SmartGuyStocks.com

Investment Banks Look Good in '08

You should wait to see how many ibankers get laid off and how soft hiring is for college grads. That will tell you if the banks are confident about 2008 -- and from what I see on the Street, they are not as confident as your article ...

Good luck.

No End in Sight to Banking Crisis

WB is testing 34.50. Guess all the bulls were wrong ...

Pick Up Undervalued Financials - Barron's Interview

Agreed. When the main thesis is "the government won't let these companies go bust," we are still going down because supporters are simply saying "these companies are not allowed to go to die and go to zero." But there's a lot of numbers in between today's prices and zero ... why take a guess when the turnaround will provide enough trading gains for everyone patient enough to wait?

For more rebuttal of Pzena's pass-the-bag puff piece in Barron's and related issues, please check out my latest article:

smartguystocks.com/?p=...

The Trouble With Turnaround Stocks

The thesis of this article is interesting, but the research and citations are nonexistent. Exactly how many turnaround plays succeed or fail? HP was the only example. C and HD are still in play.

You have interesting ideas for articles, but please spend some more time fleshing them out. I cannot conclude whether you are wrong or right based on this thin article. There are many funds that make a nice living investing in turn around plays. I think they could provide plenty of info to dispute your claim ...

No End in Sight to Banking Crisis

I said I will be buying banks as soon as their share prices start reflecting the increasingly negative risks. Why do WB shareholders not listen when I say I will be a buyer WHEN THE END IS IN SIGHT? My thesis is that it is still too early to buy banks -- not that banks will never be a good buy. Please read and digest the article before bashing simply because you are long WB and cannot stand the truth about the company to be discussed in public.

Jack Kreg, you are another reminder that the same bashers came our during the tech bubble when people started getting bearish on tech. Like I asked before, please provide data supporting why banks will go up rather than continue going down. Otherwise, you are the editorial writer for your own long shares. And why can I not promote my business? That's what this site is for: writing blog entries about finance. What do you want me to write about? How great WB is? I will do that as soon as they get their ship in order, not because of cash flow at the beginning of a weakening economic environment and credit crisis.

No End in Sight to Banking Crisis

As usual, the permabulls can't tolerate a look at the issues our economy faces. The Sky is Falling, it is possible that the issue here is bad grammer on Ken's part -- not mine. I read his statement as saying the current growth rate is AS SLOW AS it was during our last recession. If Ken expects slower growth than any time over the last 6 years, than he is saying the current growth rate is as low or lower than it was in 2001, when we were in a recession. There is nothing twisted here. I am not trying to twist anything because I am a trader and care not whether we are in a bull or bear market. In fact, I would prefer a bull market. As you can see at smartguystocks.com, my open positions (SmartGuyDH) are long.

As for risk-reward, you are the one who needs the econ 101 lesson. All I ask is WHY we should simply buy shares based on someone's comment that the long term reward of a 3 year hold outweighs major short term issues. You should have learned in your investing class that 'price paid' determines ROI. So, I ask again, why buy now if even Pzena thinks C will be cheaper in the short term (it's already cheaper than when he recommended). Moreover, if you believe our economy generally grows over time, than any moron can recommend stocks saying "the long term reward outweigh the short term risks," BUT, that is not a savvy way to maximize ROI. As I noted in my article, that didn't work out well for anyone who bought EMC, YHOO, and CSCO when permabulls used the same thesis in 2001. And, only a major contrarian would have passed on C using Pzena's logic three years ago. Here's a hypothetical analogy using the same logic as Pzena in 2004: "Given strong global growth and the exploding housing market, I believe C will be trading higher in 2007." Again, was that a good investment? Than why should that type of framework be acceptable now? If that works for you, good luck. But the rest of us are trying to BEAT the market.

And Tim Eriksen, what's illogical about my article? If you see a bottom in the credit crisis, then why are the banks selling off today? Please note some data that shows spreads normalizing and banks starting to rake in profits. If it exists, I will happily go long banks. In fact, I am hoping that things do stabilize so I can recommend going long KBE at some point in 2008. However, the point of my article is that I do not yet see an end to the crisis, and thus SAVVY investors should still wait before going long OR continue MAKING MONEY with short term bearish trades.

IMO, the only people who challenge the issues EVIDENT in the financial sector are those holding shares long. In a few days I will be posting an interview at smartguystocks.com where I speak with a hedge fund professional in the debt markets that will make it crystal clear how bad the credit markets are.

I welcome lively debate, but please provide some data to support why we should all be bullish on banks. My friends are some of the most successful traders on Wall Street, and I don't know anyone who has yet gone bullish on banks. Maybe they will in 2008, but not yet ...