29 replies to this topic

[ogm]

What does CDO crisis have to do with stocks ?


If anything its GOOD for stocks. Since money will stop flowing into CDO's

OGM I think you are a bit comical here, I mean you showed up right at the top and told us everything about the debt markets, and then you forgot about them like a fish only 6-7 weeks later as if all the problems went away now. Well they didn't and it doesn't appear to be getting quickly better actually...

It is true that the debt markets are slowly getting back to normal, but some of the debt segments are permanently gone now --like sub-primes, and its impact is still effecting the growth basically or the stock market in general. The debt related sell offs basically effected even the highest quality issues in the stock market since July...

The bond market is exponentially bigger than the stock market, saying that the money will flow into the stocks immediately is simply too optimistic. It is usually the excess liquidity via buybacks or stock based financing (secondary IPOs etc) that will go into the stocks directly and the money has to be still created in the bond market first...

So, I think the growth might sustain to keep the indices where they are until the credit growth rate improves again, however I really do not think the stocks will be able to rally much without the bonds. This only happens under the exceptional conditions that we can discuss more like an inflationary blow off, but I don't think we are in one of those hyperinflationary periods right now or a few months more, especially while the central banks are trying to push billions just to save the markets from collapsing only a few weeks ago...

- kisa

Hehe... I took the contrarian position, when the noise became deafening When the situation was only developing it was one thing. Now its another thing. Now we know how it developed, and the surprizes for the time being will be to the upside. As you pointed out debt markets are slowly coming back to normal.

I'm not saying something will happen immidiately. I'm just saying that CDO's were a huge sponge for liquidity, and now money has to find new places to go. And quite a lot of it will go into stocks, that happen to be trading at valuations not seen in years.

If you beleive that we were at the bottom of the 4.5 year cycle, we have quite a bit of time here, so no need for anything to happen immidiately

[SandStorm]

What does CDO crisis have to do with stocks ?


If anything its GOOD for stocks. Since money will stop flowing into CDO's

That has to be a trick question. Here I'll give you some hints.

What does crisis have to do with confidence and psychology?

What do confidence and psychology have to do with credit extension?

What does credit extension have to do with consumption and investment?

What do consumption and investment have to do with the economy?

What does the economy have to do with stocks??

No, Sir, the lesser-of-two-evils argument does not drive long-term stock prices.

Good stock picks, btw . . . for now.

Edited by SandStorm, 10 September 2007 - 03:59 PM.

[kc135a]

The market is down 5% off the highs in the midsts of thick doom and gloom and screams about recession and impending global economic collapse.

Thats what this whole crisis is worth.. 5%.

Thats what this whole crisis is worth.. 5%.

You just don't seem to get it.

Last month, win ratio of 2/3rds, total return 126% including one loss of 92% on a smaller than normal size position that got trapped big time.

This month up 25.4% and currently flat.

I know there are many people on this board that are blowing those results out the door because I am not catching tops or bottoms nor am I taking every setup.

Nobody cares if the DOW goes to 20000 or zero. We only care what we can clip from bone heads who will not adapt to the current market movements whether up or down.

When the bottom finally comes and we get out election year rally all of us "bears" will be right their with the "bulls" because we will be trading in the direction of the market, not because of this or that. It is no more complicated than that.

This is not rocket science. Take the trade. If you are wrong then cover. If you are right let it ride until it is no longer working or it meets other of your criteria. What is so darn hard about that?

KC

[greenie]

Thats what this whole crisis is worth.. 5%.

You just don't seem to get it.

He is a genius. Ask how his NRO and RAS longs are doing He talked about them at great length during early to mid august.

[arbman]

I'm just saying that CDO's were a huge sponge for liquidity, and now money has to find new places to go. And quite a lot of it will go into stocks, that happen to be trading at valuations not seen in years.

OK, we have some common ground of some sort, it will be most likely a slow ramp up, you also agree with me, unless it dips once more first, I favor a range of some sort. In any case, the money that managed to come out of the CDOs will not go into the riskier assets first, they will go into the safer assets instead, like Treasury bonds... At least for a while... Actually they did!

[OEXCHAOS]

Thats what this whole crisis is worth.. 5%.

You just don't seem to get it.

He is a genius. Ask how his NRO and RAS longs are doing He talked about them at great length during early to mid august.

I've got far worse holdings over the same duration!

But I gotta laugh. Take a look at RAS in after hours trading...

Pretty big divvy to get next month. Risky, but there's a good deal of risk priced in, too.

Mark

[ogm]

He is a genius. Ask how his NRO and RAS longs are doing He talked about them at great length during early to mid august.

NRO I'm flat, not considering the dividends.

RAS is VERY profitable. Half of the position is hedged with written calls. Also VERY profitable. Looks like 7.5 will get called away. Didn't see AH action before Mark posted.

Here, I went through the trouble of taking a screenshot of my account for you, just to make you happy.

Now go and do something smart, before you squander your retirement money on stupid trades.

Edited by ogm, 10 September 2007 - 07:35 PM.

[ogm]

Just for you Greenie, I also have AHT and JRT. AHT... good REIT, 8% dividend. Owns a bunch of Marriots, Hiltons, Starwoods. Trading under book value. Unless of course those hotels are tanking in price because subprime borrowers can't afford to buy them. JRT ... Just following the insider buying. What can I say, I love dividends.

Edited by ogm, 10 September 2007 - 07:47 PM.

[kc135a]

Thats what this whole crisis is worth.. 5%.

You just don't seem to get it.

He is a genius. Ask how his NRO and RAS longs are doing He talked about them at great length during early to mid august.

He is a genius.


Personally, I believe a lot of people on this board are ........... but that does mean they can trade.

KC

[ogm]

The market is down 5% off the highs in the midsts of thick doom and gloom and screams about recession and impending global economic collapse.

Thats what this whole crisis is worth.. 5%.

Thats what this whole crisis is worth.. 5%.

You just don't seem to get it.

Last month, win ratio of 2/3rds, total return 126% including one loss of 92% on a smaller than normal size position that got trapped big time.

This month up 25.4% and currently flat.

I know there are many people on this board that are blowing those results out the door because I am not catching tops or bottoms nor am I taking every setup.

Nobody cares if the DOW goes to 20000 or zero. We only care what we can clip from bone heads who will not adapt to the current market movements whether up or down.

When the bottom finally comes and we get out election year rally all of us "bears" will be right their with the "bulls" because we will be trading in the direction of the market, not because of this or that. It is no more complicated than that.

This is not rocket science. Take the trade. If you are wrong then cover. If you are right let it ride until it is no longer working or it meets other of your criteria. What is so darn hard about that?

KC

I think you got confused and lost track of the discussion. This 5% wasn't about trading. But about how far the market is off the highs comparing to the amount of pessimism out there.

If you can catch every turn on 1 minute charts... kudos to you. But thats not what that post was about.

As for trading.. everyone has their own style.

Edited by ogm, 10 September 2007 - 08:24 PM.