drbob66

Dividend Stocks to Avoid

Forget dividends...why wait for a year to collect a 6 or 7% dividend when you can make 5-10% in ONE DAY trading USB, STT or any number of financial stocks? Buy them...then sell them...then buy them again. Lather...rinse...repeat.

Be Wary of Risk Assets and Citi's 'Profit'

This is one financial stock that I'll just stay away from. Too complicated...

Why BAC Will Beat: Understanding a New Bull Market Is Not Underway

I don't get it...have the analysts been duped into thinking that the banks are in poor shape (hence their low earnings estimates)? Or, as you claim, are they part of a "con game, " purposely keeping estimates low...even though they secretly believe the banks are stronger than their estimates suggest. I look at BAC, for example, on yahoo finance...and the high and low estimates for this quarter are $0.20 and ($0.22), respectively...with an average of $0.04. Sounds like there's downright disagreement (or even confusion) in analysts' estimates to me. Which ones are right...and which ones are part of the "conspiracy"? Hard to tell from the logic of your argument. But seeing as BAC reported a profit of $0.23 in Q12008, it looks like none of them expect BAC's yoy results to be better...again, have they been "fooled," or is it a "con game"? OR could it simply be that there's genuine disagreement (perhaps because bank earnings are so difficult to predict in this environment )?

To your other points:
"(1) Financial stocks have led this recent rally, but there is nothing fundamentally strong about any of the financial companies whose share prices have led the broad markets higher recently."

The financial stocks are not at all-time highs...in fact, the XLF is down 71% from its all-time high. It could be easily argued that the "fundamental weakness" of financial companies is still priced in at this point.

"(2) If we look at the charts of individual financial stocks, volume has been weak on these rallies. Many financial stocks have probably rallied more on short-covering than anything else, and thus the rallies will not be sustainable;"

Well, the volume of BAC on April 9 (when it first broke towards $10) was over a billion shares..the highest ever. Was it due to short-covering? No doubt SOME of it was. The question is...does it matter? The price was going UP...and it's continued to go up. And only price pays...not anger, resentment or conspiracy theories. Regardless, even the volume on Friday was 487 million shares...and up until Jan, the average volume was around 100 million. Is 487 million shares "weak volume"? I guess it depends on your definition of "weak."

Similarly, WFC traded over 376 million shares when it gave its earnings "preview"...its highest ever. Is that "weak" volume?
Up until March, JPM stock was trading around 50-70 million shares/day...since March (its low point), the average had been well over 100 million. Is that DECLINING volume? I don't think so. Did you even look at the charts before you wrote this article? Or did you read somewhere on the internet that "volume was weak"?

"(3) If we look at a chart of a broader U.S. market index above, such as the S&P 500, you will notice that the rally has occurred on decreasing volume and that a doji-star candle formation, often a sign of an imminent reversal, just formed Friday. Though the MACD is still clearly positive, the MACD is a lagging indicator;"

The volume on the S&P 500 just this past week was 29 billion...in April 2003 (when the S&P500 was at the same price level...and in the early stages of what turned out to be an impressive bull run), the average volume was less than 10 billion. Which is higher? 29 billion or 10 billion?
In addition, a "doji star" is a sign of indecision...a sign of POTENTIAL reversal...just as a resistance level (for example, 840 on the S&P500) is a sign of potential resistance...until it becomes support (as it is now). If, as you say, it's "often a sign of reversal," I would ask, "How often?" More often than not? Do you have any statistics to suggest that it would indicate that a reversal is imminent?
MACD is a lagging indicator? Well, I'm not sure of that..but, in any event, it's "clearly positive," as you point out, so what does this mean? Nothing, really...it's just a term you threw in to attempt to bolster your argument, without any real significance.

"(4) Markets in the short-term often behave irrationally but long-term fundamentals drive markets in the long-term."

The market was going up all through 2006 (and halfway through 2007)...were the long-term fundamentals good then? Obviously not...but prices went up anyway, and anyone still in the market was making money. Similarly, the fundamental macroeconomic picture was awful in early March 2009...yet the market has recovered substantially. Perhaps you were out of the market then...if so, you missed a chance to make money.

Finally, your article hardly mentions price...even though price is ALL THAT MATTERS. To suggest that one should "sell in May and go away" while prices are still going up (making higher highs and higher lows) makes little sense. I would suggest that it would be better to wait for price action to confirm a reversal...because if it doesn't, you'll miss out on further profits. With reasonable stop losses in place, one can easily protect any profits made thus far...or prevent further losses. Shorting this market makes no sense at all in view of the price action...although I'm sure there are some stocks that are "overvalued" at this point, but until they make "lower highs and lower lows" (or simply break an uptrend line), shorting them seems a high risk proposition.

In the end, the ultimate conclusion that the author makes is that the "better and less risky way" to "create wealth" is to SUBSCRIBE TO HIS NEWSLETTER. Well, my only question is...were you recommending to buy BAC when it was at $3 (now $10.60)...and after the Fed, Treasury and the current administration made it clear that BAC wouldn't be "nationalized"? Did you recommend BAC stock in Jan and Feb...when insiders were purchasing hand over fist (at prices ranging from $3.50 to $7)? Or how about WFC? I bought on Mar 5 at $8.53 (now trading at $20.26)...the same day that the CEO bought 100,000 shares (at $8.05). Were you recommending WFC in early March? Or were you convinced that Dick Kovacevich was trying to "trick" people into buying his stock by investing $800,000 of his own money? Is that the kind of "advice" that you provide (for a fee) in your "Crisis investment opportunities" newsletter?

Or were you simply telling people to "buy gold"? Frankly, I've owned some gold for a while now...and my WFC shares made me more in a month than my gold has in almost a year. In fact, the GLD chart looks like it's about to roll over. Regardless, the arguments made in this article are weak, and the real result of this all-too-common attitude that "this rally isn't real" is simply missed opportunities (or, perhaps I should say, missed "crisis investment opportunities").

Oh well, at least you can maybe make some money from the advertising on your website.

U.S. Big Banks: Survival of the Simplest

"Citi is a kon-tiki raft of band-aids and failed greed sailing ahead of secret winds"

Ha! Good one...

Still, I wish I had bought some at $1...I was staring at it that day, but just couldn't pull the trigger. Bought some BAC instead (and a mega-million lottery ticket at the grocery store).


On Apr 14 10:29 AM bob zimway wrote:

> Citi soars, Goldman sours, a stark kabuki today. Nothing is what
> it seems. The Goldman stock buy adds 9% to the float. The Horror.
> It pledges to repay the TARP. Party pooper. It's their "duty." Uncool.
> Meanwhile Citi is a kon-tiki raft of band-aids and failed greed sailing
> ahead of secret winds.

Cramer's Mad Money - Wells Fargo Changes the Game (4/909)

Gee, I wonder if this guy is short BAC...


On Apr 11 03:39 AM obm wrote:

> Be careful to buy BAC and C at their current level.
> It will hurt you very hard if any of the following happens:
> 1. Fail the strss tests. People will know the results although government
> asks Banks not to disclose it.
> 2. Misses earning estimate. Anything can happen.
> 3. Just barely meet earning estimate since the expectation for the
> banks are very high now after Wells said it's earning will higher
> than double of the estimate. BAC went up 36% on Thursday. WFC only
> up 31%. So don't be fool. Bank of America is not Wells Fargo.
>

Letting the Zombie Banks Fail: A Viable Plan

"Most of the zombie banks are conglomerations that satisfy megalomania more than business sense. C, BAC, GS, JPM and WFC come to mind..."

All of these stocks are up 10-25% today.

Nice call, dude.

Don't quit your day job.

Mike Mayo's Seven Deadly Sins of Banking

WFC is up >30% this AM in pre-market (on announcement of record earnings this quarter).

Nice call, Mike. Now I see why you were pushed out of your old job. Maybe you should take some time off to "spend more time with your family."

Geithner Creates Buying Opportunity in Financial ETFs

UYG would seem to be a good bet...after all, with a hundred shares purchased for an IRA at today's price of about $2.40, the downside is limited (to $2.40...but then, does anyone think that ALL of the financial companies in this ETF will be allowed to go bankrupt, or be "nationalized"? Not likely); the upside is UNLIMITED. As long as one could handle the risk of sitting on a few hundred dollars of "paper losses," what are the chances that these 100 shares won't be worth considerably more in, say, 5-10 years?

Heck, you might even get paid something close to the current stated 15% distribution yield while you wait...

How Was March a Bad Month?

These guys have proven themselves to be pretty bad traders, IMO. My guess is that they're getting whipsawed by rapidly changing short-term trends (maybe over-relying on computer-algorithm based trading?), and have been net short the market (prevailing long-term trend) for a while now...that was a lucrative stance for trading in Jan & Feb, but not so much in March.

Honestly, does anyone believe that these guys are worth the out-sized compensation that they're accustomed to...given their actual performance over the past few years?

Is It Finally the End of the Bear Market?

Sorry... this is a reply to the comment from "Painfully Aware" above...not to the article by Emerginvest.


On Mar 17 08:04 PM drbob66 wrote:

> The linked articles does not refer to any "fundamentals"...in fact,
> it specifically states "do NOT pay attention to the fundamentals,
> they are IRRELEVANT AT MARKET JUNCTURES."
>
> Did you even READ the article?
>
>
>

Is It Finally the End of the Bear Market?

The linked articles does not refer to any "fundamentals"...in fact, it specifically states "do NOT pay attention to the fundamentals, they are IRRELEVANT AT MARKET JUNCTURES."

Did you even READ the article?

Is It Finally the End of the Bear Market?

The market could very well go up more than most people think.

www.marketoracle.co.uk...

Eight Reasons Bank of America Is Going to $20

Bought some @2.88 on Fri.

I am indeed smoking the hookah...

On Feb 22 01:56 PM ebworthen wrote:

> The government will have no problem wiping out the common shareholders.
>
>
> If you don't sell now, the government will make your shares worthless
> within two weeks.
>
> Otherwise, smoke the hookah with Jason.

Bank of America Continues to Stand Strong

Hey, a hot-looking columnist posting on SA. It's about time!

Seriously, I hope the author's right about BAC stock (although I do agree with the earlier comment about Friday's plunge being due to fears of nationalization, not the subpoena story)...I initiated a modest long position in BAC on fri @$2.88. I know, this is simply a gamble...but the chart looks promising. On Fri, it bounced off the bottom of a nine-month downward-trending price channel...the top of the channel looks to be around $10. A nice short squeeze rally could get it there (or somewhere in the vicinity). I'll sell a portion if it goes lower than Friday's low...but I'm betting that it won't.

Turning Japanese: The Audacity of Reality (Part 3 of 3)

Never mind...I should have read ALL of the comments before posting. My mistake. Interesting debate going here, though.


On Jan 31 12:11 PM drbob66 wrote:

> JQ, you didn't address his points. What gives?