We certainly missed this one when it was trading at a mere $1.50 the other day. Our sources show that the hedge funds shorted 17,000,000 shares of this stock and were forced to cover! This is a transportation stock and was due to come back to a "real" valuation multiple, and not a BK multiple. People overreacted and over sold this stock, just like many others have been oversold when the HF's hammered the bids on good quality stocks because their investors just plain "wanted out" at any cost a few weeks ago. What a shame! Many good stocks got massacred! We follow a few here. I think the shipping sector is going to bounce next once they get the banks online with their letters of credit to be able to support all the new China orders recently! Barclay's Bank will probably lead the way like Lehman did from what we are hearing. Get ready for an explosion when this happens because most have prepared for the worst, and well, we just don't see it. People still need to eat and the world economies need supplies and materials unless we're missing something here....consumption will still happen on a Global basis. Stay tuned.
Friday, December 05, 2008
YRCW Shorts Were Crushed This Week
We certainly missed this one when it was trading at a mere $1.50 the other day. Our sources show that the hedge funds shorted 17,000,000 shares of this stock and were forced to cover! This is a transportation stock and was due to come back to a "real" valuation multiple, and not a BK multiple. People overreacted and over sold this stock, just like many others have been oversold when the HF's hammered the bids on good quality stocks because their investors just plain "wanted out" at any cost a few weeks ago. What a shame! Many good stocks got massacred! We follow a few here. I think the shipping sector is going to bounce next once they get the banks online with their letters of credit to be able to support all the new China orders recently! Barclay's Bank will probably lead the way like Lehman did from what we are hearing. Get ready for an explosion when this happens because most have prepared for the worst, and well, we just don't see it. People still need to eat and the world economies need supplies and materials unless we're missing something here....consumption will still happen on a Global basis. Stay tuned.
Thursday, December 04, 2008
Newcastle Is Reporting That There Are 41 Ships Waiting to Load Coal
On December 1, they reported that there are 41 vessels off the port waiting to load 3,383,662 tonnes of coal. There are three vessels in the port loading 326,000 tonnes. Click to see the report
Wednesday, December 03, 2008
Breaking News: China Stimulus Spelled Out
The government Wednesday unveiled a raft of measures to encourage lending by financial institutions to infrastructure projects, small businesses and potential home and car buyers. Click Here To Read The News
Tuesday, December 02, 2008
Clinton And China News
HONG KONG -- At the opening of the two-day Clinton Global Initiative (CGI) meeting in Hong Kong, former US president Bill Clinton Tuesday urged China to contribute more to fight the global financial crisis, climate change and terrorism. Click For News
More News From China
Du Ying, vice-minister of the National Development and Reform Commission (NDRC) said on that this year's grain yield is on course for a record high of 525 million tons. Click For The Full Story
Monday, December 01, 2008
Great News From China
BHP Pops $4.00 in AH on the China news!
Hellenic Shipping News reports this weekend that all hopes for a turnaround are on China. Well, late today China Yunnan province announced that is is going to buy $3 Billion in metals according to Reuters news service. Click for News.
Hellenic Shipping News reports this weekend that all hopes for a turnaround are on China. Well, late today China Yunnan province announced that is is going to buy $3 Billion in metals according to Reuters news service. Click for News.
Bernanke: Lower interest rates are "feasible"
Expect rates to go lower and then stay low for quite some time. Bernanke says Fed has options as rates near "Zero". Also - The market sells off on the NBER news that we already new last year and should be built into the market already!
A Real and Free Trading Lesson
Here's the Lesson:
People here who are bullish need to look up the word Intrinsic Value. OK, here you go... The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.
What happened around the week of November 17, 2008?
When the forced selling came in it didn't matter what the Intrinsic Value was for the stock. The mutual funds, margin call sell outs, and Hedge Fund's were forced to sell at "whatever" the price was. I'd call it CAPITULATION. The Key words "FORCED" and "CAPITULATION". Your opportunity to BUY! View it like a forced sell on your neighbors house if it had to be sold in one or two days. You are not going to get Top Dollar by any means but it will sell for a deep deep discount, right?
OK, then what happens?
Well, as a former WS trader that has seen this many times, the "traders" / "Market Makers" drop the Bid Price and keep dropping it to bring in the shares at the best price. If there was massive selling say at $15, the MM's dropped to $14, 13, 12, 11, 10, 9, 8, 7 ,6 ,5 ,4....you see?
It doesn't mean that the price is the True Value. Its just where the MM's place the Bids until a buyer steps in who has $$$$ can take some heat. No one wanted to take any more heat as bids faded daily. People were scared. Again a buying opportunity to "leg" in as the stock kept falling....averaging in along the way.
So you might ask...What happens when the market ticks up and gets stronger? Well, as in the case of DryShips - DRYS, the MM's dont want to keep the Ask price or offer at $4.00 so they back away just like the reverse of the drop. The MM's move from $4 to $5, 6, 7, 8, 9, 10, then up to $20? $30? They keep moving up or lose their high cost shares at $5.00, 6, 7?? No way.
Anyways, the hard drops were done to get your shares too. This is how GS and Cantor make $100's of million in trading stocks every year! Get it? Yeah, its real. It happens all the time! Called, backing and filling....
My prediction based on past trading experience of over 25 years:
Look for a fierce bounce in the coming weeks as the smart money figures out that many stocks are trading well below their Intrinsic Values and we should get a bump from the worldwide stimulus packages too. Also, expect other Hedge Funds like George Soros and Paul Tudor to stop the liquidations at these absurd prices. George's traders were massively selling and he fired several of them. Rightly so. Go read about these HF's today.
OK, Have a good day. I hope that this was helpful? Be good.
People here who are bullish need to look up the word Intrinsic Value. OK, here you go... The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.
What happened around the week of November 17, 2008?
When the forced selling came in it didn't matter what the Intrinsic Value was for the stock. The mutual funds, margin call sell outs, and Hedge Fund's were forced to sell at "whatever" the price was. I'd call it CAPITULATION. The Key words "FORCED" and "CAPITULATION". Your opportunity to BUY! View it like a forced sell on your neighbors house if it had to be sold in one or two days. You are not going to get Top Dollar by any means but it will sell for a deep deep discount, right?
OK, then what happens?
Well, as a former WS trader that has seen this many times, the "traders" / "Market Makers" drop the Bid Price and keep dropping it to bring in the shares at the best price. If there was massive selling say at $15, the MM's dropped to $14, 13, 12, 11, 10, 9, 8, 7 ,6 ,5 ,4....you see?
It doesn't mean that the price is the True Value. Its just where the MM's place the Bids until a buyer steps in who has $$$$ can take some heat. No one wanted to take any more heat as bids faded daily. People were scared. Again a buying opportunity to "leg" in as the stock kept falling....averaging in along the way.
So you might ask...What happens when the market ticks up and gets stronger? Well, as in the case of DryShips - DRYS, the MM's dont want to keep the Ask price or offer at $4.00 so they back away just like the reverse of the drop. The MM's move from $4 to $5, 6, 7, 8, 9, 10, then up to $20? $30? They keep moving up or lose their high cost shares at $5.00, 6, 7?? No way.
Anyways, the hard drops were done to get your shares too. This is how GS and Cantor make $100's of million in trading stocks every year! Get it? Yeah, its real. It happens all the time! Called, backing and filling....
My prediction based on past trading experience of over 25 years:
Look for a fierce bounce in the coming weeks as the smart money figures out that many stocks are trading well below their Intrinsic Values and we should get a bump from the worldwide stimulus packages too. Also, expect other Hedge Funds like George Soros and Paul Tudor to stop the liquidations at these absurd prices. George's traders were massively selling and he fired several of them. Rightly so. Go read about these HF's today.
OK, Have a good day. I hope that this was helpful? Be good.
DRYS - DryShips: Buy On Any Weakness
Look for any dips as a way to Buy shares in DRYS. This stock is completely undervalued. 60% of their ships have locked in high day rates for an average of 5 years. One fund has been a seller and probably sold whatever they had left: Wellington Fund. I guess its better to take them out at $4.40 than $5.50? The buyers have been UBS, Credit Suisse, Goldman Sachs, Barclays, and others. This is at least a $30 stock folks. Company presentation October 6, 2008.
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