Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

The Bear Stare

By

The New York Times is reporting that Warren Buffett is considering a 20% stake in the once venerable firm of Bear Stearns.

PrintPRINT
The following appeared on the Buzz at 3:34 PM today.

As you've no doubt heard--and possibly see--the earlier noodle that something was afoot in Bear Stearns (BSC) has turned into a full fledged broth. The New York Times is reporting that Warren Buffett is considering a 20% stake in the once venerable firm.

That chatter has sparked a 10% rip in the beaten down broker as traders yell "ready, fire, aim!" I clearly have no insight as to whether the Oracle of Omaha is gonna take the plunge but I will remind investors that the last time we heard this chatter, it was in Hovnanian (HOV). And after the initial, euphoric spike, we all know what happened to the homies.

Be that as it may, and as I've been trading around the short side in Goldman, this chatter lit a match under the group. I've been trying to keep a loose grip on the handlebars while, at the same time, stay somewhat tight in my risk/reward profile. Not the easiest combination, nor is it one that should be envied at present.

As discussed this morning, I was (am) giving GS a bit of room on the other side of $214 as a function of price. While my gut is to fade (read: sell) spikes rather than chase 'em--particularly on rumors--I'm being very conscious not to rationalize my risk. Sometimes discipline is a bitter pill to swallow but it's medicine that has saved me many times through the years.

I'm nothing if not honest and, along those lines, I've yet to cover. My thought process, so it's transparent, is to let the initial emotional euphoria settle before pulling any triggers. The high print of the session, if nothing else, will serve as my technical toggle into the close (and perhaps beyond).

In the meantime, I'm bidding for Calgon...

R.P.

Position in GS.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE