Buzz Bits: Dow and Nasdaq End Lower
Your daily Buzz & Banter highlights.
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Bell Buzz! - Todd Harrison - 3:52 p.m.
- I was thisclose to taking down some Yahoo (YHOO) calls earlier in the session but didn't pull the trigger as I couldn't identify the edge on my gut.
- I'm tellin ya, if I ever find the table that I've left all this money are, I'm gonna be one happy camper. And no, not in a Brokeback sorta way (not that there's anything wrong with that).
- It was the moops, it was the moops!
- There are alotta reasons why we should see a lower low but, so it's said, the market trades rather dry to these old eyes. Absent news--which is this far from a given--a probe of resistance wouldn't shock me.
- Of course, Winky and I will sleep well tonight knowing that we'll have fresh legs to jab and duck tomorrow. Well, sorta fresh legs after Dimi gets done with me.
- Balance, Mon Frere, balance.
Seein' Ciena - Sean Udall - 3:12 p.m.
Nice announcement here from Ciena (CIEN) and the CN line of products. The CN4200 started out life being sold primarily into MSO customers. Now it and next iteration products are being pushed into new markets and geographies.
The CN4200 was and is a killer product for CIEN and it looks like future sales may be even more robust.
Even though CIEN has made a big move off shocking lows, the stock is still well off highs and I fully believe we'll see 2008 or 2009 highs surpass those of 2007. My fair value target is above $50 on the shares.
We have seen many stocks with similar market caps (like Citrix Systems (CTXS) just yesterday) be mentioned as potential take-out plays. Meanwhile CIEN has garnered little of this sort of buzz. In fact, not since RBAK got acquired by Ericsson (ERIC) has CIEN received any buyout attention.
I'll say that of all the current names in this fiber optic sub-sector CIEN may have done the best job of restoring a combination of growth and profits.
Position in CIEN
Betting Against Crude? - Ryan Krueger - 2:57 p.m.
The other day I was asked about betting against crude, to which I shared a couple thoughts (and that I would not). I think there is an example today that is worth highlighting for Minyans to show there is another side to the much advertised "ease" that ETFs offer investors these days.
A lot of attention is being paid to commodity ETFs like crude oil and inverse ETFs. There are problems with each, and today they are sandwiched together in shares of the DCR, which goes down when oil goes up and vice versa. So if crude is up about 3% today, why are shares of DCR down more than 25%?
My understanding is that there is a clause in the prospectus of these notes that should the front month contract trade above $111 for three consecutive days they terminate with any net assets being distributed.
I hope this is worthwhile to share, for at least a couple of reasons. One, this note was launched in late 2006 when crude was trading at $60. There have been a lot of bears for a long time in complete disbelief we would ever see prices like that. K&C Trading Rule #26: Markets are never wrong, opinions often are.
And two, it's important to realize that in very few of these baskets created by Wall Street do you actually "own" the underlying asset. Something simple doesn't require dozens of pages in size 6 font to disclaim. Three, and especially on the more prevalent long side of commodity ETF's – and why I've consistently hesitated to recommend any – is you are likely trapped to front-month action where you are forced to roll from one month to the next and some times paying premiums along the way. In certain spots they can work, just understand that low cost and easy can be confusing and expensive.
Minyan Mailbag: Confidence in Boeing? - Mark Bloudek - 12:27 p.m.
Any thoughts on the Boeing news about the good ole dreamliner? The stock is up considerably today, which could seem counterintuitive to many.
I just got finished listening to the Boeing (BA) conference call. This update is good news IMO for Boeing on the 787 front. Why do I say this after being very cautious earlier in the year on the 787 issues? Because Boeing finally is putting a realistic schedule in place for both the remaining R&D issues and the production schedule. My chief concern about trying to ramp production too quickly is/has been addressed and this is likely making investors feel a lot better about the chances of this plan working without incurring a major logistics mess in the factory. That is not to say there won't be a hit to financial performance in the next couple of years.
What we don't know yet is the extent of the penalties/givebacks that Boeing will have to pay the customers. This is coming at the first quarter conference call.
But everything isn't perfect for Boeing as I have some new concerns about the credit crunch coming home to roost on Boeing's existing product lines. More on this later.
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