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December 2010



Will Rare Earth Plays Come Back to Earth?

December 29, 2010 – Comments (7) | RELATED TICKERS: MCPIQ , REE.DL

So after getting taken to the cleaners after red thumbing MCP and REE, I was reminded once again the only thing worse then trying to catch a falling knife is trying to catch a runaway rocket that has no cap to the upside. I have now green-thumbed the pair and have my fingers crossed that they don't sell off hard before the 7 day holding requirement is met. I would love to see a good valuation model on this industry now that China is scaling back rare earth exports. Some time in the next two weeks the momentum traders will move out and I would expect atleast a 10-20% haircut in these names. For now, to the moon!  [more]



Let's Break the Bank to Buy...Well...Banks

December 17, 2010 – Comments (0) | RELATED TICKERS: C , JPM , GS

Looking at these large money center banks and the gov't moving out of the likes of C, there appears to be a great deal of opportunity here. There are also many reports of banks raising their dividends to distribute their cash hoard. Consolidation appears to be accelerating as premiums paid for acquisitons are more reasonable than anytime in the past decade.Sure foreclosures, higher interest rates, and weak lending provide some drag on growth but these big banks still look like strong buys here. Am I missing something?  [more]



Valuing Tech with PEG

December 11, 2010 – Comments (1) | RELATED TICKERS: MSFT , OPEN.DL

We have all seen when the bull trade in a stock or sector has become too crowded. Recent examples include the internet bubble of 2000 and the oil spike of 2008. At the company level, can we determine these misppricings on simply a  P/E or PEG basis? If so can we grab all cloud computing names at this time and buy a few out of the money put contracts month after month until the bubble bursts? It sure is tempting.   [more]

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