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  • Financials: Bottoms Happen When Everyone's Convinced They Won't [View article]
    Tom,

    Your thesis hinges upon the theory that the market is a "Discounting Machine". This writeup questions the validity of that theory:
    seekingalpha.com/artic...

    Next: www.marketwatch.com/ne...


    Aug 11 04:05 PM | Likes Like |Link to Comment
  • Financials: Bottoms Happen When Everyone's Convinced They Won't [View article]
    You owned 5% of Indymac bank going into Sept of last year, using something like 20% of your funds ($86MM out of ?), ouch.

    www.reuters.com/articl...

    "IndyMac is in a stronger position now because so many of its competitors have left the business, said Tom Brown, a former top-ranked bank-stock analyst who now runs hedge fund Second Curve Capital LLC. The New York-based fund has raised its passive stake in IndyMac to 5 percent from 2 percent, representing a total of 3.7 million shares"
    Aug 11 12:52 PM | Likes Like |Link to Comment
  • Wake Up America, You’re Sinking [View article]
    Read this: brighton.ncsa.uiuc.edu...

    This is a story about the future, how people interact in the future, and how we become dependent upon technology to survive. At some point, things aren't so great & mediocrity and decay set in.

    It was written in 1909, and it may take you a day or two - so print it out.
    Aug 8 11:30 AM | Likes Like |Link to Comment
  • Canadian Oil Sands, Penn West Energy Protected on the Downside [View article]
    wsigler,

    Who can't claim the 15% credit back in the US? I was unaware of that. Considering that MOST investors get the 15% back, and are not double taxed, then this is apples to appples vs. some other tax advantaged cash flow/dividend investment.

    Second, how is the theoretical net lowered by a match in DUG? Would you please explain the numbers? Are you saying that the opportunity cost of the 50% position is eating into yield? I don't see how the yield gets knocked down to 5.5 or 6%.

    Matching your investment with a 50% position in DUG (i.e. for $100K invested in the basket, 50K goes into DUG - which yields ~2%) would cause the investment to be market neutral - extracting dividend yield. At that point, your yield is contingent upon whether or not the trusts lower distributions.

    thx for your input.
    Aug 4 01:59 PM | Likes Like |Link to Comment
  • Canadian Oil Sands, Penn West Energy Protected on the Downside [View article]
    Thanks. Check out the "my website" link by my name to see this trade in more detail. I have been cooking over the trade for a week & I want people to poke holes in it (and give me 5 stars). Some of the language is NWS. IBC (linking site) has some of the best content and advice in this market - bar none. It has changed the way I invest, it features dozens of high caliber contributors - often with differing points of view.
    Aug 4 12:29 PM | Likes Like |Link to Comment
  • Canadian Oil Sands, Penn West Energy Protected on the Downside [View article]
    You can pair PWE/PGH/HTE and PVX against a 50% position in DUG to keep your principal (in theory) market neutral, while extracting ~ 15% dividend yield. If you are betting on oil going up, don't do DUG and get 15% + upside in the stock price.
    Aug 4 11:33 AM | Likes Like |Link to Comment
  • What Can Go Right for the Financials? Quite a Bit, Actually [View article]
    Great post Tom; I really like you, and I think that your opinions are revolutionary. You have really opened my eyes to the way of things. Keep on posting solid gold baby.
    Jul 31 02:40 PM | Likes Like |Link to Comment
  • U.S. Dollar Shaking Off Risk Aversion [View article]
    - The durables number was boosted quite a bit by defense spending

    - New home sales were up, but so are foreclosrures (defaults) www.bloomberg.com/apps...

    - The dollar strengthens as the velocity of money slows down (liquidity leaves the system)

    - Inflation may drive the fed to raise rates, which will strengthen the dollar but kill banks.

    - I believe the dollar was beaten down by the assumption that the Fed would continue to write blank checks. Once the FNM/FRE bailout happened, the fed's language implied that they would not bail out other institutions down the road. This gave dollar bulls clarity, considering that each bailout = weaker dollar in theory. Also, when the obligation of the Fed in regards to FNM/FRE was estimated to be 26B (and nowhere near 5T), the dollar continued to strengthen.

    - Oil is a wild card. Iran tension will push oil up, wheras deflationary pressures (lack of demand) will send it down (strengthing $).

    - Why isn't the market rallying more with such 'great' economic news today?

    - Within the last 6 weeks, 4 major institutions have issued dire warnings for the US Banking system, and the government has taken extreme measures to prevent collapse. Is more to come? The dollar bottomed this year on the day BSC went belly up, which tells me that the Dollar is also correlated to the health of the derivatives market.

    At the end of the day, there are several things that push the dollar around - including foreign monetary policy & macroeconomic events such as the amount of liquidity in the market, oil prices, and Gold. Not all of these are good things, so I wouldn't necessarily correlate dollar strength with overall economic strength.

    Jul 25 02:23 PM | Likes Like |Link to Comment
  • News Flash: Major Market Turns Aren't Announced In Advance [View article]
    www.bloomberg.com/apps...

    Poof, there goes your theory about defaults not rising. I'll see your Sean O'Toole quote, and raise you a Rick Sharga:

    "Falling home values, led by states such as Nevada and California that have the biggest default rate, have prompted RealtyTrac to almost double the projected number of foreclosures this year to about 2.5 million, said Rick Sharga, executive vice president for marketing. "

    ----------
    "Even so, there’s been no shortage of signs lately that the worst of the credit crunch is past, or soon will be. As we’ve talked about here for awhile, new delinquencies among the loans that make up the ABX subprime mortgage index have been declining for months, while delinquency roll rates have been improving. Lower delinquencies now mean fewer defaults down the road. Bingo! End of problem in sight."

    Jul 25 12:27 PM | Likes Like |Link to Comment
  • News Flash: Major Market Turns Aren't Announced In Advance [View article]
    Tom/Najdorf,

    I agree 100% that you can't simply wait for an "all clear" to call a bottom. At the same time, when there are so many atypical risks to the system, you would need a time machine to make the call you did on Tuesday. I only know one guy with a time machine. Najdorf, "Trying to get ahead of them exposes you to huge market risk and prediction risk" is right on the money.

    Tom, in my opinion - the real risk in our markets is unknown. We will know more when we have more data, however, things like WFC extending it's window for delinquent debt before it has to report the loss suggests (to me) that there is a lot that we still don't know about the current rates of defaulting debt. In the last 5 weeks, 4 major financial institutions have warned that the US Banking system is in severe distress (and to take cover). In the last 2 weeks, there has been a ban on short selling certain financial stocks, BAC has decided to allocate $3.6B (of taxpayer money?) to support their share price, and Jamie Dimon has said that prime losses could triple from here. (ap.google.com/article/...)

    Your logic is sound in a vacuum, however I feel that you are ignoring several inputs to the equitation that affect your thesis, and that the risks associated with these inputs must be taken into account.

    Is the risk/reward tradeoff "worth it" at this point, even if valuations are great & the rate of defaults has slowed down? What about commercial defaults as small/medium businesses leave their spaces?

    Have the banks written down enough? That is the Trillion dollar question.
    Jul 24 02:22 PM | Likes Like |Link to Comment
  • Financials Have Bottomed? Readers Say We're Nuts [View article]
    Nevermind Tom, I didn't see your new article. Processing...
    Jul 24 01:01 PM | Likes Like |Link to Comment
  • Financials Have Bottomed? Readers Say We're Nuts [View article]
    Tom, why don't you respond to some of the comments made under your Seeking Alpha article? You seem to like playing softball.
    Jul 24 12:18 PM | Likes Like |Link to Comment
  • Financials: How - And When - We Reached the Bottom [View article]
    That's right, just keep watching your TV's people. America must have its next top model.
    Jul 22 05:36 PM | Likes Like |Link to Comment
  • Financials: How - And When - We Reached the Bottom [View article]
    Buyitcheap, agreed. Financials have the potential to apply "claw of death" to anyone betting against them, until the next round of bad news.

    Go to ibankcoin.com for some reality. Do not let children near the computer.

    Jul 22 02:48 PM | Likes Like |Link to Comment
  • Financials: How - And When - We Reached the Bottom [View article]
    Tom, are you around to defend your thesis?
    Jul 22 02:06 PM | Likes Like |Link to Comment
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