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Stock Picking - Straight Gambling

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Boner_18

Boner_18

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I am not a financial professional... But I do love gambling. So here goes.

Right now I love Ford (F). Buy anywhere below 11.00, lock in gains around 11.50, look for it to go to 13 in two our three months.

Play it straight or look at cheap out of the money calls. I've got 5000 Feb $13 strikes.

S&P might make their debt investment grade, they are looking at resuming their dividend, there is crazy pent up demand for cars (average vehicle age on the road is 11 years) and Mulaly is a straight stud.

Get $$$
 
Muse
Boner what do you think of Bank of America?
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As a company its complete shit. Possibly the worst name in the space. that said, the price and high beta (correlation to the overall market) make it an attractive name to short term trade in. as a long term portfolio addition I would pair it, short a bad name (bac) while going long a quality name (jpm?) The
Same notional amount. Short term, who knows... But I tend to avoid names I am down on long term, like betting a game when the fix is in.
 
Boner_18
As a company its complete shit. Possibly the worst name in the space. that said, the price and high beta (correlation to the overall market) make it an attractive name to short term trade in. as a long term portfolio addition I would pair it, short a bad name (bac) while going long a quality name (jpm?) The
Same notional amount. Short term, who knows... But I tend to avoid names I am down on long term, like betting a game when the fix is in.
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I would avoid JPM like the plague. They have massive exposure to European debt.
 
MF'r
I would avoid JPM like the plague. They have massive exposure to European debt.
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I did not know that and it's something to consider closely when putting on a pair trade in financial names. Only financial name I am long is HSBC (ADR: HBC). I'm long this name because of favorable deposits and potential interest rate environments that might favor large euro depositor banks. Also they have a large Asian

Another thing to be careful of MF is assuming that stock price doesn't sufficiently take into account euro exposure. In the case of JPM (and I'm just spitballing here) perhaps forced writedowns on Greek, Italian, and Spanish debt is written in. I know they aren't carrying it at 100%, the bank and more importantly street analysts are already discounting it by at least 50%. Gotta look at coverage notes and management discussion & analysis (MD&A). it's my personal belief that banks carrying this trash will be forced to take haircuts to about 30% before they start calling then in, thus forcing default. The question is, what discount is "baked in" to the stock price?
 
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