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Old 08-29-2007, 12:50 PM   #21
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TIPS were raging bargains at the time, and not just prospectively.
And what's the raging bargain today, pray tell?
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Old 08-29-2007, 01:11 PM   #22
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And what's the raging bargain today, pray tell?
I heard a bond trader espouse the other day on what a great value high-grade corporate bonds were these days. Their yield has gone up about a percent or so since the recent turmoil.

Same bat station, more bat yield. What's not to like ? Is the buy now signal flashing ?... You be the judge.

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Old 08-29-2007, 01:21 PM   #23
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The spread looks pretty good. Not sure I'd call it a bargain, but something to consider.

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Old 08-29-2007, 01:32 PM   #24
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And what's the raging bargain today, pray tell?
Sarcasm will get you nowhere amigo. If a real 4% on a US treasury security would only appear to be a bargain in hindsight nothing can be done for you.
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Old 08-29-2007, 01:39 PM   #25
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Sarcasm will get you nowhere amigo. If a real 4% on a US treasury security would only appear to be a bargain in hindsight nothing can be done for you.
No sarcasm. Even with the "correction," I'm not seeing any raging bargains today. TIPS at 2.4% aren't a bargain. The S&P 500 with a 1.7% yield probably isn't a bargain (unless recent earnings growth can be sustained).

Junk yields are starting to look OK, but junk can get much junkier in a downturn.

Brewer thinks banks are a bargain, but I think earnings may be at risk. Shipping does look pretty good in the near term though. (Bought DRYS at 61.30 yesterday. Pray for me.)
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Old 08-29-2007, 01:51 PM   #26
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Brewer thinks banks are a bargain, but I think earnings may be at risk. Shipping does look pretty good in the near term though. (Bought DRYS at 61.30 yesterday. Pray for me.)
Whew, you picked the riskiest of the lot. I hope this was bought with your "Black Swan" capital.

I think the banks that are still in one piece will be feasting like pigs at the trough for the next few years, especially if the Fed drops rates.
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Old 08-29-2007, 01:55 PM   #27
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Whew, you picked the riskiest of the lot. I hope this was bought with your "Black Swan" capital.
Yup. I have some of the more boring shipping stocks too, but DRYS has a bit more momentum going for it. Hopefully.

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I think the banks that are still in one piece will be feasting like pigs at the trough for the next few years, especially if the Fed drops rates.
I think I'll wait a couple more quarters to see how the ARM resets go. Lots of big banks have already booked phantom revenue on those bad boys.
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Old 08-29-2007, 02:01 PM   #28
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I think I'll wait a couple more quarters to see how the ARM resets go. Lots of big banks have already booked phantom revenue on those bad boys.
I am talking about boring, traditional portfolio lenders that never took a whole lot of credit risk. AF is a posterboy, for example. They've been getting squeezed for years by all the boobs giving away prime jumbo mortgages to clean borrowers. Now all the competition has been vaporized and spreads on the loans have gapped out, yet AF and its brethren maintain liquidity and the ability to fund loans with deposits and FHLB borrowings.
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Old 08-29-2007, 02:03 PM   #29
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Even with the "correction," I'm not seeing any raging bargains today. TIPS at 2.4% aren't a bargain. The S&P 500 with a 1.7% yield probably isn't a bargain (unless recent earnings growth can be sustained).
I agree with your assessment. I did buy BAC; we will likely get lower interest rates for a while now, and what seems to be a very secure 5% dividend looks good to me. Ditto Pfizer and some pipelines and pipeline GPs. These apear to me to be pretty secure sources of steadily increasing cash flows and payouts to securities holders.

The only really cheap group of securities I know of is some stocks/MLPs/royalty trusts tied to natural gas. That they are bargains is not so easily determined unless you have a positive POV on the commodity.

Natural gas draws are very sensitive to weather, and right now we have an awful lot of gas around pushing down prices. Not many things change faster than weather so almost by definition this is a temorary factor.

I believe that before long even warm winters and cool summers will not be able to keep the USA in gas balance and it will be off to the races in this sector. But I admit they are not comfortable investments.

Ha
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Old 08-29-2007, 03:30 PM   #30
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How do you feel about Pfizer's long-term prospects, given the patent is going to expire on Lipitor in a few years? Do you think that they will be able to replace that revenue?

Note-- I own Pfizer, but they are probably so cheap for good reason. They face a fair amount of business risk in the next five years.


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I agree with your assessment. I did buy BAC; we will likely get lower interest rates for a while now, and what seems to be a very secure 5% dividend looks good to me. Ditto Pfizer and some pipelines and pipeline GPs. These apear to me to be pretty secure sources of steadily increasing cash flows and payouts to securities holders.

The only really cheap group of securities I know of is some stocks/MLPs/royalty trusts tied to natural gas. That they are bargains is not so easily determined unless you have a positive POV on the commodity.

Natural gas draws are very sensitive to weather, and right now we have an awful lot of gas around pushing down prices. Not many things change faster than weather so almost by definition this is a temorary factor.

I believe that before long even warm winters and cool summers will not be able to keep the USA in gas balance and it will be off to the races in this sector. But I admit they are not comfortable investments.

Ha
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Old 08-29-2007, 04:38 PM   #31
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How do you feel about Pfizer's long-term prospects, given the patent is going to expire on Lipitor in a few years? Do you think that they will be able to replace that revenue?

Note-- I own Pfizer, but they are probably so cheap for good reason. They face a fair amount of business risk in the next five years.
I agree with your assessment. I feel that no one can predict what might happen with pipeline drugs, if he can even find out what they are. My approach in drug stocks is to stick with proven marketers and figure that when they are cheap enough you are being paid to take the risks.

As I see it, the business risk is to muddle along. Not great, but not bad when you are getting a secure 5% dividend.

Ha
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