***Official*** 2008 Stock Market Thread

[TallBill]

Originally posted by: bignateyk

Originally posted by: TallBill
Biggest 2 day gain in 11 years and nobody cares?

Why? We are still below where we were 4 trading days ago...

So?

 

[Ricochet]

Originally posted by: TallBill
Biggest 2 day gain in 11 years and nobody cares?

I think a lot of people just got exhausted from all the mounting losses and let's not forget the suckers rally. I've spoken to enough people who tell me they're done with the stock market (and bowed out). I'm sure the sentiment is reflected here as well. Not everyone has the heart to stick it out like Naustica.

 

[Slew Foot]

The reason no one is excited about these gains is that it's not based upon any fundamental strength in the economy, its just the govt handing out money

 

[ponyo]

Originally posted by: TallBill
Biggest 2 day gain in 11 years and nobody cares?

Everything needs to be viewed in context. We're just getting back to the support level we broke from. If you didn't buy despair late last week and sold the hope today, you're likely no better off and in many cases probably worse off than you were at Tuesday of last week. Days like Friday and today is the reason you have to stay in the game and try to catch some of these moves to offset the losses you're taking staying long throughout this nasty worldwide equities/credit crash. Fiercest rallies occur in the context of the bear market, and I've been lucky to catch most of them this year. That has offset lot of the pain of the crash and have helped me outperform the general market this year. It's very tough and difficult market out there and the volatility is nothing like I've ever seen or experienced in my life. Granted I've only traded/invested for 15 years but that's probably more than most people here. I don't blame anyone for not trusting this market or wanting no part of it. I've asked myself why I'm even bothering with the market. Eventually there will be better times ahead and it will get easier. It's sort of like the forest fire analogy. The forest fire is cleansing out the system and new life will spring from it. I'm trying to stay in the game, exercise good risk management, and take part in the new bull market.

 

[IHateMyJob2004]

Naustica,

After all the capital gains taxes you've paid will you still be "outperform the general market this year"?

By the way, you are very good at re-iterating what people say on TV. And welcome to the first ever bull market you are seeing in your 15 years of investing. The good news is that it sounds like you started investing at the beginning of the last bull so you probably have done quite well.

Then again, so did Jim Cramer in about hte same time period (he quit in what 2001?). Guy gets lucky be starting a hedge fund at the start of a bull market and people think his investment record is worth talking about. When you leverage the crap out of a hedge fund, you will beat the market. He is lucky that he got out when he did. It's not like he needs the money.

 

[IHateMyJob2004]

Naustica,

Do you find this chart interesting?
http://finance.google.com/fina...q=INDEXDJX:.DJI&ntsp=0

And a fat yield the whole time. These are all holdings of mine. Wow, if you bought 3 of the best (USB and WFC being the best two) financials, everything doesn't look so gloomy does it? So, buy and hold wins. Even when talking about financials. And the only taxes are on those dividends. What's the tax rate on dividends these days?

Just wanted to continue my thesis on market irrationally creating opportunity in the financial sector.

ALso, BRK is down something like 40% from it's high. In part because it's exposure to financials has people worried. Don't worry. This is the 3rd time BRK tanked by 50%. Or is it the 4th time? So, buy a potential bottom on one of the best companies in the US? Even if it is not the bottom, let it drop more .... that means you can simply buy more! Ask me how I did in 2020.

 

[TallBill]

Originally posted by: Naustica

Originally posted by: TallBill
Biggest 2 day gain in 11 years and nobody cares?

Everything needs to be viewed in context. We're just getting back to the support level we broke from. If you didn't buy despair late last week and sold the hope today, you're likely no better off and in many cases probably worse off than you were at Tuesday of last week. Days like Friday and today is the reason you have to stay in the game and try to catch some of these moves to offset the losses you're taking staying long throughout this nasty worldwide equities/credit crash. Fiercest rallies occur in the context of the bear market, and I've been lucky to catch most of them this year. That has offset lot of the pain of the crash and have helped me outperform the general market this year. It's very tough and difficult market out there and the volatility is nothing like I've ever seen or experienced in my life. Granted I've only traded/invested for 15 years but that's probably more than most people here. I don't blame anyone for not trusting this market or wanting no part of it. I've asked myself why I'm even bothering with the market. Eventually there will be better times ahead and it will get easier. It's sort of like the forest fire analogy. The forest fire is cleansing out the system and new life will spring from it. I'm trying to stay in the game, exercise good risk management, and take part in the new bull market.

Yes, unfortunately I have no more cash to throw at the market right now. I don't expect a huge rebound to continue, but I feel like a lot of the scared sellers have already moved over to bonds.

I guess we'll see though.

 

[Azurik]

What a market these past two months huh?

There are A LOT of value plays right now given that good stocks were being dumped with bad stocks... attribute it to panic selling, margin calls, you sell/we sell psychology, but it's plain to see.

It's too bad I don't have enough free capital to buy many of those stocks. I have loaded up on Rambus (RMBS) again these past couple weeks... and now own more shares than I ever thought I would in my 8 years of following and owning this stock.

As a heads up, Rambus has won summary judgement on Claim 16 on their upcoming DDR2 consolidated trial. I got the PDF version of the order at midnight, it's not announced yet, but I can see RMBS being up over 20%, while the Nasdaq is currently down 1%, that some people knew.

What does this summary judgement mean? It means that Samsung, Hynix, Micron and Nanya (the manufacturers against Rambus in this case) have already been ruled that they infringe on DDR2, DDR3, GDDR2, GDDR3, GDDR4 dram. The judge took this question out of the jury's hands. The only real question now was if the infringement was willful. If so, Rambus can seek treble damages.

 

[Azurik]

It's up another 20% or so today in a mixed market.

I'm conflicted. The new shares I bought last week are up over 59% in just three days. I could sell for a profit while keeping my core position... but ahh.

 

[ponyo]

Originally posted by: Azurik
It's up another 20% or so today in a mixed market.

I'm conflicted. The new shares I bought last week are up over 59% in just three days. I could sell for a profit while keeping my core position... but ahh.

When I'm unsure, I tend to side with caution and reduce risk. If it was me, I would lock some of it in and look to add back on pullback. It's very light trading out there due to the holiday and early closings today and Friday. RMBS has good volume today and a nice move from the low so selling some to lock some in might be good risk management. Especially if you were chocking from overexposure before. I believe in selling when you can, not when you have to. You will still have good chunk of exposure after the sale so you still can capture some upside. May your first sale be the worst sale.

 

[abovewood]

I should look at RMBS too.
Any stock under $10 and are good for doing short term trades?

I want to know more about bonds which I can't seems to understand. Any broker offers free trading on bonds?

 

[ponyo]

I thought the market closed at 1:00pm today and Friday. I guess I should pay little more attention.

 

[abovewood]

It will close at 1pm on Friday. I am surprised that it will open.

 

[Oceandevi]

A small de-rail here. The investment options in my 401k are called institutional funds, and are only available through my 401k at work. This may apply to others also. This is the reason for the absence of ticker symbols.

 

[Azurik]

Originally posted by: Naustica

Originally posted by: Azurik
It's up another 20% or so today in a mixed market.

I'm conflicted. The new shares I bought last week are up over 59% in just three days. I could sell for a profit while keeping my core position... but ahh.

When I'm unsure, I tend to side with caution and reduce risk. If it was me, I would lock some of it in and look to add back on pullback. It's very light trading out there due to the holiday and early closings today and Friday. RMBS has good volume today and a nice move from the low so selling some to lock some in might be good risk management. Especially if you were chocking from overexposure before. I believe in selling when you can, not when you have to. You will still have good chunk of exposure after the sale so you still can capture some upside. May your first sale be the worst sale.

Naustica,

In almost every angle, your rationale is right... my thoughts were the same when I bought my last big batch of RMBS at $5.19 last week. It was meant for a swing trade. In just 4 trading days, I have made 100% profit on that portion. I think this is my fastest double. With all the buys I have been doing, I'm actually almost black in my overall RMBS investment.

The issue that comes to my mind is... with my understanding of what is going on, I feel locking in now for a good profit takes away that many shares for something I've been waiting a long long time on (RMBS saga coming to an end). I am entrenched in the camp that RMBS stock price will be $100+ once everything is resolved.

This market presented an oppurtunity I never thought I'd see again, RMBS trading in the single digits. But it allowed me to buy even more shares and dollar cost average down.

I have 7,500 shares and LEAPS so it's a lot at stake. Anything can happen and I may be wrong and kicking myself for not selling in the short-term, but it's RMBS or bust for me

P.S. I am not sure why we haven't consolidated yet... RMBS is now over double digits on above average volume again, and has now gain over 100% from the low it hit last week.

 

[imported_Lothar]

Originally posted by: Azurik

Originally posted by: Naustica

Originally posted by: Azurik
It's up another 20% or so today in a mixed market.

I'm conflicted. The new shares I bought last week are up over 59% in just three days. I could sell for a profit while keeping my core position... but ahh.

When I'm unsure, I tend to side with caution and reduce risk. If it was me, I would lock some of it in and look to add back on pullback. It's very light trading out there due to the holiday and early closings today and Friday. RMBS has good volume today and a nice move from the low so selling some to lock some in might be good risk management. Especially if you were chocking from overexposure before. I believe in selling when you can, not when you have to. You will still have good chunk of exposure after the sale so you still can capture some upside. May your first sale be the worst sale.

Naustica,

In almost every angle, your rationale is right... my thoughts were the same when I bought my last big batch of RMBS at $5.19 last week. It was meant for a swing trade. In just 4 trading days, I have made 100% profit on that portion. I think this is my fastest double. With all the buys I have been doing, I'm actually almost black in my overall RMBS investment.

The issue that comes to my mind is... with my understanding of what is going on, I feel locking in now for a good profit takes away that many shares for something I've been waiting a long long time on (RMBS saga coming to an end). I am entrenched in the camp that RMBS stock price will be $100+ once everything is resolved.

This market presented an oppurtunity I never thought I'd see again, RMBS trading in the single digits. But it allowed me to buy even more shares and dollar cost average down.

I have 7,500 shares and LEAPS so it's a lot at stake. Anything can happen and I may be wrong and kicking myself for not selling in the short-term, but it's RMBS or bust for me

P.S. I am not sure why we haven't consolidated yet... RMBS is now over double digits on above average volume again, and has now gain over 100% from the low it hit last week.

The only chance RMBS has in reaching $100+ is for them to do a 5:1 reverse stock split.

 

[imported_Lothar]

Originally posted by: Naustica

Originally posted by: Lothar

Originally posted by: Special K

Originally posted by: Naustica
Free falling. S&P 840 support broke. We already used the bounce from there before. It's ugly and I'm still not buying. I do see some crazy values in technology space.

I don't understand the whole "resistance/support" thing. Are you saying that investors will be very hesitant to let a major index drop below its previous low value? That makes no sense to me. It seems like a purely psychological decision.

Then again, investors aren't rational and there is an entire field of academic study devoted to behavioral economics, so maybe this is just the way it is.

Technical analysis does not an ounce of sense make.

Peter Lynch: "Charts are great for predicting the past."
Warren Buffett: "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer. If past history was all there was to the game, the richest people in the world would be librarians."

Technical analysis is useful for the short term. This is 100% traders market. All traders look at technicals of the market and the individual stocks even if they don't rely on it 100%. You don't have to be a technician to understand resistance/support and simple patterns like head and shoulder. I'm not a technician but I do glance at charts. One thing you have to remember if you're technician is that charts don't work in a crash. You have to throw the charts out during that time and close your eyes and buy.

Look for the 840 to turn into resistance on the way up. That was decent support before so I don't expect us to break through first time if and when we get back there. That will be good place to sell the trading shares you pick up during the current plunge lower. 780 is minor resistance as well but much smaller weaker one.

If technical analysis is so useful for the short term, why hasn't there been a self made billionaire investor who professes in such a belief yet?
If the only disadvantage was simply because it's "short term", then why can't one simply run the programs more often and be rich?

Does it work the opposite way in a bull market as well?
If a technician does both what you said and what I asked just now, then that person is neither a technician nor a chartist.

Are you trying to say that charts work in a bull market, but don't in a bear market?
If so, then those must be some pretty stupid technicians.

 

[Special K]

Originally posted by: Azurik

Originally posted by: Naustica

Originally posted by: Azurik
It's up another 20% or so today in a mixed market.

I'm conflicted. The new shares I bought last week are up over 59% in just three days. I could sell for a profit while keeping my core position... but ahh.

When I'm unsure, I tend to side with caution and reduce risk. If it was me, I would lock some of it in and look to add back on pullback. It's very light trading out there due to the holiday and early closings today and Friday. RMBS has good volume today and a nice move from the low so selling some to lock some in might be good risk management. Especially if you were chocking from overexposure before. I believe in selling when you can, not when you have to. You will still have good chunk of exposure after the sale so you still can capture some upside. May your first sale be the worst sale.

Naustica,

In almost every angle, your rationale is right... my thoughts were the same when I bought my last big batch of RMBS at $5.19 last week. It was meant for a swing trade. In just 4 trading days, I have made 100% profit on that portion. I think this is my fastest double. With all the buys I have been doing, I'm actually almost black in my overall RMBS investment.

The issue that comes to my mind is... with my understanding of what is going on, I feel locking in now for a good profit takes away that many shares for something I've been waiting a long long time on (RMBS saga coming to an end). I am entrenched in the camp that RMBS stock price will be $100+ once everything is resolved.

This market presented an oppurtunity I never thought I'd see again, RMBS trading in the single digits. But it allowed me to buy even more shares and dollar cost average down.

I have 7,500 shares and LEAPS so it's a lot at stake. Anything can happen and I may be wrong and kicking myself for not selling in the short-term, but it's RMBS or bust for me

P.S. I am not sure why we haven't consolidated yet... RMBS is now over double digits on above average volume again, and has now gain over 100% from the low it hit last week.

How much time have you spent analyzing this stock? How much time do you spend following it each week?

I'm just trying to get an idea of how much time it takes to really follow a stock and feel like you are making a good decision in buying/selling it.

It seems like it would time-prohibitive to track tens of stocks this closely.

 

[IHateMyJob2004]

I bought and held WFC last year. So far this year, it is flat:
http://finance.google.com/fina...8000&q=NYSE:WFC&ntsp=0

Same for BBT

 

[ponyo]

Originally posted by: Lothar

Originally posted by: Naustica

Originally posted by: Lothar

Originally posted by: Special K

Originally posted by: Naustica
Free falling. S&P 840 support broke. We already used the bounce from there before. It's ugly and I'm still not buying. I do see some crazy values in technology space.

I don't understand the whole "resistance/support" thing. Are you saying that investors will be very hesitant to let a major index drop below its previous low value? That makes no sense to me. It seems like a purely psychological decision.

Then again, investors aren't rational and there is an entire field of academic study devoted to behavioral economics, so maybe this is just the way it is.

Technical analysis does not an ounce of sense make.

Peter Lynch: "Charts are great for predicting the past."
Warren Buffett: "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer. If past history was all there was to the game, the richest people in the world would be librarians."

Technical analysis is useful for the short term. This is 100% traders market. All traders look at technicals of the market and the individual stocks even if they don't rely on it 100%. You don't have to be a technician to understand resistance/support and simple patterns like head and shoulder. I'm not a technician but I do glance at charts. One thing you have to remember if you're technician is that charts don't work in a crash. You have to throw the charts out during that time and close your eyes and buy.

Look for the 840 to turn into resistance on the way up. That was decent support before so I don't expect us to break through first time if and when we get back there. That will be good place to sell the trading shares you pick up during the current plunge lower. 780 is minor resistance as well but much smaller weaker one.

If technical analysis is so useful for the short term, why hasn't there been a self made billionaire investor who professes in such a belief yet?
If the only disadvantage was simply because it's "short term", then why can't one simply run the programs more often and be rich?

Does it work the opposite way in a bull market as well?
If a technician does both what you said and what I asked just now, then that person is neither a technician nor a chartist.

Are you trying to say that charts work in a bull market, but don't in a bear market?
If so, then those must be some pretty stupid technicians.

I never said technical analysis didn't work in a bear market. I said it doesn't work during a crash.

I'm not a technician. I respect the charts and keep in mind as part of my decision making process. There are self-made billionaire traders. Every traders glance at the charts whether they follow it or not. Charts are a tool. Not be all and end all.

 

[Azurik]

Originally posted by: Lothar

Originally posted by: Azurik

Originally posted by: Naustica

Originally posted by: Azurik
It's up another 20% or so today in a mixed market.

I'm conflicted. The new shares I bought last week are up over 59% in just three days. I could sell for a profit while keeping my core position... but ahh.

When I'm unsure, I tend to side with caution and reduce risk. If it was me, I would lock some of it in and look to add back on pullback. It's very light trading out there due to the holiday and early closings today and Friday. RMBS has good volume today and a nice move from the low so selling some to lock some in might be good risk management. Especially if you were chocking from overexposure before. I believe in selling when you can, not when you have to. You will still have good chunk of exposure after the sale so you still can capture some upside. May your first sale be the worst sale.

Naustica,

In almost every angle, your rationale is right... my thoughts were the same when I bought my last big batch of RMBS at $5.19 last week. It was meant for a swing trade. In just 4 trading days, I have made 100% profit on that portion. I think this is my fastest double. With all the buys I have been doing, I'm actually almost black in my overall RMBS investment.

The issue that comes to my mind is... with my understanding of what is going on, I feel locking in now for a good profit takes away that many shares for something I've been waiting a long long time on (RMBS saga coming to an end). I am entrenched in the camp that RMBS stock price will be $100+ once everything is resolved.

This market presented an oppurtunity I never thought I'd see again, RMBS trading in the single digits. But it allowed me to buy even more shares and dollar cost average down.

I have 7,500 shares and LEAPS so it's a lot at stake. Anything can happen and I may be wrong and kicking myself for not selling in the short-term, but it's RMBS or bust for me

P.S. I am not sure why we haven't consolidated yet... RMBS is now over double digits on above average volume again, and has now gain over 100% from the low it hit last week.

The only chance RMBS has in reaching $100+ is for them to do a 5:1 reverse stock split.

How did you come up with that, Lothar? I know you are being a little sarcastic, and I obviously disagree.

At the current price of $11+, RMBS is valued at $1.2 billion. Because of their enormous litigation cost, their EPS has been affected and have been negative for a while. However, they are flushed with cash, about $400m. They cannot be litigated to death by the manufacturers (thanks largely to the licenses they signed with Intel, AMD, Sony for the PS2 and PS3, Elpida and at one point, Samsung). Essentially, they will survive. Folks, this isn't about their current earnings, but what they are about to receive.

Hynix already OWES them $300m in back damages for SDRAM/DDR alone. This doesn't even account for DDR2 and beyond, which they have won an infringement summary judgement on. Hynix will owe. Samsung will owe. Micron will owe. Nanya will owe. And this is before we add in controller royalties from the likes of Nvidia.

The DRAM market this year is $30b. Rambus collects 3.5% royalties for companies who sign up - where companies who choose to litigate will pay at least $4.25% and as high as 10%+ for willful infringement. Lets assume a global settlement or Rambus legal victory in their upcoming January trial: the current DDR2 share is 88% of the $30b DRAM market. Conservatively, we'll say Rambus collects 5% royalty on average which equates to $1.14 billion per year. DDR, XDR (Sony licensed XDR for Playstation 2 and 3) and XDR2 is about 7% of the total market. At 4.25%, that's an additional $76 million annually. At 35% corporate tax rate, Rambus' after tax earnings would be $787 million. They only have 100 million shares outstanding which would equate to earnings of around $7.50 per share. At a growth P/E ratio of 35, the price per share would be $262.

This doesn't include the $4 to $10 billion in illegal price-fixing damages Rambus will receive after their Antitrust suit. They manufacturers have all admitted to price-fixing to the Department of Justice. That particular case is a slam-dunk.

A conservative analyst with Capstone Investments came out with a research note today with RMBS stock price at $50-60 with a win in this upcoming January trial (note: they have won infringement in this trial already). IMHO, he is overly conservative.

BTW, Rambus gained an additional 10%, which makes the 5-day percentage gain to be 120%. What is more impressive is it did this on with the stock market posting its 3rd worst day point wise, and on 3x average volume.

I'm not claiming RMBS will be able to reach $262. What I am stating is their decade long legal saga is about to come to an end next year. With Rambus itself today, it is only worth $3-$5 a share. With what they are about to get back that is rightfully theirs, I'd be willing to say it will get to at least $100, assuming none of the companies it has won against/will win against goes bankrupt.

If you have rationale why they won't reach that level eventually, I would welcome your response. The rationale can be based on their market segment, current legal proceedings, patents, etc.

 

[Azurik]

Originally posted by: Special K

How much time have you spent analyzing this stock? How much time do you spend following it each week?

I'm just trying to get an idea of how much time it takes to really follow a stock and feel like you are making a good decision in buying/selling it.

It seems like it would time-prohibitive to track tens of stocks this closely.

I spend about 2 hours a day analyzing this stock, or about 10 hours a week on average. You normally can't research one stock that much, but with all the legal papers flying around, there's plenty to read up and see what is happening before the newswire picks things up. For instance, a private board I'm a member of KNEW of the summary judgement a full day and a half before the newswire picked it up. You could have picked up shares around $8.00 before the run up.

And you are right Special K, there's no way you can track 10 stocks this closely. Heck, even an additional stock like RMBS would drive me insane.

 

[Azurik]

Well... I think it's time to do what the opposite of what I did earlier this year. Going long on oil if it falls below $40 a barrel.

 

[Azurik]

I sold 1,000 shares of RMBS at $11.11 for a gain of 115.98%. I did buy that lot for a trade, so I guess I may as well follow through with it.

Still hold 6,500 shares.

News could come out at anytime from now through the end of January... but I disgress. If it goes higher, I'm happy with the boatload of shares I have now. If it goes down to $5 again, I'll just pick up another batch (assuming it was following the market and not because of company specific negative news).

 

[Ricochet]

Oh wow! Reversal on a Friday late day in the trade?