Wednesday, July 9, 2008
Member since:
October 2007
October 2007
Quote:
The best time to buy will probably be after we've had a few more major failures.
I don't think the US Government (and the world economy) can afford to allow major failures of blue chip financials on the scale of BAC. Regional banks on the other hand are a dime a dozen. I'm sure we'll loose several hundred during this cycle. Everyone already knows that BAC is likely to cut dividends substancially (over 50%) in order to shore up its capital strength - and probably use Countrywide as the main excuse. It will be the first year in a long time that BAC hasn't raised dividend payouts. Fifth Third Bancorp recently reduced theirs after increasing them twice last year.
But I just can't justify chasing money (momentum) as a sole buy indicator because I'm not a day trader. As I said, many stocks I've held for many years because they've been good performers over the long term. But I do think BAC is a no brainer at these levels for someone with a longer term outlook (than a day trader). We'll see whether I'm right in 3 years
[Post edited by Skyhawk on Jul 9, 2008]
Wednesday, July 9, 2008
Member since:
October 2004
October 2004
I think buying a basket of the money center banks would be safer than gambling one just one. Maybe XLF would be a decent bet, though I haven't looked at all the components of that one.
If you look back at he 90-91 Savings and Loan crisis, there were certainly golden opportunities out there, but it was hard to separate the wheat from the chaff at the time, as it always is.
I have no doubt that one or more of C, BAC, WFC and others will be a huge performer over the next five to ten years. But I wouldn't jump in until I saw some evidence of it. BAC down another 6% on massive volume today. My one unbreakable rule of investing/trading: never ever buy a stock in a downtrend until it actually stops going down. But to each his own.
If you look back at he 90-91 Savings and Loan crisis, there were certainly golden opportunities out there, but it was hard to separate the wheat from the chaff at the time, as it always is.
I have no doubt that one or more of C, BAC, WFC and others will be a huge performer over the next five to ten years. But I wouldn't jump in until I saw some evidence of it. BAC down another 6% on massive volume today. My one unbreakable rule of investing/trading: never ever buy a stock in a downtrend until it actually stops going down. But to each his own.
Wednesday, July 9, 2008
Member since:
September 2002
September 2002
Chris --
Your investment policy is right on. IDB recommends that one should buy the stock when it is showing consistent signs of going North and not when it is continuously going South. Because investors don't know what the bottom is. Yesterday BAC was up 9%, today it is down 6%. Investors are so jittery that anything in financials is liking taking a big risk. For example, American Exp stock got so battered with the credit crisis even though it is not involved in lending money (I mean mortgage). It is an awesome company with good returns. From financials, I can easily recommend JP Morgan Chase and KBE ETF. It is the only bank that is down 28%. Compare it to its peers, JPM's balance sheet is in better shape. All financial stocks are very slow growth stocks for now. Invest your money and forget it for 5-7 years.
The sad part is apart from Natural Gas (CHK, APA, DVN, CNQ) and agricultural stocks (POT, MOS, AGU, IPI) nothing is worth buying. These stocks are damn expensive based on their P/E ratio but they have good volatile returns.
Like Jim Cramers says - " Stocks will come down to the price you what to pay? Just be patient". This volatile market, my policy is to take out 12-15 % returns or stay on the sidelines.
Your investment policy is right on. IDB recommends that one should buy the stock when it is showing consistent signs of going North and not when it is continuously going South. Because investors don't know what the bottom is. Yesterday BAC was up 9%, today it is down 6%. Investors are so jittery that anything in financials is liking taking a big risk. For example, American Exp stock got so battered with the credit crisis even though it is not involved in lending money (I mean mortgage). It is an awesome company with good returns. From financials, I can easily recommend JP Morgan Chase and KBE ETF. It is the only bank that is down 28%. Compare it to its peers, JPM's balance sheet is in better shape. All financial stocks are very slow growth stocks for now. Invest your money and forget it for 5-7 years.
The sad part is apart from Natural Gas (CHK, APA, DVN, CNQ) and agricultural stocks (POT, MOS, AGU, IPI) nothing is worth buying. These stocks are damn expensive based on their P/E ratio but they have good volatile returns.
Like Jim Cramers says - " Stocks will come down to the price you what to pay? Just be patient". This volatile market, my policy is to take out 12-15 % returns or stay on the sidelines.
Wednesday, July 9, 2008
Member since:
October 2007
October 2007
rpruthee says:
After pumping JDSU and NT just before they burst, that guy has no credibility IMO. He's the last guy I would listen to, but that's just me. In fact, from 1999 to today, I've made a lot of money NOT listening to him!
And the interesting thing, is that these represent many stocks like POT in particular that I've now held for 9 years and am now lightening up on. Perhaps you'll be buying my shares! Many of these agri stocks have jumped because of the demand for bio-fuels and the government subsidies that have fueled that growth. I don't expect that to continue - especially when people figure out that corn is grown by fertilizer fixed using the energy from oil. 
But I did make a killing with them over that time, since I bought them when no one wanted them.
Agreed. I like Canadian banks best for their solid long term returns, and whenever sentiment drops, I usually add a bit. I've held varying amounts of shares in RY and TD for over 10 years straight. They've done me good. I wouldn't own just one financial, same as I wouldn't own one single sector or company. I simply adjust the strength of my holdings over about 40 stocks (all I can manage) across several sectors. Sometimes I only own about 100 shares in one company, the next year I might own 1000 in the same company. If it doesn't perform I drop it like a piece of crap. Over the past 2 years, I lightened my financial sector inventments significantly. Now I've just begun nibbling.
It's done me well over the long term, certainly better than any mainstream mutual funds I'm aware of, including the S&P and TSX, and DJ indexes.
[Post edited by Skyhawk on Jul 9, 2008]
Quote:
Jim Cramers
After pumping JDSU and NT just before they burst, that guy has no credibility IMO. He's the last guy I would listen to, but that's just me. In fact, from 1999 to today, I've made a lot of money NOT listening to him!
Quote:
The sad part is apart from Natural Gas (CHK, APA, DVN, CNQ) and agricultural stocks (POT, MOS, AGU, IPI) nothing is worth buying.
And the interesting thing, is that these represent many stocks like POT in particular that I've now held for 9 years and am now lightening up on. Perhaps you'll be buying my shares!
Many of these agri stocks have jumped because of the demand for bio-fuels and the government subsidies that have fueled that growth. I don't expect that to continue - especially when people figure out that corn is grown by fertilizer fixed using the energy from oil. But I did make a killing with them over that time, since I bought them when no one wanted them.
Quote:
I think buying a basket of the money center banks would be safer than gambling one just one.
Agreed. I like Canadian banks best for their solid long term returns, and whenever sentiment drops, I usually add a bit. I've held varying amounts of shares in RY and TD for over 10 years straight. They've done me good. I wouldn't own just one financial, same as I wouldn't own one single sector or company. I simply adjust the strength of my holdings over about 40 stocks (all I can manage) across several sectors. Sometimes I only own about 100 shares in one company, the next year I might own 1000 in the same company. If it doesn't perform I drop it like a piece of crap. Over the past 2 years, I lightened my financial sector inventments significantly. Now I've just begun nibbling.
It's done me well over the long term, certainly better than any mainstream mutual funds I'm aware of, including the S&P and TSX, and DJ indexes.
[Post edited by Skyhawk on Jul 9, 2008]
Wednesday, July 9, 2008
Member since:
October 2004
October 2004
Quote:
And the interesting thing, is that these represent many stocks like POT in particular that I've now held for 9 years and am now lightening up on. Perhaps you'll be buying my shares!
This reminds me of "American Sucker," the boo by film critic David Denby. Denby's book is actually about his staggering losses in the stock market after the tech bubble burst. While reading it, I had to wonder if he was actually the guy who was buying the tech stocks that I was selling in Spring/Summer of 2000. Reading his film criticism has always made me wonder if he was my polar opposite, and reading how he traded stocks just about confirmed that notion.
My theory is that we are all best at trading the kind of stock market w first learned in. I was a very good momentum trader in the 90s, both at buying and selling (the far more important part!) Swing-trading isn't so much my cup of tea, and that's been all that's worked over the last several years. I've made a profit because I was lucky enough to buy and hold APPL for a couple years. Pretty much all the rest of my trades have been a wash. Or even worse since I was dumb enough to buy CROX when it was "cheap" at $17. Which reminded me to once again never ever violate my rule of not buying a stock that's heading down until it stops heading down.
Oh yeah, and the Weinstein brothers screwed me too. I thought when they turned Wellspring into Genius Productions (or something like that) they might be setting up a micro-cap company for something big. Instead it's teetering on the verge of bankruptcy and trading at 17 cents a share. Not only do you screw up my favorite movies, Harvey Scissorhands, you also fuck up my portfolio!
