Buzz Bits: Dow Heads Lower While Nasdaq Creeps Up
Your daily Buzz & Banter highlights.
Pear Shaped! - Todd Harrison - 2:53 pm
No, not me, although the bum right knee (coupled with my trainer jetting to Japan to compete in the World Karate Championships) has me on a collision course with Peardom. I was actually talking about my book, which is thinner than it was this morning. Of particular note:
I sold a slew of the Merrill (MER) puts into the slim dippage this morning. I didn't make money but I didn't lose much either. And I'm still there, just in a more manageable way.
- I unwound the balance of my driller puts. And to think, I didn't even know 'er!
- I sold my first snivlet of Gannett (GCI) (20%) to honor thy process. I have not, so you know, sold any McClatchy (MNI).
- I bought--and sold--some Microsoft (MSFT) calls, leaving me net flat versus where I came in. Truth be told--and through the lens of "you can learn a lot just by watching"--it feels like a higher bid is in the works. I can beat myself up for not buying Yahoo (YHOO), as I was thinking about on Friday, or I can manage the risk I have on my sheets. Bottom line, I'll likely cut the position in half and take the balance to bed.
- I've maneuvered around some of my other "situations" but as they've been off the radar (I don't like talking small caps), suffice to say that I'm paying heed to my overall risk profile.
Put a gun to my keppe and I'll say that a false breakout still makes sense. I'll simply offer that with the asterisk that I'm operating with alotta dry powder and wanna trade, not guess, with my hard earned coin.
Now, if you'll excuse me, I've got a deadline to meet and an M&M with my name on it. If you can't beat 'em, eat 'em. That's what I always say!
As always, I hope this finds you well.
position in mer, mni, gci, msft
Microsoft is Cheap - Sean Udall - 2:10 pm
I increased my position in Microsoft (MSFT) by about 80% today in the $28.50's. As I had been selling some positions down last week, MSFT wasn't one of them. So while I didn't double down I came close. This is more of a valuation trade vs. the thought that the Yahoo (YHOO) torture will soon end.
On another note if MSFT walks from the deal, how much upside is there in Google (GOOG)? I think $100 plus before next quarter.
On a walk and a YHOO price crash there may also be a value point at which YHOO would be very compelling. Certainly anything around $18, but YHOO might find a price foothold $3-4 points above that, given its last quarter and guidance.
Positions in MSFT, GOOG
So bad it's good, or so bad it's bad?? - Bennet Sedacca - 1-:35 am
Consumer confidence was just reported at 62.3%. Numbers this low have been greeted with stock market rallies as the news is so bad that it's good and can't get any worse.
But could it be slightly different this time? I know that is a dangerous sentence to write, but given the amount of debt and credit issues that are far greater than anything else ever experienced I suppose there could be a long lasting low level of consumer confidence. This brings the 'L' shaped recession into play.
Like they say, 'bear markets get oversold and stay oversold'.
Could it be there is a long term bear market in consumer confidence? We shall see.
Click to enlarge
The CFC/BAC Marriage - Minyan Peter - 9:51 am
Countrywide (CFC) increased its quarterly loan provision 15 fold from the first quarter of last year. Applying that same formula to Fannie Mae (FNM) would take its first quarter 2008 provision to almost $3.9 billion, or almost 40% above the fourth quarter of 2007, making quarterly profitability all but impossible to achieve.
Further, I believe that Bank of America (BAC) is now hoping that its own shareholders will vote down their purchase of Countrywide with the hope that the transaction price will be renegotiated. As I have said all along, there is no question in my mind that CFC ends up with BofA, it is only a question of price of who pays whom.
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