Dave Gore's Trades That Make Sense Message Board

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Strategies & Market Trends : Dave Gore's Trades That Make Sense

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To: Bruce A. Brotnov who wrote (12671)	9/22/2002 1:59:44 AM
From: mishedlo	Read Replies (1) of 16631

Bruce, Thanks. Now we are getting somewhere. For the record, the credit for ZERO on ACF I do not deserve at all. It came from the Reaper. He is very very good at reading financials, knowing the cost of $, etc etc. One of his specialties is retail and he is short S right now (but he does not consider that a GTZ). As for ACF, we have sub prime lending, bankruptcies increasing, debt increasing and subprime lenders piling on to keep portfolios increasing. It was a recipe for diaster. COF is following the same path. Note: these are MY reasons I do not remember his. Look at COF offering 0% deals now. How desperate is that? COF can easily go under IMO. So can JPM (without a govt bailout). Trillions and trillions of $worth of derriatives. Reinbsurers are at risk because of this as well. There is a financial disaster just waiting for the trigger. Overleverage to ever increasing risky customers just to keep revenues increasing at a time when bankruptcies are increasing as are layoffs is NUTs. ACF also was the benifactor of a huge squeeze in Feb (when they reported FEB delinquicies beyond 30 days dropped like a rock. Stock shot up on this total garbage report. 30 day delinquicies dropped in Feb month end cause FEB only has 28 days!. Nowhere was that mentioned in the report!) SPIN SPIN SPIN SCAM SCAM SCAM. Everyone is betting on another greenspan miracle. Well that miracle is not coming. GM IBM DELL JPM HI COF all these "low PE" companies have huge huge problems. We are just touching the surface of IBM Pension fund problems are going to rock IBM MMM GE and GM. SEBL and DELL have enormorous stock option problems. DELL is short millions and millions of $ worth of puts on its own company at strike 40. That is not reflected in the stock price and seldom mentioned! This will cost DELL BILLIONS! SEBL has 50%!!!! of its stock offered in employee stock options. INTC stock options are obscene as well. Take away stock options and these companies make nothing. DELL is even worse with the huge short put position. IBM has increased its PE ratio with enormous stock buybacks. It has taken huge buybacks just to keep earnings per share to grow. As a result of the buybacks, look at the debt of IBM it is staggering. A total disaster. Then figure in pension fund accounting estimated at 10%! GN has done the same. 10% pension fund estimate with a sinking stock market. Enormously undercapitalized and no one talks about it. The fact that no one talks about it means that the average investor has no idea what the looming problems are. GM and F can both easily go to zero as well. F is almost a given. Look at any company with debt. Assume it is on shaky shaky grounds. These are what we need to be discussing here instead of dead cat bounces in EDS. Look at S. Paid enormous billions of $ to but out a mere 115M in income from Lands End. S is already in debt. What do you think of the average customer at S? How much credit do they have and how good is that credit. Look at S debt. Can S go under. Seriously, this is what needs to be discussed, not whether or not ACF is good for a bounce from $6 to $7. Yes that is a nice %. But why with what I knew I did not JUST stay short insted of tring to trade in and out is beyond me. I missed much of the move in ACF figuring on a bounce that never came. On POS stocks like ACF, the power is to JUST STAY SHORT till the target is hit. In this case it was ZERO. Perhaps at 12 you come to the conclusion other wise but that is far better than playing for silly bounces at 10 and having the stock drop to 6 on you. There are extremely few stocks from a FA basis that make ANY sense whatsoever to own (other than gold stocks). 99% of everthing else is total junk. That does not mean the value of junk can not rise, but it will still be junk IN THE LONG HAUL. M

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