March 28, 2007


Beazer Blows

Crummy tone all day long and then Beazer Homes (BZH) blew up after hours. Interestingly, BZH was already unusually active during the regular hours session moving to a new low on over three times normal volume. Beazer saw even more unusual volume than Lennar (LEN), which reported earnings. Somebody somewhere knew something was brewing in Beazer and acted on it — price reveals all public and non-public information.

bzh

March 27, 2007


Boo-hoo, boo-hoo-hoo

Ugly linked to this great post from May 2006 by Bill Mann recently and I thought it worth repeating the best line:

“Vonage’s management and underwriters convinced a bunch of people and institutions that a company worth roughly the price of a Happy Meal should be valued on the market at $2.6 billion!”

Now selling for 1.3x Happy Meals!

VG

March 26, 2007


A Pile of Poorly Underwritten Loans

Key bits from this week’s interview with Sy Jacobs in Barron’s:

“… the train wreck is accelerating and is turning into a contagion. Subprime will bring down mortgage lending, housing and, in turn, the economy and the market … The problems in subprime are not self-contained. It is a pinprick to a larger problem, and it needs to be looked at that way. The notion that subprime home-equity lending is somehow ring-fenced because it is only 12% of total mortgage loans outstanding and won’t affect the rest of the mortgage and housing market is absurd. First of all, subprime lending was over 20% of 2006’s volume … Nearly $700 billion of mortgages reset this year and nearly half of that is subprime … The subprime home-equity market peaked in 2005, and the most popular product from that year was a two-year-fixed, 28-year-floating mortgage. It resets this year … Housing hasn’t bottomed, and it is just getting going to the downside.”

He might know what he’s talking about or he may just be talking his book, who knows?

March 24, 2007


Gratuitous Cute Chick Pic — March 23, 2007


look ma no straps



Best & Worst Relative Performance — Week Ending March 23, 2007

Energies leading the way again with strong outperformance…

rp best

… while Semiconductors, Gold, and REITs all showed relative weakness.

rp worst

Selected Excerpts from Nightmare in Pink

From the second book in the Travis (”permanently unemployed, by choice”) McGee series by John D. MacDonald, Nightmare in Pink (1964). I hope I turn some people on to these books by posting some of my favorite bits.

“… what is truly commercial is a kind of vulgarity upgraded just enough to look like good taste.”

“… the cop-eyes took the practiced flickering inventory — tailoring, fabric, shirt collar, knuckles and fingernails, shoe shine, haircut — all the subtle clues to status.”

“There is only one way to make people talk more than they care to. Listen. Listen with hungry earnest attention to every word. In the intensity of your attention, make little nods of agreement, little sounds of approval. You can’t fake it. You have to really listen. In a posture of gratitude. And it is such a rare and startling experience, such a boon to the ego, such a gratification of self, to find a genuine listener, that they want to prolong the experience. And the only way to do that is to keep talking. A good listener is far more rare than an adequate lover.”

“We are still carnivores, and money is the meat. If there’s a lot of money and any possible way to get at it, I think people will do some strange warped things. Hardly anybody is immune to the hunger, not if there’s enough in view. I know I’m not.”

“… as permanent as a black eye.”

“To score for the sake of scoring diminishes a man. I can’t value a woman who won’t value herself. McGee’s credo. That’s why they won’t give me a playboy card. I won’t romp with the bunnies.”

“I’ve never married and you can’t stay married, so perhaps all we’ve got is competence. And that makes a hell of a dry diet.”

“He had about him the same attitude toward sex as he had toward breakfast. He didn’t particularly care what was served as long as he could have a healthy breakfast that didn’t take too damned long.”

“I think we’re interested in each other, involved with each other, curious about each other. This was a part of exploring and learning. When it’s good you learn something about yourself too. If the spirit is involved, if there is tenderness and respect and awareness of need, that’s all the morality I care about.”

“Love is a gift, not a bargain.”

“She looked at me the way a butcher looks at a side of beef.”

“… my hotel looked like something designed to be thrown away after use. The old city was being filled with these tall tasteless rectangles, bright boxes which diminished the people who had to live and work in them. People kennels. Disposable cubicles for dispensable people. As I showered I wondered if perhaps these hideous tax-shelter buildings, with people sealed into the sour roar of manufactured air, didn’t play some significant part in creating New York’s ever-increasing flavor of surly and savage bitterness — a mocking wise-guy stink of discontent. Ugliness creates more ugliness. So these buildings could contribute, and so could the narrow greed of the truly vicious little trade unions. Screw you, buster, I’m getting mine. Thirty-hour week. Twenty-five hour week. Grind the last panicky dime out of the golden goose. So it’s down to twenty-five hours, which figures to ten bucks an hour, and anybody gets smart — all you do is walk out again and tie up the whole crappy city. But even when you’re working, what do you do with all those great raw boring horrible hunks of time? All those hours when if anybody looks at you just a little bit wrong, you want to smash them to a pulp. Man, we got a strong union. We got this city by the balls. But something is going wrong and nobody knows exactly what it is. You can read it in all the eyes you see.”

“You are as funny as a crutch.”

“We are all in a state of precarious balance, and it is difficult to realize how delicate that balance is until it is upset — either by emotions or clever chemistry.”

Related: Selected Excerpts from The Quick Red Fox - Part II | Part I

Selected Excerpts from The Deep Blue Good-By


A Word about Quickies

I enjoy playing no-limit Texas Hold’em and consider myself a professional amateur (just as I consider myself a professional amateur trader). Paradise runs tournaments named “Quickies,” so called because the levels last only six minutes. When the blinds double that quickly, luck plays a larger role than usual; if you don’t make a move early on, you’re not going to do well.

Patience is a virtue in poker, but not in a Quickie tournament. Nevertheless, I still like competing in the low stakes ($3, $5, $7) 50 and 100 player games.

quickieyet another quickie

March 23, 2007


Cellphones as Fashion Accessories

Weak market… noticed Motorola (MOT) on the new lows list (along with AMD). As soon as MOT hit the 38.2% retracement level late last year, I bought a RAZR to assure a reversal there.

A few comments about the RAZR: 1) It looks slick, but its square shape doesn’t feel so hot in my hand; 2) no smiley face function while texting; 3) difficulty typing in curse words since there are none in its dictionary; 4) my girlfriends think I’m a fuddy-duddy because they long ago moved on from the RAZR (almost all to a Samsung product), like years ago, Dad.

(She Who Must Be Obeyed has a Samsung SGH-D488.)

MOT

March 22, 2007


Step on Dee Gas

Tone was slightly positive all morning but then it just exploded post-Fed announcement. Folks positioned on the wrong side got crushed. The intraday chart of 15 Ideas portfolio member Washington Mutual (WM) is pretty representative of the action.

A word about the 15 Ideas donation campaign: I figure about 1% of my regular readers chipped in and were on average extremely generous: I thank you all. I’ll be sending donors a screenshot of the portfolio P&L from time to time (similar to the one below) to let you know how much we’re underperforming the S&P ;-).

WM

15 ideas in order


El Fogoncito - Beijing Branch

One of my girlfriends and I had dinner last night at El Fogoncito — it was terrible. I learned about it from that’s Beijing and it’s near her office so we decided to try a new place.

The place smelled like wet paint and the waitress told me “don’t sit upstairs, the stink is even worse up there.” We scrambled around for a good place to sit considering a spot near a door to diminish the paint smell but decided no, the draft was too bad.

We got some fajitas and tacos. They came with a tiny plate of weak sweet sauce, weak hot sauce, and awful guacamole (something from a jar? Yech!). As for the food itself, I can describe it in a word: GREASY! It was like fake Mexican food made by bad Chinese cooks; hang on, that’s exactly what it was. There were a couple of gratuitous authentic Mexican workers hanging around, but they weren’t in the open kitchen, that’s for sure. And my Corona wasn’t ice cold the way it should be.

Cost 155 kuai (about $20) - insult to injury. Definitely not recommended. Mantenganse lejos, mis amigos.

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