Going long on battered stocks

[Eugene]

the idiotic FOMC appears to have chosen the “print money” approach to this economic crisis (and to the larger problem of America’s excessive foreign debt)

Correction.

FOMC chose to appear to print their way out of this economic crisis.

The runup of gold is not justified by the amount of money that was printed thus far (which is basically zero).

Furthermore, there are some substantial limitations to how much the Fed CAN print unless ECB agrees to print money too which they seem to be reluctant to do.

Finally, global recession will dampen the demand for gold jewelry. Especially in China and India, and jewelry demand is something like 60-70% of total gold demand.

I think it’s a good time to start reducing your exposure to gold. Today it’s at $905. If it hits $1000, I’m going to cash out completely.

[Duck]

It sounds like you’re asking which beaten down stock to buy versus some of the standouts which I continue to hold including BRK and DE. I could see adding to BRK-b at this point as it’s currently oversold. Buffet has bet on the increase in commodity prices (specifically corn and wheat which needs to be tranported by rail) by buying railroads and his recent purchase of Marmon reinforces that long term trend so those kinds of companies are intriguing.

At some point homebuilders and financials are going to be enticing as well as retailers like HD, but it’s still too early IMO unless you have some insight into which homebuilders will survive and which financial has really fessed up in terms of their CDO exposure. I’m concerned that just about all the big financials except GS seem to be looking for more capital which leads me to believe they are worse off than anyone thinks. The only reason to raise funds when your stock is so depressed is because you must be desperate. Citi reports tomorrow and the rumor is that they are going to write down ANOTHER $24 Billion. The good thing about these guys having new CEO’s is that they should quickly write off everything so they can start from scratch. If C has a huge write off and the stock doesn’t budge then maybe financials are near bottom. I’ll still wait and catch the rise versus looking for an absolute bottom.

One thing that I haven’t seen discussed here is that the 10 year yield and LIBOR are both plummeting which at some point should translate into lower mortgage rates and easier resets for those with adjustables. Jumbos haven’t really budged, but I expect that to change once the credit crunch eases. Bill Gross says the FF rate is going to 3%.

[Duck]

It sounds like you’re asking which beaten down stock to buy versus some of the standouts which I continue to hold including BRK and DE. I could see adding to BRK-b at this point as it’s currently oversold. Buffet has bet on the increase in commodity prices (specifically corn and wheat which needs to be tranported by rail) by buying railroads and his recent purchase of Marmon reinforces that long term trend so those kinds of companies are intriguing.

At some point homebuilders and financials are going to be enticing as well as retailers like HD, but it’s still too early IMO unless you have some insight into which homebuilders will survive and which financial has really fessed up in terms of their CDO exposure. I’m concerned that just about all the big financials except GS seem to be looking for more capital which leads me to believe they are worse off than anyone thinks. The only reason to raise funds when your stock is so depressed is because you must be desperate. Citi reports tomorrow and the rumor is that they are going to write down ANOTHER $24 Billion. The good thing about these guys having new CEO’s is that they should quickly write off everything so they can start from scratch. If C has a huge write off and the stock doesn’t budge then maybe financials are near bottom. I’ll still wait and catch the rise versus looking for an absolute bottom.

One thing that I haven’t seen discussed here is that the 10 year yield and LIBOR are both plummeting which at some point should translate into lower mortgage rates and easier resets for those with adjustables. Jumbos haven’t really budged, but I expect that to change once the credit crunch eases. Bill Gross says the FF rate is going to 3%.

[Duck]

It sounds like you’re asking which beaten down stock to buy versus some of the standouts which I continue to hold including BRK and DE. I could see adding to BRK-b at this point as it’s currently oversold. Buffet has bet on the increase in commodity prices (specifically corn and wheat which needs to be tranported by rail) by buying railroads and his recent purchase of Marmon reinforces that long term trend so those kinds of companies are intriguing.

At some point homebuilders and financials are going to be enticing as well as retailers like HD, but it’s still too early IMO unless you have some insight into which homebuilders will survive and which financial has really fessed up in terms of their CDO exposure. I’m concerned that just about all the big financials except GS seem to be looking for more capital which leads me to believe they are worse off than anyone thinks. The only reason to raise funds when your stock is so depressed is because you must be desperate. Citi reports tomorrow and the rumor is that they are going to write down ANOTHER $24 Billion. The good thing about these guys having new CEO’s is that they should quickly write off everything so they can start from scratch. If C has a huge write off and the stock doesn’t budge then maybe financials are near bottom. I’ll still wait and catch the rise versus looking for an absolute bottom.

One thing that I haven’t seen discussed here is that the 10 year yield and LIBOR are both plummeting which at some point should translate into lower mortgage rates and easier resets for those with adjustables. Jumbos haven’t really budged, but I expect that to change once the credit crunch eases. Bill Gross says the FF rate is going to 3%.

[Duck]

It sounds like you’re asking which beaten down stock to buy versus some of the standouts which I continue to hold including BRK and DE. I could see adding to BRK-b at this point as it’s currently oversold. Buffet has bet on the increase in commodity prices (specifically corn and wheat which needs to be tranported by rail) by buying railroads and his recent purchase of Marmon reinforces that long term trend so those kinds of companies are intriguing.

At some point homebuilders and financials are going to be enticing as well as retailers like HD, but it’s still too early IMO unless you have some insight into which homebuilders will survive and which financial has really fessed up in terms of their CDO exposure. I’m concerned that just about all the big financials except GS seem to be looking for more capital which leads me to believe they are worse off than anyone thinks. The only reason to raise funds when your stock is so depressed is because you must be desperate. Citi reports tomorrow and the rumor is that they are going to write down ANOTHER $24 Billion. The good thing about these guys having new CEO’s is that they should quickly write off everything so they can start from scratch. If C has a huge write off and the stock doesn’t budge then maybe financials are near bottom. I’ll still wait and catch the rise versus looking for an absolute bottom.

One thing that I haven’t seen discussed here is that the 10 year yield and LIBOR are both plummeting which at some point should translate into lower mortgage rates and easier resets for those with adjustables. Jumbos haven’t really budged, but I expect that to change once the credit crunch eases. Bill Gross says the FF rate is going to 3%.

[Duck]

It sounds like you’re asking which beaten down stock to buy versus some of the standouts which I continue to hold including BRK and DE. I could see adding to BRK-b at this point as it’s currently oversold. Buffet has bet on the increase in commodity prices (specifically corn and wheat which needs to be tranported by rail) by buying railroads and his recent purchase of Marmon reinforces that long term trend so those kinds of companies are intriguing.

At some point homebuilders and financials are going to be enticing as well as retailers like HD, but it’s still too early IMO unless you have some insight into which homebuilders will survive and which financial has really fessed up in terms of their CDO exposure. I’m concerned that just about all the big financials except GS seem to be looking for more capital which leads me to believe they are worse off than anyone thinks. The only reason to raise funds when your stock is so depressed is because you must be desperate. Citi reports tomorrow and the rumor is that they are going to write down ANOTHER $24 Billion. The good thing about these guys having new CEO’s is that they should quickly write off everything so they can start from scratch. If C has a huge write off and the stock doesn’t budge then maybe financials are near bottom. I’ll still wait and catch the rise versus looking for an absolute bottom.

One thing that I haven’t seen discussed here is that the 10 year yield and LIBOR are both plummeting which at some point should translate into lower mortgage rates and easier resets for those with adjustables. Jumbos haven’t really budged, but I expect that to change once the credit crunch eases. Bill Gross says the FF rate is going to 3%.

[nostradamus]

Thanks Allan that’s a nice article and I was already looking at several of those picks so now I feel I’m on the right track.

How do you feel about American auto makers? They have been getting slammed even without the subprime-related market mashings. They are pretty much all trading at or near their 5-year low and most people wouldn’t touch them. My crazy theory is that with Japanese auto makers opening manufacturing centers in the U.S. either domestic workers will become enriched with Japanese auto-maker skills or Japanese auto makers will merge/acquire U.S. companies. This is a totally off-the-cuff thought with no data whatsoever supporting it other than my experience with cars.

Another pick I like is Blockbuster (BBI) and other online movie rental businesses. Walt Disney really made it big during the great depression with his movies, showing that even in down times people need an escape (which we might call denial) so they go for movies and entertainment. BBI on Jan 9th announced an increased focus on digital media downloads, and I think they are in a better position than Netflix is because of BBI’s recent aquisition of Movielink. One big threat is Apple which has started providing movies thru their iTunes store (but they’re expensive). And now we can watch movies on our phones and iPods and so on.

Anyhow, those are some of the things I plan on scooping up on D-Day. JNJ has always been a great company and I look forward to grabbing some of that too.

[nostradamus]

Thanks Allan that’s a nice article and I was already looking at several of those picks so now I feel I’m on the right track.

How do you feel about American auto makers? They have been getting slammed even without the subprime-related market mashings. They are pretty much all trading at or near their 5-year low and most people wouldn’t touch them. My crazy theory is that with Japanese auto makers opening manufacturing centers in the U.S. either domestic workers will become enriched with Japanese auto-maker skills or Japanese auto makers will merge/acquire U.S. companies. This is a totally off-the-cuff thought with no data whatsoever supporting it other than my experience with cars.

Another pick I like is Blockbuster (BBI) and other online movie rental businesses. Walt Disney really made it big during the great depression with his movies, showing that even in down times people need an escape (which we might call denial) so they go for movies and entertainment. BBI on Jan 9th announced an increased focus on digital media downloads, and I think they are in a better position than Netflix is because of BBI’s recent aquisition of Movielink. One big threat is Apple which has started providing movies thru their iTunes store (but they’re expensive). And now we can watch movies on our phones and iPods and so on.

Anyhow, those are some of the things I plan on scooping up on D-Day. JNJ has always been a great company and I look forward to grabbing some of that too.

[nostradamus]

Thanks Allan that’s a nice article and I was already looking at several of those picks so now I feel I’m on the right track.

How do you feel about American auto makers? They have been getting slammed even without the subprime-related market mashings. They are pretty much all trading at or near their 5-year low and most people wouldn’t touch them. My crazy theory is that with Japanese auto makers opening manufacturing centers in the U.S. either domestic workers will become enriched with Japanese auto-maker skills or Japanese auto makers will merge/acquire U.S. companies. This is a totally off-the-cuff thought with no data whatsoever supporting it other than my experience with cars.

Another pick I like is Blockbuster (BBI) and other online movie rental businesses. Walt Disney really made it big during the great depression with his movies, showing that even in down times people need an escape (which we might call denial) so they go for movies and entertainment. BBI on Jan 9th announced an increased focus on digital media downloads, and I think they are in a better position than Netflix is because of BBI’s recent aquisition of Movielink. One big threat is Apple which has started providing movies thru their iTunes store (but they’re expensive). And now we can watch movies on our phones and iPods and so on.

Anyhow, those are some of the things I plan on scooping up on D-Day. JNJ has always been a great company and I look forward to grabbing some of that too.

[nostradamus]

Thanks Allan that’s a nice article and I was already looking at several of those picks so now I feel I’m on the right track.

How do you feel about American auto makers? They have been getting slammed even without the subprime-related market mashings. They are pretty much all trading at or near their 5-year low and most people wouldn’t touch them. My crazy theory is that with Japanese auto makers opening manufacturing centers in the U.S. either domestic workers will become enriched with Japanese auto-maker skills or Japanese auto makers will merge/acquire U.S. companies. This is a totally off-the-cuff thought with no data whatsoever supporting it other than my experience with cars.

Another pick I like is Blockbuster (BBI) and other online movie rental businesses. Walt Disney really made it big during the great depression with his movies, showing that even in down times people need an escape (which we might call denial) so they go for movies and entertainment. BBI on Jan 9th announced an increased focus on digital media downloads, and I think they are in a better position than Netflix is because of BBI’s recent aquisition of Movielink. One big threat is Apple which has started providing movies thru their iTunes store (but they’re expensive). And now we can watch movies on our phones and iPods and so on.

Anyhow, those are some of the things I plan on scooping up on D-Day. JNJ has always been a great company and I look forward to grabbing some of that too.

[nostradamus]

Thanks Allan that’s a nice article and I was already looking at several of those picks so now I feel I’m on the right track.

How do you feel about American auto makers? They have been getting slammed even without the subprime-related market mashings. They are pretty much all trading at or near their 5-year low and most people wouldn’t touch them. My crazy theory is that with Japanese auto makers opening manufacturing centers in the U.S. either domestic workers will become enriched with Japanese auto-maker skills or Japanese auto makers will merge/acquire U.S. companies. This is a totally off-the-cuff thought with no data whatsoever supporting it other than my experience with cars.

Another pick I like is Blockbuster (BBI) and other online movie rental businesses. Walt Disney really made it big during the great depression with his movies, showing that even in down times people need an escape (which we might call denial) so they go for movies and entertainment. BBI on Jan 9th announced an increased focus on digital media downloads, and I think they are in a better position than Netflix is because of BBI’s recent aquisition of Movielink. One big threat is Apple which has started providing movies thru their iTunes store (but they’re expensive). And now we can watch movies on our phones and iPods and so on.

Anyhow, those are some of the things I plan on scooping up on D-Day. JNJ has always been a great company and I look forward to grabbing some of that too.

[Running Bear]

Gents,

I think you are looking at this period with the wrong mentality. We are in pretty uncharted territory and until we see some things wash through the current system I would be thinking in terms of wealth preservation not wealth accumulation. There will be plenty of time to earn money on this downturn but wait for the bottom to show itself and then get in. Missing 10% on the bottom is better than getting in 30% early. I found a chart of the Dow around the 1929 crash with comments from “experts” of the time. If you are going to do some knife catching in the current market play with money that you can throw away. Think of it as buying lottery tickets.
http://www.gold-eagle.com/editorials_01/seymour062001.html

My2Cents

[Running Bear]

Gents,

I think you are looking at this period with the wrong mentality. We are in pretty uncharted territory and until we see some things wash through the current system I would be thinking in terms of wealth preservation not wealth accumulation. There will be plenty of time to earn money on this downturn but wait for the bottom to show itself and then get in. Missing 10% on the bottom is better than getting in 30% early. I found a chart of the Dow around the 1929 crash with comments from “experts” of the time. If you are going to do some knife catching in the current market play with money that you can throw away. Think of it as buying lottery tickets.
http://www.gold-eagle.com/editorials_01/seymour062001.html

My2Cents

[Running Bear]

Gents,

I think you are looking at this period with the wrong mentality. We are in pretty uncharted territory and until we see some things wash through the current system I would be thinking in terms of wealth preservation not wealth accumulation. There will be plenty of time to earn money on this downturn but wait for the bottom to show itself and then get in. Missing 10% on the bottom is better than getting in 30% early. I found a chart of the Dow around the 1929 crash with comments from “experts” of the time. If you are going to do some knife catching in the current market play with money that you can throw away. Think of it as buying lottery tickets.
http://www.gold-eagle.com/editorials_01/seymour062001.html

My2Cents

[Running Bear]

Gents,

I think you are looking at this period with the wrong mentality. We are in pretty uncharted territory and until we see some things wash through the current system I would be thinking in terms of wealth preservation not wealth accumulation. There will be plenty of time to earn money on this downturn but wait for the bottom to show itself and then get in. Missing 10% on the bottom is better than getting in 30% early. I found a chart of the Dow around the 1929 crash with comments from “experts” of the time. If you are going to do some knife catching in the current market play with money that you can throw away. Think of it as buying lottery tickets.
http://www.gold-eagle.com/editorials_01/seymour062001.html

My2Cents

[Author]

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