***Official*** 2008 Stock Market Thread

[IHateMyJob2004]

My call for 5 years is JNJ. More than double your money while napping.

 

[Auric]

Originally posted by: IHateMyJob2004

With so many industries why not pick something with more certainty?

The more certainty, the less potential for reward... and thus the inverse too.

 

[ponyo]

Sold some Sept $15 covered calls on part of my CarMax position.

Another higher low for the market so the technicals look good. Oil is down big along with other commodities again. This is reaffirming the thesis to own Kraft, Sara Lee, and General Mills of the world. Can you say future margin expansion? But the bear case that's developing is the stronger dollar which will hurt the above names in international sales. Something always have to ruin the party.

Airline stocks have taken off since the fall of oil but the question I'm wondering is how many of these airlines hedged their future oil purchases at the peak around $140 a barrel? I've a feeling some of these idiots hedged good portion of their future oil purchases at the top and will not be benefiting from the drop in oil prices. Wouldn't surprise me. When that news comes out, expect some of these airlines to get a major haircut.

 

[ponyo]

Originally posted by: Auric

Originally posted by: IHateMyJob2004

With so many industries why not pick something with more certainty?

The more certainty, the less potential for reward... and thus the inverse too.

Peter Lynch used to say no fund manager ever got fired for owning IBM, GE, or (insert the biggest of the blue chip big cap). But running with the herd produces average results. If you want to hit the homerun and really outperform, you got to buy companies before they become the IBM and GE of the world.

 

[imported_Lothar]

Originally posted by: IHateMyJob2004

Originally posted by: Lothar

Originally posted by: Naustica
They seem to shoot at least one Nasdaq tech company a week. Today, it's Akamai. That was one hot stock back in the .com bubble and I traded it long and short many times back then. I haven't touch it since '01 but see today it blew up and received 25% haircut. That is just brutal stuff. I would be very nervous if I had any tech stock as a miss gets you a nice haircut these days.

There are good tech stocks to own.
Stay with those that actually have a moat. That means HPQ, INTC, MSFT and IBM.
Stay away from those that are either over-hyped, or don't make any sense, or both. That means GOOG, CSCO, RIMM, AAPL, and pretty much almost anything else.

http://www.bloomberg.com/apps/...cEY7ExeSqKA&refer=home
MSFT is the cheapest it's been since it's IPO. They might do a $20 billion buyback this quarter.

The problem with tech is that you don't know who will be around long term. For all I know, Apple will take over and PCs will become the thing of history museums. Case in point, 10 years ago would you have thought that Apple of all companies would have the number one portable music device? In the early 90s, IBM was big. What the heck was Dell and HPQ?

Tech changes to fast. You can not reliably predict the future. If you can not do that, how can you value a tech company?

Sorry Lothar. I think you are one of the better investors on Anandtech but I disagree on tech.

With so many industries why not pick something with more certainty?

I'm pretty much as tech adverse as you'll ever see almost anyone here get.
The only tech company I'm in is HPQ. Nothing else.
Of my 18 stocks, only 1 is a tech.

INTC, MSFT, and IBM I mentioned earlier are also options because they will be around for years to come and unlike most other tech companies rife with speculation, they actually have a moat. You're better off staying with those names than trying to find the next Microsoft.

It costs Intel $3.5 billion to build a fab. How many companies on the market can afford to make such an investment? Not much. The same way someone cannot wake up the next morning to say they want to make their own railroad to compete with UNP and BNI.
That's real competitive advantage, not Facebook, Google, or some guy making a web page and selling it for billions of dollars, or other tech stocks etc...

Why don't I have INTC, MSFT, or IBM?
Because I have my personal set limit on the number of stocks I ever want to own at a time (max 20). I currently have 18.
"If you can buy more of your best ideas, why put money into your 20th-best idea?"
-Bruce Berkowitz

I only have room for 1 tech stock.
HPQ is a hold for me. I'm not buying, but I'm also not selling what I currently have either.

For reference:
HPQ is the 6th largest portfolio holding after LUK, GILD, JNJ, KFT, and UNP.

 

[ponyo]

Originally posted by: IHateMyJob2004
My call for 5 years is JNJ. More than double your money while napping.

I'll take the otherside of that bet. Law of large numbers work against it.

 

[DomS]

Originally posted by: Auric

Originally posted by: DomS
My call for the coming week: ASFX. I'm in at .004, and around 100% profit for the week. Again, ASFX. This has run to .025 twice in the last few months and may be heading there again soon.


of course, do your own due diligence,

Meh, why gamble on dodgy companies? Following simple trends such as financials and oil/airlines has netted returns of 50-500% in three weeks.

Apparently oil is becoming so cheap now that solar has lost its relevance

I don't claim to be no Kreskin, but the risk/reward ratio is looking good for some of the better names like SOL. Plus, that has got to be one of the best symbols perhaps bettered only by POS. And if whimsy is not a solid investment strategy I do not know what is.

which oil company has netted you 500% in 3 weeks?

 

[ponyo]

I don't know if I should go long oil or short airlines when oil hits the 200 dma. I would expect oil to have a technical dead cat bounce there the first time. I'm leaning towards playing the oil (USO).

The question I have about the banks is where are they getting the money to buy back all these billions in auction-rate securities from investors? UBS is repurchasing $18.6 billions, Merrill $12 billion, and Citi $7.5 billion back from investors. Others banks like Bank of America will likely have to follow. Where is this money coming from???

 

[Squisher]

What do you guys think of Panera Bread (PNRA)? The wife has some stock options vesting and I'm not sure if we should cash out or let them ride?

 

[Auric]

Originally posted by: DomS
which oil company has netted you 500% in 3 weeks?

I dihnt refer to oil companies but rather oil plays: HOD ETF is treasury based and reflects double the movement in oil futures so as they are down around 28% from the high, HOD is up 56% from the low. Airlines UAUA and LCC are up 4 and 5.5 times from their respective lows. Jimmy Rogers was touting airlines about six weeks too early

Originally posted by: Naustica
I don't know if I should go long oil or short airlines when oil hits the 200 dma. I would expect oil to have a technical dead cat bounce there the first time. I'm leaning towards playing the oil (USO).

As said, $120 was a significant psychological barrier with $118 being a hard 20% correction (traditional bear signal). Look how quickly it plunged to $115 and of course such large nominal moves are even larger in percentage terms as it goes lower. Negative news that fostered the rise is now largely being ignored on the decline (BTC pipeline). So, unless the war in Georgia heats up or other significant development the correction is more likely to continue. Again, I don't claim to be no expert but then even the experts merely make informed bets.

 

[imported_Lothar]

Originally posted by: Naustica

Originally posted by: IHateMyJob2004
My call for 5 years is JNJ. More than double your money while napping.

I'll take the otherside of that bet. Law of large numbers work against it.

You're short selling JNJ?
I wish you good luck.

 

[Mark R]

Originally posted by: Lothar
You're short selling JNJ?
I wish you good luck.

QFT. Highly profitable company, good P/E and Forward P/E, tasty dividend with a history of progressive above inflation increase, and it's in the healtcare sector which is a stability when every other company is losing their ass.

Maybe they'll suffer a bit from collateral damage in the event of a deterioration of the financial crisis, but if you're into shorting, there are plenty of bones with more tender meat on them.

 

[JS80]

Originally posted by: Mark R

Originally posted by: Lothar
You're short selling JNJ?
I wish you good luck.

QFT. Highly profitable company, good P/E and Forward P/E, tasty dividend with a history of progressive above inflation increase, and it's in the healtcare sector which is a stability when every other company is losing their ass.

Maybe they'll suffer a bit from collateral damage in the event of a deterioration of the financial crisis, but if you're into shorting, there are plenty of bones with more tender meat on them.

Consumer staple $200 billion market cap with a 15 forward PE is not a good value. I'd take the short side too (at this price).

 

[Mark R]

Originally posted by: JS80
Consumer staple $200 billion market cap with a 15 forward PE is not a good value. I'd take the short side too (at this price).

It's not really a consumer staple though. It's main sales are medical devices and pharmaceuticals - the consumer products divison is a lot smaller than either of these.

In terms of the broader healthcare sector it's it's PE is a fair bit below the sector average.

 

[ponyo]

Originally posted by: Auric

As said, $120 was a significant psychological barrier with $118 being a hard 20% correction (traditional bear signal). Look how quickly it plunged to $115 and of course such large nominal moves are even larger in percentage terms as it goes lower. Negative news that fostered the rise is now largely being ignored on the decline (BTC pipeline). So, unless the war in Georgia heats up or other significant development the correction is more likely to continue. Again, I don't claim to be no expert but then even the experts merely make informed bets.

$110 has decent support if you look at the chart. That's also around where the 200 dma is. If crude quickly falls to $110 next week, the better chance it will bounce off that area. If it slowly bleeds to that area while going back and forth, the less of a chance for a hard bounce. If it falls hard, the risk/reward looks attractive enough to take a stab at going long oil at $110 with a tight stop below it. If it breaks $110 and the 200 dma, bail and short if you're aggressive. If it holds, roll up the stop and play the bounce. I think we'll get $100 oil before the election as that's like a magnet but that doesn't mean you can make money long or short before then.

 

[ponyo]

Originally posted by: Lothar

Originally posted by: Naustica

Originally posted by: IHateMyJob2004
My call for 5 years is JNJ. More than double your money while napping.

I'll take the otherside of that bet. Law of large numbers work against it.

You're short selling JNJ?
I wish you good luck.

Never said I was shorting JNJ. I think JNJ is a great company and one of the better companies/sector to own in this environment. I just think IHateMyJob2004 is drinking too much of his kool-aid if he thinks JNJ will easily double in 5 years. Maybe it will but I don't think it's going to be that easy given the company's size and marketcap.

 

[IHateMyJob2004]

Originally posted by: Naustica

Originally posted by: IHateMyJob2004
My call for 5 years is JNJ. More than double your money while napping.

I'll take the otherside of that bet. Law of large numbers work against it.

Law of large numbers? That is your reasoning? I'll stick with the over

 

[IHateMyJob2004]

Originally posted by: Auric

Originally posted by: IHateMyJob2004

With so many industries why not pick something with more certainty?

The more certainty, the less potential for reward... and thus the inverse too.

That is not accurate. The only way to have a potential for reward is if you buy a company that will grow in value over time and if you buy that company at a discount. Basically pay 75 cents for a dollar.

It's fun though. I used to think the way you think. risk/reward is a measure used in speculation, not investment.

 

[IHateMyJob2004]

Originally posted by: Squisher
What do you guys think of Panera Bread (PNRA)? The wife has some stock options vesting and I'm not sure if we should cash out or let them ride?

What is the barrier to entry? I can become a competitor to them tomorrow by opening up shop in the lot next door to them. All it takes is funding and knowledge of the restaurant business.

I am referring to mom 'n' pop shops of course. Anyone can enter the market that Panera is in.

 

[ponyo]

Originally posted by: Squisher
What do you guys think of Panera Bread (PNRA)? The wife has some stock options vesting and I'm not sure if we should cash out or let them ride?

I don't follow Panera. I know it has a loyal following and growing, but I've never been that impressed with the St. Louis Bread Co. Stock price has recovered nicely this year and is at around the 52 week high so I would probably cash a portion out just to take some profit. No one ever went broke from taking profit.

 

[IHateMyJob2004]

Originally posted by: Naustica

Originally posted by: Lothar

Originally posted by: Naustica

Originally posted by: IHateMyJob2004
My call for 5 years is JNJ. More than double your money while napping.

I'll take the otherside of that bet. Law of large numbers work against it.

You're short selling JNJ?
I wish you good luck.

Never said I was shorting JNJ. I think JNJ is a great company and one of the better companies/sector to own in this environment. I just think IHateMyJob2004 is drinking too much of his kool-aid if he thinks JNJ will easily double in 5 years. Maybe it will but I don't think it's going to be that easy given the company's size and marketcap.

Do a DCF on JNJ. You will quickly realize that it is grossly undervalued right now. I have Warren Buffett supporting my thesis. Now, if JNJ is worth $100 right now. To think it will be worth $140 in 5 years is not an outlandish theory. I even contemplated selling all my stock and holding only JNJ. I'l stick with my 10% weighting for now.

I know ...... if JNJ is worth $110, why is it trading at $70? You need to read Margin of Safety. I forget if it is chapter 1 or 2, but the book in one of those chapters spells out how things work and why prices do not always match value.

Basically, I am saying $140 will be hit prior to Aug 9, 2013. Naustica is saying no.

 

[IHateMyJob2004]

I would not invest in it, but if you want no risk and the potential for huge rewards, consider this stock:
FARMERS & MERCH BK (FMBL)

Why?
http://www.thediv-net.com/2008...ank-of-long-beach.html

A conservative California bank that is about to take market share from it's falling competitors.

 

[Squisher]

Originally posted by: IHateMyJob2004

Originally posted by: Squisher
What do you guys think of Panera Bread (PNRA)? The wife has some stock options vesting and I'm not sure if we should cash out or let them ride?

What is the barrier to entry? I can become a competitor to them tomorrow and open up shop in the lot next door to them. All it takes is funding and knowledge of the restaurant business.

And, what does that have to do with my question? Just because I know how to make a cup of espresso does that mean there never was a time to buy Starbucks?

:roll:

 

[IHateMyJob2004]

Originally posted by: Squisher

Originally posted by: IHateMyJob2004

Originally posted by: Squisher
What do you guys think of Panera Bread (PNRA)? The wife has some stock options vesting and I'm not sure if we should cash out or let them ride?

What is the barrier to entry? I can become a competitor to them tomorrow and open up shop in the lot next door to them. All it takes is funding and knowledge of the restaurant business.

And, what does that have to do with my question? Just because I know how to make a cup of espresso does that mean there never was a time to buy Starbucks?

:roll:

You are starting to understand value investing if you understand why Starbucks was never a good investment. insert emoticon here::thumbsup: Why didn't you use Krispy Kream as your example? :roll:

I maintain this statement to my day. Only one restaurant would ever be an investment of mine. McDonalds. To bad it is not on sale. Maybe with the next mad cow disease breakout.:evil:

 

[ponyo]

Originally posted by: IHateMyJob2004

Originally posted by: Squisher

Originally posted by: IHateMyJob2004

Originally posted by: Squisher
What do you guys think of Panera Bread (PNRA)? The wife has some stock options vesting and I'm not sure if we should cash out or let them ride?

What is the barrier to entry? I can become a competitor to them tomorrow and open up shop in the lot next door to them. All it takes is funding and knowledge of the restaurant business.

And, what does that have to do with my question? Just because I know how to make a cup of espresso does that mean there never was a time to buy Starbucks?

:roll:

You are starting to understand value investing if you understand why Starbucks was never a good investment. insert emoticon here::thumbsup: Why didn't you use Krispy Kream as your example? :roll:

I maintain this statement to my day. Only one restaurant would ever be an investment of mine. McDonalds. To bad it is not on sale. Maybe with the next mad cow disease breakout.:evil:

I guess all those people who bought Starbucks at 70 cents a share back in 1992 think Starbucks was a terrible investment. :disgust: I guess I made a great investing decision back in 1998 when I sold my Starbucks shares I purchased at $4/ shr for $5. Triple in 10 years I missed out is terrible return anyways. :roll:

I don't care about value, growth, momo, etc. I care about making money. That's the name of the game. We're all in this to make money and whatever process we use to get there, profit is the only thing I understand and value.