September Stock Talk III

Vermeer,

You said more than I usually do..haha.

Perfect explanation.

Oh and share number, there is no limit to how many shares you need for a distribution.

Good comments about the FED and the presidency btw..

I am considering lining up some puts for this FED meeting..might take a gamble here and give it a shot.

This action is strong, it might make for a better short entry tomorrow or the next day.

They sell it and force it even higher, but interestingly there are many stocks off the high...GOOG is 4 bucks off the high.

I am going to puke..

All day I am watching a few choice stocks that are great for momentum plays...AAPL, FSLR, GOOG, CNQ etc and the market goes crazy..

The one I always watch and forgot about was DRYS..son of a b!tch..they had 70 strike options expiring on friday which traded below a buck and closed at 4...good grief I forgot about that stock.

SKF down 7 on this news and no, continue to wait, as GS and others report and will report good numbers for this quarter.

 My thinking is that this number (Lehman's) is misleading.I think later numbers will be more accurate an estimation of the squeeze yet to be worked out.
  Simply put, the true cost of the credit debacle has yet to be calculated. I may be underestimating the impact of this cut, but I do not see how M&A activity will return to previous levels either.
 Naturally I am looking for reasons NOT to think so, so please share any disagreements.

Puke if you must, rest if you must, JUST DONT QUIT!.

Anyone watching the turn in the finance and builder stocks?

HUGE bearish reversal in the group..I am shocked.

HOV went from 15.59 to 13 just today..

I am just unable to see how, given the massive stockpiles of inventory in housing, that anything the Fed did would materially help builders.I need elucidation on the way this should work.

The lower the rates the easier for people to buy houses is the theory.

That builder friend I always reference emailed me today saying certain locations where they are offering are starting to see some nibbling when it had been dead for months.

So maybe this helps just a bit..but it doesnt justify current valuations, especially since many of these builders are reporting losses, not just reductions in profits but outright losses..especially on land values.

I finally got to sell of ROC bought it at $31.72 and finally it spiked today and sold it at $33.91...until today it had been really flat.

As far as hindsight is 20/20 sold of my FTO at $38.70 on 8/28/07...even though it dropped $2 per share today  it is valued at $45.

 

 

 

  I get the theory in that regard, and am puzzled I suppose by the immediacy of expected results, or what percentage of people will be favorably impacted by it.Does anyone really have a clue about how many hedge funds will NOT go bust due to such a rate cut? I sure do not.

Jeff,

You look at the financials and ratios on RIO?

Holy hell..they have 5 BILLION shares out...good grief. Selling at 4 times sales and 5 times book.

Chart looks like MSFT in the hayday, I hope she keeps going up for you!

I almost freaked out when I looked at the chart of RIO, as I had that stock for almost a year and lost track of it, did not realize it had split...almost stroked out at the price. RIO and BHP are monsters in minerals.I am out of it now but they are going to be around a long time.

Gunners,

This keeps happening on CRDC..it gets close to my buy range then it pops up a buck..I am still waiting on the low 8s as an entry..

WS, what are your thoughts on QLogic these days at a price point under $13? 

This analysis printed yesterday is why I remain puzzled over the interpretation of these cuts...

Although short-term interest rates fell as a result of the rate cut (notice the change from orange to green on the yield curve), long-term rates actually increased.

Most mortgages are priced based on the long-term rates. So, after the rate cut, things are looking worse for mortgage rates.

Depeche,

I think QLGC is a longer term winner..it wont run like RMBS did since the growth has slowed over the past year or so, but looking at just the numbers the stock has fair value right here.

Selling at 2 times book, no debt on the books, selling at 3 times sales (a number I would like to see lower)

I wouldnt feel worried to start a HALF position if the stock went to 12 or in this area. I dont consider this a 3 bagger, rather that over time they would return better than the market, but the problem is the market thinks the company is going to slow growth even more.

I think they are a good takeout candidate with such a clean balance sheet and reasonable ratios..

There really is no huge rush to get in since the beta is low and the stock is not in favor..

Vermeer,

I think the reason long term rates moved higher is because the spread between the two had been so tight that it was bound to happen once the "news" was out..plus I think the view might be that the fed will raise rates if things improve and inflation starts to surface..meaning that this cut might not be a longer term cut.  

This analysis printed yesterday is why I remain puzzled over the interpretation of these cuts...

Although short-term interest rates fell as a result of the rate cut (notice the change from orange to green on the yield curve), long-term rates actually increased.

Most mortgages are priced based on the long-term rates. So, after the rate cut, things are looking worse for mortgage rates.