The Sluce

7 Comments

    • BofA May Renegotiate CFC Purchase [view article]
      First of all, BofA never said that it "likely" wouldn't take on any of CFCs debt but that they just hadn't made a decision on what they were going to do. Secondly, BofA came out yesterday (5/5/08) and reiterated that they are indeed going through with the CFC purchase as planned. Granted the 3rd quarter is a long way away but this deal looks fairly solid. May 06 10:37 AM
    • 3 Reasons To Be Bullish on Solar Stocks - Cowen [view article]
      One last note: If you are truly pessimistic on the solar stocks you could sell out of the money call options to help finance more put option buying but that opens the door to a lot of risk if the sector has a huge run. Mar 27 01:14 PM
    • 3 Reasons To Be Bullish on Solar Stocks - Cowen [view article]
      Buy STP! Mar 27 12:45 PM
    • 3 Reasons To Be Bullish on Solar Stocks - Cowen [view article]
      Supershort, whether you are right or wrong with the movements in these stocks shorting the shares outright can be very dangerous. STP and SPWR have had roughly 30% moves in the last 5 days and I believe other solar stocks have followed suit. To limit risk, I recommend that if you are going to short that you do so with puts. You pay a premium but for that premium you limit risk. Plus, there are a lot of people that have bet against these stocks so a move like we have had over the last five days calls for a lot of covering, which may beget more covering. If you are short the last five days have been very damaging.

      These stocks do rely on a great deal of subsidies but it is highly likely that these subsidies will continue. Belief in global warming is there and governments want to combat this aggressively. The next U.S. president, regardless of whom it is, will push for further environmentally sensitive energy policy, particularly if it is Clinton or Obama. Also, the U.S. states are being aggressive as well. Just look at California for a prime example.

      Additionally, the growth rates of these companies is phenomenal. That explains the TTM P/Es and forward P/Es. Nonetheless, you cannot read too much into these numbers as there are many, many low p/e stocks out there that are getting hammered. The selling in the solar sector was overdone and we are probably just getting back to sustainable levels. We will very likely be another 20% higher by summer.

      Obviously, I am biased as I am long STP (in my view the best value in the sector).       Mar 27 12:43 PM
    • JP Morgan Chase Bear Stearns Acquisition Call Transcript [view article]
      There is no way in hell that I am voting my shares in favor of this deal. $2 ... I would rather see what happens in bankruptcy. I have no idea exactly how much influence the Treasury had on this deal but it sounds like it was putting tremendous pressure on BSC. And the Fed taking $30 billion of relatively illiquid assets ... this was a no-brainer for JPM. The problem for JPM is that Bear will be much more healthy by the time the vote comes up. I'm sure there are all kinds of BSC shares being purchased even by JPM shareholders just so they can vote the deal through. Still there are many shares that will vote the deal down. My shares are some of them. Mar 18 10:54 AM
    • What's Behind Microsoft's Decline? [view article]
      Well said. Mr. Softie has now lost more of it's market cap than the cost of the Yahoo! deal. Additionally, MSFT tends to undershoot their estimates and guidance. At these prices ($28.04 this morning) MSFT is a steal. Feb 07 09:42 AM
    • Buying Countrywide Ahead of Today's Fed Action [view article]
      William, you sound like you may be in a bad loan yourself. Although there were some deceptive practices by some lenders and probably more individual brokers the ultimate responsibility should be on the backs of people taking these loans. The amount of fraud out there by many of these borrowers is astounding and I am just upset that so many of them will now be getting assistance through loan modification and perhaps even some form of government help. For the responsible out there this is just sickening. Nonetheless, with housing bringing the economy and financial system down with it I understand the need for stimulus and help. It will help save us all. With so many people holding bad loans they seem to now have the power in the lender/borrower relationship. Much like Trump did in the early 90s.

      Buying CFC here as an arbitrage play isn't a bad idea at all. Most likely the deal will go through as planned. The financial system will start to recover quickly with all the stimulus being pumped into it and BAC will have gotten a great deal. The risk is that BAC trades lower in the mean time or that the deal is halted or modified. Stephen, another benefit to the trade is the roughly 10% yield on CFC. This is an arbitrage deal worth a good 25% total return and you end up with owning shares of BAC. Not a bad deal!       Jan 30 10:30 AM
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»