Friday, September 28, 2007
I thought it might be a good idea to touch on Merrill Lynch again. Dylan Ratigan can repeat it again and again that what's good for GM is good for America. Now that may have been true 50 years ago but today it is less so today. I know 1 in 12 jobs here is auto related according to many sources much smarter than I but what I do know is that as goes Merrill so goes the market. What we are seeing now is a MAJOR NEGATIVE DIVERGENCE between MER and the overall market.
The mass media and Wall St. pundits can ignore and cover it over but the fact remains that as the overall market has raced back from the abyss Merrill has floundered down here, looking worn and tired. Now maybe it is making a large base from which to catapult higher shortly. And maybe we are going to get another rate cut from uncle Ben, with the markets near all time highs !
There is a rot under the financials that is growing worse by the day. Waiting and hoping that these toxic paper positions will recover is folly of the first order. The mortgage re-sets are coming, and as the consumer retracts, much slower economic numbers will be the order of the day. Then instead of Merrill playing catch up with the overall market the reverse will be true. With the market playing catch up to Merrill, on the downside.
I wish I had better news for you but the weight of the factual evidence points to this. My question for the ultra ardent bulls is this, do you really want a stock market at 16,000, 18,000 or 20,000 if it means a dollar at 60,50 or 40. If so you should consider investing in Zimbabwean equities with double digit appreciation weekly if not daily. Forget the fact that in Zimbabwe, the former 'breadbasket of Africa', there is nothing on the grocery store shelves and prices on consumer goods(if you can get your hands on them) re-set every couple of hours. Mark my words, lower rates will be the death knell to equities over time and if devaluing the currency was the path to properity Latin America would rule the globe. Good trading to you all.
Thursday, September 27, 2007
Wednesday, September 26, 2007
5 easy steps on how to create a market into which one can unload a monster losing position without punishing.
- Step 1 Get into a position which you now find under water.
- Step 2 Average down said position to lower your cost, dollar cost averaging.
- Step 3 Repeat step 2 averaging down more as the stock falls, as it is a better deal now!
- Step 4 Finally realise the writing is on the wall. What you should have seen earlier is now widely known, start planning exit strategy, before more bad news hits.
- Step 5 Realise you can't get out without crushing the stock so put in call big newspaper and tell the lazy boob on the phone mucho financial magnet is buying into above losing position. As said imitation financial reporter spins story, to his investigatively challenged clones, amid dreams of the Pulitzer, you sell into nirvana.
The airwaves are full with stories, rumors and innuendo that Warren Buffett, among others, is taking a minority stake in Bear Stearns. It's one of those moments in time where watching bubble TV (CNBC) is better than comedy. Maria and Dylan fawning over each other about how they knew how cheap financials were and how the 'smart money' was buying the dip. Pure comedy ! My take on this is if you don't know already is this is nothing more than a pump and dump scheme.
Any of you out there still trading on news ?? If so you get what you deserve.
Now we get word from Charlie Gasparino that Jimmy Cayne(CEO of Bear Stearns) was soliciting Chinese investor(banks) interest in Bear Stearns. Should be a match made in heaven considering how Chinese banks cook their books. To the Chinese banks the Bear Stearns balance sheet(on and off) should look like Mother Theresa's check book. What a joke and to think there are people trading off this, gotta love the free markets. Now on the fat chance Warren Buffett is buying into Bear Stearns which I highly doubt, consider that he went into Solomon Bros. to bail out his old buddy Gutfreund. Now we have to assume that the same man who called financial derivatives weapons of mass destruction has now changed his mind and wants to climb in bed with them? Buffett is a master at his craft yet he has had messes(airlines) and has a mess on his hands with M&T Bank (MTB). Why would he want another one? Good trading to you all.
Wow did the home builders stink yesterday. August home sales drop 4.3% ! The markets response seems to say that it doesn't matter. Just like Fedex's warning last week, and more of the same with the retailers. Now this morning durable goods orders down 4.9%. I know price is the final arbiter and you cannot argue with the tape. But there are certain times when participation entails more risk than is warranted and I believe this is one of those times. Again I am not basing this on my opinion which can often be wrong but rather on the facts. The facts continue to point to an economy that is steadily deteriorating and a market whose leadership continues to narrow, which is never good, yet in the face of this the market chugs higher. Lets face it BIDU is trading with a 200 multiple right now and while it continues to make new highs only the most experienced and disciplined traders should be playing this right now. If not you risk life and limb if it reverses, either way on you.
A friend reminded me the other day of an oft uttered saying 'don't fight the fed' and while it carries weight of substantial value I am trying to balance it with a saying that rings in my head of 'don't fight the facts'. Now the tape can become de-coupled(to say the least) from facts for a time but like the drunk who continues to pound them back eventually he will hit the floor. Make no mistake this will happen as the market always does what it is supposed to just never when. We saw this with the tech bubble and with the housing bubble and now we are witnessing it with a global asset bubble. I mentioned shorting Ryland back in early 2005 to some former working colleagues who laughed their asses off at me. I never did it and was definitely too early for sure but I bring it up because there are so many examples of ideas that look so bizarre at the time only to become brilliant with time.
Ask yourself a question right now, will Apple and Amazon who are effectively retailers be immune to the housing induced consumer spending slowdown? If you believe yes, then you had better hope so because given the multiples that these 2 are trading for there is no room for error and if the tech bubble taught us anything it is that the market can be ruthless to high multiple stocks that disappoint. So which will win out, the Fed or the facts? My money is on the facts. Good trading to you all.
P.S. The financials continue to lag. I know the media will have you believe this and anything else that is negative doesn't matter, and if it does it will be spun positive for stocks. I continue to harp the financials are they are very important to the overall market(approx. 20% of the S&P)and continue to look very sick. They are no where near to making new highs and quite frankly look tired and poised for a failure here. Bubble TV reported yesterday that traders are expecting another rate cut in Oct.
Tuesday, September 25, 2007
I was at the Tiger game the other evening(they lost and sure don't look like the team they were last year) and had a conversation with a regional banking exec. whom I was a guest of. The conversation turned to housing/economy/markets and not knowing what I do for a living I asked their opinion of things, which was summed up in 5 words, 'the market can't go down' ! I broached some of the issues that I and many others have chronicled(housing, toxic paper,etc) and still the same, markets always go up. The blind faith in the Fed which sometimes borders on religion is fascinating to me, but more so is the absolute disregard of indisputable facts that are staring everyone in the face. The best part was when I mentioned the run on Northern Rock which resulting in a laugh, so I went on and mentioned the story of the hotelier and his wife who wanted their 1million pound sterling, and barricaded the branch manager in the office until a police orchestrated ending, again a hearty laugh. I am the weirdo for finding this stuff absolutely NOT FUNNY !
I truly believe that the masses do not want to hear the truth if it is negative or sour. Just this morning I caught some bubble TV (CNBC) and the had on a real estate guru Barbara Corcoran. She really disliked what another guest had to say about retail and the consumer (he was very bearish). To the point where she wanted his mic turned off. Isn't that quaint, turn his mic off, silence him, we don't want to hear it. She then went on to suggest that people who can afford their homes should take them off the market. Managed economies anyone, anyone, comrade !! She then, (laughing) suggested we all hold hands. That's it hold hands and have a seance, that'll fix everything. Good trading to you all.
Thursday, September 20, 2007
I came across the following article earlier today and have lifted it from MSN money in its entirety. It is worth your time as it is an interview with a true derivative "insider". What he has to say is not what many out there 'want to hear'. This type of information will not be presented to you by the mainstream financial media and if it is it will be subjected to ridicule and derision.
I applaud Jon Markman for seeking out Mr. Das and passing on his thoughts and observations. Is this derivatives cat overhyping the risk, is he self-promoting? Please read the article and decide for yourself. At worst you will waste 5 minutes of your time. Good trading to you all.
Are we headed for an epic bear market?
The credit bubble is just starting to unwind, a credit-derivative insider says. And while U.S. borrowers are being blamed for the mess, they were really just pawns in a global game.
By Jon Markman
Satyajit Das is laughing. It appears I have said something very funny, but I have no idea what it was. My only clue is that the laugh sounds somewhat pitying.
One of the world's leading experts on credit derivatives (financial instruments that transfer credit risk from one party to another), Das is the author of a 4,200-page reference work on the subject, among a half-dozen other tomes. As a developer and marketer of the exotic instruments himself over the past 30 years. He seemed like the ideal industry insider to help us get to the bottom of the recent debt crunch -- and I expected him to defend and explain the practice.
I started by asking the Calcutta-born Australian whether the credit crisis was in what Americans would call the "third inning." This was pretty amusing, it seemed, judging from the laughter. So I tried again. "Second inning?" More laughter. "First?"
Still too optimistic. Das, who knows as much about global money flows as anyone in the world, stopped chuckling long enough to suggest that we're actually still in the middle of the national anthem before a game destined to go into extra innings. And it won't end well for the global economy.
An epic bear market Das is pretty droll for a math whiz, but his message is dead serious. He thinks we're on the verge of a bear market of epic proportions.
The cause: Massive levels of debt underlying the world economy system are about to unwind in a profound and persistent way.
He's not sure if it will play out like the 13-year decline of 90% in Japan from 1990 to 2003 that followed the bursting of a credit bubble there, or like the 15-year flat spot in the U.S. market from 1960 to 1975. But either way, he foresees hard times as an optimistic era of too much liquidity, too much leverage and too much financial engineering slowly and inevitably deflates.
Like an ex-mobster turning state's witness, Das has turned his back on his old pals in the derivatives biz to warn anyone who will listen -- mostly banks and hedge funds that pay him consulting fees -- that the jig is up.
Rather than joining the crowd that blames the mess on American slobs who took on more mortgage debt than they could afford and have endangered the world by stiffing lenders, he points a finger at three parties: regulators who stood by as U.S. banks developed ingenious but dangerous ways of shifting trillions of dollars of credit risk off their balance sheets and into the hands of unsophisticated foreign investors; hedge and pension fund managers who gorged on high-yield debt instruments they didn't understand; and financial engineers who built towers of "securitized" debt with math models that were fundamentally flawed.
"Defaulting middle-class U.S. homeowners are blamed, but they are merely a pawn in the game," he says. "Those loans were invented so that hedge funds would have high-yield debt to buy."
The liquidity factory Das' view sounds cynical, but it makes sense if you stop thinking about mortgages as a way for people to finance houses and think about them instead as a way for lenders to generate cash flow and create collateral during an era of a flat interest-rate curve. Although subprime U.S. loans seem like small change in the context of the multitrillion-dollar debt market, it turns out these high-yield instruments were an important part of the machine that Das calls the global "liquidity factory." Just like a small amount of gasoline can power an entire truck given the right combination of spark plugs, pistons and transmission, subprime loans became the fuel that underlays derivative securities many, many times their size.
Here's how it worked: In olden days, like 10 years ago, banks wrote and funded their own loans. In the new game, Das points out, banks "originate" loans, "warehouse" them on their balance sheet for a brief time, then "distribute" them to investors by packaging them into derivatives called collateralized debt obligations, or CDOs, and similar instruments. In this scheme, banks don't need to tie up as much capital, so they can put more money out on loan.
The more loans that were sold, the more they could use as collateral for more loans, so credit standards were lowered to get more paper out the door -- a task that was accelerated in recent years via fly-by-night brokers now accused of predatory lending practices.
Buyers of these credit risks in CDO form were insurance companies, pension funds and hedge-fund managers from Bonn to Beijing. Because money was readily available at low interest rates in Japan and the United States, these managers leveraged up their bets by buying the CDOs with borrowed funds.
So if you follow the bouncing ball, borrowed money bought borrowed money. And then because they had the blessing of credit-ratings agencies relying on mathematical models suggesting that they would rarely default, these CDOs were in turn used as collateral to do more borrowing.
In this way, Das points out, credit risk moved from banks, where it was regulated and observable, to places where it was less regulated and difficult to identify.
Turning $1 into $20 The liquidity factory was self-perpetuating and seemingly unstoppable. As assets bought with borrowed money rose in value, players could borrow more money against them, and it thus seemed logical to borrow even more to increase returns. Bankers figured out how to strip money out of existing assets to do so, much as a homeowner might strip equity from his house to buy another house.
These triple-borrowed assets were then in turn increasingly used as collateral for commercial paper -- the short-term borrowings of banks and corporations -- which was purchased by supposedly low-risk money market funds.
According to Das' figures, up to 53% of the $2.2 trillion commercial paper in the U.S. market is now asset-backed, with about 50% of that in mortgages.
When you add it all up, according to Das' research, a single dollar of "real" capital supports $20 to $30 of loans. This spiral of borrowing on an increasingly thin base of real assets, writ large and in nearly infinite variety, ultimately created a world in which derivatives outstanding earlier this year stood at $485 trillion -- or eight times total global gross domestic product of $60 trillion.
Without a central governmental authority keeping tabs on these cross-border flows and ensuring a standard of record-keeping and quality, investors increasingly didn't know what they were buying or what any given security was really worth.
A painful unwinding Now here is where the U.S. mortgage holder shows up again. As subprime loan default rates doubled, in contravention of what the models forecast, the CDOs those mortgages backed began to collapse. Because they were so hard to value, banks and funds started looking at all CDOs and other paper backed by mortgages with suspicion, and refused to accept them as collateral for the sort of short-term borrowing that underpins today's money markets.
Through late last month, according to Das, as much as $300 billion in leveraged finance loans had been "orphaned," which means that they can't be sold off or used as collateral.
One of the wonders of leverage is that it amplifies losses on the way down just as it amplifies gains on the way up. The more an asset that is bought with borrowed money falls in value, the more you have to sell other stuff to fulfill the loan-to-value covenants. It's a vicious cycle. In this context, banks' objective was to prevent customers from selling their derivates at a discount because they would then have to mark down the value of all the other assets in the debt chain, an event that would lead to the need to make margin calls on customers already thin on cash.
Now it may seem hard to believe, but much of the past few years' advance in the stock market was underwritten by CDO-type instruments which go under the heading of "structured finance." I'm talking about private-equity takeovers, leveraged buyouts and corporate stock buybacks -- the works.
So to the extent that the structured finance market is coming undone, not only will those pillars of strength for equities be knocked away, but many recent deals that were predicated on the easy availability of money will likely also go bust, Das says.
That is why he considers the current market volatility much more profound than a simple "correction" in prices. He sees it as a gigantic liquidity bubble unwinding -- a process that can take a long, long time.
While you might think that the U.S. Federal Reserve can help prevent disaster by lowering interest rates dramatically, as they did Wednesday, the evidence is not at all clear.
The problem, after all, is not the amount of money in the system but the fact that buyers are in the process of rejecting the entire new risk-transfer model and its associated leverage and counterparty risks.
Lower rates will not help that. "At best," Das says, "they help smooth the transition."
The fine print Das notes that Japan in the 1990s lowered interest rates to zero and the country still suffered through a prolonged recession. His timetable for the start of the next serious phase of the unwinding is later this year or early 2008. . . . Das' most readable book for laypeople is "Traders, Guns & Money," an amusing exposé of high finance, published last year. Das occasionally writes a blog at his publisher's Web site. Also available are a boxed set of his reference books on derivatives and his book specifically on CDOs
. . . .
Perhaps the oddest line on the subject by a world leader was uttered by Luiz Inacio Lula da Silva, the president of Brazil. Asked if he was worried about the effects of the credit crunch in his country, he dismissively called it "an eminently American crisis" caused by people trying to make a lot of "third-class money." . . . CDOs were first widely used back in the late 1980s by Drexel Burnham Lambert junk-bond king Michael Milken to sell off damaged and previously unsellable debt in a way that was more palatable to customers.
Wednesday, September 19, 2007
The housing bubble was spawned via an artificially low interest rate environment which was the result of a futile attempt to mitigate the fallout of out a prior bubble (tech, do you see a pattern here?) The housing charade was fostered by non-existent to completely fabricated borrower documentation environment which created phenomenal yet artificial demand. Now some may argue how could it be artificial? It was real, I saw the prices paid, the transactions are recorded and a matter of public record. Yes on all counts, but the wealth that was supposedly being created was and is fictional. Worse, all the economic growth this bubble fostered via mortgage equity withdrawals and job creation via home building is now working in reverse.
The slicing, dicing, packaging and offloading of this paper permitted abuses beyond compare. The mortgage originators had no skin in the game so they encouraged their representatives to aggressively pursue clients. Borrowers who would never have been given the time of day by a conventional lender under traditional normal circumstances were now shown the red carpet, aided and abetted by fraud laden paperwork, and deceit driven appraisals. Unwittingly the average homeowner has become participants in what I believe in hindsight will be considered the greatest swindle in financial history. Charles Ponzi would be proud.
This paper having been cycled through the Wall St. meat grinder was now given a AAA credit status by the ratings agencies, bought and paid for by the same firms the operate the meat grinder. How nice! This toxic paper now resides in hedge funds, off balance sheet investment vehicles, overseas pension, endowment and state sponsored institutional accounts. There is no market for this garbage, with many of the holders steadfastly refusing to mark to market, stubbornly still marking to fantasy. The tectonic nature of this chain of events cannot be overstated. The U.S. financial system considered premier has put the screws to their global bankers. To think they will let this slide is naivete of the first order.
Much like the Chicago 'Black' Sox throwing of the 1919 World Series this has now become an issue of confidence. Legitimate companies in need of financing have been shut out of the commercial paper market. No one trusts anyone right now and 50, 100 or 300 basis points will not change that. As evidenced by the LIBOR rate continually rising. LIBOR is especially important as it is the rate that banks will lend to one another. The Bank of England is stepping in to guarantee "all deposits" at Northern Rock and other banks. Will the government become the lender of last resort when all refuse to lend similar to how government has become insurer of last resort in Florida leaving taxpayers on the hook.
The Fed's cutting of rates will not solve this predicament but what it will do is seal the coffin on U.S. dollar. This rate cut means open season on the U.S. dollar. This will be the result of a short sighted, politically expedient decision to bail out bad investment decisions. I sure wish the fed would bail out my bad trades. The fed's actions to cut are the complete opposite of everything free market capitalism stands for. It is unjust and it is wrong. I believe the U.S. financial markets are at a crossroads. They are at a point where an overhaul of the U.S. financial system, including ratings agencies, banking rules, etc. is necessary so that confidence can be restored. Market participants need to be able to believe that no matter what document they read, it is true and accurate. Like I have said before, where the heck is Paul Volker when you need him, and believe me, the U.S. financial markets in particular the dollar needs a man like him now more than ever. Good trading to you all.
Following the rate cuts all of the above conditions that around previously still exist and could actually be exacerbated by the cuts. This move only delays the inevitable day of reckoning when the paper must be priced. Like the bond investor who buys the 20 yr paper at 97 and watches it drop to 75 and claims he is a long term investor and will hold the paper til maturity. Seems to me one Robert Citron of Orange County fame proclaimed the same strategy. Unfortunately for him and the taxpayers there bankruptcy arrived before maturity.
As I have said previously, stock market players are not exactly the savviest around. Mr. and Mrs. Joe Six pack tend to play the stock market and avoid the debt and currency markets where the shrewdest participants reside. Sorry to rain on the equity parade but that's just the way it is. I am confounded that as the dollar tanks and oil , gold and bond yields rise, yet, in the face of this stocks soar on the rate cut news. Is this inherent strength ? Is it abject stupidity by stock traders? The answer will soon become evident. The one thing I do know is that continually rising oil prices will not be a stock market positive no matter how hard the shills try to spin it and as for the dollar, if a deteriorating currency was the path to economic nirvana, Latin American would rule the world, right next to Zimbabwe, and we would all bow our collective heads in reverence to the IMF.
Do you really believe Lehman's numbers. Do you believe they have accounted for all the off balance sheet "stuff". Is everything marked to market. Is there a market? Just wondered.
The National Assoc. of Home builders index touched 20, a level not seen since 91. So what props the stock market, blind faith and hope?
Bank runs in England prompt the Bank of England to guarantee all deposits and the pound craters.
Seems to me we now live in a world where any and all news is stock market bullish.
- Bad economic numbers, fed will cut, hence bullish for stocks.
- Good economic numbers, earnings will rise, hence bullish for stocks.
- Dollar tanking, exports will rise, hence bullish for stocks.
- Dollar rising, will attract global capital, hence bullish for stocks.
- Oil rising, indicative of strong economy, hence bullish for stocks.
- Oil dropping, like a tax cut, hence bullish for stocks.
- Low p/e multiples, stocks are cheap, bullish for stocks.
- High p/e multiples, mean good growth prospects, hence bullish for stocks.
Everything,everywhere at all times is bullish for stocks. It could not be a bubble if this were not so. Remind you of 1929 or 2000 at all ? Good trading to you all.
Monday, September 17, 2007
Friday, September 14, 2007
The chart of the Pound (above) shows the gap down today thru short term up trend after forming a lower high. Not good.
Wednesday, September 12, 2007
Tuesday, September 11, 2007
Very nice looking descending triangle forming on Meritage (MTH chart above). A break of 15.50 spells more trouble.
Monday, September 10, 2007
Las Vegas Sands (LVS chart below)shows a larger double top and you can see the recent rally is dissipating. Again short here a small initial exploratory position, standing ready to add as it moves in my favor or cut and run if it proves me wrong, just as the above case.
Now here we have the bulls pounding the table about stocks and valuations being cheap as they use the metrics of earnings estimates when in this speculator's opinion these estimates are far too generous given economic conditions. I love how the perma-bulls don't care a whit for fundamentals are missing or are ignored on the rise up yet whine about their importance on the way down. In the debacle of 1929, the economy measured by GDP recovered and bettered its pre-crash numbers by the late 30's yet stocks did not reclaim their high water marks till the 50's.
Are we to learn something from this? You bet ! That earnings and fundamentals will not matter a hoot when investor psychology has changed from bull to bear. In bull markets all news is bullish and in bear markets all news is bearish, remember, news conforms to the tape. How else do you explain a 2 for 1 stock split being a bullish event. I have been in this discussion more times than I care to count. The same people who would tell me to jump in the lake if I cut their 8 slice pizza into 16 smaller slices yet attempted to charge them a higher price will willingly ignore this fundamental law of nature when it happens in the stock market and readily pay up.
Also, markets are far from being rational beings as they are constantly swinging from one extreme of over optimism to over pessimism. So while the bulls rejoice in the swing to over exuberance they lament and whine over a natural and healthy swing to over pessimism. If they are the shrewd bargain hunters they say they are they should welcome this as their opportunity to take advantage of this blatant mispricing. Unfortunately the perma-bulls know only how to invest in bull markets and have no clue as to speculating in neutral or bear markets which take up 2/3's of market time.
Gotta love the gift on Intel this morning. Are you still listening to these people. Its called disinformation. These are paid cheerleaders, whether they be analysts, brokers, company insiders and the media alike. You need look only at the unfolding disaster in the real estate market to figure out that paid shills of NAR (National Assoc. of Realtors), agents, brokers, the housing industry, etc all spouted endless lies and anyone who following this self serving advice is in a world of pain. Look around you, do your own homework, educate yourself. You really think the Intel insiders are buying into this 'upward guidance' this morning or do you think they are selling? I posted the chart on Friday's blog and I encourage you to have a look. This way you won't be so upset when in 5 short weeks (or less) Intel recants the entire news, can you say Washington Mutual.? Good trading to you all.
Friday, September 7, 2007
Harley on the weekly (above) has broke a major (8 year) trend line. Again the facts are the facts. Do you listen to the shills and charlatans promoting their own self interests or do you listen and hear the charts. They don't lie.
Speaking of Mr. Mozilo and Countrywide, is it not curious that the stock has fallen below the $18 strike of the convertible preferred Bank America took. Is it not curiouser the lack of coverage/commentary by CNBC on this issue, just another reminder to do your own homework and follow your own judgement. I surmise that their is some discussion going on at BAC right now. Maybe they are going to average down their position again, as if were a bargain before it must be a bigger bargain now ! I would humbly suggest they bring on Nick Leeson to help them co-ordinate this dollar cost averaging as he is expect at it. Just ask the Queen, she will vouch for him as he took down her bank doing it.
The above chart is a weekly view of Las Vegas Sands (LVS). Double top?
Thursday, September 6, 2007
Wednesday, September 5, 2007
I read something where a blogger/analyst called this market an issue of insolvency rather than illiquidity and that rate cuts are not going to help. I continue to encourage all of you to watch the debt and credit markets as this is where the brains of the market reside, not the equity market. Hence you know why I labor the commodity and equity market, plain ol' not smart enough. What I do know is that these 'smart players' see big trouble as evidenced by spreads. The equity market will eventually wake up to it but it may be too late. This is a big domino game and once a domino falls others eventually are affected to believe otherwise is naivete of the highest order. This is where our advantage comes in, the debt and credit markets are 'the tell' and we now know this stock market is bluffing, the question becomes are you prepared to call the bluff.
Countrywide continues to deteriorate since the BoA announcement. The CFC shareholders had a gift to get out on that news, which I hope they did. For those that like to trade news or even fresher news as some like, you get whats coming. Remember, news conforms to the tape. Insiders and management are cheerleaders for the stock, always over hyping the positive and downplaying the negative. Mr. Mozilo can be candid now as he has sold some 400+ million of stock. the last few years. Do you really think he would let you in on the negatives so you could cut in front of him to sell? If you do believe that and that management and insiders are on your side, always telling it as it is may I suggest the race track for you speculations as you will have more fun there.
I re-read Reminiscences of a Stock Operator over the weekend, for what is now somewhere in the mid twenties as to the number of times I have read it. What a refreshing, simple wonderful read on speculation. It is a valuable read, whether you are in a trading slump, staring into the abyss or riding high on all cylinders. I cannot recommend it highly enough to speculators out there, it is MUST reading for anyone considering or already in the markets. I will post some charts of interest a little later this morning. Good trading to you all.