***Official*** 2010 Stock Market Thread

[IHateMyJob2004]

When you pump and dump it makes more sense to sell at 60c. Again this is speculation and not "value investing.". You really don't get it do you?

Using options as leverage on the stock of an undervalued company? Pump and dump? really? Because i knew it would hit 60 cents? Really?

 

[The-Noid]

Rmbs is more of a short term play.

The traders hall of fame is no where near an empty room, have you read anything over the last 10 years? Aren't the markets down 2% annualized? Read risk magazine it may change your paradigm on a traders hall of fame.

 

[IHateMyJob2004]

I got into Columbia grad school. IMO the MSF program is better at cal where I graduated.

The way you carry yourself, you don't think anyone believes that do you? God, you are a blatant liar.

 

[IHateMyJob2004]

Rmbs is more of a short term play.

The traders hall of fame is no where near an empty room, have you read anything over the last 10 years? Aren't the markets down 2% annualized? Read risk magazine it may change your paradigm on a traders hall of fame.

Name one trader that's done it for 20+ years that is well known. Not one. But you, you are different somehow.

Klarman, Buffett, Pabrai. Famous value investors! Kalrman, 28 years of 20% annualized gains. Shall I continue? Pabrrai only has a 10 year track record ... of something like 30% annually. So he is debatable. Not everyone accepts him as the real deal. Most want to see 10 more years of performance before crowning him as a great.

Risk magazine. No, I don't care. As much as you think that this "new math" of your works, it will not forever. Then what? Buffett says with a small amount of money ($1 million) he could do better than 50% annually in today's environment. and somehow, people believe him. Maybe it's that stupid 50 year track record.

 

[The-Noid]

That's enough for me.

 

[IHateMyJob2004]

That's enough for me.

What, not a single well known trader out there? Somehow they all make money in a zero sum game. Just like gamblers at the casino. All the ones I know come out with more money than they entered with. I don't know how the places stay in business. I hate to tell you this, but well over half of the RMBS traders are probably in the red, just to proud to admit it.

Oh, I get it. If JNJ is worth up to $79 right now in your own opinion (I'll accept that it is yours), it might get up to $100 in 5 years. OK, I'll be honest to. I just revalued JNJ. I still have $100 as the current top end but the low end is probably closer to $85. Not $90. The thing is, that is the value now. The value of the company will keep going up. Eventually it will be trading at it's actual value. If that takes 5 years, it could go from $60 today to it's intrinsic value 5 years from now. But 5 years from now, IV will be much greater than it is today. Your top end will be $79 plus 20%, 30%, ??%. I fully expect to double my money in 7 years and then some. Plus dividends (3.7% yield). So, 11% annually plus 3% extra in dividends (post taxes). 14% return annually for the next 7 years. Where is my tissue? More importantly, why do you think I am laughing at you? Better get laid alot while you still have time. And those 11% annualized gains? I get to keep it all till I exit eventually. Uncle Sam gets a fat cut of yours each year through short term cap gains taxes.

As for the indices as a whole thing. Ya, individual stocks did not all go flat for 10 years. how do you think Pabrai did 30% each year in that time span. By guessing tops and bottoms daily?

 

[The-Noid]

I hope JNJ does. I also agree about RMBS.

If you read back I talked about purchasing protection over and over to Azurik which he did on RMBS.

 

[IHateMyJob2004]

I'm acting like an ass just a tad bit. I admit it. I'll stop. Can we all, just get along! People both think we are both insane at this point. I am an hour past starting a netflix movie. Some of the streaming stuff is great.

To be honest, I never read any of the RMBS talk. I don't have any interest in tech. I don't get it. it evolves to quickly. I couldn't tell you if RMBS will be around in 10 years or not. Not my kind of stock or industry.

Technological evolution is my only fear with LEE. In that Lee will have to constantly evolve technologically in order to distribute content on the latest devices. I think what I read about the Kindle is interesting though. I can see reading a newspaper on a kindle like device. A bigger Kindle though.

 

[The-Noid]

Yeap I am to the get along stage now. I actually thank you for the heated debate. Maybe it is my job to but I always look at the glass as half full.

 

[Jassi]

Hug it out.

 

[bookem dano]

there's only one way to solve this.....

mud-wrestling.

 

[FelixDeCat]

there's only one way to solve this.....

mud-wrestling.

they have resolved to call it even, case closed....for now

 

[lothar]

What do you guys think about Dollar Cost Averaging at this point? Maybe a few hundred a week into about 10 stocks. Market dips, you'll continue to buy more shares.

The version of DCA you describe is called paying unnecessary stupid fees to brokers...

There's no point in doing DCA every week.
If it's a security I'm interested in, I wait till about a 15-20+% drop.
I remember when I first bought ACF at $10/share, around when Naustica announced his investment in KMX. I averaged down and bought at $8, $5, $4, and $3...I missed the $2 range when it was there, but still got my average share price to $5.

Speaking of Naustica, where is he? He hasn't posted in the stock threads in a while.
Since I won our MCD vs. SBUX bet, he owes me a Big Mac. ^_^

 

[lothar]

3) I also bought MEAD. In hindsight I wish I did not. It was a mistake. I don't knwo hte company well enough to buy it. And I don't know it's competition. It was an NCAV play. I should have just tried to get RSKIA for the low $4s if I wanted to do an NCAV play.

5) KFT is undervalued but I will not buy till the CEO is canned. She has no idea what she is doing.

3.) Never understood what people saw in MEAD. That stock was posted almost everywhere as an NCAV play. I examined their business and what they did, still didn't understand anything besides them selling binoculars...I examined their finances and see they've been trending down on FCF. It seems they're selling businesses(their European division) in certain areas which would only prolong their cashflow problem(unless management knows where they can put the proceeds to better use).

RSKIA? I see that I'm not the only one who follows Ravi Nagarajan . Good luck buying that stock. It trades by appointment. I put a limit order, never executed and I cancelled my order after almost a month and when I saw an almost $1 difference between the bid/ask price.

5.) KFT is undervalued(but not as much as before) and I still own my original shares, but I will never buy new shares until they rein in on excessive executive compensation. KFT is an example of executive compensation run amok. Their CEO was awarded about $11 million in compensation for 2007, $17 million for 2008, and $26 million for 2009. A sandwich could run a company like KFT.

 

[IHateMyJob2004]

Yaxxy,
I'm glad we can go back to being friends. I think the key difference is the time horizon thing. We seem to have different concerns because of it. We should have stopped sooner though. I think there was a whole page of garbage that we produced. We might as well have been talking about religion or politics.

RSKIA ... Ya that was a Ravi pick that made my eyes explode. He and I had a good back and forth about it at the gurufocus forums when he mentioned it. RSKIA is a fairly easy company to understand. Well run, shareholder friendly. Seems to have a moat albeit small. I win though I've had my limit order in for $4.20 for 6 months it seems! I think I've seen everything from $4.25 and $5 since I put my order in. I have modified my order a bit based on my holdings at the time though. Well, if I buy I'll try to post here so you see that it has dropped some. What were you hoping to pay for it?

MEAD ... I regret buying. They pretty much are shrinking the scope(no pun intended) of what they do. Selling off pieces of the company. No more binoculars. They are now telescopes only. I did some reading about telescopes and regarding the high end stuff, I think that the makers will/have split market share. The specific things that the telescope gurus want are so specific that there is no dominant brand. I basically decided to do it based on NCAV (NNWC to be specific). If MEAD doesn't stop burning cash I could loose out big time. Just a stupid mistake. My mindset going in was just irrational. I did it knowing that it might be a big looser. Violating rules 1, 2 and 3. Of course, don't loose money, don't loose money and 3rd, don't loose money. Worse yet, the company is not easy to understand. trade data doesn't exist that I noticed. And competitor info is tough to come by. Often times, the competition is foreign and/or private. So not even the industry is easy to undertand. Just stupid, stupid, stupid mistake.

KFT .... I'm only amazed that Buffett still holds it. He said why though. Even after the failure of the CEO to sit on her hands and do nothing properly, the company is still undervalued. The thing is, Kraft is a very good brand. That's their moat. I'm amazed every time I go to the grocery store by Kraft. But the CEO is an idiot that needs to get canned. Or prove she has some smarts and create shareholder value instead of destroying it. I think I made about $60 and exited. I really did not care at that point. I just wanted out at a small profit. I only waited because it was (and still is) undervalued.

I just watched a 2 hour documentary on Pixar. Wow, I wish that were a public company. They just know how to do 3D movies properly. They give the animators creative freedom which is very important for morale. And they use an iterative approach to animating. Periodically, there are peer reviews. Where each second is reviewed to make sure that everything is perfect, giving inanimate objects like cars (in Cars) a human like personality. The reason that the movies are successful is that they pay attention to small details that cause the viewer to get sucked into the movie. Of course the stories are all happy ones. So it is also a trusted brand of parents to (just like Disney). Just awesome!

 

[Connoisseur]

Seems that during the G20, the Euro nations decided to can stimulus spending and cut deficit instead. Any thoughts on how that's going to affect the market going forward?

 

[FelixDeCat]

Long July DNDN 40 call @ .98

 

[The-Noid]

G20 is a bunch of posturing, based on the current economy and extremely low borrowing rates there is no way any government is going cut borrowing.

Obviously we will grow our way out of any problems, right?

 

[FelixDeCat]

G20 is a bunch of posturing, based on the current economy and extremely low borrowing rates there is no way any government is going cut borrowing.

Obviously we will grow our way out of any problems, right?

We have been trying to grow our way out and going into debt for it since the 80s. We had a brief pause in the late 90s when both parties woke up and smelt the damn coffee. Now we are so hopelessly addicted to the teet of outrageous debt I think default is probably inevitable. We will not stop borrowing until we are forced to. The world will say "no mas" and Im very sad to say it will be a painfull day for Uncle Sam because by then it will be too late. But its not like we didnt see it comming - we did.

Will we save ourselves before this nightmare occurs? Will America embrace responsible austerity before it is forced upon us and the dollar crashes to a nickel? I hope so.

 

[eLiu]

Long July DNDN 40 call @ .98

What makes you think DNDN will have upward pressure in the short term? I guess all the hedge fund interest evaporated after fda aprpoval; people just don't have the patience to wait for the drug to start selling?

At this point I'd be more tempted to buy DNDN stock than anything. Meant to do it last week but my hotel's internet connection was so damn slow that etrade only timed out D:

 

[endervalentine]

What makes you think DNDN will have upward pressure in the short term? I guess all the hedge fund interest evaporated after fda aprpoval; people just don't have the patience to wait for the drug to start selling?

At this point I'd be more tempted to buy DNDN stock than anything. Meant to do it last week but my hotel's internet connection was so damn slow that etrade only timed out D:

Likewise, I bought a large chunk when it was at $43, thinking of picking up some more, but given how DNDN is still a gamble, I'm not sure if I'm willing to sink more into another speculative stock since I have RMBS as well ... decisions decisions

 

[eLiu]

Likewise, I bought a large chunk when it was at $43, thinking of picking up some more, but given how DNDN is still a gamble, I'm not sure if I'm willing to sink more into another speculative stock since I have RMBS as well ... decisions decisions

Whether DNDN is a gamble really depends on your time frame. The drug is approved; manufacture & sales has begun. It is estimated as being a multi-billion dollar drug, so DNDN's future should be bright. But it will take time before production/sales ramps up... so I'd guess that in the next few months, DNDN will continue to behave mysteriously.

In like a year, I'm sure you'll be solidly in the black.

Edit: in the short term, how quickly they can start raking in sales (i.e., finish building manufacturing facilities & waiting on the fda to certify) will probably drive the stock price. If they don't meet projections I can imagine another substantial dip; if they beat projections there could be a pop.

 

[FelixDeCat]

What makes you think DNDN will have upward pressure in the short term? I guess all the hedge fund interest evaporated after fda aprpoval; people just don't have the patience to wait for the drug to start selling?

At this point I'd be more tempted to buy DNDN stock than anything. Meant to do it last week but my hotel's internet connection was so damn slow that etrade only timed out

I was looking at the trend the last few days, just trying to catch some momentum:

closing price -

Jun 25, 2010 37.01
Jun 24, 2010 36.01
Jun 23, 2010 35.13
Jun 22, 2010 34.56

 

[eLiu]

I was looking at the trend the last few days, just trying to catch some momentum:

closing price -

Jun 25, 2010 37.01
Jun 24, 2010 36.01
Jun 23, 2010 35.13
Jun 22, 2010 34.56

Ah at 10:37AM (when you posted), it looked like DNDN was going to be up at least another buck for the day. Hopefully the momentum you wanted hasn't dried up.

edit: I'm now super-wary of doing this sort of thing with call options, after epic-failing with rmbs, lol.

 

[The-Noid]

We have been trying to grow our way out and going into debt for it since the 80s. We had a brief pause in the late 90s when both parties woke up and smelt the damn coffee. Now we are so hopelessly addicted to the teet of outrageous debt I think default is probably inevitable. We will not stop borrowing until we are forced to. The world will say "no mas" and Im very sad to say it will be a painfull day for Uncle Sam because by then it will be too late. But its not like we didnt see it comming - we did.

Will we save ourselves before this nightmare occurs? Will America embrace responsible austerity before it is forced upon us and the dollar crashes to a nickel? I hope so.

my sarcasm was apparently hard to interpret. My apologies.