Surprise? Short Selling Measures Taken and Stocks Skyrocket?

Posted on September 18, 2008
Filed Under Investment Reflections | Leave a Comment

The UK bans short selling, major pension funds refuse to lend shares to short, naked shorting rules in the US start taking effect… and stocks skyrocket? Coincidence?

>>Read More

US Government Bailout is More Like Government Robbery ala Latin America

Posted on September 17, 2008
Filed Under Investment Reflections | 2 Comments

What the government is essentially doing in its current “bailout” schemes, in my opinion, is simply stealing money from US shareholders and citizens. This sort of thing used to happen in third-world countries, like Brazil, where for example during the reign of their President Fernando Collor de Mello, citizens bank accounts were essentially confiscated overnight and replaced with less money the next morning.

In the same vein, Paulson and the rest of the US Government, are simply taking advantage of short-term liquidity issues to confiscate US companies, and wipe out shareholders in the process overnight. Yes, they haven’t actually gone into citizens bank accounts yet, but is there really a difference? And could we expect anything different when we hired a Treasury Secretary, whose former job was running Goldman Sachs?

>>Read More

Quanex Building Products (NX): Thin Film Solar Connection Could Boost Shares

Posted on September 16, 2008
Filed Under Members, Alternative Energy | Comments Off

Despite significant exposure to the US residential real estate market, I believe that Quanex (NYSE: NX), a recent spin-off, has solid appreciation potential over the next few years. My optimism is based on the following two factors: the company’s growing presence in the thin film solar market, and a pristine balance sheet ($50 million in net cash, $2 million in debt, and $20 million in cash pending receipt), which should allow NX to pursue highly accretive acquisitions in the current weak operating environment. In addition, the stock’s low valuation, already appears to reflect the well-known problems in US residential real estate. As such, a slight sentiment change in the macro environment, combined with a growing recognition of NX’s solar and other green growth opportunities, could lift the shares.

>>Read More

Major Financial Institutions Failing: So What?

Posted on September 11, 2008
Filed Under Investment Reflections | Leave a Comment

First there was Bear. Then Fannie and Freddie. Now possibly Lehman will fail. But the key question, I keep asking myself, is: So What? Has the economy really been damaged by the failure of any of these firms. The answer is: No. Will the economy be damaged by more failures. The answer, again, is, I believe: No.

>>Read More

Stress Testing Lufkin’s (LUFK) Earnings for Significantly Lower Oil Prices

Posted on September 9, 2008
Filed Under Members, LUFK | Comments Off

Like many stocks in recent weeks, Lufkin (LUFK) has sure been a roller coaster. After recommending the stock back in July at about $78, the stock soared after an exceptional earnings report, only to completely collapse over the last week or so in the broader oil/commodity sell-off. Given sharp share price drop, I thought it might pay to take a step back and run an earnings stress test on LUFK assuming oil prices continue to decline dramatically. Interesting, this type of stress test can be done for many other oilfield service shares, in order to determine potential downside in the event that oil prices do not stabilize (an unlikely scenario in my opinion).

>>Read More

Buy the Bad News

Posted on September 5, 2008
Filed Under Members, Investment Reflections | Leave a Comment

With the stock market in another big swoon, I thought it would pay to review one classic method of making money in stocks. Hopefully, this post will help us fight the emotion of fear which grips all investors during major corrections, of which we’ve had tons in the last year or so.

>>Read More

Power-One’s Shares (Nasdaq: PWER) Could Recover Significantly in 2009

Posted on September 5, 2008
Filed Under Members | Comments Off

Power-One Inc. (Nasdaq: PWER – Current Price: 2.10) could potentially rise 50% to 100% over the next twelve months, as financial results, driven by the company’s fast-growing solar and winder inverter business, begin to show significant improvement. In addition, a recent acquisition of a competitor to PWER by Schneider Electric , a huge European conglomerate, provides a solid metric for estimating the potential takeout value of PWER under various scenarios.

>>Read More « go back —