***Official*** 2008 Stock Market Thread

[ponyo]

Is this fun or what? As the saying goes, you can learn lot by watching. And if they can't get them down, it usually means it's going higher.

Wachovia all but threw the kitchen sink out today trying to clear the deck for the new CEO. Classic move and should be easy for the new guy to look good for the next couple quarters. If he can't, this free pass is going to be taken away real quick with the real punishment.

I said the best way to play falling oil prices was not by shorting oil but to buy the airlines. I didn't take my own advice and missed out on some massive rallies on the airlines the past couple days. UAL went up nearly 70% today and Continental up 43%. This after over 100% gain last week. You snooze, you lose. Jim Rogers probably made out like bandit.

I did however replace most of the CarMax shares I sold on Friday so I'm happy. I'm now positive on the overall position and lowered my cost basis many dollars so this decline helped me.

DBA has been falling for many days now. If this keeps up and oil keep falling, this should provide boom for food packagers like Sara Lee, General Mills, Kraft, etc.

 

[Ricochet]

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

 

[alphatarget1]

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

I actually bought BAC at 35.50 and then 24.90. I only made about 3%, not bad for 3 months I guess. Playing short term is basically gambling and I'm not a big fan of gambling. I bought WB at 26 and then doubled up at 8.45, but I sold half of it at 9.36. If I had kept it I would've made money by now, but I was worried about the earnings.

I'll be going into ETFs. Watching individual stock prices will give me a heart attack one of these days. I went from losing 1300 dollars on BAC to making 180.

 

[Slew Foot]

Bought in some Kraft for the long haul at 29, I figured if it was good enough for WB at 30, its good enough for me at 29.

 

[JS80]

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

GOod sell.

Forgot to post a stock tip - IAR. Earnings next week. Stock should double.

 

[Slew Foot]

IAR, haha I got a bunch of them when they broke off of VZ a year or so back. Theyve gone from 30+ to a 1.50

 

[IHateMyJob2004]

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

Piggyback Waren Buffett.

Buy WFC and USB, two of his most recent picks .... accept you can pay less than he did.

 

[alphatarget1]

Originally posted by: IHateMyJob2004

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

Piggyback Waren Buffett.

Buy WFC and USB, two of his most recent picks .... accept you can pay less than he did.

WFC is in the 30s right now... I wouldn't touch it just yet.

 

[JS80]

Originally posted by: Slew Foot
IAR, haha I got a bunch of them when they broke off of VZ a year or so back. Theyve gone from 30+ to a 1.50

should be at $3 by next wed.

 

[alphatarget1]

what IS IAR?

 

[her209]

VMW down to 32.5

:shocked:

 

[IHateMyJob2004]

Originally posted by: her209
VMW down to 32.5

:shocked:

Why would anyone invest in that?

 

[IHateMyJob2004]

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

BOught it at $45 (I think). Held it down to nothing and still own it. I expect BAC to hit all time highs in 1-3 years. Yup, $50+

 

[IHateMyJob2004]

Originally posted by: Slew Foot
Bought in some Kraft for the long haul at 29, I figured if it was good enough for WB at 30, its good enough for me at 29.

I ha ve not figured out why WEB bought KFT yet.

It seems like KFT is going the GE way. Only keeping businesses around if they are #1 or 2 in their specific product segment.

Anyone know how KFT manages it sub-divisions? Is it like BRK and JNJ where upper the divisions are let to self manage for the most part and those divisions just hand the profits back to corporate for re-investment?

If I can wrap my head around these simple concepts, I'd be willing to buy KFT. I just don't see the value yet. The PE is a bit high, so I have not done a DCF on it. Maybe a DCF would tell me KFT is grossly undervalued?

 

[IHateMyJob2004]

Originally posted by: alphatarget1

Originally posted by: IHateMyJob2004

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

Piggyback Waren Buffett.

Buy WFC and USB, two of his most recent picks .... accept you can pay less than he did.

WFC is in the 30s right now... I wouldn't touch it just yet.

Heheheh ... I think you are going to be surprised where WFC will be in 2-3 years.

 

[alphatarget1]

Originally posted by: IHateMyJob2004

Originally posted by: alphatarget1

Originally posted by: IHateMyJob2004

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

Piggyback Waren Buffett.

Buy WFC and USB, two of his most recent picks .... accept you can pay less than he did.

WFC is in the 30s right now... I wouldn't touch it just yet.

Heheheh ... I think you are going to be surprised where WFC will be in 2-3 years.

yeah but it was 20 dollars a share last week!!!

 

[alphatarget1]

Originally posted by: IHateMyJob2004

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

BOught it at $45 (I think). Held it down to nothing and still own it. I expect BAC to hit all time highs in 1-3 years. Yup, $50+

Financials have gone up too fast in a week... I think it'll go back down and when the banks start to write their assets back up they'll rack in a lot of cash

 

[alphatarget1]

Does anyone own VFH by the way? Nice way to diversify.

 

[IHateMyJob2004]

KFT

I did a quick DCF (discounted cash flow) analysis. I used conservative growth rates and an 11 discount rate. Doing so gave me a fair value of about $38. Not bad seeing how the current price is $29.

I don't trust my calculation that much, so I want a 35% margin of safety on my $38 estimate. This basically means that I would be willing to pay about $25 for KFT stock.

At that point, the PE will be more attractive and the yield would be near 4%.

No I will not hand out my worksheet. It truly is not a good work up on value. It's better to be approximately right than precisely wrong though.

------------------------------------
As for why WEB bought? Well, he would probably be using a 9% discount rate right now. That change alone with a 25% margin of safety gives you $29 for a buy price.

 

[IHateMyJob2004]

Originally posted by: alphatarget1

Originally posted by: IHateMyJob2004

Originally posted by: alphatarget1

Originally posted by: IHateMyJob2004

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

Piggyback Waren Buffett.

Buy WFC and USB, two of his most recent picks .... accept you can pay less than he did.

WFC is in the 30s right now... I wouldn't touch it just yet.

Heheheh ... I think you are going to be surprised where WFC will be in 2-3 years.

yeah but it was 20 dollars a share last week!!!

price is what you pay and value is what you get. I'll assume that you are a speculator at this point. You did listen to the conference call nd did notice the the 10% increase in the payout right?

 

[IHateMyJob2004]

Originally posted by: alphatarget1

Originally posted by: IHateMyJob2004

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

BOught it at $45 (I think). Held it down to nothing and still own it. I expect BAC to hit all time highs in 1-3 years. Yup, $50+

Financials have gone up too fast in a week... I think it'll go back down and when the banks start to write their assets back up they'll rack in a lot of cash

Even Warren Bufft has said that the worse is behind us in financials. Except he said this months ago.

 

[alphatarget1]

Originally posted by: IHateMyJob2004

Originally posted by: alphatarget1

Originally posted by: IHateMyJob2004

Originally posted by: alphatarget1

Originally posted by: IHateMyJob2004

Originally posted by: ricochet

Originally posted by: alphatarget1
Sold BAC today at around 32. This market is freaking nuts... BAC's low was 18.44 a week ago.

Nice going. I'm not brave enough to touch financial. Same with airlines. Miss out on a lot of money because of it.

Piggyback Waren Buffett.

Buy WFC and USB, two of his most recent picks .... accept you can pay less than he did.

WFC is in the 30s right now... I wouldn't touch it just yet.

Heheheh ... I think you are going to be surprised where WFC will be in 2-3 years.

yeah but it was 20 dollars a share last week!!!

price is what you pay and value is what you get. I'll assume that you are a speculator at this point. You did listen to the conference call nd did notice the the 10% increase in the payout right?

The yield is still nowhere near BAC's dividend although they may cut it at some point (?). If a few more banks go broke financials will go back down, I think.

Like I said before I don't feel comfortable holding individual stocks anymore. My BAC went from 35.5 to 18.44 and back up to 32.40. Watching that gives me a heart attack. I'd rather take a smaller return and diversify than to stay with single stocks...

 

[alphatarget1]

What do you guys think of AIG?

 

[JS80]

Waaay too early to go back into financials. However, WFC is the most solid bank out there.

 

[ponyo]

No need to chase the financials. Leave that to the emotional traders. You let the stock price come to you. Chasing in this market is foolish and will eat you up as it swings back down. You rarely get a V bottom. W or triple is more likely. So retest will come. Like I said earlier, I fully expect financials to ultimately trade even lower than last week's low. There will be winners but sorting them out right now is too tough. Are JPM, BAC, WFC, GS the ultimate winners? Looks like it right now but who really knows. But at current prices, I really don't want to touch any of them. This financial mess wasn't created in a day and it won't end in one either. This debt unwind could take years.

The sector I'm currently looking at and feel is attractive are the healthcare and pharm stocks. Many of these companies are priced like Obama has already won the election and these companies are dead. Rising healthcare cost are killing HMOs but there are values in these names. People are not getting younger and more need it. You have people living longer too. I sold my GSK position last week to raise fund but would like to buy it back. I'm looking at HMOs like UnitedHealth and Wellpoint.