***Official*** 2011 Stock Market Thread

[Kntx]

Wonder if I should start swapping US of A money to Canadian dollars. Nice 5% spreads coming up. Must figure out a cheaper way to convert though. Banks raping me with a 1%+ commission at a time.

You can buy a security that is listed on both a US and Canadian exchange. Buy on the exchange you want to convert from, and sell on the other. This method will get you the "real" exchange rate without bank fees.

 

[Imp]

You can buy a security that is listed on both a US and Canadian exchange. Buy on the exchange you want to convert from, and sell on the other. This method will get you the "real" exchange rate without bank fees.

I've read about that, but it sounds like my bank knows that people do that, and have been denying those trades for a while. Can't let people get away with dodging 1+% conversion fees on massive amounts of money.......

Markets back to the holding pattern today.

 

[The-Noid]

I've read about that, but it sounds like my bank knows that people do that, and have been denying those trades for a while. Can't let people get away with dodging 1+% conversion fees on massive amounts of money.......

Markets back to the holding pattern today.

Weird, didn't know fees were that high...How much money are you talking?

 

[Kntx]

Weird, didn't know fees were that high...How much money are you talking?

The difference between the buy and sell rates from banks is typically 4-5%.

 

[The-Noid]

The difference between the buy and sell rates from banks is typically 4-5%.

I am very confused by that, Bid/Offer FX spreads are among the smallest in the industry only 4 pips on CAD.

Even exchange for physical payer/receive swaps are 20pips max...

Must be extremely low notional value.

 

[Kntx]

I am very confused by that, Bid/Offer FX spreads are among the smallest in the industry only 4 pips on CAD.

Even exchange for physical payer/receive swaps are 20pips max...

Must be extremely low notional value.

You need to shift your assumptions a bit. This thread is mostly populated by retail investors.

 

[Imp]

Weird, didn't know fees were that high...How much money are you talking?

Very low 5-figure range. When I started swapping my money last year around this time, I recall paying a pretty hefty premium. Because it was so "hefty", I bit the bullet and just didn't keep track of the buy-sell spread. It may have been close to 2%. When the CAD$ was over the US$, I think the premium was just 0.5%-ish, which is more reasonable.

Haven't had much time to shop around for a better trading platform, and I'm mostly happy with what I have now. I also don't see myself trading currencies much, so I'll just stay with what I have.

 

[Ms. DICKINSON]

Pulled the trigger. CIM all the way.

 

[chusteczka]

Pulled the trigger. CIM all the way.

I have been watching that one and currently own 1,000 shares of it. I read an article a few months back where the CEO mentioned the stock could go as low as 2.86 or as high as something in the $5-$6 range. They have had no problems so far with paying the nice dividend of 15-18% but I am wondering why the price is dropping today. Why are people selling?

The high risk of this stock has me questioning whether it is a good opportunity to purchase.

EDIT:
Since this is a mortgage REIT with no government guarantees, people may be getting skittish with signs of further European economic problems. That is the only reason I can think of for the price drop. There is nothing in news about this company today, except an article comparing the price volatility with other companies.

 

[The-Noid]

I have been watching that one and currently own 1,000 shares of it. I read an article a few months back where the CEO mentioned the stock could go as low as 2.86 or as high as something in the $5-$6 range. They have had no problems so far with paying the nice dividend of 15-18% but I am wondering why the price is dropping today. Why are people selling?

The high risk of this stock has me questioning whether it is a good opportunity to purchase.

EDIT:
Since this is a mortgage REIT with no government guarantees, people may be getting skittish with signs of further European economic problems. That is the only reason I can think of for the price drop. There is nothing in news about this company today, except an article comparing the price volatility with other companies.

No news on BBG Term, Thomson Reuters or Dow Jones. Don't know why there is such a move.

 

[chusteczka]

No news on BBG Term, Thomson Reuters or Dow Jones. Don't know why there is such a move.

Thank you for checking. It looks like a good purchase opportunity. It seems to be stuck currently at $2.60. I think more people may sell tomorrow. It is possible that with expected weak holiday retail sales, the market and CIM may drop further. I am unsure whether to purchase now or wait. With that, I will purchase a little tomorrow if the price drops from today and wait to see if another purchase opportunity presents itself between now and Christmas.

With CIM's 15-18% dividends, I see it is a stock to hold or trade between quarters rather than use for short term trading.

EDIT:
Or maybe I will purchase a little today and wait to see if the price drops again later for a subsequent purchase. I put in a limit order for $2.55 and the price just dropped unexpectedly to fill my order for another 1,000 shares. I now hold 2,000 shares of CIM.

EDIT2:
CIM is a new type of company for me. They have Earnings/share of $0.58 and Dividends/share of $0.52. I have watched the share value drop from my original purchase at $4.00 down to the current $2.55 but have not been worried since I expect to still get ahead over time by the dividends. The drop in share value is almost unimportant for me but then I only owned 1,000 shares at the higher price anyway. This is a good stock if the dividends are able to continue, especially with the share price of $2.55 being below the Book Value of about $3.

 

[zimu]

Thank you for checking. It looks like a good purchase opportunity. It seems to be stuck currently at $2.60. I think more people may sell tomorrow. It is possible that with expected weak holiday retail sales, the market and CIM may drop further. I am unsure whether to purchase now or wait. With that, I will purchase a little tomorrow if the price drops from today and wait to see if another purchase opportunity presents itself between now and Christmas.

With CIM's 15-18% dividends, I see it is a stock to hold or trade between quarters rather than use for short term trading.

EDIT:
Or maybe I will purchase a little today and wait to see if the price drops again later for a subsequent purchase. I put in a limit order for $2.55 and the price just dropped unexpectedly to fill my order for another 1,000 shares. I now hold 2,000 shares of CIM.

EDIT2:
CIM is a new type of company for me. They have Earnings/share of $0.58 and Dividends/share of $0.52. I have watched the share value drop from my original purchase at $4.00 down to the current $2.55 but have not been worried since I expect to still get ahead over time by the dividends. The drop in share value is almost unimportant for me but then I only owned 1,000 shares at the higher price anyway. This is a good stock if the dividends are able to continue, especially with the share price of $2.55 being below the Book Value of about $3.

when was the last dividends payout for CIM?

 

[chusteczka]

when was the last dividends payout for CIM?

The last dividend payout was 2011 October 26. They have been paying quarterly. It is expected for the stock price to drop a bit after a payout, then rise in anticipation of the next payout. I did not expect the price to drop below $2.75.

CIM was featured as a good opportunity in a Smart Money article about a year ago. Since then, the stock price has dropped from $4 to $2.55 to what I can only surmise as being general market panic over a very risky stock.

CIM focuses on residential mortgages not guaranteed by the government. Similar companies are PNNT, AINV, and ARCC.

In some ways, it is possible the residential mortgages CIM purchases are less risky than the common government backed mortgages. I expect a bank will have investigated and checked the credit for a non-guaranteed loan more closely and better vetted the ability to pay.

 

[SunnyD]

The last dividend payout was 2011 October 26. They have been paying quarterly. It is expected for the stock price to drop a bit after a payout, then rise in anticipation of the next payout. I did not expect the price to drop below $2.75.

CIM was featured as a good opportunity in a Smart Money article about a year ago. Since then, the stock price has dropped from $4 to $2.55 to what I can only surmise as being general market panic over a very risky stock.

CIM focuses on residential mortgages not guaranteed by the government. Similar companies are PNNT, AINV, and ARCC.

In some ways, it is possible the residential mortgages CIM purchases are less risky than the common government backed mortgages. I expect a bank will have investigated and checked the credit for a non-guaranteed loan more closely and better vetted the ability to pay.

Last report was home prices across the board fell again and housing starts are still going down. Expect weakness in this market for an extended period.

That said, looks like a decent opportunity, picked up a handful of shares at $2.55 myself.

 

[chusteczka]

Last report was home prices across the board fell again and housing starts are still going down. Expect weakness in this market for an extended period.

That said, looks like a decent opportunity, picked up a handful of shares at $2.55 myself.

Thanks for stepping in. It is good to hear a bit of news from other people in case I may have missed something obvious. I just purchased another 3k shares myself, for a total of 5k.

EDIT:
Current share price: $2.55-$2.60
Price/Book Value: .77
Book Value/share: < $3
Earnings/share: $0.58
Dividends/share: $0.52

My Purchase Value = Book Value/share + Earnings/share + Dividends/share
$4.10 = 3.00 + .58 + .52

Current share price / My Purchase Value = $2.60 / $4.10 = .62
.62 < 1.0

This stock has room to grow.

 

[The-Noid]

Thanks for stepping in. It is good to hear a bit of news from other people in case I may have missed something obvious. I just purchased another 3k shares myself, for a total of 5k.

EDIT:
Current share price: $2.55-$2.60
Price/Book Value: .77
Book Value/share: < $3
Earnings/share: $0.58
Dividends/share: $0.52

My Purchase Value = Book Value/share + Earnings/share + Dividends/share
$4.10 = 3.00 + .58 + .52

Current share price / My Purchase Value = $2.60 / $4.10 = .62
.62 < 1.0

This stock has room to grow.

The only problem with the model is that if DPS takes up a large portion of EPS then the company has very little room to grow and should be valued like a perpetual preferred i.e. Dividend / Required Rate of Return. With only .06 of accounting earnings per share (dividends use real cash not accrual) they may even have negative Free Cash Flow causing a decrease in share price, similar to a self liquidating company.

Remember this is a macro concept not a micro and may not be applicable to the company in question. Do your own research...

 

[paperfist]

I think the capital gains arguement is stupid... So, because you don't want to be taxed, you're going to sit still and make nothing?

During the time you held long for a few years, your stock probably crashed and rallied more than once. But sweet, you got to collect a ~4&#37; dividend per year... Oh wait, you can make that on a one day rally. Obviously some people don't and end up losing their money, but there's a chance.

And sweeeeeeeeet... Market finally crashing. But shite, I bought in a bit yesterday. Oh well, I was smart enough to be 75% in cash this time around🙂.

You're right. I've held 7-10 different stocks for over 1 year (most 4) and they have indeed crashed and rallied more then once. If I sold them all today I'd bank $2.5k profit.

I can make $100 short of that by generating $200 profit/month on quick buys/sells and the capital gains isn't going to be much different.

I'm not holding anything long term right now except some callable corporate bonds that are paying 11%

Europe is a mess right now, I don't want to take a hit.

I figure a thousand in a day (actually $1500,I was in and out of BRK.A too, and made another $500, was surprised, expected the website to tell me to call for the trade like the last time I bought BRK.A, but now eTrade will let you trade it online.) so $1500+ in a day is pretty good.

Better than having to work for it 🙂

I do have some GMCR, just a few thousand worth 🙁 And some DPK, holding the DPK to see what happens tomorrow... will likely sell it tomorrow, holding leveraged ETF's is sort of foolish...

Etrade is giving away a $200 iTunes GC is you make 30 trades in this quarter, so, I'm just playing anyway.

Also, I don't do options, I've read a bit about them, and took a $10K hit on them once, hate investments that bite you in the ass...

Seems like the way to go, I'm sure you'll get burned here or there but the same can be said going long term. I'm going to have to give etrade a try, I use Scottrade and it seems limited.

 

[chusteczka]

The only problem with the model is that if DPS takes up a large portion of EPS then the company has very little room to grow and should be valued like a perpetual preferred i.e. Dividend / Required Rate of Return. With only .06 of accounting earnings per share (dividends use real cash not accrual) they may even have negative Free Cash Flow causing a decrease in share price, similar to a self liquidating company.

Remember this is a macro concept not a micro and may not be applicable to the company in question. Do your own research...

Yes, you are correct. Your thoughts are appreciated because I am definitely not a professional and this is a risky stock in ways I am not familiar with. CIM is purely for 100% dividends with no growth opportunities. A year of dividend payouts should pay back the stock price at the current 18% level.

CIM has increased their dividend payouts from $0.17 in January to $0.48 in July, to $0.52 in October. The increased dividends could itself be an indicator of problems. Dividends are increasing but share price is dropping.

Here is an article that explains the situation well.
The Market's Scariest Highest Dividends

Honestly, this stock does provide reason to worry, and I do.

 

[Ms. DICKINSON]

Yes, you are correct. Your thoughts are appreciated because I am definitely not a professional and this is a risky stock in ways I am not familiar with. CIM is purely for 100&#37; dividends with no growth opportunities. A year of dividend payouts should pay back the stock price at the current 18% level.

CIM has increased their dividend payouts from $0.17 in January to $0.48 in July, to $0.52 in October. The increased dividends could itself be an indicator of problems. Dividends are increasing but share price is dropping.

Here is an article that explains the situation well.
The Market's Scariest Highest Dividends

Honestly, this stock does provide reason to worry, and I do.

My first few purchases were at the same time as yours @ 3.8x and $4.00 more than six months ago. Yeah the market panic is seen throughout and you could profit riding the fluctuation. I didn't have the gut to get in on recent dip (beginning of Oct). In a good week CIM will rise to 3$ easily. As long as the interest rate is low, they will keep paying high dividends.

edit: where did you get those dividend figures? Future dividends? The Oct payout was 13cents per share.

 

[Imp]

Pretty half-assed rally day. Italy and Greece still effed, seems like we're ignoring that for now.

 

[chusteczka]

edit: where did you get those dividend figures? Future dividends? The Oct payout was 13cents per share.

I do not know anything about future possible dividends. If I am doing something wrong, please let me know.

I got those figures from Yahoo Financials. This is where I keep my list of stocks to watch.

In a good week CIM will rise to 3$ easily. As long as the interest rate is low, they will keep paying high dividends.

I agree and hope for the same.


EDIT:
Maybe that Yahoo dividend is an accumulated total for the year of 2011??? That would explain why the dividends were $0.17 in January. I thought that $0.52 was for the quarter...

If my stated dividends have been wrong, I am truly sorry.

 

[Ms. DICKINSON]

I do not know anything about future possible dividends. If I am doing something wrong, please let me know.

I got those figures from Yahoo Financials. This is where I keep my list of stocks to watch.

Yea, they are incorrect. Companies only announce it near the ex-date but it's been under 15cents in recent quarters. I use Google Finance:

 

[Schfifty Five]

lol bought 5 more shares of aapl today (yeah I'm a high roller). Taking a stab at this whole low production of products as being an over reaction. we'll see. I'm usually wrong haha.

 

[chusteczka]

damn noob mistake. I feel low now. Thank you for correcting me.

Something felt wrong but I could not figure out what, especially with my attention being on work.

I just got excited when the price dropped.

 

[manly]

lol bought 5 more shares of aapl today (yeah I'm a high roller). Taking a stab at this whole low production of products as being an over reaction. we'll see. I'm usually wrong haha.

since I'm also a shareholder, couldn't you have jinxed another company? 😛