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alstry (36.08)

Alstry smells a set up.....

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March 17, 2009 – Comments (10)

Jefferies & Co.'s Daniel Binder upgraded Best Buy to "Buy" from "Hold" in a note to clients. At the same time, he jacked his rating to "Buy" on several other retailers, including Target, Home Depot, Costco and Kohl's.

Banks are starting to be more willing to lend to consumers and businesses, Binder said, and a macroeconomic recovery may be looming, with retail earnings recovering.

Obviously Mr. Binder doesn't give a damn about Jefferies customers or doesn' t read.  He seems to be unaware that banks are about to cut over $3 Trillion from credit card lines of credit.  In addition, he must not care that credit card and auto loan delinquiencies are shooting through the roof.

You think banks are going to continue to extend Best Buy's customers no doc loans to keep buying pricey electroninics for much longer in this environment????

And then on the fundemental front.....he forgot that WalMart and Costco are making HUGE inroads into profitable flat panel TV sales and now WalMart is making a strong push into other areas as well.

Alstry may just have to make Best Buy his new favorite red thumb candidate especially after the departing CEO levered this company up to the hilt just before his departure.  Does anyone think there is a connection between the two and maybe some of Mr. Binder's clients trying to exit a large position before someone ACTUALLY looks at BestBuy's balance sheet.

10 Comments – Post Your Own

#1) On March 17, 2009 at 8:31 AM, PrestonCheek (31.81) wrote:

Sounds like a pump and dump to me. I think you nailed it Al, good work. It's no secret that the credit markets are a mess, and I think anyone saying that it's not must have a motive of some sort.

Preston

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#2) On March 17, 2009 at 8:38 AM, alstry (36.08) wrote:

It is not hard to see through these guys especially when you are a party dog like Alstry.....

My guess is that the CEO is departing because he knows what is right around the corner.  Sales across many industries tanked since the beginning of the year and electronics is no different.

Not only that he is leaving the company with little cash and a pile of debt with declining sales and shrinking margins.....as I said above...it ain't hard to see though for this party dog...

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#3) On March 17, 2009 at 9:07 AM, Gemini846 (46.67) wrote:

Best Buy's credit arm is offered by HSBC Cards. Deduce from that what you will. Other than internet retailers BBY is left alone in the big box electronics sector. That has to count for something.

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#4) On March 17, 2009 at 9:11 AM, alstry (36.08) wrote:

Nucor cites deterioration in economic and market conditions

Macquarie cuts 2010 copper forecast 10%


Alcoa shares fall sharply after dividend cut

Nokia to cut 1,700 jobs as cell-phone demand falters

Weyerhaeuser to close lumber mills and cut 307 jobs

DANIEL BINDER....PLEASE DON'T HURT ME NO MORE

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#5) On March 17, 2009 at 9:39 AM, checklist34 (99.71) wrote:

remember, negativity will always be right until its wrong.  and while its often said that death and taxes are the only sure things in life, that statement is patently false.  One can also count on change.

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#6) On March 17, 2009 at 9:45 AM, alstry (36.08) wrote:

It is not about one or the other, it is about being right or wrong.  When things are positive...you should have a positive outlook on that thing....when things are negative....you should be realistic.

Regardless what things are, you party, play, and be the best you can be.......even if you are feeling a little blue....

 

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#7) On March 17, 2009 at 11:22 AM, 4everlost (29.45) wrote:

Thanks for the insight.

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#8) On March 17, 2009 at 11:46 AM, unvrsldeflation (82.85) wrote:

While the motives of the departing boss may be fairly close to the assessment I don't think those going along with the BBY upgrade are motivated by the same type of greed. No, theirs is the hope that the contracted marketplace (post Circuit City) will yield them some substantial gain. I always hated Circuit City and saw their potential withdrawal as less stabilizing than prognosticators dreamed. I agree that there will be less benefit from the changes than Binder assumes, though there will be some. That being said I wonder what shape curve the benefit will take? It could be that when it comes to the financial side in this deal the only gravy is up front.

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#9) On March 17, 2009 at 1:36 PM, angusthermopylae (39.92) wrote:

It could be that, since Best Buy is one of the last big electronic stores, "they" (Binder and others) are hoping that it will have a huge market share when things start to get better...kinda the "in the country of the blind, the one-eyed man is king" thing...

With that said, I agree that Binder is blowing smoke when he stated that a macroeconomic recovering is..."looming"?  The sudden rush to declare all is well has me more nervous than usual...no one can say why, just that it's "better."

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#10) On March 17, 2009 at 2:33 PM, checklist34 (99.71) wrote:

but my point, Alstry, is that going with the crowd or aligning yourself with the prevailing sentiment is only successful for a while.  And over the history of the US stock markets, the biggest fortunes have been made going against the grain, not with it.  Buying real estate in 1995 was a good idea, but probably in 1995 nobody thought it was a good idea.  Buying real estate in 2005 was something EVERYBODY knew was a good idea, and I base that on personal house shopping experience.  Houses seemed expensive, used houses were selling for no less than the cost of new construction it seemed, but everybody from homeowners to internet forums to every realtor knew they'd go up.  "well the house will go up, thats a given". 

And today everybody knows the dow is going to 2000 (is that even possible?) and society is ending and things are so bad that anybody who even thinks theres a chance of soceity in the US carrying on is a fool. 

In my opinion the smart money is currently betting against the grain.  I'm not saying this si the beginning of the next great bull market, and I've hedged myself somewhat against downturns over the next few months in support of that belief...  but historically the single biggest mistake that investors have ever made is thinking "this time is different".

Everybody "knew" that tech was different in the late 90;s.  Its a new economy, the rules of the old economy don't apply. 

Everybody must have known in 2002 that things were horrible and were going to stay horrible, although I wasn't following the market then and I don't recall why they were horrible.

Everybody knows today thats its different and society is over.  Despite the fact that we've done this before.  The 1991 bank crisis, also associated with the popping of a real estate bubble, was in th eopinion of the guy who oversaw it from the federal level (his name eludes me) worse than this one and would have led to a great depression if FAS 157 was forced on institutions then. 

Its easy and comforting, and one can find great commaraderie going with the flow.  Its challenging and lonely to go against it.  But, historically, going against it leads to riches.

I'm with history, Alstry, thats all I'm trying to say. 

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