***Official*** 2011 Stock Market Thread

[lothar]

Not surprised about this outcome at all. RMBS has been nothing but hot air. Can we PLEASE now once and for all not ever mention it again on this forum? Azurik - you're probably the one cause for hyping the stock up. Please, just let it go now?

CIM was a great call, quickest dollar I made - I definitely wouldn't have heard about these guys had it not been for this board, so thank you chusteczka

There's no need to kick him while he's already down.
As much as I think all those people saying with RMBS "Earnings don't matter, the only thing that matters is settlement" were crazy, since they were essentially concluding(and speculating at that) that RMBS will win regardless, I still respect his opinion.

Despite what anybody thinks, I still have much respect for Azurik.
He put more effort in following RMBS than I've ever put in any following any stock I've owned.
With the type of job I do, I don't have that much time to be as involved in my stocks as Azurik was involved in RMBS.

 

[FelixDeCat]

There's no need to kick him while he's already down.
As much as I think all those people saying with RMBS "Earnings don't matter, the only thing that matters is settlement" were crazy, since they were essentially concluding(and speculating at that) that RMBS will win regardless, I still respect his opinion.

Despite what anybody thinks, I still have much respect for Azurik.
He put more effort in following RMBS than I've ever put in any following any stock I've owned.
With the type of job I do, I don't have that much time to be as involved in my stocks as Azurik was involved in RMBS.

I agree, everyone likes Az...myself included. We have constructive arguments over stocks and it benefits everyone.

That being said, I have to laugh at this from the Bloomberg article:

The antitrust case was certainly a cornerstone of the investment thesis I had on Rambus,” Jeffrey Schreiner, an analyst at Capstone Investments Inc. in Menlo Park, California, said in an interview. Schreiner has had a “buy” rating and $50 price target on Rambus shares. “With this court decision, it becomes a lot harder to achieve that goal.”

He said will drop coverage of the stock.

From a $50 prediction to completely dropping coverage? Wow. Someone should be fired for that one.

$50? Really?

 

[JS80]

RMBS needs to do a RIF, discontinue their core operations, and sell their royalty stream and return what's left to shareholders. I just don't see a LT business.

 

[Pliablemoose]

In and out of RIMM and GMCR, up about $4K this week.

 

[senseamp]

Rambusted
I had no idea 60% of the value of the company was based on winning a dubious lawsuit over events that happened a decade ago.

 

[Pliablemoose]

Sorry to hear about RMBS, Azuik, hang in there...

 

[jingramm]

any good stocks worth looking at?

 

[IHateMyJob2004]

any good stocks worth looking at?

First thing is first. Sorry about RMBS. There is alot I'd love to contribute to this thread. However, I can't because I think alot of people are very emotional right now and I simply want to avoid angering people. If people are ready, I will discuss some root causes of failure.

Anyway ...
5x normalized FCF. Listen to the recent conference call. Actually, just find the transcript. Notice that people lump all housing stocks together and this one is hihgly ignored for no good reason other than laziness.

Ticker: USG

Boring I know. But if it goes from $9 to $5, I'll double my position without flinching and sleep well at night.

 

[jingramm]

First thing is first. Sorry about RMBS. There is alot I'd love to contribute to this thread. However, I can't because I think alot of people are very emotional right now and I simply want to avoid angering people. If people are ready, I will discuss some root causes of failure.

Anyway ...
5x normalized FCF. Listen to the recent conference call. Actually, just find the transcript. Notice that people lump all housing stocks together and this one is hihgly ignored for no good reason other than laziness.

Ticker: USG

Boring I know. But if it goes from $9 to $5, I'll double my position without flinching and sleep well at night.

Can you summarize what the recent conference call said?

 

[IHateMyJob2004]

Can you summarize what the recent conference call said?

It's 10 minutes of reading.

http://seekingalpha.com/article/300939-usg-s-ceo-discusses-q3-2011-results-earnings-call-transcript

The Q&A is worth reading more so than anything else.

It's a boring stock. pay attention to things about demand for lightweight wallboard. Also pay attention to their international plans.

It's hard to state the importance of these little things without knowing anything about the company. Want to know the importance of lightweight wallboard? Go to Home Depot and try to pick up a 2 sheets of the stuff (they are bound together). Then imagine if it weighed 30% less. I've been following USG for a while. I am 100% convinced that within the next 10 years it will be bought out by Berkshire Hathaway for atleast $17/share. Berkshire basically has a 50% interest right now but it is not obvious unless one considers convertible debt and other companies it owns that own USG. Hint, there is a company out there that BRK owns alot of that also has alot of convertible USG debt.

 

[Imp]

I'm baffled by the verdict myself. I haven't been following the case but I have to assume RMBS gave a great case. Regardless, if anything this shows the unpredictability of juries.

I think the Casey Anthony trial and OJ should have been warning enough, even if the cases could be considered "weak" upon retrospective analysis.

RMBS down -60%, wow. I usually refuse to hold through quarterly earnings, so gambling on one major event is not my cup of tea.

 

[chusteczka]

Whoa! What Just Happened to My Stock?
http://www.fool.com/investing/general/2011/11/16/whoa-what-just-happened-to-my-stock.aspx

This article states the reason for the unexpected price drop we saw for CIM these last few days was due to a delay in filing quarterly reports (Form 10-Q). Investors got scared and sold off.

Under the weather
Mortgage REIT Chimera Investment gave its investors a bit of a scare last week when it announced a delay in its quarterly filings. The stock sold off about 10% over two days, but it's filing the other day provided more clarity that any adjustments wouldn't be material.

There's been some concern lately that the Fed's Operation Twist may kill the golden mortgage REIT goose. Like American Capital Agency (Nasdaq: AGNC ) and Annaly Capital (NYSE: NLY ) , Chimera harvests gold eggs produced by the Fed's low-interest rate policies that allow them to borrow money for next to nothing and profit from the interest rate spreads on the mortgage-backed securities they invest in. As a result they're able to offer eye-popping dividend yields that offer an alluring, yet risky, attraction to investors.

The risk is that Operation Twist will encourage greater prepayment of mortgages, something already being seen, meaning the REITs will have to replace them with paper that has terms not as advantageous as those previously held.

CAPS member thecashmen finds Chimera to be too risky, but ballengerm says the Fed's low-rate policies will continue to benefit the REIT, at least for the next few years: "Including dividends, this stock will outperform until 2013 when the Fed expects to raise interest rates. Cheap now too."

Chimera Investment downgraded to Sell from Hold at Wunderlich
http://finance.yahoo.com/news/Chimera-Investment-downgraded-theflyonthewall-3538317223.html?x=0&l=1
Nov. 16, 2011

Wunderlich believes that the severity of Chimera's loss on foreclosure of underlying loans has exceeded expectations, resulting in the company over-accreted discount and overpaid dividends. Price target is $2.50.

This downgrade from HOLD to SELL seems to be at odds with numerous insider purchases this past year, with the low interest rates, and with the CEO's statement that dividends will remain unchanged. I have a feeling this analyst is risk averse.


High Yield In A Slow-Growth World: Mortgage REITs
http://seekingalpha.com/article/308439-high-yield-in-a-slow-growth-world-mortgage-reits?source=yahoo
Nov. 16, 2011
Some good background information concerning REITs.


Chimera Investment Corporation Updates Status of 10-Q Filing; Announces No Material Changes to Historical Financial Statements; No Impact on Taxable EPS and Dividends; September 30, 2011 GAAP Book Value of $3.27
http://finance.yahoo.com/news/Chimera-Investment-bw-2366084310.html?x=0&l=1
Mon, Nov 14, 2011

Matthew Lambiase, the Company’s chief executive officer
Accordingly, the Company’s previously announced second quarter GAAP book value of $3.35 per share and economic book value of $3.08 per share will not change as a result of this analysis. We have determined that as of September 30, 2011, our GAAP and economic book value was $3.27 and $3.01 per share, respectively, and our taxable income for the third quarter was $0.13 per share. The Company’s dividend distributions are based on taxable income, not GAAP income, and the results of this analysis will have no impact on the Company’s prior or future dividend distributions.

I am holding and consider purchasing another 1100 shares if the price drops below $2.70.

 

[Miramonti]

Hang in there AZ.

 

[The-Noid]

11/17/2011 @ 9:55, RMBS early trades up to 8.50/.51 +1.40 for only a 58.3% YTD loss.

 

[Aharami]

man Azurik, hang in there. First DNDN, then this. Hope you're doing alright

 

[RGUN]

I just wanted to add that I really appreciate hearing both sides of the investing story. I started investing myself just over a year ago and have had some great gains, and thankfully only relatively minor misses. When the topic comes up, you really only hear people talking about the wins, and it gives outsiders and novices unrealistic expectations of possible returns. Hearing about big losses can hopefully save people from entering the market blind to the risks.

I'd love to get in on the chatter you guys have, but I trade exclusively on the TSX/TSXV. I still follow the thread for interest sake however, and invest mainly (so far atleast) in the resource sector. I'd post my stock picks asking for other peoples opinions, but I gather from the talk here that most of you avoid mining/exploration companies.

 

[SunnyD]

11/17/2011 @ 9:55, RMBS early trades up to 8.50/.51 +1.40 for only a 58.3% YTD loss.

Like I said yesterday - not a big deal. I expect to break even by holding for ~6 months. Then again, I did get in when it was at $13.60/share.

 

[IHateMyJob2004]

I just wanted to add that I really appreciate hearing both sides of the investing story. I started investing myself just over a year ago and have had some great gains, and thankfully only relatively minor misses. When the topic comes up, you really only hear people talking about the wins, and it gives outsiders and novices unrealistic expectations of possible returns. Hearing about big losses can hopefully save people from entering the market blind to the risks.

I'd love to get in on the chatter you guys have, but I trade exclusively on the TSX/TSXV. I still follow the thread for interest sake however, and invest mainly (so far atleast) in the resource sector. I'd post my stock picks asking for other peoples opinions, but I gather from the talk here that most of you avoid mining/exploration companies.

The greatest failure is to have a game changing event occur which requires a change in investment thesis but emotion and other cognative biases prevent one from forgetting the past. The question is always, what is ABC corp worth today and why. Not what did I think ABC corp was worth yesterday.

 

[darkxshade]

anyone buy @ 7/share yesterday after the news? Congrats if you did

 

[Azurik]

Rambus Gets Nothing in Suit Against Rivals
Three jurors, all older women, said that they didn't agree with the verdict, with one interjecting "no!"
Cynthia Foster

The Recorder
November 16, 2011

SAN FRANCISCO — Nine jurors agreed that semiconductor-makers Hynix and Micron didn't conspire to force Sunnyvale-based technology licensing company Rambus out of the high-speed computer memory business. Rambus had asked for $3.85 billion.

After deliberating for almost two months, the San Francisco jury rejected all of Rambus Inc.'s claims Wednesday morning.

Initially appearing shocked] "We're very pleased," said Hynix lawyer Kenneth Nissly, of O'Melveny & Myers. "Rambus was not able to prove its allegations. There was no conspiracy."

Jurors declined to talk to reporters, but were polled before leaving court at Rambus' request. Three jurors, all older women, said that they didn't agree with the verdict, with one interjecting "no!" when San Francisco Superior Court Judge James McBride asked her if it was her true verdict.

"All of you are winners," she said to the lawyers on both sides when she filed out of the courtroom.

Rambus General Counsel Thomas Lavelle said he was disappointed in the jury's verdict and that he's currently analyzing avenues for appeal. One possibility is McBride's ruling that price-fixing in this case would be governed by the rule of reason rather than considered a per se violation of the law. Lavelle said this decision is unusual.

"I have never seen a price-fixing case where it wasn't a per se case," he said.

Rambus accused its competitors of colluding with manufacturers of digital memory and computer processors to make Rambus' proprietary RDRAM less attractive to manufacturers. They did that, Rambus said, by limiting supplies of RDRAM chips, which drove up prices, making the new technology less attractive to manufacturers like Intel Corp. Micron Technology Inc. and Hynix Semiconductor Inc. said that the RDRAM chips failed to gain market share because they were slow and prone to overheating.

Sedgwick antitrust partner Paul Riehle, who's not involved in the matter, said he believes the two-month deliberation is among the longest ever in a state civil trial, and that the length of deliberations makes the verdict a "shocker."

"When a jury deliberates for that long, often you think that they're trying to come up with a number," he said. "It's surprising to see a jury deliberate that long and end up with a defense verdict."

 

[darkxshade]

Sounds like Rambus neglected to pay off the jurors.

 

[Arachnotronic]

If I may -- never bet on a company because it's going to litigate itself to profit. I was a 10 year old kid when the Pentium 4 came out, and I remember that RDRAM sucked. It was high latency, expensive, and just crap. DDR was SUCH the better choice then. That's why RDRAM lost.

 

[SunnyD]

If I may -- never bet on a company because it's going to litigate itself to profit. I was a 10 year old kid when the Pentium 4 came out, and I remember that RDRAM sucked. It was high latency, expensive, and just crap. DDR was SUCH the better choice then. That's why RDRAM lost.

If you would remember more accurately, you would also have remembered that when RDRAM came out DDR was equally as expensive. It wasn't until memory manufacturers flooded the market with DDR (and limited availability of RDRAM) as well as slashed the price of DDR to where most memory makers were actually LOSING money on ram that DDR became the defacto standard.

RDRAM was actually the superior product, and it scaled up quite well. It was prohibitively expensive because nobody wanted to make it and pay Rambus royalties on it.

The memory manufacturers have already been found guilty of price fixing in a separate case. There's a reason that Rambus is now collecting royalty and licensing payments on DDR-based technologies too.

RDRAM wasn't an inferior product. It simply was technologically ahead of it's time, so to speak.

 

[Arachnotronic]

Maybe my memory is hazy -- could you point me to some articles from back then comparing DDR an RDRAM on an objective level?

Also, how's Rambus' XDR compared to DDR3 nowadays?

 

[senseamp]

If you would remember more accurately, you would also have remembered that when RDRAM came out DDR was equally as expensive. It wasn't until memory manufacturers flooded the market with DDR (and limited availability of RDRAM) as well as slashed the price of DDR to where most memory makers were actually LOSING money on ram that DDR became the defacto standard.

RDRAM was actually the superior product, and it scaled up quite well. It was prohibitively expensive because nobody wanted to make it and pay Rambus royalties on it.

The memory manufacturers have already been found guilty of price fixing in a separate case. There's a reason that Rambus is now collecting royalty and licensing payments on DDR-based technologies too.

RDRAM wasn't an inferior product. It simply was technologically ahead of it's time, so to speak.

It was also proprietary, controlled by Rambus in actual collusion with Intel, and expensive. Why would you expect memory manufacturers to push it and give up control of their destiny to third parties? You heard in the trial that Intel could control the RDRAM market by making more or fewer RDRAM chipsets, to the point where RAM makers had to lie to Intel to assure sufficient supply of chipsets and prevent a bottleneck. Of course they were going to back an open standard over RDRAM. It's hard enough being a commodity supplier, it's even worse being a commodity supplier with a third party controlling your market. SDRAM makers busted an Intel-Rambus duopoly, they should have been given a medal by anti-trust regulators, not sued under anti-trust laws.