From a fundamental standpoint, it is highly overvalued and in an industry that is going to be in a decade long decline. Trading volumes are down and customer churn is up. I personally know of a lot of very smart people who are very short.
That is one of the dumbest comments I have ever heard. The industry is already starting to come back, financials have been strong and will constinue to be as we win this war. Oils as well will do very well as oil prices come down, allowing them to return to the types of margins previously realized. The shorts must be squirming now on SCH, JPM and many other financials. JPM is on a 5 point straight rip fueled by the war and the reutrn of some confidence.
We'll see... I'm only short the banco de harley now (HDI). Am looking to really push the short bet in the next few weeks though.
Wow. The guy asks for comments and then this reply. I think he wanted someone to validate his long position P2! You broke his heart!
LOL... I know a lot of people in SCH. They tell me that things are falling apart. High volume traders are going to IB/prop firms. Low volume traders are trading less and with smaller accounts. Customer churn is way up and AMTD is killing them. Insiders are purging their own shares and option overhangs will eat up any increases in earnings. Not that there are any earnings of course. This is a great business, but if you must continue to spend like SCH is in order to keep up customer lists, it really is a low return business. Look at ROE from yahoo. 2.32% That is half of what a government bond yields with a lot more risk. Chart looks ok, not great, but bottomy. Over 8, yeah, I can see it maybe surge to 10, maybe more. I know these guys are days from warning. Who would take a position now and risk that. OTOH: AMTD went up after warning. When you can buy companies trading at 4Xnet cash, half of tangible book and with PE's of 3.5 like IBA (which has historically had ROE in the 15+ range) and a 7-10% yield (it varies at the whim of the controlling family) with no option overhang, why bother with a crapper like SCH. There are dozens of other IBA's out there. Maybe IBA doesn't work. Who knows. But I feel confident that a basket of 20 will beat the crap out of whatever sch does in the next 18 mos. Next 3 weeks, who knows. As for his opinion that trading volumes have bottomed, that is straight out wrong. Look at total trades per customer. That is the only metric that matters.
Hmmmm... Glad Im not short. Feels good to be long at 6.70. I hate to say it, but check the chart. Did I actually pick a bottom? Damn! BUT you know what Cramer says....Bulls make $, Bears make $, Pigs get slaughtered. I wont be a pig.
SCH, AMTD and other brokers catering to retail are calls on the market right here but no doubt will have to face up to fundamental problems in due course. I guess the longterm question for SCH is how much of their problems would go away if the market took off here and stayed relatively strong? No reason to buy them unless you accept that scenario, as they surely won't rally if the bear market resumes.
Good trade silverbullet. I would take some off the table here. I think you're playing with fire, but it may just keep going for a while. The company has problems though, and that is not reflected in the chart.