Items Tagged With David Neubert

Financial Stocks: Take Sector Risk, Not Specific Risk at this Point
Written By: David Neubert
2008-03-10 14:24:03
A friend who must remain anonymous asks:

"Sent you a message on your Facebook acct...you adding to Merrill Lynch (MER - $42.97)? Can't get a read on the big pullback..do the institutional traders know something we dont?"

I'm not adding to MER and I'm actually out of it for a while. My stop loss rule got me out just after I wrote about Thain. (Sadly, I did not apply that same stop loss rule to some other stocks recently).

The institutional traders are selling everything financial. There is nothing special happening with MER that isn't happening with Lehman (LEH - $42.03 ), Goldman (GS - $160.92), Citigroup (C - 20.16), Morgan Stanley (MS - $40.62) and the rest. And if there is I'm not sure what it is. Unless you have really done a lot of research and figured out something special about specific financial companies, I'd rather play the financials using the financials iShare (XLF -23.66) at this point. I'd rather not take the specific risk of any one company at this point. If you believe financials are cheap you might as well buy them all. The fund provides diversification and thus is much less risky. I don't know if any of these firms are going under but I'm sure they are all not. And when they bounce back up they will NEARLY all bounce together.

Follow Up: Yahoo Response to Microsoft's Letter
Written By: David Neubert
2008-04-07 10:52:12
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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Ford Preferred (F-PS): Use Only with Diversification
Written By: David Neubert
2007-08-05 18:38:40

Reader Question:

David Neubert,

I am thinking about buying some Ford preferred stock symbol (F-PS). Do you think

its still a good investment? I sold all my market holdings early that Thursday morning, a few weeks ago, before the market begin to really take a dive. Now I want to get back in with some good stocks.

Frank

Houston, TX

---

Frank,

Thanks for your question. As you might know, an enhanced conversion exchange for this Ford Motor Co Cap Trust II 6.50% Preferred (P-FS - $38.86) for Ford Common (F - $8.06) just ended. I did not participate in the exchange.

Since I am not your financial advisor and do not know the details of your specific financial situation I cannot tell you if these securities are right for you. What I can tell you is what I'm doing. I continue to hold the Preferred shares. I've owned them for years. I hold them in both my tax deferred IRA (because these are not qualified dividends - no tax advantage) and my taxable account. But these are risky assets and should not be treated like a safe bond. They make up less than 1% of my total investment portfolio.

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Forget Commodities, How About URLs?
Written By: David Neubert
2008-05-14 10:27:24
Is virtual real estate the next big investment craze? Will everyone start buying words online? And are financial words/URL's going for more than porn words now? I'm consulting a startup web company right now and buying a name is a real problem. I heard a rumor that Mint.com paid $200,000 for their name. At some point, high prices will drive away potential buyers and the public will become accustomed to seeing more two and three word names for websites.

WallStreet.com has been idle since it was sold four years ago for $2.3 million by a Caribbean-based casino, Cahn said. That company paid $1 million for it in 1999.

Numbers like $5 million or more are starting to float around as the price for this web property. I have looked everywhere to see what it actually sold for, but it seems that information is private. I did see a transfer of the name in whois dated April 2008.

For a list of some auction prices, check out this domain auction industry site.

You can recognize a mania when items are being sold for way more than they are economically useful, in the hopes that a greater fool will make a bigger mistake. Just think about all of those empty homes in Florida bought by speculators hoping to sell them to other speculators. When you see a hedge fund set up for domain name investing, it will be time to sell all your domain names for whatever you can get.

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Free Toaster With Your Bank?
Written By: David Neubert
2008-08-06 14:09:25
Bank Shares are just so darn cheap right now they could be giving them away with toasters. If you don't want to have to figure out which bank is going under next you can just buy the (XLF -22.36) on next dip. Personally, I've been buying Lehman (LEH - $20.63) because I think they will not go the way of Bear Stearns and American Express (AXP - $38.13) because they are not a bank and any temporary reduction in credit card spending will be made up by the secular trend toward credit card usage and the higher service provided by American Express products.

This cartoon from the Sacramento Bee says it all:

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