Yes, I'm short

3 Comments

    • Double Whammy: Bank Card Companies May Be Next [view article]
      Fact is, and this is somewhat directed at the poster asking about the low P/E's, is that a decline in earnings is already priced into these stocks. They should trade at single digit ratios, b/c their earnings stand to fall 50% + People still don't see that, while rising, deliquency statistics and charge offs are still near historic lows. Consumer charge-offs tend to DOUBLE from trough-to-peak, and we've only seen the beginning. Given that the only outsized growth these companies will experience would have to be obtained by subpar underwriting, they deserve multiples of approximately 12x - a fair market multiple. Assume that their profit margins have been unduly high for some time and will contract, and that charge offs will rise, lump in rising financing costs due to the shut down of the securitization markets and I'd say that COF and DFS are trading at multiples of what true, normalized earnings will be of approximately 18-20x. I'd say they have up to 40% to fall once analysts begin to revise estimates and the market begins to discount future earnings. Apr 09 01:14 PM
    • The Impact of Long Bonds on This Market [view article]
      The RMBS market is DWARFED by the treasury bond market. That statement is pretty ludacris. Jun 13 12:11 PM
    • New Century: This REIT Yields Over 20% In a Cooling Housing Market [view article]
      Ask and ye shall receive...Pick it up now at $19 a share or so. Things could get real bad, count on a 60-75% div cut from here for at least the next 4Q's. All things considered, thats still a 10% yield at this price. Dont think BK is an overwhelming risk but it must be considered. Waiting until the restatement could see the shares pop $5-7 but could also head south another $4. Right now, assuming a steady 1.1x P/B multiple, the market seems to be discounting the Mortgage Loans Held for Investment 7-10%, or hacking a billion $ off of book value. The stock will move in step with the size of the restatement.

      I went long today and sold long-dated, in-the-money calls. downside risk being bankruptcy or prices below $12.75       Feb 14 12:23 PM
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