August 18, 2007

After the Meltdown, Which Stocks Bounced?

posted by MR WAVETHEORY at 8/18/2007 04:44:00 PM
I wrote an article called "After the Meltdown, Which Stocks Will Bounce?" on Thursday and on Friday, the Fed lowered rates. I presented two categories of stocks which I thought were buys, headline risk stocks and momentum IPO stocks. These stocks moved big time suprising even me.

First, let's take a look at the headline risk stocks. You will remember these are the stocks associated with the subprime sector. Here's the tally on the subprime stocks I wrote about and the percentage move on Friday. The red figure is how much they were down from the 52 week high before Friday and the green figure is the gain on Friday.

RAIT Financial Trust (NYSE RAS -80%) +12%
CB Richard Ellis Realty Finance (NYSE CBF -72%) -2%
KKR Financial Holdings LLC (NYSE KFN -56%) +8%
Thornburg Mortgage (NYSE TMA -56%) 21%
Friedman Billings Ramsey Group Inc (NYSE FBR -52%) +3%
JER Investors Trust (NYSE JRT -51%) +12%
CB Richard Ellis Realty (NYSE CBG -31%) +13%
Grubb & Ellis Co (NYSE GBE -40%) -5%
Grubb & Ellis Realty Advisors (AMEX GAV -2%) - No Trade

You can see that the worst performing stocks were some of the best performers on Friday. Thornburg Mortgage and RAIT, one of the worst performers this year, were two of the best performers.

The momentum IPO stocks performed well too.

Trina Solar (NYSE TSL -42%) +10%
First Solar (NYSE FSLR -33%) +4%

Trina Solar was the top performer in the solar category. It added 10% which is a nice move. The thesis was simply to buy the IPO stocks with low liquidity and I believe the reason for the sharp gain on Friday is due to the lack of liquidity in Trina. There were so few buyers and sellers in the stock that a little bit of short covering triggered a big move upwards.

Even after the big move Friday, I am still somewhat skeptical as to whether there are more skeletons in the closet. There are reports of a mini run on the bank at Countrywide Bank. Frankly, I'd run too if I had money deposited there. The CEO of Countrywide Financial Corporation (NYSE CFC) announced a pretty significant change in strategy. Rather than originating mortgages with financing provided by other financial institutions, they now intend to more aggressively fund the mortgages themselves. Where's the money coming from you ask? I can only guess that it's coming from the depositors at Countrywide Bank. So simply put, depositors at Countrywide will be lending their hard earned dollars to deadbeat borrowers. I can just see the excitement on the faces of depositors are Countrywide Bank. I can't blame em. If I were a customer of Countrywide Financial Corporation (on the banking side), I'd pull my money out as fast as I can.

I hope more bargains will present themselves in the coming weeks. Happy bargain hunting!

Watch the Bourne Ultimatum Online

posted by MR WAVETHEORY at 8/18/2007 09:33:00 AM
I watched the Bourne Ultimatum at the AMC theatre yesterday, but missed the first few minutes of the movie. Luckily, I searched for it on Google Video and found it. It took a few minutes to find it. I first searched for Bourne Ultimatum. There were too many results so I filtered by duration > 20 minutes. That did the trick. The second hit was The Bourne Ultimatum. It was uploaded by named one socalled redskins.

Update
Search for the Bourne Ultimatum online at Google Video.
Watch the Bourne Ultimatum online at Google Video.

August 17, 2007

Who is Tay Zonday? Only The Most Popular Video on YouTube, Watch Chocolate Rain

posted by MR WAVETHEORY at 8/17/2007 12:15:00 AM
Answer: A pop hit phenom on YouTube. Tay Zonday is Adam Bahner, a University of Minnesota grad student.

His video, "Chocolate Rain" has been viewed over 5 million times, beating out clips by U2 and Green Day, Ne-Yo and "High School Musical."

I can't vouch for his musical talent but I can see that this is going to be big! Without further adue, Chocolate Rain.

Watch chocolate Rain by Tay Zonday.

August 16, 2007

Bye Bye Bolt.com - Bolt.com Makes History, First Video Sharing Site Sued Out of Existence

posted by MR WAVETHEORY at 8/16/2007 11:55:00 PM
August 14th will be a day to be remembered in video sharing history. To the best of my knowledge, Bolt.com is the first video sharing cum social networking service to get sued out of existence.

Please be advised that the operations of Bolt, Inc. and Bolt.com have ceased. Net Revolution, Inc. and Bolt, Inc. have executed an Assignment for the Benefit of Creditors effective as of August 14, 2007. Please direct any creditor related questions or comments to the Assignee's office to the attention of:

Development Specialists, Inc.
345 California Street
Suite 1150
San Francisco, California 94104-2664

Att: George E. Shoup, III

Email: boltassignee@dsi.biz

The Notice of Assignment will be mailed to all known creditors in the near future. If you are interested in acquiring this site or other assets of Bolt or Net Revolution please contact, boltassignee@dsi.biz.

Bolt was sued by Universal and couldn't pay up. It was supposed to be bought by GoFish but the deal fell through because GoFish itself had problems of its own - with an incredibly shrinking stock price.

After the Meltdown, Which Stocks Will Bounce?

posted by MR WAVETHEORY at 8/16/2007 01:38:00 PM
There is no doubt that the market has been very volatile lately. I've been doing some research on stocks to pick up on the way down, I think broadly there are two categories of stocks that could be interesting stocks to own. First, there are the "headline risk" stocks. These are the stocks that are related to the subprime mortgage sector. I call them "headline risk" stocks because they are the ones that have been all lumped together as bad stocks because of bad news from a few really bad actors in the lending industry. You know which companies I am talking about. Companies like American Home Mortgage (NYSE AHM) and New Century Financial (NYSE NEWCQ.PK) which have gone bankrupt have given the sector a bad name. Second, there are the companies which I would call the "momentum IPO" stocks. These are companies that have recently gone public, and primarily I am talking about the solar stocks. They have low float, have had incredible runs and have gotten beaten down in the last 4 weeks.

So, let's take a look at the first category of headline risk stocks. Why do I like them? First, I believe that there have been far too few bankruptcies in the subprime lending area to justify selling all of them. Think about it for a second. If the entire sector is under distress, would you expect just a few companies to go bankrupt? Frankly, there are so few bankruptcies that I think subprime is a much healther space than most people think it is. So what if American Home and New Century went under? Aegis or Resmae? I would expect to see dozens of lenders go under if this were a major problem. But we are not. In fact, there isn't enough evidence or proof of a liquidity crunch to justify the wholesale slaughtering of subprime stocks. That's why I agree with William Poole of the Federal Reserve that the Fed doesn't need to lower rates between Fed meetings. It's okay to have a little pain in the markets, because that's what creates bargain hunting opportunities.

The Wall Street Journal wrote a good article the other day about commercial REITs that have really gotten blown apart and that's a great place to start.

There are a couple of stocks that look interesting at this point. I'll just put the list I've been looking at down and the corresponding change from the 52 week high. They are:

RAIT Financial Trust (NYSE RAS -80%) - Founding family buying shares.
CB Richard Ellis Realty Finance (NYSE CBF -72%) - Won't be making new loans. I take that as a good sign.
KKR Financial Holdings LLC (NYSE KFN -56%) - Name brand in finance. Unlikely this will fail. Plus, it's down 70% from the high.
Thornburg Mortgage (NYSE TMA -56%) - CEO says they will survive. I believe him.
Friedman Billings Ramsey Group Inc (NYSE FBR -52%) - Mortgage arm of the FBR investment bank.
JER Investors Trust (NYSE JRT -51%) - 2Q results were apparently good.
CB Richard Ellis Realty (NYSE CBG -31%) - Lots of exposure to California real estate. Kind of like th Goldman Sachs of real estate.

I am adding two more to the list:

Grubb & Ellis Co (NYSE GBE -40%) - This is a baby version of CB Richard Ellis. Much smaller, but just as hammered.
Grubb & Ellis Realty Advisors (AMEX GAV -2%) - Commercial real estate acquirers.

So, there you have the list of the headline news stocks.

Next, I looked at the momentum IPO stocks. These are stocks that have recently gone public and have run up significantly. The category that fits this definition to a T is the solar stocks. They went up because of scarcity of shares, and now they are collapsing because market makers are refusing to support the shares. You can't blame em. After all, the name of the game is to buy low and sell high - and leave your customers hanging dry!

Okay, I'm being sarcastic, but let's look at some names.

Trina Solar (NYSE TSL -42%) - Company founded by ex-Suntech Power executive. It's a momentum stock because of the hyper growth.
First Solar (NYSE FSLR -33%) - Lots of revenues. Backed by Wal-mart scion - Walmart also happens to be a big customer.

The valuation of these companies is in the stratosphere even after the minor meltdown, but could be good when things really fall apart.

I would add some stocks to the momentum IPO list, but that would spoil the fun of stock hunting for you. If you have some interesting stocks that fit the description I wrote above, please post a comment.

Happy bargain hunting!

Marketwatch Goes Down

posted by MR WAVETHEORY at 8/16/2007 08:30:00 AM
Ummmm... This is not what you would expect from Marketwatch.com which is owned by Dow Jones & Company, Inc. (NYSE DJ) . Is anyone else getting this? Not what you would want when are about to be bought for a lot of lucre by News Corporation (NYSE NWS)