Wells Fargo was told, supposedly, to clean up its balance sheet by the Fed. The stock rockets.
I don't get it, but who cares? If you own WFC, you're stoked. From 19 to 20 to 23 in a couple of days?
Showing posts with label wfc. Show all posts
Showing posts with label wfc. Show all posts
Monday, May 4, 2009
Saturday, May 2, 2009
The Oracle still loving his WFC
He's consistent, if anything.
I gave up my WFC shares several weeks ago. Yeah, bought in around 14, sold around 14, and the very next morning, Wells Fargo surprised the world with an early earnings announcement that sent shares to 19 instantly.
Anyway, the reason I bought the shares in the first place was that Warren Buffett was very bullish on WFC, that it would handle its derivatives well and profit enormously from them. As of yesterday, he's saying the same thing, though his Berkshire Hathaway shares are running red recently.
I'm not about to get into WFC again, but the way Buffett hypes WFC and USB, it's hard not to think twice and do a little homework at the very least.
I gave up my WFC shares several weeks ago. Yeah, bought in around 14, sold around 14, and the very next morning, Wells Fargo surprised the world with an early earnings announcement that sent shares to 19 instantly.
Anyway, the reason I bought the shares in the first place was that Warren Buffett was very bullish on WFC, that it would handle its derivatives well and profit enormously from them. As of yesterday, he's saying the same thing, though his Berkshire Hathaway shares are running red recently.
I'm not about to get into WFC again, but the way Buffett hypes WFC and USB, it's hard not to think twice and do a little homework at the very least.
Tuesday, April 14, 2009
View from the sideline
Dow -137 and S&P 500 -17 to 841.50 this morning. No surprise. Whether this is a bear market rally or not, it still needs a pit stop now and then. Breadth was against the bulls, no sense fighting the tape and forcing a trade to work. Wouldn't work without a ton of luck. I sat and watched after I sold WFC. That turned out positive since WFC closed at 18.22, almost a dollar below my exit point.
C hit 4.48 within an hour after the opening gap, but steadily slid as buyers walked out and sellers remained. I had chances to sell a portion at 4.35 and especially 4.25. C closed at 4.01 and is trading a few cents less in afterhours. Should I have sold near the high? Maybe. But this is clearly a core holding. Instead of swing trading another stock, I could do that with C, which normally has a somewhat consistent trading range intra-day. With a swing position, I would've sold above 4.35, bought back at 4.05, sold at 4.15. A 10¢ gain would've been sufficient as a goal. A lot of would-shoulda-coulda beens.
Bottom line: No bad buys today, i.e. chasing up. Chasing WFC last week turned out to be a tie. (I had chances yesterday to sell at a decent profit but held. Today I waited for it to move up so I wouldn't take a loss.) I left LVS and DNDN alone after their big gap ups. ONTY, the sympathy play to DNDN, was at 2.80 earlier and I passed. Lack of liquidity, wide spreads. Kind of like EBAY at the beginning, but worse in many ways. Closed at 3.01 on 231,000 shares traded.
BAC, like most of the financials, was down. Dropped 8.4% to 10.09, no surprise after running up 60% in the previous two days. How does BAC slide while C finishes up 5.5%? Citi had not run as far as BAC, plus there had to have been more short covering in C today; 1.2 billion shorted shares do not convert in just a day or two. Options expiry is this Friday, when C is expected to report.
Theory #1: WFC (Thursday) and GS (Monday) announced early to separate themselves from other financials. Whether they know what the other banks have or not, they believed in their numbers so strongly that they wanted to establish their positions as Alpha Dogs, preferring not to be lumped in (as if!) with JP Morgan (reports in two days) and Citigroup (Friday).
Theory #2: Obama and Geithner "requested" that leading financials -- after studying the stress-test results -- open the earnings season with their surprise announcements. This shook out most of the shorts and created the most impact on a wounded public. Both WFC and GS had similar "margin of victories" by more than doubling the estimates for EPS.
Theory #3: The White House recently (as in 3-4 weeks ago) hired a Citigroup executive. WFC shareholder Warren Buffet is a pretty close friend to Obama and the administration. Why wouldn't it be hard to believe that all of this is orchestrated by a maestro or two. Or three.
I have no problem with it. The game is what it is. Players who adjust to the officiating and rules will make money. Those who whine from their soap boxes will miss opportunities. My theories are crazy, but there might be a thread of truth in there somewhere. Obama has the people's faith, but even he couldn't stop today's selloff.
C hit 4.48 within an hour after the opening gap, but steadily slid as buyers walked out and sellers remained. I had chances to sell a portion at 4.35 and especially 4.25. C closed at 4.01 and is trading a few cents less in afterhours. Should I have sold near the high? Maybe. But this is clearly a core holding. Instead of swing trading another stock, I could do that with C, which normally has a somewhat consistent trading range intra-day. With a swing position, I would've sold above 4.35, bought back at 4.05, sold at 4.15. A 10¢ gain would've been sufficient as a goal. A lot of would-shoulda-coulda beens.
Bottom line: No bad buys today, i.e. chasing up. Chasing WFC last week turned out to be a tie. (I had chances yesterday to sell at a decent profit but held. Today I waited for it to move up so I wouldn't take a loss.) I left LVS and DNDN alone after their big gap ups. ONTY, the sympathy play to DNDN, was at 2.80 earlier and I passed. Lack of liquidity, wide spreads. Kind of like EBAY at the beginning, but worse in many ways. Closed at 3.01 on 231,000 shares traded.
BAC, like most of the financials, was down. Dropped 8.4% to 10.09, no surprise after running up 60% in the previous two days. How does BAC slide while C finishes up 5.5%? Citi had not run as far as BAC, plus there had to have been more short covering in C today; 1.2 billion shorted shares do not convert in just a day or two. Options expiry is this Friday, when C is expected to report.
Theory #1: WFC (Thursday) and GS (Monday) announced early to separate themselves from other financials. Whether they know what the other banks have or not, they believed in their numbers so strongly that they wanted to establish their positions as Alpha Dogs, preferring not to be lumped in (as if!) with JP Morgan (reports in two days) and Citigroup (Friday).
Theory #2: Obama and Geithner "requested" that leading financials -- after studying the stress-test results -- open the earnings season with their surprise announcements. This shook out most of the shorts and created the most impact on a wounded public. Both WFC and GS had similar "margin of victories" by more than doubling the estimates for EPS.
Theory #3: The White House recently (as in 3-4 weeks ago) hired a Citigroup executive. WFC shareholder Warren Buffet is a pretty close friend to Obama and the administration. Why wouldn't it be hard to believe that all of this is orchestrated by a maestro or two. Or three.
I have no problem with it. The game is what it is. Players who adjust to the officiating and rules will make money. Those who whine from their soap boxes will miss opportunities. My theories are crazy, but there might be a thread of truth in there somewhere. Obama has the people's faith, but even he couldn't stop today's selloff.
Punting WFC
Of course, as soon as I sell, WFC runs up a bit.
Sold my shares at 19.12 after seeing it dip to 18.33 earlier. Choppy, down market overall, but WFC has been churning through this 19 area for a few days now. I have some freed-up cash now, but it's slim pickins.
C is doing well, up to 4.48 earlier and holding strong in the 4.40 area despite the market. Watching LVS, DNDN (talk about an old heartbreak), BAC and something called ONTY, which could be a sympathy play to DNDN's prostate cancer drug.
Sold my shares at 19.12 after seeing it dip to 18.33 earlier. Choppy, down market overall, but WFC has been churning through this 19 area for a few days now. I have some freed-up cash now, but it's slim pickins.
C is doing well, up to 4.48 earlier and holding strong in the 4.40 area despite the market. Watching LVS, DNDN (talk about an old heartbreak), BAC and something called ONTY, which could be a sympathy play to DNDN's prostate cancer drug.
Monday, April 13, 2009
Strong opening hour
Haven't gone long GOOG yet. No need to. In fact, I'd go long AAPL first. For now, an hour into today's session, C is up 12% to 3.42. Serious resistance at this level, but no complaints from me. It moved fluidly, not the usual million-share blocks on either side to slow it down.
WFC gapped down with the rest of the market (Dow -77 points), but is back at break-even (19.60). BAC is still moving, now at 10.31.
LVS hit 5.00 earlier. I sold it on Thursday at 4.45. I didn't know Steve Wynn would interview on 60 Minutes over the weekend. If I had some extra cash, I'd look for a pullback on LVS and maybe BAC. But I'm up 9% so far. With GS reporting tomorrow, I'm not looking to sell C or WFC yet.
WFC gapped down with the rest of the market (Dow -77 points), but is back at break-even (19.60). BAC is still moving, now at 10.31.
LVS hit 5.00 earlier. I sold it on Thursday at 4.45. I didn't know Steve Wynn would interview on 60 Minutes over the weekend. If I had some extra cash, I'd look for a pullback on LVS and maybe BAC. But I'm up 9% so far. With GS reporting tomorrow, I'm not looking to sell C or WFC yet.
Friday, April 10, 2009
Disciplined shopping? Ugh
Little bit of fatigue and a little bit of quiet time game me a chance to review transactions of the past month. Not that many, in hindsight. Prolific daytrader I am not. Nine wins, two defeats, two ties. Purposely didn't look into scale of victory/loss as much as whether I took profits or cut off losses methodically rather than emotionally. I've gotten better in that regard.
Didn't note this the other day, but I'm still thinking about it. I haven't lost in Citigroup (yet) because of the financials' bull run and my patience. The stock is up to 3.04 now, a shade under my average cost basis. But I'd have been better off by not buying above 3 -- the higher end of its trading range. After I bought a different points above 3, C dove back down as low as 2.32. So even though I'd bought C beforehand as low as 1.70, the lesson was lost on me. Now I wonder if I've repeated history with my buys of Wells Fargo at 18.93 and 19.30. Though I firmly believe WFC should be a 25-30 stock, that's no reason to pay a higher price rather than wait for a better one. Even as financials report in the coming week, I never gave the price a chance to pull back. It could come down to 17.42 (as it did intraday on Friday). Maybe 16.
Will it get that low? I doubt it. Revenues of $20 billion for Q1 in a reviving Cali real estate market are real. WFC should trade well above its Wednesday closing price of 14.89. Maybe it'll be stuck between 17 and 20 for awhile. But one other thing concerns me. One of my favorite bloggers, Beanieville, shorted WFC on Thursday at 18.03. Now, that's a good price, I thought, to go long. Funny? Maybe. I was sleeping while the stock dropped to 18 and below, or I would've bought some there. So, either Beanieville is right or I'm right.
Maybe we'll both be right. Maybe WFC has to bottom out at 16 before surging into the mid-20s. I hate to lose.
Didn't note this the other day, but I'm still thinking about it. I haven't lost in Citigroup (yet) because of the financials' bull run and my patience. The stock is up to 3.04 now, a shade under my average cost basis. But I'd have been better off by not buying above 3 -- the higher end of its trading range. After I bought a different points above 3, C dove back down as low as 2.32. So even though I'd bought C beforehand as low as 1.70, the lesson was lost on me. Now I wonder if I've repeated history with my buys of Wells Fargo at 18.93 and 19.30. Though I firmly believe WFC should be a 25-30 stock, that's no reason to pay a higher price rather than wait for a better one. Even as financials report in the coming week, I never gave the price a chance to pull back. It could come down to 17.42 (as it did intraday on Friday). Maybe 16.
Will it get that low? I doubt it. Revenues of $20 billion for Q1 in a reviving Cali real estate market are real. WFC should trade well above its Wednesday closing price of 14.89. Maybe it'll be stuck between 17 and 20 for awhile. But one other thing concerns me. One of my favorite bloggers, Beanieville, shorted WFC on Thursday at 18.03. Now, that's a good price, I thought, to go long. Funny? Maybe. I was sleeping while the stock dropped to 18 and below, or I would've bought some there. So, either Beanieville is right or I'm right.
Maybe we'll both be right. Maybe WFC has to bottom out at 16 before surging into the mid-20s. I hate to lose.
Thursday, April 9, 2009
More monster madness
Nothing convinces quite like big numbers. That's why I took my new cash (from the LVS 'tie') and added more shares of WFC in afterhours at 19.30. The stock dipped to 17.42 during the morning due to profit-taking, which happens when a stock is up 25-30%.
With a little freed-up cash, WFC is a solid move. Not as risky as BAC, which already ran 37% today without substantial news. Come Monday, the hedge and mutual funds might start backing up their trucks now that they have real numbers from WFC to work with. Sure it would've been nice to add more at 17.42, but 19.30 (and my earlier purchase at 18.93) will be in the rear-view mirror sooner rather than much later.
Citigroup closed at 3.04. Nice push over 3.00 in the final hour or so. I didn't sell a share. So, why not diversify, or at least venture into another financial? Google reports next week and Apple will likely be hot going into earnings. VM Ware is tempting, too. But the financials have tail winds: 1. New York Times report today was bullish on first-quarter profits, 2. Wells Fargo pre-announced that earnings will be $.55 per share (exceeding expectations of $.26), 3. Goldman Sachs leads off the financials' earnings reports on Tuesday. (That's Ricky Henderson in his prime stepping to the plate with the sacks filled.)
All will be fresh and tasty food for thought when Monday morning arrives.
With a little freed-up cash, WFC is a solid move. Not as risky as BAC, which already ran 37% today without substantial news. Come Monday, the hedge and mutual funds might start backing up their trucks now that they have real numbers from WFC to work with. Sure it would've been nice to add more at 17.42, but 19.30 (and my earlier purchase at 18.93) will be in the rear-view mirror sooner rather than much later.
Citigroup closed at 3.04. Nice push over 3.00 in the final hour or so. I didn't sell a share. So, why not diversify, or at least venture into another financial? Google reports next week and Apple will likely be hot going into earnings. VM Ware is tempting, too. But the financials have tail winds: 1. New York Times report today was bullish on first-quarter profits, 2. Wells Fargo pre-announced that earnings will be $.55 per share (exceeding expectations of $.26), 3. Goldman Sachs leads off the financials' earnings reports on Tuesday. (That's Ricky Henderson in his prime stepping to the plate with the sacks filled.)
All will be fresh and tasty food for thought when Monday morning arrives.
No dice
Out of LVS at 4.45 for a tie. At this price, it's already 10% up today, but it was a calculated risk on my part to see if it would get back to 5.00 (which it hit on Monday).
No question, I'll use the new cash to get into another financial. Maybe GS. Maybe BAC, which ran from 9.40 to 9.78 in the past 10 minutes. Might hit 10 before close. Crazy, but BAC has quite a bit in common with Wells Fargo ... Tempting to buy more C, but I'm overweight there. C is finally topping the 3.00 mark (3.02) again.
No question, I'll use the new cash to get into another financial. Maybe GS. Maybe BAC, which ran from 9.40 to 9.78 in the past 10 minutes. Might hit 10 before close. Crazy, but BAC has quite a bit in common with Wells Fargo ... Tempting to buy more C, but I'm overweight there. C is finally topping the 3.00 mark (3.02) again.
Banking on Vegas, Macao
Wind back the clock a bit to 4:40 a.m. HST.
Las Vegas Sands (LVS) was available at 4.45
Bank of America (BAC) was at 8.48.
I opted to "diversify" even with short-term trades and picked up a few shares of LVS. (I already have shares of Citigroup and Wells Fargo.)
Fast-forward more than 4 hours. LVS is hovering at 4.46. BAC surged and is at 9.35.
Crud. Not complaining, but I'll keep an eye on this. Might be a lesson to it. When one sector has such bullish news from premarket on, I might approach things a little differently next time.
Las Vegas Sands (LVS) was available at 4.45
Bank of America (BAC) was at 8.48.
I opted to "diversify" even with short-term trades and picked up a few shares of LVS. (I already have shares of Citigroup and Wells Fargo.)
Fast-forward more than 4 hours. LVS is hovering at 4.46. BAC surged and is at 9.35.
Crud. Not complaining, but I'll keep an eye on this. Might be a lesson to it. When one sector has such bullish news from premarket on, I might approach things a little differently next time.
In for now
Back in WFC at 18.93 ... not the ideal entry point, but I'm willing to chisel in and accumulate. Once the institutions pile in, it will be at 18 no more.
Also dipped into LVS at 4.45, which is off its recent high around 5. (I stayed at The Venetian once and indulgent as that was for a working trip, how can I forget?)
Hated to see STP trading at 14.50 earlier -- after I sold yesterday at 12.95. Oww. But if I can make it up by staying fluid and trading the next day in an up market, it should balance out enough. Minimizing risk versus making a profit.
C is nowhere near its premarket level (3.05) and has been in a rut between 2.92 and 2.94 for most of the morning. Are the MMs sitting on C? Who knows? Tempted to sell a big chunk of shares here for a 8.5% gain (from yesterday).
Also dipped into LVS at 4.45, which is off its recent high around 5. (I stayed at The Venetian once and indulgent as that was for a working trip, how can I forget?)
Hated to see STP trading at 14.50 earlier -- after I sold yesterday at 12.95. Oww. But if I can make it up by staying fluid and trading the next day in an up market, it should balance out enough. Minimizing risk versus making a profit.
C is nowhere near its premarket level (3.05) and has been in a rut between 2.92 and 2.94 for most of the morning. Are the MMs sitting on C? Who knows? Tempted to sell a big chunk of shares here for a 8.5% gain (from yesterday).
Ouch!
I sold my position in WFC yesterday at 14.70. It closed at 14.89.
This morning, WFC announced record profits for Q1, beating expectations. They weren't even supposed to announce today. The stock is trading in premarket at 18.06. My action yesterday cost myself a pretty mean profit.
Yeah, this sucks. But I move on. Plus, financials were all up early on a New York Times report. Citigroup is up a bit to 2.80.
Of course, I'm not surprised that WFC is making bank, so to speak. Buffett's no liar. I just didn't expect it this SOON. Something to be said for leaving good enough alone. Still might be an acceptable re-entry point this morning. Or afternoon.
This morning, WFC announced record profits for Q1, beating expectations. They weren't even supposed to announce today. The stock is trading in premarket at 18.06. My action yesterday cost myself a pretty mean profit.
Yeah, this sucks. But I move on. Plus, financials were all up early on a New York Times report. Citigroup is up a bit to 2.80.
Of course, I'm not surprised that WFC is making bank, so to speak. Buffett's no liar. I just didn't expect it this SOON. Something to be said for leaving good enough alone. Still might be an acceptable re-entry point this morning. Or afternoon.
Wednesday, April 8, 2009
Play List
Note to self: Stocks to watch for short-term trades tomorrow (Thursday)...
WFC > Upside value.
VMW > Ruler of its kingdom.
STP > Solars rallied on Wednesday, STP rules China.
GS > Earnings out Tuesday, pimp of Wall St.
AMZN > Retail doing well so far this week.
AAPL > Retail doing well, Apple is grand poobah.
GOOG > On a pullback.
RT > Huge move today (positive guidance), but might pull back and rise one more time, a la RIMM.
WFC > Upside value.
VMW > Ruler of its kingdom.
STP > Solars rallied on Wednesday, STP rules China.
GS > Earnings out Tuesday, pimp of Wall St.
AMZN > Retail doing well so far this week.
AAPL > Retail doing well, Apple is grand poobah.
GOOG > On a pullback.
RT > Huge move today (positive guidance), but might pull back and rise one more time, a la RIMM.
Pre-holiday ride?
Who knows? Tomorrow, pre-holiday, likely to be lighter in volume than normal. Some stocks could shift up and down like Taz or Road Runner. Might be harder to get the price you want. Though I sold my WFC today (small position), I'm still looking to trade it. I like the company, toxic assets and all, and have confidence that the balance sheet will work itself out in the long run. Or so says the Oracle.
WFC has traded between 14 and 17 for a month or so now, which kind of pinpoints me as a chicken for jumping out today at 14.70 (closed at 14.88). Really, shouldn't anyone be buying WFC below 15 and selling above 16? Yeah. Of course. But I don't trust this market. I don't trust the programs that sell millions of shares by the minute, whether it's Wells Fargo or Citigroup (especially) or any other entity.
Tomorrow, I'd like to ride WFC between 15 and 16, no question. I'll even take a gain of $.50. Until the financials start reporting on Tuesday (Goldman Sachs), it will remain choppy. Maybe go long on GS Monday.
WFC has traded between 14 and 17 for a month or so now, which kind of pinpoints me as a chicken for jumping out today at 14.70 (closed at 14.88). Really, shouldn't anyone be buying WFC below 15 and selling above 16? Yeah. Of course. But I don't trust this market. I don't trust the programs that sell millions of shares by the minute, whether it's Wells Fargo or Citigroup (especially) or any other entity.
Tomorrow, I'd like to ride WFC between 15 and 16, no question. I'll even take a gain of $.50. Until the financials start reporting on Tuesday (Goldman Sachs), it will remain choppy. Maybe go long on GS Monday.
So long STP
My sell order on STP at 12.95 got hit while I was on the phone. It was at 12.80 when I made the order, so that's a pleasant surprise. Sure, it could go back over 13, but I'm not willing to play with the risk of the market falling on its face in the final hour. Friday's a holiday, which means tomorrow could be really flaky out there.
I got a minor profit in STP, missing out on last week's run to 14. It's all froth in this area since STP was at 6 two weeks ago. I do like green tech, but at the right price and when the currents are more stable. Right now, things are pure whitewash. I'd rather have some cash and be fluid.
WFC is down to 14.51. Glad I got out.
I got a minor profit in STP, missing out on last week's run to 14. It's all froth in this area since STP was at 6 two weeks ago. I do like green tech, but at the right price and when the currents are more stable. Right now, things are pure whitewash. I'd rather have some cash and be fluid.
WFC is down to 14.51. Glad I got out.
Aloha WFC
Media pounding us with bad news (Fed minutes report). One thing I'll never like about media, particularly TV, is the tone and method of blowing things out of proportion. As if they were tasked with the duty of scaring the public to death. Can't fight that. So rather than wait for WFC shares to keep dropping, I sold at 14.70 with a very minor profit. I can get back in when the media and the market are more rational and a little less hysterical.
I actually got a more normal night of sleep. Didn't get up until 7:30 or so, and by then C had dropped from a high of 2.84 to 2.76, now trading at 2.72. I would probably have sold at 2.81 and taken the nickel gain. I'm not married to the thing. I'll take a dime or nickel any time now. It's just choppy seas until the financials report. Then it gets better or worse.
If I'd been as practical last week, I would've sold WFC at 16-plus.
Have a limit order to sell STP at 12.95. Currently at 12.86.
I actually got a more normal night of sleep. Didn't get up until 7:30 or so, and by then C had dropped from a high of 2.84 to 2.76, now trading at 2.72. I would probably have sold at 2.81 and taken the nickel gain. I'm not married to the thing. I'll take a dime or nickel any time now. It's just choppy seas until the financials report. Then it gets better or worse.
If I'd been as practical last week, I would've sold WFC at 16-plus.
Have a limit order to sell STP at 12.95. Currently at 12.86.
Friday, April 3, 2009
The Bear is dead?
Still have my Apple withdrawls, but it's getting better.
Instead of trying to micromanage and weave in and out of the market today, I let my trades sit. C, STP and WFC struggled to tread water for a good part of the day. So did the market. But all three wound up positive. C moved from 2.74 to 2.85. STP went from 13.95 down to 12.62 back up to 14.00. WFC from 15.33 to 16.34. No complaints here.
I scribbled down a projection yesterday of a 20% gain for this trio within the next three weeks.
C
2.72 (Apr. 2)
3.26 (Apr. 18, after 1Q earnings)
STP
13.95 (Apr. 2)
16.74 (Apr. 18)
WFC
15.33 (Apr. 2)
18.39 (Apr. 18)
Too optimistic? Maybe. Too pessimistic? Maybe. By the time Citigroup reports, most of the big boys in the financial sector will have reported. I think Goldman Sachs, JP Morgan and others will report on the positive -- not perfect -- side of the ledger. I may wind up selling most or all of my C shares before earnings (Apr. 17). But I'm convinced and have been for the past few days that selling at a loss this early would not be prudent. I didn't sell at 2.32 and I'm not selling at 2.85. Ideally, I'll keep a small position after taking profits by the 18th.
Suntech Power really might be strictly for daytrading. Had I sold near 14, I could've bought back in at 13 for the ride back up. This is not going down very much despite the huge rally in the past week. There are 30 billion reasons in China why the nation's top solar company will thrive from the subsidies and stimulus money. Not a tough hold.
WFC? The 'W' could stand for wacky. Stock has made drastic turns up and down between 13 and 17 in the past two weeks. It's just strange to recognize that a bank stock is being played by daytraders, hedge funds, whomever. I'm fine holding these shares. Just might daytrade all or most of the shares, though, with this volatility.
The jobs/unemployment report this morning did have an impact for a half-day. Maybe it bought buyers some time to get in, if Cramer is right and we're in a new bull market. I'm not quite as optimistic, but this is no bear market either. I'll be content to stay long with 25% of my portfolio and use the rest as a trading vehicle.
I still want them Apples.
Instead of trying to micromanage and weave in and out of the market today, I let my trades sit. C, STP and WFC struggled to tread water for a good part of the day. So did the market. But all three wound up positive. C moved from 2.74 to 2.85. STP went from 13.95 down to 12.62 back up to 14.00. WFC from 15.33 to 16.34. No complaints here.
I scribbled down a projection yesterday of a 20% gain for this trio within the next three weeks.
C
2.72 (Apr. 2)
3.26 (Apr. 18, after 1Q earnings)
STP
13.95 (Apr. 2)
16.74 (Apr. 18)
WFC
15.33 (Apr. 2)
18.39 (Apr. 18)
Too optimistic? Maybe. Too pessimistic? Maybe. By the time Citigroup reports, most of the big boys in the financial sector will have reported. I think Goldman Sachs, JP Morgan and others will report on the positive -- not perfect -- side of the ledger. I may wind up selling most or all of my C shares before earnings (Apr. 17). But I'm convinced and have been for the past few days that selling at a loss this early would not be prudent. I didn't sell at 2.32 and I'm not selling at 2.85. Ideally, I'll keep a small position after taking profits by the 18th.
Suntech Power really might be strictly for daytrading. Had I sold near 14, I could've bought back in at 13 for the ride back up. This is not going down very much despite the huge rally in the past week. There are 30 billion reasons in China why the nation's top solar company will thrive from the subsidies and stimulus money. Not a tough hold.
WFC? The 'W' could stand for wacky. Stock has made drastic turns up and down between 13 and 17 in the past two weeks. It's just strange to recognize that a bank stock is being played by daytraders, hedge funds, whomever. I'm fine holding these shares. Just might daytrade all or most of the shares, though, with this volatility.
The jobs/unemployment report this morning did have an impact for a half-day. Maybe it bought buyers some time to get in, if Cramer is right and we're in a new bull market. I'm not quite as optimistic, but this is no bear market either. I'll be content to stay long with 25% of my portfolio and use the rest as a trading vehicle.
I still want them Apples.
Thursday, April 2, 2009
Ray Guy should be in the Hall
Sometimes, all you can do is punt. Particularly if you're as stubborn and greedy as I am. I was up 9% before pre-market today. Citigroup and Wells Fargo were buoyed by the impending news of new mark-to-market relaxation (alleviating the harm from toxic assets). Suntech Power was hoisted up by the solar sector in general, which had been injected (or will be, I should say) by major subsidies and stimulus from China's government, as well as the Fed in the U.S.
Yep, though my brain was scrambled and I could barely keep my eyes open at the opening bell, 3:30 a.m., I knew I could just sell most of my trades. But my average cost for C, which started at 1.70, is now 3.05 (as a result of chasing last week), and when the stock opened at 2.97, I waited for a run past my average cost. I wanted to at least break even -- I refused to "lose". Preposterous, yes, but that's a weakness of mine. Rather than work within the moment -- and take a significant profit off the table -- I let it sit there. I fell asleep on the couch briefly.
I woke up and C was waffling between 2.88 and 2.92. That lasted about 15 or 20 minutes. Plenty of time to put in a sell order. I waited. I fell asleep again. When my eyelids opened, C was at 2.78. Talk about hating. Who was hating Citigroup? Didn't the mark-to-market vote work in favor of the banks? Who was hating me? Easy: me. But I'm not so hard on myself anymore. I was just concerned that shares would dip below yesterday's closing price (2.67). With the Dow up 250 points, the market makers kept C above 2.72. After Obama spoke from the G-20 summit in London, the Dow was up 300 points and C is now seemingly stable at 2.77 with less than an hour left in the session.
C could falter in the coming two weeks, with only an uptick rule vote next week, and a slew of earnings reports out. Citi doesn't report until the 17th -- after some major banks report. Could be ugly. Could be good.
But what's keeping me optimistic enough is that STP continues to trade well, now up 11% to 14.03. WFC isn't doing bad either, up almost 7% to 15.47. I feel justified in buying STP (and selling AAPL, which is up 4.6% to 114) and not selling WFC. I feel OK holding any of the three for more than a week, maybe a month. But the reality is, I have to take profits and I didn't do that while it was still dark outside. My punts have to be with just cause. Any team that punts as often as I do is not going to score points.
Yep, though my brain was scrambled and I could barely keep my eyes open at the opening bell, 3:30 a.m., I knew I could just sell most of my trades. But my average cost for C, which started at 1.70, is now 3.05 (as a result of chasing last week), and when the stock opened at 2.97, I waited for a run past my average cost. I wanted to at least break even -- I refused to "lose". Preposterous, yes, but that's a weakness of mine. Rather than work within the moment -- and take a significant profit off the table -- I let it sit there. I fell asleep on the couch briefly.
I woke up and C was waffling between 2.88 and 2.92. That lasted about 15 or 20 minutes. Plenty of time to put in a sell order. I waited. I fell asleep again. When my eyelids opened, C was at 2.78. Talk about hating. Who was hating Citigroup? Didn't the mark-to-market vote work in favor of the banks? Who was hating me? Easy: me. But I'm not so hard on myself anymore. I was just concerned that shares would dip below yesterday's closing price (2.67). With the Dow up 250 points, the market makers kept C above 2.72. After Obama spoke from the G-20 summit in London, the Dow was up 300 points and C is now seemingly stable at 2.77 with less than an hour left in the session.
C could falter in the coming two weeks, with only an uptick rule vote next week, and a slew of earnings reports out. Citi doesn't report until the 17th -- after some major banks report. Could be ugly. Could be good.
But what's keeping me optimistic enough is that STP continues to trade well, now up 11% to 14.03. WFC isn't doing bad either, up almost 7% to 15.47. I feel justified in buying STP (and selling AAPL, which is up 4.6% to 114) and not selling WFC. I feel OK holding any of the three for more than a week, maybe a month. But the reality is, I have to take profits and I didn't do that while it was still dark outside. My punts have to be with just cause. Any team that punts as often as I do is not going to score points.
Bears still growling, but this market has horns
There's no point in debating the merits of whether this is a doomed (bear market) rally or the start of a new bull market.
With just about every stock on steroids this morning (pre-market), it is what it is at this moment. You can either stay in bed and get those z's or get up and make some cash. Staying too bullish can hurt, just the same being too bearish. It is always worth hearing a counterpoint. Doug Kass was right all along about the decline of the market. (He went bullish a few weeks ago.) Then there's an unyielding perspective of continued misery from Merrill's David Rosenberg. The instability of the housing market, he says, will continue to thwart any rebound by the economy and market.
So be it. My only concern this morning is if and when to take profits on C, STP and WFC. Though the mark-to-market vote is a few hours away -- odds are the FASB votes yes for change -- there's nothing wrong with taking profits rather than risk watching it blow away like dust should something unforseen occur. Up 9% today already (before pre-market).
With just about every stock on steroids this morning (pre-market), it is what it is at this moment. You can either stay in bed and get those z's or get up and make some cash. Staying too bullish can hurt, just the same being too bearish. It is always worth hearing a counterpoint. Doug Kass was right all along about the decline of the market. (He went bullish a few weeks ago.) Then there's an unyielding perspective of continued misery from Merrill's David Rosenberg. The instability of the housing market, he says, will continue to thwart any rebound by the economy and market.
So be it. My only concern this morning is if and when to take profits on C, STP and WFC. Though the mark-to-market vote is a few hours away -- odds are the FASB votes yes for change -- there's nothing wrong with taking profits rather than risk watching it blow away like dust should something unforseen occur. Up 9% today already (before pre-market).
Monday, March 30, 2009
Hintz on Fast Money: M2M change will be catalyst
From CNBC's Fast Money today. The segment was titled "Death to Mark-to-Market?"
Brad Hintz
Brokerage Analyst
Sanford Bernstein
#1 financial analyst on the street
Melissa: "Let's go through some of the estimates floating around out there. If you overhaul mark-to-market, it could boost Citigroup's profits by 20 percent. ... (Is) this right on?"
Hintz: "Well, what happens is all the major capital market firms, this is good for. JP Morgan, Citi, Goldman, Bank of America, Wells, Jeffries even. So, this is one where you're taking rules that were well designed. I don't want to say mark-to-market accounting was flawed. It's just that it was designed with the idea that markets don't stay illiquid for long periods of time, so it's really caused some major problems for the firms this time, right, because they've had to mark their balance sheet to distress trades, chaotic trades in the market place which has caused them to sell. I had a trader tell me, 'I know the assets that I've got are good. I know they're going to be worth more than what I marked. I can't hang on to them because they're Level 3. Headquarters won't let me.' "
Melissa: "In terms of a boost to the profits, Brad, are they baked into the stocks already because we've certainly seen a big rise in the stocks for the past month or so, or is it yet another catalyst to stocks soon?"
Hintz: "It's another catalyst. We've seen the credit markets modestly improve, right? We've got liquidity now in the investment-grade industrials. That's, you know, it's a small part, but it's a step in the right direction. This also reduces the risk that you're going to have, the surprise losses. That means you're going to hang on to losses, you're not being forced to sell. All of these are improving credit."
Guy Adami: "I'm sort of with you on the mark-to-market thing, Brad. We go mark-to-model. Is there going to be a mark-to-model czar? Who at a firm in their right mind would like to take a job of overseeing the mark-to-models at a Citi or at a JP Morgan or at a Wells Fargo, for that matter?"
Hintz: "In the end, actually, that's the external auditor. You know, the external auditor doesn't have a lot of courage at this point, right? And we've seen the SEC come out, what was it, in March, in September of 2008 with letters to CFOs saying, 'You really don't have to mark to market quite as aggressively as you have.' They didn't give them a bright line saying here's a safe harbor. If the markets are totally disrupted, you can go to mark-to-model. Mark-to-model is actually the old way the street modeled their portfolios during illiquid periods. As long as you were using the model that you traded with every day. Not some other type model, but a model that you used for your trading decisions, and if the auditors were comfortable with that, that's what you would use. It was a reasonable way to do it. Now, the 157, the new approach, came in and was much, much more conservative. It said, if there are any trades, we have to look at the trades."
Karen Finerman: "Very quickly, Brad, do you think any chance that we see no change at all since there's so much pressure to change?"
Hintz: "There's pressure for change. Just as there are going to be regulatory changes, you're going to see some sort of a safer harbor coming out on this one. If they don't fix it this time, they'll fix it next time. Because they know that what they're doing is causing pro-cyclicality. They're causing companies to take losses and have to raise capital in difficult environments."
Melissa: "OK, thank you, Brad, thank you for you time. Appreciate it. OK guys on the desk, what names do you buy ahead of that April 2nd meeting. He says it's going to happen. It's going to happen."
Pete Najarian: "I think it's the same old names. Go ahead."
Karen: "You know, Bank of America, I like the preferreds, but I think the XLF if you don't want to make a specific, you know, if you just want to broaden your exposure."
Pete: "If you're looking for a little more bang for your buck out of that XLF because of its beaten-down area, even though it's had its run recently the FAS is another way to get involved in the financials without picking out an individual name."
Guy: "It could line up just as we trade down to that 741 line. The stars could line up and you get some positive news on April 1st, April 2nd and then that may be a chance to really look to that move on 900, so the stars might align on this one."
Pete: "Melissa, to Brad's point, they HAVE to do it this time. They can't say, well, we'll keep talking about it and we'll look for the next meeting. They have to do it this time or we have more issues in front of us and forget 740."
Melissa: "A lot of lobbying pressure in DC, that's for sure."
Brad Hintz
Brokerage Analyst
Sanford Bernstein
#1 financial analyst on the street
Melissa: "Let's go through some of the estimates floating around out there. If you overhaul mark-to-market, it could boost Citigroup's profits by 20 percent. ... (Is) this right on?"
Hintz: "Well, what happens is all the major capital market firms, this is good for. JP Morgan, Citi, Goldman, Bank of America, Wells, Jeffries even. So, this is one where you're taking rules that were well designed. I don't want to say mark-to-market accounting was flawed. It's just that it was designed with the idea that markets don't stay illiquid for long periods of time, so it's really caused some major problems for the firms this time, right, because they've had to mark their balance sheet to distress trades, chaotic trades in the market place which has caused them to sell. I had a trader tell me, 'I know the assets that I've got are good. I know they're going to be worth more than what I marked. I can't hang on to them because they're Level 3. Headquarters won't let me.' "
Melissa: "In terms of a boost to the profits, Brad, are they baked into the stocks already because we've certainly seen a big rise in the stocks for the past month or so, or is it yet another catalyst to stocks soon?"
Hintz: "It's another catalyst. We've seen the credit markets modestly improve, right? We've got liquidity now in the investment-grade industrials. That's, you know, it's a small part, but it's a step in the right direction. This also reduces the risk that you're going to have, the surprise losses. That means you're going to hang on to losses, you're not being forced to sell. All of these are improving credit."
Guy Adami: "I'm sort of with you on the mark-to-market thing, Brad. We go mark-to-model. Is there going to be a mark-to-model czar? Who at a firm in their right mind would like to take a job of overseeing the mark-to-models at a Citi or at a JP Morgan or at a Wells Fargo, for that matter?"
Hintz: "In the end, actually, that's the external auditor. You know, the external auditor doesn't have a lot of courage at this point, right? And we've seen the SEC come out, what was it, in March, in September of 2008 with letters to CFOs saying, 'You really don't have to mark to market quite as aggressively as you have.' They didn't give them a bright line saying here's a safe harbor. If the markets are totally disrupted, you can go to mark-to-model. Mark-to-model is actually the old way the street modeled their portfolios during illiquid periods. As long as you were using the model that you traded with every day. Not some other type model, but a model that you used for your trading decisions, and if the auditors were comfortable with that, that's what you would use. It was a reasonable way to do it. Now, the 157, the new approach, came in and was much, much more conservative. It said, if there are any trades, we have to look at the trades."
Karen Finerman: "Very quickly, Brad, do you think any chance that we see no change at all since there's so much pressure to change?"
Hintz: "There's pressure for change. Just as there are going to be regulatory changes, you're going to see some sort of a safer harbor coming out on this one. If they don't fix it this time, they'll fix it next time. Because they know that what they're doing is causing pro-cyclicality. They're causing companies to take losses and have to raise capital in difficult environments."
Melissa: "OK, thank you, Brad, thank you for you time. Appreciate it. OK guys on the desk, what names do you buy ahead of that April 2nd meeting. He says it's going to happen. It's going to happen."
Pete Najarian: "I think it's the same old names. Go ahead."
Karen: "You know, Bank of America, I like the preferreds, but I think the XLF if you don't want to make a specific, you know, if you just want to broaden your exposure."
Pete: "If you're looking for a little more bang for your buck out of that XLF because of its beaten-down area, even though it's had its run recently the FAS is another way to get involved in the financials without picking out an individual name."
Guy: "It could line up just as we trade down to that 741 line. The stars could line up and you get some positive news on April 1st, April 2nd and then that may be a chance to really look to that move on 900, so the stars might align on this one."
Pete: "Melissa, to Brad's point, they HAVE to do it this time. They can't say, well, we'll keep talking about it and we'll look for the next meeting. They have to do it this time or we have more issues in front of us and forget 740."
Melissa: "A lot of lobbying pressure in DC, that's for sure."
Tuesday, March 24, 2009
In Buffett, I trust
A rather quiet day on the market front. Good thing. Work is a big load. Organizing All-State projects can be super fun, but sometimes it gets tough. Today's pullback was predictable after the mammoth gains of Monday. I added a few more shares of Wells Fargo (at 15.55) after contemplating over Apple (too expensive), Bank of America (leadership issues?), Google (hmmm), Amazon (nice pullback) and a few more. I settled on more WFC considering the pullback today and the leadership within the company. Warren Buffett, 'nuff said.
WFC dropped from 17+ to a price I liked, so I pulled.
WFC dropped from 17+ to a price I liked, so I pulled.
Subscribe to:
Posts (Atom)
