Friday, October 19, 2007

A surprise to who? The criminally insane?

BoA takes surprise credit crunch hit

What is it with these clowns? This "credit crisis" has been obvious to me (and many others) since at least 2003 (and in some cases before).

Posted by lvmreader @ 09:20 AM (1233 views)
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6 thoughts on “A surprise to who? The criminally insane?

  • Ok, genius, maybe you should have shorted it in 2003? Oh, wait, you’d have been OUT OF THE MONEY ever since you made the trade, and would still be OUT OF THE MONEY today. Before you start calling professionals ‘clowns’, perhaps you should consider what you’re actually recommending.

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  • I recommended in 2005 shorting Northern Rock, Alliance and Leicester, Dixons Stores Group, CSL, DFS, MFI, Lloyds and Barclays.

    A few of those have made money. I also began to invest in companies which offered energy efficiency and ways for people to save money doing what they usually do – as a position to express my view that high oil prices and massive debt writeoffs would curtail the US and UK consumer.

    I also advocated shorting French and Spanish sovereign debt.

    James, answer me this – was Warren Buffet wrong to stay out of the technology boom?

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  • And did you put positions on? Actually, I know you didn’t because it’d be rather difficult to find any repo on CSL (?) DFS or MFI. So taking the shares where there’s decent liquidity, and taking an average price for your 2005 shorts and rounded prices for today:

    NRK 800 – 200 – Great, assuming you weren’t forced to close at any point when the price was > 1000
    ALL 850 – 700 – Moderate return for 2 years
    LTSB 475 – 560 – You’re still out of the money after 2 years
    BARC 575 – 590 – You’re still out of the money after 2 years

    So even had you made these trades, borne out the huge margin calls over the past 2 years then got lucky in the past 2 months, it wouldn’t have been a great strategy, would it?

    Buffett was absolutely right not to get involved in the dotcom bubble. BRK is a long term value investor. But you’re suggesting a speculative investment strategy that would have lost money for 2 years and probably is still out of the money overall whilst tieing up a hell of a lot of capital. As the sage would say ‘Only invest in what you understand’ – in your case, I’d suggest only invest how you understand.

    By the way, these recommendations of yours – where can we see them?

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  • @James,

    You are so full of sh*t. Some of the best trades in history lost money for up to 2 years and then the payday was huge.

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  • whiteknight says:

    James – figure out your own trades. It seems it would make you happier.

    The aim is to be happy right?

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  • I have been shorting B&B for a year now! What a trade!

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