"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.
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.
Look Out for More Recession News to Quell Panic Rally Written By: David Neubert 2008-03-24 13:43:57 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.
Seven Trends to Kickstart a Major World Conflict Written By: Eben Esterhuizen 2008-08-14 02:58:24 Photo: Dawn Endico, Creative Commons, Flickr
Apologies for the sensational headline. To put it more academically, following are seven issues that might significantly negatively affect the global political economy:
Good: I'm getting the opportunity to buy quality companies and cheap-long term prices. Recent buys include Proctor and Gamble (PG - $63.38), Pepsi (PEP - $64.55), Coca Cola (KO - $51.00), General Electric (GE - $27.10) and United Technologies (UTX - $60.38)
Bad: My bet on oil stocks isn't paying off the way I had hoped in this rising oil market.
