***Official*** 2011 Stock Market Thread

[Azurik]

I was tempted to pick up more shares when it dipped to $11, but couldn't get myself around to do it given how much RMBS I'm already holding, for sure not as much as you, but still a good chunk...

Reasonable endervalentine, I wouldn't commit more than I'm comfortable with. For me, it was more about conviction that this court case that was filed in 2004 is about to come to a conclusive ending... win, lose or draw.

As you and others know, I am heavily invested in RMBS, with already a sizable profit. If this case ends within my expectations, I intend to sell a lot of my shares to lock the gains, although still retaining a significant portion for future prospects. I've been in this since my senior year in high school (by far my longest and biggest holding) so it's time to cash in some gains.

Interest in RMBS is huge right now, the implied volatilities on both the October call and put options are running in the 150s. Any kind of sign and one side or the other will just go nuclear.

The closing arguments for Rambus yesterday was amazing, but I wouldn't underestimate the defense. Both sides have high-profile firms and their lawyers working for them and it's hard to guess what a panel of fellow citizens will decide.

 

[Capt Caveman]

Damn, Visa is at an all-time high and another one of my stocks is too.

Don't think I can sell Visa.

 

[Azurik]

Outside the SF Courthouse this morning... end of closing arguments today and it's garnered a lot of attention outside of the suits. Peanut gallery is way past full capacity:

 

[manly]

LOL, I freaked out, up 11 points on no news I can find, except another analyst saying they'll have 2 devices released and the cheaper phone is expected to do well in China.

Where Apple is masterful is ramping up it's stock price prior to a product announcement or earnings. It very carefully and purposely releases info that gets the market excited.

I tend to be "all in" prior to earnings or a product launch, typically 3-4 weeks prior to either. This October will be a double play (earnings and a product launch), and honestly, one of the things I suspect Tim Cook wants to do is get Apple's stock price above Google's for Senior Jobs before he dies. I also suspect few people really understand how much Jobs actually hates Google...

That's your opinion, but I haven't seen evidence Apple manipulates its share price. Everybody knows the new iPhone is just around the corner, and investors are piling on. If anything, Apple has tended to be ultra-secretive on future products. Quarterly earnings will be great again, the question is how high?

Apple already has the biggest market cap, if I thought Tim Cook cared about hitting GOOG's per-share price, then I'd get the out of AAPL. That's the kind of weak thinking that might temporarily support the stock, but keeps the eye off the long-term ball. Your hypothesis is rather bizarre.

 

[JTsyo]

Does Apple offer dividends? If not earning don't mean as much for the shareholders, unless they want to sell I guess.

 

[Azurik]

WSJ: Market Expects Near-Record Swings in Rambus Amid Litigation
By CHRIS DIETERICH

NEW YORK — The options market is signaling near-record anticipation for major stock swings in Rambus Inc. as jurors in California are set to deliberate over its long-running legal battle with Micron Technology Inc. and Hynix Semiconductor Inc. Traders held nearly 10,000 October $20 calls Wednesday.

Rambus's "implied volatility," a key measure of options prices, has soared in recent weeks as investors use options to speculate on the trial's outcome. Implied volatility expresses the market's view for future stock price moves in either direction. Rambus's 30-day implied volatility has jumped roughly 70% over the last two weeks, according to data provider Livevol Inc.

There are potentially billions of dollars at stake for Rambus, which has a market capitalization at about $1.5 billion. Rambus alleges Micron and other memory chip makers colluded with the pricing of their processors to block Rambus's technology from being adopted as an industry standard. Lawyers were set to finish closing arguments Wednesday in state court in San Francisco.

A source at the company familiar with the court proceedings said that Rambus is seeking royalties near $4 billion. Under California law, that sum would automatically triple to around $12 billion. The case also could be settled before the jury renders any decisions. Analysts at Sterne Agee & Leach said in a note to clients Tuesday that settlement estimates have ranged as high as $3 billion.

"Whatever the outcome is, you're going to see a very violent stock move," said Hamed Khorsand, a stock analyst at BWS Financial Inc. in Woodland Hills, Calif.

Rambus, based in Sunnyvale, Calif., licenses patented technology used to accelerate the performance of memory chips, including products known as dynamic random-access memory, or DRAM, chips that are a mainstay of personal computers. For more than a decade, Rambus has waged legal battles to collect royalty payments from companies that allegedly don't license its patents, including Micron, Hynix and Nanya Technology Corp. Much of the company's perceived value is based on its ability to garner compensation for its patents.

"That is an interesting story in itself—volatility is at a level that's nearly greater than the November 2008 crisis level, and higher than previous levels at moments of potential outcome of the litigation matter.

Volume in Rambus's options has been above average in each of the past seven trading sessions, Trade Alert data showed. The relatively rich prices investors paid for upside calls signifies strong investor interest in the court ruling, said William Lefkowitz, options strategists for vFinance Investments.

"It's speculation at its best," he said.

 

[D1gger]

Got a nice win on one of my stocks this year:

Grayd Resources

I bought at $1.25 and they have just accepted a purchase deal to sell stocks at $2.80.

Toronto (September 19, 2011) – Agnico-Eagle Mines Limited ("Agnico-Eagle") (NYSE & TSX: AEM) and Grayd Resource Corporation ("Grayd") (TSX-V: GYD & OTCQX: GYDRF) jointly announce that they have entered into an acquisition agreement, pursuant to which Agnico-Eagle has agreed to offer to acquire all of the outstanding common shares of Grayd at $2.80 per share by way of a take-over bid. The transaction is valued at approximately $275 million on a fully-diluted basis. The offer price of $2.80 per Grayd share represents a premium of 65.7% to the volume weighted average price of Grayd shares on the TSX Venture Exchange for the 20-day period ended September 16, 2011 (the last trading day prior to announcement of the transaction).

Now I will have to look into Agnico-Eagle and see if I want Agnico shares at 0.04039 of an Agnico-Eagle share for each Grayd share, plus and $0.05 in cash per share, or take the $2.80 per share and run. Anybody know anything about Agnico-Eagle?

 

[Ms. DICKINSON]

What's the worst that can happen to BAC? I wanna get in for long but I am too new in the market to know the fluctuation that we're in. ...started since 2010.

 

[rcpratt]

Today looks like it will be fun.

 

[IHateMyJob2004]

What's the worst that can happen to BAC? I wanna get in for long but I am too new in the market to know the fluctuation that we're in. ...started since 2010.

BAC is not a well run in a business in a sector where the well run companies are around 20 years later.

The worse that can happen is that it goes to zero. I doubt that would happen but I would not dare to try and price it. It is a gamble. Simple as that.

There are better banks to buy and most are undervalued.

 

[Pliablemoose]

That's your opinion, but I haven't seen evidence Apple manipulates its share price. Everybody knows the new iPhone is just around the corner, and investors are piling on. If anything, Apple has tended to be ultra-secretive on future products. Quarterly earnings will be great again, the question is how high?

Apple already has the biggest market cap, if I thought Tim Cook cared about hitting GOOG's per-share price, then I'd get the out of AAPL. That's the kind of weak thinking that might temporarily support the stock, but keeps the eye off the long-term ball. Your hypothesis is rather bizarre.

So is having a former VP/current board member do a controlled leak...

http://www.cnn.com/2011/09/22/tech/...lip/index.html?hpt=hp_t2'%20rel='nofollow

So you're saying Apple doesn't do controlled, carefully placed leaks? :biggrin:

As far as the Google hate, the audio was taken down, and I don't have time t find another source...

http://techcrunch.com/2010/10/18/steve-jobs-android-audio/

 

[Azurik]

Final Note: Guys, even though I am extremely elated at the performance of Rambus' lawyers at the AT Trial, realize these things can go either direction, or a mix of in between.

Make no mistake, this is a very pivotal point in RMBS' history. A case filed in 2004 is FINALLY completed and is in the hands of jurors. This will be highly volatile event that could lead to a stunningly huge addition to the bottom line of Rambus ($1.5 billion dollar company with the maximum addition of around $12 billion) and the near financial death of Micron and Hynix, or a loss that wipes out Rambus' stock price from $13 to low single digits.

Disclosure: I have roughly 15,000 shares. I also have some October $20 calls bought earlier on. I also have a lot of October $10 puts to protect on the downside. The puts and calls could be entirely wiped out if the decision is not going to happen by the 3rd Friday in October, which is the option expiration date. I don't recommend a stop limit as Rambus (and other stocks) have been known to be manipulated right before reversing itself on real news.

 

[Azurik]

Ya it's been moving the last few days. I have some options that are looking real nice right now. But with options it's way too easy to get greedy, then get burned.

October options are just ridiculous now. My puts are up several times over and it's for nothing! It's not like I'm going to sell and risk losing 6 figures. Ahh. Nice to look at on paper I guess

 

[IHateMyJob2004]

Dumped my LEE holding today. Bought FBN with the proceeds.

If what I think will happen, happens I will flip back to LEE. Bacially, LEE goes no where while FBN runs up 20-30%.

SD was down in the low $6s today. Not sure how low it got. Good opportunity there.

 

[jessieqwert]

Not sure of the most technical way of saying this so I'll just muddle through..

It seems like most RMBS investors are playing the trials more so than the value of the company. With this being the case, the value of the stock should rise up until a decision is reached (assuming it stays favorable). Once the verdict is reached, if RMBS loses the stock plummets. If they win, it gains a large boost but then will drop out as investors look to cash in and get out. Seems like a lose-lose?

 

[FelixDeCat]

On the quote page for RMBS @ Yahoo finance is a story from Motely Fool mentioning patent trolls. :biggrin:

I've been banging the drum about a broken patent system for years. But the problem keeps getting worse, not better.

So when researchers take my side in the patent-trolling debate, it's hard not to feel a little vindicated. A fresh study from Boston University notes that patent trolling has cost publicly traded defendants as much as $500 billion in lost market value since 1990 -- and the rate of evaporating money just keeps accelerating. The current run-rate is about $83 billion a year.

And the suits aren't simply shoveling cash into the pockets of hyperactive plaintiffs. According to the study, 14 publicly traded NPE plaintiffs reduced the market value of their targets by $88 billion over a two-decade period -- but collected only $7.6 billion in total revenue. More than 90% of the destroyed wealth converted into something positive for someone else. The rest is just collateral damage to investors in companies that actually make stuff -- like you and me.

The 10 most-targeted companies in these value-destroying lawsuits include proven innovators Apple (Nasdaq: AAPL http://my.fool.com/watchlist/add?ticker=AAPL&source=iwlsitbut0000010) , Hewlett-Packard (NYSE: HPQ http://my.fool.com/watchlist/add?ticker=HPQ&source=iwlsitbut0000010) , and Motorola Mobility (NYSE: MMI http://my.fool.com/watchlist/add?ticker=MMI&source=iwlsitbut0000010) / Motorola Solutions (NYSE: MSI http://my.fool.com/watchlist/add?ticker=MSI&source=iwlsitbut0000010) . Note that we're not talking about Apple suing Motorola, or HP suing Apple. Those staggering market-value losses all came from lawsuits by non-practicing entities, also known as patent trolls.
The defining characteristic of a troll, as the less inflammatory NPE term implies, is that the company doesn't actually make or sell anything other than intellectual property and therefore can't be fought with a patent-based counterstrike.

The largest and scariest NPE by far is Intellectual Ventures, founded by former Microsoft CTO Nathan Myhrvold and presiding over more than 10,000 patents. Longtime and fairly successful Stock Advisor recommendation InterDigital (Nasdaq: IDCC http://my.fool.com/watchlist/add?ticker=IDCC&source=iwlsitbut0000010) is the third-largest such entity, with about 2,500 patents at its disposal, and memory-tech specialist Rambus (Nasdaq: RMBS http://my.fool.com/watchlist/add?ticker=RMBS&source=iwlsitbut0000010) lands in third with 780 issued patents to its name, according to sources cited in the Boston U study.
It should come as no surprise that 62% of the wealth-destroying lawsuits are brought on software patents, while only 2% involve chemicals or drugs. It seems obvious to me that the standard of quality on software patents is much lower than in the strictly regulated drug and chemical fields. Wouldn't it be a good idea to impose an equally high bar on software patents, so that true innovation can be rewarded and all the junk thrown out with the trash? I think that investors in everything from Microsoft to Apple or HP should demand it, lest frivolous suits continue to hold back their innovation and eat away at shareholder returns.

Earlier this year I thought that RMBS would be swept up and fall to a low of $5 based simply on a bad market overall. With only three months left I still think the DOW goes below 10,000 and RMBS sees $16 before it sees $5.

Good luck AZ!

 

[Imp]

What's the worst that can happen to BAC? I wanna get in for long but I am too new in the market to know the fluctuation that we're in. ...started since 2010.

I played it for a while, then lost some money, and never felt comfortable again after realizing that among the "Big 3"-ish banks, they are the one with the highest chance of going bankrupt.

Major mortgage related issues, Countrywide is hemorrhaging money for them, revenue is going down with new financial regulations, trading revenues are down, etc., etc.

I went with a "small" position in Citi. Worldwide exposure (good and bad), less dependent on retail banking. Still risky, but not as bad. WFC appears to be among the more stable banks, but it doesn't appear to have as much upward potential.


And wow. Meltdown today. Totally saw this coming by looking at the chart for the DOW, but still bought in. Oh well, got a new long!

 

[SunnyD]

I played it for a while, then lost some money, and never felt comfortable again after realizing that among the "Big 3"-ish banks, they are the one with the highest chance of going bankrupt.

Major mortgage related issues, Countrywide is hemorrhaging money for them, revenue is going down with new financial regulations, trading revenues are down, etc., etc.

I went with a "small" position in Citi. Worldwide exposure (good and bad), less dependent on retail banking. Still risky, but not as bad. WFC appears to be among the more stable banks, but it doesn't appear to have as much upward potential.


And wow. Meltdown today. Totally saw this coming by looking at the chart for the DOW, but still bought in. Oh well, got a new long!

Regions Financial just hit a 52 week low, yet is a fairly solid financial/banking institutions. They've made solid growth over the last several years along with some smart regional acquisitions. I think they're just a casualty of yesterday's Fed announcement plus the sagging financial market. I'm not seeing any other major reason for their continued downward trend otherwise.

 

[Imp]

Regions Financial just hit a 52 week low, yet is a fairly solid financial/banking institutions. They've made solid growth over the last several years along with some smart regional acquisitions. I think they're just a casualty of yesterday's Fed announcement plus the sagging financial market. I'm not seeing any other major reason for their continued downward trend otherwise.

It's just your standard panic selling (I have to pay attention to the DOW charts more). Love the reasoning: "OMFG, the Fed do da stimulus, so economy must be super bad than we though, SELL, SELL, SELL!!!!". We're approaching the lows of 2008, yet Europe hasn't actually defaulted yet, so I'd love to see what everything's at when it happens.

I was perplexed when I saw that Suncor was down 8.5% earlier, then I realized that it's only fown 5%, but because I bought it in the US market, the rising US$ and falling CAD$ was making it worse.

 

[SunnyD]

It's just your standard panic selling (I have to pay attention to the DOW charts more). Love the reasoning: "OMFG, the Fed do da stimulus, so economy must be super bad than we though, SELL, SELL, SELL!!!!". We're approaching the lows of 2008, yet Europe hasn't actually defaulted yet, so I'd love to see what everything's at when it happens.

I was perplexed when I saw that Suncor was down 8.5% earlier, then I realized that it's only fown 5%, but because I bought it in the US market, the rising US$ and falling CAD$ was making it worse.

It was more a statement than a question (as in wow, a solid financial institution - relatively speaking - hitting a new 52 week low...). Otherwise I agree. I'll be more than willing to pick up RF and BAC on their lows, and even ride them lower for the next year or two until things right themselves.

BAC is on the "too-big-to-fail" list, so picking it up is a no brainer, especially if it goes sub-$5. RF would be icing on the cake once financials and the economy in general turn around.

 

[IHateMyJob2004]

Not sure of the most technical way of saying this so I'll just muddle through..

It seems like most RMBS investors are playing the trials more so than the value of the company. With this being the case, the value of the stock should rise up until a decision is reached (assuming it stays favorable). Once the verdict is reached, if RMBS loses the stock plummets. If they win, it gains a large boost but then will drop out as investors look to cash in and get out. Seems like a lose-lose?

Those that are long and short carry all the risk and reward. Of course, regardless of outcome, who knows what hte markets will do.

 

[Azurik]

Not sure of the most technical way of saying this so I'll just muddle through..

It seems like most RMBS investors are playing the trials more so than the value of the company. With this being the case, the value of the stock should rise up until a decision is reached (assuming it stays favorable). Once the verdict is reached, if RMBS loses the stock plummets. If they win, it gains a large boost but then will drop out as investors look to cash in and get out. Seems like a lose-lose?

With any large spike, a dip to correct the upside will inevitably happen. However, it depends on the verdict. The entire company is valued at $1.5 billion. If Rambus, say, in the best case scenario wins $12 billion... it will not go back to these levels. $12 billion with 114 million shares outstanding is a $100+ cash per share on hand. Of course, at that point, you need to figure tax rate, appeal issues, if Micron and Hynix can even pay all of it, etc.

Anyway, it's no use speculating. I need to know the dollar amount, what the trembled amount is and if it applies and what Hynix and Micron will do afterwards to judge how much I should retain.

 

[Azurik]

Sold some RMBS Oct 22 $10s puts for a profit and converted them into the weekly Sept 30 $10s puts for the protection through Friday next week. The jury can't decide that long ::cross fingers::

Jury in deliberation today until 1:30pm PST. If they don't finish, it will continue starting on Monday. They have tomorrow (Friday) off.

My gut tells me if they've been deliberating since 8:30am this morning, then they're not going to let Micron and Hynix go, but just figuring the damages and who owes what and how much. We'll see.

 

[SunnyD]

Sold some RMBS Oct 22 $10s puts for a profit and converted them into the weekly Sept 30 $10s puts for the protection through Friday next week. The jury can't decide that long ::cross fingers::

Jury in deliberation today until 1:30pm PST. If they don't finish, it will continue starting on Monday. They have tomorrow (Friday) off.

My gut tells me if they've been deliberating since 8:30am this morning, then they're not going to let Micron and Hynix go, but just figuring the damages and who owes what and how much. We'll see.

My lunch money is riding on your gut, Azurik.

 

[manly]

What's the worst that can happen to BAC? I wanna get in for long but I am too new in the market to know the fluctuation that we're in. ...started since 2010.

The worst outcome for any TBTF bank is to get nationalized, wiping out the common stock.

So is having a former VP/current board member do a controlled leak...

http://www.cnn.com/2011/09/22/tech/mobile/al-gore-iphone-5-slip/index.html?hpt=hp_t2' rel='nofollow

So you're saying Apple doesn't do controlled, carefully placed leaks? :biggrin:

As far as the Google hate, the audio was taken down, and I don't have time t find another source...

http://techcrunch.com/2010/10/18/steve-jobs-android-audio/

Come on Moose, Gore is barely an Apple figurehead and he said one comment in South Africa or wherever. Seriously, was he the last guy to know the next iPhone arrives in October or just the last to mention it? I wouldn't honestly know but I suspect Gore's involvement with Apple is like his involvement in creating the Internet.

Apple's supply chain is huge, and where all the juiciest leaks come from are the photos of partially assembled iPhones. Unless you believe Apple's directing a network of Far Eastern bloggers as well. If Jobs/Cook wanted to juice the stock, all they would have to do is announce a dividend. I'm sure you know this but to their credit, they're worried about building and sustaining a lights-out business because the stock price takes care of itself.

I don't know the enmity between Apple and Google, but it probably reminds Steve of when MSFT stole their ideas and messed around with Windows in the 1980s. You work with somebody only to see them invade your turf a couple years later. My point is that AAPL is already the most admired publicly traded company on the planet, whether its per-share price exceed's GOOG is unimportant.