Another Couple of Days and We Can All Be Like Wayne

Rot 911 · 10-15-2008, 09:54 AM

And buy into a stock market that is below 8000. Down 500 points right now. I think it is becoming apparent that Wall Street at least is not buying into the bailout scheme.

onewhippedpuppy · 10-15-2008, 09:55 AM

I thought either MIT was giving discounts, or Pelican was going public.......

M.D. Holloway · 10-15-2008, 10:00 AM

Edited. Inappropriate comments removed. -Z-man.

einreb · 10-15-2008, 10:03 AM

Quote:

Originally Posted by Kurt V

I think it is becoming apparent that Wall Street at least is not buying into the bailout scheme.

So the old argument that lows get retested is out the window? This is S.O.P.

That being said... you may not see much of an upside to the market for several quarters. Assuming the recession is 4-5 quarters and the market leads out.

The one thing that will make this bottom a little different is that there wont be much of a short covering (cliche) rally.

slakjaw · 10-15-2008, 10:28 AM

Already did.

C at 12.10

slakjaw · 10-15-2008, 10:30 AM

In and out of S and MOT over the past few weeks as well.

sammyg2 · 10-15-2008, 10:31 AM

This may be just testing the bottom but I'm not looking day to day.
I expect unemployment figures to get worse over the coming months, I expect the GDP to drop significantlly, and I expect the market to bounce down near 6000 before spring.
We'll just have to see.
I know the company I work for was up 30% on Monday and is down 11% today, waaay too much volatility.

HardDrive · 10-15-2008, 10:42 AM

I dunno....I usually have a pretty good 'gut' reaction to the markets.

I just don't feel the floor yet. There just too much uncertainty, and there are too many freaked out baby boomers off loading. Glad to see some global action to stem the tide, but thats no reason for a sustained climb. If you have some brass ones, it could be a fine time to day trade, but count me out thanks.

Rot 911 · 10-15-2008, 01:43 PM

At the close: down 733.08-7.87%

pwd72s · 06:24 PM

Since this is all opinion anyway... I can't call this a correction. Can't call it a Bear market, either. If you ask me, we're seeing a good old fashioned Crash...one driven by panic selling.

Wayne's theory is a good one...just can't say when the best time will be to begin picking up bargains.

competentone · 10-15-2008, 09:09 PM

Quote:

Originally Posted by Wayne at Pelican Parts

Macy's is at 4.67 PE ratio. Even if earnings get clipped in 1/2, it's a 9 P/E ratio. So, it's 1/2 of cheap. That's like a 1988 Carrera for sale for $12K, but wait, today it's $6K. Daily price swings will happen, if you buy on the fundamentals, in the long run you should be rewarded.

I'll buy some more if things go lower. 7800 was a magic number for me, because that's when I missed out last time (I was out of the states at the time).

-Wayne

http://finance.yahoo.com/q/ks?s=M

Macy's has over $10 billion in debt. Their debt-to-equity ratio is 1.05.

When does their debt need to be rolled over? What if they are locked out of the credit markets and cannot roll the debt again?

Before buying any common stock in this market, you need to study a company's debt.

Be careful with "long run" thinking. What happened to "long run" holders of Kmart and Woolworth?

"Time" didn't save those retailers when they got in trouble.

It's a jungle out there; you need to have really well developed "survival skills" to wade into this market.

competentone · 10-16-2008, 06:09 AM

Quote:

Originally Posted by Wayne at Pelican Parts

Macy's is at 4.67 PE ratio. Even if earnings get clipped in 1/2, it's a 9 P/E ratio. So, it's 1/2 of cheap. That's like a 1988 Carrera for sale for $12K, but wait, today it's $6K. Daily price swings will happen, if you buy on the fundamentals, in the long run you should be rewarded.

I think that 1988 Carrera might have same major issues -- that's why it's so cheap. Better get a good PPI.

Quote:

NEW YORK, Oct 15 (Reuters) - Moody's Investors Service changed its outlook on Macy's Inc to negative from stable, indicating a rating downgrade into junk territory is more likely over the next 12-to-18 months.

*****

The "Baa3" rating is the lowest investment grade. Downgrades into junk territory can substantially increase a company's borrowing costs.

"Should operating performance decline by more than the company expects, then -- barring other changes in the company's capital structure or cash flow expectations -- debt protection measures could weaken further and be more appropriate for a lower, non-investment grade rating," Moody's added.

http://www.reuters.com/article/marketsNews/idINN1531195920081015?rpc=44

jyl · jyl's Garage

Info on M -
Cash $0.75BN (corrected), debt ST $1.6BN and LT $8.8BN
L4Q FCF $1.3BN, 39% trailing FCF yield on $3.3BN mkt cap
Debt/EBITDA is 3.3X and EBITDA/IntExp is 5.5X.
$950MM debt matures 2009, about $200MM matures 2010.
Price/Sales appx 0.12X, at lows of 1990/91 for typical multiline retailer
Also have $2BN LOC
All public info
Don't know about their CC exposure

competentone · 10-16-2008, 07:01 AM

Quote:

Originally Posted by jyl

Info on M -
Cash $1.3BN, debt ST $1.6BN and LT $8.8BN
L4Q FCF $1.3BN, 39% trailing FCF yield on $3.3BN mkt cap
Debt/EBITDA is 3.3X and EBITDA/IntExp is 5.5X.
$950MM debt matures 2009, about $200MM matures 2010.
Price/Sales appx 0.12X, at lows of 1990/91 for typical multiline retailer

I haven't researched M, but if I were looking at them as a potential stock purchase, besides looking at their corporate debt, I'd be looking at any exposure they have in the "consumer credit market."

What exposure do they have to potential defaults on their store credit cards? How is such debt accounted for right now? Could there suddenly be some unexpected write-down from defaults on store cards that would surprise investors?

911pcars · 10-16-2008, 07:13 AM

Some economist mentioned, for some reason, the pattern of purchasing stocks is unlike regular consumer purchases.

When the price of a stock drops, people are reluctant to buy, but when the the price goes up, that's when people want to purchase. Have you ever seen that phenomenon with a set of Fuchs?

If you have the cash, buy now. If enough people do it, their value will eventually go up.

I once stayed at a Howard Johnson's.

Sherwood

kstar · 10-16-2008, 09:25 AM

Don't pick stocks; buy the market for the long haul.

Now is a good time to do that, and a better time should the market keep falling.

Buy in tranches and average down; trying to "pick a bottom" is silly.

59GS · 10-16-2008, 11:05 AM

My rules for buying now:

Strong conservative fundamental picture; MAX debt to equity = 1:2; The more cash the better; buy only on turns higher bouncing from significant support price points; get out with whatever profit you have at any overhead resistance price point if it breaks above it and then sinks back thru it. Don't fall in love with any stock, fund or ETF; Do not buy anything without a clear exit strategy which includes a price point below which you will not go - no matter what. Be as disciplined with this as Mistress Mandy (no pic's available) and you will be fine.