September Stock Talk III

@.75, does look crappy, like it longer term however

Did anyone view that interview on the street.com on CRDC. Basically, if not, guy said buy if it goes over 12 bones, but not until then. And of course he pointed out that no one ever knows how to properly value these type of experimental stocks.

Vermeer,

I am unable to watch streaming video on my comp..I have no clue as to why, so I dont even try.

I think the risk/reward on that CRDC is good enough to take a gamble. If it goes back to 8 I will buy in and not sell like a dope last week..  

Basically a young (to me ) "hedge fund manager/day trader" said, do not touch it until i gets to 12.Buy then purely on price action alone, as 12 would be the breakout price to start.

  Depending on your computer you just need quicken or real audio or windows media player installed...and have a decent speed connection.  More and more content will be video, so it should be something you would want to get the bugs out of. But any recent comp should handle it.But what the heck...I hate crashing and avoid things that even give me any instability, so I get the reasoning behind not bothering
 

Vermeer,

Yeah I have Quick Time and WM player and Real Player etc...just somthing about my laptop that refuses to play longer than a minute of ANY streaming video..it pisses me off so much that during the holidays I will get another laptop. All the research and fixes I have tried dont work period.

I get what the guy is saying..momentum over the high with volume, but I think it is worth the risk if it drops another buck....regardless of what that point he was making.     

OK gotcha on the laptop deal. I do know a computer tech who does nothing but laptops, so if in any way you want to hear his idea of what is happening, just let me know th model and make and I will ask him. He has been a goldmine for me with similar irritations.

 The question unresolved to me in that interview was when can anyone properly value such a stock? After a quarter post run up, after two quarters, after a year, when? Like I say, he knew almost nothing really about the stock but the technical aspects. His rule of thumb seems simple enough, wait until you see it has staying power at higher levels, post initial ramp up, then feel safer that it has legs.

From a newsletter...

Let's look at 1987, 1998 and 2000. All three periods had rather solid US economies. All three had rather significant disruptions. And all three saw the Fed open the liquidity flood gates.

You can expect the same today. As I have often written, when the Fed embarks upon a new course, they will go further and the course will last longer than anyone thought at the beginning of the process. Who thought when the Fed began to loosen monetary policy in early 2001, when rates were 6.25%, that we would see 1% within a short period of time? And who thought it would stay that way for so long? And when they began tightening again? Who thought it would get to 5.25%? Back then, 4% seemed like a very high rate.

Right now, the market is pricing in rate cuts of 75 basis points by the end of the year and another 25 basis points within 12 months. I think that is low. If the Fed is cutting, it is because they see the economy weakening. And I think that means they will cut more than anyone expects. What is the end number? I don't know. But I bet it is a lot lower than 4.5%.

Why? Because the credit markets are going to take a lot longer to sort out the mortgage problems than we might think. And that means that a lot of homes are not going to move for some time, which is not good for consumer sentiment or spending. And there will be substantially less mortgage equity withdrawal. As home prices drop 10% and then 15% and then 20%, boomers are going to realize that a large part of what they thought they had for retirement in the equity of their homes is not there. That means they need to spend less and save more. While that is good as an individual policy, it is rough on the economy at large. I still think this process ends in a recession.

But John, (I hear you ask) if the Fed cuts rates, won't that make mortgages cheaper? The answer is that for conforming loans it will. But right now, if you want a home with a loan larger than $417,000, you are looking at interest rates as high as 9%, even with excellent credit. And if you have poor credit? There are no subprime loans for you, without substantial down payments.

The problem, as I repeat, is not the availability of liquidity. It is the lack of credibility. No one is buying paper they are not absolutely 100% sure about. And until a new mechanism is developed that will allow for transparency in the mortgage markets which will then allow for the securitization process to being again, it is going to be tough to get a mortgage for someone who does not fall with the confines of conforming loans (for foreign readers, those are agency loans made by quasi government agencies like Fannie Mae which have the implicit backing of the US government.)

It will take some time, but the current disorder will again become order and the process will begin again, with a bubble happening in some other market which will eventually come undone and create a new black swan event.

(And yes, the implications of lower rates means a lower dollar and thus higher gold.)

And let's end with a great quote from Taleb, which is not exactly on point, but is a great quote nonetheless.

"We humans are the victims of an asymmetry in the perception of random events. We attribute our success to our skills, and our failures to external events outside our control, namely to randomness. We feel responsible for the good stuff, but not for the bad. This causes us to think that we are better than others at whatever we do for a living. Ninety-four percent of Swedes believe that their driving skills put them in the top 50 percent of Swedish drivers; 84 percent of Frenchmen feel that their lovemaking abilities put them in the top half of French lovers." (p. 152)

yeah that kind of says what we have been talking about concerning the Fed..

Anyone read this article about GreenspaM bashing Bush to sell books?

LINK

Problem is Greenie was head of the FED for the majority of Bush's reign of terror, so how can he bash Bush (which was deserved btw) while patting his back in public while Fed-Head?

To me Greenie was just as bad or worse with the garbage he did while chair, trying to smash the market too late, then save Bush and the market after 9-11 and wait too long and ignore the subprime mess on his watch.

Greenie is smarter than Bush so I expect more from him than book-selling bashing.  

I have no real love for Greenie, far from it.But I do think he is correct in this evaluation of Bush's absolute abandonment of conservative fiscal policy.Bush never met a spending bill he did not like, and as a result has been a profound disappointment to me.

 In essence, he ran like a conservative, yet has spent like a drunken sailor You expect the Democrats to do nothing but tax and spend, you would like to think the Republicans offer a choice, but the Bush brand of Republicanism does not.

 .In fact, one could make a reasonable case that Bill Clinton's administration  was that of a Taft Republican. Ironically, Bush is more like LBJ, spending enormous amounts of money and prosecuting an unpopular war, and the economic consequences (stagflation) will also, I suspect, be  regrettably similar.

Vermeer,

Greenspam said the most intelligent president he worked with was Clinton, the most vulgar was Nixon and the worst was Bush I, that Bush I would try and upstage the FED in public and that Bush was a control freak and Bush II was the most fiscally irresponsible president.

He also said Mr.Clinton would make a good president which I found interesting from such a conservative republican like Greenie is.

Depeche, are you holding IRBT? Tough break on that stock...  

ws, yeah I am.  Friggin sucks.  Story is fluid though.  The company that was awarded the contract seems like a two-bit operation and was sued a few weeks ago by IRBT for patent infringement.  The owner is a former IRBT employee and the product appears to be a knockoff.  IRBT claims that he has tried to destroy evidence.

D2,

Well if you think so then this is a chance to buy 25% lower..

Also known as just higher than the price I paid ($18.08) a few months ago.  I'll stick with my position and I do think it will head back higher.

Navigant Consulting (NCI) getting whacked today.  Had that on my possibly buy watchlist.  Looks like they are going to deliver some bad news.

Looking for a couple stocks to buy and really lost on how to play it.

D2,

never heard of NCI, but today makes a 52 week low..tell me what you like about it? I see why they tanked it..cancelled an investor conference and release early, reorganize..not good if you ask me.

Gunners...no way no how on IOM. I think they really should be a private company. Their margins are THREE PERCENT!! I think they are an odd duck in the memory/storage pool..and it would never be a stock I would own. Same reasons I will never own JAVA too..  

Gunners,

There are no stupid questions.

I remember the first run IOM had back in the 90s when their ZIP drives were first to the market..out of control action.

Here is what you are looking for-

Income Statement

So lets do some quick math..the quarter ending Jul-07 has 59,319 in revenues and 12,139 in gross profit. That means the COST of making the product nets the company about 20.5% per every 1 buck sold..so they are selling their product for a mere 20% markup.

Then you factor in normal operating expenses and they were actually making the product and selling it for a LOSS last quarter.

Notice how prices for mobile memory are always dropping..because technology is better and competition is very high. I dont want to own ANYONE in this space, but IOM is definately near the bottom of the list.

In the memory field I want to own the companies who either are improving technology (like RMBS) or are specialized and have margin because what they provide is in high demand.

What IOM produces is not in high demand..there are too many players making what they do and I dont want to own a company like that..

Now can you make money? Well the stock is on a big run from the lows of the year, but seriously I consider IOM a stock that should be private and maybe not even in business..or just a subsidiary of a larger company.

E trade exiting online mortgage business..

Very interesting, stock taking more hits, but I think longer term it is the right move and MIGHT signal joining forces with AMTD down the road without the mortgage business.....

For you guys who like microcaps and momentum plays and the sort....check out LSGP...Lighting Science Group.  LED pure play at 55M market cap.  Great management.

D2,

Man that looks dicey..after checking out the balance sheet and income statement, well you know what I mean.

Its gonna struggle in the 55 to 60 range as a triple top, but if you believe they have somthing I can see why you might risk it.

55M market cap, but less than 750k in sales and 85k in cash and 2M in debt. I also can guess that they either float all the time or have lent to some vulture capitalists..

  I suppose you mean he thinks Mrs Clinton would be a good president.I am afraid I little regard for Greenie's political judgment.In fact the idea that the family Clinton offers hope to America is truly hilarious to me.

  I know a man writing a bio of Clinton and he too raves about his "intelligence," claiming him to be the smartest pol he ever met etc etc etc.Even if that is damning with faint praise (but he means it) the ultimate end for Billy boy is that he was a charming charlatan;his wife is a charmless charlatan, a Nixon in drag.

  When I consider the possibility that the United States cannot come up with a better choice for president than that offered by all of two families (for a possible total of 20 years in office), I really do wonder at the vacuity of talent that represents.

 I am glad Greenie is retired, and I do hope he stays that way.Go push you book Alan, and leave the economy alone...
 
 
 

One thing economic:I think there is an odd thing going on this week.The damage done is not going to be seen in toto this quarter, yet horizons are so immediate as to mislead many.
 Next quarter and beyond is where reality sinks in methinks.Maybe I am wrong, but instead of celebrating Lehman's reports, I am going to look at buying more SKF...will wait for helicopter Ben to talk but nothing has fundamentally changed among the financials.

Not to speak for WSC but:

If the Board declares a dividend, it will announce that the dividend (of a set amount) will be paid to shareholders of record as of the RECORD DATE and will be paid or distributed on the DISTRIBUTION DATE (sometimes called the Payable Date).Check the company website or the latest news from the company using tools such as yahoo finance.

Before we begin the discussion of dates and date cutoffs, it's important to note that three-day settlements (T+3) became effective 7 June 1995. In other words, the SEC's T+3 rule states that all stock trades must be settled within 3 business days.

In order to be a shareholder of record on the RECORD DATE you must own the shares on that date (when the books close for that day). Since virtually all stock trades by brokers on exchanges are settled in 3 (business) days, you must buy the shares at least 3 days before the RECORD DATE in order to be the shareholder of record on the RECORD DATE. So the (RECORD DATE - 3 days) is the day that the shareholder of record needs to own the stock to collect the dividend. He can sell it the very next day and still get the dividend.

If you bought it at least 3 business days before the RECORD date and still owned it at the end of the RECORD DATE, you get the dividend. (Even if you ask your broker to sell it the day after the (RECORD DATE - 3 days), it will not have settled until after the RECORD DATE so you will own it on the RECORD DATE.)

So someone who buys the stock on the (RECORD DATE - 2 days) does not get the dividend. A stock paying a 50c quarterly dividend might well be expected to trade for 50c less on that date, all things being equal. In other words, it trades for its previous price, EXcept for the DIVidend. So the (RECORD DATE - 2 days) is often called the EX-DIV date. In the financial listings, that is indicated by an x.

On the DISTRIBUTION DATE shareholders of record on the RECORD date will get the dividend. If you own the shares yourself, the company will mail you a check. If you participate in a DRIP (Dividend ReInvestment Plan, see article on DRIPs elsewhere in this FAQ) and elect to reinvest the dividend, you will have the dividend credited to your DRIP account and purchase shares, and if your stock is held by your broker for you, the broker will receive the dividend from the company and credit it to your account.

Dividends on preferred stock work very much like common stock, except they are much more predictable.