Dow Above 13,000 / NASDAQ 3,000
The Dow Jones Industrial Average is an index that is made of 30 stocks which are a general representation of US economy. The index consists of companies like McDonalds, Wal-Mart, Home Depot, Bank of America, and Procter & Gamble. The Dow being above 13K is significant because some consumers like you and me are feeling a little bit better as we watch our collective investment wallets head in the right direction. If you are invested in the markets through a personal account, 401K, IRA or some other investment vehicle chances are they are all doing better. To put this in perspective the last time the Dow was at this level was in May 2008. Or this may help, when things were really bad a few years ago the Dow was at 6,547 on March 9, 2009. That was four years ago the stock market was where it is today, so we've come along way. I almost forgot the NASDAQ, which is an index tracking primarily technology stocks. The NASDAQ briefly hit 3,000 a level it hadn't seen in about 12 years!!
URB Investment Tips: My take away is that this is proof as why you usually want to stay invested in the markets and to not be scared away by the big swings. I also want to mention that this is a good time to cash in a few of your BIG winners. In short, I've been impressed by the momentum of jobs and have enjoyed this ride up in the stock market. I will be watching closely because I think we've come along way and worked hard to get here and I think the market may take a deep breathe and pull back (i.e., decline in price) a few months from now.
Here are a few themes from my latest quarterly stock picks:
~ Beaten down stocks
~ Pharmaceutical stocks
~ Gold Miners stocks
Stay tuned, they'll be released shortly.
Showing posts with label Bank of America. Show all posts
Showing posts with label Bank of America. Show all posts
Saturday, March 03, 2012
Thursday, December 17, 2009
Can The Banks Signal The Economy's Direction??...
The major banks {Bank of America, JP Morgan Chase, etc) that issue credit to people like you and I, are reporting numbers that will help us understand what people are doing (or not doing) with their debt lately. A good number of the banks reported that chargeoffs are on the rise again. Charge0ffs measure the number of accounts that no longer have the ability to pay off the debt that they've spent. This can happen for a number of reasons and be a sudden occurrence but usually charge0ffs are the end result of the cardholder being delinquent and not paying minimum amounts off for their credit balances. For example, I may chargeoff because I declared bankruptcy, made some type of settlement agreement with the bank, or after a long period of time (7mos) the bank determines that I will not be paying my debt off. So the fact that there are more of these situations occurring is not not a good thing. In general, the banks chargeoff levels mirror the rate of unemployment which is understandable. The one thing this trend tells me is that it appears to be more likely that once a cardholder starts to become delinquent they usually stay that way until the bank writes them off (after 7mos) and determines that they won't get their money back.
If people aren't making good on their existing debts then that means their available credit is shrinking and I go back to my example that indicates the consumer will be pulling back or not making new purchases because they don't have any more room on their cards. This means that most purchases need to come from cash and that is hard to come buy nowadays. Does this signal another leg down for the economy...its hard not to think that we've come too far too fast.
Now before you go and think that I have nothing positive to say, there was some good news. Most of the banks reported that the number of people going delinquent is declining slightly. So its seems like the key will be for the banks to do everything in their power to keep people making those minimum payments.
See the attached link for a view of the "Lifecycle of a Deliquent Card Account" (provided by creditcards.com):
http://www.creditcards.com/credit-card-news/life-cycle-delinquent-debt-1265.php
And the reaction of one credit card issuer is to charge very high interest rates, see the what a 79% interest rate looks like here:
http://www.creditcards.com/credit-card-news/first-premier-79-rate-fees-credit-card-1265.php
If people aren't making good on their existing debts then that means their available credit is shrinking and I go back to my example that indicates the consumer will be pulling back or not making new purchases because they don't have any more room on their cards. This means that most purchases need to come from cash and that is hard to come buy nowadays. Does this signal another leg down for the economy...its hard not to think that we've come too far too fast.
Now before you go and think that I have nothing positive to say, there was some good news. Most of the banks reported that the number of people going delinquent is declining slightly. So its seems like the key will be for the banks to do everything in their power to keep people making those minimum payments.
See the attached link for a view of the "Lifecycle of a Deliquent Card Account" (provided by creditcards.com):
http://www.creditcards.com/credit-card-news/life-cycle-delinquent-debt-1265.php
And the reaction of one credit card issuer is to charge very high interest rates, see the what a 79% interest rate looks like here:
http://www.creditcards.com/credit-card-news/first-premier-79-rate-fees-credit-card-1265.php
Saturday, August 15, 2009
What's in My New Fave Five Portfolio
Well if I had my T-Mobile Sidekick I would be dialing up these stocks in my Fave Five list. After reading my previous post you see that I am looking to build a base with longer term plays that will offer protection and growth. Stocks like TIP, EPD, and GE are for the long road because they protection you from inflation, provide a nice dividend, and offer large cap value...respectively.
I became to write about clarity and the activity that I am seeing in the markets allows me to return to my screening process. A process that allows me to rely on quantitative data analysis and less on my emotions. Here are my picks and the my views of what the data tells me.
My FAVE FIVE for August with price points:
Interactive Brokers (NasdaqGS: IBKR) - This may be my favorite pick this month. I would be a heavy accumulator between $18.15 -18.60. Also any points when they dip below $19.12 I would start nibbling at the stock. I like the activity in the stock market which allows this company to garner more fees and I am bullish on the fact that they market themselves as a low cost fee servicer.
Americredit (NYSE: ACF) - I am pleased that this stock came up screen. At 16.94, I would be a buyer of this automobile finance contract purchaser and servicer. I believe 'Cash for Clunkers' will be a huge benefit to this company and the proof is in a recent discussion on CNBC with the AutoNation CEO. He directly attributed the program with bringing buyers with good credit scores into showrooms.
Bank of America (NYSE: BAC) This one is simple. Everyone and there mama is buying into BAC and I told you before I don't go against smart money. It came up on my screen and further research shows industry hedge fund smart guys like Peltz, Jana Hedge fund, Dan Loeb and my current favorite John Paulson are jumping on to this train. Take Paulson, my dog owns 168 Million shares. Hmmm, is that enough to make you think twice! I'm struggling with a price point but I'd love to see a small pullback to pick this stock up @ 15.96
Becton Dickinson (NYSE: BDX) - This one is simple. Even though I like Paulson, I am a bigger fan of Warren Buffet. He steered me right with Burlington Northern and now he's on board with BDX. Jump on the wagon @ $65.49
Pfizer (NYSE: PFE) - This was not uncovered by my screen but I like the activity around PFE. This was added at the last minute and switched with my honorable mention Boston Sci. As I was researching PFE, I learned that the management has indicated a plan to raise the dividend by 25% by the end of the year. I can dig that!
Honorable Mention Fave Fives:
Rait Financial (NYSE: RAS) - I have to give you a 'penny stock'. RAS hits my screen and should be picked up at $2! The only problem is that it took off the other day to the tune of 29%. Well you win some and you lose some.
Boston Scientific (NYSE: BSX) - This gets the dubious number six on my list. It got replaced by an older maybe more responsible friend PFE. But grab BSX @ $11.06.
I became to write about clarity and the activity that I am seeing in the markets allows me to return to my screening process. A process that allows me to rely on quantitative data analysis and less on my emotions. Here are my picks and the my views of what the data tells me.
My FAVE FIVE for August with price points:
Interactive Brokers (NasdaqGS: IBKR) - This may be my favorite pick this month. I would be a heavy accumulator between $18.15 -18.60. Also any points when they dip below $19.12 I would start nibbling at the stock. I like the activity in the stock market which allows this company to garner more fees and I am bullish on the fact that they market themselves as a low cost fee servicer.
Americredit (NYSE: ACF) - I am pleased that this stock came up screen. At 16.94, I would be a buyer of this automobile finance contract purchaser and servicer. I believe 'Cash for Clunkers' will be a huge benefit to this company and the proof is in a recent discussion on CNBC with the AutoNation CEO. He directly attributed the program with bringing buyers with good credit scores into showrooms.
Bank of America (NYSE: BAC) This one is simple. Everyone and there mama is buying into BAC and I told you before I don't go against smart money. It came up on my screen and further research shows industry hedge fund smart guys like Peltz, Jana Hedge fund, Dan Loeb and my current favorite John Paulson are jumping on to this train. Take Paulson, my dog owns 168 Million shares. Hmmm, is that enough to make you think twice! I'm struggling with a price point but I'd love to see a small pullback to pick this stock up @ 15.96
Becton Dickinson (NYSE: BDX) - This one is simple. Even though I like Paulson, I am a bigger fan of Warren Buffet. He steered me right with Burlington Northern and now he's on board with BDX. Jump on the wagon @ $65.49
Pfizer (NYSE: PFE) - This was not uncovered by my screen but I like the activity around PFE. This was added at the last minute and switched with my honorable mention Boston Sci. As I was researching PFE, I learned that the management has indicated a plan to raise the dividend by 25% by the end of the year. I can dig that!
Honorable Mention Fave Fives:
Rait Financial (NYSE: RAS) - I have to give you a 'penny stock'. RAS hits my screen and should be picked up at $2! The only problem is that it took off the other day to the tune of 29%. Well you win some and you lose some.
Boston Scientific (NYSE: BSX) - This gets the dubious number six on my list. It got replaced by an older maybe more responsible friend PFE. But grab BSX @ $11.06.
Monday, March 23, 2009
Wall Street - When is Toxic Good?...
The resounding answer to this question is when you don't have to hold the toxic stuff anymore. That appears to be the solution to the problems plaguing America's banking system, which is clogged with these non-trading pools of mortgages that are usually packaged together to be sold off to investors. (Note: Other assets can be packaged together and sold off...like credit cards debt, however for this discussion we will just focus on mortgages)
The investors who usually bought these packages of assets lost faith in them and ran away and the market just dried up. So the assets began selling for less and less and the banks soon became stuck with these assets that "currently" had little to no value. But here is the tricky part for most people to understand: These assets could have value some day if the economy stabilizes.
So what the government is attempting to do is bring all the key players bank to the table and make it worth everyones while. Here are the players and how they will benefit:
Banks - They benefit, if and when they get these assets that "currently" have little value off of their books
Investors (Private Firms) - They benefit by being able to buy these assets again at reasonable prices, because they provide consistent income
Government - They benefit if both the Banks and Investors come together and hold hands again and start trading these assets again. It will help to stabilize the banks and assist in stabilizing the economy
How the Government plans on doing it:
The stock market is on the rise today because the government has officially unleashed its plan to loan $1 Trillion dollars to private firms(investors) who will share in the costs to find a price and buy these toxic assets from banks and split both the profits and losses around these assets.
This gets all the major players involved again and could change the way Wall Street looks at the banks.
Urb Thoughts:
I think that this plan is a well put together solution to the troubling problem around toxic assets. Ironically it helps and hurts the banks but overall it helps the banks and I will explain why. This hurts the banks because "one day" these assets will have value and they will miss out some of those gains but the biggest plus is getting these toxic assets off of their books. And in my opinion, once these assets are off the books, the banks should have no excuse to not make money. They are borrowing money and pay next to nothing for these dollars because the rate at which banks are being charged is at historic lows (Fed Funds Rate)...its between 0 and .025%!!! I could make money if I was borrowing money at these levels. Now the explosive part is all those bad assets that were sagging down their balance sheets will be sold off...this definitely puts the banks in a better position. The one thing to note is that as banks sell off these assets they will have to take a write-down and earnings for the next few quarters may not be pretty but LONG-TERM the banks may be the best BUY of the century.
I'm not sure how I will play this but I will gain some exposure to:
Direxion Financial Bull 3X Shares (FAS)
Also adding the banks that I belive have the best ability to survive will be key:
Wells Fargo (WFC)
JP MorganChase (JPM)
Bank of America (BAC)
The investors who usually bought these packages of assets lost faith in them and ran away and the market just dried up. So the assets began selling for less and less and the banks soon became stuck with these assets that "currently" had little to no value. But here is the tricky part for most people to understand: These assets could have value some day if the economy stabilizes.
So what the government is attempting to do is bring all the key players bank to the table and make it worth everyones while. Here are the players and how they will benefit:
Banks - They benefit, if and when they get these assets that "currently" have little value off of their books
Investors (Private Firms) - They benefit by being able to buy these assets again at reasonable prices, because they provide consistent income
Government - They benefit if both the Banks and Investors come together and hold hands again and start trading these assets again. It will help to stabilize the banks and assist in stabilizing the economy
How the Government plans on doing it:
The stock market is on the rise today because the government has officially unleashed its plan to loan $1 Trillion dollars to private firms(investors) who will share in the costs to find a price and buy these toxic assets from banks and split both the profits and losses around these assets.
This gets all the major players involved again and could change the way Wall Street looks at the banks.
Urb Thoughts:
I think that this plan is a well put together solution to the troubling problem around toxic assets. Ironically it helps and hurts the banks but overall it helps the banks and I will explain why. This hurts the banks because "one day" these assets will have value and they will miss out some of those gains but the biggest plus is getting these toxic assets off of their books. And in my opinion, once these assets are off the books, the banks should have no excuse to not make money. They are borrowing money and pay next to nothing for these dollars because the rate at which banks are being charged is at historic lows (Fed Funds Rate)...its between 0 and .025%!!! I could make money if I was borrowing money at these levels. Now the explosive part is all those bad assets that were sagging down their balance sheets will be sold off...this definitely puts the banks in a better position. The one thing to note is that as banks sell off these assets they will have to take a write-down and earnings for the next few quarters may not be pretty but LONG-TERM the banks may be the best BUY of the century.
I'm not sure how I will play this but I will gain some exposure to:
Direxion Financial Bull 3X Shares (FAS)
Also adding the banks that I belive have the best ability to survive will be key:
Wells Fargo (WFC)
JP MorganChase (JPM)
Bank of America (BAC)
Friday, January 16, 2009
Been Busy...
Some would say being right on the money. Well lets look back at over four months ago, when we told you to re-allocate your portfolios because the worst ain't here yet. And what have we seen is that are call is right on. The Dow has continued to plummet to the level I thought we wouldn't hit for awhile. and that is roughly around Dow 8000. This is a compelling moment because months ago I said that I would recommend that we all start inching back into the market, but at this point the news continues to be bad. Just searching articles on the internet you may come across these themes: Banks Need the rest of the TARP Bailout - Citigroup is selling their brokerage unit! - Bank of America is showing signs of cracking Retailers are not looking good. - Even Walmart sales are declining - Circuit City can't find a buyer and is liquidating all their stores!! Unemployment rates continue to rise - GE Capital is set to shed 11000 jobs Downgrades send stocks to their 52week/all-time/all world lows There is no strategy when the headlines read like this. The only thing is to stay the course with the consistent message that we've had before. I repeat I am and have recommended that you are completely out of the stock market and fully allocated to Treasurys and cash assets. This is especially true for your 401K portfolio because it primary purpose is capital preservation...not appreciation. A portion of your portfolio needs to be exposed to the market and I recommend that you have your own trading account where you can DO IT YOURSELF (DIY)...I don't need Bernie Madoff or any other scandalous investors out there losing my money...when I can do that on my own. It this portfolio you should be shorting more that buying things. Find attractive price points (see previous posts on price points) for both buys and shorts:
SHORTS:
- SSG: ETF that shorts the Semiconductor Sector
- KBE: EFT that shorts the Retail Banking Sector
- Also short the retail, and credit sensitive sectors
BUYS: - BBY: Best Buy is primed for increased earnings now that Circuit City is going BANKRUPT
- V: VISA is down towards their Initial Public Offering (IPO) again after being downgraded
I'll be back to update this post later
SHORTS:
- SSG: ETF that shorts the Semiconductor Sector
- KBE: EFT that shorts the Retail Banking Sector
- Also short the retail, and credit sensitive sectors
BUYS: - BBY: Best Buy is primed for increased earnings now that Circuit City is going BANKRUPT
- V: VISA is down towards their Initial Public Offering (IPO) again after being downgraded
I'll be back to update this post later
Sunday, September 14, 2008
Lehman Brothers/Merrill Lynch/AIG
Three words just used to describe the state of what's currently happening in the financial markets: HISTORIC, DISTURBING, and ENORMOUS.
Credit is given to CNBC for breaking Sunday's developments in these three firms. I will update this posting tomorrow but in short summary:
1. Lehman will declare bankruptcy
2. Merrill Lynch has been forced by the Federal Government to sell itself...and Bank of America will be the acquirer
3. AIG is dire needs to acquire capital and is considering selling some of its assets
More to come!
Credit is given to CNBC for breaking Sunday's developments in these three firms. I will update this posting tomorrow but in short summary:
1. Lehman will declare bankruptcy
2. Merrill Lynch has been forced by the Federal Government to sell itself...and Bank of America will be the acquirer
3. AIG is dire needs to acquire capital and is considering selling some of its assets
More to come!
Thursday, May 01, 2008
Best Performing Stocks
Patience is something that cannot be taught. And as I have evaluated some of the best performing stocks of this year so far, I am pleased to note that one of our recommendations comes in on all the lists with big returns this year. It is Clayton Williams Energy Inc (CWEI). This stock has been with us so long that if patience is your weakness it would have been exposed. If you gave up on this stock that was in a sector we have constantly talked about week after week you would have taken part in these great gains. Need more proof check out these:
Urbanomics post on Clayton Williams, and other energy plays...notice the date of the article and the message from 2 years ago to stick with Energy stocks, Clayton Williams and Weatherford, and Chesapeake Energy.
http://urbanomics.blogspot.com/2006/04/portfolio-alert-ballin-of-wall-street.html
http://urbanomics.blogspot.com/2006/01/stock-update.html
Motley Fool's take on this year's top stocks:
http://www.fool.com/investing/small-cap/2008/04/17/the-years-top-stock.aspx
Seeking Alpha's write-up on top stocks:
http://seekingalpha.com/article/75107-another-month-of-08-in-the-books
I like to note that a few of my friends are making great recommendations at this point and one of their stocks is actually topping the list. This stock is Finish Line (FINL) and what I love about this stock is that we were 100% on the money with our analysis. Now I did not buy into this stock but my recommendation was to wait for the legal proceedings from the Genesco trail to end and look to accumulate this stock in the event that the judge allows Finish Line to walk away from its original deal to acquire Genesco. I didn't like the potential acquisition and it looks like the street agreed with me. Also I would like to point out that another one of my friends has been enjoying an incredicble ride with the credit card network processors Mastercard (MA) and Visa (V). Again, I do not own shares here but I think these are great plays due to the fact that the networks don't have exposure to customers with deteriorating credit concerns like the big credit card issuers do (Bank of America, Capital One, Citigroup)...they just run the transactions back and forth.
Urbanomics post on Clayton Williams, and other energy plays...notice the date of the article and the message from 2 years ago to stick with Energy stocks, Clayton Williams and Weatherford, and Chesapeake Energy.
http://urbanomics.blogspot.com/2006/04/portfolio-alert-ballin-of-wall-street.html
http://urbanomics.blogspot.com/2006/01/stock-update.html
Motley Fool's take on this year's top stocks:
http://www.fool.com/investing/small-cap/2008/04/17/the-years-top-stock.aspx
Seeking Alpha's write-up on top stocks:
http://seekingalpha.com/article/75107-another-month-of-08-in-the-books
I like to note that a few of my friends are making great recommendations at this point and one of their stocks is actually topping the list. This stock is Finish Line (FINL) and what I love about this stock is that we were 100% on the money with our analysis. Now I did not buy into this stock but my recommendation was to wait for the legal proceedings from the Genesco trail to end and look to accumulate this stock in the event that the judge allows Finish Line to walk away from its original deal to acquire Genesco. I didn't like the potential acquisition and it looks like the street agreed with me. Also I would like to point out that another one of my friends has been enjoying an incredicble ride with the credit card network processors Mastercard (MA) and Visa (V). Again, I do not own shares here but I think these are great plays due to the fact that the networks don't have exposure to customers with deteriorating credit concerns like the big credit card issuers do (Bank of America, Capital One, Citigroup)...they just run the transactions back and forth.
Wednesday, October 24, 2007
Welcome to the Good Life
I go for mine, I got to shine...Now throw you hands up in the sky! This is the third track off of Kanye West's "Graduation" album featuring T. Pain. Now this is the jam, but I am not sure what life Kanye was referring too. It's interesting I find myself not writing as much whenever there is a lot of turmoil in the market. This usually also reflects turmoil in the world, which then reflects itself through the market. Let's see, we have major financial companies, Bank of America, Merrill Lynch, Citigroup, and Wachovia Bank all getting hammered by the weakness in the credit markets and the mainly through the bad investments that were made. Add to that the mortgage crisis in the US which has led to homeowners everywhere defaulting on their homes. All the companies in these areas, which were once living the "Good Life" are singing the blues and laying people off. Then there is that pesky thing called energy...it currently sits at levels that are unthinkable. Oil is reaching levels of roughly 90 dollars a barrel and predicted to continue to rise. Now maybe I am too young to really know what I'm talking about but there has been the "R" word thrown out by some analysts and that would be RECESSION and from what I am seeing in the markets I don't think that some of the whispers are too far off.
I am no mathematician but poor financial markets + bad consumer debt + rising foreclosures + declining property values + layoffs = something is wrong (possibly RECESSION). I am not comfortable with the volatility in the market because as companies are beating earnings or being upgraded they go up and then immediately the market brings them right back down due to all the negative news. Now Warren Buffet wouldn't care because he's in it for the long haul (and he's rich), so for the rest of us that were out there speculating its time to take gains were it makes sense and build on our recession proof stocks...like dividend stocks. I like buying stocks that make products that we continue to buy even when times get tough and I still like technology. You'll appreciate the following updates:
Advent Software (ADVS) - reported positive earnings today; (technology)
Radisys (RSYS) - upgraded by Cantor Fitzgerald, price target raised from 11 to 18 (technology)
Emcore - coverage initated with BUY by Roth Capital (technology)
Burlington Northern (BNI) - reported positive earning (transportation)
They have a few things in common being technology plays and one defensive plays. I think this will be the direction to go for awhile.
I am no mathematician but poor financial markets + bad consumer debt + rising foreclosures + declining property values + layoffs = something is wrong (possibly RECESSION). I am not comfortable with the volatility in the market because as companies are beating earnings or being upgraded they go up and then immediately the market brings them right back down due to all the negative news. Now Warren Buffet wouldn't care because he's in it for the long haul (and he's rich), so for the rest of us that were out there speculating its time to take gains were it makes sense and build on our recession proof stocks...like dividend stocks. I like buying stocks that make products that we continue to buy even when times get tough and I still like technology. You'll appreciate the following updates:
Advent Software (ADVS) - reported positive earnings today; (technology)
Radisys (RSYS) - upgraded by Cantor Fitzgerald, price target raised from 11 to 18 (technology)
Emcore - coverage initated with BUY by Roth Capital (technology)
Burlington Northern (BNI) - reported positive earning (transportation)
They have a few things in common being technology plays and one defensive plays. I think this will be the direction to go for awhile.
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