As sure as I sit here, if MGM should fall through $13, I will buy more on margin. The idea that this stock is getting nailed this hard is pure madness. Asian turmoil is MGM turmoil. U.S. turmoil is MGM turmoil. Hell, Europe is MGM’s problem too.
But the Middle East? Fuck the Middle East.
There is not reason that MGM should be getting hammered thusly, except for the obvious; far too many people trade MGM’s stock, but have no care about the companies prospects.
Dear God, let short sellers running off on technical signals comprise 20% or more of the stock’s float. I will buy up the market, along with others who get how absurdly undervalued this kind of company is, in the low teens, while sending these clowns to their deaths.
Meanwhile, BG is also getting cut down, back to $70. I’d presume higher oil prices are being expected to cut into BG’s profit margins, yadda yadda.
Fine, but the company is already serverely under priced, which makes it a hidden gem that could light up at any moment. I’m not dropping it because it’s losing 3% from the weak not being able to hold strong. I will also be buying more BG below $70.
And CLP is the same as the others. It is down below where I made my first round purchase; yet, nothing substantial with regards to this company has changed in the last week. I’ll buy more of that too, if it approaches $18.
What I am saying here is simply; sure the market sucks, and lots of stocks are going to get cut down to size. But, not my stocks, because they were already trading cheap. I won’t accept losses on these operations; in fact, I was running at zero credit for just this possibility.
I will gobble up my quality names as imbeciles topple towers and set the world on fire. If they want to sell me these companies at a discount, so be it.
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I’m putting my money where my mouth is:
Increased my stake in MGM by 25%, for $13.29.
I also added to BG for $70.06, which was close enough to my target.
I have been long MGM since February 2009, adding only in early July 2009. It ALWAYS gets hammered when things turn negative, regardless of anything, ALWAYS. While LVS held up last summer, MGM did not.
I currently own puts on MGM, every last share, and I thank you for posting this as I may sell them one of these minutes or days…
remember, when the market turns ugly and MGM gets heavily negative, reason does not apply, there is no reason it can’t go down alot farther than you think as it seems to detach wholly from reality during market panics
Yes, you are correct. I didn’t mean to say it wouldn’t. I meant to say “I don’t care; I’m taking it in the chest.”
right on.
I’d like to read a longer post about your valuation of MGM. When it comes to casinos, I just don’t get it. They’re under a mountain of debt almost every time I see them, and Vegas is as saturated as it can get with casinos. I guess Macau could drive the stock higher, but it’s hard for me to make a bullish argument for a company carrying $12B in debt on $1B EBITDA. Obviously I haven’t looked into the sector like you guys have, but I am interested in learning.
agreed, which is why the last casino shares I have were hedged with long puts (1 put per 100 shares) a month ago as I refuse to ride them down again.
I honestly think part of the reason for the casino valuations is that people like going to vegas, getting drunk, chasing girls, and find the town itself alluring or glamorous in some way, and this transfers to the stocks. I honest to all that may be holy think they trade at a premium because of the kind of activities they are associated with. A “glamor premium” if you wish.
I can run a piece later detailing MGM and how its finances are being managed. I don’t know if I can give an exact price range, as this is more of an inequality type logic, but I’ll lay it out best I can.
Sorry I’ve been somewhat absent; a lot of change going on right now. It’s starting to stabilize though, and I’ll be back to my usual self shortly.
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Good to see someone willing to distribute their knowledge on this topic.