CD,
I'm still in, but that is in part because I have some motivation to wait until mid February, at least, before selling. That said, I can still sympathize; knowing when to sell has been the hardest thing for me to figure out in this game. I usually get out too early, figuring it's better than too late. And that's a good way for us to play it until we are more refined.
I think that whatever the Fed does near term is priced into the stock, except perhaps no hike. OK stop laughing, I knew I was joking when I said that. I mean even a half per cent hike won't derail WAMU in any serious way from these levels. Much like an earnings report and conference call, in which the CC -- not the earnings -- determines the direction of the stock price, the focus should be on what the Fed says as well as does. Most people expect at least 50 points worth of hikes this year, the only question is will we get it in one dose or two? More important is what the Fed thinks it is seeing and what its bias is. If the Street hears some hint that rates will go up more than .5%, you could get your pullback right away.
I'll be curious if Greenspan makes any remarks regarding liquidity. The Fed left a lot in the system to counter any Y2K crises that might arise. They haven't arisen, so the Fed will drain the excess. This will take a few months to play out, but the Street may realize it or be reminded of it before then. So keep your eye on WAMU. The pull back may come. Just start drying your powder. My HO, of course.
Cheers, Tuck |
