|
Stonehenge
Alt Center

Registered: 06/20/04
Posts: 14,850
Loc: S.E.
|
Re: Stock Update for May 6, 2009 - BGZ, SDS, SKF, JCP [Re: Redstorm]
#10308933 - 05/08/09 04:11 PM (14 years, 8 months ago) |
|
|
RS, I already posted the link to the story about the insiders dumping their stock.
Well, the time to pull the plug is fast approaching. I plan to do it by wednesday, maybe even on monday. I'm back to about even for what I made in march and early april. I hope to recover some of that monday.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
|
SuperD
Cacti junky



Registered: 10/05/03
Posts: 6,648
Loc: The bridgesii bridge
|
Re: Stock Update for May 6, 2009 - BGZ, SDS, SKF, JCP [Re: Stonehenge]
#10310011 - 05/08/09 08:09 PM (14 years, 8 months ago) |
|
|
Are there any stocks you'd recommend buying on Monday?
--------------------
   D Manoa said: I need to stop spending all my money on plants and take up a cheaper hobby, like heroin. Looking for Rauhocereus riosaniensis seeds or live specimen(s), me if you have any for trade
|
geokills
∙∙∙∙☼ º¿° ☼∙∙∙∙


Registered: 05/08/01
Posts: 23,417
Loc: city of angels
Last seen: 3 hours, 55 minutes
|
Stock Update for May 11, 2009 - COF [Re: geokills]
#10324182 - 05/11/09 08:30 PM (14 years, 8 months ago) |
|
|
Capital One Financial (COF), my bane!!
Discipline trumps conviction. I violated one of my key disciplines by neglecting to define my risk on the recent short I initiated in Capital One Financial (COF). Thankfully, I did not add to the short as it was squeezed to unbelievable heights over the past two weeks. Nevertheless, COF was around $18 when I initially went short and closed over $30 last week! With no trailing stop in place and on blind conviction, I rode this one to an unrealized loss of around 75% at its worst!
There is some relief today, with COF announcing a 56 million share secondary offering. This had the stock down some 10 - 12%, which I used as an opportunity to close out half of the short position... at an extremely disappointing 50% loss. This has by far been my worst trade, ever. Most regrettable is that I thought I'd learned this lesson about clearly defining my risk in the past, and to repeat it at such a cost is unbelievably frustrating. I'm pretty sure I won't be making this mistake a third time.
I still have quite a few short positions on, including my remaining stake in COF as well as AXP, CAKE, JCP, and the long-sided leveraged inverse funds BGZ, SKF, and SDS. As I will be away from my computer Wed-Fri, tomorrow is my last day to give good attention to my portfolio, and I am hoping for some more downside in order to further lighten my short bias, in turn bringing my portfolio into to a relatively flat position (roughly equal short & long exposure)... as not to worry while I'm away with my honey enjoying a special burrito at Las Palmas in Santa Cruz, CA and getting down with the Dead the next day at Shoreline!

--------------------
-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
|
NoAgenda
THEY'RE BABIES!



Registered: 03/12/09
Posts: 348
Loc: NYC
Last seen: 14 years, 1 month
|
Re: Stock Update for May 11, 2009 - COF [Re: geokills]
#10327607 - 05/12/09 02:32 PM (14 years, 8 months ago) |
|
|
Wheres a good place to get news on stocks? I usually listen to Andrew Horowitz when he talks with John C. Dvorak at www.thedisciplinedinvestor.com, buts that's the only place I know of.
And if I did want to get deeply into stocks what should I be taking in school or learning about?
|
Stonehenge
Alt Center

Registered: 06/20/04
Posts: 14,850
Loc: S.E.
|
Re: Stock Update for May 11, 2009 - COF [Re: NoAgenda]
#10328004 - 05/12/09 03:47 PM (14 years, 8 months ago) |
|
|
I feel your pain, geo. I'm in the same boat but probably losing even more. I had a good day yesterday and another good one today. It puts me back into positive territory but I'm still way behind on my shorts. I think I'll close out the ge tomorrow and wait and see on the ebay. At some point you have to pull the plug.
It doesn't matter if it's stupid money or smart money pouring into the market. It doesn't matter if it's all happy talk from the media making them do it. What counts is the price a stock reaches.
"COF was around $18 when I initially went short and closed over $30 last week! "
Good lord and I thought I was in trouble when ge went from 10 to 14. But you probably only have a little in it. It's only money, right? Easy come easy go.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
|
geokills
∙∙∙∙☼ º¿° ☼∙∙∙∙


Registered: 05/08/01
Posts: 23,417
Loc: city of angels
Last seen: 3 hours, 55 minutes
|
Stock Update for May 12, 2009 - COF, BGZ, AXP, US$ & Gold [Re: Stonehenge]
#10330203 - 05/12/09 11:05 PM (14 years, 8 months ago) |
|
|
As the market tacked on more losses (intra-day) today, I had placed some stops that were triggered on three of my shorts.
Closed out the remainder of my COF short position for a 35% loss, my AXP position for a 3% loss, and was stopped out of BGZ at a 9% loss. While I'm not proud of that performance, I am proud that I didn't panic when things seemed at their worst last Thursday and Friday and I felt like the losses would never end! Having the wherewithal to take a breath and wait for my emotions to cool allowed me to make back almost 50% of what I had "lost" on paper at the worst moment last week.
In happier news, my short position in Cheesecake Factory (CAKE) is performing, up better than 15% so far. Likewise, my JCPenny (JCP) short is also up a handsome 12%. I did add to the SKF today just a touch, but am keeping a tight stop just in case. That leaves me positioned fairly conservatively again - thank goodness! Tomorrow it's off on a mini three-day vacation and hopefully next week I'll find some better opportunities to grow my capital.
I will have a couple of hours tomorrow morning, in which I may find a way to play dollar weakness, as the US Dollar is now breaking below its 200-day moving average. I may use a short dollar ETF like the UDN, or add to my position in the SPDR Gold Trust (GLD), or even to a gold miner like Yamana (AUY). Of course, trailing stops will be mandatory - especially since I'm leaving town again!
Discretionary Portfolio as of 5/12/2009:- 47% Cash
- 9.9% Kinder Morgan Energy Partners (KMP)
- 8.2% WalMart (WMT)
- 7.3% UltraShort S&P500 ProShares (SDS)
- 6.0% UltraShort Financials ProShares (SKF)
- 5.5% Pepsico (PEP)
- 5.1% BP plc (BP)
- 4.3% iShares FTSE/Xinhua China 25 Fund (FXI)
- 4.0% Gilead Sciences (GILD)
- 3.9% SPDR Gold Trust (GLD)
- 2.2% Marathon Oil (MRO)
- 2.1% JPMorgan (JPM)
- -2.5% margined short equivalent JCPenny (JCP)
- -5.4% margined short equivalent Cheesecake Factory (CAKE)
NoAgenda: You could take some courses in both economics and psychology that may or may not prove useful in developing an understanding of the stock market and how to trade within it. But honestly, getting your hands dirty and experiencing it first hand is the most reliable way to learn this thing... and even then, you'll never be able to find a rational explanation for why the market does what it does, as it's oftentimes an irrational place. Start up a funny-money portfolio and get some hands on experience in the trenches. Take a moment to read my first post in this thread if you haven't already, and keep the following websites in mind:
--------------------
-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
|
geokills
∙∙∙∙☼ º¿° ☼∙∙∙∙


Registered: 05/08/01
Posts: 23,417
Loc: city of angels
Last seen: 3 hours, 55 minutes
|
Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: geokills]
#10331444 - 05/13/09 08:51 AM (14 years, 8 months ago) |
|
|
Just a quick note that my remaining short hedges continue to perform this morning and I am flat to higher on a day that has so far seen the market down 2%. I am making a few moves, with protection, for the subsequent three days that I will be away. The idea is to get some long exposure to a beaten down sector (real estate), while hedging for inflation (gold mining), and simultaneously leaving enough room for my shorts to continue performing, but not so much that they'll eat me alive if we experience another large upswing.
- Bought 1000 shares of ProShares Ultra Real Estate (URE) @ $3.50, with 1000 more on order if the fund should get to $3.25. Trailing sell stop will currently be triggered at $3.00, for a maximum 15% loss. This is a high yielding leveraged real-estate related fund. It's been beaten down and the downside looks minimal at this point.
- Limit order for 500 shares of Yamana Gold (AUY) at $9.12, with a 5% trailing stop on execution. AUY has been able to consolidate a slow ramp higher over the past month, and as gold is now breaking out over its 50 day moving average, I think this gold mining company has room to run.
- My JCPenny (JCP) short continues to fall on bad news from Macy's today that is hurting the retail sector at large. This one is already a 15% gain for me, and if I were able to watch closer over the next few days, I would have a tighter stop... but to act as a hedge while I'm away, I am keeping my trailing stop a little wider at 5%.
- UltraShort Financials ProShares (SKF) also seems to be turning higher, on the heels of the major secondary offerings coming out of so many banks recently. Dilution is at work and these stocks were getting priced for perfection. Alas, a perfect environment is not what we have. Of course, these stocks are still very susceptible to governmental manipulation, so I will keep a 7% trailing stop active here.
- My Cheesecake Factory (CAKE) short has now returned better than 19% on my book. It hasn't shown any signs of turning higher yet, but I will keep a 6% trailing stop active, which would currently require the stock to trade above yesterday's closing highs in order to close the position.
That's all for now... time to hit highway 101 and hang out on the beach in Santa Cruz this afternoon! 
--------------------
-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
|
SuperD
Cacti junky



Registered: 10/05/03
Posts: 6,648
Loc: The bridgesii bridge
|
Re: Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: geokills]
#10331516 - 05/13/09 09:15 AM (14 years, 8 months ago) |
|
|
I'm getting my ass handed to me so far this morning. Gained $247 yesterday and lost $305 thus far today, still going down.
--------------------
   D Manoa said: I need to stop spending all my money on plants and take up a cheaper hobby, like heroin. Looking for Rauhocereus riosaniensis seeds or live specimen(s), me if you have any for trade
|
pothead_bob
Resident Pothead


Registered: 04/12/08
Posts: 1,811
Loc: Your computer screen
Last seen: 3 years, 9 months
|
Re: Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: SuperD]
#10331588 - 05/13/09 09:49 AM (14 years, 8 months ago) |
|
|
It's been a while since I've been on this thread, but I found out about HTGC on here and it's been quite good to me since then. I've picked it up in increments all the way to it's low and now I'm making money riding it up. I've been making bank with it's super-high dividend of around 20%, too.
I've been switching my investing strategy to high paying dividend stocks like HTGC because of the nice steady income. I was wondering if anybody on here had some reccomendations for good companies that pay a hefty dividend? A friend of mine owns LINE, which is in the US gas/oil business. Anybody have opinions on this one?
-------------------- No knowledge can be certain, if it is not based upon mathematics or upon some other knowledge which is itself based upon the mathematical sciences. -Leonardo da Vinci (1425-1519) Speak well of your enemies. After all, you made them.
|
Stonehenge
Alt Center

Registered: 06/20/04
Posts: 14,850
Loc: S.E.
|
Re: Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: pothead_bob]
#10331769 - 05/13/09 10:51 AM (14 years, 8 months ago) |
|
|
So far I'm having my best day ever. But the day isn't over yet. GE is finally dropping like it's supposed to and so is ebay. I may get out of the woods yet. I'm glad I didn't close my positions too early. I don't know if that was discipline or lack of it. Geo, I bet you wish you had held on to your cof a little longer. If this keeps up I'll be out of the woods soon. If I had pulled the trigger last week, last friday lets say, I'd be very unhappy now.
It goes to show that no amount of happy talk in the media can overcome a steady diet of bad news in the real world. Even the stupid money is starting to notice the truth. I'm going to ride this down and then go long, just as I planned before everything went wrong. Even my sds is up.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
|
Hotnuts
old hand



Registered: 02/26/05
Posts: 3,436
Loc: Wild Blue Yawnder
Last seen: 25 days, 10 hours
|
Re: Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: Stonehenge]
#10336631 - 05/14/09 07:20 AM (14 years, 8 months ago) |
|
|
Remember what I mentioned a couple of months ago about tech getting pounced on? Rumor is, short sellers are starting to pile up onto technology, retailers and financials.
Edited by Hotnuts (05/14/09 07:21 AM)
|
Stonehenge
Alt Center

Registered: 06/20/04
Posts: 14,850
Loc: S.E.
|
Re: Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: Hotnuts]
#10338386 - 05/14/09 03:05 PM (14 years, 8 months ago) |
|
|
I'm still waiting for the market to simmer down but I did close out my ge shorts today. It was down to 12.91 end of the day yesterday and I was tempted to close then. But I put in a limit order and picked it up at 12.73 when it dipped this morning. I also bought 2000 shares at 12.72. When I logged in today I see that it's up to 13.14 so I sold for a profit of 42 cents a share. I then sold 1000 shares short at 13.13. It closed at 13.04 and I plan to flip it when it drops to 12.93. I'm grabbing those fast profits now.
I had a good day monday, a better day tuesday and a very good day wednesday. If I had closed out ge on friday I'd be slapping my head by now. I close the short position at near the low for the day, made $840 on the way up and am sitting on a profit for my new short. I made over 900 today on ge plus saved money closing my previous shorts. Ebay is up or I would have made money for the day. I'm not worried about ebay, I'll make a profit when I close it out.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
|
Stonehenge
Alt Center

Registered: 06/20/04
Posts: 14,850
Loc: S.E.
|
Re: Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: Stonehenge]
#10354933 - 05/17/09 06:37 PM (14 years, 8 months ago) |
|
|
I nailed the short on ge for a 22 cent profit on 1000 shares. I would have made more if I had waited a little longer but a bird in the hand... I have an open buy order for 12.60 which I will also quickly flip. My sds has been going sideways but I'm up slightly. I noticed your CAKE stock went up, geo. I don't think that's what you wanted. But remember the saying, you can't have your cake and eat it too. <-- that was a little stock humor. Us stock market players are a jovial bunch.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
|
SuperD
Cacti junky



Registered: 10/05/03
Posts: 6,648
Loc: The bridgesii bridge
|
Re: Stock Update for May 13, 2009 - URE, AUY, JCP, SKF, CAKE [Re: Stonehenge]
#10354992 - 05/17/09 06:47 PM (14 years, 8 months ago) |
|
|
Nicely done, Stoney. I don't have an account set up to try doing short sales but I envy the profits seen here by some such as yourself.
--------------------
   D Manoa said: I need to stop spending all my money on plants and take up a cheaper hobby, like heroin. Looking for Rauhocereus riosaniensis seeds or live specimen(s), me if you have any for trade
|
geokills
∙∙∙∙☼ º¿° ☼∙∙∙∙


Registered: 05/08/01
Posts: 23,417
Loc: city of angels
Last seen: 3 hours, 55 minutes
|
Stock Update for May 17, 2009 - CAKE, JCP, SKF, AUY, URE [Re: Stonehenge]
#10356217 - 05/17/09 11:30 PM (14 years, 8 months ago) |
|
|
I was stopped out of my CAKE short on Thursday for a 19% gain.  Picked up another 15% after being stopped out of JCP at $27.33.
Stopped out of a trade in the SKF for no gain/loss. Triggered into AUY and stopped out for a 4% loss. I was also triggered into buying an additional 500 shares of URE @ $3.20.
May be looking to get back into AUY long and JCP short tomorrow morning. Also looking at FXB @ $150, adding to my SDS and selling some FXI.
--------------------
-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
Edited by geokills (05/18/09 12:52 PM)
|
geokills
∙∙∙∙☼ º¿° ☼∙∙∙∙


Registered: 05/08/01
Posts: 23,417
Loc: city of angels
Last seen: 3 hours, 55 minutes
|
Stock Update for May 18, 2009 - FXI, URE, SDS [Re: geokills]
#10358961 - 05/18/09 02:39 PM (14 years, 8 months ago) |
|
|
Had a great day today, thanks to URE as my largest position - up a solid 13%. I've since booked profits into the strength and added to my Ultrashort S&P (SDS).
- iShares FTSE/Xinhua China 25 Fund - Closed position for a 32% gain
I was fortunate to ride an excellent ramp in this name over the past several months. The Chinese stimulus plan is in fact stimulating their economy, however given the large run up in conjunction with weak Asian markets overnight (with the exception of India!), I'm going to capitalize on today's strength and close the position for the handsome 32% gain. If shares fall back to $30 - $32, you will probably see me buying this one back, as China's economy continues to grow and their government has been very proactive in implementing real stimulus programs.
- ProShares Ultra Real Estate (URE) - Sold 500 shares (1/3 of position) for a 9% average gain
This leveraged Real Estate ETF ramped today after Lowes (L) reported a great quarter. Inventory for home builders has also returned to a normal level, so I wouldn't be surprised to see this one continue to ramp as people continue to view real estate as "not so bad". All the same, since I bought 500 shares on the weakness last Friday at $3.20, I want to lock in the quick 17% move from that entry. I'm still keeping 1000 shares on the trade, as I expect Home Depot (HD) will also surprise to the upside tomorrow and this one could get some momentum swingin' behind it. However, since this ETF in particular has been extremely volatile, I will not hesitate to sell into massive strength and possibly buy weakness.
- UltraShort S&P500 ProShares (SDS) - Bought 25 shares @ $59.40
I added to my downside protection in the form of this leveraged inverse S&P 500 ETF. The S&P 500 will meet strong resistance at 910 (closing today just shy of that mark), and given the rolling over of the various overbought oscillators last week, including the violation of the uptrend channel on the Russell 2000... I just want to have something to feel good about in case we go down. Of course, I am adding to this position slowly, as this market has now proven to be very resilient. I will stay away from the triple bear funds like BGZ for now, but if we pop again tomorrow, I will likely continue to add to this position in the SDS.
Discretionary Portfolio as of 5/18/2009:- 47.6% Cash
- 9.0% UltraShort S&P500 ProShares (SDS)
- 9.0% Kinder Morgan Energy Partners (KMP)
- 7.4% WalMart (WMT)
- 6.2% ProShares Ultra Real Estate (URE)
- 5.2% Pepsico (PEP)
- 4.6% BP plc (BP)
- 3.6% SPDR Gold Trust (GLD)
- 3.6% Gilead Sciences (GILD)
- 2.0% JPMorgan (JPM)
- 2.0% Marathon Oil (MRO)
--------------------
-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
|
Stonehenge
Alt Center

Registered: 06/20/04
Posts: 14,850
Loc: S.E.
|
Re: Stock Update for May 18, 2009 - FXI, URE, SDS [Re: geokills]
#10364577 - 05/19/09 02:22 PM (14 years, 8 months ago) |
|
|
Geo, your strategy of not settling all at once paid off for you with your cake. Instead of settling it all about a week ago, you saved some and made money on the remainder. In my case, settling all my ge shorts last week turned out to be the best move. It shot up to over 13.90 today. I'd be in a real funk thinking about the missed opportunity if I hadn't settled. As it is, I made over 1000 playing the ups and downs although my latest short ran into trouble. I shorted 1000 ge at 13.44 and today it's up. I went and shorted another 1000 at 13.91. It closed at 13.70. Ebay shot up so I shorted another 1000 at 18. If that keeps going up I'm in trouble. It closed at 17.87.
I expect the market to take a long awaited dive end of this week or early next week. GM is headed for bankruptcy, chrysler already is, and ford is in trouble. RE keeps dropping but the papers are babbling happy talk. How long can that work? I plan to close out my ge shorts and go long and close out my ebay shorts too. SDS dropped to below 58 or just above where I bought it. Don't worry, geo, it'll go up when the little crash comes and you'll make money on your latest purchase. You may make money on the stock you bought at 66 too. That's where I'm getting out. Silver is up, I haven't checked gold.
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
|
NoAgenda
THEY'RE BABIES!



Registered: 03/12/09
Posts: 348
Loc: NYC
Last seen: 14 years, 1 month
|
Re: Stock Update for May 18, 2009 - FXI, URE, SDS [Re: Stonehenge]
#10366503 - 05/19/09 08:33 PM (14 years, 8 months ago) |
|
|
I just got a Share Builder account for my birthday. Can anyone suggest a few shorts for right now?
I bought PRGN at 6
Edited by NoAgenda (05/20/09 11:07 AM)
|
geokills
∙∙∙∙☼ º¿° ☼∙∙∙∙


Registered: 05/08/01
Posts: 23,417
Loc: city of angels
Last seen: 3 hours, 55 minutes
|
Stock Update for May 20, 2009 - BAC, SDS [Re: geokills]
#10372327 - 05/20/09 08:55 PM (14 years, 8 months ago) |
|
|
- Bank of America (BAC) - Bought 225 shares @ average price of $11.50
I am now beginning to build CORE positions in the financial sector that I intend to potentially maintain for 5 to 10 years or more. I've started with JPMorgan (JPM), which is probably one of the best off, and now I am going to take on a little more risk for a little more potential reward by building a long-term position in Bank of America. This does not mean I won't trade around these positions by selling strength and buying weakness, but the confluence of events including our government's insistence in not letting our major banks fail, and the numerous secondaries that have been issued over the past week, the fact that the stocks are holding the issue price of the new shares indicates that the demand is there. Furthermore, all of these capital raises give the banks more security in being able to see through the current turmoil in the financial markets. And since the Fed has been giving these banks money at essentially no charge, the net interest margin (the amount of money banks can make by extending credit with the capital they have) is tremendous - well above normal levels.
Bank of America in particular, offered close to 1 billion new shares yesterday for $10.75. Even though this was a huge offering of new stock, many fund managers were unable to obtain the number of shares they wanted and some were shutout completely (this may be due to the government of Kuwait taking down a large portion of the offering). In addition to that simple evidence of exceptional demand, there were restrictions placed on the secondary offering such as not allowing purchasers to flip the majority of their positions for a specific time period. As Doug Kass put it:Conditions today are far different than last year for the banking industry.
In 2008, most failed to forecast the magnitude of the economic and housing downturn. I saw it by contrast. What I didn't see (in part, owing to the opaqueness of the banking industry's disclosure) was the magnitude of the weight of the toxic assets held on their balance sheets.
Now market participants are aware of the depth of the problems, and the industry has been recapitalized. Normalized earnings will come into greater focus, and the value of a low-cost and stable deposit base will emerge following solvency fears.
The stocks have been huge winners, and Armageddon is off the table.
I suspect that the pace of share-price appreciation will not moderate as the above factors come into focus. I also believe that there is risk of a double-dip, as I related in yesterday's opener on The Edge (my exclusive RealMoney Silver trading diary), but I strongly believe that before that double-dip becomes an issue, the bank stocks will continue on their ascent. I will continue to build a position in BAC on weakness.
- UltraShort S&P500 ProShares (SDS) - Bought 25 shares @ $57.25
Averaging down on this hedge against my increasing long positions and lack of individual shorts. This will help protect me in the event that the market falters - which at this point is very difficult to tell. But given how resilient the market has been over the past few months, one should be mindful that things do not tend to go up in a straight line forever. One must also be aware that though the S&P has been able to maintain its up-trending channel, the Nasdaq and Russell 2000 have not. It shouldn't take much to trigger a fall back below 900 on the S&P. I would expect that should we close below 895 on the S&P, it's not a far cry to see us re-visit 875 in short order.
Discretionary Portfolio as of 5/20/2009:- 41% Cash
- 11.6% UltraShort S&P500 ProShares (SDS)
- 9.1% Kinder Morgan Energy Partners (KMP)
- 7.3% WalMart (WMT)
- 5.8% Ultra Real Estate ProShares (URE)
- 5.3% Pepsico (PEP)
- 4.7% BP plc (BP)
- 4.3% Bank of America (BAC)
- 3.6% SPDR Gold Trust (GLD)
- 3.5% Gilead Sciences (GILD)
- 2.0% Marathon Oil (MRO)
- 1.9% JPMorgan (JPM)
--------------------
-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
|
Stonehenge
Alt Center

Registered: 06/20/04
Posts: 14,850
Loc: S.E.
|
Re: Stock Update for May 20, 2009 - BAC, SDS [Re: geokills]
#10377493 - 05/21/09 04:43 PM (14 years, 8 months ago) |
|
|
Good for you, geo. SDS is up 1.68 today. I predict a market downturn by monday. I had a good day today. I closed out my ge shorts for a tasty profit and saw my ebay shorts drop over half a point. Silver and gold were up too. I closed out one lot of ge shorts at 13.29 for a profit of 15 cents and another lot for a profit of 61 cents. That gives me the equivalent of a 76 cent profit on 1000 shares. I then bought 2000 ge at 13.13 and flipped them in after hours at 13.24 for an 11 cent profit on 2000. I just said give me the 11 cents and there will be no trouble.
I'm getting to be the wall street panhandler. I'm rattling my tin cup and saying "got any spare change?" But as all good pan handlers know, if you pick up a little change here and a little change there, it adds up. I'll try to grab some more change tomorrow.
BTW, when you were short on your CAKE stock, is that like owning shortcake? Maybe you should have bought some strawberry and cream futures?
-------------------- “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (attributed to Alexis de Tocqueville political philosopher Circa 1835) Trade list http://www.shroomery.org/forums/showflat.php/Number/18047755
|
|