More Shorting

I really like puts on LEH right now. Lehman Brothers lost about 9% today and I think they are the next hedge fund target to break. This market greatly favors the short position on this sort of firm and today confirmed, at least in my mind, that LEH is the next casualty. That's not to say that they will eventually be bought out, I don't know that it will be as bad as the collapse at BSC. With that said, I think the correct play is puts on LEH. The removal of the uptick rule by the SEC last July has really opened to door to targeted campaigns by powerful investors to do their own damage and make good money from shorts.

BSC

Think maybe James Cayne reads our little blog?

http://www.reuters.com/article/businessNews/idUSN2739700520080327

And it isn't done yet, this is just a sign of worse things to come.

CKP

Nice call Caroline.

CKP is hovering around 28 compared to the 24 buy target.

Keep up the good work.

Short of BSC

Ok, so this has been the most sporadic of any stock over the past week and a half. Look at why that is:

1. They pretty much declare to the world they are about to crash into the ground (which sends the stock through the floor).

2. They get bailed out with help from another firm and the Fed (stock rebounds a good bit).

3. Shareholders demand a better deal (stock goes up again).


In my opinion there is no reason to believe that just because JP Morgan bought them out (and eventually even sweetened the deal) that their troubles are over. We have yet to see all the damage inside the company and I don't think that risk is yet built into the price. Recall that the initial news of their downfall was blamed on "market rumors". Well, I think it had a lot more to do with risky investments not yet exposed and eventual write downs then it did with some loudmouth in a Yahoo Finance chat room. I expect continuing bad news from Bear and think that these last two upswings are hopeful and unrealistic.

Short it.

WHR

       Did we ever make a decision on Whirlpool? 

Mutual Funds

One angle would be to go with a primarily international fund.

In order to decide if this is the right plan, it is necessary to form an opinion on the stability of the world economy. There is an idea now that the rest of the world isn't as dependent of us as they once were. If you believe this theory then an international fund would be a good choice. However, if you think that the global economy is still a reflection of the US economy then it might be wiser to stay in cash.

Personally, I think we could find some international funds which would be greatly independent of a US recession.

We can look first at ADR heavy state-side funds and spyders.


The other option is to put money into a "Bear Fund" which focuses on shorting. I haven't ever bought into a bear fund but now is as good a time as any I think--well, maybe two weeks ago would have been better. One such fund which has put up 6.59% YTD is the Rydex Inverse S&P 500 Strategy Inv which would be really good if you think the S&P is still on the way down.

Mutual Fund

Even my mutual fund is performing poorly. It would seem even in times of recession we could find a fund to store some cash in while we wait for a recovery. Anybody's thoughts on this? 

March 7

Futures look pretty bad this morning.

I'm staying in cash.

Any thoughts?

MRVL

So, good news and bad news.

Turns out I was right about MRVL beating analyst expectations. In fact, they did so in convincing form. Unfortunately they followed their outstanding earnings report with higher cost expectations than had been previously stated. These two events led to an instant rise in price to the tune of as much as 9% followed by a slide which is currently down around -5%. Deutsche Bank still has a PT on this one of $16 but I was hasty with this call--no doubt. Unless you got out within an hour of the close you lost money on this one and that is certainly not a big enough window to warrant this type of risk.

This market is absolutley terrible and I think a move to cash is wise in the short-term. If you followed my advice than half your principle investment is still in APA--move it too. The market will turn, but tomorrow is not the day.

Buy Price

Everyone welcome Caroline S. , the noob. Caroline hopefully people (including myself) will give you some feedback on your post. In the future we typically give a recommended buy price range. I'm guessing yours is the 24$ range, but that's a bad thing to assume. Let us know; glad you're here. 

Marvell Technology

MRVL

Reports earnings Thursday after the close.

I am taking the earnings from APA and moving them here. It is a risk, but I think this one could shoot up in a couple of days.

Checkpoint Systems Inc.

Checkpoint Systems Inc. is getting noticed. CKP, is an innovative multinational company that makes tracking and security devices for retailers. On 2/29/2008 the CEO Robert P. Van Der Merwe bought 50,000 shares for $24.06. Market closing for 3/03/2008 was $23.82. Their fourth-quarter net income showed a increase of 36%. This company overall shows constant growth in the global arena. I recommend checking it out for consideration as a moderate growth short term stock and as a successful 2-4 year stock.