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06-14-2006, 01:10 AM
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#1
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Recycles dryer sheets
Join Date: May 2005
Posts: 323
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Something's Wrong
"shares of Goldman Sachs fell almost 4 percent, to $139.25, after the company reported that its profit more than doubled, and Lehman Brothers, which reported a record profit on Monday, fell 4 percent yesterday, to $59.42, after dropping 5 percent on Monday.
"It's one thing if you make mistakes and the stock goes down," said Mr. Black, president of Delphi Investments, "but when you are shooting the lights out and the stock is getting drilled every day, that is a bear market."
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06-14-2006, 03:52 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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Re: Something's Wrong
When the market wants to go down "good news" is bad and "bad new" is even worse. The spin I heard was "investors are concerned that the unexpectedly good earnings will not be able to be sustained." In a few days the "investors" will suddenly realize the new P/E and jump on it like.....
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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06-14-2006, 05:39 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Re: Something's Wrong
that's the best kind of drop in stock prices - one where the fundamentals haven't changed but the price drops. It's just going on sale. When you buy the stock, you're getting the same thing, just cheaper.
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06-14-2006, 10:06 AM
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#4
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Re: Something's Wrong
Quote:
Originally Posted by boont
"shares of Goldman Sachs fell almost 4 percent, to $139.25, after the company reported that its profit more than doubled, and Lehman Brothers, which reported a record profit on Monday, fell 4 percent yesterday, to $59.42, after dropping 5 percent on Monday.
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Nothing wrong with taking a profit.
Especially near the end of a seasonality quarter with options expirations and other volatility-enhancing events influencing investor emotions.
__________________
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Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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06-14-2006, 10:23 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: Something's Wrong
Quote:
Originally Posted by 2B
The spin I heard was "investors are concerned that the unexpectedly good earnings will not be able to be sustained."
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Lets see...a quick pass through the spin degenerator says the real answer is:
"We dont know"
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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06-14-2006, 11:55 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Re: Something's Wrong
Quote:
Originally Posted by Diaper Bunny
Lets see...a quick pass through the spin degenerator says the real answer is:
"We dont know"
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So that sounds like a BUY BUY BUY! to me. Or are you saying sell sell sell!?
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06-14-2006, 03:20 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: Something's Wrong
Oh, its "buy!"...just probably not now.
I'll put you on the "buy!" notification list right behind dantien if you'd like!
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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06-14-2006, 03:29 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Re: Something's Wrong
Quote:
Originally Posted by Diaper Bunny
Oh, its "buy!"...just probably not now.
I'll put you on the "buy!" notification list right behind dantien if you'd like!
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That's ok. I've got my own predictive indicators I look at. They are 100% correct. It's just that timing is an issue. They are only reliable to +- 1 day unfortunately.
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06-14-2006, 03:33 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,032
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Re: Something's Wrong
I don't think the issue with Goldman relates to the market as a whole.
GS earns an increasing % of their profits from proprietary trading. They aren't required to disclose many of the details about this trading and the potential exposures it creates.
This makes it a very hard company to analyze, and therfor makes their spectacular profits less so.
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06-15-2006, 02:19 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Re: Something's Wrong
Quote:
Originally Posted by justin
That's ok. I've got my own predictive indicators I look at. They are 100% correct. It's just that timing is an issue. They are only reliable to +- 1 day unfortunately.
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CFB,
My predictive indicators reveal that yesterday, 6/14/06 would be a very good day to get into the market. Hope that helps some. Your welcome in advance!
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06-15-2006, 03:43 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: Something's Wrong
Just wait until next week. You might change your mind...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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06-16-2006, 01:44 AM
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#12
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Thinks s/he gets paid by the post
Join Date: May 2006
Location: Where the stars at night are big and bright
Posts: 2,847
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Re: Something's Wrong
Could you say this was a case of buying on the rumor and selling on the news?
I’ve been doing a lot of reading about why and when the “Smart Money” on Wall Street buys and sells. Looking back at the last week or so I came up with some reasons why they would have been concerned about future revenue streams. I would be interested to hear what some of you think of my attempt at analysis.
GS is divided into different philosophical camps, like the bankers vs the securities guys. A lot of their profits in the past year have been from the securities side of the house. But, the ability to keep that going in the near future had some doubt cast on it Monday when Lehman’s announced their quarterlies with some qualifiers. Basically, they said last quarter was the easy one for equities, but the next one is going to be difficult to predict. About 60% of GS’s profits right now are coming from the trading side of the house. GS started falling that same day, as did Lehmans.
Specific to Goldman Sachs is the fact that their CEO is leaving for Treasury and the President, Blankfein, is moving into his spot. That’s not the big worry for the “smart money” as much as who Blankfein’s replacement is going to be. What philosophical camp the new president comes from can have a dramatic impact on what the company’s philosophy on doing business will look like.
The banking side of the house had a decent year but there have been a few bumps in the road. They’ve never had a problem paying debt, but they’ve also never had as high a debt to equity ratio as they do now. Again, something to be concerned about. A few more bumps in the investment banking side and a crappy quarter for the market investors and who knows what might happen. Like Saluki said, the securities side of the business is a little murky to start with and when their competition starts pointing out that the easy day was yesterday the future gets even murkier.
So, simply put I think that the wall streeters look at GS and see a company that has raised its dividend by 40% in a year and now the revenue stream that supports that is possibly threatened. It may not be a credible threat, but there is a blip on the radar screen so to speak. They don’t want to be left holding the bag if everybody else bails so they move out of their positions.
The way I see the so-called smart money guys is that they’re like a couple of gunfighters in the old west. Each trying to anticipate the other guy’s move so they can try and beat him to the draw and pull the trigger first. For us long term kind of guys it can be unnerving, especially when you’re trying to move in or out of a stock. But the rest of the time the smart money crowd is just an annoying noise that we have to put up with.
__________________
There is no pleasure in having nothing to do; the fun is having lots to do and not doing it. - Andrew Jackson
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06-16-2006, 08:55 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: Something's Wrong
The analogy works until you reveal the truth that very few gunfights occurred the way they're shown in the movies. When they did, usually both guys died. Maybe thats the punchline.
Very few of the big name gunfighters engaged in many gunfights, and almost all of them were shot in the back at some point. Thats a good punchline too.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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04-16-2023, 04:34 PM
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#14
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Recycles dryer sheets
Join Date: May 2005
Posts: 323
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Although I was ignored, I was certainly correct in my post, "Somethings Wrong". By January 3r, of 2007 banks started failing. Lehman Brothers then nearly took down the world economy. My post was just months before this and centered on the banks.
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04-16-2023, 05:15 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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Congrats on the great call. What moves did you make to profit from this observation? And of greater importance, what can we do now. Thanks
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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04-16-2023, 05:27 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,931
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Quote:
Originally Posted by boont
Although I was ignored, I was certainly correct in my post, "Somethings Wrong". By January 3r, of 2007 banks started failing. Lehman Brothers then nearly took down the world economy. My post was just months before this and centered on the banks.
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Are you saying something is wrong now ? If so what? Please just the top ten things..
__________________
20's "something" mind, trapped in a 70's "something" body
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04-16-2023, 06:38 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Jan 2020
Location: Milwaukee
Posts: 4,047
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That's a long time to hold an "I told you so" grudge...
__________________
The closing years of life are like the end of a masquerade party, when the masks are dropped. -Arthur Schopenhauer, philosopher (1788-1860)
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04-16-2023, 07:22 PM
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#18
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Administrator
Join Date: Apr 2006
Posts: 23,038
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__________________
Living an analog life in the Digital Age.
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04-16-2023, 07:29 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,893
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Please tell me this isn't déjà vu all over again. Oh, well, we've had a pretty good fifteen year run so I guess it's time for the rubber band to snap back and start over !
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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04-17-2023, 04:58 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,720
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Quote:
Originally Posted by boont
Although I was ignored, I was certainly correct in my post, "Somethings Wrong". By January 3r, of 2007 banks started failing. Lehman Brothers then nearly took down the world economy. My post was just months before this and centered on the banks.
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Do you mean the world ignored you, or people on this forum? Maybe both?
Companies, and that includes banks, do fail in our system. So we should expect that to happen, but less so where the company holds our savings and we expect safety.
The bond schemes of the great recession seem to be a different kind of stupid than what we saw with SVB and others.
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