***Official*** 2010 Stock Market Thread

[The-Noid]

This is incorrect. A senior tranche holder doesn't end up paying out if there is a credit event. The junior tranche holder pays IN since they are short CDS (equiv. to being long a junior tranche of mortgages, absorbing the first losses), normally they've paid in cash to begin with and were getting paid premiums + GIC income from the cash/asset deposit. As the credit losses mount eventually the senior positions pay on the CDS, into the CDO.

Why would a junior tranche survive losses compared to a senior tranche? That's impossible.

According to FRM text senior tranche often sells credit protection in balance sheet / non arbitrage related CDO transactions to Junior/Equity tranche in 90/10 CDO to produce above average cash flow and move credits off senior holders balance sheet.

Your definition makes more sense. Could be in the definition of equity tranche. I always imply equity as junior/extremely subordinated. Could have a different meaning in synthetic CDO.

FRM could be wrong, synthetic CDO's are a product I do nothing with.

 

[LegendKiller]

According to FRM text senior tranche often sells credit protection in balance sheet / non arbitrage related CDO transactions to Junior/Equity tranche in 90/10 CDO to produce above average cash flow and move credits off senior holders balance sheet.

FRM could be wrong, synthetic CDO's are a product I do nothing with.

There may be some odd structures in balance sheet management of senior CDO positions in order to get favorable capital treatment. However, these are exceptions to structured finance transactions with seniority and cashflow waterfalls set out in a pre-determined pattern. Under normal CDO investing, the seniors will never end up paying a junior position.

However, a straight-up investor in a CDO, the junior tranche will not get paid by, or before, a senior tranche when it comes down to sustaining credit losses.

 

[The-Noid]

However, a straight-up investor in a CDO, the junior tranche will not get paid by, or before, a senior tranche when it comes down to sustaining credit losses.

Agree 100% the way you put it.

The only ones I read about were balance sheet related and from issuer side arbitrage cdo's make a heck of a lot more sense now as an investment.

 

[JS80]

Sooo....GS is a buy buy buy? I took a huge position this afternoon...

 

[Kntx]

Sooo....GS is a buy buy buy? I took a huge position this afternoon...

Channeling Cramer?

 

[JS80]

Channeling Cramer?

Woot up a grand on GS alone today.

 

[HopJokey]

Woot up a grand on GS alone today.

Nice!

 

[KDKPSJ]

HP buying PALM for $ 5.70 a share. Sad that 1) I sold my portion in PALM (Avg @ around $ 6.50) for $ 4.89 a share two days ago, 2) I didn't have a gut to average down when it was under $ 4 last month, and 3) even if I did, my cost average was probably higher than $ 5.70. lol.

 

[JS80]

GS will be 168 by May 21.

 

[jessieqwert]

DNDN just popped

 

[KDKPSJ]

Woo hoo! DNDN halted while I was in meeting!! Can't wait to see how high DNDN will go after halt removed. Thanks again, Azurik the Midas!!

 

[Azurik]

just landed in DC on my way to LA and i get a bunch of texts as soon as i turn my phone on haha. looks like it's approval - has it resumed trading?

 

[KDKPSJ]

just landed in DC on my way to LA and i get a bunch of texts as soon as i turn my phone on haha. looks like it's approval - has it resumed trading?

No resume yet. Looks like they will have CC at 2:30.

 

[HopJokey]

Dndn = $$$$

 

[HopJokey]

What do you guys think of KERX? I like their pipeline a lot. It's jumping today on DNDN's approval.

 

[AUMM]

what price do you guys think DNDN will peak at?

 

[lothar]

holy cow, I just bought $15k worth of FAIRX last Friday, and now this news:http://news.morningstar.com/articlenet/article.aspx?id=329507 I didn't really like their kmart holding, but now AIG commons...hope it's not a mistake on my part.

I doubt someone like Berkowitz will ever change his emphasis of free cash flows and earnings yield.
Berkowitz is no Bill Miller.

FAIRX has owned SHLD for more almost half a decade.
People like Ackman bought SHLD at $120/share and later bailed out when the stock hit a $22 low...Berkowitz kept buying all the way through.
I think many people make the mistake of valuing SHLD as a retail company without taking it's brands and real estate into account. SHLD is not the typical JCP or TGT store.

FWIW, I think SHLD is a little overvalued now. I valued them at ~$86 a while back and I believe I saw somewhere that Berkowitz valued them at ~$102...This of course was around when it was trading in the $44 range almost 2 years ago, so things may have changed compared to when I looked at it last.

Sorry about GNVC guys. Bio-techs can be hot potatoes. I learned that lesson with Insmed.

I've given similar warnings in the past biotech stocks but no one ever listens.
http://forums.anandtech.com/showpost.php?p=29472188&postcount=903
One would think they'd at least pay a little attention to someone who's a pharmacist.

This truly sux...luckily, I did take my own advise and took some money off the table going into this news, wish I took more off. So pretty much most of my GNVC gains from the beginning of this year will be gone, but I think I am still ahead this year so far, thanks to GGP and other stocks. This is just a minor setback, I will definitely buy more to avg down tomorrow, their hearing loss program alone is worth a few bucks.

No need to catch a falling knife.

 

[HopJokey]

I doubt someone like Berkowitz will ever change his emphasis of free cash flows and earnings yield.
Berkowitz is no Bill Miller.

FAIRX has owned SHLD for more almost half a decade.
People like Ackman bought SHLD at $120/share and later bailed out when the stock hit a $22 low...Berkowitz kept buying all the way through.
I think many people make the mistake of valuing SHLD as a retail company without taking it's brands and real estate into account. SHLD is not the typical JCP or TGT store.

FWIW, I think SHLD is a little overvalued now. I valued them at ~$86 a while back and I believe I saw somewhere that Berkowitz valued them at ~$102...This of course was around when it was trading in the $44 range almost 2 years ago, so things may have changed compared to when I looked at it last.



I've given similar warnings in the past biotech stocks but no one ever listens.
http://forums.anandtech.com/showpost.php?p=29472188&postcount=903
One would think they'd at least pay a little attention to someone who's a pharmacist.



No need to catch a falling knife.

What do you think about GILD now with their recent setback? I'm starting to do some DD on them.

 

[lothar]

What do you think about GILD now with their recent setback? I'm starting to do some DD on them.

The same thing I've always thought of them since I've owned their stock. I'd rather own JNJ/TEVA than GILD if I was in your position and didn't have any shares in GILD.
They're not the only ones that are experiencing setbacks with the recent healthcare legislation (or are you talking about their Phase II blood pressure trial?).

Gilead Sciences said the U.S. healthcare legislation passed last month will reduce revenue by $200 million.
Johnson & Johnson reported that the health overhaul may reduce sales by as much as $500 million this year.
Eli Lilly & Co. said their first-quarter earnings were trimmed by 12 cents a share by the legislation.

I would prefer a company's management that reveals such information rather than attempt to sweep it under the carpet.

That said, GILD needs to do something with their monstrous cash before their HIV cocktail loses patent status by 2018-2021.

 

[wpd7]

Anyone have any other picks in their DD pipeline?

After the GNVC drop and the last few days of bad news, I'm down a good chunk. I have a few things that I would drop if they float high enough, but nothing solid for appreciation.

Any ideas/tips? =)

 

[HopJokey]

The same thing I've always thought of them since I've owned their stock. I'd rather own JNJ/TEVA than GILD if I was in your position and didn't have any shares in GILD.
They're not the only ones that are experiencing setbacks with the recent healthcare legislation (or are you talking about their Phase II blood pressure trial?).

Gilead Sciences said the U.S. healthcare legislation passed last month will reduce revenue by $200 million.
Johnson & Johnson reported that the health overhaul may reduce sales by as much as $500 million this year.
Eli Lilly & Co. said their first-quarter earnings were trimmed by 12 cents a share by the legislation.

I would prefer a company's management that reveals such information rather than attempt to sweep it under the carpet.

That said, GILD needs to do something with their monstrous cash before their HIV cocktail loses patent status by 2018-2021.

Great thanks. I was referring to their recent pps reversal (10%) on a not so favorable Outlook given by them.

As for JNJ, I did open a position with them back in March after you had rec'd them when I studied them more closely.

 

[HopJokey]

Anyone have any other picks in their DD pipeline?

After the GNVC drop and the last few days of bad news, I'm down a good chunk. I have a few things that I would drop if they float high enough, but nothing solid for appreciation.

Any ideas/tips? =)

I'm looking at KERX right now, but it's only a quick glance so far. After GNVC announced their TNFerade failure I exited them. My only "speculative" position currently is RMBS and I don't plan on adding to that basket anytime soon.

 

[Azurik]

WOOOOOOHOO, baby! I just landed in L.A. and found out I made 5-figures on DNDN's Provenge approval!

Where can I blow this money in L.A.?

 

[FelixDeCat]

Congrats to all on DNDN! (I had no financial interest in it.)

In other news:

Government to begin criminal probe of GS trading. Financials will probably weaken
tomorrow. GS down $5 after hours. The market has a lot of gains to digest.

 

[Azurik]

what price do you guys think DNDN will peak at?

Do you even have to ask? Make no mistake, this is a BREAKTHROUGH drug that has just been given the green light for commercial use. DNDN has a few other drugs in its pipeline using the same technology.

Provenge will become an instant multi-billion dollar drug.

DNDN will probably spike big tomorrow and then swing wildly maybe, but will be $120+ this time next year. With no partners, they are going to reap all the profits themselves.

DNDN is the new AMGN.