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XMFSinchiruna (28.57)

Taking the Pulse of the CAPS Blogs: Blogger's Choice. :)

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July 14, 2008 – Comments (12)

The first two installments of this new series of articles drawing from the collective intelligence and insight of the CAPS blogoshpere were both very well received.  I want you all to have a say in the subject matter of the third piece.  There is one important criterium:  the discussion has to be able to bring several widely-traded equities into the fold.

Please post your suggestions here, and let's come to a decision together.  I know the inflation / deflation debate has been huge lately and I think it's among the more important topics out there, but I simply don't see that discussion meeting the above criterium or relating back to specific stocks. 

One idea I just had was to cover this whole debacle with the banks:  i.e. what the prospects are for another Bear Stearns, or whether the gov't would let the next one fail... the specter of FNM and FRE insolvency and how the FED has to step in for those 2... China as largest holder of their bonds... what it all means for investors, etc.

There's one idea to get you started.  Let's hear your thoughts.  What exactly IS the pulse ofthe CAPS blogs just now?  What's most important to you as an investor, and what is it that you're most eager to discuss with your fellow bloggers?

Once we have a topic, let's keep this post going as we link blog posts below, discuss the topic further here, and together we can help tell the world what it is the CAPS bloggers are thinking during these epic and unprecedented times for financial markets.

With profound admiration and appreciation for the talented members of this blogosphere, 

Christopher

12 Comments – Post Your Own

#1) On July 14, 2008 at 10:01 AM, AnomaLee (29.17) wrote:

I think the risks for the next Bear Stearns are just as high now as they were weeks after the BS bailout. I'm sure we will slowly experience the S&L crisis in regional banks and we can watch the numbers tick on the ML-Implodeometer.. The government is tapped and the risks to the financial system are not lower.

Most casual and inactive investors/traders are probably terrified, but now is the time to be eyeballing stocks. I'm beginning to see value dividend-payers that I haven't seen in a while. I think most of the active bloggers discuss and figure the dollar will slide against foreign currencies or six of the other G-8 countries are going to inflate along with us(my view). That will drive base and precious metals higher along with other commodities throughout the world and we continue to experience 'inflastagdeflation' unless policy-makers stop writing blank checks.

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#2) On July 14, 2008 at 10:24 AM, XMFSinchiruna (28.57) wrote:

AnomaLee

Love the new word!  :)

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#3) On July 14, 2008 at 4:03 PM, leohaas (93.62) wrote:

Chris,

Good luck with that. I would really enjoy this kinda discussion, but I just don't see that happening. Just one comment 8 hours after posting this blog is not a good sign.

Allow me to illustrate:

"What exactly IS the pulse ofthe CAPS blogs just now?"

Gloom and Doom. That says it all.

"There is one important criterium:  the discussion has to be able to bring several widely-traded equities into the fold."

That criterium is ignored by most bloggers. It is the reason I rarely read the blogs anymore.

My 2 cents: the financial sector as a whole will remain under pressure for awhile. If you agree with me, the easiest way to profit would be to short the XLF (or to buy a put option). 

 

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#4) On July 14, 2008 at 9:04 PM, binv271828 (< 20) wrote:

Sorry for the late reply :)

I agree with leohaas, but I tend to be an "optimistic" doom-and-gloomer ... :) yuk, yuk.

I really don't have any real suggestion unfortunately. I think commodities and alternative energy are the best investments right now. May perhaps focusing on specific commidies for a "pluse of caps"? But you already write articles about the specific commidities (gold/silver, oil, steel, aluminum, natural gas, etc.).

... Hmmmm. Maybe stocks with P/E ratios over 100 that are good to short? See you don't short stocks (neither do I) so that is probably a bad subject. I wish I could be more helpful :)

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#5) On July 14, 2008 at 9:06 PM, binv271828 (< 20) wrote:

Man, I was in such a hurry I didn't proofread. How many times can I misspell commodities? See, now with this reply, I didn't save any time at all. Doh! :)

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#6) On July 15, 2008 at 12:17 AM, jester112358 (29.46) wrote:

I would be interested in a discussion of how the contraction of credit in the US will affect our trading partners such as China and the Mid-east nations.  What is the possibility of a US government default due to withdrawal of credit support by other nations/investors.  This could lead to deflation-a bad case for my overall commodities growth hypothesis, which I know you share.   The commodities and the companies which extract/produce them are the only refuge for the next 5-10 years to preserve capital.  However, a worldwide depression would negate this hypothesis.

 How can the US re-industrialize to regain our independence?  Obviously more scientists and engineers and less lawyers is a good starting point.

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#7) On July 15, 2008 at 12:24 AM, AnomaLee (29.17) wrote:

leohass,

I don't think "doom and gloom" is a problem. I don't associate being bearish or negative on the market with "doom and gloom." Common discussions involve "economic downturn, stock market decline, overspending, printing money, oil through the roof to $170, gold to the moon," but what is inaccurate besides gold to the moon? However, there still is a possibility NASA may conduct lunar experiments involving gold particles :)

I've witnessed people using the term "doom and gloom" as an insult and attacking several CAPs players for their bearish predictions or because they have certain charms, but if you consider the collective intelligence of the CAPs community and its bearish tone then it has been a tremendous success.

I do agree that there have been a lot of junk posts lately. There's been a void of popular bloggers who've 'retired' like flordiabuilder, HollywoodDan, Eldrehead and others, but the question should be: Ask not what the community can do for you, but what can you do for the community

Chris, I was surprised that the market pushed lower despite the supporting news for the financial market. People are more interested to see which bank will be the next IndyMac. I think WaMu is a very strong candidate and today's price action indicated that. Some other notable calls would be 

BankUnited Financial Corporation (BKUNA),
Downey Financial Corporation (DSL)
Corus Bankshares (CORS)
Doral Financial (DRL)

...and possibly National City among other regional banks.

I'm still expecting a short-term correction in commodity prices - particularly energy, but if oil were to drop to let's say... $80 - I'd dump my entire portfolio into the USO fund because the fundamentals are there and we're not getting off oil anytime soon. Infrastructure investment and infrastructure stocks look amazing particularly those exposed to non-energy resources, and I'm interested to see if T Boone Pickens proposals gain support for alternative energy. There have also been some amazing discoveries and breakthroughs in medicine and nanotechnology...

The headlines are there. If you read them then you'd know it's not all doom & gloom. There's some pretty amazing stuff going on in the world today and it's not all bad. There's some pretty amazing stuff for America, and there will be a new administration and new Congress. The USA will still be the leader in medical and technological innovation, and agriculture for years. We're also seeing a return of manufacturing and production. I mean anybody can take their pick of topics.

You could even argue that it's just as easy to profit during market downturns as bull markets by just being short. You could've made a killing holding SKF or any other inverse ETF which were all very easy calls.

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#8) On July 15, 2008 at 12:36 AM, Tastylunch (29.93) wrote:

I agree with Anomalee, I think Regional Banks are the story right now.

Moreover I think the Bear market fear minset is the actual story here, rumours and off hand commentrs are turning into self- fufilling prophecies it seems.

Whether it be CNBC reporting that Bear can't clear trades, to Schumer's letter re: Indymac, to that Fed chairman's comments about Fannie Mae and Freddie Mac and now NCC and WaMu today, it seems the banks are so so weak that a mere thought can kill or cripple them.... who's next Corus, Lehmans'?

When this bear is finally over there are going to be some killer bargains out there. I've been bearish for a long time now but this is getting riduculous...

Another story angle would Wall Street's sector rotation out of stocks that they fear likely President to be Obama will hurt (high dividend,insurance, hospitals etc)

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#9) On July 15, 2008 at 12:41 AM, Tastylunch (29.93) wrote:

err minset=mindset. typo sorry

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#10) On July 15, 2008 at 7:44 AM, podrag (< 20) wrote:

Yeah... um... buy gold... why does everyone write at such length trying to sound intelligent when all you need are cashed up precious metal miners and oil service companies. I mean how easy can this investing stuff be? And even people like Sinchiruna, who I thought was cool, delete my comments! I mean come on! It's sooooo easy to make money! Gold is still under $1000! RIG are trading at 10 times 09 P/E! Duh! How stupid can the market (and that means most people) be?

And of course Fannie Mae and Freddie Mac were gonna go bankrupt. Isn't it obvious when they're insuring $5 trillion in home loans with the market as it is and was always going to be? Anyone in this sector deserves tarring-and-feathering. Just losing their money isn't enough.

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#11) On July 15, 2008 at 8:50 AM, XMFSinchiruna (28.57) wrote:

podrag

I don't have the power to delete your comments, so I can assure you I never have.  If you feel I have wronged you somewhere along the way, I apologize.  I still think you're cool.  :)  

jester112358

"However, a worldwide depression would negate this hypothesis."

I think the hypothesis will fare just fine.  Resource-producing countries like Russia, Brazil, and China will retain economic strength relative to the rest, and they have the means to get at their resources even if all the U.S. and European banks were to shrivel up.  Their currencies, furthermore, will vastly outperform the dollar.

AnomaLee

I like the idea... I think we should go with a story about the banking situation.  I'll get busy this evening mining the blogs for recent posts on the matter, and if you all can post any links as well, that would be a tremendous help.  More importantly, if any of you post additional discussion of the topic over the coming week, please be sure to link it here as well.  Thanks so much!  The whole world is watching this banking crisis.  Let's show the world that they could learn as much from the CAPS blog as they could from 100 other sources combined.

 Tastylunch

I don't think fear is the story.  I think fear is a healthy reaction to what's happening to the balance sheets of these banks... and what's coming to light about everything that was kept off the balance sheets.

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#12) On July 15, 2008 at 6:51 PM, jesusfreakinco (29.55) wrote:

Podraq,  TMFSinchiruna - amen brothers.   Got gold?  Easy double, triple, or more on  many junior shares.  I am not sure why people can't correlate today with the 70s and understand that some will be rich in a few years because of gold's run.  The difference is that gold will outperform and stay high because of fear and uncertainty over the USD.  There is so much working against the USD that it isn't funny.

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