Posts tagged trading
September 30, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged dollar, dow, euro, fourth quarter, oil, Q3, Q4, stock market, third quarter, TMA, trading, WAMQ, Washington Mutual
Everyone loves a bargain. Yesterday’s loss that evaporated $1.2 trillion from the value of US stocks was just north of half-way made up today by investors scooping up some good deals. Maybe the sentiment is that the bottom has finally been hit. Or maybe it’s the belief that Congress will end up passing some sort of relief bill when they meet back up on Thursday. Even Japan, who’s been in a bit of a slump themselves for a while, is pressing us to pass something and vowed to give money to our banks to keep them liquid. The world is watching our scales turn, ripping money from the rich hands of a few and giving it to the open hands of many little investors who know when a price is right.
I need to do something about my portfolio. TMA and the new Washington Mutual (WAMQ) respectfully made 50% and 140% gains today, and all I made was a combined $75 on the two. After the TMA reverse split, and the fact WAMQ is now trading at 8 cents, these big percentage gains mean little to my combined 450 shares of the two. A 140% increase on an 8 cent stock was barely a nickel move. I need to pick up more shares to take advantage of these huge percentage gains, but this is where my rational self and my irrational self start fighting. My rational self says “forget it, wait it out and pay your credit card off this month,” while my irrational side says, “screw your credit card, this is a once-in-a-quarter-century opportunity to get in on the bottom of the market!” Who will win, who will win…. I get paid Friday.
The Dow closed up 485 points after a steady climb all day to $10,850. Oil gained $4.27 to close the day at $100.64. The dollar made up some ground it had recently lost against the euro; it would now take $1.41 to get one euro.
And so ends the third quarter.
September 9, 2008
· Filed under economy, investing, money, politics, stock market · Tagged ABK, ArthurDental, BAC, C, dow, Fannie Mae, FMH, freddie mac, investing, LEH, Lehman Brothers, MA, oil, OPEC, PMI, RDN, reuters, September 9 2008, STI, TGIC, TMA, trading, Visa, Washington Mutual, WM
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.
September 8, 2008
· Filed under money, politics, stock market · Tagged Alan Fishman, Andrew McCain, dollar, dollar value, dow closed, financials, Fitch Ratings, freddie mac, Friedman Billings Ramsey, Hurricane Ike, investing, John McCain's son, Kerry Killinger, money, oil closed, Radian Group, RDN, SCA, September 8 2008, Silver State Bancorp, SSBX, Steve Stelmach, stocks, Syncora, trading, Washington Mutual, WM
“Never count your chickens before they’ve hatched” goes the saying, but I didn’t follow this advice. This morning during the premarket, I busted out my calculator to crunch just how much I was set to make based on the premarket numbers, and it was a lot. So you can imagine my surprise when I signed back into Etrade at 11AM to see most of my stocks in the red and Freddie trading at $1 (which actually was better than I expected). Indeed, the financials all opened up big- real big- and I’m sure today’s blip will be seen for years to come. But then things happened. I’m still not sure exactly what, but maybe it was a composite of a bunch of things:
Washington Mutual (WM) gave their CEO Kerry Killinger the boot, instated veteran Alan Fishman, and was told by the Office of Thrift Supervision to provide “an updated, multi-year business plan and forecast for its earnings, asset quality, capital and business segment performance” (SmartMoney.com). Sure sounds like micromanagement to me. WM closed the day down 5.62% after being down 20% during some of the session.
Syncora’s (SCA) rating was withdrawn by Fitch Ratings, who had just in August changed SCA’s rating from “evolving” to “positive”. Who are these Fitch Ratings people anyway, and why does their word mean so much? SCA closed the day down 4% after being down by double digit percentages various times during today’s session.
Radian Group (RDN) opened the day at $5.50, which was up from Friday’s close of $4.79, steadily fell throughout the day like its siblings, then fell off in the last few minutes of trading to close the day down 17%. Google message boarders think someone knows something, although no news has yet hit.
Silver State Bancorp (SSBX), driven into the ground by John McCain’s son Andrew McCain, failed on Friday, making US bank casualty number eleven. I held just 125 shares of them, worth just over $100, so the hit wasn’t so hard. But that with Freddie had me reeling. I contemplated selling WM and SCA, or buying more WM, or buying Deerfield Capital (DFR), or not buying them, or waiting it out, or putting a 60-day limit order in, but in the end I did nothing. I sold SSBX at market for a gain less than the commission and held on to FRE. I decided that once the smoke clears, which stock is which and where each is going will become much clearer. But I sure do wish those pre- and early-market numbers held! And most of all, I hope today isn’t a sign that the US banking industry is going the way of Wal-Mart (who coincidentally closed the day up 2%), and headed to put all the little guys out of business. One analyst, Steve Stelmach of Friedman, Billings, Ramsey & Co. said that “mortgage insurance could become an obsolete form of credit enhancement” in the long-term because of the bailout. He was loosely referring to the drop in RDN’s share price and how the company, and ones like it, could be phased out.
The Dow ironically traced a smiley face, opening way up, dipping a bit, then closing the day up 289 to $11,510. Because of Hurricane Ike barreling towards the Gulf of Mexico, oil closed the day up as well, but just by 11 cents to $106.34. The dollar is at its highest value in nearly a year! It would now take just $1.41 to get one euro. Including the hit from SSBX, I closed the day down $323, $211 of which was from FRE.
You win some, you lose some; I just wish I had won today. The market rallied and I was left in its dust. With any luck, much of today’s activity in the financial sector was just profit-taking and the days to come will reveal the real reaction to this past weekend’s news. Next time I won’t count my chickens before they’ve hatched and started laying eggs of their own!
August 31, 2008
· Filed under money, stock market · Tagged Bryan Durkin, emergency, emergergency oil trading at NYMEX, Esa Ramasamy, Gulf of Mexico, Gulf oil, Gustav, hurricane gustav, IEA, NYMEX, oil, oil production, trading
As a capitalization on peoples’ fears, the New York Mercantile Exchange (NYMEX) created a “special Sunday afternoon trading session”, the first time the NYMEX has ever done such a thing for a [perceived] emergency. Hurricane Gustav has shut down most of the oil production in the Gulf of Mexico, but has everyone forgotten the IEA’s announcement three days ago? Oil opened this special trading day at $116.65, up $1.19 from Friday’s close, and climbed to $118.60 before rationality took over and the price began to settle. By 4:30PM when I realized today’s trading wasn’t going to stop at 4PM and decided that vegging on the couch in front of a creepy Stephen King movie was more appealing than guessing when to stop refreshing NYMEX.com, oil was trading at $117 on the nose. Hey Bryan Durkin, hey Esa Ramasamy, was it worth your Sunday afternoon?
Somehow I knew Friday wasn’t my last entry.
August 29, 2008
· Filed under money, stock market · Tagged banks, dollar best montly gain in 16 years, financial sector, financials, FRE, Gustav, investing, McCain, money, Palin, PMI, TMA, trading
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!
August 28, 2008
· Filed under money, stock market · Tagged ABK, ambac, Gustav, IEA, investing, MBI, MBIA, money, RDN, trading
Yertle, my 7,000 year old turtle, woke me up this morning grinding her shell against my bedroom furniture she’s a little too big to fit under, and because it was already light out, my efforts to fall back asleep failed. So, I got up and of course got onto Etrade to watch the premarket. Expecting to see all zeros in the % change column in my watch list, you can imagine my surprise when most were green. I had never realized that the premarket watch list reflected the closing price from the afterhours the night before, and because good news came out about MBIA (MBI), it blew up over night and took a lot of its fellow bondsmen with it, including ABK, PMI, SCA, TMA, and RDN.
Yertle’s not really 7,000 years old; actually I have no idea how old she is. She could be 7,000, she could be 70. All I know is that I’ve had her for 12 years and she’s about the same size as when my friend first handed her down to me, which leads me to believe she’s probably older than anyone would guess and that I’ll have to will her to someone when I die.
Europe and Japan are reportedly headed towards their own recessions, but Bloomberg reported that our economy- possibly fueled by exports to these struggling regions- grew faster in the second quarter than originally calculated. This boosted today’s market big time. Trading is thought to have been the biggest contributor to the growth of the economy in the quarter, and a bigger contributor than it has been in 30 years. Well no kidding! Everyone knows to get in at the bottom!
My car got towed today because I was on the wrong side of the street for street sweeping, and it wasn’t until I got to the tow lot that I realized I had my debit instead of my credit card. So I got back on my bike, rode back home, got the card, rode back to the tow lot, and paid them $117.47 (on top of the $40 ticket this fair City slid under my wiper) to bail my car out of car prison. If it wasn’t for MBI and Ambac (ABK), which came out of the cut today with a 41% gain sometime between the tow fiasco and when I finally sat back down to look at everything, I would have been way more pissed. Street sweeping. Please! Five seconds after the zambonie passes, trash is back on the street. What a joke.
The stars align once in a while in the financials sector, and today was one of those days. Thursday August 14 was the last time it happened. Today’s massive gains were a combination of the revised economy numbers, MBIA’s good news, and the Bloomberg report that “Crude oil fell more than $2 a barrel after the International Energy Agency (IEA) said it would tap strategic stockpiles, if needed, because of Tropical Storm Gustav.” Forecasters are now predicting Gustav will turn Category 3 and is headed straight to Louisiana. Oil crashed at 11AM because of the IEA’s announcement, then took a bit of a bounce around noon, but the damage was already done. The Dow gained 212 to end the day at $11,715, oil lost $2.56 to end the day at $115.59, my stocks pulled in $1,700, and so probably ended the week’s rally. No doubt the profit takers will enter the market tomorrow.
August 26, 2008
· Filed under money, stock market · Tagged bonds, dow closed, fed, freddie mac, gulf of mexico oil reserves, hurricane gustav, interest rates, money, oil cloded, stocks and bonds, Thornburg Mortgage, TMA, trading
Happy Birthday, Mom!
Back to work in the UK. Yesterday was a bank holiday over there for some reason.
The dollar has gained and lost value against other world currencies since trends like these began being recorded in the 1970s, and usually, as the Wall Street Journal reported yesterday, the tide takes about a half decade to come in and another half decade to go back out again. The most recent downtrend triggered in 2002 is now six years strong, and with the bounce the dollar has seen in the past few weeks, some analysts are predicting that the dollar is in fact beginning an uptrend. It may all be due less to a better domestic economy and more to a weakening economy oversees, but oil’s recent falls are real, and in the last month and a half the dollar has gained a significant 8% on the euro and 5% on the Japanese yen. The dollar closed the day up 0.68% against the euro today, decreasing the cost of one to $1.4648. News is that the Fed’s next interest rate adjustment will be an increase, but no timetable has yet been set. Consumer confidence in July was said to be up more than expected.
Thornburg Mortgage (TMA) closed yesterday at $0.40, then jumped over 50% in afterhours last night. A friend of mine says he saw 80 cents in premarket trading this morning, but I was sleeping when it happened. The stock opened today up 25%, climbed to 50% above opening, then slowly slid to close up 22%. Google message boarders are predicting TMA to reach anywhere between $1.20 to $5 by week’s end. I’m not holding my breath on $5 by Friday, but it’s starting to look like $1 may be possible. A year ago, TMA was trading at $14/share, which was down from $27 just one month before. One thousand shares of this stock could really pay off if TMA reaches even a quarter of its 52-week high.
Freddie had another up day: 20%. The morning made it look like a great day was about to unfold for just about all the financials, but by the afternoon things had changed. Other than TMA and FRE, most were down except for a few that just squeaked into the green. One financial, Michigan Heritage Bancorp (MHBC) did something I’ve only ever seen OTCs do: it closed up 100%. But the trading volume on MHBC is so low I’m not touching it.
The Dow had a sideways day that ended up 26 points to $11,412, and on anticipation of Hurricane Gustav disrupting production and refining in the Gulf of Mexico region, oil climbed $1.16 to $116.27 a barrel. However, that was down from an earlier increase of over $2, so it may be that Gustav is changing course.
August 25, 2008
· Filed under money, stock market · Tagged Alexei Kudrin, Biden, bonds, Columbian Bank and Trust, Denver, FRE, freddie mac, investing, money, russia, stocks, Thornburg, TMA, trading
Barack Obama announced over the weekend that his running mate will be Joe Biden. The Democratic National Convention begins tonight in Denver, Colorado.
Columbian Bank and Trust Co. of Topeka, Kansas collapsed, bringing the death toll to nine, and Korea Development Bank is having second thoughts about buying Lehman.
My stocks were split in the morning: PMI, FMD, FRE, RDN, TMA, ABK, MBI, and C all saw green while SSBX, SCA, WM, CHC, RF, NCC, and MTG were in the red. Freddie Mac has seen this same pattern day in and day out: big daily swings, which have no doubt has been making some big people some big money. Russia’s Finance Minister Alexei Kudrin reported that his country has made over one billion dollars (670 million euros at today’s exchange) on Freddie Mac bonds in the last six months, and Reuters has reported that demand is up for their 3-month and 6-month bills, so maybe today’s gain has some backbone to it. Warren Buffett says it’s “game over” for Freddie and Fannie, so it could be the run on bonds is an anticipation of a government bailout. Bonds get paid first. Time will tell. The stock has lost 2/3 of its value since I bought in, so at this point my 50 shares aren’t really worth worrying about.
Oil was up in the morning but went red by around 11AM. Resales of homes previously owned rose in July from the 10-year hit in June, and were the highest since February, which beat the Street’s forecast. The median home price has dropped 7% in a month, making is seem as if home prices may finally be meeting buyers’ expectations. Still, the amount of homes for sale in July was the highest ever, according to TradeTheNews.com.
Once the lunch bell rang, oil went green again, and the Dow really started to nosedive. Citigroup (C) clicked into red, and FMD followed once the brokers got back from lunch, but FRE, RDN, and TMA really started to take off. I’d think it was the bond insurers shining again after the news about Russia’s take on FRE bonds, but SCA wasn’t following suit. I take the fact that any stocks are up on a day the Dow is down over 200 points as a good sign of things to come, but the market these days is anyone’s interpret.
Meanwhile, as a throwback to my greener days, America’s Wind Energy (AWNE), the last slug standing, continues to drop. By now, much like with FRE, I’ve lost so much on the thing it’s not even worth thinking about, except for the fact that AWNE was supposed to be bought out by a larger wind company at some point and I continually wonder when that day will be. I’m not really even sure if that day has passed or has yet to come, or if it will ever come to fruition, or if that fruition will be fruition at all. All I do know is that “AWNE” may not even front an actual company and its presence in my portfolio serves as a constant reminder that day and swing trading OTCs on good news may be ok, but trying to invest in one of these small non-companies with low trading volumes is never ever ever a good idea. Ever.
After some flip flopping between red and green, my stocks eked out a modest $80 gain with TMA and FRE as the day’s big gainers and WM and MTG as the day’s big losers. The Dow lost 241 points to close the day at $11,386, and oil gained 52 cents to close the day at $115.11.
All eyes on Denver.
August 22, 2008
· Filed under money, stock market · Tagged Bernanke, dow closed at, FRE, freddie mac, Korea Development Bank, Lehman, money, oil closed at, Thornburg Mortgage, TMA, trading
It seems like a dream come true, but raisin bran that is exactly one-half raisins is kind of disgusting. Is wheat really that expensive? Maybe there was a sale on grapes.
After an extremely red week, it was certainly a breath of fresh air waking up this morning to large percentage gains in before hours trading. When the market opened, it was a wash of green- even Freddie Mac. Whew! The dollar gained and oil fell overnight as worries eased about Russia holding our oil hostage.
Warren Buffet came out today saying that there’s no way the government won’t have to intervene in the Freddie and Fannie situation but that the two giants are too big to fail (Freddie Mac owns half of the bad mortgages out there), that it will be until at least 2009 before the economy really starts to turn north, and that he’s supporting Barack Obama for president. In the August issue of Smart Money magazine, Buffet discloses that he believes the dollar will weaken over time and is investing his money oversees. When Warren Buffet talks, people listen. I just hope he’s not right about the dollar.
Analysts seem to think that a hostile takeover of Lehman brothers (LEH) is imminent, so its shares rose $2, or about 14%, overnight. An oversees bank, Korea Development Bank, also helped bump LEH by announcing their consideration of an investment in the beaten up investment bank. Lehman Brothers has a 52-week high of $67 and a current trade of $15.
By 10:30AM, the main points of Ben Bernanke’s speech at the annual Fed meeting hit Bloomberg. Bernanke threatened that lawmakers would step in if the rise consumer prices didn’t begin to slow and stated that he believes inflation will begin to ease by 2009. He also thinks that the financials need stricter oversight. Analysts are betting that interest rates will increase by year’s end. Within an hour of Ben’s speech, with the Dow still up almost 200 points, one-third of my financials blinked into the red. By lunchtime, most were. I know that I still have a lot to learn about how all this stuff works and what it all means, but it seems to me that if the head of the Federal Reserve has people running for cover, something isn’t right.
Oil lost $6.59 to close the week at $114.59. The Dow closed the week at $11,628, up 198 points from yesterday.
