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Strategies & Market Trends : BAK - Investing

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To: sameplot who wrote (2641)	5/13/2012 3:04:23 PM
From: normlasky	1 Recommendation Read Replies (1) of 3249

Re: JPM "Would you own JPM here Norm. If not, at what price?" I did own some jpm prior to the announcement. About half with covered calls. Still own it. Imo, the market is a dangerous place right now. I went to 80% cash and covered calls a couple of weeks ago. I'll put some money to work if we get a 10% correction- djia sub 12,000. Otherwise, I'll day trade the market and see how things play out. I have nice memories of the market volatility during last year's debt ceiling fiasco. We're going to be revisiting that subject shortly. Couple this with likely recession in european, us election and worldwide uncertainty and it makes a compelling argument to be on the sidelines. The US does have a number of pluses. I was really pleased at the US energy report released last week. US oil production is up 6% for the year and around 10% over last 4 weeks. Driven by North Dakota crude and liquid/gas production. Our gas and jet fuel us is usage is down around 5% for the year. I see gas prices continuing to decline this year which is a big plus. Auto production is booming. Housing is about to upturn. US households have much better balance sheets. Corporations are flush with cash and are earning almost record profits. State governments have reduced spending significantly. US employment data is ok given a very bad housing market. Don't understand how jpm screwed up so badly on the cds na ig cds and made it through the financial crisis when we had much more volatility. They should have realized that hedge funds were going long the cds of the 125 companies in the index (selling cds) and shorting the index cds (buying cds). That's why spread narrowed from 70 bsp to 30 bsp in 4 months. Jpm will emerge as a winner. They're going to earn $6/7 share in 2013. Worth $50/55 share. I would accumulate at tbv - $33/34. Otherwise I would day trade it on big burps - like last Friday. It's important to be deliberate. If we do get a 10% correction I'll still be largely in cash and covered calls until the macro picture worldwide becomes less uncertain.

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