Just a thought from Ft Lauderdale
Try this on for size----I think the swing of TBR is based on a number of factors. First is probably the Dow. Unfortunately or fortunately we are in the middle of a major event (TBR). As I think Steve has mentioned before we are climbing a ladder that has three steps, at least in the short term.
Also as a side note on the Dow, I think with out any question that the Dow over shot itself in regard to projected earnings and growth, hence the top dollar we have been paying for the pearls of the group. I also think we are in a adjustment period and will find a level that is perceived as fair value. How much work do we have left, I only wish I knew. My feelings, for whatever they are worth, is probably not much more. I think we start to level off around 8000 and then start working from there.
Remember how sensitive the Dow has been on any news, to the down side, watch the next couple months show us the same reaction to the up side with even a trickle of good news.
Step one (TBR)of course was the auction itself. Biggest of all steps. Step two was maintaining good value at the auction. Step three is the trading of the baby bras. In the middle of all those steps were side line items that were very important. Who are the players taking control. At what price were they willing to enter the game. What are there plans and projections. Most of this has played out nice.
I would imagine that there are many people on the side lines waiting for the spin to start trading. I also think that this type of market movement gets the weak at heart types out of stocks that they don't love and understand. Also, If I wanted to have some funds in this type of play, I don't think I would be overly interested in picking up all 12 when in fact I may want to cherry pick, for the long term.
So what happens when they start dumping TBR....Well not much. Remember it's all a function of supply and demand. If they are not lining up at the plate to absorb TBR because of many reasons, we will continue to see our baby get even more undervalued. I still feel that we will see a 20% upside when the spin starts to trade. $125 to $135 is what I'm betting.
How many times on this board have I heard all the concern about how the spin off will happen, when and if it would happen and all the other concerns that have been posted. Would you buy into all this confusion. Sure if you were smart enough to understand that confusion normally breeds opportunity. Remember the street does not like to gamble. They like all the details packaged just right. The less confusion the better.
All I can tell you is this, I work with both DLJ Direct and Raymond James and all I can tell you is they are about as clueless as you can imagine, in regard to the whole TBR deal. And getting answers from NYSE or CBOE is like pulling teeth.
As I finish my little note I see the market down 30 and TBR trying holding 107. I would certainly not be short now. I think the real fun will begin Friday.
As a side note to Steve Fancy.....Great work my friend. Your time and effort is very much appreciated.And that's an understatement.... |
