- This topic has 130 replies, 31 voices, and was last updated 14 years, 7 months ago by Anonymous.
June 6, 2006 at 8:12 AM #6680
Now you get to see first hand how wealth is created and how the knowledge of an overpriced housing market that is starting to cool can be transalted into cash.
I am now heavily SHORT the stock LEND. This means I’m interested in a falling share price, so that I can buy back the shares at a future price much cheaper then they are now and pocket the difference.
I expect to make several hundred thousand from my shorting activities in this stock alone.
Watch and learn.June 6, 2006 at 9:25 AM #26304
This is a “sophisticated” trade? The short percentage of the float was 41.6% a/o May 10th.
Here we have a local (San Diego)company (how cute, convenient, and lazy) with nearly 50% of the shares available to purchase, already sold short.
Pigs get slaughtered…so do sheople.
I would encourage the readers here to be very careful about following anyone’s strategies (mine included, as this trade could work out wonderfully well..who knows?) especially those who claim to be “sophisticated investors” and then throw out a strategy any simplot could have picked(and has…41.6% short ALREADY) on his/her own:
Let’s see…company does only sub-prime lending..lots of ARM resets ahead..think I’ll throw my dart at this one.
If it seems too easy..it is. Remember, there are a LOT of institutions out there who monitor stocks like this every second of every day. Be prepared to lose your ASS going short. Look into buying options if you are that bearish (your downside risk/loss exposure is limited) instead.
Be careful out there.June 6, 2006 at 9:35 AM #26305LickitysplitParticipant
Perhaps someone could point in the direction of some good online tutorials on practical techniques for investing on a falling value and the risks associated with each method? This would be quite beneficial for those of us who are currently rather unsophisticated in our investing but would like to improve.
Thanks in advance 😉June 6, 2006 at 9:45 AM #26306AnonymousGuest
LEND may be a good short, but right now is a little too early for adding more to this in my opinion. And as another responder mentioned, the short interest is very high on this one.
I am looking at NEW for a future short prospect. NEW is another sub-prime lender and has been very resilient to the bad real estate news. It also has a much smaller short interest. Once it starts trending down (wait for it to drop below 50day moving average) I think it will be a good short play because it has a long way to drop.
But if you really want to take advantage of the real estate crash, the obvious play right now is to short home builder stocks. They have been clearly in a downtrend for some time and they still have a LONG, LONG way to fall. There is also a new homebuilder ETF that you can short called XHB, seems to be tracking the homebuilder index.June 6, 2006 at 9:48 AM #26308
What we really ought to do is form an investment club of our own…for FUN (first) and PROFIT (second). I’ve got ties from my old days as a Wall Street financial consultant to a full-service broker (friend) who discounts my trades to chump change.
Anyone interested in forming an investment club? We could go small $$ ($500 to $1000 per club member) and all get together wearing our Mr. Housing Bubble T-shirts once a month/quarter.
Just a thought. I use to work with a couple of investment clubs and they were mostly social clubs. We’ll not get wealthy doing this but it could be fun.June 6, 2006 at 9:50 AM #26309lindismithParticipant
I’m in. I’d love to meet some of the people on this forum!June 6, 2006 at 9:53 AM #26310
Hey bubble dude, you jealous for attention or something?
You criticize my idea but offer NOTHING of your own. In my opinion, that is the definition of a loser and probably explains why you aren’t wealthy yourself. Most people who are not wealthy criticize those who are because it makes them feel better. I advise you to get over it.
I have given a real time idea that everyone will be able to follow and see how it plays out, what have you shared with this forum, but a bunch of the same useless re-hashed drivel?
Obviously, my frustration with the whole housing bubble is that its a very crowded trade. Both smart money and dumb money are on the same side, which makes the outcome often different then one might expect.
Also, a quick lesson for you, sophisticated doesn’t mean complex. Warren Buffett made his wealth with very simple trades that any “simplot” could have seen at the time.
Finally, as you obviously are ignorant in your historical knowledge of the stock market, the vast majority of stocks with large short-interest end up with major declines. There are a few that do qet squeezed and they make all the headlines and create fear amongst the retail investor (aka, the dumb money.)
Is that a valid risk for LEND? Certainly, I’m not blind to the risks, but I will hedge any upward momentum with short term calls. LEND is a very liquid stock and unless they display some operating momentum, in my opinion, a squeeze is unlikely.
Instead of bashing me, why don’t you go see if you can contribute something of value.June 6, 2006 at 9:57 AM #26312
HAHAHAHA…Your “old days” as a Wall Street financial consultant seem to have paid off handsomely….Really, you think $500 would be enough to get started? Wow, that’s some big bucks there kiddo.June 6, 2006 at 10:10 AM #26314
If we get several participants (many of whom are in their twenties and probably not flush with thousands of dollars) we could start up with very little capital.
RightSide-you are certainly welcome to join in (assuming you can get enough people to toss coins into your roadside cup to meet our minimum funding standards).
Good luck with that trade (paper?) in LEND!!June 6, 2006 at 10:15 AM #26315BugsParticipant
That sounds like some fun. Let me know if you decide to do this – I’ll pay to play.June 6, 2006 at 10:16 AM #26316LickitysplitParticipant
I’d join.June 6, 2006 at 10:23 AM #26318
Honestly, your club idea sounds like a tactic perverts use to pick up little boys on the internet. I’m staying the hell away from you.June 6, 2006 at 10:23 AM #26319
Perhaps we could do some brainstorming about how best to arrange a meeting so that we don’t get menaced by those who would love for me to shut up.
I’m actually a pretty nice guy.
I’ve shaken the cage of RightSide because many weeks ago he referred to himself as a “sophisticated investor” in the “Bressi Ranch 25% off” post and ignored repeated requests from others to identify what makes him a “sophisticated investor”. Additionally, the smugness in THIS VERY FORUM (which he created) up top…”Watch and learn” I believe he said, had me calling BS! Again… most who refer to themselves as “sophisticated investors” are anything but.
Now..on to an investment club (or social club)…June 6, 2006 at 10:27 AM #26320
You’ve pissed me off because you bash me for no reason…I could care less what you think of me, but I’d like to share ideas and I’m open to critiques.
But you just offer insults with no substance.
Start a fight with me, I’m going to fight back, online or off.June 6, 2006 at 10:29 AM #26321
Alright, I apologize RightSide….I am being unfair. I have been thinking of going short (with options) myself in LEND, too. I sincerely hope that it does work out for you.
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