The following was originally posted in the comments section of my previous blog post as a reply to a commenter named "Jahbu." [more]
When WSJ fires David Wessel for being such an ass, they should hire someone who knows about economics and/or markets. Someone like Seth Jayson. Or, if he can't peel himself away from the Fool long enough, they could hire me. [more]
When Bear Sterns was looking at an uncalculable loss from its leveraged plays on collapsing real estate prices, someone realized that, depending on would happen in the future, Bear shareholders (including all of its employees) could have wound up getting nothing as the company dissolves into a catastrophic bankruptcy. So some people made some calls to some other people, and the guys at JP Morgan realized that they could chance offering $2/s for the Bear, and they would likely end up with a nice profit because they could wait longer for a real estate upturn than could Bear Sterns alone. That was on a weekend when Bear Sterns had closed at $30 on Friday. When they "popped the question," Bear Sterns dropped to around $3/s. I guess it was just too much to bargain shares down more than 90% in a day. [more]
...on Thursday, except for a couple call options. No joke. My selling a stock is pretty much the only buy signal you need.
...This? It came as a total shock to me.
Someone wanted me to do a post on Bear Sterns. What is there to say? I have no idea how anyone sold these shares for $3.50 on Monday. And whoever did probably felt like amateurs when the people they sold them to got $7 for them on Tuesday. Between writing that last sentence and this one, I found an article headlined "Why Bear's Shares Are Above $2." It's loading now.... Let's hope this sheds some light on the matter. (Gee, my internet connection is slow.) [more]
I wanted to put this somewhere I could find it on another computer. Also, you might want to have a look. The url:
Someone asked for evidence to support my earlier assertion that the S&P is in a bad way for the foreseeable future. Here it is. [more]
Okay, that was a bit dramatic, and it's the same stupid thing people have been saying periodically for the last 30 years. But how long has the S&P been outperformed by the total stock market - those indices with 3,000 or 4,000 or even 10,000 stocks in them? I would not be surprised to see the S&P 500 underperform these, international benchmarks, and inflation for the next 5, 10, or perhaps even 20 years. [more]
I really can't believe that people would be so stupid as to reject a $7/s cash offer for a failing mortgage company trading for $5-6/s. This when Bear Sterns was bought out for $2/s not long after trading for around $60/s. The ones who approved the BSC buyout were a lot smarter than the ones rejecting the OCN buyout.
I don't see why Visa's IPO is going to have such a huge impact on Mastercard's shares. Are there really people out there who think "I'm going to pay a $10 commission to sell MA so I can pay another $10 to buy V because I think Mastercard is going to get edged out of the credit card business by this strong new competitor"? Are there people who think that the IPO changes anything? Maybe Visa's IPO will cause people to rebalance the credit card payment systems segment of their portfolios. [more]
Today's Best market mover on CAPS' front page says "Morgan Stanley" and if you click the link, you see the ticker SVL and some gibberish about Valero. I put SVL into Y!Fin, and it had similar stuff. MS 8% VLO SPRQS. One of the news stories Y!Fin found for it was about Silverleaf Resorts. What the heck?
The Fool is wise to advise its readers that doing nothing is often the best course of action in a market panic. In many cases, fear impels us to do things for which hindsight will rebuke us. [more]
...that the CAPS clock hasn't yet been changed for daylight savings time? I'm no big fan of dst, but I think the American exchanges use it.
For those of you who still think that Gov. Spitzer was a fair and good AG and Gov brought down by an unfortunate sex scandal in an otherwise stellar career of serving the public good and bringing integrity to private industry, read [more]
I know you're all dying to hear my thoughts on Gov. Spitzer's recent admission that he had sax with portstitutes. That's because as soon as you heard about it, you changed the channel and skipped the infinite blathering that filled every news orifice in all media so that you would not be adequately sick of it until I had had my say. [more]
I think it's rather comical that players who rate their risk tolerance lower than mine pick C or BSC to outperform. Do they know something about the limits of their subprime exposure, or hold some guaranty of the end of the credit crunch? Come on! Wouldn't AINV be a better risk-reward profile? Or ONJP.pk?
Okay, I didn't mean that, and you didn't deserve it. But still... C? BSC?
Okay, machine head has nothing whatever to do with it, but I am going back to red-thumbing because of a revelation I had. (I'm feeling very competitive, so I won't tell you about it.) [more]
I was reading something on some financial website that said target date funds take less risk by shifting funds into cash and bonds as you near retirement. That's like saying that you avoided a car accident by walking to the grocery store. Okay, cash has never suffered a capital loss to the best of my knowledge, or at least not since The Great Depression. However, bonds suffer capital losses all the time. They don't go up very much for very long, and they rarely earn more than 6% - several points (hundreds of basis points) less than dividend paying stocks, which are themselves not risky in any sane sense of the word. [more]