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re: Random Money/Business/Finance Thoughts Thread

Posted on 7/14/11 at 10:45 am to
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 7/14/11 at 10:45 am to
Say what?
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 7/14/11 at 10:48 am to
So I just tried to play that video in purple haze's WYHI thread and wasn't able to bc Flash isn't available for the iPhone. This is the message you get from Adobe when this happens:

quote:

Thanks for trying to access Flash Player. Unfortunately it is not available for your device because of restrictions that Apple has put in place. Click here to see a wide array of the latest smartphones and tablets that do support Adobe's Flash Player.


someone is bitter
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 7/14/11 at 2:45 pm to
What a mixed bag of fin/econ news:

U.S. Economy: Retail Sales Stagnate on Higher Unemployment LINK ][LINK]

quote:

Americans contending with declining home values and unemployment above 9 percent are holding back on spending, prompting retailers such as Target Corp. to sweeten discounts.


I can attest to this as I talked Target into a 40% discount on a dresser I bought from them. Headline is misleading btw.

quote:

After the retail sales data, economists at Morgan Stanley and Deutsche Bank Securities Inc. in New York were among those cutting tracking estimates for second-quarter consumer spending. Morgan Stanley economists lowered their forecast to 0.4 percent at an annual pace from a prior projection of 0.9 percent.


50% ax there, damn.

U.S. Jobless Claims Declined More Than Forecast Last Week LINK ][LINK]
U.S. Wholesale Prices Fell 0.4% in June on Cheaper Energy LINK ][LINK]

quote:

The 0.4 percent decline in the producer-price index followed a 0.2 percent gain in May, Labor Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for a 0.2 percent drop in June. The so-called core measure, which excludes volatile food and energy costs, increased 0.3 percent, more than projected.


JPMorgan Shares Rise After Earnings Beat Analysts’ Estimates LINK ][LINK]
Posted by reb13
Member since May 2010
10905 posts
Posted on 7/14/11 at 7:34 pm to
What are the disadvantages of focusing on investing in stocks that yield a high dividend? Opposed to stocks that do not yield a dividend? I ask because I am looking at all of these high yield dividends that are offering 10-12% a year and I see it as easy money. Tell me why it is not guys!
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 7/14/11 at 8:05 pm to
Well, for one, usually when it's a large dividend like that, you aren't getting too much price movement on the underlying security.
Posted by TheHiddenFlask
The Welsh red light district
Member since Jul 2008
18384 posts
Posted on 7/14/11 at 8:08 pm to
Hug div yields are a sign of a company that doesn't have any good future prospects. I don't consider diva at all when valuing a company.
Posted by reb13
Member since May 2010
10905 posts
Posted on 7/14/11 at 8:26 pm to
I mean is that not a guaranteed 10 percent return? What are the downsides? I mean I do not care if it moves at all if I get a 10% return guaranteed. I know there is some downside or everyone would just invest in these companies and not bonds etc.
Posted by Athanatos
Baton Rouge
Member since Sep 2010
8190 posts
Posted on 7/14/11 at 9:04 pm to
It's only guaranteed if they continue to pay a dividend.
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 7/14/11 at 10:42 pm to
Ain't nothing guaranteed brah, especially a dividend. You're last in line to get paid, which means you are first to get the ax.
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 7/14/11 at 11:17 pm to
BHP Billiton to Acquire Petrohawk for $12.1 Billion in Cash LINK ][LINK]


Pretty big deal there. eta: Props to GHS making their way into the story. Also 18.4x EBITDA, hot damn.
This post was edited on 7/14/11 at 11:57 pm
Posted by lynxcat
Member since Jan 2008
25177 posts
Posted on 7/15/11 at 12:29 am to
And, the PV of those future dividends should already be priced into the value on the stock...theoretically.
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 7/15/11 at 12:43 am to
Absolutely, that's why the stock (whatever it may be) is yielding a 10% div in the first place. The market is placing the discount rate on the PV of those dividends at a very high rate. Doesn't necessarily mean the market is right, but that's where you make money, when you can figure out the reason every one else is wrong. Caveat that many educated and respectable people (board included) think this is impossible.
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 7/15/11 at 1:07 am to
PS tomorrow is an avalanche of information. I, for one, am excited. EU bank stress tests, CPI, NY manuf, IP, and consumer sentiment. Get rowdy. LINK ][LINK]
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 7/15/11 at 1:45 am to
LINK ][LINK]

These are some just brutal looking charts, just for perspective. Source is a blog yes, original source is SF Fed.


Real PCE/person

Real household net worth/person

PCEs

Employment/Population ratio
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 7/15/11 at 10:00 am to
Wow, there is nothing refreshing about those charts.

OT: Just closed my CORN calls for a decent gain. When I initially bought them, I was hoping for something greater than only 7.5%, but I decided to part with them today because the roller coaster has become old and I've noticed my option purchase price was high relative to the price the underlying security was trading at at the time I purchased them. So I will likely re-enter if I can get the same Nov. $45 calls for under $4.

Just purchased some Dec. $10 GGB calls. Bid/Ask was .60/.80. Put in a limit order for .80 and was filled at .67. Great start to the day. Already have my sell order in for .80.
Posted by GregYoureMyBoyBlue
Member since Apr 2011
2964 posts
Posted on 7/15/11 at 10:31 am to
You seem to have been bit by the option bug my friend haha.

I have yet to dip my toe in to test the option waters, but you are increasing my confidence by the day.
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 7/15/11 at 10:33 am to
quote:

I have yet to dip my toe in to test the option waters, but you are increasing my confidence by the day.


Please don't let me increase your confidence!

Posted by GregYoureMyBoyBlue
Member since Apr 2011
2964 posts
Posted on 7/15/11 at 10:35 am to
LINK

Wish i had thought about buying a Google out of the money call yesterday before earnings...some are up over 1000% today...
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 7/15/11 at 10:42 am to
Damn. Those $575s are up 1200%.
Posted by John Merlyn
Member since Oct 2009
2203 posts
Posted on 7/15/11 at 10:49 am to
I shorted the harry potter opening weekend revenue at $147,500,000. Anything below that I cash in. Only two other movies have ever beaten that number. Keep your fingers crossed.
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