Bear Stearns trading above $10 takeout

[selkirk]

not sure why Bear Stearns is trading much above the $10 take out. it hit a high of $13.85, closed at $11.25.

JP Morgan has 39.5% of the stock and any bondholder who owns equity (and some will buy shares) will vote for the deal...the bonds will then rally, compared to getting crushed if the deal falls through. it is wise for a bond holder to buy the shares and vote for the deal.

this is a very risky short above $10 because the stock is very volatile, (there is an observation).

still around 12-13 a chance for a decent short. also could use call spreads, or put spreads...

anyways time will tell, will probably use some options on this, believe the deal will go through at $10, if not will lose on the trades.

thanks
selkirk

 

[selkirk]

BSC is now at $10.16, I am no longer short the equity, covered.

still have uncovered call options out May 15, and 12.50. most are at May 15, around the time of the orginal (first) post you could sell May 15 calls at .70.

even a few days later they were at .50-.55. so for one contract you would get 70, (55-50).
will wait for these to expire.

these worked out well, for the most part covering any short positions (in stock, options) since the market has been acting very bullish, there are five days where I thought the market would go down more on news and it was flat or even up.

actually thought on Friday though the market went down was surprised it was not even worse on the GE news. and the market does not seem to care about inflation or rising oil prices. do not fight the market.

only own one US financial currently Well Fargo,have a small position and a large positon of $25 puts that I sold about one month ago, July 25 puts got 1.50/1.75 for them. still think they are decent value, to sell. time will tell.

own some cdn. banks in financials and MFC, and SLF.

also have traded GS, somtimes good, sometimes bad, or dreadfull.

thanks
selkirk

 

[DOGS THAT BARK]

Have a couple financials left Krk.
The hong kong bank BKEAY.PK been holding its own--
and AINV which sold on stop during crunch and bought back @ 14.82
Had bad press yesterday---
"Apollo Investment downgraded by Friedman" Billings
--and still made a few pennies.
Look to buy back BNS when smoke clears--
-rumor is they may buy my local bank here -National City--would welcome that.

Shipping and a few metal stocks have been only bright spot past few months.
Just plugging along for most part

 

[dawgball]

only own one US financial currently Well Fargo,have a small position and a large positon of $25 puts that I sold about one month ago, July 25 puts got 1.50/1.75 for them. still think they are decent value, to sell. time will tell.

thanks
selkirk

Good to see we are thinking alike. I believe WFC is poised to have a nice gain over the long haul. It is probably the position I own that has the longest outlook in my portfolio.

And if you ever truly understand what is leading the pricing for BSC, you will be up there with Mr. Graham in my book! :SIB

 

[selkirk]

DTB the financials are showing strength, a concern going forward is how quick can they grow their earnings. will probably slowly add to the positions in this group, hard to pick a bottom.

BNS has been reported National, they take their time when buying anything, so it probably does not happen quickly... they also have stated after the report came out, that the US was not an area they were looking at.......however if it is cheap enough they will buy, and would probably not want to talk up the bank,...to pay more.
in the past sometimes their domestic operations were an area of concern (great int. growth). however the last 2Q they have done very well on that front.

metal and energy stocks just keep on climbing, in fact shocked at how quickly natural gas weighted stocks have risen, just keep on going higher every week, would expect a pullback but will stay on the train until it stops, (stopped out of some of the positons).

shipping stocks, missed, though spotted the sector years ago, incredibly high div, at the time....always believed they would build more ships and drive prices down, did this in the past. however what has changed is the materials and skilled labour, sure the cost of building a ship has risen sharply. also increased world trade, however the cost of builidng more ships is probably a large reason.

Dawgball, like WFC, however even on terrible news ie. UBS these stocks rally, time will tell if they can continue their growth, believe WFC can...
will probably add to my cdn. banks and MFC and SLF, and WFC and look at some foreign banks, owned a few in Brazil that had a good run.

believe the fed should not lower rates anymore, concerned they are destroying the value of the currency and when non core inflaiton is running 6-8%, not sure why the need for massive cuts. they must be concerned about energy and metal prices. heard one "expert " on TV that said it has not shown up in wages, however come on, after a while (short time) it will, people will demand higher wages to cover energy, and food costs, then you have a bigger problem.

thanks
selkirk

 

[dawgball]

believe the fed should not lower rates anymore, concerned they are destroying the value of the currency and when non core inflaiton is running 6-8%, not sure why the need for massive cuts. they must be concerned about energy and metal prices. heard one "expert " on TV that said it has not shown up in wages, however come on, after a while (short time) it will, people will demand higher wages to cover energy, and food costs, then you have a bigger problem.

thanks
selkirk

I agree 100%. No more rate cuts.