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some thoughts on the market today

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August 18, 2009 – Comments (2)

well, yesterday I covered my short calls on SPY (for a gain), blew out my puts on SPY (for a loss, but not quite as big as the loss was last Thursday), bought back most of my August calls including LVS 13s, ASH 35s, TCK 27s, RCL 17.50s, BOOM 17.50s, USG 15s, BYD 10s, XL blah, and so on. 

I didn't cover any of my jan 2011 covered calls although alot of them dropped considerably in value in the last 2 days.  I didn't cover my shorts of levered bull ETFs (which are not large positions).  

I bought RJET, I ddin't buy BZ because I didn't have an automated buy order in and I wasn't looking at my monitor when it hit 2.50.  Darn, darn, darn.  I didn't buy anything else.  

RJET is now in my top 5 biggest positions alongside high-fliers ASH, TCK, XL and DOW, all bought at prices far lower than today.  I'm not up much on my RJET at this time.  ACAS is, i believe, now out of my top 5 after recent large trimmings.  DOW is not hedged, ASH, TCK, and XL are hedged with varying degrees of upside left ranging from little to a fair amount.  

My favorite stock is RJET.  My favorite short is none.  DIN is getting cheap enough to be interesting here.  Price/cash flow of 3, p/e of about 6.  I bought some far-in-the-future DIN calls today.  Slowly I am working up the urge to short a stock for the first time in real life.  Shorting levered bear ETFs like SKF has been profitable for me, but thats like throwing a ball and hitting a wall while inside a small room.  Just wait, eventually you will win, guaranteed.  Folks, if you can borrow the shares...  Its hard to find the shares to borrow. 

But forget all of that.  Some girl from Wisconsin is here and frankly she smells alot better than my stock screener.  I can't sleep but she is.  oh well, I have always been an insomniac.  

Part of my hopes that the market has more of a correction in it than this.  I'd love to have those farther-in-the-future calls melt away some more, sell some puts to buy the calls back and buy shares with the leftover cash...

My two bankrputcy stocks, CEMJQ.PK and GGWPQ.PK are looking odd.  Chemtura is now 22x (was 35x) its low after BK, and 3x my cost average (was 4x my cost average).  And I don't think the shares are worth diddly.  General Growth Properties is Bill Ackmans big experiment i guess, I am holding the houses money and darn curious how it all turns out.

I read Porte's blog earlier, although I couldn't digest it all that well as I was starving and had a to make it to dinner with the aforementioned.  

The Team of Bipolar Monkeys that is wall street will do what it will do tomororw, and the headlines will search long and hard for a reason.  But ultimately there isn't really a reason.  Don't believe me?

BZ was 3.45 a couple days ago.  $2.50 yesterday morning.  $3.25 yesterday afternoon.  What, pray tell, made that stock worht 30% more in the afternoon than the morning?  Worth 30% less Monday morning than Thursday afternoon?  Nothing, team of bipolar monkeys.  Buy the sad side of bipolar, sell the happy, make money.  I think someone who inspired Warren Buffet once called that Mr. Market.  But, frnakly, in this modern age where information disseminates in minutes and volatility is epic, I think Mr. Market is far too subtle.  The Team of Bipolar Monkeys is here.  

Nite folks, and happy trails.  

2 Comments – Post Your Own

#1) On August 19, 2009 at 7:57 AM, fireman9119cac (39.43) wrote:

Checklist34

Novice investor but big fan.  Please your thoughts on Canadian banks, BNS BMO TD RY and your current top 3 picks.

 Canadian doller is high (obviously I am a Canuck looking for cheap Amercican stocks

 Thank you in advance  FM

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#2) On August 23, 2009 at 5:02 AM, checklist34 (99.72) wrote:

current top 3 picks:

RJET

high yielding BDCs (many picks, i'll list them all.  ARCC, HTGC, FSC, PSEC, PNNT, AINV)

MGM

my fav of the high yielding BDCs is ARCC, and I really think that right now the high yielding BDCs potentially in a position to grow and invest in this environment are among the best buys out there.  Dividends are, historically, a huge part of returns.  

I love RJET.  MGM is possibly more speculative but its difficult to deny that management has gotten a great deal done in the last half-year, and that they have potential.

stocks aren't as cheap as they were.  But I think the above are winners.  I would diversify in the high-yielding BDC space.  I wouldn't bother with the broken BDCs like ACAS here.  I'm just holding my ACAS shares at this time, not buying more.

I honestly don't know anything about canadian banks, but i have read that they are in better shape htan ours, so if they offer good values (check price/tangible book value maybe, or price/dividend or price/normalized earnings) they could well be good buys.  But I know nothing about them.

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