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Ocean Man  

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  • Most Investors Miss The Point: Operation Twist Is Brilliant [View article]
    The Fed doesn't make moves to affect the next day's market movement, or even the next week. There's a butterfly effect that takes time. Twist - housing - unemployment - economy - stock market. Stocks are incorrectly priced right around 100% of the time.
    Sep 24, 2011. 03:08 PM | Likes Like |Link to Comment
  • CME Group hikes margins again on gold by 21%, silver by 16% and copper by 18%. (pdf).  [View news story]
    This news obviously leaked earlier today, if not earlier this week....
    Sep 23, 2011. 10:57 PM | 3 Likes Like |Link to Comment
  • Most Investors Miss The Point: Operation Twist Is Brilliant [View article]
    If there are any sure things in this market, it is 1) that Bernanke does the right thing for the economy, and 2) the market doesn't get it at first.
    Sep 22, 2011. 12:38 AM | 2 Likes Like |Link to Comment
  • 10 Commandments For Dividend Growth Investors [View article]
    Great article, Just Sayin, and congrats on becoming a contributor. I hope to have a story like your Colgate one a few years from now.
    Sep 18, 2011. 07:34 PM | 4 Likes Like |Link to Comment
  • 4 Large-Cap Dividend Stocks To Avoid, 1 To Buy: Here's Why [View article]
    Well, if anybody did buy KMB on Friday, you may have bought it from me. I don't know why you'd buy a sideways stock like KMB at its 52-week high.
    Sep 18, 2011. 01:08 AM | 1 Like Like |Link to Comment
  • Nationwide Mortgage Refinancing Impacts On mREITs [View article]
    Good article, Todd, you're doing a great job keeping up with the day-to-day news surrounding the mREITs.

    A bit off-topic, but a giant thank you for turning me on to UAN. I had put a sell on it if it hit $26, which it did today. That gave me about a 25% return from when it dipped under $21 about a month ago. Not bad in this market.

    I'm about halfway there on another recent IPO MLP too - QRE. It also has about a 9% yield and it's being added to the Alerian MLP Index on Friday at the closing bell which could give it another pop with the buying pressure from the index funds since it's under $1B market cap. Check it out.
    Sep 14, 2011. 02:11 AM | 1 Like Like |Link to Comment
  • Why mREIT Stocks Should Be Heading Higher Soon [View article]

    Chimera (noun):

    1) a horrible or unreal creature of the imagination

    2) a wild or unrealistic dream or notion

    Synonyms: dream, fantasy, delusion

    Why would you name your company this?! Although it does seem fitting......
    Sep 12, 2011. 01:54 AM | Likes Like |Link to Comment
  • 5 Stocks That Lost On Friday To Buy For Large Gain In The Near Future [View article]
    Let's face it, the Dow was higher in 1999 than it is right now. That was 12 years ago.

    You can argue all day whether we're in a recession or not, or whether we're headed into one or not. The fact is we've been in a sideways market for the past 12 years, and we've been in a sideways market for the entirety of 2011. During this time, there was money to be made riding CAT from its dips up 10 or 20 points from time to time.

    I've taken CAT for a ride several times in the past year, and Brian's right, it's at a relative low point after a slew of bad macro news, and some good news is due and could give it a ride. Besides the macro news, CMI is having an analyst meeting on Tuesday, and if they spin a good story, CAT and DE will get a bump along with CMI. China's inflation cooled off last week too, and if they stop tightening as a result, there's another catalyst for these three.

    It's not a sure thing, but it's a decent bet and riding a high beta stock from 83 to 93 is a reasonable proposition in this market. It's best of breed, will add Bucyrus accretion this quarter, will add Japan rebuilding this quarter, will add Obama road and bridge construction soon, a great China play, you could do a lot worse.
    Sep 12, 2011. 01:32 AM | Likes Like |Link to Comment
  • 5 Stocks To Benefit From Obama's Job Plan [View article]
    I agree about CAT, will be a major recipient in the construction effort, as well as the rebuilding of Japan after the earthquake / tsunami, plus China's growth which seems to be back on an upswing with inflation settling down.

    FCX also gets the double help from US jobs and China growth, a great play on China's phone and electricity growth.

    I agree on the rails too, CSX in the east and UNP in the west to carry the construction materials where they need to go much cheaper than trucking can.

    I'd add CMI (engine maker) and some of the coal producers to this list as benefitting from both the US and China recent developments.
    Sep 11, 2011. 09:35 AM | Likes Like |Link to Comment
  • Will Operation Twist Work For mREITs? [View article]
    I agree, which is why I didn't think they would do Operation Twist back when it was first discussed in these forums a month ago. If the Fed plans to buy the 10-year in order to push down its rate, and wants to finance that action by selling the ST that they previously bought to push down ST rates, how does that selling not push up the ST rate? Rising ST rates have been the biggest fear of mREITs all along. And it sounds more and more each day that Op Twist is a done deal later this month.

    However, my other point was that mortgage rates are already very low, and not the reason people aren't buying houses (prices aren't going up) and not the reason people aren't refi-ing (too far underwater or credit shot). So lowering the 10-year wouldn't help the housing market. Not unless it was being done in tandem with a nationwide refi program. And Bernanke's last speech said the solution needs to be fiscal policy, it can't be monetary policy alone.

    So my bet is on Op Twist to accompany the nationwide refi program, as neither makes sense without the other. Note: these are both really bad for mREITs, especially if they're done together.
    Sep 8, 2011. 02:38 AM | 2 Likes Like |Link to Comment
  • Has mREIT Nirvana Vanished? [View article]
    Another great article, Todd. I stared at my screen perplexed all day today, as I couldn't for the life of me figure out why NLY would be down a point and AGNC would be up a point. That never happens unless one has an ex-div or an SPO, or at least company-specific news. These two trade as if they're holding hands.

    But after the close, I did some research that led to a theory. Both have significant institutional ownership, but I think NLY is more hedge funds and AGNC is more mutual funds. The hedge funds prefer the much larger market cap of NLY so they can move in and out of it easier without moving the price. The mutual funds that sell themselves as "high yield funds" prefer the 20% yield from AGNC to the 14% from NLY for basically the same risk level, and they don't plan on moving out of it frequently.

    Enter today's advice to institutional investors from JP Morgan that said that China was done raising rates. The hedge funds immediately sold out of NLY to move into cyclicals, which is why stocks like CMI went up 6% today, the coal producers were up 6% to 15%, as well the other industrials like CAT, DE, HON, DOW, etc. The China news could move these much, much higher.

    However, the mutual funds with names like "high yield fund" can't trade out of AGNC at 20% into CAT at 2% to try to capture price appreciation. They're dividend funds. So AGNC went up with the market, showing its normal beta. While NLY went down on an up day since the hedge funds were selling it for industrials. That's my theory.
    Sep 8, 2011. 02:06 AM | 2 Likes Like |Link to Comment
  • Target Has Significant Upside Potential [View article]
    Terrific article, Dr. O. I agree with the upside, returning to $60 at the very least and probably to your numbers on the wave of back-to-school season followed by the holiday season.

    This morning on CNBC, they asked Cramer what he thought would be the one stock to be the biggest winner from Obama's jobs speech Thursday night and he said Target without hesitation. Those who will be helped by Obama's $300 billion shop at Target.....
    Sep 8, 2011. 01:44 AM | 1 Like Like |Link to Comment
  • 5 Profitable And Undervalued Targets For Takeover Or Buyout [View article]
    MHP has a couple of activist hedge fund investors pushing it to break itself up into 4 pieces. They claim the stock will go from $40 to $70 if MHP does this. At the very least, they're already planning to spin off the low-margin education division, already working with bankers on the spin off, and that should be worth a good portion of that $30 jump.
    Sep 8, 2011. 01:37 AM | Likes Like |Link to Comment
  • Will Operation Twist Work For mREITs? [View article]
    Excellent article, Todd. Some great new information and scenario forecasting.
    Sep 6, 2011. 10:11 PM | 2 Likes Like |Link to Comment
  • Recent mREIT Regulatory Risk Fears Are Likely Overblown [View article]
    JP - some good points, but here is my response:

    1) You're looking at only one aspect of SEC changes that could affect the mREITs, and I agree that the one you mentioned has a small likelihood of coming to fruition. However, the 2X and 3X bull and bear ETFs are being lambasted every night for adding to the volatility in the markets. If the SEC makes an anti-leveraging ruling against these, it could hit the mREITs too. That's the greater SEC regulatory risk.

    2) It doesn't really matter if Operation Twist is speculation or reality. The yield curve has already flattened as the market expects OT to happen. The bad result for mREITs is already in.

    3) The reason the nationwide refi is viewed as likely is because it doesn't require Congress approval. It also helps those Obama needs votes from. The wealthy won't qualify, nor would they vote for Obama anyway. The only thing Obama wants to fix more than housing is jobs, and your point that the mortgage infrastructure couldn't handle all the additional refi work just allowed The Pres to kill both birds with one stone.
    Sep 6, 2011. 02:38 AM | 1 Like Like |Link to Comment