David White

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    • Wed Oct 15th 12:32 PM | Rating: 0 0
      Commented on:
      Some Stocks to Research for the Market Rebound
      Other than the fact that the markets will realize the Q4 earnings comparisons are coming up soon (Q4 was the first big write off quarter), the VIX has also been abnormally high for an extended period of time now. As it falls, which it seems bound to do, the markets should go up. These two items along with the major support level bounce are my main reasons for predicting a near term rise. When the Q4 financial results are made available, the government seems to be virtually ensuring that the comparisons to last years financial sector Q4 will be favorable. When this happens, as I am tending to believe it now will, it seems likely it will mean relative growth in the financial sector. After the carnage of the last year. This will be encouraging to the markets. Perhaps all stocks will begin to look more appealing then, even in the face of the challenging business environment.
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    • Wed Oct 15th 12:20 PM | Rating: 0 0
      Commented on:
      Some Stocks to Research for the Market Rebound
      jbde: Thanks for the silicon(e) correction. I should be more careful.

      I am aware that UMG is a less pure form of polysilicon. That's why it is cheaper. It is my understanding that the process is not quite as simple as you imply though. I believe a backbone of UMG grade polysilicon is used. Then a higher grade polysilicon is used on top of that to make these solar wafers. Since much less of the higher grade polysilicon is used, it is cheaper. I am not sure UMG solar wafers fall precisely into one of the other categories.
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    • Wed Oct 15th 11:55 AM | Rating: 0 0
      Commented on:
      Some Stocks to Research for the Market Rebound
      The market zoomed up off of the support in the $82 to $85 range in the SPY. Now it has given back a lot of its most recent gains to stand at $95 now. This seems so far like the normal behavior of the market. My thinking is that the immediate threats to the markets are being assuaged. There is a recession, but this is not new news. That should mean that the market will likely continue its rise off the relatively strong support at the $82 to $85 level. This still gives all of the earmarks of a typical market bounce. It seems this should proceed upward for the next month. We may get some bad earnings reports in Q3. However, those have been mostly expected, although perhaps they have not been estimated correctly. Q4 last year was the start of the downturn, especially in the financial industry. We should start to do better when comparisons start to be made to that quarter and future quarters. Since they were down quarters, it should be easier to break even or improve on the results. We could have already had our bottom, or we could have a some more to go. I didn't bring my crystal ball. There are a lot of complex factors involved. People like Jim Cramer, who make sweeping pronouncements of gloom, are not helping this situation. There can be no absolute clarity at this time. We have to wait to see how all of this plays out. If the most recent bottom is the market bottom (an almost 50% fall already from the top), the people who get in now will profit most. If it is only close to a bottom at 7700 on the DOW or 7200 on the DOW that some are predicting, the investors who get in now, may still do well over the long term. If the markets fall to the $42 to $45 level of support on the SPY, people getting back in now will likely sell out on the way down. For now it looks like the markets should swing temporarily upward. The support level in the $82 to $85 level should be a near term bottom at least. I generally see improving news. The banks are not all going to go bankrupt. A lot of the toxic mortgages are going to be bought up by the government. This is all good. The retail sales data has long been expected. This should not be surprising news. Short term at least, the market should zigzag its way upward. We will all have to monitor the news closely to see if it will continue upward beyond the short term.
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    • Wed Oct 15th 11:36 AM | Rating: 0 0
      Commented on:
      Some Stocks to Research for the Market Rebound
      I want to make it clear that I advocate solar much more than oil. I too see it as the wave of the future. However, it is important to realize that the infrastructure of the U.S. and other countries is geared toward oil (gasoline and heating oil). This will be very slow to change. This means we will continue to consume oil at alarmingly high rates. Since we import most of it, this will put an increasingly high burden on the U.S. economy as it gets more expensive over time. We have seen the initial "scare" blip up in oil prices. They are going down now with the recession. However, they will generally trend higher over time as China, India, and Russia use more oil. This conclusion seems inescapable. This means a huge hit to the U.S. trade deficit unless we do something about it now. Now is not the time to be lulled to sleep by falling oil prices. Now is the time to act to ensure that the U.S. economy is in a position to grow as we come out of the recession. The oil cost is like an anchor around the neck of the U.S. economy. All of that money flows out of the U.S. economy, keeping it from growing. I agree that people tend to ignore what is not their most immediate concern. I am hoping that the future president and the Congress will have seen that we cannot afford to do this. We need offshore drilling because there are big untapped reserves out there. We need some sort of package from Congress to stimulate U.S. oil companies to produce that oil (and other oil to which the own leases). There are two solutions which present themselves. First Congress could establish a national oil company much like FRE or PBR (Brazil). It would be much easier to encourage such a company to pursue U.S. strategic oil initiatives. The alternative is to come up with a package of incentives and penalties for U.S. companies to explore more with the goal of increasing oil production by U.S. companies over time. I want to make the point that it is important that they be U.S. companies. Then the money they generate in oil sales will tend to recirculate back into the U.S. economy to stimulate it. Foreign oil company production of the same assets may lower the overall price of oil slightly, but it will not address the issue of the oil trade deficit. The Congress has to address this issue. It has to do this soon. I hope they will not be lulled to sleep by falling oil prices. This is an economic disaster in the making for the U.S.
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    • Wed Oct 15th 11:19 AM | Rating: 0 0
      Commented on:
      Some Stocks to Research for the Market Rebound
      User279905: The shipping play is more of a long term thing. The PE and FPE numbers are very low. In that sense it is unquestionably a good buy. However, the shipping rates could go lower as you suggest. Then shippers such as DSX with fixed contracts might be preferred. Still no one will be building new ships with the current downturn in shipping prices and the current credit crunch. Or at least they won't contract for any more. This means that there will be a period in the not too distant future when shipping is at a premium again. When the recession ends, shipping seems likely to go up dramatically. There will likely be to little of it. The day rates will only go down so far. A lot of stocks such as shipping have been oversold due to the recent mutual fund / hedge fund sell off. The multiples on shipping seem very attractive to me at the moment. My reasoning is probably dependent on a 1-2 year recession. If we have already been in one for much of this year, we may only have a year to go. In the case of a 5 year recession, the logic of this buy may not be so good.
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    • Wed Oct 15th 02:53 AM | Rating: 0 0
      Commented on:
      Tuesday Outlook: Everything But the Kitchen Sink
      Larry the Hunt: I disagree. For instance, when most investors lose money as the market goes down, wealth is destroyed. The few who profit do not spend it. The rapid declines essentially ensure that wealth is evaporating at least temporarily. Someone else is simply buying the stock for much less money. The value of that asset is listed as much less. Money effectively disappears in quick sell off's (ignoring shorts and puts for the sake of argument). The loss of capital means loss of spending power. It also means that businesses, which periodically sell stock to get money for expansion cannot get nearly as much money for the same percentage of their company. This is bad. It means that many people do not even try to bring IPO's out in a "tough" environment. It means that the market capitalization of the stocks is much less. The company is viewed as worth much less. This usually means that they have a harder time borrowing money. When people spend less because they have less due to the rapid devaluation of their stock holdings (or having sold out at low prices -- their cash). It means that they are contributing much less to the GDP. I believe about 2/3 of the GDP is due to spending. It means that people can no longer afford to buy the new house they were thinking about because their other holdings are worth less. It means that the housing market (home prices and the foreclosure rate)likely takes a further hit because fewer people buy houses. I think you can see how this death spiral works. This all may have started in the mortgage/bond market. However, it is expanding to encompass the whole economy. The more panic, the more the immediate short term losses in capitalization (in capital). The more severe these losses become, the more dominos topple. I am being a little simplistic, but it is true nonetheless.
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    • Tue Oct 14th 02:33 AM | Rating: 0 0
      Commented on:
      Tuesday Outlook: Everything But the Kitchen Sink
      Oh yes, at this point in time, the futures are up substantially. It is currently looking like tomorrow will be another up day. Even if that fades as the day wears on. Remmeber the markets zigzag up. When all you hear is good news about actions the government is taking, it is unlikely that the bottom will suddenly fall out of the markets. Many people are profiting (using PUTS and short sales) from the panic they are trying to instill in the average investor. Be smart. Listen to the real news, not the gloom and doom propaganda of profiteers. If fears are easing (and the VIX does seems to be going down), don't feel the need to sell out. It is unlikely the market is going down. It is more likely the market is going up. Don't contribute your money to someone else's coffers.
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    • Tue Oct 14th 02:27 AM | Rating: 0 0
      Commented on:
      Tuesday Outlook: Everything But the Kitchen Sink
      I keep hearing people compare this crash to the1929 crash. I am embarassed that there are so many people running scared. Certainly there were the bad mortgages. Then there was the complete drying up of the commercial paper market. Everyone was scared all the banks would fail. Some have. Some were saved by buyouts. The $700 billion dollar bailout should rescue us from that fate. Apparently the U.S. government is going to invest $250 billion in U.S. banks. This should provide at least the big ones with enough capital to tide them over through this tough period. The Fed is now buying commercial paper. This is already helping the commercial paper market. The housing market even had good news last week, when the number of houses sold went up for a change (even though they sold at lower prices). The Wells Fargo buyout of Wachovia is going through. Mitsubishi is buying into Morgan Stanley. Everything is turning rosy. The market bounced off a strong support point last week. There is strong support at $82 and $85 on the SPY. After that there are no strong support points until the $42 to $45 range in the SPY. The SPY hit $83 and change last week intraday. It bounced upward. There is every indication that this is at least a near term bottom. It may turn out to be the longer term market bottom we have all been hoping for. Only time will tell that. However, it does look like a strong bounce for the moment. The immediate big bank failure fear is gone. The belief is that the government and the Fed are slowly bringing the commercial paper market back. The government has promised several actions to shore up the housing market. This is starting to be a little bit less worrisome, especially if there are further programs enacted to further shore it up. In normal market bounces, the market goes up in zig zag lines for about a month or more. It appears we should be able to expect this again. Perhaps it will be better than that. Perhaps we have hit bottom. Only time will tell that.

      Still this is not another coming of the great depression. How do I know that? I look at history. Look at the changes in the laws. Look at the improvement in the Fed and the Treasury. In the 1920's the market just kept going up, unreasonably so. People were so happy with it they invested as much as they could, so they could get richer faster. This meant that many people were heavily margined. In those days the laws allowed up to 90% margin (i.e. you only had to have 10% of the stock value to buy it). When the margin calls started coming in the great crash, everyone had to sell. Those that were not as heavily margined had to sell to avoid losing all they had because a lot of people were heavily margined. The result was that almost all investment in stocks ended. With no money from the stock market to feed their expansion, etc., virtually all businesses shrank. They could do nothing else. The housing market collapsed then too. A lot of people lost everything. This is why the margin requirements law was changed. This is why many people today have no margin at all. They just own stocks through mutual funds. People like Jim Cramer did not help the situation. There was some severe panic. That should be lessening.

      This is likely a bad recession. Perhaps it is comparable to the mid 1970's recession. However, there is no reason to believe it should be a great depression unless we make it into one. The way to do that is to take all of your money out of the stock market. This will mean that businesses must shrink. You may lose your job as a result. If you stop spending because you are scared, business's profits will fall drastically. People will lose there jobs. Again there will be a cascade effect. As FDR said so many years ago, we have nothing to fear but fear itself. It is this fear, this panic, that can really destroy our system. Have a little faith in the government. Have a little faith in your economic system. Spend prudently, but spend. Invest prudently, but invest. The sky is not falling. Don't make it.

      My personal belief is that this is at least a rally off a near term low (which may have been an actual bottom). The big profit is to be made in the early stages of that rally. Listen to the fear mongers, and you will miss it. If you do invest, monitor the markets. If we start getting a lot more news about bank failures, or the commercial paper market drying up, or even about a lot of businesses going bankrupt, then consider selling again. However, you should not make all that a foregone conclusion by insisting on a death spiral, when it doesn't have to happen. Sometimes "fear" really is the thing we have to fear most.
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    • Mon Oct 13th 11:15 AM | Rating: 0 0
      Commented on:
      Some Stocks to Research for the Market Rebound
      I expect they will get more serious about offshore drilling soon. One of the items that was not included in the bill was state sharingof royalties. I am sure a number of states that are in trouble, such as California might want to reconsider their stance on relatively distant offshore drilling for fiscal reasons. It would be good for the U.S. economy as a whole, but it would specifically be good for the California economy. It would also mean California would have less money going out of its economy to pay for foreign oil. Since California is a huge oil glutton, offshore oil drilling could do a lot to help the California economy. All of the money paid for foreign oil by California drivers is now flowing out of the California economy. At some point Californians will realize they need the money for schools, etc. Then all of the Congress people from California will start to vote for instead of against offshore drilling. Offshore drilling in the U.S. is definitely a developing story, even it Barak Obama gets elected. Any offshore drilling that can be down safely, with relatively little potential harm to the environment needs to be done as soon as possible. We simply cannot afford our current oil trade deficit. The people who think we can have their heads in the sand.

      I should note that I am also a fervent backer of alternative energies. We need them for the short term and for a longer term solution. But oil problems will not disappear anytime soon. Our economy is too fixed on it at this time. We need to address the issue of what it is costing us. Offshore drilling is one of the most sensible ways of doing this. Of course, if the leases are just sold to foreign oil companies, this will not help us very much. They might employ a few U.S. citizens, but we will still be adding to our trade deficit by buying this oil from them. If we really open up offshore drilling, it should be to help fix the U.S. trade deficit. The leases should go primarily to U.S. companies. There should perhaps even be penalties for selling the leases to foreign companies. Or perhaps there could be tax benefits only accrued if you are a U.S. company.
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    • Mon Oct 13th 02:00 AM | Rating: 0 0
      Commented on:
      LDK Solar: Now Bottoming?
      For those of you who don't know, the U.S. Congress extended the solar tax benefits for many years to come when they approved the bailout bill.
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    • Mon Oct 13th 01:58 AM | Rating: 0 0
      Commented on:
      LDK Solar: Now Bottoming?
      Well, LDK didn't bottom higher because it continued down with the rampant across the board selling in the stock market. When a lot of people redeem their mutual funds, there is going to be a lot of selling of LDK because a lot of mutual funds are invested in it. Naturally this causes the price to go down. The good news is that it is an even better bargain now than it was before (PE = 7.4, FPE = 4, PEG = .16). It seems likely that the market may have bottomed for the near term. The futures are up today (Sunday Oct. 12). The VIX spiked above 70. There must surely be a limit somewhere? Apparently Jim Cramer told everyone to sell all of their stock on a national TV show. We can all blame him again (partial sarcasm). Seriously, there is good support for the SPY at the $82 and $85 level. The market made it down to slightly below $84 on the SPY last week. It seems to have bounced off this major support area. We will know more as the week wear on. However, I expect that some of Mr. Bernanke's and Mr. Paulsen's actions will start to be felt positively in the market over the coming weeks. This should allow the markets to go upward for a change. I am hoping for the best. LDK looks like a great long term investment. To me it also looks like it may do great over the short term also. If the markets rise in the next couple of months, LDK should outperform.
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    • Sat Oct 11th 19:09 PM | Rating: 0 0
      Commented on:
      Fear the Market or Fear Yourself?
      I should address Mr. Smarty_Pants issues. First from reading other articles I can tell you that he owns a lot of puts at this time. He wants the market to go down further so he can profit further from it. Second I looked at the article he cited. That article told of how it took a long time to recover from the 1929 crash. However, that is simply a bad comparison. The stock prices were inflated then. A lot of people had been buying with only 10% margin. When the market started going down, everyone had to sell. Those that didn't have to sell were forced to sell or lose their entire investments. After that happened there was no money for businesses to use to expand. Not surprisingly there was only contraction for some time to come (i.e. the Great Depression). The amount of leverage present in the market in the late 1920's simply does not compare to the present situation. The leverage of the banks, especially with regard to home loans is the big exception to this. Hedge fund leverage has also not helped. Still most investors own their stocks outright (or nearly so) through mutual funds or individual stocks. Hence there is not the same impetus for a crash that there was in 1920.

      In contrast the 1987 crash was a deep crash, but the market rebounded from it within a year. That was also a housing top crash to some extent, although there weren't as many bad loans out there. With the oil problems and the home loan problems, I am expecting a bounce. However, I am expecting a slower recovery than in 1987. In the mid 1970's there was a recession largely brought on by oil prices. That took a while to recover from. There are definite similarities. However, we did not have alternate energy in the 1970's. We did not have hybrid cars. We did not have as much mass transit. Those are all things which may draw their roots from the mid 1970's. It should be easier to recover this time. However, we definitely need to address the trade deficit due to oil, cars, etc. It probably still makes sense to buy Prius's, etc. However, we need to realize that we are cutting our own throats by buying many of the other cars. Detroit really needs to more fervently address the issue too. We are kidding ourselves that we can afford the rampant gas guzzlers like most of the SUV's. We cannot. The U.S. economy cannot. Detroit needs to be a leader in their thinking, not just in car innovations. Stop trying to make slightly more efficient gas guzzler small limo's. Start trying to make smart efficient cars. Try to make cars that allow us our freedom -- the real attraction of a car for most Amercans, but do not impoverish the country at the same time with a huge trade deficit. Try to make cars that don't pollute, so we can breathe clean air.

      Let me return to the market from that pet peeve. There is strong technical support for the SPY at approx. $85 and $82. After that there are some minor support points, but none of them give any feeling that they can stop a downturn. The next strong support point is at approx. $42 to $45. That would be a long way for the market to fall. If enough people panic, that could happen. I don't believe there is any overriding reason that it should though. My plea to you is not to panic. The government is trying to address the mortgage crisis. They will likely do a decent job. The market likely will start to go up again soon. It may take a long time to reach the market highs of last year again. However, the markets could recoup 50% or more of the loss fairly quickly. Their were a few good signs last week. The housing data indicates more homes were been sold recently, admittedly for lower prices. Still they were being sold. Then GE commented that the commercial paper market looked a little healthier. It also now looks like the Wells Fargo buyout of Wachovia will be allowed to go through. This should help stabilize the market. I am hoping for more good news going forward. As the government spends the $700 billion in the places it is needed most, the economy should start to improve. Still it will pay to push your Congress people and Senators to address the oil trade deficit as quickly as possible. This is the single most negative influence on the American economy currently.

      I should also point out that the $700 billion can be looked at not just as a new debt. It can be looked at as a way to spread the debt around through inflation. It effectively makes everyone contribute a small amount to the rescue effort. Why wouldn't we want to do this. The government is trying to rescue our banking system, our equities markets, and our home values. With the proper type of first aid applied quickly, we may prevent systemic illness. We should appreciate what Hank Paulsen and Ben Bernanke are trying to do. I know I certainly do. I think the Paulsen / Bernanke team can stop this crisis in its tracks. From a purely technical standpoint, this looks like the time to do it. The Smarty_Pants's simply want to profit from your fear. They would have you believe the sky is falling, so they can make a few more bucks. It might be smart not to listen. Rationally the government should be able to stop this crash at this point. Most businesses are essentially healthy. If it ends up requiring more money, we should not look askance at this. Letting the government fight the necessary fires is likely the best solution. Letting them burn until they go out on their own is a fool's solution.
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    • Thu Oct 9th 10:45 AM | Rating: 0 0
      Commented on:
      Goldman Turns Cautious on Solar Sector
      Oh, and LDK got an upgrade from one analyst to buy recently. FSLR and SPWR are going the other way. Even GS hasn't downgraded LDK.
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    • Thu Oct 9th 10:43 AM | Rating: 0 0
      Commented on:
      Goldman Turns Cautious on Solar Sector
      There was this downgrade. However, there has also been a lot of non-specific hedge fund and mutual fund selling. Virtually all of the hot areas have been hit hard. The most obvious reason is that all of the mutual funds and hedge funds owned these stocks. If they have to sell to give suddenly wary customers back their money, they are selling these formerly hot stocks. Now these stocks are beaten down. Some of them likely deserve to be. FSLR's multiples had been outrageous. They are probably still too high. However, other stocks such as LDK had reasonable multiples. These stocks are now bargains. Eventually the market will sort this out. LDK for instance just raised its revenue guidance for Q3 by about 10%. They have reach production capacity goals earlier than expected also. When a projected 80% grower has a PE of 8, an FPE of 4, and a PEG < .2, you have to think its a bargain. Also LDK has firm contracts for virtually all of its production in 2008 and 2009 at fixed prices. For the last several quarters, this has hurt their margins. If there is an oversupply problem here or coming in the near term, LDK should weather it well. Their fixed price strategy will start paying dividends. Further they are one of the leaders in adoption of UMG solar. This should help them in two ways. It should allow them to use virtually all of the scrap that they buy, without running it through their polysilicone plant (an added cost). It should give them high margins on this sector of their solar manufacturing. This all means more profit for LDK. It also likely means management is doing a great job.
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    • Tue Oct 7th 10:17 AM | Rating: 0 0
      Commented on:
      Solar Gets What They Want, But Stocks Still Suffer
      The prospects of LDK and CSIQ remind me of an old FDR fireside chat adage, "We have nothing to fear but fear itself."
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