Posted: August 17th, 2007 | Author: Stock Pitcher | Filed under: Fast Money | No Comments »
Fast Money traders sounded a little more optimistic. Guy Adami said that the Dow will move 500 points higher from here. Macke said that it should be up tomorrow and this is just a short-term bottom. All the financials led everything up and it finished strong. Eric called everyone and didn’t quite understand why it led the market up. But most of the traders were more optimistic in the short term. Eric Bolling says he feels that the market has bottom and stopped his yen carry trade by closing his positions in yen. Bolling seems to be the most bullish. Eric says he didn’t get out of many positions and he pointed out that the VIX, volatility index. On the other hand, Jeff Macke was still very negative on the market and says that he’s sleeping like a baby still.
TRADE PICKS
Najarian noted that Alcoa (AA) saw lots of call buying. Adami says the low may be close. Keep in mind commodities are still getting beat down.
Hewlett-Packard got strong numbers after hours. Macke said that the business was strong and Najarian said that it should carry the market. Adami says Dell (DELL) should be good after the accounting investigation.
Adami picks some strong stocks like Biogen Idec (BIIB) and Hewlett-Packard (HPQ).
Thornburt Mortgage (TMA) insider buying suggested that the stock was safe and Pete Najarian is now long.
In fanancials, Adami picked that Bank of America (BAC) and Goldman Sachs (GS) while Najarian says Wells Fargo (WFC). Jeff Macke says Goldman Sachs is a trade.
INTERVIEW WITH DENNIS GARTMAN
Commodities traders were killed and Dennis Gartman of the Gartman Letter says that the market was a little over extended and the market will move back for a few days. He’s watching Euro/Yen currency trade says the trading is violent. Gartman says that he’s still going to stay away from US Steel and he may start buying oil. Gartman says we’re in a bear market in stocks and bull market in volatility. He says the bounce will be on very weak volume but he could park. Gartman says you’ll get a strong bounce for the next few days on short covering from Friday and Monday. But he says sell into the rise.
INTERVIEW WITH CORNING CEO
Corning Inc (GLW) James Flaws, CFO says he has seen no slow down in glass fiber demand and the company is doing fine. He says that he feels that slow down in consumer spending will not hurt them (defy economics?). Also other segments are growing as well. Jeff Macke is hold on it. Najarian says it’s a buy. Adami and Bolling says hold it. Bolling says the chart is horrible.
POPS AND DROPS: Mostly drops today. How weird.
Drops:
Ford (F) – Adami says sell
Freeport – McMoran (FCX) – Eric Bolling says stay away.
Gold (GLD) – Bolling says you can own it.
Sotheby’s (BID) – Macke says you can buy it.
SONY INTERVIEW
Sony (SNE) CEO was on the show but after his presentation, all the traders said it was a total sell. Poor CEO who came on the show. He looked really disappointed – it was borderline sad. Can’t help but feel bad for the guy.
WEB EXTRA:
Eric Bolling says Beazer Homes (BZH) is the bulleye of the market and should go bankrupt while Macke says that JC Penny (JCP) was doing well despite a good retail environment.
FINAL TRADES:
Mackes wants General Motors (GM) because it’s at the bottom. Najarian says that Thornburg Mortgage (TMA) might be bought but Macke says or bankruptcy. Adami says Network Appliances (NTAP). Bolling says buy financial XLF
Posted: August 16th, 2007 | Author: Stock Pitcher | Filed under: Mad Money | No Comments »
After the market came back from a 340 point drupping, Cramer pointed out some good picks in financials. “Wells Fargo (WFC) could survive the post-Bernanke world and head higher,” said Jim Cramer on his “Mad Money” TV show Thursday. “It is the great speculative play that should prosper” because it has a good dividend and is diversified but he would buy between $32 to $34 (Wells Fargo close at $35.40 today). In the long term, the survivors will “long-term beneficiaries” of Ben Bernanke’s term. But overall he still said that financials were still a bad play and pointed out some short ideas such as Washington Mutual (WM), H&R Block (HRB), Capital One Financial (COF) and Friedman Billings Ramsey Group (FBR).
In terms of the market, Jim said that you shouldn’t sell during the panic like he did in the low points of 1987 and 1998 and it’s not “time to bail” but he gave some sell recommendations like selling Vmware (VMW) and to sell off minerals even after taking the losses. Also he mentioned that the retail industry is getting weak so that’s a sell too because spending could be weak under this fed. Other sells were Lamson & Sessions (LMS) and Six Flags (SIX) were are having attendance problems at that parks. But Cramer predicted that we’ll continue to see ups and downs until a market disaster or “capitulation” so it’s better focus on long terms buys and not trades.
Cramer pointed out that although KKR Financial (KFN) and Thornburg Mortgage (TMA) are two of the higher-paying dividends, they aren’t quality because the price is going down making the yield go up which means that it jeporadizes the yield when profits go down so when they stop or cut dividends, the stock loses the floor on it. Instead he recommended cigarrette maker, Reynolds American (RAI) which pays a “nice dividend,” at 5.5% yield or Altria (MO), which he owns for his charitable trust.
LIGHTNING ROUND – Highlights.
Crocs (CROX): “I will always keep some Crocs on hand. … I like the stock. It’s had a nice pullback. It’s having a nice quarter. … I want to reiterate that Crocs is still in the growth phase. I’m not abandoning the story.” – He’s sticking with it but he just said he’s down on RETAIL! WHAT!
Acadia Pharmaceuticals (ACAD): “I got behind Acadia awhile ago. It was my speculative play, and then I switched to Nastech Pharmaceutical (NSTK). … That’s the one you want to be in.” Yes the nasal stock again!
Apple (AAPL) “I think Apple’s come back enough. I like it. It’s one of my four horsemen. I know it’s been crushed.” Sticking with it. iPhone is still a top seller.
Wells Fargo, WFC, H&R Block, HRB, Capital One Financial, COF, Friedman Billings Ramsey Group, FBR, Apple, AAPL, Acadia Pharmaceuticals, ACAD, Nastech Pharmaceutical, NSTK, Crocs, CROX, Lamson & Sessions, LMS, Six Flags, SIX, KKR Financial, KFN, Thornburg Mortgage, TMA, Reynolds American, RAI, Altria, MO
Posted: August 16th, 2007 | Author: Stock Pitcher | Filed under: Short Stocks | 1 Comment »
It’s tapped 11.5 Billion in funds to stay afloat. It said that it wasn’t in trouble. Then it said it was having difficulty. Can we believe anything but looking at an old interview – we definitely can’t! Here is the interview with Businessweek between Maria Bartiromo and the CEO of Countrywide Financial Angelo Mizilo from March.
Do you worry that the subprime fallout will bleed into the prime mortgage market?
I don’t think it’s going to bleed substantially into prime.
(Well he announced in earnings that it did bleed…oopps)
How exposed is Countrywide to the subprime mess?
In 2006 subprime loans were about 9% of our total business, now down to 7%. We’re a prime lender…but we also have been on a mission…to try to increase home ownership opportunities for minorities and low-income borrowers.
(Well I guess your mission to put people in homes that don’t belong there isn’t the best idea…is it?)
What will the impact be?
When you cut that first-time home buyer out, there’s a ripple effect. I’ll be the first to admit that a lot of players came into the industry that were not banks, not even mortgage banks, and that they exploited a certain number of people. But that exploitation was in the minority. You had 17 increases in the Fed funds rate. Then those [exotic] loans began to reset, and that was the tipping point. When you begin to cut off the demand, values start to recede. And there’s an old saying that you never know who’s swimming naked until the tide goes out.
(Well I guess you’re right there was some exploitation and it’s just starting to tip and it looks like you may be swimming naked)
The Wall Street Journal said you sold $140 million worth of stock. Do you worry that shareholders will say: “Oh well, he’s selling. He must be losing confidence. Maybe I should sell”?
As a CEO, the only way to eliminate that issue is to never sell stock, just die. Die owning the stock and never exercise an option. In fact, I’ve sold very little stock. Almost all of what I sold were options I accumulated over the last 10 years. I’ve chosen to keep most of my net worth in Countrywide.
(He didn’t quite answer the question because changing those options to stocks meanings selling stock you retard plus 140 million worth of stock is a pretty nice chunk of change – plus he sold most of his stock at $40s while now it’s about $18)
WHAT A GREAT INTERVIEW HUH FOLKS?
Posted: August 16th, 2007 | Author: Stock Pitcher | Filed under: Econ Talk | No Comments »
There is a huge drastic change in the psychology of the market recent – actually within the last four weeks or less. The credit market is deteriorating because of the lack of transparency. Banks and financials are getting hurt. All the deals and the buyout premiums are being taken out. But there can be worse to come. There hasn’t been a reevaluation of stocks yet. Yes this is yet to come. Will the American consumer who is being slow stretched be affected? Well the piggy bank of refinancing has finally come to an end with tighter lending standards and falling home prices. The consumers spending the most were the same people spending the most on their homes. When consumers stop spending, revenues go up while fixed cost are basically fixed thus profits go down. Way down. If PEs go up then stocks will need to go down. Value funds will have to readjust. Growth stocks are definitely not in favor with the lack of growth.
Did someone say recession? Is it possible? Some people are saying it’s possible when before it was not. A rate cut doesn’t seem to be coming soon with the threat of inflation. Here is the possibilities for this market.
Ok the world’s best consumer us is falling apart. Will corporations start laying people off in foresight of this consumer spending drop. Yes there will less money to spend and less money to spur the economy because we know that everyone in America already maxed out their credit cards. Well what about world growth, what about world growth. It depends on us, the world’s best consumer who isn’t so great anymore.
Why is there so much selling? Why? Well let’s see. The loan funding was pulled. Lack of liquidity in the mortgage market pushed up the rates for loan funding. Then this pushed up rates for corporate borrowing. Then this killed the buyout mania. Then the catalyst for stocks started falling one by one. Buyouts were more expensive. Stock buybacks are more expensive. Borrowing cost for corporations are more expensive. So it’s a huge problem. So now you have stocks dropping and people demanding for redemptions of their money because they are scared. I’m scared. I sold everything today because the market is dropping on low volume. Flight to quality it’s called. So now funds will need to sell everything as the redemptions come and you know what some people aren’t sticking with these funds who are supposed to beat the market and so heavily invested. So there will be fund closures not because of subprime but because of the regular market dynamics. This is not good for the world of capitalism.
It would be nice to just wait it out until all the rates reset and the banks figure out what is going on with the liquidity situation because money is disappearing every single day. I say go with something save until you see huge selling at huge volume. Like is the world coming to an end volume. We need something to say that everything is ok. Wait it out folks.
Posted: August 16th, 2007 | Author: Stock Pitcher | Filed under: Fast Money | No Comments »
The bloodbath continues as today the S&P 500 has just gotten into the red. Jeff Macke says that you should sell until you can sleep because this is a real problem. Guy Adami says there is a lot more downside. Time Seymour, the Ambassador says that stocks will still suffer. Pete Najarian says the volatility index hit 31 and the put activity in Countrywide Financial (CFC) was insane and he is short CFC.
Financial Trade:
Guy Adami points out that Buffet bought Bank of America (BAC) and there may be some value in financials. But Macke points out there hasn’t been reductions in earnings yet and Goldman Sachs (GS) with a PE of 8 is wrong and needs to be reevaluated.
Tim Seymour was actually buying something but says that a dollar play would help you. Seymour says that you should look into ETFs FXC which is a Canadian dollar ETF.
But Jeff Macke says just sell it. Sell it. It sounds very scary now.
Deere (DE) – is running up; part of the agriculture trade. Guy says there is opportunity but it is a tricky market right now.
Hewlett Packard (HPQ) Trade – There is a lot of optimism and Jim Goldman, CNBC’s Silcon Valley Bureau Chief says he owns this and that cost cutting and operating margins may move Hewlett Packard but it will all depend on outlook.
The Materials and Finance sectors were the worst performing. But materials were a huge surprise but Tim Seymour said that all the trends are challenged but not out. Guy Adami says there is a capitulation so there may be a buying opportunity soon. US Steel (X) went from $127 now trading at $80. Jeff Macke says that all the trades were crowded and all the funds were dropping it and everything else. He says don’t confuse the stock with the market meaning that the stock is good. 20 to 1 put to call ratio in materials according to Najarian.
China Mobile (CHL) – all the traders says that it’s a good trade because mobile markets are still growing. Guy Adami says there is still more growth and says it’s a great place to park your money. Tim Seymour says mobile is the best emerging market play!
PetSmart (PETM) beat the market and the CEO says that they are riding the wave of the “humanization” of pets along with services that differentiate themselves. Macke, Najarian, Adami, and Seymour all say it’s a good buy.
DROPS
Lehman (LEH) – Adami says sell
Emerging Market ETF (EEM) – Seymour says Short
AMR Corp (AMR) – Najarian says it’s going lower
KKR Financial (KFN) – Mortgage exposure – Adami says it’s a pop tomorrow though.
Crocs (CROX) – Seymour says it’s not right for men not from Sweden to wear clogs so it’s a sell. A little humor in the insanity.
POPS
Thornburg Mortgage (TMA) – Najarian says it’s a fake pop – we’ll see.
H.J. Heinz (HNZ) – Seymour says it’s a buy – Note Nelson Petz has a position
VMWare (VMW) – Adami says don’t chase it but watch it.
New York Times (NYT) – Macke says still a sell.
Final Trade:
Jeff Macke says don’t buy anything.
Najarian Short Etrade Financial (ETFC)
Adami buy more DOG
Seymour says buy MBT
Countrywide Financial, CFC, Goldman Sachs, GS, Hewlett Packard, HPQ, Deere, DE, US Steel, X, China Mobile, CHL, China Unicom, CHU, Thornburg Mortgage, TMA, H.J. Heinz, HNZ, VMWare, VMW, New York Times, NYT, Crocs, CROX, KKR Financial, KFN, AMR Corp, AMR, Emerging Market ETF, EEM, Lehman, LEH, PetSmart, PETM, Etrade Financial, ETFC
