iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,009 Blog Posts

Time to Reset

This is a tricky time for the markets, On one hand, we seem to be heading down the shit pipe. On the other, buying stocks when sentiment is weak is usually a great time to catch a swing.

Due to an erroneous downgrade, [[FTK]] is trading lower. This, my friends, is what I call a buying opportunity. With oil shooting higher, I like my chances being long [[RIG]], [[ARD]], [[PCZ]] and [[DO]].

Some banks are bucking the downtrend, namely [[UB]], [[HCBK]], [[BOH]], [[HBAN]] and [[CMA]]. Conversely, big losses can be found in all of the brokers and select regionals, like [[EWBC]], [[FTBK]] and [[STI]].

If you must be invested, stay long energy and short everything else. The next big leg down is likely to be found in tech. The financials have been murdered and may bounce soon. In short, having an oversized cash position is not a bad idea.

If you have big gains, like “The Fly,” it makes little sense to press your bets here.

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8 comments

  1. kd

    Fly,
    Are you gonna tell us what the mvis rumor you heard?

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  2. The Contractor

    kd you are such a leech.

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  3. CAP

    KD,
    Rumor is MVIS is holding an ungodly amount of subprime and Alt-A mortgages and hence they are going to 0. There you have it. This was part of the ‘Joosy deettails’- that Tokman kept from you.

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  4. alphadawgg

    If I recall, MVIS actually had some auction rate securities that they were able to unload last quarter, but they still have some left, I believe. That was supposed to be part of their working capital. Ha!

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  5. Can of Corn Humper
    Can of Corn Humper

    I heard a rumor that MVIS patents are worthless.

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  6. Juice

    my sentiments exactly … tricky juncture

    I know some pretty smart cookies who are buying calls in fucked financials (like WB ), for an interim relief rally before they resume their descent.

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  7. Bennet

    Someone just showed me a Level 3 Asset. This is a first for me.

    This particular piece of garbage was a AAA rated CDO that was issued in 2007. It’s now rated CCC-/C. It was issued at 100 and is marked on the books of this particular financial institution (to remain nameless) at 10 cents on the dollar.

    I ran some quick analytics on the underlying collateral and I came up with the following valuation: Zero. Yes, 0.

    What this means is that the write-downs are not close to being over and the stress in the system is also far from over. if anything it will likely accelerate.

    In addition, as banks, brokers and insurance companies try to shrink their balance sheets for June 30’s quarter end, bonds remain under more pressure than normal. When a dealer buys from an account, unless they have a real money buyer on the other side, they hedge by selling Treasuries.

    The most popular kind of bonds being sold? AAA rated, non agency MBS in the 93-94 dollar price area.

    They’re selling what they can, not what they should be.

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  8. Karnal

    “buying stocks when sentiment is weak is usually a great time to catch a swing” Perhaps “His Flyness” or others would enlighten as to how to gauge individual stock sentiment – other than price alone or put/call ratios ?

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