JANUARY STOCK TALK PART II

Question

At the end of college football season I ask one non stock related question:as a casual observer of football, how is it that Ohio State, a team that seems like it would finish 4th or 5th in the SEC, is always seemingly playing for the national championship? When are the assclowns of the NCAA ever get a playoff system in that one sport? Sheesh.

Now as to stocks...best long idea from me is MO (I love dividends in this environment, well make that all environments). I think if the Fed cuts rates and creates an ephemeral rally I will use it to sell into, and consolidate.I will also add some more SKF if it declines.

Lastly, anyone got a good ballpark figure for total writedowns of the housing meltdown? I have read as much as one trillion dollars.Anyone think that is excessive?

Vermeer · Answer

At the end of college football season I ask one non stock related question:as a casual observer of football, how is it that Ohio State, a team that seems like it would finish 4th or 5th in the SEC, is always seemingly playing for the national championship? When are the assclowns of the NCAA ever get a playoff system in that one sport? Sheesh.

Now as to stocks...best long idea from me is MO (I love dividends in this environment, well make that all environments). I think if the Fed cuts rates and creates an ephemeral rally I will use it to sell into, and consolidate.I will also add some more SKF if it declines.

Lastly, anyone got a good ballpark figure for total writedowns of the housing meltdown? I have read as much as one trillion dollars.Anyone think that is excessive?

Vermeer · Answer

From a newsletter....again not to beat the bear drum, just something to consider if we are in one:

The S&P 500 Index is a leading indicator par excellence. Since the 1950s, the Index has always peaked before the peak of a business cycle, with the 1980 business cycle being the only exception. The Index has established a trough prior to the end of a recession without exception.

(2)	The median percentage decline of the Index from its peak to trough was 16.9%.

By the close of the market yesterday the S&P 500 Index was down by 9.5% from its peak in October 2007. Although the expectation of a recession has been gaining support, it does not represent a consensus view by a long shot

Gunners · Answer

My post might have gotten lost in the last thread... wallstreet, what do you think of HANS in this environment right now?

depeche2 · Answer

Looks like the early gains here are pretty tenuous and may reverse course...

wallstreetcappers · Answer

Gunners,Sorry for not replying when you first mentioned it.HANS would be a stock that I would purchase a medium ammt, not like having it be one stock in my portfolio. They arent hyper growing like they were, but this price represents that fact.  At a 30 PE with their growth rates, I would expect you could get 20% return in the stock, but I would also put a 10% stop loss on the trade. So the risk is 10% the upside is 20-30% or more..so the risk/reward is good on the trade.Their products are great, I dont buy the vitamin water phase (if people start thinking, they will realize that the absorption of vitamins through water, especially synthesized vitamins isnt very good and the phase will pass) but the energy drink category should continue until somthing viable and marketable comes along.

accventures · Answer

down we go

depeche2 · Answer

Market turning pretty red now.  Ugly.

Gunners · Answer

[Quote: Originally Posted by wallstreetcappers] Gunners,Sorry for not replying when you first mentioned it.&#xD;&#xA;&#xD;&#xA;[/Quote]&#xD;&#xA;no problem.  thanks for the insight.  I&#x27;m definitely not going to make it my only holding.  I received a serious bonus this year and can allocate a lot of money to investing now.  and i&#x27;m not going to buy any more OTC or penny stocks anymore, so i&#x27;m getting into the real game and i&#x27;m looking for some nice names.

KOAJ · Answer

mkt turnover due to a few things:-CFC fabricating documents in a bankruptcy hearing-CFC bankruptcy rumoror most likely-morgan stanley downgrading MBI, ABK, SCAif those 3 debt insurers dont have triple AAA ratings then everyone has to pay more to have their debt insured...and if one fails...well, it will be very very bad

KOAJ · Answer

see below:Bond insurers are beginning to realize "sizable" losses&#xD;&#xA;on their portfolios of residential mortgage-backed securities,&#xD;&#xA;refunding income has slumped and there&#x27;s been a sharp slowdown in the&#xD;&#xA;use of municipal bond insurance, Ken Zerbe and colleagues at Morgan&#xD;&#xA;Stanley wrote in a note to clients on Tuesday. &#xD;&#xA;    &#xD;&#xA;         "The headwinds facing&#xD;&#xA;the guarantors appear to be worsening," Zerbe said. "The continued&#xD;&#xA;deterioration in the credit markets is taking a significant toll."

wallstreetcappers · Answer

That MBI looks very interesting to me. I almost jumped on it last week, glad I didnt.

Financials turned nasty, look terrible.

From the surface CFC looks cheap, but they still carry a 3.6 B market cap.

I bet if anything they reorganize..not go under completely..so the downside on the stock might be minimized..

Gunners, HANS is a stock I could own and really not stress about. Another is WFMI. Both are market leaders near the lows for the year, numbers look reasonable and I dont think either have the risk to get nailed. I would feel safer owning HANS or WFMI than say a lofty stock like CMG.

Vermeer · Answer

[Quote: Originally Posted by KOAJ]  see below:Bond insurers are beginning to realize "sizable" losses&#xD;&#xA;on their portfolios of residential mortgage-backed securities,&#xD;&#xA;refunding income has slumped and there&#x27;s been a sharp slowdown in the&#xD;&#xA;use of municipal bond insurance, Ken Zerbe and colleagues at Morgan&#xD;&#xA;Stanley wrote in a note to clients on Tuesday. &#xD;&#xA;    &#xD;&#xA;         "The headwinds facing&#xD;&#xA;the guarantors appear to be worsening," Zerbe said. "The continued&#xD;&#xA;deterioration in the credit markets is taking a significant toll."   [/Quote]    Think this bodes well for WB&#x27;s new muni bond insurance co to really clean up...

KOAJ · Answer

wall - my brother covered those debt insurers and when MBI announced last week they had $8b in subprime cdo exposure, even the analysts didnt know about thatcaveat emptor with any of these

wallstreetcappers · Answer

Vermeer,If the market is soft for all insurers then it will be as tough for WBs firm as it is for other firms.In fact if the conditions continue or worsen, it might be a BAD business decision to enter into a risky business like this.Just think if the FED stops the money train, if our currency isnt cheap relative to the rest of the world, what will that mean to demand for ANY debt, municipal, federal, any kind of debt?WB might be making a pretty big mistake for such a safe looking investment on the surface.

Vermeer · Answer

I think WB knows risk analysis better than anyone. And I think he knows that the panic level that might come from municipalities unable to get financing from regular sources will enable him to really really stick it to them in premiums.He is going to make them pay through the nose to get financing from a pristine balance sheet company.

wallstreetcappers · Answer

Vermeer,WB isnt perfect and does make mistakes, and I think he might be making one of those mistakes in this case.Good thing for him, since his company is so big you can make mistakes and not have them really hurt the overall operations.If every other insurer is having troubles, thinking that WB can come in and take over the industry doesnt make sense to me. The group is having troubles, and the answer isnt having minicipalities "pay through the nose", that would be a huge mistake. You cannot do business charging excessive fees for services. If his approach is to overcharge to mitigate risk I am quite sure these municipalities will take their business elsewhere.I wish I could go into a troubled line of business and just charge everyone huge fees and think that would make me a millionaire.Many people exaggerate WB, I am not a disciple of his at all. He made his money when market transparency didnt exist. He could never replicate his successes in this market. Good for him, but I look at the current market and opportunites, not that WB bot Sees and Coke 30 yrs ago.JMHO

boiler-room · Answer

could not disagree more wall,,,they will pay extra for the security of a real aaa rating and the confidence of dealing with a sure thing in buffet,,now im not saying i think that way but others will ,just watch

LeRinkRat · Answer

looks like the 8th day in a row down with another rally failing the last hour. should be close to a short term washout or at least an oversold rally.

Vermeer · Answer

Wall, the question is, are they really going to be able to "take their business and go elsewhere?" And secondarily, who determines when fees are "excessive" ???

I think Buffett is going to hire an awful lot of good people who do old fashioned, thorough, risk analysis (something that that industry, among many others has not done for years) and, without being in any way compelled to go after stupid business, will make a lot of money out of the huge mistakes the previous companies created for themselves.

KOAJ · Answer

cfc down 25% of 3x avg daily volumehead for the hillsrumor has it, Weichert Realtors told their agents not to accept anything with a countrywide stamp of preapproval on itmemo went out at 12:15

boiler-room · Answer

[Quote: Originally Posted by LeRinkRat] &#xD;&#xA;looks like the 8th day in a row down with another rally failing the last hour. should be close to a short term washout or at least an oversold rally.[/Quote]   up yesterday no?

LeRinkRat · Answer

as I posted in the ETFC thread, I&#x27;m wondering IF it&#x27;s worth a shot here close to $2?

depeche2 · Answer

I think market went through technical sell levels retesting and plowing through the August lows.  Maybe another 3-4% downside before the next support?

Vermeer · Answer

I knew knew knew I should have shorted the hell out that ...will take SKF&#x27;s gains but still :stick a fork in that turkey!!

LeRinkRat · Answer

WOW!!! a "just get me the fuck OUT" move the last 15 mins

JANUARY STOCK TALK PART II

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