***Official*** 2008 Stock Market Thread

[IHateMyJob2004]

GE is about 1/3 financials. I forget if that is by earnings or sale so r what though.

 

[ponyo]

Covered Apple short this morning at $165.84. Happy to take $20/shr. This will buy me quite a few new iPhones.
Just went short Lehman at $25.82 in the afterhours. Maybe a bad news or buyout in the teens will emerge over the weekend.

 

[ponyo]

Didn't get the buy under I was looking for with Lehman over the weekend. My hope went up when Lehman execs were called into meeting over the weekend but nothing came of it. With the trade catalyst gone, I covered at $26.65 for a small loss. I'm moving on.

Added to my Kraft holding today. Bought more shares at $30.25.

You can learn lot by watching and it was strange how GE traded end of last week. Stock seemed always in the red even when the market rallying. Today we get the analcyst downgrade. That kind of explains it. I did like how the stock shrugged off the downgrade and recovered. Price action was positive. But that $27 is like a magnet. If it gets there, $25 will call.

Thinking about going short oil via USO. I'm going to sleep on it.

 

[her209]

NVDA put out a new product today and it lost money.

Thankfully this was not the case with AMD.

And thanks for the upgrade ratings on RIMM.

 

[ponyo]

Tried to put an order in to short USO. Got denied. Apparently there are no shares available to short at my brokerage. Everyone must be on the short oil bandwagon.

 

[OS]

not that i necessarily disagree with shorting oil, but shouldn't you guys wait for it to actually break down first?

 

[Slew Foot]

hmmm, maybe a good time to look into some leap puts on USO.

 

[ponyo]

CarMax stinking up the joint. Added more shares at $16.25 and have orders for more shares at lower.

 

[Azurik]

Originally posted by: Naustica
CarMax stinking up the joint. Added more shares at $16.25 and have orders for more shares at lower.

The company will pick up when the economy picks up, the disconcerting thing to me is, which is also why I'm hesitant to buy right now too, is that they are suspending same store comparables going forward until they see a more stable market. AKA = they are reducing transparency in their reports.

 

[Azurik]

I have another GE buy order with a limit of $28.00 - if it gets there.

 

[OS]

Originally posted by: Azurik

Originally posted by: Naustica
CarMax stinking up the joint. Added more shares at $16.25 and have orders for more shares at lower.

The company will pick up when the economy picks up, the disconcerting thing to me is, which is also why I'm hesitant to buy right now too, is that they are suspending same store comparables going forward until they see a more stable market. AKA = they are reducing transparency in their reports.

so basically, they are withholding data that is probably would have pounded their stock price.
if you have walked around a carmax recently, their lots are basically all trucks, SUVs and luxury cars, fast depreciating things no one wants or can afford now.

 

[Slew Foot]

I like the Carmax busniess model, but I dont think its a good time to be an investor though. Keep in mind I tend to be more bearish than most right now, but things are going to be ugly for a couple years.

 

[ponyo]

Added more shares of CarMax at $16 and Kraft at $30. Spent lot of money today

 

[ponyo]

Originally posted by: Slew Foot
I like Carmax busniess model, but I dont think its a good time to be an investor though. Keep in mind I tend to be more bearish than most right now, but things are going to be ugly for a couple years.

I agree. It's ugly out there and is only going to get uglier. I buy when it's ugly. I sell when it's pretty. It's not pretty at CarMax and hasn't been for about a year now. But I believe in the business model and growth plan. Nothing today told me anything is wrong with either. I will keep accumulating until that changes. This was 4-5 year hold for me when I first bought in earlier this year.

 

[moparacer]

THIS ugly????

:shocked:

I think I need to move more into cash lol.

 

[ponyo]

I just finished listening to the recorded CarMax conference call. It was ugly and they're getting attacked from multiple fronts with slow retail and increased credit spreads. Looks like it's going to get lot worse before it gets better. They said the slowdown increased dramatically in late May through June. SUV segment is killing them. But I love how they're adjusting and managing the inventory and dealing with the problem. Their business model and growth plan remains intact. I'm not concerned with margins at this point. I want new store openings and marketshare. Margins will come later with the economy of scale. I like how they're committed to expansion in this tough environment. This is dead money for awhile but future looks very bright IMO.

 

[imported_Lothar]

Originally posted by: IHateMyJob2004
Buy good companies at great prices ..

WEB can but improtant concepts into words so well:
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

Such a simple quote but it says so much. The guy really has a gift with words. If he made a video and sold it such that proceeds went to charity, I would pay in the hundreds of dollars for the video. For a 6 hour video, I would pay $1,000. He won't write a book because there is nothing left to be written that has not been written already (like "The Intelligent Investor"). But if he were to write a book or do a video or anything and donate the proceeds to charity, wouldn't that be wonderful?

I think WEB sold UNP when he bought BNI. For that reason alone, I would only want to buy BNI ... especially if all the railroads are up by about the same percentage.

Well Lothar .... it's actually nice talking to you. Consider the PM I sent you. I think you would liek the forums over there

Although Buffett reduced his stake, he still has a large stake in UNP.
His stake in UNP is certainly nothing to sneeze at.

I went with UNP because they have the lowest debt and were the only railroad(of the "big 4") to boost their 1st quarter earnings when I started analyzing railroads last May after the Buffett picks in April. I think both are good, and I'm sure Buffett has access to much better numbers than I do to support his decision, but who cares really?
BNI YTD: 23.96%
UNP YTD: 20.71%

BNI 1yr: 16.78%
UNP 1yr: 26.08%

If all the railroads are up by almost the same percentage, then it doesn't really matter which one I pick does it?

Both UNP and BNI are good and their 15 year records are clean. They're on the east coast, ship chinese goods (which will keep happening because America likes "Wal-Mart") and also transport coal. BNI boasts one of the fastest railroad growth, but the company seems "expensive" when compared to the others.

CSX seems to be the worst of the four IMO. Slowest trains, poor service. East coast is bad, M'kay? They're losing a LOT of volume because Ford and GM are creating less vehicles in Michigan leading to less shipments. Most new plants being built by them is based in Mexico now. Granted they're balancing that by increasing coal shipments in Florida. Right now, there's some in-fighting going on between the management and some hedge funds.
TCI/3G White paper "CSX: The Case for Change"

NSC is the most efficient of them all(they have one of the lowest accidents rate and many other good stats), but unfortunately they has little room for growth compared to the others because they're on the east coast. They suffer from the same reason CSX does above (without the fighting and Jim Cramer part)

Lets not forget Canadian National. Rumor has it that Buffett convinced Bill gates on opening a large stake. Bill Gates investment vehicle(Cascade Investment) owns 8.7% of CNI shares.

The thing with railroads is it doesn't really matter which one you pick. Fastest growth, lowest debt, best valuation, most efficient, etc...
At the end of the day, they all move up and down by almost the same amount IMO.
"A rising tide lifts all boats"

And no, I will not sell(or exchange) my current UNP shares for BNI just for the sake of Buffett. I see no benefit in doing so.
If Buffett thought UNP was such a horrible investment, he will have sold all his shares.

 

[imported_Lothar]

Originally posted by: IHateMyJob2004
GE is about 1/3 financials. I forget if that is by earnings or sale so r what though.

Part of the reason why I decided not to increase my stake anymore.
I think I read somewhere that GE gets 50% of it's profit from it's finance division.

If I'm going financial, I might as well go all out.
BAC make their dividend decisions in July usually. I'll gladly wait to see what they will do.
They need to stop writing checks they can't cash.

Granted, the chance of a company like GE cutting their dividend is almost 0%, I'll still wait till July to see what BAC does.
GE will always be there.

 

[imported_Lothar]

Originally posted by: Naustica
CarMax stinking up the joint. Added more shares at $16.25 and have orders for more shares at lower.

As soon as I saw your post on KMX, I decided to check ACF.
Man, it got slaughtered as well.

WMI on the other hand has certainly been bucking the market trends.

 

[imported_Lothar]

Originally posted by: OS

Originally posted by: Azurik

Originally posted by: Naustica
CarMax stinking up the joint. Added more shares at $16.25 and have orders for more shares at lower.

The company will pick up when the economy picks up, the disconcerting thing to me is, which is also why I'm hesitant to buy right now too, is that they are suspending same store comparables going forward until they see a more stable market. AKA = they are reducing transparency in their reports.

so basically, they are withholding data that is probably would have pounded their stock price.
if you have walked around a carmax recently, their lots are basically all trucks, SUVs and luxury cars, fast depreciating things no one wants or can afford now.

I'm one of those people who doesn't care much about company guidance or analyst estimates.
If I see a good business worth buying, I buy it.

 

[evident]

siri is the worst stock ever!

 

[imported_Lothar]

Originally posted by: Naustica
Added more shares of CarMax at $16 and Kraft at $30. Spent lot of money today

I just increased my stake in KFT as well this morning.
Bought shares at $29.60

That's my personal birthday present.

 

[vi edit]

Originally posted by: Naustica
I just finished listening to the recorded CarMax conference call. It was ugly and they're getting attacked from multiple fronts with slow retail and increased credit spreads. Looks like it's going to get lot worse before it gets better. They said the slowdown increased dramatically in late May through June. SUV segment is killing them. But I love how they're adjusting and managing the inventory and dealing with the problem. Their business model and growth plan remains intact. I'm not concerned with margins at this point. I want new store openings and marketshare. Margins will come later with the economy of scale. I like how they're committed to expansion in this tough environment. This is dead money for awhile but future looks very bright IMO.

Does Carmax buy any sort of insurance to cover losses in particular vehicle segments? SUV's for example. Resale values of large suvs has gone in the gutter as of the last 6 months and I'm sure they have lost a huge chunk of potential value in that freefall.

Do they carry any sort of policy that helps hedge that?

Not really a stock question, I'm just curious how well they can protect themselves.

 

[ponyo]

Originally posted by: moparacer


THIS ugly????

:shocked:

I think I need to move more into cash lol.

I see what he sees. If you look at the chart of the Dow from the year 2004 to now, there's a head and shoulder formation and if it breaks, there's not really much support until around 10,700 range. Just something to keep note of.

dow chart

 

[ponyo]

Originally posted by: vi edit

Originally posted by: Naustica
I just finished listening to the recorded CarMax conference call. It was ugly and they're getting attacked from multiple fronts with slow retail and increased credit spreads. Looks like it's going to get lot worse before it gets better. They said the slowdown increased dramatically in late May through June. SUV segment is killing them. But I love how they're adjusting and managing the inventory and dealing with the problem. Their business model and growth plan remains intact. I'm not concerned with margins at this point. I want new store openings and marketshare. Margins will come later with the economy of scale. I like how they're committed to expansion in this tough environment. This is dead money for awhile but future looks very bright IMO.

Does Carmax buy any sort of insurance to cover losses in particular vehicle segments? SUV's for example. Resale values of large suvs has gone in the gutter as of the last 6 months and I'm sure they have lost a huge chunk of potential value in that freefall.

Do they carry any sort of policy that helps hedge that?

Not really a stock question, I'm just curious how well they can protect themselves.

No. They do have the one of the best real time inventory management system in place that track all sort of data about pricing trends and adjust their buy and sell price on the fly but even that can't help when SUV prices depreciated 25% in 3 months. That's way more than one year normal depreciation. Prices fell faster than they could mark down. But everything has a price and they're going to what it takes to move the inventory. That means more markdowns and lower buy price.