SteveInChicago

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Tue May 20th 22:30 PM | Rating: 0 0
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Why You Should Short Companies Doing Share Buybacks

I'd draw a big distinction between a profitable company with an excess of cash buying back shares and an unprofitable company trying to prop its prices. In particular, borrowing money to buy back shares is especially suspect.

There is a tax advantage (capital gain vs. dividend) in returning money to shareholders through buybacks, and I think that this is why we see them rather than dividends.

As to your original premise, I feel that stock buybacks financed by debt are definitely shortable, but would not short a healthy company because it bought back its own stock.
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Sun Feb 17th 11:08 AM | Rating: 0 0
Commented on:
A Common Sense Look at MBIA

I think the reason for all of those buys can be explained by the "smart money" betting on a government guarantee and/or buyout. On its merits, there is no way that all of the monolines (except Buffett, of course) are not doomed.

I decided not to short MBIA for this exact reason. Take a bunch of stocks that traded around $100 and are now hovering below $10, and a government guarantee immediately rockets them up to $50. Not the kind of risk I want as a short, and the options were already pricing in a quick trip to zero.
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Fri Sep 21st 09:14 AM | Rating: 0 0
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Most Attractive Stocks On A PEG Basis

I normally like the PEG as an acid test to compare companies, especially in the same group, and occasionally some good companies wind up thrown into the deep discount bin along with the others. Unfortunately, I see a lot of stocks on this list that are priced low for a reason. Boeing got knocked down last week because it looked like the dreamliner might be delayed, but they have enough orders in the pipe that it might just be a temporary hiccup.

Once the job market tanks, Monster's jobs available are going to tank right along with it, and the companies posting available jobs are the ones paying the bills.

We also have a few retailers and risky financial names that have been hammered for a reason.
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