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David Neubert
Former Wall Street trader
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Written by Michelle Haimoff
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Tuesday, 29 April 2008 |
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I collaborated with David Neubert to come up with a list of the best stocks under $10, but the first thing he said was, “Most stocks under $10 are ones that have problems.” All of the stocks on his list are speculative. “Just buying stocks with low prices is not a very smart strategy. There is no disadvantage to buying one share of Google for $520 as opposed to 100 shares of stock with a price of $5.20.” It turns out most online brokers charge the same commission regardless of number of shares. |
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Last Updated ( Sunday, 11 May 2008 )
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Written by David Neubert
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Tuesday, 15 April 2008 |
Zubin Jelveh at Portfolio.com combines research on the disadvantages of testosterone in traders. He goes as far as to suggest that traders take female hormones to become better risk managers. It looks like he's never been a trader.
I, for one, can attest to all the disadvantages of testosterone in my life. Premature baldness, extreme aggressiveness, attraction to competition and likely and early death are all things I worry about in relation to my overproduction of testosterone.
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Last Updated ( Tuesday, 15 April 2008 )
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Written by David Neubert
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Monday, 14 April 2008 |
The New York Times has the best CEO compensation viewing tool ever. This is the best way to see how bloated the pay package of the U.S. company CEOs is.
My favorite CEO on the list is John Thain for managing to negotiate Merrill Lynch (MER - $42.60) shareholders out of $83 million for doing not much more than quitting his job at the NYSE and moving into his new office. I want this guy on my team next time I buy a car. Though, unless he considered me a charity case, I couldn't afford him. |
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Last Updated ( Monday, 28 April 2008 )
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Written by David Neubert
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Wednesday, 09 April 2008 |
Photo:Miguel A. Lopes, Creative Commons, Flickr
Felix from New York asks in a comment about my March 2008 top holdings, "What a lot of oil! Is this list in any way shape or form socially responsible?" |
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Last Updated ( Sunday, 13 April 2008 )
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Written by David Neubert
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Monday, 07 April 2008 |
When I started on Wall Street most things were still traded this way. I was trading Emerging Market Bonds over the phone and never used these signals except across a crowded loud room, and even then I mostly got them wrong. I usually had to resort to a phone call.
However, over time, some things became part of my body language vocabulary. I've confused girlfriends and friends who never used these signals by using them instead of talking sometimes.
Here's a link to a photo essay on some of these trading signals from the oil pit of the NYMEX.
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Last Updated ( Monday, 07 April 2008 )
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Written by David Neubert
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Monday, 07 April 2008 |
So Yahoo (YHOO - $27.82), calls out Microsft (MSFT - $29.30) and details responses to their fight over Yahoo's online brand, assets and people. Larry Dignan at ZDNet does a fantastic job of ironically translating the letter from Yahoo to Microsoft.
What does this all mean? Yahoo is willing to have a proxy fight and thinks they can win. A deal between Microsoft and Yahoo is probably further away than ever. The situation is starting to look like a lose-lose for Microsoft. Either they pay up too much for Yahoo and dilute their share price, or after a long proxy battle, Microsoft eventually acquires an engineer/key employee depleted Yahoo at the lower stock price.
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Last Updated ( Sunday, 13 April 2008 )
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Written by David Neubert
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Sunday, 06 April 2008 |
This month's top 15 is full of financials and oil. I like to bottom fish, and this month it finally worked. My exposure to big bad oil is starting worry my wallet and my heart.
1. Lehman Brothers (LEH - $44.05): Now that more than three years have passed since I left Lehman Brothers I feel it is appropriate to disclose my position in the investment bank. I have to admit that this has not been a great quarter to own any investment bank, but I have a lot of confidence in Lehman management and think that they understand the risks inherent in liquidity that funding an investment bank requires. In other words, they are no Bear Stearns.
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Last Updated ( Monday, 07 April 2008 )
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Written by David Neubert
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Sunday, 06 April 2008 |
I like what blogger Thomas Hawk says about what will happen to Yahoo (YHOO) if they ignore Steve Ballmer's exploding offer to buy the company from the board.
In fact, if Microsoft really wanted to play hard ball at this point they could simply give Yahoo 48 hours to accept the terms or pull the offer off of the table. With the offer off of the table Yahoo stock would immediately drop. The lawsuits would take place driving the stock down further and if Microsoft just waited 6 months or so they might be able to end up buying the stock in the end for somewhere around $8 a share.
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Last Updated ( Monday, 07 April 2008 )
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Written by David Neubert
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Tuesday, 01 April 2008 |
Check out this list from Bespoke Investor of the cost of bank default insurance. The highest costs go to Lehman and Merrill and other American Banks while the lowest prices are European.
I think this is the result of the implied government guarantee that most investors believe is far stronger in Europe.
However, now that the global financial system is so strongly intertwined I don't think the world financial system could handle a default resulting in the liquidation of any bank on the list.
So does that mean all these banks' default insurance should be trading at government rates?
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Last Updated ( Tuesday, 01 April 2008 )
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Written by David Neubert
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Tuesday, 25 March 2008 |
Thornburg Mortgage (TMA - $1.60) has changed their bylaws to allow large shareholders. It seems that CEO, Brian Mcmahon, is really going to save this company. I admire him for being honest about the condition of the company and its margin calls back when the whole mortgage market started to melt down.
I'm willing to make a speculative bet that he will be able to keep Thornburg Mortgage solvent but at a very dear costs to equity holders, but just in case I'd rather buy the preferred stock (TMA_PRC - $4.59, TMA_PRD - $4.55). I'm assuming preferred would still have some value in a liquidation. If there is no liquidation and the company is saved, it could return shooting distance ($19.00ish) of the par value of $25.
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Last Updated ( Tuesday, 25 March 2008 )
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Written by David Neubert
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Monday, 24 March 2008 |
Today the Chicago Fed released notes on the economy showing a decrease in U.S. economic activity to the lowest level in five years. This indicates the recession may have already begun. Watch for more recession news to end this stock market rally as analysts look for earnings decline. I'm taking some profits on some of my financials into this rally a bit while nibbling at long term bargains like United Technologies (UTX - $69.77) and Apple (AAPL - $139.40). I think I'll have a chance to buy UTX and other industrials in the next few months at better prices as well.
Disclosure: I own UTX. I sold half my position in both FNM and FRE last Thursday. I own AAPL and added to the position today and last week. I may write some short term out of the money calls (160-170) against AAPL if it continues to rally above 140.
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