any thoughts on market yesterdays

[DOGS THAT BARK]

can't say I ever seen declines as such with basically no real reason that I see other than guy in china and greenspan both commenting on same day that markets have been "too good too fast"

They certainly have some wild bid/ask prices this morning--

PETROCHINA CO LTD
Price: 114.2500 Change: 0.0000 Bid: 101.1200 Day's High: 0.0000 Open: 0.0000
Time: 0:00 ET Volume: 0 Ask: 127.9200 Day's Low: 0.0000 Prev. Close: 114.2500

 

[selkirk]

well the markets in China, Greenspan, and overall poor economic numbers out of the US. You also had a market going straight up.

have a boring cdn. div fund, for the last 30 days it was up 5.4%. every other equity fund was up 2-4% for 30 days.

just glad the market has not down much more today.
stocks that have fallen that I like are TRP, MCD, NXY, TLM, AL, and in Toronto TCK.b.

the only stock bought today was FAP on Toronto. Asia bonds. short term hold.

thanks
selkirk

 

[DOGS THAT BARK]

Question Kirk Why was there such wild bid/ask diff today especially on asian stocks. Trying to discourage buying and selling?

 

[selkirk]

DTB do not believe it is to discourage buying or selling. often when liquidity drys up, the bids and asks will widen.

ie. on the Montreal exchange that trade stock options, in Canada have some options that trade often. the spreads are always narrow. others have very large spreads and always will; when a large market move happens or uncertain markets, people just move to the sidelines and the bid and ask spreads will grow.

also at the start of trading these spreads be wide.

a income trust in Canada that I own a small amount 500 shares QSR.un is an expample of this.... QSR.un owns most of the KFC (franchise) stores in Canada. over 400. it pays a 11.3%.

anyways for a few weeks, it would close at 11.20-11.30. in the morning it would open at 11.40-11.70, then it would quickly drift lower to around and close at 11.20-11.25.

the trend is gone, however for a few weeks it was nice knowing you could sell the stock in the morning and buy it back .20-.30 cheaper at the close of the day.

note: QSR.un is not a good trading stock since there is relative low volume.

thanks
selkirk

 

[DOGS THAT BARK]

Thanks--

Had some U.S. stocks sell via stop loss--have not bought back yet and may not--did add to china positions--CKISF.PK and ACH

the ACH is quite interesting--unusual #'s to say the least---can't remember last time I saw a 1.9 PE ratio paying 12.8 div.

CP CHIN ADS (NYSE:ACH) Delayed quote data

Pre-Market: 23.25 0.27 (1.17%) as of 8:00am ET on 03/02/07

Last Trade: 22.98
Trade Time: Mar 1
Change: 0.00 (0.00%)
Prev Close: 22.98
Open: N/A
Bid: N/A
Ask: N/A
1y Target Est: 28.92

Day's Range: N/A - N/A
52wk Range: 15.5275 - 27.90
Volume: 1,100
Avg Vol (3m): 839,452
Market Cap: 2.68B
P/E (ttm): 1.93
EPS (ttm): 11.90
Div & Yield: 3.04 (12.80%)

 

[selkirk]

also not buying anything for about two weeks DTB. just going to see how this plays out.

have got stopped out of 5 positions, 2 at a small loss, ie. snp.u, and eeb.

bought FAP as stated and have sold it for a big .10 gain per share...lol. like FAP on Toronto just thought 8.92-8.95 was a high price and would not break through $9.

it is currently at 8.80-8.85 and may try to buy it again. maybe sell for a small gain, not bad to keep since it yields over 8%.

DTB that stock is cheap however the div, is always more important than the pe....well in most cases.

PE can sometimes be reported which make them look lower than they are........

a div, and a growing div, is a good sign of the cash flow and growing revenue and earnings.

also most companies hate to cut the div. so a sign a company like their prospects going forward.

thanks
selkirk

 

[smurphy]

I've been short-selling since the crash. Plan to keep doing it while the market trends down. You guys have any experience with short-selling?

A few stocks I currently have with expection of continued short-term decline:

HD Home Depot
HOG Harley Davidson
GOOG Google
AAPL Apple
ACW Accuride
QCOM Qualcom
PCZ Petro-Canada

Put order in for AKAM Akamai

Already bought-to-cover for nice gain on GS Goldman Sachs, F Ford, and the best was SSRI Silver Standard Resources.

Asia already hit hard again to start the week. They are predicting Shanghai Index could drop to 1700 before things settle - that's another 30+%!! That could be a bit extreme, but there's no question that there's still more correction to happen.

 

[smurphy]

I hope nobody here has any mortgage lenders in their portfolio. They got destroyed today. None worse than NEW... -68% !! They might disappear altogether.

Added CFC Countrywide Funding, ENN Equity Inns, and PSB Business Parks to my short-sells. Real estate operations and lenders are reeling.

Cashed ACW.

 

[selkirk]

Smurphy had a shareclub meeting and we all thought that a correction could be near, a few weeks ago. of coarse when is always the question.

short only a few stocks, when I want to play the downside of a stock sometimes just buy puts. and sometimes sell uncovered calls. puts and calls are still very cheap for most stocks, indexes.

as for your list many of the names should move well on up and down days. however why not play an energy etf instead of Petro Canada.

should say I own Petro Canada, and after almost one year have a loss. it is a very small position. and sold two calls, one expired and one will this month, (unless it goes up $10...lol). anyways counting the div still a loss.

now they have failed to report the production this year that was expected, but they should increase production. also it has not moved so would think it has less downside.
by the way months ago there was an article in the globe of all their pass screw ups.....

if oil sells off an energy etf will probably fall more than PCA. by the way have stop losses on 80% of my energy holdings as they may get taken out and shot....ie. TLM comes in with a good q, but misses earnings by one whole cent and gets shot.

the selloff will probably continue in the oil/base metal sector, it can get brutal, after all who wants a base metals company trading at 5X and pays a div and cash on hand, or an energy company at less than 4X cash flow with growing production and buying back stock. these stocks could fall another 10%.

should also note own a small position on PWT.un have sold covered calls on the position in Aug $36 cdn. there number were average to weak. so would rate it a hold/sell. keeping it for the monthly div and will write covered calls against the position.

thanks
selkirk

 

[DOGS THAT BARK]

Intersting Kirk--especially view on base metals--glad I read thread 1st as was going to venture out in that area this morning--will put on hold now--Thanks

 

[selkirk]

DTB it may still be a good idea to invest in base metal stocks, you just have to be carefull.

maybe wait for a positive day. also maybe buy half of your position, then the remaining half later.
still believe many of these stocks are cheap however have seen some people take large positions and be down 10-20% in a few weeks.

TCK.b trades on Toronto a few weeks ago it was above 90 now it is 77. 10% moves in a couple of weeks in not uncommon. believe it is a great company, along with HBM also on Toronto.

find a good stock and slowly build up a position, maybe half then another half. also if there is a sell off wait until it is over. This may cost you 3%, but like to buy when the market has stablilzed.

use to own Falconbridge and inco, taken over. now own TCK.b and HBM. on Toronto.
as long as the US grows at 1-3% then asia will be fine, and base metal plays will do great.

if US has negative growth, these stocks will get shot, and no one will want them.

good luck with the play dtb.

thanks
selkirk

 

[smurphy]

Kirk,

I could learn some things from you. I don't know how 'puts' and 'calls' work, and why would that be a suggestion instead of short-selling? ....I'm still very green with a lot of this, in case you haven't noticed.

Regarding PCZ, I'm short selling it purely from technical reasons. It continues to reach new 1 year lows, so I'm counting on that following course in the near term.

I'm only going for base hits on these. If I can get $100 or more from a give short-sell, then I'll make sure it cashes. I don't feel confident with anything over the long run at the moment.

 

[selkirk]

Smurphy most people can invest without using options, also if you are doing very short term trades probably options would not be used.

quick examples

Royal Bank (canada) option on Montreal
current price Royal Bank $55.56

RY Call $54 Oct 3.60-4

so this allows the buyer to buy Royal Bank for $54 up until the third friday in October. for this pays 3.60-4 a share (1 contract = 100 share=$360 )

the seller recieves $360 (and all dividends, if they hold the stock). however must sell it if goes over $54.

PUT

let us say you believe Royal Bank will tank, (not sure why but this is an example)

RY P $54 oct 1.60-1.95

so the seller believes Royal will go higher or stay above 54. and sell the put (100 shares /1contract $195)

the buyer believes Royal will tank so buy a put $54 oct. for 195. this allow the buyer to sell Royal bank at 54 until 3rd friday in october.

so if royal falls to 45. you would make a good profit.



US examples

Home depot HD
$38.64
Puts

MAy P 37.50 .95-1.05

you hate retail and you believe the housing market will only get worse. you could buy a put that allows you to sell for 37.50.

until 3rd friday in may.

this will cost you $105 dollars, or 95.

just a few examples, actually the prices for some options have gone up, I guess a sharp sell off does that...lol.

the options are priced on time and how volatile the stock/index is...... this makes sense.

an investor would be more willing to pay a higher price for a volatile stock. stocks that fit this bill are base metal companies, energy, techs, ect.

low volatile stock will have lower premiums ie. utilities, banks, ect.

will post some of my options here so people can track them and see how many get wrong.

for the most they do well, wrote one this week wish I had back....

thanks
selkirk

 

[selkirk]

just a quick note, own Petro Canada long, and have a covered call that will expire this month against it.

also because of the great results from Royal Bank, have bought this company and sold some puts on the bank. will not sell covered calls, believe the bank (thought not cheap) can make 10%. well not covered calls...yet.

also bought a very small posiition on HD. this is probably a bearish sign as it is very hit or miss with retail. my history anyways.

thanks
selkirk

 

[smurphy]

Ahhh, OK. Thank you very much Selkirk. ...I really jumped into all this without knowing much. I blame Bill Frist.

I'm mostly watching the markets now - and trying to learn. Missed the quick payoff on some of those shorts, but will wait it out, as things are pretty volatile and I think there will be plenty of rises and falls. One consistant factor has been some amount of selloff the last 20 minutes of every trading day.

I'll investigate more on those puts and calls. It does seem the better way to go for some of these situations.

 

[DOGS THAT BARK]

the little previously obscure china aluminum stock has been getting lots press of late--

today--
http://yahoo.reuters.com/news/artic...4-14_06-32-52_SHA268408&type=comktNews&rpc=44

--and few days ago---PE as changed per price jump

Highest Yielding China Stocks holdings

ACH ACH
ALUMINUM CP CHIN

11.4% dividend. P/E of 9. selling for about half of book value with a billion and a half dollars in cash.

 

[selkirk]

bought some March 15-16, bought the stocks that I suggested in the presentation on Int. investing to my shareclub in March. just to see how they do, going forward. thanks for the two China stocks.

the metal sector has done well after being ignored, tck.b has bounced from 80 to 87 cdn.

HBM on Toronto is still cheap and does not want to move 21.01, should go over $25 by the end of the year..... cheap and ignored on Toronto. only problem could stay that way....

thanks
selkirk