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Old 01-11-2009, 10:54 PM   #1
Edward64
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Top 5 Stock Picks

I wanted to create a thread on stocks (not mutual funds, economy, recession etc) and know there are some knowledgeable stock pickers in FOF.

Although I have been wrong about the bottom and am tired anticipating it, I can't help but believe there are some great values right now. I would like some advice from the forum (your disclaimer is assumed) and I think others will also appreciate it.

I am personally looking for some great US stocks that will rebound with the economy and will be part of my 401k brokerage portfolio for 10-15+ years.

So, as an exercise, I need volunteers to
  1. List their top 1-5 stock picks
  2. Qualify it with their time horizon and risk tolerance
  3. Indicate some reasoning for their selection
  4. Optional - record the datetime, price which will be on record and the hoped for stock price appreciation (either in $ or %) over 10 to 15 years.
Up to the challenge?


Last edited by Edward64 : 01-11-2009 at 10:58 PM.
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Old 01-12-2009, 09:29 AM   #2
Subby
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Here's a tip...

Get an experienced money manager to help you and stay away from Internet message boards for financial advice.
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Old 01-12-2009, 09:36 AM   #3
Coffee Warlord
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Here's a tip...

Get an experienced money manager to help you and stay away from Internet message boards for financial advice.

+1
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Old 01-12-2009, 09:54 AM   #4
Fidatelo
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Here's a tip...

Get an experienced money manager to help you and stay away from Internet message boards for financial advice.

Not to say that a text sim message board is a great place to go for financial advice, but I'm not sold on 'experienced money managers' either.
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Old 01-12-2009, 10:17 AM   #5
mrsimperless
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I don't have a top 5 for you, but rather a general strategy. Choose some stocks now that are the most likely to benefit from the upcoming stimulus package. I'm thinking infrastructure related companies as we know that should be a big part of this.

Let me know when you have our list. =)
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Old 01-12-2009, 04:33 PM   #6
path12
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I'm going long fast food. Cheap meals FTW.
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Old 01-12-2009, 04:44 PM   #7
Flasch186
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whatever i do, do the opposite.
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Old 01-12-2009, 04:45 PM   #8
QuikSand
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While my focus isn't as long term as yours, I'm willing to play. I'll give it some thought.
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Old 01-12-2009, 08:18 PM   #9
Edward64
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While my focus isn't as long term as yours, I'm willing to play. I'll give it some thought.

Hey thanks. I was about to give up on this crowd.
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Old 01-12-2009, 08:41 PM   #10
Marc Vaughan
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I'll play as well - I'll have to think about it - but I know the bulk of mine will be environmentally friendly companies (Hydrogen based (like HYGS), Solar Engergy and Electric power cell) and large battered stocks.

The main thing they'll all have in common is a lack of debt and a requirement for the purchaser not to look at the stocks again for at least another year - otherwise you'll probably have heart failure if its the wrong time

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Old 01-13-2009, 01:03 AM   #11
BishopMVP
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If I have time, I'll try to get the program I had and run some new tests, because P/E ratio was a part of my formula for narrowing things down before and that's obviously useless right now. If I have time though, I'll try picking some individual ones.

Overall, in terms of bottom-guessing, I would wait a week or two. I think there was a bubble from excessive optimism about the stimulus package, and that earnings reports are going to knock that down.

Also, if you want to try to organize this a little bit http://marketocracy.com/ lets you pick portfolios, set up groups etc.
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Old 01-13-2009, 08:10 AM   #12
Flasch186
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First, I think we'll revisit the November lows

Second, I look for the Tech and infrastructure play to get us out of this so that will lead to the upside whenever the markets begins to turn north.

Third, I was so far off on predicting a bottom in housing that it is laughable. that being said I am now looking to pick up a foreclosure, shortsale, or Builder inventory home this spring (with a special 4% fixed mortgage HELLO)

I currently hold 4 stocks in my portfolio with ~40% of my money on the sideline with more $ targeted for investment when the waters are more calm which may not happen this year, at all.

I do NOT see another commodity bubble anytime soon, unless inflation takes hold on the back end of this, which I doubt will occur in substantial enough amounts to make it noteworthy. I know people fear all this money being printed should lead to inflation but I'd argue that that's at baseline...we're far below baseline IMO.

I still recommend doing the opposite of me.
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Old 01-13-2009, 09:30 AM   #13
NoSkillz
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I'll eventually throw my two cents in as well but I'll need to do a bit of research.

I'm in a holding pattern right now, almost fully invested and willing to be as patient as necessary in order to recover my paper losses last year. I sold off enough at the end of December to balance out my capital gains from earlier in the year, posting a net gain of a dollar officially in '08.

It was a tough year in reality though and I'm way behind on a number of my holdings. Again, with one or two notable exceptions, I'm invested in solid companies with great long-term prospects so I'm not worried whatsoever about my money.

I expect to have some more money to play with in the next month or two so I was going to start doing some research anyway. Hopefully, I can make a post in the next week or two with some thoughts.
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Old 01-13-2009, 09:30 AM   #14
QuikSand
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Here's a quick stab at things. Not getting on top of the mountain and predicting what's going to happen with everything... just picking a few stocks, that's all.

- - - - -

Caterpillar (CAT)

Not exactly a “stimulus package” play (I think any reasonable effect of a stim program is already built into prices, sadly), but rather a pretty standard cyclical play. With the economy and real estate both massive depressed, this construction-related blue chip is trading at embarrassingly low ratios – right now its P/E ratio is around 7, that’s just silly (earnings may dent that short term, admittedly). This company is **not** going out of business. The dividend is not a firm one from year to year – but at today’s rates, that itself is around a 4% yield at today’s prices of around $40. Highway robbery for what sits right now as a great value stock.

Forecast: eventually the world starts building shit again, and we need big rigs to move dirt around. CAT makes them. Stock goes to $56 or better in two years, and the dividend is pretty secure.


Hecla Mining (HL)

In the wake of a commodities meltdown, I think there’s real value in a number of related stocks. Precious metals took a massive thumping last year (full disclosure: I suffered) and mining stocks seemed to take a double whammy from not only a loss in the commodity price, but also a sell-of effect just by virtue of being equities. Where does that leave a silver and copper mining company like Hecla? Looking at a $11/oz price for silver, and wondering what the hell happened to them? This is a well run company where I’m already very long, but I see the current price in the $2.20-2.40 range being a complete steal. The gold/silver price ratio is too high, that usually means that silver is heading upwards… but even if silver stays at $11-12 an ounce for the next two years, Hecla should be at $3.50 rather than $2.25.

Forecast: ups and downs in the short run (profitable themselves if you move on both) but this thing has a bounce-back in the next 18 months, and should end 2009 over $3.00, possibly over $4.00.


Cedar Fair (FUN)

My bias is strong here, as I grew up practically in the shadows of their flagship amusement park and worked summers there. But the company has a lot going for it – among the operators of regional amusement parks, they are the one who obviously “gets it” and offers the best mix of entertainment, rides, food, and (underrated) appearance/cleanliness.

This is also a dividend play, almost completely. A share of FUN pays a quarterly dividend of 48 cents – that means you’re getting nearly two bucks a share back in dividends, at a share price right now of only $13. **IF** that remains intact, this is a monstrous yield, completely unsustainable.
There’s a real risk here. The company (a limited partnership) recently bought out Paramount Parks, and did so mostly with leveraged debt, so their books look bad. Their long time CEO is resigning (or just has), and he has been really good. So, it’s possible that this company simply loses its way, slashes its dividend, and the stock price drops to six bucks.

Why like it? Because I like their market position (and I think I understand it). In concept, sure, they lose out when a midwestern family says they can’t afford two hundred bucks for a weekend at Cedar Point this summer due to tight times. But they also make out well when a similar family says they can’t afford twelve hundred for a trip to Disneyland, and so they opt instead to go to a nearby regional attraction like Cedar Point . It’s like Wal-Mart, in a way – neither the top nor the bottom of the ladder, and that’s not too bad in these times.

I also know the driving mentality of this stock… they are a darling of "income investors" and realize that the dividend is essentially sacrosanct. It may not be the smartest move in toto, but I think they want to protect that dividend as best they can for fear of massive investor backlash.

Forecast: 2/3 chance that the company retains its dividends, has a solid 2009, and finishes 2010 with a stock price in the low 20s… 1/3 chance that they are in fairly serious trouble, drop the dividend, and the stock price is halved to 7 by then


Woodward Governor (WGOV)

This NASDAQ listing is somewhere amidst the seas of growth plays, energy plays, and technical plays. I think it has a decent case on each front. They make energy-related equipment, including nearly universal parts for aircraft – a pretty down industry right now. In time, that should promote a cyclical rebound.

However, the area for growth is that their transmission technologies are well suited for… windmills. If you buy the general notion that we have momentum toward renewable energy sources (I do, in part) then this seems like a fruitful area.

On the technical side, the stock is selling at a pretty modest P?E of 13. That’s not criminally low, but if you think this stock has any growth potential, it’s still pretty attractive. The stock price has really been punished of late, and while getting in at around $21 (today’s price) might not be the actual bottom, signs point to this stock heading upwards before long.

Forecast: Immediate future partially tied to oil/gas prices (when they are down, the fervor for alternative energy is lessened) but in the next several years this is a growth company with several reasons to like it – I think it hits $30 by the end of 2010, and has more potential past that, likely back to $40 or better within five years.


Cynosure (CYNO)

A bit of a goofy play here, but I am enamored for two reasons. First, I am becoming an old fart, increasingly out of touch with the young crowd, and thus I just love their company niche – tattoo removal technology.

From a technical standpoint, I also love that they have a ton of cash on their books – fairly odd for a somewhat new company. Even if all that happens is that they get bought out by someone big (and that’s not unthinkable given their balance sheet), that’s still a solid win for a shareholder.

No dividend, no history, nothing to say “solid” but this is an interesting spec play that has a chance to work out really well. Stock price right now is around eight bucks (after a mini-bump the last couple of weeks) and where it goes from here is anyone’s guess.

Forecast: Flip a coin. It could finish 2009 at $6 or $16. Or $36, I suppose. Might need to make that a 20-sided die after all, this thing could land just about anywhere.

Last edited by QuikSand : 01-13-2009 at 09:33 AM.
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Old 01-13-2009, 10:12 AM   #15
ageofquarrel
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Cynosure (CYNO)

A bit of a goofy play here, but I am enamored for two reasons. First, I am becoming an old fart, increasingly out of touch with the young crowd, and thus I just love their company niche – tattoo removal technology.

From a technical standpoint, I also love that they have a ton of cash on their books – fairly odd for a somewhat new company. Even if all that happens is that they get bought out by someone big (and that’s not unthinkable given their balance sheet), that’s still a solid win for a shareholder.

No dividend, no history, nothing to say “solid” but this is an interesting spec play that has a chance to work out really well. Stock price right now is around eight bucks (after a mini-bump the last couple of weeks) and where it goes from here is anyone’s guess.

Forecast: Flip a coin. It could finish 2009 at $6 or $16. Or $36, I suppose. Might need to make that a 20-sided die after all, this thing could land just about anywhere.

just wanted to add my 2 cents. My friend does tattoo removal for a living and he says a company called HOYA has the best lasers.
http://www.conbio.com/html/medlite.html
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Old 01-13-2009, 10:40 AM   #16
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When E.F. Quiksand talks, people listen.
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Old 01-13-2009, 02:40 PM   #17
SportsDino
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It cuz he smartz!

I've been trying to avoid posting this thread, but Quiksand just hit two stocks I've made a play on within the past 6 months (although I'm a bit promiscious when it comes to stocks so thats not saying much I guess).

So just for giggles:

I own some FUN in my version of a long portfolio, loaded up in October but it triggered auto-sale at up 20%, re-entered at 14 and 12 in November, and plan on sitting on it. It has been flat since, but that is a good thing as far as I'm concerned... at the moment it is almost exactly par.

I shorted CAT... back in July, I think they have taken their lumps and performed the steps they had to do in the time since that though. I have been doing one of my volatility plays on them with a range of 35 to 40, so I got a 12% in both October and November, but do not currently own them because they've been over range since then. So they are on my short list to re-evaluate.
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Old 01-13-2009, 02:42 PM   #18
stevew
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Cedar Point ftw!
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Old 01-13-2009, 02:44 PM   #19
Galaxy
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How do you guys see medical/health care/biotech stocks in the long-term?
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Old 01-13-2009, 02:49 PM   #20
albionmoonlight
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So if Cedear Point decides to dig a huge hole in the ground and create an underground park made of silver and powered by windmills, and it is so successful that it causes former Disneyophiles to change allegiance and get their Mickey Mouse tattoos removed . . .
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Old 01-13-2009, 02:53 PM   #21
SportsDino
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I'm pretty sure that is exactly what is going to pull us out of a recession albionmoonlight... we're just waiting for the underground amusement park stimulus package to get passed.
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Old 01-13-2009, 03:09 PM   #22
albionmoonlight
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From my outsider's perspective, it seems like getting into an index fund or ETF for banking stocks may not be the worst thing long term. While I would not want to bet on any one bank, it seems that, after the banks all finish eating each other, the sector as a whole has a ways to come back to be fairly valued.
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Old 01-13-2009, 03:15 PM   #23
MikeVic
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It cuz he smartz!

I've been trying to avoid posting this thread, but Quiksand just hit two stocks I've made a play on within the past 6 months (although I'm a bit promiscious when it comes to stocks so thats not saying much I guess).

So just for giggles:

I own some FUN in my version of a long portfolio, loaded up in October but it triggered auto-sale at up 20%, re-entered at 14 and 12 in November, and plan on sitting on it. It has been flat since, but that is a good thing as far as I'm concerned... at the moment it is almost exactly par.

I shorted CAT... back in July, I think they have taken their lumps and performed the steps they had to do in the time since that though. I have been doing one of my volatility plays on them with a range of 35 to 40, so I got a 12% in both October and November, but do not currently own them because they've been over range since then. So they are on my short list to re-evaluate.

You slut.
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Old 01-13-2009, 03:18 PM   #24
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So if Cedear Point decides to dig a huge hole in the ground and create an underground park made of silver and powered by windmills, and it is so successful that it causes former Disneyophiles to change allegiance and get their Mickey Mouse tattoos removed . . .

GOLD

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Old 01-13-2009, 11:00 PM   #25
SportsDino
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You slut.

QFT
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Old 01-14-2009, 09:33 PM   #26
lynchjm24
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I dumped 20k in a ultra S&P ETF at about 11 this morning hoping for a bounce.... SSO went all the way from 22.92 to 23.00 at days end.

You don't want to be holding leveraged ETFs for long, but please can we just pop a little tomorrow so I can have one happy day?
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Old 01-14-2009, 09:40 PM   #27
DaddyTorgo
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From my outsider's perspective, it seems like getting into an index fund or ETF for banking stocks may not be the worst thing long term. While I would not want to bet on any one bank, it seems that, after the banks all finish eating each other, the sector as a whole has a ways to come back to be fairly valued.

yes
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Old 01-14-2009, 10:32 PM   #28
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Hell I'll play. And these are all plays I have personally invested in, so my money is where my mouth is so to speak. Dont take my advice or you will go broke.

1) Cummins (CMI) This is a play against QS pick of Caterpillar in a way. CAT recently announced a pull out of the on highway engine market leaving Cummins as the only independent engine manufacturer in the world for on highway applications meeting EPA standards. They are a traditionally liquid company and while a series of recent job cuts seem disastrous it appears they are staying ahead of the curve as opposed to chasing it.

Stock is trading at 24.52 today when as recently as August it was in the 70s. I look for a mid yer rebound and this stock to be in the 50s by year end.

2) Pepsico (PEP) Just a solid value play in my book. Their drink brands, snack food products and fast food business are near recession proof. Sure they are down like every stock but I look for huge returns for year end.

Trading today at 51.10 near a 52 week low I think this stock sees 75 before it sees 40.

3) Research in Motion (RIMM) Despite blackberry taking a beating to the Iphone and Googles latest greatest this stock continues to have ridiculous statistics. With Verizon now pushing the blackberry, as people begin to crunch home budgets I look for them to disconnect home phones and maybe even GASP give up home internet...why not if you can carry both with you?

Today its 45.10. While I dont see the quick run I see in my last 2 the dividend will help offset modest incremental gains. Still I see this stock pushing 60 by years end.

4) Bristol-Myers Squibb (BMY) Not even Obama will keep folks from getting sick. And this is the BEST drug company on the market, another recession proof industry.

Trading today at 22.20 I think this stock hovers on the high 20s maybe bumping 30 by years end.

5) General Electric (GE) With a company this diverse its almost like owning a mutual fund. Jack Welch may be moved on, and Jeff Immelt may have enemies in every corner, but this giant is just too big. I mean seriously when else can you simultaneously buy Aircraft engines and medical imaging equipment?

Its 14.10 today, I jumped in right at 13.00 in mid december. I plan to hold until ~16 and Ill take my profit then...if it drops Ill keep right on holding.

Last edited by CU Tiger : 01-14-2009 at 10:36 PM.
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Old 01-15-2009, 09:25 AM   #29
flere-imsaho
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GE does seem underpriced. I wonder how much of that is recession, how much of that is a lack of confidence in Immelt, and how much of that is merely speculation.
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Old 01-15-2009, 09:28 AM   #30
Flasch186
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I think one of the problems is that no one has a good gauge on what a "proper" valuation is since the previous short term history was overinflated pretty much from top to bottom. Youll hear people talk PE v/ EPS v/ float /, etc. and no one knows what to compare it to. You cant compare year/year, you cant compare quarters, its almost like you just look into the balance sheet and make sure the company has enough cash to cover short term debt, that theyre worth more in cash and assets than float and then wait until we grind to a bottom and say, "here we go, par."
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Old 01-15-2009, 12:58 PM   #31
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Have to agree with Flasch, in my opinion all past values are suspect (although if we are talking traditional economics here, past values SHOULD NOT MATTER, the history is dead and not a perfect predictor of the future and all that jazz).

Most of my valuations I try to take into account short term debt issues since the mention of the 'credit freeze'. A lot of companies, if they survive that, will probably still be around for whatever rebound that occurs. Also don't assume that the current price is necessary the bottom, there are quite a few stocks I still see losing some weight, and a couple where i put their 'recovery' price below their current price (as in after the fall and bounce to normal they will still trade at a lower share price because they haven't shed all of their fictional inflated value yet).

Finally, this is my particular gambit and not for everyone, but because price targets are often hard (and sometimes just pulled from no where)... I have a tendency to set up automatic cutoffs where I would be comfortable with a short term gain (say any boost over 10%, or so on, relative to confidence in the short term future of stock). If you are looking for ultra long term and don't want to bother with transaction costs, of course ignore that altogether, but if you have been playing ups and downs, it is slightly more reliable than halting for a predicted target and suffering the short term ups and downs. Especially with volatility, you might trigger a 10% gain, bounce out, it might fall a couple days later, you get back in, and then another bounce and profit taking.... rinse and repeat. If you are willing to take the chance that it will go up and keep going up and that you are risking missing the boat... well it can give you a few mini-gains for a large gain, even though the stock price is only slowly trending up overall.

I don't consider this so much of a stock tip as a theoretical game, so I don't feel bad about revealing it, there are of course downside risks so I'll be happy to explain further (and feel free to attack the idea as complete shit, I've got buddies that point out problems and once in a while I find a new variant that is even better for certain situations).
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Old 01-16-2009, 03:11 PM   #32
lynchjm24
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At some point I'm buying USO. The opportunity to buy an ETF that somewhat tracks crude is the perfect hedge against heating oil and gas prices. If I don't make any money on the EFT my living expense are lower. If I lose disposable income on gas/oil then at least I'm somewhat covered in my portfolio.

Of course I'm going to get cute and try to time the oil bottom.
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Old 01-16-2009, 03:58 PM   #33
Flasch186
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$28/barrel
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Old 01-16-2009, 04:46 PM   #34
lynchjm24
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$28/barrel

You think that's the bottom?

At 3:59 I bought another 10k of SSO. Just looking for a happy market on the 20th... it's really just gambling, but it's my speculation money so why not gamble with it.
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Old 01-16-2009, 05:00 PM   #35
Flasch186
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i dunno, a guess. The Cantango is going to have a problem here shortly when the storage begins to run a bit hotter than they'd like so the expected profit'll get squeezed there (at the margin) forcing more supply on the market PLUS as the credit squeeze begins to hit more and more countries those that produce oil will want to move more barrels in contrast to what they say, since selling oil now (relative to demand) is better than cutting supply, hoping the price goes up and breaking even. Theyre all nervous and they dont see the scenery improvbing anytime soon.


All of the above is simply speculation, do your own DD.

I believe will tap a low for a while and then prices will go high er to feel some sort of stick in the 60$ range but who knows. I will pat myself on the back and say that I did say the oil trade was a bubble along with the commodity trade and whle I tried to dance around it at the top was able to avoid the pain on the way down. whew.
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Old 01-20-2009, 09:42 PM   #36
lynchjm24
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Here is to a better tomorrow. At least I didn't have BAC or C....
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Old 01-20-2009, 09:44 PM   #37
Flasch186
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Damnit I shouldve shorted it for real (SDS) instead of just thinking it. I have such a hard time putting my $ where my mouth is and instead stay with the long and hold philosophy since the 'fast money' philosophy highlighted in my thread last year didnt work either. grrrrrr
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Old 01-20-2009, 11:50 PM   #38
SportsDino
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I sort of predicted a BAC fall back in the 'Recession...' thread.. its about 60% down from my entry point (I'm an evil shorter). I'm not one to give advice, but if you are direct shorting BAC realize it is 20% of what it was 3 months ago and maybe 13% of what it was 4 months ago. I personally have liquidated, there is no point finding a bottom if you already got sure money!

Haven't been following Chase specifically.

I have been playing some of the ETFs around financials, SDS peaks have been insane the last few months.
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Old 02-05-2009, 04:19 AM   #39
lighthousekeeper
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Originally Posted by QuikSand View Post
Here's a quick stab at things. Not getting on top of the mountain and predicting what's going to happen with everything... just picking a few stocks, that's all.

- - - - -

Caterpillar (CAT)

Not exactly a “stimulus package” play (I think any reasonable effect of a stim program is already built into prices, sadly), but rather a pretty standard cyclical play. With the economy and real estate both massive depressed, this construction-related blue chip is trading at embarrassingly low ratios – right now its P/E ratio is around 7, that’s just silly (earnings may dent that short term, admittedly). This company is **not** going out of business. The dividend is not a firm one from year to year – but at today’s rates, that itself is around a 4% yield at today’s prices of around $40. Highway robbery for what sits right now as a great value stock.

Forecast: eventually the world starts building shit again, and we need big rigs to move dirt around. CAT makes them. Stock goes to $56 or better in two years, and the dividend is pretty secure.

been meaning to pick up CAT based on the reasoning above - but glad i've procrastinated considering it's down 25% since the pick was made
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Old 02-05-2009, 08:28 AM   #40
QuikSand
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Heh, I actually finally plunged in on CAT once it got down to nearly $30... I don't know where the bottom is with the company, but I simply refuse to believe that the company is dead or dying. I'm in for about half of what may be a long term position... so the likeliest spot for me to by the other half would be at around $26 (if it keep sliding) or maybe around $36 (if it looks like it's coming back after a bit).

The bigger worry is with Cedar Fair, where I am already too long. They released some guidance intimating a new dividend policy may be in the offing, and the stock is hurting (though not crushed). The February dividend is fine, but the next quarter might get halved or worse, and that's trouble. I might take a beating there... but still, even if they cut the dividend in half, a buck a year on a ten dollar stock is still pretty money (double entendre intended).
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Old 02-05-2009, 10:30 AM   #41
SportsDino
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I got FUN for a little over 12 bucks (back in November), lost about 16%, but dividend payment covered about 4-5% of that. The rumor (and likelyhood) of a dividend cut is probably responsible for most of that lost. I'm hoping the actual news will result in a bump instead of a further drop...
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Old 02-05-2009, 10:36 AM   #42
Tekneek
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If you're buying for your 401(k), why would you NOT get into good index funds? The only reasons to buy stocks in individual companies would be if you really want to own that company, or love to speculate in the market. And speculating is not investing in your future or those companies, it is more like gambling.

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Old 02-05-2009, 01:20 PM   #43
SportsDino
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I don't know if that is directed at me or not, but for me:

1. I don't believe in most mutual fund managers abilities or trustworthiness, so that rules out those funds.

2. The index funds have fallen with the economy (unless you are talking about very specific ones, in which case you are back to researching a segment of the economy anyway).

3. The notion of investment without research to me is the true gambling. Oh the market averaged 12% from 1930 to 2000, buy the index and you are 'safe' is a 'DOES NOT COMPUTE!' moment for me given my understanding of economics.

4. I like to do my own research. And I've stated elsewhere, if you don't like homework you should go into specific funds or better some sort of fixed payment investment system through a bank. You don't deserve 12% return on your money, it is not a privilege, and it has a RISK rate that people seem to ignore.

5. Everything is like gambling, including 'good index funds'. Everything has risk and estimated reward rates, denying such is just ignorance. Given recent market situations I've decided to take certain risk and reward scenarios and avoid what might have been 'good common sense'. Lately the common sense has been lacking in common sense investing, in my opinion (this is why you have banks that belong on fail blog).
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Old 02-05-2009, 01:38 PM   #44
Flasch186
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GE seems incredibly undervalued right now considering that it's like a mutual fund anyways and their yield is silly. (Edit to add, hopefully their bond rating isnt cut and their yield stays put)
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Old 02-05-2009, 01:57 PM   #45
Tekneek
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Good index funds are not like gambling, because it is a widely diversified investment across the span of the entire economy. You aren't trying to time the market. You aren't trying to pick the winners and losers. You aren't at the whim of an analyst sending a torpedo into your biggest holding. Overall, over time, the index funds tend to make steady gains and that is what is best for most people trying to get money for retirement. You adjust your balance between stock and bonds, but otherwise you don't worry about where the market is going from day to day. You also don't have some manager or big financial institution eating you up with management fees, brokerage fees, etc.

For the average person, any choice other than widely diversified index funds is probably a mistake. If you enjoy doing all of the work and can demonstrate that you generate better returns (all fees included) than index funds, then good for you. Many people don't beat good index funds once you include fees (if at all).

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Old 02-05-2009, 03:22 PM   #46
SportsDino
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Good index funds have risk. A diversified bet is still a bet.

If you want to think of it like a roulette wheel, you can consider the index fund bet being a bet on both black and red. You look good a whole lot of years, then you hit green (say economic crisis) and well you are out of luck. If the rate of return is right on average you will probably survive those green years as well overall.

They are not invincible, that is the thought I'm railing against... although for the average investor is it a better option... okay my practical side of the brain can see that as an option. But if you want to get really into thinking about it, technically you could play timing games on index funds of the whole economy as well. For instance, I'm sure most people would appreciate dodging the DJIA going from 12000+ to 8000 territory.

Any stock, bond, or collection of stocks and bonds, is GAMBLING (by definition, no risk = no reward... ignore poor perverted treasuries for a moment). Lets make that the first thing we teach in kindergarten, then move on to the discussion of average rates of return and default risk and economic downturns and all that jazz.

All that noise aside, I would rather people buy an index fund then follow the picks within this thread without studying the stuff themselves. As Tekneek says, its a lot of work, and for the most part probably not worth the costs/risks.
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Old 02-05-2009, 07:58 PM   #47
Tekneek
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Good index funds have risk. A diversified bet is still a bet.

Of course. But the risk is mitigated, generally, because the best funds are going to be weighted evenly across a wide spectrum. You won't have huge upside, but you won't have a huge downside (compared to the rest of the economy). A good index fund play is an investment in capitalism itself.

Quote:
They are not invincible, that is the thought I'm railing against... although for the average investor is it a better option...

Nothing is invincible when it comes to this stuff.

Quote:
But if you want to get really into thinking about it, technically you could play timing games on index funds of the whole economy as well. For instance, I'm sure most people would appreciate dodging the DJIA going from 12000+ to 8000 territory.

Sure they would. However, trying to time the market is a fool's errand. Eventually, you will find yourself chasing a trend and end up on the wrong end of it, either losing more value than you should, or leaving some on the table.

Quote:
All that noise aside, I would rather people buy an index fund then follow the picks within this thread without studying the stuff themselves. As Tekneek says, its a lot of work, and for the most part probably not worth the costs/risks.

People just need to know that "picking stocks" is something most individuals should only do for fun, and not with money that they really need for anything else.

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Old 02-05-2009, 11:59 PM   #48
bionicgrov
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Go long Corporate bonds. Grossly undervalued as most of the monies flowing into fixed income has gone into Treasuries recently.

Also, short the long Treasuires. At some point people will stop buying our debt and we will have to increase the yields to entice people into buying our crap again.

Buy and hold won't work again for another 8-10 years.
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Old 02-06-2009, 12:12 AM   #49
DrAFTjunkie
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Plymouth Rock Studios

I don't know much about stocks, I picked a few winners for my some of my stupider friends with money after 9/11, but that was based on deductive thinking and not any financial prowess. I don't even balance the checkbook in my familily. That said, the above seems like a low risk/high reward venture based on what I'm hearing. I'm not sure if it's even IPO'ed, or anything but I have friends in Hollywood/Southern Cali (mostly comedy troupe performers, writers and such) who say that there is a pretty big buzz around "Hollywood East" and thy're thinking that PRS, who I hear was stared by a bunch of former execs from some major studio, will absolutely blow Vancouver out of the water....whatever that means.

I dunno, I just thought I'd throw that out there.

No se holmes.
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Old 02-06-2009, 01:03 AM   #50
Marc Vaughan
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I'll bite ...

SOLR - GT Solar International, Inc
Solar power, if Obama goes alternative energy as seems to be indicated then it'll play a big part in things. Has beat earnings expectations regularly and is trading at a ludicrously low level despite having risen nearly 50% in the past 2 days.
Don't even consider purchasing yet though as I reckon it'll yoyo down to around $3.50 again before it breaks out from its current levels.

I fully expect this stock to at least double up within the next 2 years.

FVE - Five Star Quality Care, Inc.
This is at the riskier end of investments at present simply because the company carries a fair bit of debt. That being said even in a recession people get old and as such need to be looked after.
A company which has expanded agressively and is presently trading at $1.85 against a high of around $12 a couples of years ago.
Presuming the company doesn't get itself into too much trouble with refinancing debt I'd expect its price to be at least $3-5 within the next 5 years.

NOK - Nokia
Largest mobile phone manufacturer in the world, limited debts and huge clout. It lacks the sexiness of Apple's Iphone or RIMM's Blackberry but more than makes up for it with its range of products and vitally is competitive nearly everywhere in the world (with the odd absence of notable market share in the US).
Reasonable dividend of around 4% and a very low P/E multiple with its present price around $13, I can't see this company failing to remain stable even if the recession is prolonged. Ideally I expect them to eat up smaller up and coming tech companies in the meantime, setting themselves up for growth during the recovery period.

MSFT - Microsoft
Safe bet, the worlds most popular operating system manufacturer. Its obviously a stable largely debt free money machine presently priced at $19 - or around 60% of its valuation a year ago. It pays a small but safe dividend.
Microsoft will be releasing the 'new' Windows in the next year which is a guarenteed revenue bringer, the Xbox360 is now profitable and while behind the Wii appears to be fending off the PS-3 with ease, on top of this there are strong rumours of a 'Microsoft phone' going around - something which if done intelligently could open up a whole new market.
On top of this I conjecture that Apple allowing non-DRM music downloads/conversion of existing libraries will allow people to escape from the iTunes/iPod lock which has kept most other mp3 players as nothing more than a niche - potentially allowing Microsofts Zune or descrendants to make some headway into that market.

HYGS - Hydrogenics Corporation (USA)
A hugely risky proposition which will either make me look like a genius or a moron in the future. A penny stock currently priced at 44c, HYGS produces hydrogen fuel cells and suchlike.
My theory is that while hybrid electrical systems are presently trendy in the long term the post petrol transport solution will be hydrogen based.
Reasoning being - its easier to convert existing car engines to use hydrogen than into hybrids (cutting costs for users and manufacturers), its also easier for companies to sell hydrogen at gas stations then it is to do the same with electric products (where a user can plug in at home). This allows the present 'gas' companies to move into hydrogen and retain their present approach to business largely.
No idea what will happen with the company to be honest, its purely speculative - but at 44c a share its affordable enough to pick up a few hundred shares and dream that they might be the next big thing.

All these stocks are suggested as long term purchases (ie. buy and hold), in the current market I think buying for short-term gain is best left to people braver than myself

Last edited by Marc Vaughan : 02-06-2009 at 01:06 AM.
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