lazycatcat
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I posted a few weeks ago on SPU. I found this company while digging along the line of HANS. It is still very speculative but in case you want to take a look...
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精华 苦辣酸甜难书尽，成败得失笑谈中
- 主题发起人 加京游子
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[FONT=幼圆]If you are really serious about RMBS and follow each suite, I think it is probably worth shorting RMBS sometime. I don't recommend it but keeping an eye on it is probably worth while.
[FONT=幼圆]This settlement is hardly what is expected. Only $100 M per year for next 5 years with initial payment of $200 M. RMBS is hardly making any money yet its share price is at $2.2 B.
I thought Samsung was their big fish and settlement would be in the range of billions. Maybe Micron is the big fish ? If similar settlement is done with Micro and another company starts with H, RMBS is probably a dead fish pretty soon in the future.
I probably miss something but RMBS is the company that is a myth to me in terms of stock valuation.[/FONT]
Yes, the settlement today took me by a big surprise. Although the claimed damage was 4.3B and California has an automatic trebbling provision in commercial suits, the settlement said to me that RMBS was never very convinced in its claims to begin with itself. Following this, I expect Micron and Hynix to settle soon too. The upside potentials are now limited but downside risks back to 10 （Ｅｖｅｎ ５）for real. I will put it once my hands are free from BAC, WFC, LVS, and MGM. AMAG announced secondary offering AH and I will see where the offer is priced before closing that position.[/FONT]
lazycatcat
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Tomorrow
Republican just got one seat it needs to block any of Obama's legislations.
I won't be surprised if Wall Street hail the victory tomorrow, especially healthcare like HUM and financials. Plus, USD may bounce back too.
I guess socialism is difficult to find a place in US even after such a historic crisis ...
Republican just got one seat it needs to block any of Obama's legislations.
I won't be surprised if Wall Street hail the victory tomorrow, especially healthcare like HUM and financials. Plus, USD may bounce back too.
I guess socialism is difficult to find a place in US even after such a historic crisis ...
Republican just got one seat it needs to block any of Obama's legislations.
I won't be surprised if Wall Street hail the victory tomorrow, especially healthcare like HUM and financials. Plus, USD may bounce back too.
I guess socialism is difficult to find a place in US even after such a historic crisis ...
It is a heavy ER day and I expect politics to take a back seat. It was a good win for the republican and bad for the demo but Obama is their elected president. Throughout the history, Americans always rally behind their presidents for key decisions. Personally, I don't give too much weight to the impact this vote may exert on the market amid heavy-weight ERs. We shall see.
IBM reported good results yesterday but failed to ignite the market in AH trading. Could this be Last Friday's repeat? I feel it is in the making: INTC reported good results but the market tanked with JPM's mixed bag; IBM reported good results and we will see how BAC's and WFC's results look like. A tripple-digit loss would be good for my puts.
BAC ER out: 4Q loss of 0.6 per share vs estimate loss of 0.52 per share
DOW futures in the red of 53 as of 7:16am. BAC $16 is in danger in early PM trading.
WFC ER to come out at 8am, estimate loss of 0.01 per share. Let's see what it has in the bag.
DOW futures in the red of 53 as of 7:16am. BAC $16 is in danger in early PM trading.
WFC ER to come out at 8am, estimate loss of 0.01 per share. Let's see what it has in the bag.
The market animal is simply irrational in the short term
I was right with BAC ER but Mr. Market simply wanted me to lose money today; I was wrong with WFC ER and Mr. Market also wanted me to lose money. Both reactions took me completely by surprises. After reading WFC ER, I panicked out of WFC puts at the open with huge losses and it turned out that that was a deadly wrong move. Given BAC ER, I decided to hold and it turned out that that was a deadly wrong move too.
Being right on the overall market and with BAC ER, I am very pissed at losing big money today but that is life in the market. What is hard to swallow is being mostly right in holding puts positions and losing money in a big down day. No rational behaviour to predict in the short run and today was one of those bad bad days for me.
Take a deep breath and live to fight for another day.
I was right with BAC ER but Mr. Market simply wanted me to lose money today; I was wrong with WFC ER and Mr. Market also wanted me to lose money. Both reactions took me completely by surprises. After reading WFC ER, I panicked out of WFC puts at the open with huge losses and it turned out that that was a deadly wrong move. Given BAC ER, I decided to hold and it turned out that that was a deadly wrong move too.
Being right on the overall market and with BAC ER, I am very pissed at losing big money today but that is life in the market. What is hard to swallow is being mostly right in holding puts positions and losing money in a big down day. No rational behaviour to predict in the short run and today was one of those bad bad days for me.
Take a deep breath and live to fight for another day.
lazycatcat
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I am a bit surprised that you suffered huge loss today. What is the strike prices of your puts ?
It is always difficult to do short-term puts. I think writing puts shall server you far better as far as three big banks are concerned. In your particular case, steady in-flow of investable cash, long-term experinece with markets, appetite for risks, it would be very profitable to adopt a mini-Buffett like model.
By the way, Buffett didn't earn his billions by buying a few companies like Coke and then one day reaped 10 times gains. This is Fischer and Peter Lynch's model. Not Buffett's model. Buffett's model is simpler but far smarter. Watsa, Fairfax Financials, is able to duplicate the model very successfully.
I think with today's option market, an individual has high probability of duplicating the model too, albeit at micro scale (comparing to billions of dollars)...
It is always difficult to do short-term puts. I think writing puts shall server you far better as far as three big banks are concerned. In your particular case, steady in-flow of investable cash, long-term experinece with markets, appetite for risks, it would be very profitable to adopt a mini-Buffett like model.
By the way, Buffett didn't earn his billions by buying a few companies like Coke and then one day reaped 10 times gains. This is Fischer and Peter Lynch's model. Not Buffett's model. Buffett's model is simpler but far smarter. Watsa, Fairfax Financials, is able to duplicate the model very successfully.
I think with today's option market, an individual has high probability of duplicating the model too, albeit at micro scale (comparing to billions of dollars)...
I am a bit surprised that you suffered huge loss today. What is the strike prices of your puts ?
It is always difficult to do short-term puts. I think writing puts shall server you far better as far as three big banks are concerned. In your particular case, steady in-flow of investable cash, long-term experinece with markets, appetite for risks, it would be very profitable to adopt a mini-Buffett like model.
By the way, Buffett didn't earn his billions by buying a few companies like Coke and then one day reaped 10 times gains. This is Fischer and Peter Lynch's model. Not Buffett's model. Buffett's model is simpler but far smarter. Watsa, Fairfax Financials, is able to duplicate the model very successfully.
I think with today's option market, an individual has high probability of duplicating the model too, albeit at micro scale (comparing to billions of dollars)...
It has been one of those days, my friend. 喝白水也塞牙! I would not have suffered losses if I had not panicked out of WFC puts at the open. After seeing a surprise profit of 0.08 rather than a loss of 0.01 and the pps spiking over 29.20 around 8:30am when I left the house for work, I entered my market order at 9:35am and caught the only runup of the day, selling at the absolute bottom. My BAC puts are for the 17 strike and WFC for 28. I executed badly and paid dearly. I really wanted to put BAC and WFC last Thursday when I exited BAC calls but hesitated to wait for JPM's ER confirmation. So far, I have learned from my own experience that if I had the idea, I should immediately act on it. Hesitation has caused me numerous great entry opportunities.
I don't like writing puts for 2 reasons: 1) capital requirement is rather burdensome; and 2) upside potentials are capped. If I feel bullish about an issue, I simply own calls out right or puts otherwise. RMBS was my first hedge and it turned out a wash. It all depends on personal perspective.
You keep mentioning those big names you have studied. I wish you shall be one of them some day. As for myself, I am not even full-time doing the market, leaving alone learning from those heavy hitters. I have lost quite a bit of my own hard-earned money over ELN and DNDN (SVA's big loss last year was on the house). I also made three million-dollar blunders last year selling DNDN, BAC and MGM calls prematurely. My first objective is to fully utilize the capital loss provisions, which I more than did last year but the last 3 months dug me in a big hole again by my own being stubbornly stupid. I foresee myself repeating the first 6 months of last year (March to September, during which I could not even lose one hand) this year by going mostly puts in the first half of the year. I need to get a good handle from the get go. Today's end results are very discouraging but it is only one bad day. Shit happens! After that, I will take it from there, one day at a time. The ultimate objective is to earn an early retirement and that is all. To give you a historical perspective, Jesse Livermore's heavy short positions were trapped for nearly 1/2 year in 1929 before the final breakdown materialized, in which he profited in the billions in one day. Markets tanked upon INTC and IBM great ERs, which I read as tea leaves for my puts positions.
I have turned from being a stubborn bull last year (and lost big in the last 3 months) to a mostly bear for the first 1/2 this year. Whatever I have put in is what I can afford to lose although I intend to turn them into huge profits. Never under-estimate a plunger, especially when it comes to options. I remain hopeful for a big hit as long as my broker account remains active. My today's loss was chiefly because of lack of conviction in holding WFC. By the way, I added to my MGM and BAC puts today. My livelihood doesn't depend on my market results and I am no risk averse.
lazycatcat
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I really don't know if it is a good idea to short the market at current level. After all, S&P 500 is at a level lower than before LEH was broke.
The business climate in US was very bad till yesterday. Demo's attack on big banks is really ugly. Yesterday's MS election is a significant event.
It marks the continuation of free market in US. The trend was disrupted by the financial crisis and ultra conservatism of Republicans. With moderate Republicans coming back, US should find its fighting spirits again (versus current whining spirits).
The business climate in US was very bad till yesterday. Demo's attack on big banks is really ugly. Yesterday's MS election is a significant event.
It marks the continuation of free market in US. The trend was disrupted by the financial crisis and ultra conservatism of Republicans. With moderate Republicans coming back, US should find its fighting spirits again (versus current whining spirits).
lazycatcat
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Buffett's CNBC talk today
Just part of the talk on equity
JOE: Warren, we've come back -- the market's come back a long way, as you know. And you've commented, and I know on any given day you're not going to say whether it's expensive or cheap or whatever. But have we fixed enough of what got us into the mess to warrant being back at 10,700, or is this a bit of a bubble from all of the Fed accommodations and in all the things that the extraordinary measures we've taken? Do you have a feeling for whether this is real and supported?
BUFFETT: Well, I have no feeling at all, you know. As you've said, I don't know where the market's going to be in a day, week, month or year. I do know that if I had a choice between holding cash or 30-year bonds or owning equities, I wouldn't hesitate for a second to own equities. You know, the market is up quite a bit from march. But it's down a lot from three or four years ago. And if I were going to buy a farm, Joe, and somebody said, well, with great certainty, they said, you know, this is going to be a terrible year in terms of weather, I wouldn't say, well, I'll only pay $1,100 an acre, but I'll pay $1,500 an acre if you'll give me a favorable forecast if I am going to own a farm for 50 years. I am going to have a few lousy years in terms of weather. I'll have a few good years and a lot of pretty good years. And the idea that you try to time purchases based on what you think business is going to do in the next year or two, I think that's the greatest mistake that investors make because it's always uncertain. People say it's a time of uncertainty. It was uncertain on September 10th, 2001, people just didn't know it. It's uncertain every single day. So take uncertainty as part of being involved in investment at all. But uncertainty can be your friend. I mean, when people are scared, they pay less for things. We try to price. We don't try to time at all. And pricing, I would rather own equities today --
Just part of the talk on equity
JOE: Warren, we've come back -- the market's come back a long way, as you know. And you've commented, and I know on any given day you're not going to say whether it's expensive or cheap or whatever. But have we fixed enough of what got us into the mess to warrant being back at 10,700, or is this a bit of a bubble from all of the Fed accommodations and in all the things that the extraordinary measures we've taken? Do you have a feeling for whether this is real and supported?
BUFFETT: Well, I have no feeling at all, you know. As you've said, I don't know where the market's going to be in a day, week, month or year. I do know that if I had a choice between holding cash or 30-year bonds or owning equities, I wouldn't hesitate for a second to own equities. You know, the market is up quite a bit from march. But it's down a lot from three or four years ago. And if I were going to buy a farm, Joe, and somebody said, well, with great certainty, they said, you know, this is going to be a terrible year in terms of weather, I wouldn't say, well, I'll only pay $1,100 an acre, but I'll pay $1,500 an acre if you'll give me a favorable forecast if I am going to own a farm for 50 years. I am going to have a few lousy years in terms of weather. I'll have a few good years and a lot of pretty good years. And the idea that you try to time purchases based on what you think business is going to do in the next year or two, I think that's the greatest mistake that investors make because it's always uncertain. People say it's a time of uncertainty. It was uncertain on September 10th, 2001, people just didn't know it. It's uncertain every single day. So take uncertainty as part of being involved in investment at all. But uncertainty can be your friend. I mean, when people are scared, they pay less for things. We try to price. We don't try to time at all. And pricing, I would rather own equities today --
I really don't know if it is a good idea to short the market at current level. After all, S&P 500 is at a level lower than before LEH was broke.
The business climate in US was very bad till yesterday. Demo's attack on big banks is really ugly. Yesterday's MS election is a significant event.
It marks the continuation of free market in US. The trend was disrupted by the financial crisis and ultra conservatism of Republicans. With moderate Republicans coming back, US should find its fighting spirits again (versus current whining spirits).
You sound like a convicted bull. I will mostly be a bear until September, which actually goes to next Jan. for Q4ER.
lazycatcat
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On another financial crisis and JPM's CEO Jamie Dimon
JMP probably not a good target for puts based on WEB's comments
CARL: Warren, there are those out there who argue that the economy is being held together in a way with tape and glue,right? With NBS purchases and stimulus measures and cash for clunkers. Bill Dudley of the New York Fed is out this morning and he says the prospect of another financial collapse, in his words, sort of a reiteration of what he said before, is extremely remote. Do we have the cushion to withstand another big shock or would you side with what Dudley is saying this morning?BUFFETT: Well, I think we have the conditions in place to take care of any normal shocks. If you talk about some, you know, major terrorist activity that is carried off or something, I mean, there are exogenous factors that could cause problems now just like they could have five or ten or 20 years ago. And we didn't know them ahead of time. But if you're talking about a world where there is nothing of an extraordinary nature, I think the chances of a second financial panic are extremely low.
BECKY: Warren, when you talk, people listen and people are watching right now. In fact, Jamie Dimon wrote in. He is watching. He says he agrees with most of what you're saying. He wrote in when you were talking about Washington.
BUFFETT: I feel good. Jamie is a very smart guy and he has run a bank the right way.
JMP probably not a good target for puts based on WEB's comments
CARL: Warren, there are those out there who argue that the economy is being held together in a way with tape and glue,right? With NBS purchases and stimulus measures and cash for clunkers. Bill Dudley of the New York Fed is out this morning and he says the prospect of another financial collapse, in his words, sort of a reiteration of what he said before, is extremely remote. Do we have the cushion to withstand another big shock or would you side with what Dudley is saying this morning?BUFFETT: Well, I think we have the conditions in place to take care of any normal shocks. If you talk about some, you know, major terrorist activity that is carried off or something, I mean, there are exogenous factors that could cause problems now just like they could have five or ten or 20 years ago. And we didn't know them ahead of time. But if you're talking about a world where there is nothing of an extraordinary nature, I think the chances of a second financial panic are extremely low.
BECKY: Warren, when you talk, people listen and people are watching right now. In fact, Jamie Dimon wrote in. He is watching. He says he agrees with most of what you're saying. He wrote in when you were talking about Washington.
BUFFETT: I feel good. Jamie is a very smart guy and he has run a bank the right way.
lazycatcat
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Buffett on WFC today (CNBC)
BUFFETT: Well, my guess is that the revenue and all of that is more or less like I expected. I mean, Wells, right straight through this period has done pretty much exactly what they said they would do and they've made money consistently through it. They've run into much larger losses than anybody anticipated three or four years ago but they can handle them very easily. Last year we talked about 'em having 40 billion of pre-provision income in 2009, and you know, they had it, and that easily handles 20 billion, roughly, of losses.
BECKY: They also issued a lot more shares though, to pay back the government. What did you think of that?BUFFETT: I didn't like it. (Laughs.) No, I mean, the government forced them to issue the shares. The government's done a lot of good things for the economy and net I'm a beneficiary and Berkshire Hathaway is a beneficiary of the things overall they've done. But they cost us real money at Wells Fargo.
JOE KERNEN: Berkshire could be a Dow component. I don't - don't stop at the S&P. We'll get rid of Alcoa or something, ah, I know - that would be great. Hey Warren, the revenue number on Wells was 22.7 and the estimate was I think 21.9. So unlike any of the other banks, I think that's the first one, I mean I didn't look at US Bancorp, but the major ones that we reported on, this is the first one that's beat on the revenue and it was also a profit of eight cents with the TARP repayment, even though the Street was looking for a loss of a penny. So, seems to be a little bit better and the stock is now 29, it's almost up a dollar at this point.
BUFFETT: Wells runs a terrific bank. They're a very customer-oriented bank. They're almost like thousands of community banks when you get right down to it. They have a lot of services they sell for each customer. So their revenues are going to come through. And actually when the stress test was done in the spring of last year, that's where the people evaluating them were way off, was on the revenue number. Wells did not disagree with them on the possible losses number, but they felt that the people just didn't understand the revenue potential, that were looking at them, and I agreed with them. But unfortunately they had to issue a lot of shares in conjunction with that stress test. I don't think Wells was ever going to disappoint on revenue. They have a lot of customers and those customers do a lot of business with them.
BUFFETT: Well, my guess is that the revenue and all of that is more or less like I expected. I mean, Wells, right straight through this period has done pretty much exactly what they said they would do and they've made money consistently through it. They've run into much larger losses than anybody anticipated three or four years ago but they can handle them very easily. Last year we talked about 'em having 40 billion of pre-provision income in 2009, and you know, they had it, and that easily handles 20 billion, roughly, of losses.
BECKY: They also issued a lot more shares though, to pay back the government. What did you think of that?BUFFETT: I didn't like it. (Laughs.) No, I mean, the government forced them to issue the shares. The government's done a lot of good things for the economy and net I'm a beneficiary and Berkshire Hathaway is a beneficiary of the things overall they've done. But they cost us real money at Wells Fargo.
JOE KERNEN: Berkshire could be a Dow component. I don't - don't stop at the S&P. We'll get rid of Alcoa or something, ah, I know - that would be great. Hey Warren, the revenue number on Wells was 22.7 and the estimate was I think 21.9. So unlike any of the other banks, I think that's the first one, I mean I didn't look at US Bancorp, but the major ones that we reported on, this is the first one that's beat on the revenue and it was also a profit of eight cents with the TARP repayment, even though the Street was looking for a loss of a penny. So, seems to be a little bit better and the stock is now 29, it's almost up a dollar at this point.
BUFFETT: Wells runs a terrific bank. They're a very customer-oriented bank. They're almost like thousands of community banks when you get right down to it. They have a lot of services they sell for each customer. So their revenues are going to come through. And actually when the stress test was done in the spring of last year, that's where the people evaluating them were way off, was on the revenue number. Wells did not disagree with them on the possible losses number, but they felt that the people just didn't understand the revenue potential, that were looking at them, and I agreed with them. But unfortunately they had to issue a lot of shares in conjunction with that stress test. I don't think Wells was ever going to disappoint on revenue. They have a lot of customers and those customers do a lot of business with them.
