***Official*** 2008 Stock Market Thread

[ponyo]

Originally posted by: 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?

Why buy Kraft? Did you miss the news of the BUD buyout? Premium brand like Kraft could be attractive for buyout with the dollar being so weak.

Maybe Buffett thinks Kraft can grow faster than expected. Food processors are raising prices as fast as they can with the commodities prices and oil going up. If both were to decline significantly, this would spell $$ for these companies as their margins would explode to the upside.

Kraft is my second largest position and I don't see that changing anytime soon. My daughter and both of my nephews now own Kraft shares as well and they'll keep collecting dividend as they wait. They eat lot of Kraft Mac and Cheese.

 

[ponyo]

Originally posted by: alphatarget1

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...

"Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing."

-Warren Buffett

 

[sniperruff]

Originally posted by: JS80
Waaay too early to go back into financials. However, WFC is the most solid bank out there.

i concur. sold off 70% of my WFC today and broke even. once this rally fueled by the "things ain't so bad after all" mentality dies in a few days, i'll find another entry point

bought AAPL @ $149 today pre-market. up 8% for the day... barely put a dent on what i lost these few months.

 

[alphatarget1]

Originally posted by: Naustica

Originally posted by: alphatarget1

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...

"Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing."

-Warren Buffett

But I frankly don't enjoy looking at and researching stocks. I just want to beat inflation by about 5-6% and I'm satisfied.

In short: I'm a graduate student, not a day trader

 

[richardycc]

you guys are weak, I am buying more ABK, bought 1k shares @ 1.86 almost 2 weeks ago, will add another 2-3k shares and will sell them around $10/share. Got some FRE @ 9.7 too.

 

[sniperruff]

Originally posted by: alphatarget1

Originally posted by: Naustica

Originally posted by: alphatarget1

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...

"Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing."

-Warren Buffett

But I frankly don't enjoy looking at and researching stocks. I just want to beat inflation by about 5-6% and I'm satisfied.

In short: I'm a graduate student, not a day trader

day-trading is opposite to what buffett preaches. he emphasizes on buying on firms with good fundamentals on low prices (such as around this time) and hold them as long as the management is competent.

Originally posted by: richardycc
you guys are weak, I am buying more ABK, bought 1k shares @ 1.86 almost 2 weeks ago, will add another 2-3k shares and will sell them around $10/share. Got some FRE @ 9.7 too.

that's nothing. i loaded on AMD and will cash them all in @ $46 in a few years.

 

[imported_Lothar]

Originally posted by: her209
VMW down to 32.5

:shocked:

Why is that a surprise to you?

 

[imported_Lothar]

Originally posted by: sniperruff

Originally posted by: richardycc
you guys are weak, I am buying more ABK, bought 1k shares @ 1.86 almost 2 weeks ago, will add another 2-3k shares and will sell them around $10/share. Got some FRE @ 9.7 too.

that's nothing. i loaded on AMD and will cash them all in @ $46 in a few years.

:laugh: @ both of you.

 

[imported_Lothar]

Originally posted by: 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.

When I did my valuation months earlier, I arrived at ~$37/share which is pretty close to your figure.
I think either S&P or M*(not sure which one) arrived at your $38/share conclusion as well, but then again I don't pay much attention to financial analysts.

 

[ponyo]

Costco warns and stock falls. I hope they crush it as I'm looking to buy back shares I sold earlier this year. People have been hiding in Walmart and Costco for way too long. Bear market is brutal. No place to hide except cash.

 

[Azurik]

Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

 

[JS80]

Originally posted by: Azurik
Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

Stock will drop the amount of dividend...

 

[alphatarget1]

Originally posted by: JS80

Originally posted by: Azurik
Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

Stock will drop the amount of dividend...

it drops after the ex-dividend date I thought, not the actual pay date.

 

[JS80]

Originally posted by: alphatarget1

Originally posted by: JS80

Originally posted by: Azurik
Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

Stock will drop the amount of dividend...

it drops after the ex-dividend date I thought, not the actual pay date.

woops. u r correct.

 

[ponyo]

Originally posted by: Azurik
Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

Way to battle back. :beer: I'm nicely positive on CarMax. I sold the trading shares I picked up for the second time at $15. Two for two so far playing the range. Both times it failed to break $15.50. Planning to pick it up again at ~$13. I plan on keep doing it until it stops working.

GE is getting some nice press from Pickens wind project.

 

[JS80]

Originally posted by: Naustica

Originally posted by: Azurik
Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

Way to battle back. :beer: I'm nicely positive on CarMax. I sold the trading shares I picked up for the second time at $15. Two for two so far playing the range. Both times it failed to break $15.50. Planning to pick it up again at ~$13. I plan on keep doing it until it stops working.

GE is getting some nice press from Pickens wind project.

can you explain to me your love affair with carmax?

and do you think some fairy wind project will make a dent to the value of a company with a $775 billion enterprise value?

 

[ponyo]

Originally posted by: JS80

Originally posted by: Naustica

Originally posted by: Azurik
Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

Way to battle back. :beer: I'm nicely positive on CarMax. I sold the trading shares I picked up for the second time at $15. Two for two so far playing the range. Both times it failed to break $15.50. Planning to pick it up again at ~$13. I plan on keep doing it until it stops working.

GE is getting some nice press from Pickens wind project.

can you explain to me your love affair with carmax?

and do you think some fairy wind project will make a dent to the value of a company with a $775 billion enterprise value?

Perception is reality in the marketplace. Pickens talking about his wind project and the need for more projects like it in Congress yesterday and today can only help GE short term. GE is supplying the turbines so it gets some good press out of it.

CarMax is boring and has been struggling for about a year. This is positive. I like their business model and management. CarMax grew to control 2.5% of the total used car market in the US in about 6 years. That's impressive but they're just getting started. They're expanding rapidly even in this lousy environment which is the absolutely the right thing to do. SUV mess along with the lousy retail environment has hurt them but they're working through the SUV mess. Car sales are absolutely terrible for everyone right now so many dealers are closing or pulling back. CarMax is marching on to take marketshare. As the economy improves, they should be in great position to benefit from their expansion and larger marketshare. They should have double the number of stores in about 4 years. Even a slight margin increase can add lot to their bottom line and I fully expect their margin to increase as they grow more dominant. My hope is CarMax can do something like Home Depot did to the hardware stores and consolidate all those fragmented family run dealerships.

 

[Noirish]

bidu > goog in china

 

[Auric]

I cannot be arsed to goggle it but was not CarMax originally a queer subsidiary of Circuit City? I seem to recall it being an ill conceived drag on the latter in ye olden days. If true, it is oddly fitting that the Blockbuster braintrust thought buying Circuit City was a good idea. In that it is equally retahded.

 

[Azurik]

Originally posted by: alphatarget1

Originally posted by: JS80

Originally posted by: Azurik
Well... I'm pretty close to break even on GE with it outperforming the market the last few days. Their tasty dividend is coming this week which will probably push me into the green for the year on the stock! Woooo!

And my short on USO is doing nicely :thumbsup:

Stock will drop the amount of dividend...

it drops after the ex-dividend date I thought, not the actual pay date.

Yes, it already dipped on the ex-dividend last month. That's already accounted for since you had to own the shares before that date. There won't be a sell through now for the actual payment.

 

[ponyo]

CarMax used to be part of Circuit City as a tracking stock and then was completely spun off. It was known as "Honest Rick's Used Cars" internally when they were developing the concept in honor of then Circuit City CEO Rick Sharp. Circuit City wanted to expand beyond their retail electronic business.

 

[JS80]

Originally posted by: 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.

Anyone get in on my stock tip?

 

[Slew Foot]

Originally posted by: JS80

Originally posted by: 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.

Anyone get in on my stock tip?

:thumbsup:

Where do you think it goes from here?

 

[JS80]

Originally posted by: Slew Foot

Originally posted by: JS80

Originally posted by: 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.

Anyone get in on my stock tip?

:thumbsup:

Where do you think it goes from here?

My over/under is $3.

 

[sniperruff]

just bought some XTO... check it out.