FCX @ 33.00 **
NAT @ 20.00
FRO @ 29.00
RIMM @ 50.00
AAPL @ 80.00
RIG @ 70.00
SLB @ 57.00
XTO @ 30.00
CLR @20.00
BEXP @ 4.00
HGT @ 19.00
“Buy when there’s blood in the streets.” Baron Rothschild
Monday, September 29, 2008
Thursday, September 18, 2008
Cash'n In
So, the Fed might just bail out whoever is left after all! They are meeting to plan how they can take the bad debts from financial institutions so they will be free and able to move on......at the taxpayers expense of course. I loved watching the press conference and seeing Pelosi and Reid front and center pretending to be the angels of mercy as though it was all their idea. gag.
And I just read that the SEC will most likely ban short selling temporarily! That's a recipe for a HUGE rally!
In light of this new proposition, I'm thinking I might add to my Bank of America position. Seeing that BofA recently acquired Countrywide, the largest mortgage company out there and thus acquired a whole lot of bad mortgage debt. I'm guessing that BofA will benefit greatly from this new proposition bail out. I got in and out a month ago when they reported for the quarter and had a quick 15% jump. I got back in again a few weeks ago when they were trading around $33.00. Depending on how the day starts tomorrow, I might pick up some more if it stays in the $30-31 range. Of course, I'm kicking myself for not picking some up yesterday when it was down to $26. Eh......it's just money.
And I just read that the SEC will most likely ban short selling temporarily! That's a recipe for a HUGE rally!
In light of this new proposition, I'm thinking I might add to my Bank of America position. Seeing that BofA recently acquired Countrywide, the largest mortgage company out there and thus acquired a whole lot of bad mortgage debt. I'm guessing that BofA will benefit greatly from this new proposition bail out. I got in and out a month ago when they reported for the quarter and had a quick 15% jump. I got back in again a few weeks ago when they were trading around $33.00. Depending on how the day starts tomorrow, I might pick up some more if it stays in the $30-31 range. Of course, I'm kicking myself for not picking some up yesterday when it was down to $26. Eh......it's just money.
Wednesday, September 17, 2008
RIP
LEHMAN BROTHERS
and
BEAR STEARNS
and
MERRILL LYNCH
Now.......can we move on already? I wanna buy some more stuff on the cheap!
Wednesday, September 10, 2008
Want to see how much damage a liquidating Hedge fund can do?
In a matter of 2 weeks? ( **cough** Ospraies Hedge fund and now Lehman Brothers scrounging to raise capital **cough** )Notice not only the massive drops but also the volume of shares being traded compared to "normal".
Check out Freeport McMoRan:
Then Chesapeake Energy:
How about Continental Resources? Taken out back and slaughtered!
And of course, Frontline. My 23% dividend paying darling:
XTO Energy, another one of my holdings, dropped 23 points in less than six weeks. It dropped 8 points in a matter of days with the liquidation of Ospraies Hedge fund whose ownership of XTO contributed to most of its holdings.
So, this tells me a few things.
Check out Freeport McMoRan:
Then Chesapeake Energy:
How about Continental Resources? Taken out back and slaughtered!
And of course, Frontline. My 23% dividend paying darling:
XTO Energy, another one of my holdings, dropped 23 points in less than six weeks. It dropped 8 points in a matter of days with the liquidation of Ospraies Hedge fund whose ownership of XTO contributed to most of its holdings.
So, this tells me a few things.
1. I must have obviously picked some winners if many of my investments are in companies that were also owned by hedge funds.
2. Hedge funds can obliterate a sector in a matter of days.
3. It feels like CHRISTMAS!!!!!
I am SOOOO excited to see my stocks hit this hard. And I love even more that Lehman was forced to liquidate because their loss is my gain.
Today started out feeling like a bad hangover. No one knew for sure what to do after not only yesterdays sell off but the continuous seven day slam on commodities and energy. Slowly, I saw people getting back in these stocks. I completely expected a sell off at the end of the day knowing that in this market, to make money, you have to sell into rallies. And gains of 5-10% in energy and commodities is a HUGE rally. But this time, it was different. I sat at my computer the last hour of trading and watched and waited for the sell off. It didn't happen! Maybe I'm kidding myself. Maybe it will take place tomorrow or the next day. But this has to be good news. Especially when I read that several of these energy companies ( XTO, APC and CHK ) are having some serious insider buying going on. Could it finally be that the hedge funds at Lehman has liquidated what it can and we can get back to a more stable, trade on real fundamentals market? I'm going to give it a try.
Chesapeake is trading at MINUS 16x multiple! That's in sane! Freeport is trading at 8x P/E. To put it in perspective......when Bank of America, one of those financial stocks struggling to stay afloat is trading at a 17x P/E, you know something is just wrong.
I've been stocking up in cash over the last couple of months just waiting for this very moment! I think about now is the time to get back in, slowly, and trade these poor, badly beaten stocks.
And while I'm at it.......my commentary on a couple of other issues I see. First is the "cut" from OPEC. Well, it is actually a forced adherance to the 2.8 million bpd production in oil instead of the 3.3 they have been producing. That should help except for the fact that our inventories have been dropping the last couple of weeks due largely in part to the Gulf being shut down because of Gustav and who knows what Ike will bring? Also, China has yet to lift their polution ban as the next two weeks they are holding the paralympics in Beijing. Give it a couple of more weeks, and we will probably see some more movement in China.
Also, gold has tanked and the dollar has risen.......FAST! If history repeats itself, as with oil, huge swings in either direction are cause for a swift correction. The dollar needs to slow down and I think it will when the reality of the government take over of Fannie and Freddie finally kicks in. A simple and win-win way to do so would be for the Fed to cut interest rates soon. You can't prop up a dollar when you're printing it like it's going out of style.
Tuesday, August 19, 2008
ECHO! Echo! echo!
Did I not just say the same thing a week ago specifically point 3 of my previous blog entry?
http://www.cnbc.com/id/26289118
I'm still sticking with my energy/gold/healthcare/tech plays for now. USAA has an interesting mutual fund ( USAAX ) with companies like Mastercard, XTO, IBM, Monsanto, Google, Oracle, Apple, RIG and Gilead. It's down 20% from its highs last October and with most of those stocks taking a beating over the last 3 - 6 months, I think it might be a good, diverse bet to wade through the upcoming volatile months ahead.
http://www.cnbc.com/id/26289118
I'm still sticking with my energy/gold/healthcare/tech plays for now. USAA has an interesting mutual fund ( USAAX ) with companies like Mastercard, XTO, IBM, Monsanto, Google, Oracle, Apple, RIG and Gilead. It's down 20% from its highs last October and with most of those stocks taking a beating over the last 3 - 6 months, I think it might be a good, diverse bet to wade through the upcoming volatile months ahead.
Monday, August 11, 2008
I love a good sale!
Holy cow! What a fast, swift ride down in energy and commodities over the last month! Of course, I bought a few stocks at the peak myself and have quickly lost......well.....a LOT in the last 4 weeks after seeing nice gains in others in the sector. I can't beat myself up too much as I did take profits along the way ( investing 101 ) and bought us a trip or 2 to Disneyland and a backyard patio. But still, that kind of decline that fast is hard to stomach.
Have you seen gold plunge 150 points in the last 2 weeks? Crazy!
Here's my theories:
1. Financials were shorted and beaten down so much and energy was the place to be. When we saw oil hit that 150 mark, it seemed to be the turning point where people ( investment hedge funds ) started profit taking and scrambling to cover their options by pulling money out of energy and putting it into financials. I can justify this reason as causing the initial 15 - 20% drop. The additional 15% drop that followed was pure emotion. Those who couldn't take the heat or see past six months from now, bailed.
2. Oil will be back. I've read many articles about China recently regarding their oil usage. Today, I read they had a 7% drop in demand this last month. To someone who might not know better, they might freak out and think that if China was slowing their demand, prices MUST be high. But what they might not realize is that for the last 6 weeks or more, the Chinese government mandated a cut back in driving as well as closed factories to try and "clear the air" before the Olympics. Plus, the price per gallon that they pay is subsidized by the government. They haven't seen the huge run ups in prices like we have seen here. At least not yet. I'm betting that a few weeks after the Olympics are over we'll start to see the "demand" pick up in that region again.
3. Then there's gold. Come on! Do people really think that we are out of this mortgage mess yet let alone curbing inflation any time soon? I don't. I'm still paying twice for my loaf of bread and 50% more for my juice. Do I really think I'll see the old prices ever again? I wish. Northwest Airlines just announced another $70 "fuel surcharge fee" they will begin charging soon. We all know where the "old" fuel surcharge fees from the early 2000's went. No where. We're just barely dealing with people who got 3 year ARMs. Next year will be those who got stuck in the 5 year ARMs and won't be able to refinance because their home is worth 30% less than what they paid. Not to mention that 40% of the homes on the market in my town are in foreclosure. Two homes on my street were abandoned over eight months ago and are just now being auctioned off. Retail companies are posting losses even after the "stimulus checks" yet we see their stocks jump on the news. How does any of this make sense? It doesn't. And I think the rally in the dollar is just an over reaction to Europe talking about a recession and choosing to not raise interest rates. Another reason I think gold will go back up is that the 800 level seems to be the point where mining companies won't be able to make a profit ( because of higher energy and inflation ) and will slow down mining which will bring up demand and prices.
Here's my game plan. I'm buying beaten down stocks. I know. It's HARD to buy low when you don't know how much lower they "could" go. It's scary. But it's SMART! I bought MCD at $50/share in January after they reported their 4th quarter '07 numbers which were good but not good enough and the stock took a 10% beating. Look at where it is now......$66! More recently, look at XTO Energy. I bought a few shares at its peak a month ago. It dropped 20% pretty quickly each day thinking it couldn't possibly go lower. Then it did. So when it finally hit 25% down and was ridiculously oversold, I bought some more. It's still hovering around that low but I have all the faith in the world that it will be back up soon.
The key is spotting a great deal and understanding the difference between a stock going down because it's a bad company or because it reported a less than stellar quarter.
I'm still buying into my USAGX fund as well. Gold isn't going away any time soon. I'm thinking at near its 1 year lows, it's a pretty good deal.
This is an interesting read:
http://www.financialsense.com/fsu/editorials/dancy/2008/0516b.html
Have you seen gold plunge 150 points in the last 2 weeks? Crazy!
Here's my theories:
1. Financials were shorted and beaten down so much and energy was the place to be. When we saw oil hit that 150 mark, it seemed to be the turning point where people ( investment hedge funds ) started profit taking and scrambling to cover their options by pulling money out of energy and putting it into financials. I can justify this reason as causing the initial 15 - 20% drop. The additional 15% drop that followed was pure emotion. Those who couldn't take the heat or see past six months from now, bailed.
2. Oil will be back. I've read many articles about China recently regarding their oil usage. Today, I read they had a 7% drop in demand this last month. To someone who might not know better, they might freak out and think that if China was slowing their demand, prices MUST be high. But what they might not realize is that for the last 6 weeks or more, the Chinese government mandated a cut back in driving as well as closed factories to try and "clear the air" before the Olympics. Plus, the price per gallon that they pay is subsidized by the government. They haven't seen the huge run ups in prices like we have seen here. At least not yet. I'm betting that a few weeks after the Olympics are over we'll start to see the "demand" pick up in that region again.
3. Then there's gold. Come on! Do people really think that we are out of this mortgage mess yet let alone curbing inflation any time soon? I don't. I'm still paying twice for my loaf of bread and 50% more for my juice. Do I really think I'll see the old prices ever again? I wish. Northwest Airlines just announced another $70 "fuel surcharge fee" they will begin charging soon. We all know where the "old" fuel surcharge fees from the early 2000's went. No where. We're just barely dealing with people who got 3 year ARMs. Next year will be those who got stuck in the 5 year ARMs and won't be able to refinance because their home is worth 30% less than what they paid. Not to mention that 40% of the homes on the market in my town are in foreclosure. Two homes on my street were abandoned over eight months ago and are just now being auctioned off. Retail companies are posting losses even after the "stimulus checks" yet we see their stocks jump on the news. How does any of this make sense? It doesn't. And I think the rally in the dollar is just an over reaction to Europe talking about a recession and choosing to not raise interest rates. Another reason I think gold will go back up is that the 800 level seems to be the point where mining companies won't be able to make a profit ( because of higher energy and inflation ) and will slow down mining which will bring up demand and prices.
Here's my game plan. I'm buying beaten down stocks. I know. It's HARD to buy low when you don't know how much lower they "could" go. It's scary. But it's SMART! I bought MCD at $50/share in January after they reported their 4th quarter '07 numbers which were good but not good enough and the stock took a 10% beating. Look at where it is now......$66! More recently, look at XTO Energy. I bought a few shares at its peak a month ago. It dropped 20% pretty quickly each day thinking it couldn't possibly go lower. Then it did. So when it finally hit 25% down and was ridiculously oversold, I bought some more. It's still hovering around that low but I have all the faith in the world that it will be back up soon.
The key is spotting a great deal and understanding the difference between a stock going down because it's a bad company or because it reported a less than stellar quarter.
I'm still buying into my USAGX fund as well. Gold isn't going away any time soon. I'm thinking at near its 1 year lows, it's a pretty good deal.
This is an interesting read:
http://www.financialsense.com/fsu/editorials/dancy/2008/0516b.html
Tuesday, July 22, 2008
I can't believe I'm going to say this
I'm a big, huge skeptic. I especially have a hard time believing something to be true when all of the actions point to an opposite reality. I live by the mantra both in dealings with others as well as in the stock market, "Fool me once.....shame on you. Fool me twice.....shame on me". I tried bottom fishing with financials way back in the spring when Citigroup was trading around $24/share. Luckily I bailed on the idea around $21/share since it swiftly dropped to $15.
So it's hard for me to swallow what I'm about to say.
( choke ) It might be time to get in on some financial stocks ( gasp. choke. gag. )
I can't believe those words fell out of my mouth.
But, I did it. I sucked it up and did it. I bought some Bank of America shares today. They've been up 50% in just last week alone thanks to "better than expected losses and write-downs". But, I got in first thing in the morning as I followed the quarterly reports of Fifth Third and Wachovia. At the end of the day, I was up a quick 16% before selling 30% of my shares before the market closed to take profits. I bought BAC for a couple of reasons. 1. I knew a few big names were reporting today and took the gamble that they would do as well as the other companies that reported last week who saw 10/20/30% gains in a single day. 2. Congress is supposed to pass some kind of bill to help/bail out Fannie/Freddie and the housing market on Thursday.
At this point, though, how much worse could financial stocks get compared to the beating the energy stocks have taken this last month? Companies that I own like Freeport McMoRan and XTO Energy both reported today. Freeport reported a 14% loss partly related to the Phelps Dodge acquisition last year. They have plans to boost production in both their Morenci and Safford Copper mines this year plus increased their dividend to $2.00/share up from $1.75. This is a company that I've owned off and on over the last year or so. Without fail, the stock value will rise until it is time to report for the quarter and then for some reason, it gets slammed. It will trade up 25 points then pull back 20 which makes for an easy "buy low/sell high" stock to follow. I sold half of my position about a month ago in anticipation for today which did exactly what I suspected. Down 6%. Zero logic.
XTO has been a thorn in my side. They report a 33% increase in profit today after boosting their earnings estimates to 20% last month and the company's shares fell 9% which is better than down 11-12% like it was in early trading. It's nuts! This company just bought out a company called Headington Oil Company who has about 350,000 acres of leasehold in the Bakken Shale in Montana and North Dakota. Why is that important to me? Because I know for a fact that there is oil in that area because my parents receive a hefty check every month from the former Headington Oil Company for their mineral rights on that land. If there wasn't oil, they wouldn't be receiving a check which has gone up a LOT in the last year. So, if Headington found oil, XTO now owns it. So why on earth has XTO shares gone down almost 30% in the last month? Who knows. The large drop in natural gas probably. Reporting on a day when the price of oil per barrel dropped $4.00 was just dumb luck. I did buy back some more today since I thought the smack down they've received has been ridiculous. Their earnings growth and potential deserves better than that.
Natural gas plays are typcially cyclical and tend to trend down in July and August. Once hurricane season and winter gets closer, they hopefully should move up.
EDITED: So I bought some BAC last week. I made a nice 16% profit in one day before selling some of my shares. I put a stop limit to sell the rest at a 10% profit because I just don't have the stomach for it just yet. So, in 2 days, I did a pretty good, quick trade. I'm still going to be cautious and have a "wait and see" attitude........
So it's hard for me to swallow what I'm about to say.
( choke ) It might be time to get in on some financial stocks ( gasp. choke. gag. )
I can't believe those words fell out of my mouth.
But, I did it. I sucked it up and did it. I bought some Bank of America shares today. They've been up 50% in just last week alone thanks to "better than expected losses and write-downs". But, I got in first thing in the morning as I followed the quarterly reports of Fifth Third and Wachovia. At the end of the day, I was up a quick 16% before selling 30% of my shares before the market closed to take profits. I bought BAC for a couple of reasons. 1. I knew a few big names were reporting today and took the gamble that they would do as well as the other companies that reported last week who saw 10/20/30% gains in a single day. 2. Congress is supposed to pass some kind of bill to help/bail out Fannie/Freddie and the housing market on Thursday.
At this point, though, how much worse could financial stocks get compared to the beating the energy stocks have taken this last month? Companies that I own like Freeport McMoRan and XTO Energy both reported today. Freeport reported a 14% loss partly related to the Phelps Dodge acquisition last year. They have plans to boost production in both their Morenci and Safford Copper mines this year plus increased their dividend to $2.00/share up from $1.75. This is a company that I've owned off and on over the last year or so. Without fail, the stock value will rise until it is time to report for the quarter and then for some reason, it gets slammed. It will trade up 25 points then pull back 20 which makes for an easy "buy low/sell high" stock to follow. I sold half of my position about a month ago in anticipation for today which did exactly what I suspected. Down 6%. Zero logic.
XTO has been a thorn in my side. They report a 33% increase in profit today after boosting their earnings estimates to 20% last month and the company's shares fell 9% which is better than down 11-12% like it was in early trading. It's nuts! This company just bought out a company called Headington Oil Company who has about 350,000 acres of leasehold in the Bakken Shale in Montana and North Dakota. Why is that important to me? Because I know for a fact that there is oil in that area because my parents receive a hefty check every month from the former Headington Oil Company for their mineral rights on that land. If there wasn't oil, they wouldn't be receiving a check which has gone up a LOT in the last year. So, if Headington found oil, XTO now owns it. So why on earth has XTO shares gone down almost 30% in the last month? Who knows. The large drop in natural gas probably. Reporting on a day when the price of oil per barrel dropped $4.00 was just dumb luck. I did buy back some more today since I thought the smack down they've received has been ridiculous. Their earnings growth and potential deserves better than that.
Natural gas plays are typcially cyclical and tend to trend down in July and August. Once hurricane season and winter gets closer, they hopefully should move up.
EDITED: So I bought some BAC last week. I made a nice 16% profit in one day before selling some of my shares. I put a stop limit to sell the rest at a 10% profit because I just don't have the stomach for it just yet. So, in 2 days, I did a pretty good, quick trade. I'm still going to be cautious and have a "wait and see" attitude........
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