American Capital is down 16% to $3.50 today... this isn't nearly enough. After seeing partner in crime Allied Capital drop 50% yesterday, and another 20% today, you've got to be worried if you're long ACAS. You see, ALD and ACAS are both out of money... however ALD's insolvency is more clearly apparent... look to get out on the next bump up ACAS shareholders, cause your stock price is going to become increasingly Allied with ALD. ALD last trade: 1.54 -.37 (19%) [more]
This post is in response to a question I got from Goodvibe4ever. I hadn't looked into this company until today, so this is just my quick take. [more]
My Seekingalpha article on Repros Therapeutics (RPRX) was released yesterday, and the market is starting to sell the stock off this morning. [more]
Gold has smacked into a big solid resistance level here around 900, silver is not following gold's move today in magnitude or even over the past week. Thus gold has gone off and made a bull run without confirmation despite forex moves that suggest gold should not be strengthening. The entire rally in gold and miners is based on flight to safety, not real concerns about inflation or dollar issues. Once the flight to safety ends (and it will as soon as the market recovers above 8,000--which I expect imminently) gold and the other shiny rocks are going to get smashed. Precious metals always do badly in deflationary collapses, and these recent run in gold and her miners is a flashing green light to short the stuffing out of them. GG and KGC are particularly juicy with their otherworldly P/E ratios, however just about any miner is a short here. With P/E ratios well north of 30, the entire mining sector is at least 50% overvalued. GDX is up 10% today, when an index is up that far in a day, you know that the speculative animal spirits have overwhelmed any true reality about the stocks... get short now or at least take your undeserved profits on longs, the miners and metals are going down hard next month. [more]
e-mail me at firstname.lastname@example.org if you want an advance copy.
The airlines have gotten killed due to bad but not terrible news out of AMR. JBLU, on no news of its own, has dumped 13%. This is irrational and ridiculous. JBLU is a far better airline than AMR, its costs are lower, planes are newer, and routes are superior. JBLU was running breakeven at the heights of the outrageous oil prices this summer. Now, JBLU can be expected to make a lot of money with cheap oil (my estimate is about 80 cents a share for FY '09.) For a $6.25 stock, this is very cheap. Long story short, JBLU has gotten whacked on no news and is no less valuable than yesterday, when it closed over $7. By buying $7.50 calls, we only need a return to last week... when the stock traded over $7.70, for the trade to be a big winner. If you aren't in calls, the outright purchase of JBLU shares is also recommended. GMX added 200 shares of JBLU @ 6.35 before his calls purchase finally filled. [more]
I just bought March 20 puts on Kinross Gold. (KGC 19.24 +1.36). Kinross is up 4 dollars since Thursday and has reached positively ludicrious valuation. This company is overvalued by at least 50% and will suffer a sharp decline later this year when people resume trading on profits and future growth rather than blind optimism and uniformed lunacy. With a P/E of 35, Forward P/E of 31, P/S of 8, and a 150% increase in the share price off the fall 08 lows, this stock is going to get crushed. [more]
As the S&P slumps another 2.5% lower this morning, it is important to note just how wrong the Obama rally callers have been. All week, CNBS and the cable news channels were jubiliantly talking about how the Man was going to come in and fix everything-- Free Ponies For Everyone! Of course, the market has been plunging for the past week and today the dive is accelerating. What can we take from this? Government isn't the solution, and placing your trust as an investor in the government is foolish. Particularly in areas of the economy where the government has interfered, the stocks have tanked. Financials are so low they've fallen off my chart entirely. When you invest (different from rampant speculative short-term trading I sometimes engage in) never A) use the government as a major part of your bullish thesis, B) trust any sort of deal or contract with the government as the banks have painfully learned, and C) invest in garbage cause you hope it will get bailed out. [more]
Where did this kind of advice go, Fool? This article from 2001 written by Whitney Tilson on this very own Fool website urged people to sell dog stocks BEFORE they went to zero (or 82 cents in Satyam's case.) Now, we are, it appears supposed to hold junk right up until the bankruptcy filing, witnessing the Fool newsletters' stubborn refusal to issue sell ratings on walking zombies such as ACAS and MTH. I want the old bold Fool back that said it was okay to sell dogs. In his article, Whitney wrote, "Looking critically at your holdings -- particularly hopelessly depressed ones -- can be difficult, but investors who bail on bad bets before it's too late may preserve both money and sanity." [more]
I'm stunned this shady ex-bulletin board outfit got its market cap back over $100 million. Anyway, this company is complete trash. I bring back a pitch I used on QBC on August 20th, 2008 when the stock was up at $3.26. I've updated it slightly to keep it relevant. [more]
For reasons that are so vapid as to insult the long lost art of so-called "common sense," a herd or rampaging pump monkeys descended upon American Capital (ACAS) shares last week. They drove shares of the insolvent, incompetently-managed ACAS from under $3 to over $7 within a couple of days on no more news than that the crooks over at ALD had gotten (paid for?) an upgrade. I watched this stock tout with outraged confusion wondering who was so crazy as to buy into the boiler room shenanigans. Sadly, a lot of people fell for it, the rally exceeded my CAPS entry point of $5 by a decent margin. Befuddled by such rampant stupidity, I pitched only "ROFL" as any reaction other than laughter to this fraud would have been anger or blind rage. I was roundly attacked for my pitch, but as per usual, the pumpers died, the day traders are dumping the stock, and the pink sheets appear looming ever larger. Let this be a note to all of you... don't buy stocks that have already doubled, it will only end it heartbreak. Rich evil men pump worthless shares to try to sell them to you (distribute them to use market-speak.) Don't buy them more yachts, avoid dredge like ACAS, if by some tragedy you still own some, sell it now before it's delisted. [more]
I realize picking a stock like TLT to outperform sounds like lunacy. Yes, 5 members of the CAPS top 20 have red thumbs on the stock. Treasury bonds clearly are a bubble. Then why, GoldminingXpert, would you be putting a green thumb on this high-risk low-yielding govt bond fund? [more]
Appears this company (RPRX) is the same as Zonagen (ZONA). They just changed names in 2006. The same management team is running the RPRX ship as ran ZONA's. While I'm no expert on biochemistry, I'd say their past is a bit, um, checkered. Check out this article from the Motley Fool which ran a decade ago (!) to see the sort of trouble Zonagen (now Repros) ran into. Remember, you can sell short RPRX directly or buy puts. I own the Jan 15's and will be buying May 10's tomorrow. [more]
Quotes of his blog in italics [more]
I've been trying out a new screener, and in addition to yesterday's discovery of the stunningly shockingly bad Repros (RPRX), I also discovered Gaylord Entertainment (GET). While this company at least has revenue, unlike RPRX, the S&P report I have up does not show any profit over the past five years. The company almost made money last year as they lost only a penny per share. However, 2008 was a far better year for the economy than this year will be--I sure don't want to be running a luxury hotel chain in this environment--particularly one that has a long history of losses. Once we throw in a few other factors (stats from Yahoo! Finance as CAPS seems to be wrong here (the P/E of 1 certainly is wrong)). I see cash of $47 million and levered free cash flow of minus $300 million. This strikes me as bad. Throw in $1.3 billion of debt (2.5x the market cap) and the fact that the operating margin is negative, and I think this thing is headed for zero. The stock technically has already rolled over from its astounding 140% increase from November through the end of the year. This dog is headed for a euthanization, it's final run has ended and only the long slow decline into insolvency remains. Sell or short this thing, it's glory days are over, the only entertainment this thing has left is in watching the flicker of the GET ticker fade from red to black. [more]
Repros is a lousy terrible awful company. Neither of their drugs are particularly promising and aren't near approval. The company just had to do a shelf offering, creating major delution for all the bagholders (ahem, shareholders) of Repros. The company was out of cash, and at their burn rate, the new shelf offering won't last long either. You get no revenue if you purchase this stock, and with a book value of 50 cents a share, you aren't getting much else either. Why puts now? The stock has run up 3 bucks (30%) on absolutely no news on average to below average volume. Long story short, a terrible piece of junk stock is floating upwards with no conviction--even the slightest whiff of reality will send this junk tumbling back to the single digits. Most attractive are a direct short (if you can find shares) or JAN 12.5 puts (45 cents) or JAN 15 puts (2.10). May 10's (1.05) are also exciting as this stock should trade below 8 by then. I bought Jan 15's--join me for a high-probability trade that is likely to score a nice return--if nothing else throw in a red thumb, RPRX is a dud. [more]
I say yes. What say you?
If nothing else, I know my new gmXmkttiming profile has a 98+ CAPS rating and is the hottest player on CAPS today as its rating increased 78 percentiles.
Welcome to gmXmkttimg, my new profile which will attempt to prove that the market can be timed by picking the ultrashorts/long and stable value bond funds. By picking a stable value bond fund, i.e. SHY, you get only the return of the S&P as your score. If you outperform SHY (as you should right now--it's in gmXmrkttiming's queue for tomorrow), you score points as the S&P declines. Since the S&P will decline 20% this year, SHY should score 20 points (+ maybe a point or two of interest from SHY.) Check out gmXmkttiming's picks when they go active tomorrow morning--it's going to be a bearish bonanza. [more]