Posts tagged PMI

Monday May 11, 2009: MBIA (MBI) posts a Q1 profit! Rallies after hours

May 11, 2009 · Filed under business, economy, investing, money, politics, stock market · Tagged , , , , , ,

Friday was a $1500 day for me, which was a first.  I made [back] the same amount of money in a day as I do after taxes in two weeks of work.  I’m looking forward to being able to exclude [back] from my vocabulary.

The market has been rallying and against everyone’s suggestions, I continued to average down over the winter.  Now it’s spring, or it is according to my landlord who shut the heat off for the year even though it gets into the forties over night (fucking bastard), and the world is again becoming green.  I’m now down “only” 18%, and most of my stocks weathered the cold.  Still, I’m looking forward to the day when I’m deep in the green with all of my survivors.

Ambac (ABK) released its Q1 results today and at one point rallied from its open of $1.58 to $2.09.  It posted a loss, but “not as bad” (heh) as expected.  PMI Group (PMI) was up over 50% at one point this morning before it fell to more conservative gains.  PMI closed the day up 27%, which was a 50 cent gain.

After market close, MBIA (MBI) posted its first profit in five quarters, and as of 6PM, its share price is up $1.61 (23%) to $8.57.  Back last summer when I first began buying stock in the bond insurers, good news for one would pull them all up.  Hopefully that will hold true tomorrow. 

Overall, the market sold off today after Friday’s rally.  The Dow fell 155 to close at $8418, which is still the highest it’s been since January.  I haven’t been following oil because the “pain at the pump” has subsided.  It’s been so long since I’ve seriously written this blog because of work and work and disgust at being so wrong with stock picks and winter and work and school and just plain laziness.  Winter itself takes the wind out of my sails, so add that to being six months ahead of a financial rally… well, let’s just say I felt like a total asshole.  But maybe things are getting good again. 

Here’s a list to consider…

 

Stock                           52-week low                Current shareprice

  1. ABK                            $0.35                                        $1.75
  2. MBI                             $2.17                                        $6.96
  3. PMI                             $0.26                                        $2.36
  4. RDN                            $0.70                                        $3.43
  5. RF                               $2.35                                        $5.92
  6. C                                $0.97    !!                                  $3.96

If I was an “if only” kind of person, I’d be kicking myself for not seeing into the future that in March 2009 my stocks would be selling at fractions of where I bought them.  But scrolling out their Google Finance charts to a year, two years, three years, shows that, even with current rallies, their share prices are still considerably low.

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Monday September 15, 2008: Down go the Banks

September 15, 2008 · Filed under business, economy, investing, money, politics, stock market · Tagged , , , , , , , , , , , , , , , , , , , ,

Exactly two months from the widely-believed bottom, “the biggest shakeup since the Great Depression” is what it’s being called.  Today was the largest 1-day loss to the Dow in seven years.  What a total mess.  All this time, I’ve been sure no one knew what they were talking about the financials and that the bottom was already hit.  Slowly though, I’m coming to ask myself, “what were you thinking??”  Analysts had said the worst wasn’t over, but of course I didn’t believe them; I’m stubborn and always have been.  Late last night and early this morning, former employees streamed out of Boston’s Lehman building, and all other Lehman locations, with boxes and resumes in hand.  After last night’s negotiations failed, it was certain death for their jobs, and their stock, which was at 70 cents by 6:30AM, 45 cents by 7:30AM, and 18 cents at day’s close.  In less than 24 hours, the 158 year old mainstay lost 94% of its value.  Not only was the bankruptcy of Lehman Brothers the largest bankruptcy in United States history, it dwarfed all other bankruptcies in our country’s history.  Along for the hellevator ride from par to the bottomless abyss went all the financials today.  Even Merrill Lynch, which was up 30% in premarket trading because of being bought out last night for nearly twice its current value, closed the day up just 0.6% from its sorry close on Friday. 

 

Articles and blog titles that ht today had some pretty colorful titles: “Jaw-dropping day for financial markets”, “A day of reckoning”, “Meltdown in US finance system pummels stock market”, “AIG fights for survival”, “Street’s nasty surprises keep experts guessing”, “Giants fall on judgment day”, “Stocks plummet on financial meltdown”, “It’s a morose Monday for Street’s employees”, “Goodbye to easy money”, and “Broken brothers” were just a sampling.  The articles spanned all languages as today hit the entire world like a million tons of bricks. 

 

So many questions arose out of today.  What will happen to WaMu?  What will happen to the mortgage insurers now that one of the banks they insured has evaporated?  What will happen to AIG’s stock value now that the bank plans to head to the lending window?  AIG had asked for $40 billion, but word on the street is that they’ll “only” get $20 billion.  Following suit of its sibling ratings companies, Standard & Poor cut Washington Mutual’s rating to “junk” today.

 

Of the stocks I watch, here are today’s nearly unbelievable numbers:

 

Regions Financial (RF):                           Down 4% to $11.12

Community Bancorp (CBON):                    Down 4% to $4.53

Syncora Holdings (SCA):                          Down 6% to $2.39

Thornburg Mortgage (TMA):                       Down 7% to 35 cents

Triad Guarantee (TGIC):                         Down 9% to $2.1549

Financial Select Sector ETF (XLF):            Down 9% to $19.15

MBIA (MBI):                                               Down 11% to $11.45

National City (NCC):                                    Down 11% to $4.28

First Marblehead (FMD):                        Down 14% to $2.67

Centerline Holding (CHC):                          Down 14% to $2.05

Radian Group (RDN):                               Down 14% to $3.90

Citigroup (C):                                                Down 15% to $15.24

Ambac (ABK):                                             Down 16% to $6.24

PMI Group (PMI):                                        Down 17% to $2.57

Deerfield Capital (DFR):                          Down 18% to 60 cents

Bank of America (BAC):                              Down 21% to $26.55

MGIC Investment (MTG):                       Down 21% to $5.35

Washington Mutual (WM):                          Down 26% to $2.00

American International Group (AIG):  Down 60% to $4.76

 

 

My friend works for AIG.  I hope that if he loses his job it’ll be the kick in the pants he needs to get his ass to Hollywood.

 

The Dow plunged 504 points today to close below $11,000 to $10,917.  A few days ago, an analyst on TV said that “it is possible we may see $100 oil within six months”.  Within six months, buddy, how about within six days?  Crude oil fell to a 7-month low today, losing $5.47 to close at $95.71 a barrel. 

 

This experiment is going to be much longer-term than I previously thought.  Luckily I have time to wait.  I took another advance on my credit card to possibly take advantage of some of the week’s bargains, and will pay it back on Friday when my paycheck hits.

 

Later in the day, an article titled “Wall Street Losses Seen Spurring Regulatory Reform” hit CNNMoney.com.  Some are calling for another ban on short-sellers.  Alan Greenspan, in his interview this weekend, said that short-sellers are necessary to keep prices as a closer reflection of company values.  But if Washington Mutual, for example is really trading at [now less than] 17% of its book value (MarketWatch, September 11), how real are the shorties really keeping things?

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Tuesday September 9, 2008: Lehman Bros. (LEH) Ruled the Day

September 9, 2008 · Filed under economy, investing, money, politics, stock market · Tagged , , , , , , , , , , , , , , , , , , , , , , , ,

My God, what have I done?  All across the country, investors in all sectors and companies must be asking themselves the same thing.  I know my friends are.  After yesterday’s huge [emotional] rally in all sectors but one (energy), today seemed completely irrational.  Everything fell.  This was more than profit-taking.  All of yesterday’s gains, 280 points, were shaved off the Dow as the index slipped all day to close down to $11,230, as investors in the financials asked themselves one extra question: “will any financial survive?” 

 

Lehman Brothers (LEH), Washington Mutual (WM), Radian Group (RDN), PMI Group (PMI), Ambac Financial (ABK), First Marblehead (FMH), MBIA, Inc. (MBI), MGIC Investment (MTG), Triad Guarantee (TGIC), and Thornburg Mortgage (TMA) are just some of the financial institutions that had double-digit percentage losses today, and those are just the ones with losses greater than 10%.  Citigroup (C), Bank of America (BAC), JP Morgan (JPM), SunTrust (STI), American Express (AXP), and even Visa (V) and MasterCard (MA) lost today.  Lehman Brothers (LEH) is reporting their third quarter earnings tomorrow- a week early- after their Korea Development Bank deal fell through and its stock price lost 45% of its value today.  LEH stock did bump up 7% in afterhours trading, so maybe there’s good news on the horizon.  But no doubt, this bad news cast even more doubt into the financial sector today and helped push share values down.  Today was very, very painful.  Luckily I was so busy at work, with teaching, duties, and meetings, that I had no time to sit down and digest what was happening. 

 

But my friends did.  One of my stock friends, who has made a small fortune day-trading these financials, sent me an article that eased my mind a bit.  It definitely crossed my mind a few times in the last couple days that my experiment may not work out after all, but the article he sent gave me some hope.  It was titled “S&P Picks and Pans: Wells Fargo, Washington Mutual, TW Telecom, JC Penney, Avery Denison”, and was an article in BusinessWeek online.  After all the upgrades and downgrades and rating cuts by people with questionable credentials and too much power, it was nice to read an article from a reputable source deeming one of my stocks, WM, a “hold”.  If Washington Mutual is a hold and its going through some actual concrete, documented troubles, then my thinking (and hope) is that yesterday and today’s major sell-offs were out of pure fear.  But I still hope the sell-off doesn’t continue! 

 

A Reuters article from yesterday titled “Ambac’s planned muni insurer may be hit by changes” shed some light on what the common sentiment towards the mortgage and bond insurers might be.  “In another even more fundamental change, agencies are mulling a shift in how they rate muni debt, using the same scale used for corporate debt. That would result in widespread rating upgrades for municipal bonds, which have a much smaller risk of default than corporate bonds. Higher ratings would in turn reduce the need for insurance.”  If there’s less risk of default, then there’s less need for insurance.

 

One last article I’ll quote, this one from MarketWatch.com titled “Community building ire MarketWatch readers kindle own outrage over Fannie, Freddie takeover” quoted ArthurDental, who is a member of the MarketWatch Community.  “”Everyone gets upset about financial aid to the poor,” ArthurDental wrote, “but where’s the outrage when taxpayers foot the bill because some ‘investments’ went sour? So stockholders would be largely wiped out; why then aren’t bondholders made to pay for their mistakes, too?”

 

It’s telling that this article didn’t hit yesterday when the market soared, but ArthurDental is right.  When SSBX failed, I lost my investment.  But when Freddie and Fannie exposed themselves to trillions of dollars in bad mortgages and therefore didn’t have the capital to pay the bonds it issued to China, the two lending giants got a slap on the wrist and trillions of our taxpayer dollars.  Hey, I made a mistake investing in a company run by a McCain, where’s my money?  It ain’t coming and I have to deal.  And that’s the way it should be. 

 

That Hurricane Ike took a turn south, and the Organization of the Petroleum Exporting Countries (OPEC) will likely maintain its oil production even though demand is down, caused the price of crude oil to fall to a 5-month low.  Crude oil lost $3.08 to close the day at $103.26 a barrel.  I lost $1700 today, or in my brother’s terminology, “seventeen hundo”.  Ouch. 

 

So what is going to happen now that the rules of the game have completely changed?  I don’t dare speculate.  But whatever it is that eventually happens seems as if it won’t make itself known for a while.  For now, I’ll keep the faith.  I took a gamble and put in a limit order for 25 more shares of WM today, and you can imagine my surprise when I signed on later, saw the stock price was at $3.30, and that my order executed at $3.60.  When I put the order in, I assumed it was so low that it would expire unexecuted. 

 

And more than anything, tomorrow’s a new day when anything can happen. 

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Thursday September 4, 2008: The market’s back bear! (and no one knows why)

September 4, 2008 · Filed under money, politics, stock market · Tagged , , , , , , , , , , , , , , , ,

“Nobody knows why the Dow dropped 345 points today” was the headline on Bloggingstocks.com.  The bottom dropped out of the Dow today- 344 points to close at $11,188!- and speculation is flying about why.  All three indices- the Dow, NASDAQ, and S&P 500- fell back into bear markets. 

 

A lot of data was slotted to come out this week, and today’s data showed that initial unemployment claims, and therefore people recently laid off, have risen to a near 5 year high.  But retail store sales are up and oil dropped $1.46 to $107.89, a 5-month low.  Oil has lost $40 in two months.  So why did the market plunge today? 

 

Conspiracy theorists think the rich of the world sold off for a reason and are keeping tight-lipped about why.  Maybe it was a hedge fund sell off.  A story came out yesterday predicting the fall of many hedge funds because commodities are falling.  Maybe it’s just a manifestation of the extreme volatility the market has seen this summer.  Bill Gross, the head of Pacific Investment Management (PIMCO), recognized and announced August’s light trading volumes, and warned of an imminent “financial tsunami”.  Maybe this scared people?  What the heck is a financial tsunami?  Was today’s selloff a reflection of a weakening global economy?  The dollar is up to its highest against the euro since the year began, and it now takes just $1.43 to get one euro.  The euro was created, in part, as a similar exchange to the US dollar, but $1.43 is a great improvement from the $1.5903 it would have taken to get one euro on July 15.  And isn’t it true that if the US economy improves it will lead the world back out of the hole? 

 

Maybe Sarah Palin’s dirty nomination speech made everyone run.  “When [Obama] you’re done parting the waters and healing the world…”?  Was she serious?  Maybe when she’s done slinging mud she’ll focus on what she’ll do about the desperate economy and enormous national debt. 

 

It’s unclear what happened today, but what I know for myself is that I lost $300 today when the Dow lost 345, and I gained $1,000 yesterday when the Dow gained just 15.  Five of my financial stocks- PMI, RDN, ABK, SCA, and MTG- had double digit gains yesterday, so I expected a selloff today; but I expected it to be a lot worse than it was after [fighting my internet connection and finally] seeing that the market took such a hit today.  National City’s (NCC) rating was cut today by S&P but the stock price fell less than 6%!  First Horizon’s (FHN) rating was also cut, and its stock price fell just over 6%.  If I can make large gains when the market makes small ones, and have medium losses when the market has big ones, then I’ll be sure my experiment is working. 

 

Data on the total unemployment rate comes out tomorrow, and it is believed to be at 5.7%.  Will this data spike the market again?  A lot of questions are unanswered. 

 

It’s easy to read between the lines that I’m voting for Barack Obama, but to stay aware of both sides, I have been watching speeches from both sides and John McCain’s speech scared me tonight.  By the end of his speech, it seemed that if he had a gun he would have started popping caps in the air.  I’m not sure I’d feel safe with him in the same room as the red phone and bomb button. 

 

In the hopes that Mary Caraccioli had some insight into today’s market, I stayed up past McCain’s speech and then past Comcast Channel 3’s insightful commentary on McCain’s speech to catch Money Matters Today.  It’s usually on at 11PM (and rerun the next day at 11AM) but to my dismay, the show was completely run over by the McCain commentators and was not pushed up to a later time.  The sports show Out of Bounds came on instead.  Typical.  I guess tomorrow will be a complete surprise. 

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Friday August 29, 2008: Gustav closes in, McCain chooses a woman, the Dow falls but financials hold

August 29, 2008 · Filed under money, stock market · Tagged , , , , , , , , , , , ,

Exactly three years since Katrina, President Bush declared a state of emergency for Louisiana.  Gustav, now at hurricane status and predicted to morph into a category 3, is on its way.  John McCain chose Governor Sarah Palin of Alaska as his running mate, which pretty much nailed his coffin shut.  Maybe the thinking is that he’ll lasso in all the Hilary supporters who feel abandoned by their party, but I think the big companies already know Obama’s slated to win.  Ford and Chrysler applied for, and will likely receive in January, $25 billion in government loans to transform their outdated factories into ones that can build alternatively fueled vehicles.  This tells me that these two giants are already hedging the tax increases they know a Democrat will bring.  Hey, if you know you’re going to have to pay more taxes, why not ask for some of the money back under the guise “green energy”?  Democrats love everything green!

 

I’m too cheap to buy cable (and I’d end up watching The Hills reruns all day) so I never get to see Bloomberg on television.  But today I spent some time at my Dad’s, who has every station imaginable, so I got to see the channel for the first time.  Quotes stream along the bottom of the screen, as anyone who watches the station would know, and whereas yesterday would have been a stream of green speckled with red, today it was just the opposite.  And the green speckles, with the exception of UnitedHealth Group (UNH), were all the financials.  Although a far cry from yesterday, the financial sector held up today and the profit grabbing wasn’t nearly as rampant as I assumed it would be after yesterday’s major gains and right before a holiday weekend.  The PMI Group (PMI) and Thornburg Mortgage (TMA) grew the most, while the tide finally caught up to Freddie Mac (FRE), which fell 13%.

 

The Dow lost 171 points today to close the week at $11,543, and oil also lost, closing down 13 cents to $115.46.  The dollar reportedly had its best monthly gain since October 1992, which is an entire decade before its value began falling against other world currencies.  The dollar is on its way back.

 

Because I go back to work on Tuesday, this may be my last entry for a while.  It’s going to be hard making the transition from watching the market continuously to not at all, but work calls and I’m hardly in a position to quit.  I like my job teaching math, and in fact, our math MCAS scores improved exponentially from two years ago to this past year.  Fifteen percent of our students scored advanced or proficient in 2007 on the math portion of the exam, and this past year that percentage jumped to 45.  Eighty percent of our students passed the math section, which is pretty good for an urban high school.  Yeah, I’m looking forward to going back, and maybe even teaching my algebra kids a thing or two about the stock market.  Who knows?  Maybe one of them will be the next Warren Buffett!

 

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Friday August 15, 2008: Bond insurers continue to rally, Ambac (ABK) hits $6

August 15, 2008 · Filed under money, stock market · Tagged , , , , , , , , , , , ,

Both MBIA and ABK were upgraded afterhours last night, so their share prices soared in afterhours trading, leaving no possibility of getting more ABK on the cheap!  I put in a limit order to buy 100 more shares, but it didn’t take, so I bumped my order down to 75 shares at a higher price and the order took.  Prices always seem to fall after a hot stock’s early morning surge, but I got punchy and bought in.  Luckily by the end of the day, my buy-in price started looking pretty cheap.  ABK broke the $6 mark, then fell to close the day at $5.63- up 23% on the day. 

 

Shares of Silver State Bancorp (SSBX) fell 25% today on news that their second quarter loss was miscalculated and was actually larger than reported.  Ouch.  Google message boarders think the bank will go bust.  Its 52-week high is $19 and SSBX is currently trading at just 62 cents.  My very scientific calculation of dividing the current share price by the 52-week high yields the tiny fraction 0.0326, which tells me, in a very scientific way, that this thing is at least a decent bet and at most a real money-maker.  I’ll keep my $77 worth of shares until the real bottom is reached, then maybe average down.      

 

When starting this experiment, I set two goals for myself: to have a $1000 day, which happened yesterday, and to hit $10,000 by October.  Today I hit the second goal two months early, thanks mostly to the bond insurers PMI, ABK, MBI, RDN, and SCA.  So what now?  Let it ride!  I honestly wasn’t sure $10,000 would ever happen.  But it did.  So what’s the next goal?  I like base 10. 

 

The Dow moved sideways today to close the day up 44 points to $11,659.   Oil closed down $1.24 today to $113.77 on news that world demand is down.  Wasn’t demand in developing countries reportedly way up a month ago?  Wasn’t that the reason oil was at $140 a barrel?  Gee, things sure can change in a month!  Please, it’s all speculation. 

Whoo hoo, Friday!  I’m headed out of Massachusetts for the first time in a while. 

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Thursday August 14, 2008: PMI gets bought out and leads a financials rally

August 14, 2008 · Filed under money, stock market · Tagged , , , , , , , , , , ,

At the bewilderment of the New Yorker who took my call, I cancelled my free trial membership to the Financial Times today.  “Your free month isn’t over yet, are you sure you want to cancel?” she asked.  “Yes,” I answered, “I never get a chance to read it.”  The honest answer would have been that there aren’t enough pictures and the print is too small, but I didn’t want to get into all that.   I picked up the October issue of Writer’s Digest because it boasted a 28-person long list of agents who are actively seeking new work.  I emailed three of them last night.  Two of them already rejected me.  Fuck them. 

 

Better times did indeed come today.  QBE Insurance Group announced this morning that they plan to buy PMI Group’s (PMI) Asian and Australian businesses for $896 million, which caused my 250 shares of PMI to skyrocket in price from $2.79 to $4.00 in premarket trading, climb to 70% above open, and fall to close the day up 49% to at $4.17.  All at once, all the losses I incurred this week disappeared.  Nice. 

 

I had a change of heart about UCBH last night.  Its 52-week high is just $20, which doesn’t seem worth the $4 a share now.  The financials are so beaten down, there are much better bargains to be found.  Picking up more shares of Ambac Financial (ABK) for the same price, and which has a 52-week high of $74, may be a better bet, but its share price was up too high to buy in today.  PMI, SCA, RDN, and MBI all had double digit percentage gains, and just about all the financials closed in the green today.  Tomorrow, when everyone is done grabbing profits, will be a better time to buy.  I had a dream last night that I signed into my brokerage account, which wasn’t Etrade but another strange trading platform, saw that I had made $50,000 (I wish), and somehow lost the internet connection and web address to get back in and sell.  By the time I did get back in, after a tryst with my dead friend and being robbed by one of my student’s parents, all the profits were gone.  I woke up pretty distressed, so the surprise about PMI came on a good morning. 

 

I also hit a personal goal today: my portfolio took in $1000 in a day.  Making $1000 everyday would be pretty sweet, and I really never thought it would actually happen.  But it did.  Maybe my experiment is really working.  One of my friends said that he feels bad for the people losing money, but I don’t.  They don’t cry on my bad days.  I’m all about helping people, and in fact can’t imagine what I’d do if I wasn’t a teacher.  Well I’d be a locksmith, but they help people too.  Whenever I locked myself out of my car, which used to be a lot, just the sight of the locksmith truck made me tear up.  They help people big time.  But I have learned to separate good deeds from money.  There’s absolutely no correlation at all between the two, no matter how many times people that say nice people don’t care about money.  Nice people are nice because they don’t have to worry about their hot water being shut off or not being able to buy their organic vegetables at Whole Foods.  The Wall Street Journal reported today that inflation hit a 17-year high in July, and that it’s being fueled by the costs of energy, clothing, and food.  Getting ahead has been replaced by making par in this economy.  It’s OK to want to make money.  Ain’t nuttin’ wrong wit buying Hood milk!   

 

The Dow made a rainbow today, opening in the red, soaring into triple digit green, and then dipping to close up 83 points to $11,615.  The news about inflation seemed to tip the scale a bit, but it was still a decent day.  Bloomberg cited Fannie Mae and Freddie Mac as leading today’s financials rally, but I think it was PMI.  Oil closed the day down 99 cents to $115.01, falling on news that demand is down.  I wonder what would have happened if yesterday’s news about the decline in oil inventory hit today and today’s lower demand story hit yesterday.  Or what if the two stories hit on the same day?  There isn’t as much money to be made in a flat market.  Oh these news people sure are savvy!

 

“Annals”.  I heard this word today for the first time since I was a kid.  I remember pouring over the annals at the Worcester public library to write book reports on Egyptians and early American settlers.  Annals.  What a funny word. 

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