WFC earnings...good news

[selkirk]

WFC reported earnings of .53/share for the latest quarter compared to .67.

those these are down they are much better than the disaster in other financials and beat estimates of .49

the write off from loans increased from 3.01 billlion from 720 million a year ago.
insurance and credit card (fees) were strong.

the company actually annouced they are increasing their dividend....I know had to read that a few times over again....quarterly div. from .31 to .34.

have 25 july puts sold for 1.50
have 25 july calls sold for .75

so hope it can get close to 25. own a small position in WFC. only common US financial own currently.
the last two earnings reports have been good, well not a disaster from hell.

the markets have been slammed, the cdn. financials have even gone down 3-5% a day for a few days.
not adding to positions hoping for a few days of strenght but some are getting cheap.

thanks
selkirk

 

[DOGS THAT BARK]

Ditto on BAC earnings today--

Sold on stop of $21 a few weeks back today at about $31

I have been 0 at trying to guage these financials--

 

[selkirk]

DTB these are very volatile markets, wild swings from lows to highs.

the morning I posted about the earnings the previous day WFC was trading close to 20. after the earnings the stock went up over 32%. this is a large blue chip bank, but acted like a penny stock.

options the 25July put for 1.50 expired worthless, bought back the 25 July call (sold for .75) at 1.40.

so total profit was on avg. .85 (not counting com.).
looking back maybe I should have not sold the calls, and just kept the puts in position. though thought it was a good hedge and the banks were all weak.

also after I sold the calls, the stock went to 20, so thought the stock would be put to me. at one time was thinking of buying back all positions and taking a loss.

bought some more at prices between 26.50-27, still like wfc.
would look to buy jpm do not own any common however own some preferreds.

Reasons for the Rally

1. oil is off over 20%, there was a simple trade for quite a while, go long resources and short financials.
this trade made great amounts many financials are off 30-80% year over year....some in just six to four months.

while resources especially energy stocks rallied sharply after Jan, as did oil, and natural gas.

oil has corrected 20% off its high in just a few weeks, this will curb inflation fears, and perphaps a rate hike to fight inflation.
this supports financials.

2. Low Expectations.
these stocks reported their numbers, alll are down from last year, however some look decent like WFC, JPM, (have not had time to look at BAC).

no Citi, Wamu, were brutal, however not as bad as expected or feared. I mean Citi only lost half the amount expected and some feared much more.

the bank stocks were getting cheap was going to buy jpm, kbe however I did fear Citi results, and Wachovia.

Wachovia numbers are brutal, however their core business is decent and seem to have new good managnement.

DTB a loss is loss and sometimes hard to deal with here are some ways to get back in the game...note this more of a trading market, and would still have small positions.


XLF $22 may fall back to 20 would look at it then.

KBE regional banks index 33.44 this hit a low of 22.
was looking at buying 24-25 but passed.

WFC, JPM, (BAC will probably follow the pack, of these).

will not buy leh, c, wash. mutual, though these have the most upside, however look out below if markets turn lower.
could say the same thing about kbe, as some regionals may go under, why did not buy at 24 though thought it was getting cheap.

some cdn. financials are decent ways to play,

MFC at one time hit 34, now around 36-38 back at 34 will add.

BNS has gone from 44-48 less upside the US though good int. play. note: if US economy get much worse may effect their operations in mexico.

TD great retail bank with exposure to US northeast.

finally loss on VLO, however bought back some

VLO 35.26 close. last time this was a loss, though it is a good hedge as my energy stocks did well and this loss me money....though could have just thrown money away.

previous times this trade worked last time loss close to 20%.
VLO for a trade...good company, avg. mangament...at best.


thanks
selkirk

 

[selkirk]

finally these stocks have rallied sharply would see if they pullback....and then buy in slowly.

have had some stocks called off of me, in july and aug. with this will reduce my energy weighings by 50%.

thanks
selkirk

 

[DOGS THAT BARK]

Thanks Kirk---Appeciate your input as always.