Sell In April And Go Away? How To Capitalize [View article]
If we see a sell-off in April, the money doesn't have to flow to the bonds. The money can still stay in the stocks. I would guess that the money would flow to beaten down stocks such as Apple if other stocks see a sell-off. I like the article and agree with many of the points made though.
See, the pullback has arrived already and it's bringing new buying opportunities. Stocks never go in the same direction for too long. There will be always volatility.
Past behavior is the best predictor of future behavior. If a company's stock sees a lot of volatility, this makes it very likely that there will be a pullback when a development fails to impress investors.
I never said BBRY is overvalued, but cheap stocks can get cheaper too, especially when they are highly volatile.
Well you talk as if this stock didn't have a pullback just a couple weeks ago. This is one of the most volatile stocks in the market today. I've seen stocks with market caps of $200-300 million that are far less volatile than this one.
US housing bubble was caused by banks who extended people loans very easily. Because everybody could afford a home due to easy mortgage standards, house prices went up big time. We are not seeing that at this time. Banks don't just lend anyone money anymore and they are more careful about the bets they make. Just because something is moving upwards doesn't mean it's a bubble.
Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
The funny thing is a lot of people here think that Apple will die if it doesn't invent new products out of thin air every few years.
As it turns out, all Apple has to do is to build products a little better than the competition. Apple just has to be one step ahead of the competition and that's about it. Apple doesn't invent new products, it takes existing products and makes them better.
Smith & Wesson: Dirt Cheap As Market Is At Peak [View article]
Back in 2008, when the economy was in trouble and all the companies were shrinking, gun companies were doing really well. A lot of people said it was because people were afraid that Obama would ban guns when he becomes the president. That didn't happen, yet people continued to buy more and more guns each year.
If people's gun buying behavior was mostly due to the fears that guns will be banned soon, we would only see it in assault weapons which have the highest likelihood of being banned. What we see is gun sales boom across the board, even in guns that are not likely to be banned anytime soon.
Should Microsoft Make A Smartphone? [View article]
"Whoever can rebalance public perception that Windows = Work = Boring will be the marketeer of the century. "
Maybe a few more products like Xbox might accomplish that. Perhaps Microsoft needs to spin off a new company that sells home products and keep the original company's focus on enterprises alone.
Should Microsoft Make A Smartphone? [View article]
Nokia accounts for 80% of all Windows Phones that are sold today. There are many companies like Samsung and HTC that build windows phones with no success. Microsoft would just be another company with less than 1% market share. Without Nokia, Windows Phone wouldn't last a year.
If Microsoft buys Nokia and builds phones under Nokia's name, that's a different story.
American Airlines Is Ridiculously Expensive [View article]
Under normal conditions, AAMRQ might be worth $19 a share, but you are forgetting an important detail. AAMRQ recently went through bankruptcy and when companies go through bankruptcy, their share price gets next to nothing. AAMRQ can't just walk out of bankruptcy like nothing happened. Bankruptcies wipe out shareholder value.
American Airlines Is Ridiculously Expensive [View article]
At the end of the day, AAMRQ shareholders are the last ones in the pecking order. After everyone else collects their money, if there is leftovers, they will collect the leftovers.
First, all the creditors of AAMRQ must be paid sufficiently. This requires the merged company to reach a value where it easily passes the amount owed by AAMRQ. Second, all LCC investors have to get their equivalent shares in AAMRQ and this is independent from the value of the merged company.
If you look at historical levels, the companies that emerged out of bankruptcy gave their last shareholders next to nothing when the emergence was completed. There are very few cases, if any, where those people didn't lose a lot of money.
American Airlines Is Ridiculously Expensive [View article]
Here is what AAMRQ says in its website:
"Some of our creditors have agreed, subject to certain conditions (the “support and settlement agreement”), to support a plan of reorganization for us that provides for holders of AMR equity interests (including common stock, warrants, restricted stock units and options) to receive shares in the merged company representing 3.5% of the total number of shares of the merged company's common stock, subject to customary dilution, and potentially to receive additional shares of common stock of the merged company under certain circumstances."
1. It says "some of our creditors agreed" so, not even all creditors agreed with the current plan.
2. The current plan allows for 3.5% of the new company to be given to current shareholders of AAMRQ, which again didn't even get supported by all creditors. So even the 3.5% is not guaranteed.
3. It says: "potentially to receive additional shares of common stock of the merged company under certain circumstances" which is very vague. It has to be under very certain circumstances and it only exists as a potential, and again, only some of the creditors agreed to this.
Basically, once all the creditors of AAMRQ are paid for and LCC investors get their shares, if anything is left over, AAMRQ shareholders will be collecting the leftovers. If it turns out that the merged company is worth like $30-35 billion as opposed to the $11-13 billion estimated by both companies, AAMRQ shareholders can get $4 per share but this is extremely unlikely. Watch LLC's share price closely and keep in mind that each AAMRQ share is worth about 1/8th of current LCC shares.
Sell In April And Go Away? How To Capitalize [View article]
10 Reasons To Go Long BlackBerry [View article]
10 Reasons To Go Long BlackBerry [View article]
I never said BBRY is overvalued, but cheap stocks can get cheaper too, especially when they are highly volatile.
10 Reasons To Go Long BlackBerry [View article]
Well you talk as if this stock didn't have a pullback just a couple weeks ago. This is one of the most volatile stocks in the market today. I've seen stocks with market caps of $200-300 million that are far less volatile than this one.
10 Reasons To Go Long BlackBerry [View article]
The U.S. Housing Bubble Is Back [View article]
Samsung Galaxy S4: A Gift To Apple Shareholders [View article]
As it turns out, all Apple has to do is to build products a little better than the competition. Apple just has to be one step ahead of the competition and that's about it. Apple doesn't invent new products, it takes existing products and makes them better.
Smith & Wesson: Dirt Cheap As Market Is At Peak [View article]
If people's gun buying behavior was mostly due to the fears that guns will be banned soon, we would only see it in assault weapons which have the highest likelihood of being banned. What we see is gun sales boom across the board, even in guns that are not likely to be banned anytime soon.
Should Microsoft Make A Smartphone? [View article]
Maybe a few more products like Xbox might accomplish that. Perhaps Microsoft needs to spin off a new company that sells home products and keep the original company's focus on enterprises alone.
Should Microsoft Make A Smartphone? [View article]
If Microsoft buys Nokia and builds phones under Nokia's name, that's a different story.
American Airlines Is Ridiculously Expensive [View article]
American Airlines Is Ridiculously Expensive [View article]
But I guess the negotiations are not complete yet. We will have to wait and see.
American Airlines Is Ridiculously Expensive [View article]
First, all the creditors of AAMRQ must be paid sufficiently. This requires the merged company to reach a value where it easily passes the amount owed by AAMRQ. Second, all LCC investors have to get their equivalent shares in AAMRQ and this is independent from the value of the merged company.
If you look at historical levels, the companies that emerged out of bankruptcy gave their last shareholders next to nothing when the emergence was completed. There are very few cases, if any, where those people didn't lose a lot of money.
American Airlines Is Ridiculously Expensive [View article]
"Some of our creditors have agreed, subject to certain conditions (the “support and settlement agreement”), to support a plan of reorganization for us that provides for holders of AMR equity interests (including common stock, warrants, restricted stock units and options) to receive shares in the merged company representing 3.5% of the total number of shares of the merged company's common stock, subject to customary dilution, and potentially to receive additional shares of common stock of the merged company under certain circumstances."
1. It says "some of our creditors agreed" so, not even all creditors agreed with the current plan.
2. The current plan allows for 3.5% of the new company to be given to current shareholders of AAMRQ, which again didn't even get supported by all creditors. So even the 3.5% is not guaranteed.
3. It says: "potentially to receive additional shares of common stock of the merged company under certain circumstances" which is very vague. It has to be under very certain circumstances and it only exists as a potential, and again, only some of the creditors agreed to this.
Basically, once all the creditors of AAMRQ are paid for and LCC investors get their shares, if anything is left over, AAMRQ shareholders will be collecting the leftovers. If it turns out that the merged company is worth like $30-35 billion as opposed to the $11-13 billion estimated by both companies, AAMRQ shareholders can get $4 per share but this is extremely unlikely. Watch LLC's share price closely and keep in mind that each AAMRQ share is worth about 1/8th of current LCC shares.
American Airlines Is Ridiculously Expensive [View article]
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