is...trading
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Took starter position in FAZ last week...
From another board...
An Easily Understandable Explanation of Derivative Markets:
Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later.
She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit .
By providing her customers' freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.
At the bank's corporate headquarters, expert traders transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics.
Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.
One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since, Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.
Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from the Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers.
lol Thanks Tsafi!
No, not married, but gonna be soon...
I am a very lucky guy, she is a beautiful, smart, successful woman and she is my best friend, so its all good.
(But, She is not happy now that she cant drink for a long time!)
So, I have to drink for both of us! lol
Good to hear from you, keep me updated, maybe you can give me some pointers on this whole fatherhood thing!
I'm gonna need all the help I can get!
Hey Kev, I'm mostly on the sidelines right now...
Just found out a few days ago that I'm gonna be a father...
Big Changes coming for me as far as my lifestyle...
I'm Scared Shitless!
Its a crazy time right now, so its tough to call...I watch the DOW when I'm in FAS too...it does look like there is room left to go up some more on the charts...but some chitty news or bad economic data or even Friday profit taking could knock things down quickly...
I might daytrade FAS as long as the DOW stays above 7750 and FAS above 6.00...at this point I dont think you should be holding FAS overnight...too risky...anything can happen...although I have and might again at any time...
Keep in mind: I drink alot, I have an addictive personality, I am greedy, and I take chances that most wouldnt...I'm not playing with my rent money here either...
A pullback is inevitable, the question is...how soon will it come?
If I was able to predict the future with any kind of certainty, I would just buy lottery tickets instead...
lol
Thanks Kev
I think its safe to say Lang aint holding SRS...
She usually bails early if its headed down, and its at 52 week low today, and probably going lower, my guess is she got out long ago...
Just realized CDR had AH news, suspending the Divi for common...frees up some cash but could be a down day tomorrow as a result...
I'd move this further down on the list just to be safe
Tough to call, I guess this is the order...
1. BEE .77 - looks real nice, doji yesterday and closed at the high today, RSI needs to break 50. Bottom isnt very far away (.61), so risk/reward looks good here. I wouldnt be afraid to buy this between .70 and .80 and hold for a week or so with a 1.00 target and a hard stop at .60
2. CDR 1.97 - This would have been my top pick yesterday, but not a fan of that huge gap up today, still all indicators pointing up and makes huge swings every day, massive Volume today...lots of room to move up.
3. EBHI .55 - nice volume, lots of room on the upside, needs to break 50 RSI. Needs to hold MA13 at .50
4. EVC .44 - bouncing all over the place, and near the upper boilie, so I like this one the least...maybe wait for a break of .49 (MA50), but looks like big resistance at .60 and a long ways back down scares me...
In all of my trades I'm keeping an eye on the DOW and watch key support levels in case of a giant tank...
Yeah, different strokes for different folks...with this much volatility I find I need to be patient thru some red and eventually I get there...I admit, I have been lucky, I just need to remind myself why I entered the trade and keep my stops just below key levels of support...
I appreciate all the work you have been putting in on your board, some great reading on there and always some interesting picks...
Keep up the great work Lang!
Great video Popeye...
Sounds good in theory, but I think the banks will find a way to hold it down for years to come...I dont think $500 and oz will happen...
Maybe $50 to 75 in 2 or 3 years?
lol tempting, but I make a FAT Salary...tough to walk away...
Of course, if March is any indication of how my year could go in trading, then it is tempting...more than doubled my money in my tax free savings account in less than 30 days trading only FAS, CNO, and FITB...
Weeeeeeeeeeee!
Hey Lang...I had UFI on watch but missed the big move today, I still think it could break a buck...
I also like EBHI, CDR, BEE, URE, EVC and some others, but I have to travel to Denver next week on business so will probably be mostly on the sidelines in cash...
So damn busy at work, its getting in the way of my trading!
lol
Well, she definitely broke a buck as predicted...
I Bailed early right at $1.00 yesterday, had to lock in profits....fighting my urge to be greedy...
Profit is all good!
:)
Weeeeeeeeeee
All out
Both Stretch targets achieved
3.00 and 1.00
Done for the day. Have a good one all!
FITB thru 3.00 in PM
Nice work bailing at the HOD!! Excellent trading Lang!
I held both CNO and FITB...
Keeping tight stops, hopefully they dont get hit if its a down day tomorrow...I wanna see FITB break 3.00 and CNO break 1.00 on Thursday with some M2M momo...
I am above my original targets on both...but I am a greedy bastard...
Weeeeeeeeeeeeeeee
Lang and ZZ, are we gonna hold financials for a big M2M pop?
earnings are out, con call after the close
CNO new HOD on earnings report...
Yeah, I might bail b4 end of day today regardless, I dont want it to drop below 2.75 again, need to lock in profits...
CNO moving up now on final results for the fourth quarter 2008
FITB new HOD
More FITB news...
Fifth Third Makes First Dividend Payment to U.S. Treasury
Tuesday March 31, 2009, 9:58 am EDT
Yes FITB 2.74 up nicely in PM!!!
Also, CNO news, .83 in PM!!!!
Weeeeeeeee
Holding FITB and CNO...
Watching for possible entry on CDR, FRP, RHIE, SHS and/or VRNM. All are pinchers, havent run big yet, and indicators turning up....Thanks to anyone who brought any of those to my attention....Alot of the other stuff I see out there looks toppy...
Daily DOW looks like we need a down day or two, but I think the week closes Green with M2M changes and some surprising earnings...
...but WTF do I know!
Have a drink and enjoy the ride!!!!
FITB NEWS!!!
Fifth Third Bancorp and Advent International Announce Fifth Third Processing Solutions Joint Venture Processing Business Valued at $2.35 Billion
Monday March 30, 2009, 12:01 am EDT
...."The transaction is expected to contribute significantly to Fifth Third's retained earnings, capital levels and capital ratios, generating an expected pre-tax book gain of an estimated $1.7 billion and increasing Fifth Third's tangible common equity and Tier 1 capital by an estimated $1.2 billion."
FITB 2.35 NEWS
Fifth Third Bancorp and Advent International Announce Fifth Third Processing Solutions Joint Venture Processing Business Valued at $2.35 Billion
Monday March 30, 2009, 12:01 am EDT
Fifth Third Bancorp
CINCINNATI and BOSTON, March 30 /PRNewswire-FirstCall/ -- Fifth Third Bancorp (Nasdaq: FITB - News) and Advent International announced today that they have signed a definitive agreement whereby Advent International will acquire a 51% interest in Fifth Third's processing business through the establishment of a joint venture that values the new company at approximately $2.35 billion before valuation adjustments by either party. Fifth Third will retain the remaining 49 percent interest in the new company, Fifth Third Processing Solutions, LLC.
Pursuant to the agreement, Fifth Third Bank (OH), an indirect wholly owned subsidiary of Fifth Third Bancorp, will contribute the assets and operations of Fifth Third's merchant acquiring and financial institutions processing businesses to a new limited liability company ("LLC"). The LLC's capitalization prior to the purchase of this interest will include senior secured notes payable to subsidiaries of Fifth Third in the amount of $1.25 billion. Advent will pay Fifth Third $561 million in cash for a 51 percent ownership interest in the equity of the LLC and for certain put rights. Additionally, Fifth Third will receive warrants in the new company exercisable in certain circumstances. Fifth Third estimates the valuation adjustments related to these warrants, the put rights, and minority interest discounts may reduce its implied valuation of the business by an estimated $50 million. The agreement is subject to certain potential purchase price adjustments. The terms and conditions of the transaction are more fully described in Fifth Third's Form 8-K filed on March 30, 2009. The transaction will be accounted for under Financial Accounting Standard 160, "Noncontrolling Interests in Consolidated Financial Statements." Fifth Third will retain its credit card issuing business, including retail credit card and commercial multi-card services.
"Advent has a long and impressive record of investing in and growing payment processing companies to achieve exceptional results, and we believe that its investment will significantly enhance the ability of our processing business to generate even stronger results in the future," said Kevin T. Kabat, Chairman, President and CEO of Fifth Third Bancorp. "Partnering with Advent will provide the processing business with access to additional capital and resources that we believe will create significant new opportunities and incremental growth in that business. At the same time, our ability to offer the best-in-class capabilities of Fifth Third Processing Solutions to our banking customers will continue to be a key entry point for us in creating new relationships and in expanding existing relationships."
"This transaction represents the culmination of work we began last summer as part of our capital plan announced in June. It is expected to generate meaningful additions to our tangible common equity and Tier 1 capital ratios, reflecting the value of the business as a whole, while at the same time enabling us to retain significant ownership in the joint venture and its ongoing creation of value. The cash proceeds represent 13 times the earnings divested. And the valuation of the business, at 3.3 times 2008 net revenue, compares favorably with large publicly-traded processing businesses. The expected equity and capital contribution reflects not only the economic value of the interest being sold, but also the economic value of our remaining interest in the business. As a result, this transaction represents a highly efficient source of capital for our shareholders relative to capital alternatives in the current environment."
"The transaction significantly enhances the level and composition of our already very strong regulatory capital position. We believe our strengthened capital position, in combination with our strong credit reserves and earnings power, provide us with the resources and the ability to withstand a more difficult economic environment should that occur."
"We are excited to enter into this partnership with Fifth Third," said David Mussafer, Managing Partner of Advent. "We have long viewed Fifth Third Processing Solutions as the premier processor for merchants and financial institutions in the U.S., and we look forward to working with Fifth Third and the management team of the processing business to continue the impressive growth of the business. We are excited about opportunities to make further investments in this business, and we expect to leverage our international infrastructure and work with Fifth Third Processing Solutions to expand outside the U.S."
"We are pleased to welcome Advent as a partner and investor in our processing business," said Charles Drucker, President of Fifth Third Processing Solutions, who will be CEO of the new joint venture company. "Over the years, we have successfully built our processing business into one of the country's leading providers of payment processing services. Advent's worldwide set of portfolio companies in financial services and payments processing provides Fifth Third Processing Solutions with new opportunities to partner internationally. The technology focus and operational expertise of Advent and its partners will provide us with significant opportunities to enhance the wide range of products and services that we offer to clients."
"Our customers and employees should expect a smooth transition. Our industry-leading platform will remain in place, so our clients will not experience a system conversion, and our clients will continue to be served by the same people from Fifth Third Processing Solutions in the same locations. We look forward to working with the Advent team to grow the business going forward."
Advent has been investing in the financial services sector for over 20 years, and has backed more than 25 companies worldwide in a broad range of sub-sectors, including payments, transaction processing, and financial technology. Advent has done several transactions of particular relevance to Fifth Third Processing Solutions: CSU Cardsystem is a leading card processor in Brazil, which went public in 2006; Dolex Dollar Express, a leading money transfer business which Advent sold to Global Payments in 2003; and Monext, a French merchant acquirer and bank processor which Advent acquired in 2008.
"As a processor, Fifth Third Processing Solutions has tremendous scale in both of its core businesses, merchant acquiring and debit/ATM processing," said Chris Pike, Managing Director of Advent. "Working with our operating partner, Pam Patsley, we had identified Fifth Third Processing Solutions early on as the premier company in the payment processing space. We worked closely with Fifth Third to structure a transaction and a partnership that met our mutual objectives in a difficult environment, and to position the business for accelerated growth over this next exciting period. Patsley is the former President of First Data International, where she was responsible for all of the company's business outside of the U.S. from 2002 to 2007."
The transaction is expected to contribute significantly to Fifth Third's retained earnings, capital levels and capital ratios, generating an expected pre-tax book gain of an estimated $1.7 billion and increasing Fifth Third's tangible common equity and Tier 1 capital by an estimated $1.2 billion. On a pro forma basis, the estimated increase in Fifth Third's tangible common equity to tangible asset ratio at December 31, 2008 would have been more than 0.9 percent, to approximately 5.2 percent, and its Tier 1 capital ratio would have been increased by an estimated 0.9 percent to approximately 11.5 percent. Fifth Third's December 31, 2008 pro forma book value per common share would have been an estimated $15.21, compared with the $13.57 reported, and its tangible book value per common share would have been an estimated $10.74, compared with $8.74. On a pro forma basis for 2008, the transaction would have been dilutive to Fifth Third's earnings by an estimated $100 million, or approximately 17 cents per share, of which $57 million or $0.10 per share represents non-cash intangibles amortization.
The transaction is subject to regulatory review and approval by the Ohio Department of Financial Institutions as well as review under the Hart-Scott-Rodino Act. It is currently expected to close in the second quarter of 2009. Credit Suisse acted as exclusive financial advisor, while Sullivan & Cromwell, LLP, Chapman & Cutler, LLP, Alston & Bird, LLP, and Graydon Head & Ritchey, LLP acted as legal advisors to Fifth Third in this transaction. Morgan Stanley and Weil, Gotshal & Manges, LLP acted as financial and legal advisor, respectively, to Advent
LOL It's Drink O'clock!!! Have a great weekend.
Not gonna happen, she is gonna close strong....
DOW wants to close above 7850
Yeah, gambling on the filing on Tuesday...
watching FRP...
CNO .76
Sold all on Wed...
Rentered at .65 a little smaller and still holding...
Look at the short position on this pig.
from Yahoo:
Shares Outstanding5: 184.75M
Float: 183.26M
% Held by Insiders1: 8.84%
% Held by Institutions1: 86.90%
Shares Short (as of 24-Feb-09)3: 6.52M
Short Ratio (as of 24-Feb-09)3: 4.6
Short % of Float (as of 24-Feb-09)3: 3.60%
Shares Short (prior month)3: 5.74M
If insiders/institutions hold 95% of the stock, then there is only about 10M available in the public float and it appears that more than half of them are short. Short squeeze potential is huge.
It all hinges on the 10Q which is expected "on or before Tuesday, Mar 31st".
If it contains a "going concern" statement, it goes down, if it doesnt, or contains some good news, CNO breaks a buck easily....
Look at 6mo chart, the Aroon signals a change in trend, it crosses in Nov and the stock went up til January, it crosses again Jan 20th and the trend is down.
The stock bottomed March 10th at .26 and has climbed up as high as .92 this week...notice it is still technically within the huge downtrend even with the recent pop. The Aroon still hasnt crossed over to signal the new uptrend.
Lots of upside potential still...RSI still hasnt broke thu 50, Full Sto still not thru 80
The Doji today could signal the end of the downtrend, or is it telling us that there is a reversal from just this past two week uptrend?
This looks like a Bullish Harami Cross. Red candle followed by the Doji.
CNO new HOD .92!!!
Thats the plan! Thanks Lang, good to see the board is doing really well and you are making bank!
Holding some FITB from 2.07 for a swing
.72 now in AH, will bail if it falls below .65
Thanks Lang, i got in at .44 last week :)
shoulda sold today but didnt...
oh the greed in me...
I think more upside to come, HUGE volume today...lots more room to move before 10Q on 31st
CNO new HOD .82