Wednesday, October 22, 2008
Tuesday, October 21, 2008
CAKE and C downgraded
And the hits keep on coming! These stocks have been destroyed. Where is the mercy rule?? CAKE does not have any toxic mortgages on it's balance sheet!
CAKE dropped over 6% on an analyst downgrade to close at $9.82.
Cown & Co. analyst Paul Westra cut his rating to "Neutral" from "Outperform" and said the stock will probably trade "in line with the market over the next six months.
They announce earnings on Thursday.
C also dropped a little over 6% on a Goldman Sachs downgrade to close at $14.18.
Goldman analyst reversed his call from a month ago, when he upgraded Citi to "Neutral," and removed it from his "Conviction Sell List," a group of stocks the investment bank advises against holding.
"We believe it will be difficult for Citi to generate profitability over the next 12 months as additional write-downs, lower levels of capital markets activity, and further deterioration in credit quality trends will continue to weigh on the firm's operating results and capital ratios," Tanona wrote in a note to clients Tuesday.
They also slashed their price target on the shares by half, to $11, from the $22 they set last month.
The analyst also recommended buying Morgan Stanley and shorting Citi.
The market closed down 230 points (2.5%). S&P down 3%. NASDAQ down 4%.
CAKE dropped over 6% on an analyst downgrade to close at $9.82.
Cown & Co. analyst Paul Westra cut his rating to "Neutral" from "Outperform" and said the stock will probably trade "in line with the market over the next six months.
They announce earnings on Thursday.
C also dropped a little over 6% on a Goldman Sachs downgrade to close at $14.18.
Goldman analyst reversed his call from a month ago, when he upgraded Citi to "Neutral," and removed it from his "Conviction Sell List," a group of stocks the investment bank advises against holding.
"We believe it will be difficult for Citi to generate profitability over the next 12 months as additional write-downs, lower levels of capital markets activity, and further deterioration in credit quality trends will continue to weigh on the firm's operating results and capital ratios," Tanona wrote in a note to clients Tuesday.
They also slashed their price target on the shares by half, to $11, from the $22 they set last month.
The analyst also recommended buying Morgan Stanley and shorting Citi.
The market closed down 230 points (2.5%). S&P down 3%. NASDAQ down 4%.
Monday, October 20, 2008
+413 points
Nice day in the market. Closed above 9000 (9265).
Did we hit the bottom last week on Oct 10?
AMEX announced earnings tonight and beat estimates. Their profit did drop more then 20% (but we all know that does not matter- it's already priced in).
Did we hit the bottom last week on Oct 10?
AMEX announced earnings tonight and beat estimates. Their profit did drop more then 20% (but we all know that does not matter- it's already priced in).
Friday, October 17, 2008
Open Letter from Warren Buffett
Appeared yesterday in the NY Times:
"THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.
So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
Why?
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.
Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.
"THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.
So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
Why?
A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.
Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.
Interesting, easy 401K investment strategy
Picked this up from another site-
The following course of action is doable by most investors reading on this forum, if they have a 401K. Let's say you have access to three different actively managed capital appreciation goal mutual funds. You select one to start to invest in. You begin biweekly investing. You use the computer and about monthly or quarterly on Yahoo Finance, use "compare" charts with your fund, the other funds and the S&P 500. If your fund is lagging over a quarter or half year, why stay with it? Switch to a better performing one. No tax involved...just the click of a mouse. Don't want to switch, then change your payroll deductions to the best performing fund and continue from there.
In addition, anytime you read, see or hear that the stock market is hitting new highs...records being set, and everyone discussing how much money they are making, go down to your employee relations office and change your future payroll deductions to be anywhere from 50 to 100% bond funds.
And when you hear that the stock market is down 10% or more, switch payroll deductions back to 100% stock mutual funds. Furthermore, if you hear we are in a bear market, down 20% or more (like now), switch your current bond fund holdings to stock mutual funds, if your portfolio is $100,000 or less. If your portfolio is from $100,000 to $200,000, switch 50% of your bond holdings to stock funds. Above $200,000, reallocate per your portfolio allocation plan, biased towards high end for stock fund holdings.
This is perhaps a way of incorporating Jack Bogle's words of "caution" we hear at certain market peaks...and Warren Buffets advisory's regarding buying 100% equities at market lower points.
The following course of action is doable by most investors reading on this forum, if they have a 401K. Let's say you have access to three different actively managed capital appreciation goal mutual funds. You select one to start to invest in. You begin biweekly investing. You use the computer and about monthly or quarterly on Yahoo Finance, use "compare" charts with your fund, the other funds and the S&P 500. If your fund is lagging over a quarter or half year, why stay with it? Switch to a better performing one. No tax involved...just the click of a mouse. Don't want to switch, then change your payroll deductions to the best performing fund and continue from there.
In addition, anytime you read, see or hear that the stock market is hitting new highs...records being set, and everyone discussing how much money they are making, go down to your employee relations office and change your future payroll deductions to be anywhere from 50 to 100% bond funds.
And when you hear that the stock market is down 10% or more, switch payroll deductions back to 100% stock mutual funds. Furthermore, if you hear we are in a bear market, down 20% or more (like now), switch your current bond fund holdings to stock mutual funds, if your portfolio is $100,000 or less. If your portfolio is from $100,000 to $200,000, switch 50% of your bond holdings to stock funds. Above $200,000, reallocate per your portfolio allocation plan, biased towards high end for stock fund holdings.
This is perhaps a way of incorporating Jack Bogle's words of "caution" we hear at certain market peaks...and Warren Buffets advisory's regarding buying 100% equities at market lower points.
Thursday, October 16, 2008
Market Rally
Another tremendously volatile as the Dow ended up 400 points (+4.68%), after falling 380 early in the session.
Citi announced earnings and suffered its fourth straight quarterly loss. It also forfeited the title of largest U.S. bank by assets and is falling behind in the reshuffling of the U.S. banking system.
It lost $2.8 billion- 60 cents per share- in the third quarter, compared with a profit of $2.2 billion, or 44 cents per share, a year ago. The deficit for the July-to-September period brings Citi's total losses over the past 12 months to $20.2 billion. It closed down about 2% to $15.90.
FAF closed down $1 to a new 52 week low of $20.50. It has gone from $33 to $20 in less then a month. Talk about a haircut. It has to be institutions dumping the shares. It paid its $.22 per share dividend yesterday.
SHLD continues to falter. It did not participate in todays rally and is expensive with a P/E of 18.55. Closed at $60.87. I do not have confidence in this stock/ company and should sell. I believe it drops further from here.
$150 went into JSVAX yesterday.
Citi announced earnings and suffered its fourth straight quarterly loss. It also forfeited the title of largest U.S. bank by assets and is falling behind in the reshuffling of the U.S. banking system.
It lost $2.8 billion- 60 cents per share- in the third quarter, compared with a profit of $2.2 billion, or 44 cents per share, a year ago. The deficit for the July-to-September period brings Citi's total losses over the past 12 months to $20.2 billion. It closed down about 2% to $15.90.
FAF closed down $1 to a new 52 week low of $20.50. It has gone from $33 to $20 in less then a month. Talk about a haircut. It has to be institutions dumping the shares. It paid its $.22 per share dividend yesterday.
SHLD continues to falter. It did not participate in todays rally and is expensive with a P/E of 18.55. Closed at $60.87. I do not have confidence in this stock/ company and should sell. I believe it drops further from here.
$150 went into JSVAX yesterday.
Showdown in Sac Town
Finally booked my ticket to my comeback show today- Showdown in Sac Town - next weekend in Sacramento. Its a gold level show. This is my comeback show and first show since winning North Bay in summer 2007.
The events:
-Yoke/ power stair medley. 600lb Yoke for 50ft followed by power stairs. 350 up 3 steps (supposedly high steps), 400 up 3 steps. Being taller will be an advantage. I should do well in this event. Top 3.
-Overhead medley. 4 implements- 120lb "dumb log", 180lb keg, 240lb axl, 260lb log. My worst event. I probably wont even try the log. If it's a real 260, out of my range. I will get the other 3 fast and should beat everyone that does not get all 4 lifts.
-Axl deadlift for reps. 60 sec. 450lbs. Hit 11 w/ 465 in training 2 weeks ago. Good chance to win this.
-Prowlers push/ farmers medley. 50 ft prowler. 50 ft farmers w/ 260. I should win this. I have been very very good in training. We simulated the prowler by pushing a truck. Have been doing 275 farmers. I think I finished in 32 secs last weekend beating 2 lightweight Pro's.
-Fingal finger/ odd object load- aka Circle of Death! 3 fingers. 1 sandbag and 2 kegs loaded to platform. I should do well in this event as well. I have never done fingal fingers, but being taller w/ long arms will be an advantage.
I should have a good show. I am in decent strongman shape but a little light. I am weighing around 217-218 and will be giving up weight to some of the 231's that cut to make weight. Oh well, it will be fun, a chance to compete, hang out with a good group of guys, and I have a good shot to win it.
Wednesday, October 15, 2008
Bought some CAKE
I pulled the trigger on CAKE late this afternoon right before the market closed. Hopefully I did not try to catch a falling knife. Time will tell.
500 shares @ $9.98.
Opened today at $10.73.
Closed at $9.91.
I will most likely sell into the next big rally.
I also have my eye on American Express.
-closed at $24.41
-down 13.4% today
-PE of 8.09
-$17.90 cash per share
One of my favorite quotes
I sent this out to some of my friends today. It is reassuring even in today's financial crisis-
Most people are poor because when it comes to investing, the world is filled with Chicken Littles running around yelling, "The sky is falling. The sky is falling." And Chicken Littles are effective because everyone of us is a little chicken. It often takes great courage to not let rumors and talk of doom and gloom affect your doubts and fears.
Do you know Why consumers will always be poor. when the supermarket has a sale on say toilet paper, the consumer runs in and stocks up. When the stock market has a has sale, most often called a crash or correction, the consumer runs away from it. When the supermarket raises its prices, the consumer shops elsewhere. When the stock market raises its prices, the consumer starts buying.
Most people are poor because when it comes to investing, the world is filled with Chicken Littles running around yelling, "The sky is falling. The sky is falling." And Chicken Littles are effective because everyone of us is a little chicken. It often takes great courage to not let rumors and talk of doom and gloom affect your doubts and fears.
Do you know Why consumers will always be poor. when the supermarket has a sale on say toilet paper, the consumer runs in and stocks up. When the stock market has a has sale, most often called a crash or correction, the consumer runs away from it. When the supermarket raises its prices, the consumer shops elsewhere. When the stock market raises its prices, the consumer starts buying.
Biggest plunge since crash of 1987
Today's doom and gloom headlines:
-S&P loses 9.1%.
-Dow drop more then 700 points.
-2nd biggest DOW drop on record (Biggest was last week).
-Dow down 10 of last 11 days.
-Talk of global recession fears increasing. What? WE have been in a recession for 6 -months!
-Monday's rebound just about gone.
-Grim sales data knocks consumer stocks.
-Retail sales data drops most in 3 years.
-Selling accelerated in final hour.
-Oil drops to $75.
-Exxon plunges 14%, Morgan Stanley loses 16%, Citi drops 13%
The nightmare continues.
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