October Stock Talk 4

I feel like flipping something today.

It could if there wasnt a freeze in this sector. To increase monetary supply is inflationary but this isnt meant to allow them to margin and borrow MORE, the point is they have been lending less and afraid to transact business. The move of course was to free up the credit logjam and I hope they unwind it when liquidity returns.

DRYS showing great strength today

VH2,

This still is nothing, they are underpricing the stock by 50 bucks plus.

At 70 that prices the underlying shipping at a very lean 4 times 2009 earnings (assuming terrible current BDI rates) with 40 bucks shipping and 30 for the spin.

I expect more vessel acquisitions this year, I hope on the dirt cheap..get the fleet up to 75 plus over the next two years.

Nice piece from TSCM today, even though they have it wrong for the most part.

I hope that plays true Wallstreet . . . I really enjoyed reading all the pieces that keep coming out about DRYS. 

I loaded the truck on the trip down to the teens and now have averaged down substantially on this stock.  I feel now I am in a good position for the long haul. 

Funny that I get excited about a move up to $25 or so when this was a $55 stock just 3 weeks ago. 



Thankfully I've used the opportunity to reduce my average cost drastically.  Hopefully in the long run it pays off. 

Get a nice little dividend at the end of the month which will mean more shares. 

What do most people here do . . . take the cash or reinvest in the form of company shares?

VH2,

It has been BRUTAL, the BDI drop has been worse than a falling knife.

Hilarious how just 3-4 months ago, those LTCs didnt look so hot relative to the spot market, now they are 2 times BETTER than current spot.

CC,

I know you dont like the bank assistance but man this market needed it and I will take the price tag than to let this disease spread to every single sector and segment of the economy.

It sucks to a degree but it would be worse to have a state go BK or small businesses fail because banks cannot and will not lend, and the vaporization it did to the 401k holders was brutal.

CC,

I dont think that is possible because the events of issue werent only subprime. In fact the media has duped the public to believe we are in a mess because Clinton changed the lending rules to give lower income families rights to lending (bullcrap) or that the housing market brought down the economy. Neither is true as we both know, and I dont think they had a CLUE as to the real problem last 2007. I remember I was in a road trip during the collapse and I didnt even know it back then.

The reality is these financial firms were so quiet and deceptive about their margin and leverage that NOBODY knew except the companies in the middle of it and some deep economist thinkers. Citi was raising cash back then under the guise of their mortgage division, of course that is a farce and it was because they knew that their computer models were breaking down and at 40 to 1 leverage, a moderate teetering of the housing market meant a meltdown of their leveraged investments even though they were and are high quality.

If you call socialism that the government takes a position in a public company, I am ok with it because at extreme times the government can act to protect the economy and if at the same time they can profit off the risk then I am fine with it. Also, the potential this has to destroy innocent people and those not involved with the industry and problems I have to agree that this intervention and cost does more good than harm and is necessary.

We got to this point because the FED wanted to extend the economic cycle and because regulators were either paid off or just not watching..either way the government did not do its job in regulating these firms and so we have to pay for it. If we compensated these regulators correctly, staff them correctly and gave them tools and power to regulate, I am sure we wouldnt be here and it would not have happened.

I read 1984 of course..in high school and there arent enough similarities though there are a few. I have to think our ages are not that far apart but my thinking is that we wont be rounding up people to execute and your bunker will be a place to watch some football when this is all said and done.

We got to this point because the FED wanted to extend the economic cycle and because regulators were either paid off or just not watching..either way the government did not do its job in regulating these firms and so we have to pay for it. If we compensated these regulators correctly, staff them correctly and gave them tools and power to regulate, I am sure we wouldnt be here and it would not have happened.

  So....apparently... the idea is that more regulation will......prevent the Fed from doing what it intended to do??? Now that is an interesting but internally contradictory position to hold...

Vermeer,

Once the FED was allowed to stop showing M3 numbers, that gave them the shroud of secrecy that they needed..it stopped showing their actions and nobody questioned it or told them to start reporting again.

My comment about the regulators isnt wanting MORE regulation, rather to be staffed and compensated correctly to do their jobs..not MORE regulation..just capable regulation.

Even Adam Smith knew that greed requires regulation and that is why the free market cannot be completely unreliant on some form of government regulation.

The FED wanting to be secretive makes me wonder if the edict came from outside the organization..  

 I see your point Wall and agree. And of course it is in every politicians' interest to understate the effect of their fiscal irresponsibility. They always understate the cost of any proposal, and they always overestimate revenue.
 
 Unfortunately, the prevailing notion which I think will  be acted upon after November will be..more regulation.Not better regulation, like you rightly think required.

  The logic promoted by the media and which has generated the latest show trials of executives is that the only explanation for mistakes is malfeasance. It reassures people to think that if only the "bad guys" were stopped, the mistakes of policy that have been produced by political decision  making would be mitigated and/or overcome. Demonize an exec and the good policies will prevail, or so the lie goes.

 Hence the ultimate absurdity of guys like Dodd, Frank, et al pretending to be outraged when they have been busily creating the problem for the past twenty years.Which goes a long way towards explaining how Congress has a 10% approval rating, and I suspect it is in fact single digits now.

Why not issue legit M3 numbers? They can't afford to admit what they have been doing...
 
 

Market retracing pretty quickly, I am starting to get interested in some short term trades here.

Vermeer, they said it cost too much to produce the M3 numbers which is horsesh!t of course..

Having scratched my way to a place where I can just watch the circus, I am sitting on the sidelines until after the elections (mainly,  do still have some smallt rades, and will leap in to yet another SKF trip as soon as it hits the magic number (and a certain select group of pols/hacks announce the worst is over).

 I see a very, very deep and very prolonged recession in the cards, and the disappointment of B.O. backers will be his greatest danger in the coming years.

 



 

I would sell into any rally but they hardly last long enough to do so anymore!!

I think oil will keep dropping, its the trend and they are making 52 week lows.

In the longer term our supply ratio hasnt changed, so we should enjoy it as long as we can.

Hat, you went DOWN on the DOW today right?

g or do you see a slight rally comming?