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TranceAddict Investors Club @ Marketocracy (pg. 122)
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| Moongoose |
I miss this thread, it need to come up to the front page more often.
Anyway i dont think very is an appropriate adjective for describing how spectacularly underpriced the market really is. Just look at EXM, it was 66$ 6 months ago today its about 9.2$...and 5 weeks ago it was 3.75 :crazy: Good stuff is happening right now if you're a smart investor. |
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| Krypton |
| quote: | Originally posted by Capitalizt
The market might be undervalued if the earnings estimates stick...but the trouble is many companies are going to be losing LOTS more money than they previously expected.. Things are worse than most people anticipated, so old earnings estimates are largely meaningless.
Drop those estimates 20-25% and see what your model says then Krypt. I think the market is fairly valued, or even slightly overvalued given current fundamentals. |
These aren't estimates. The 10-Year Treasury yield is today's current yield. The earnings and dividend yields for the Dow Jones are calculated from the third quarter 2008. The 4th quarter calculations are probably going to be done in February. |
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| atbell |
| quote: | Originally posted by Moongoose
I miss this thread, it need to come up to the front page more often.
Anyway i dont think very is an appropriate adjective for describing how spectacularly underpriced the market really is. Just look at EXM, it was 66$ 6 months ago today its about 9.2$...and 5 weeks ago it was 3.75 :crazy: Good stuff is happening right now if you're a smart investor. |
LOL
It's not around because falling stocks are just plain grim.
I know someone who was loosing 1000$ / day in Sept. and he calls himself a conservative investor. Needless to say anyone who's 'in the market' is feeling rough.
I'd stay out for at least another couple of months... |
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| Groundhog Boy |
| quote: | Originally posted by atbell
LOL
It's not around because falling stocks are just plain grim.
I know someone who was loosing 1000$ / day in Sept. and he calls himself a conservative investor. Needless to say anyone who's 'in the market' is feeling rough.
I'd stay out for at least another couple of months... |
I had a few of those days last fall. I just got numb to it, which wasn't good.
As for now, it's a bit late, but you could go short. Even with the drawbacks of the Ultra Shorts that have been highly discussed by now, that's worked out well for me over the last 2 weeks. I'm trying to figure out whether I need to exit the SDS tomorrow. I picked up in 2 parts, once the week between Christmas & New Year's and again early last week. I think it's going to rally with the AAPL and BAC news that came out after hours, but could pull back in the following days due to an Inauguration Day rally, not to mention that another day like today will put us at the support levels that we held a few times until the indexes broke through them for a few days before Thanksgiving.
SRS is going to soar as well after VNO's new dividend policy destroys that big chunk of the IYR tomorrow. That's one that you don't want to hold onto for very long and is just a trading vehicle. It was up 10% today and moved another 2.5 points higher in AH, but I've watched it go down that much or more in a few hours as well. |
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| Joss Weatherby |
Some financial pinks and otc stocks have been good to me the last few days, but a few NASDAQ traded finacial stocks have been bogging me down.
Krypton is right though, everything points to things being under-priced. BUY! Especially finance right now, everything is way below what its worth and if you spread out you can probably cover any loses in the long term. Beyond the death of capitalism everyone will eventually need credit again! :D
I might be crazy, but I am liking WaMu more and more. I think there is going to be some big turn arounds with them.
Then again I would never invest in any bankrupt companies unless its money you don't care about losing. :p |
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| Krypton |
| quote: | Originally posted by Joss Weatherby
Some financial pinks and otc stocks have been good to me the last few days, but a few NASDAQ traded finacial stocks have been bogging me down.
Krypton is right though, everything points to things being under-priced. BUY! Especially finance right now, everything is way below what its worth and if you spread out you can probably cover any loses in the long term. Beyond the death of capitalism everyone will eventually need credit again! :D
I might be crazy, but I am liking WaMu more and more. I think there is going to be some big turn arounds with them.
Then again I would never invest in any bankrupt companies unless its money you don't care about losing. :p |
:p WAMU? lol...
Personally, I'd stay away from the financial sector, but if I was to make a contrarian pick, it'd be Citigroup (C). They'v got some massive restructuring to do and they were at the very edge, but fortunately for their stock holders, they are considered "too big to fail". So they got their parachute, those lucky bastards. As with the contrarian aspect of it, if you're going to bet on a come back, Citigroup is it. Potential returns are 200+% in my opinion. The question for them is, are they going to split their business up, or are they going to sell some parts, or keep the same 'one-stop-shop' business model which they failed miserably at implementing.
IN fact, here is a valuation I did on Citigroup. If they didn't have their 'too big to fail' status, they'd be in the bankruptcy line, but they're not. So yea....pay heed to the green areas.
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| Joss Weatherby |
| quote: | Originally posted by Krypton
:p WAMU? lol...
Personally, I'd stay away from the financial sector, but if I was to make a contrarian pick, it'd be Citigroup (C). They'v got some massive restructuring to do and they were at the very edge, but fortunately for their stock holders, they are considered "too big to fail". So they got their parachute, those lucky bastards. As with the contrarian aspect of it, if you're going to bet on a come back, Citigroup is it. Potential returns are 200+% in my opinion. The question for them is, are they going to split their business up, or are they going to sell some parts, or keep the same 'one-stop-shop' business model which they failed miserably at implementing. |
See with WaMu, my hope is that they come out of BK and even though they lack their banking business they go into credit cards more or some other sort of financial industry. That is the talk that I have heard at least from a few places.
I have been keeping an eye on Citigroup, but all of the national banks exposure to this sub-prime is too much for me. I mean granted WaMu was in that same boat, but still, I can make a reasonably small investment there with the hopes that in the long run I will make massive returns. These somewhat still worth something major banks are too unstable for my blood.
Regional US banks are what I have faith in right now. They were way too small to expose themselves to a lot of this mess right now in the credit market and the are the only ones still making loans. On top of that they are making loans with even more precaution than they did before so they seem like stable investments to me.
I want to get out of finance a bit though and more into energy.
Krypton, do you know of any companies related to the Pebble Bed Reactor (PBR) industry? I think its an incredibly viable solution to a lot of the issues with nuclear power. |
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| Krypton |
| quote: | Originally posted by Joss Weatherby
See with WaMu, my hope is that they come out of BK and even though they lack their banking business they go into credit cards more or some other sort of financial industry. That is the talk that I have heard at least from a few places.
I have been keeping an eye on Citigroup, but all of the national banks exposure to this sub-prime is too much for me. I mean granted WaMu was in that same boat, but still, I can make a reasonably small investment there with the hopes that in the long run I will make massive returns. These somewhat still worth something major banks are too unstable for my blood.
Regional US banks are what I have faith in right now. They were way too small to expose themselves to a lot of this mess right now in the credit market and the are the only ones still making loans. On top of that they are making loans with even more precaution than they did before so they seem like stable investments to me.
I want to get out of finance a bit though and more into energy.
Krypton, do you know of any companies related to the Pebble Bed Reactor (PBR) industry? I think its an incredibly viable solution to a lot of the issues with nuclear power. |
I hate to inform you, JP Morgan Chase acquired all of WAMU...:(...There is no such thing as Washington Mutual anymore. Their stock has been completely delisted from all the exchanges, except pink sheets. Personally, I think pink sheet exchanges are bunch of crap which I wouldn't ever touch.
As I said, Citigroup is 'too big to fail'. The government won't let them fail, so really, it doesn't matter how much subprime exposure they have, they'r not going to fail. WAMU, as I'v said, doesn't even exist anymore. So yea, you don't have anything to go on with them...:p
Anyways, I'm not even going to touch the financial sector. I only chose Citigroup as a pick if I had to choose one financial stock to buy. I wouldn't touch regional banks or any of that poo poo. I'm playing the dry bulk shipping sector. NM, DSX, TRMD, EXM, ESEA. Those are some good names.
I know there are several factions who want to resume construction of nuclear power plants, but currently, there are none in the works that I know of because of a government moratorium on building them. If you believe the government will allow nuclear power plants to be built again, you might want to bet on the price of uranium going up by buying uranium mining stocks, or uranium futures contracts, or buying uranium stock options.
Oh, and PBR to me stands for Petroleo Brasileiro (PBR) which isn't that bad of a company...:) |
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| Joss Weatherby |
| quote: | Originally posted by Krypton
I hate to inform you, JP Morgan Chase acquired all of WAMU...:(...There is no such thing as Washington Mutual anymore. Their stock has been completely delisted from all the exchanges, except pink sheets. Personally, I think pink sheet exchanges are bunch of crap which I wouldn't ever touch.
As I said, Citigroup is 'too big to fail'. The government won't let them fail, so really, it doesn't matter how much subprime exposure they have, they'r not going to fail. WAMU, as I'v said, doesn't even exist anymore. So yea, you don't have anything to go on with them...:p
Anyways, I'm not even going to touch the financial sector. I only chose Citigroup as a pick if I had to choose one financial stock to buy. I wouldn't touch regional banks or any of that poo poo. I'm playing the dry bulk shipping sector. NM, DSX, TRMD, EXM, ESEA. Those are some good names.
I know there are several factions who want to resume construction of nuclear power plants, but currently, there are none in the works that I know of because of a government moratorium on building them. If you believe the government will allow nuclear power plants to be built again, you might want to bet on the price of uranium going up by buying uranium mining stocks, or uranium futures contracts, or buying uranium stock options.
Oh, and PBR to me stands for Petroleo Brasileiro (PBR) which isn't that bad of a company...:) |
Are you sure about Wamu? Washington Mutual Inc. still exists as a company, and that is the entity in chapter 11 right now. Its banking division, assests, liabilities, etc were sold to JP Morgan Chase.
I still think Citigroup can fail, they said Wamu Bank was too big to fail too, and there it went. Like you said above, it might be split into a whole slew of things as well and not even come out of this as Citigroup anymore.
Also at somepoint I am pretty sure the Americans wont want anymore of this bailout stuff. :p |
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| Groundhog Boy |
| quote: | Originally posted by Joss Weatherby
Are you sure about Wamu? Washington Mutual Inc. still exists as a company, and that is the entity in chapter 11 right now. Its banking division, assests, liabilities, etc were sold to JP Morgan Chase.
I still think Citigroup can fail, they said Wamu Bank was too big to fail too, and there it went. Like you said above, it might be split into a whole slew of things as well and not even come out of this as Citigroup anymore.
Also at somepoint I am pretty sure the Americans wont want anymore of this bailout stuff. :p |
I'm sure about WaMu since I had shares the day it got taken over. Also, you can go to their online website and see who owns them at the bottom - https://www.wamu.com/personal/default.asp
WaMu was miniscule compared to the megabanks like JPM, Citi and BoA.
As for Citi or BoA, at these values, I'd be a buyer, except for the fact that "too big to fail" pertains to the company, not the stocks. If things get bad enough, the government bailouts could severely dilute shareholders, just like what happened with AIG. |
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| jerZ07002 |
| quote: | Originally posted by Groundhog Boy
I'm sure about WaMu since I had shares the day it got taken over. Also, you can go to their online website and see who owns them at the bottom - https://www.wamu.com/personal/default.asp
WaMu was miniscule compared to the megabanks like JPM, Citi and BoA.
As for Citi or BoA, at these values, I'd be a buyer, except for the fact that "too big to fail" pertains to the company, not the stocks. If things get bad enough, the government bailouts could severely dilute shareholders, just like what happened with AIG. |
the problem with these banks is they have intangible asset values (goodwill) from prior acquisitions that are inflating their worth. For those who don't know, when a company pays a 50% premium in an acquisition, most of that premium goes into the value of goodwill, and sits on their balance sheet as an asset. In hindsight, these acquisitions don't look so good and the premium isn't justified as an asset. Now, those premiums have to be taken off their books to reduce their book values. There are about to be huge revaluations on their balance sheets and you are likely to see intangible asset values slashed in half. Take a close look at the intangible asset values of these companies. Some companies have book values that are hugely out-of-line with market capitalization. I would stay away from financials. While i agree that these companies will eventually have to lend again, i don't know how much these companies have to reduce their book value to be in line with realistic valuations.
This link discusses a goodwill revaluation taken by Macys, as a result of overvaluing an acquisition.
http://www.bloomberg.com/apps/news?...7xPw&refer=home |
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| Shakka |
| Or as we like to say with the dangers of debt..., the asset values may fluctuate, but the debt stays. The banks are even more desperate when they have insufficient Tier 1 capital ratios and can't raise equity... |
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