Thursday, July 26, 2007
Quick Reminder: The Bears Are Weak
Anyway, we are down more than 300, as predicted. Now what?
The problem is strictly cosmetic. Meaning: The current perception is that stocks are vulnerable, so the domino effect is in play.
What's important to remember is the high short interest, saddled onto stocks. My guess, this current dip gets blown out of proportion by the fucktards at CNBC, effectively putting a bottom in the market. Based upon current earnings estimates, this market is finger licking cheap.
In short, I am not afraid of this dip. Instead, I am scouring the market for oversold securities. In other words, I am embracing the "asshattishness" of those who dive into empty pools.
Doing some quick scans, I like the discounts in AMTD, LAZ, BSC, GS, CSG, FMX, WCI, PLPC, TEX, CENX, RS, FCX, ALCO, BWLD, HANS, BBND, GIGM, KUB, WF, BBD, AMKR, ASTSF, MU, CAJ, TSM, HUGH, TAR, ALJ and NDAQ.
Additionally, some stocks are showing unusual strength, such as: NMR, FMCN, KEX, AXYS, TNH, CMI, FRN, PAS, DLB, BBI, BG, PSYS, NGAS, NFX, ARD, OII, SPWR, BDCO, INCY, RPRX, KERX, ONXX, BMRN, OMI, DNA, WYE, AFFX, VSTA, NTRI, AET, OMTR, ARTG, DSCM, JUPM, PG, MMM, TOMO, BIDU, HIHO, EQIX, XING, FFIV, HLIT, IKAN, ARTG, SAT, SHEN, IFSIA, ONNW, RGCO, RVBD, CROX, VIGN, CKSW, MSCS, FORM, MRVL, AAPL, OVEN, AUO, RIMM, ORA, DRIV, LSI, WFR, UTEK and RADN.
What to do with these long, tedious lists?
I don't know. Stick it in your ear.
With my money, I will hop into my car, made of dynamite sticks, and drive towards the sun.
Wish me luck.
icarus allusion? well played.
except for you no doubt use some kind of massive gorilla glue, not some pussy wax, for commoners. Fall out? Unlikely.
My AK-46 is out of bullets, but I still have my rake.
1) They've got almost $1 trillion of assets on their balance sheet, some portion of which is corporate bonds. Corporate credit spreads have blown out, with high yield spreads widening 200 basis points in a few weeks. That's an enormous mark down of bond value. Sure, everyone who works there is smarter than Einstein, but there's no way they are perfectly hedged on their bond book when credit spreads widen that much, that fast.
2) The capital market turmoil will reduce fees from fewer M&A deals. New issuance of securities will also decline, which will also reduce fees.
Everyone knows all the BDs are going to take big hits to earnings, but how big the hits will be is impossible to quantify at this point. That's probably why there's no bid for any of the BDs.
Links to this post: