Monday, 19 January 2009 23:00

I'll be back to blogging late tonight

I'm winding down activities in DC (I had to catch a political ball or two to do some schmoozing) and then its back to business. Those who read my post from January 6, "Amid the rally, I look at the Doo Doo 32 and their receipt of the TARP" and took heed (with access to subscription materials) should have had a very, very profitable day today. I would like subscribers to share their experiences, both successes and failures, so I can both observe the effectiveness of the research and potentially make improvements, where practical.

In addition, those who have not yet subscribed can hear the testimonies (both good and bad) of actual subscribers. I will start tomorrow evening off with at least one forensic update, and possibly another full report, with another full report following either Friday or early next week (3 in total). Unfortunately the hacking consumed an immense amount of time and resources and affected the timeliness of the reports, but the information gleaned within should be close to priceless for those who grasp the magnitude of what is actually happening.

One is a full macro/forensic on a Spanish bank, with some minor trading info (not necessarily recommendations), and the other will be the JPM update - following will be a retailer. I am looking for the home run candidate, but alas have not found it yet.

Last modified on Monday, 19 January 2009 23:00

20 comments

  • Comment Link Jarret Pazahanick Thursday, 22 January 2009 07:46 posted by Jarret Pazahanick

    I have been following Reggie since the beginning and the research and track record are second to none. He has delivered winner after winner and all you had to do is buy the day he released the report and hold on. Sounds easy doesnt it...well....

    That is where I have managed to come in and although I made good money in MS....I covered all the regional bank shorts in the run up in Sept around the short ban and all the other govt manipulation and of course lost money (that would have been a HUGE gain was I still holding today). I am interested in a subscription model that details out the trading strategy on the research as I am sure several others are as well.

    Looking forward to the retail pick as I know that industry very well and think there is a lot of downside all the way around.

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  • Comment Link Phil V Wednesday, 21 January 2009 20:05 posted by Phil V

    I mean will holders of agency mortgages take a haircut from a cram-down in the principal paid back at maturity? If so, then there's some SERIOUS money to be bad pretty easily...

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  • Comment Link shaun noll Wednesday, 21 January 2009 20:02 posted by shaun noll

    it's not clear what you're asking

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  • Comment Link Phil V Wednesday, 21 January 2009 18:59 posted by Phil V

    Reggie, any thoughts on a cram down in agencies?

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  • Comment Link shaun noll Wednesday, 21 January 2009 18:36 posted by shaun noll

    that site seems to be pretty quality upon initial review, thanks

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  • Comment Link shaun noll Wednesday, 21 January 2009 18:20 posted by shaun noll

    i just found it, thanks for bringing that up, ESI seems to face similar issues,

    http://www.citronresearch.com/

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  • Comment Link shaun noll Wednesday, 21 January 2009 18:17 posted by shaun noll

    any chance you could post a link to that citron APOL write up? i'm having trouble finding it?

    thanks alot!

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  • Comment Link NDbadger Wednesday, 21 January 2009 15:12 posted by NDbadger

    STI is tomorrow. Last quarter their texas ratio jumped to 40% - and the environment has only gotten worse. I won't be pretty.

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  • Comment Link NDbadger Wednesday, 21 January 2009 15:08 posted by NDbadger

    The option part does bother me. But their SQL business is growing quickly and is very profitable. The office suite is just pure profit, if it sustainable. My problem with MSFT is the management seems completely out of touch with no chance to replace. Yahoo seems like a money burning exercise. If they doubled their dividend and replaced Balmer with someone like Hurd, the stock would probably move up 50%, but it won't happen until (if ever) Gates wants a change.

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  • Comment Link NDbadger Wednesday, 21 January 2009 15:04 posted by NDbadger

    Citron has a writeup on Apollo as a short idea. I think most of the education stocks are very expensive now, but this is their environment, so they may still have a few good quarters ahead of them.

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  • Comment Link shaun noll Wednesday, 21 January 2009 14:08 posted by shaun noll

    many of the for-profit education stocks look insanely over valued, the bull case commonly made i don't think will hold water this time around....

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  • Comment Link Phil V Wednesday, 21 January 2009 14:01 posted by Phil V

    reached a 52 wk high.

    there could be some meat on this guy...

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  • Comment Link shaun noll Wednesday, 21 January 2009 13:27 posted by shaun noll

    one of my previous favorite chemical shorts was SOA. check them out, the stock has already tanked so i'm not sure how much meat is left on that one but i seriously can not find one thing going right for them. every end market of theirs is screwed.

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  • Comment Link shaun noll Wednesday, 21 January 2009 13:25 posted by shaun noll

    is incredible, i can honestly say that i have probably learned more about REAL security analysis from my digging and verifying and using your research to go find where you got that data from the financials than i probably did from the first two levels of the CFA. this site is amazing, and i probably check this site more than my email! ahhaha

    my only constructive comment would be the "actionable updates", more of those are great, if you could involve your readers more in the process prior to the final reports i feel that would add even more incremental value, as your thought process and looking at the companies you screen out and why is immensely valuable. perhaps one of your readers has some specialized knowledge or skill with regards to a company you excluded or industry you eventually decided to pass on that would be helpful to you or them? basically, any steps along your research path/process that you could share with us as you go along would be great, wouldn't take much time, just short posts "here is my initial screen of retailers on their way to the graveyard" and your excel list, i think this could benefit you as well since many of your readers are pretty good analysts themselves and would be more than willing to share their thoughts too. that and please keep citing your sources for your charts and graphs and model information.

    you are on fire lately Reggie, and its truly amazing to watch, i'm 100% a believer who has been reading the blog since the start and even i'm impressed at the duration of this run you are on, you must be proud man, and you should be! thanks for your hard work! i'll keep trying to give back with investable ideas in any way that i can and also please let me know if there is ever any way i can help :)

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  • Comment Link Cassandra Complex Wednesday, 21 January 2009 12:29 posted by Cassandra Complex

    Is a disaster, I think...All the profits just go to employees via options, and they haven't been able to make much money off of anything if they can't leverage their operating system monopoly (I consider office suite part of that), which is becoming less and less relevent. Their execution of virtually *everything* else (other than maybe Xbbox) has been abysmal, and when people don't like their products, those arrogant SOBs figure that a markting campaign will somehow save their @$$e$.

    They're like every other monoply in old age--fossilized and crippled with osteoperosis...

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  • Comment Link Cassandra Complex Wednesday, 21 January 2009 12:26 posted by Cassandra Complex



    I agree with this--I should've posted that myself :) I think the subscription at its current price is well worth paying for--I just wanted to post my own experiences with the actual investment returns.

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  • Comment Link NDbadger Wednesday, 21 January 2009 12:13 posted by NDbadger

    I think the research is outstanding. After three years of investing on my own, I finally feel like I'm no longer the dumb money. I feel like I'm getting a decent handle on what is going on in the macro environment and how to analyze a bank and have applied that to my investment approach.

    It would be great to have someone to ask technical questions to, but i don't know if that is feasible for you. I know your time is constrained.

    For example, USB announced today- metrics continued to deteriorate. One key piece was that TangAssets/TCE was 36x. But USB reported it as 22x, as they are adding back in the mortgage servicing rights-I think. But is this the right way to think about it? Are the MSR's worth anything if people are defaulting?

    With regards to the comment: the stocks have already gone down, I wish we could have known earlier, I think is entirely missing the point. First, on many companies, eg. AXP, you were very early. But the point I think is, that the companies you are throwing out here are the most likely to go bankrupt, so it really doesn't matter if its gone from 80 to 20. If it's going to zero, that's still 100% return.

    With the banks, the end game is that all current equity holders of dead banks will be severely diluted, so it doesn't much matter if it goes against us for a while. Use any upside as an opportunity.

    Along these lines, I've been wondering if you would start to investigate the chemical industry. Many of those companies have tons of debt in a severely deteriorating environment. I have been trying to keep up with the banks, so haven't had time to explore, but I bet it is a fruitful area.

    Finally, any comments you have on buying opportunities and gold would be interesting. There are a lot of great companies, great business models, generate a lot of cash that are at historically low multiples such as MSFT. These companies aren't going bankrupt. Are they worth taking a long position at this time or are we still to early?

    On gold, with the fed creating so much liquidity, should we also have some gold and silver exposure to protect against future inflation?

    Maybe you would say the certain profits are in the banks, so that is where we should have the most exposure? but these are just questions I've been kicking around.

    Anyway, the work is outstanding, truly the best I've ever seen. I only wish I had found you a year ago. I'd be a lot better off financially. One thing I really enjoy are the follow up reports (ex. JPM). Thanks for everything.

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  • Comment Link Cassandra Complex Wednesday, 21 January 2009 11:48 posted by Cassandra Complex

    Content-wise, you've clearly been on the money, and had I followed you, I'd have done great. As it is, I did fairly well, but not as well as I should have (the difference between "should have" and "did" being my fault, not yours).

    I realize you don't want to screw up your own prop account, and it's understandable, but at the same time, much of your analysis lately comes after a stock has moved 70% or 80%. Maybe it's because of your personal account, maybe (likely?) it's because the markets have been moving very quickly, but ideally, it'd be nice to get things well ahead of time instead of during the middle of a big move.

    Again, I'd have made more money if I was more willing to jump in the middle, so maybe it's just my style that needs to change. Also, the posts over spring and summer 2008 were amazingly good. Just understanding what's going on is also great, even if I am not making as much $ of off it as I'd like to.

    Just my opinion--most people will probably disagree.

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  • Comment Link Mark Roman Wednesday, 21 January 2009 11:04 posted by Mark Roman

    I sure wish I was in SKF rather than SRS which I am still clawing back from the drop from 130 to 50 while averaging down. Allright MAC, HIG, PFG, FRO, RAH....comon team, look at the nice drops every other Reggie pick is doing and take the leap!

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  • Comment Link DAVE Hoffman Wednesday, 21 January 2009 10:40 posted by DAVE Hoffman

    So we should be looking for at least one report tonite. Thanks

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