25M lb/year.
So assuming moly at $30/lb on average between 2014 and 2020, GMO will have about $770M in free cashflow per year, which translates into about $7 of cashflow per share for the first 5 years, which is about 1.5X of its current share price. Wow... This is a much better deal than RBY, which will have annual cashflow of 0.25X its current share price.
US is bringing in water pumps and hoses to the Fukushima site, wonder if those were made in China?
ReplyDeleteAnon > funny you mentioned SIFY cuz after the meltdown in RAS yesterday I started questioning my conviction in REDF and was looking at how it compared to SIFY. SIFY has definitely been trading quite well....who's this guy they brought in? i personally don't like their biz model nearly as much as REDF though.
ReplyDeleteDavid - GMO - The permit risk is probably a bit higher for GMO than RBY but I have a feeling the permits will be granted and news is forthcoming sooner rather than later. I really can't imagine how permits can be expedited, but that's what I'm anticipating.
ReplyDeleteAll that said, I'd like to see $3 before adding but $4.40ish might be a good place to start considering.
I removed all my original capital, so it's all house money right now. ;)
Thinking NVDA might be a good one for me. Any of you guys follow it?
ReplyDeleteI hope they chose a big enough extension cord.
ReplyDeleteStill feel there is some more room to the downside. Yeah, we have these nice pops off of daily lows, but bottom line is we still keep going down on good volume.
ReplyDeleteSounds like the Fukushima workers will soon have generator powered lights to replace their magnified C-cell flashlights. ;)
ReplyDeleteI guess they had to do that once all the batteries on store shelves disappeared from hoarding.
ReplyDeleteHave I ever mentioned my observations pertaining to Japanese safety mentality?
ReplyDeleteWe fought them for six months before they'd allow us to place safety caution/warning/danger labels on the various electrical and chemical service panels of their production equipment b/c they didn't want people to think their equipment was dangerous.
Re: Liking the negativity-> Back into OAKBX in the buy-and-hold newSubmitted by 2nd_ave (5332 comments) on Wed, 03/16/2011 - 15:45 #81754 (in reply to #81738)
ReplyDeleteAt the close. Kind of feels like we successfully tested SPX 1250- if so, it was about a -7% pullback, which also feels about right. All JMO, of course.
2nd - You know what we get next right? Black Thursday of course.
ReplyDeletetof- As long as traders feel that way, we should be OK.
ReplyDeleteI don't know guys. Is 1.7% down blood on the street?
ReplyDelete"I don't know guys. Is 1.7% down blood on the street?"
ReplyDeleteI have my doubts, feels like dip buyers are just beginning their retreat.
We need a clincher to stop the bleeding, perhaps NASA will step in to provide a comprehensive safety review resulting in a clean bill of health two thumbs up for the nuclear power industry similar to the one they performed for Toyota.
Just pay no mind to NASA's own safety record and we're home free...
RoBear...VIX double the lows + 7% dip from the highs qualifies as blood in the street after the monstrous rally and talk of no dips coming til 1,500
ReplyDeleteStarted scaling in today: MSFT, NVDA, HPQ, AMZN, NTAP. Also got some ECUTF yesterday.
ReplyDeleteTeam, Yes i could see that relative to this rally a 7% pullback is huge. Did the Vix hit 30?
ReplyDeleteIf it was just a pullback on econ data or Fed or something I would be with you. All the news based risk including the ignored MID EAST and EURO debt is going to keep me on the side lines. Yet a continuation of the BullSheet rally would not surprise at all. I love it when everyone says bullsheet and the market chugs higher.
RB > i hear ya...the nuclear thing is the biggest risk no doubt about it. but we don't know that it's anything other than overblown fear. just like everything else over the past 2 years. the bp oil spill was supposed to kill our economy. the greek issue was going to end the EU. saudi arabia was supposed to have a day of rage that would spike oil to 225. c'mon now! for all we know this bahrain issue gets resolved soon and the nuke issue is fixed and we go to 1,400.
ReplyDeleteMSA - Does anyone think there may be a renewed interest in safety products going forward?
ReplyDeleteSSO @ 47.31. This is now getting a little silly.
ReplyDeleteTeam,
ReplyDeleteI think I hear what you are saying. World wide upheavel?
Honey badger dont care, Honey badger dont give a shiit.
honey badger just sticks his nose right up in there. honey badger don't give a fuck.
ReplyDeleteoh man i gotta watch that again.
heres to the japanese people getting the nuke plant contained. God help them.