CFC was my 52nd consecutive profitable trade of 15% or better...

Discussion in 'Trading' started by mrmarket, Mar 1, 2004.

  1. Today I sold CFC at 92.88. That's a 16% return over my (split-adjusted) purchase price of 80.16. All of this was achieved in a period of less than 3 months. Over the same period, the S&P 500 was only up 7%. Can you do that? You? You?? YOU???

    That makes 52 consecutive profitable trades of 15% or better. No one else on this planet can do that! There are 52 cards in a deck. Pick a card....any can match a $$$MR. MARKET$$$ winner to any of these cards. Oh ho ho feels so good....eee eeeee eeeeehhh BOIK! Aaaaaaaaaaaah......

    CFC dropped to about 70 on January 10, about a month after I had bought it at 80. If I had been a coward and sold, I would have been a

    L - O - S - E - R!!

    The 8% stop loss rules is for L - O - S - E - R s who can't pick stocks.

    Instead, once again I am a W - I - N - N - E - R!!!! Selling CFC today at 52nd consecutive profitable trade of 15% or better!!

    I am H-U-G-E!!!

    I live what others dream. My 19" biceps do all the work as I plink away at the keyboard making my stock picks. Wait....that didn't come out right. $$$MR. MARKET$$$ does not "plink".

    March madness is around the corner... It reminds me of the time I spent an afternoon with Titanomega drinking beers eating hot wings watching hoops with huge bets on the line. We on the AC boardwalk, livin large lighting our cuban stoogies with Franklins. The days' entertainment was complete observing the Hooters waitresses at the Tropicana.

    This means a $$$MR. MARKET$$$ March madness pick is around the corner. Got any you want me to throw into my database?

    I am HUGE!!!

    $$$MR. MARKET$$$


    Posted: 04 Dec 2003 08:46 pm Post subject: CFC ==> The "I'm Freezing My Ass off" Winner


    Now on the street tonight the lights grow dim
    The walls of my room are closing in
    There's a war outside still raging
    you say it ain't ours anymore to win
    I want to sleep beneath peaceful skies in my lover's bed
    with a wide open country in my eyes
    and these romantic dreams in my head

    There’s something about that wide open country thought that makes me think expansively. Actually it makes me eat until my stomach grows expansively. My ass is getting as wide as Tennessee…actually it’s getting Countrywide.

    Today I bought CFC (Countrywide Financial Corp) at 106.88. I will sell it in 4 to 6 weeks at 123.84. Here’s why I like CFC:

    Countrywide provides mortgage banking and diversified financial services in domestic and international markets. Mortgage banking businesses include loan production and servicing principally through Countrywide Home Loans, Inc., which originates, purchases, securitizes, sells, and services primarily prime- quality loans.

    CFC is up 120% in the last 12 months yet its P/E is a microscopic 7.1, A very safe play says $$$MR. MARKET$$$.

    Now everyone out in TV land is saying that $$$MR. MARKET$$$ must be on crack cocaine. Why would anyone want to buy stock in a mortgage company when it is obvious that interest rates have begun their climb? I’m not going to hold CFC forever, only til it reaches my target. So here’s my plan. What are people going to be doing for the next 3 weeks? And how are they going to pay for all of their gifts? cards. And how are they going to pay off their credit cards next month when they get their Visa bills??? Rutro,,,,

    Correctamundo….We will see a wave of home equity loans in February when people have to pay off their Christmas bills. The last vestiges of refinance holdouts, presumably the financially incompetent, will dive into cheaper money to rid themselves of their Mastercard and Discover misery.

    Remember, the 30-year fixed mortgage rate is still among the lowest in 40 years. Much better than paying 19% on your credit card.

    And many homeowners may rush to purchase or refinance as they see rates rising, giving another boost to the sector. $$$MR. MARKET$$$ continues to believe that if rates are going up, it's because the economy is getting better. That's a better situation than having lower rates. I'll take 8% rates with a strong economy instead of 5% in a bad economy any day. People buy more houses in a strong economy and the home sales need to be financed. Don't expect housing to collapse when rates do climb.. Historically low rates may be a big reason for continued strength in the sector, but in recent years housing has also been buoyed by poor investment alternatives, tight home supply, and changing demographics. The sector has had a history of boom and bust cycles but it doesn't look poised for a bust anytime soon. Sales of new and existing homes remain at near-record highs. There is no bubble.

    Management also believes earnings per diluted share for 2004 will range from $12 to $16. Key assumptions in the 2004 forecast are as follows:
    • Ten-year Treasury rates of 4 to 6 percent.
    • Origination market of $1.4 to $2.4 trillion.
    • Countrywide origination market share of 13 to 15 percent, implying Company origination volume of $182 to $360 billion.
    These are all reasonable economic assumptions. Furthermore, October was still a red hot month for new home sales. CFC is going to blow away 4Q earnings estimates of $3.80/share. $$$MR. MARKET$$$ sees them carding $5.60/share to make 2003 earnings a whopping $18.48/share. Wall Street will have a hard time keeping their P/E below 7, especially if the homebuilders continue to smash their numbers. 7 x 18.48 is a stock price of 129.36/share which is well past my target. Even if CFC only does the low end of their estimates, a PE of 10 sends their stock price to 120. Don’t forget they can also raise their dividend with all of the cash that comes piling in.

    In addition, the Board declared a 4-for-3 stock split to be effected as a stock dividend payable on December 17, 2003 to stockholders of record on December 2, 2003. Bullish bullish bullish…Did you ever think that a 4 billion dollar company could double its sales in one year?? Insane?!!

    In addition to excellent loan production, CFC has posted strong gains in its insurance, capital markets, global and banking businesses in recent quarters. CFC's efforts to diversify its earnings base will serve it well as it navigates the ebbs and flows of the cyclical mortgage business. Diversified Businesses include the operations of Capital Markets, Banking, Insurance and Global, and accounted for 15 percent of consolidated pre-tax earnings for the third quarter of 2003. Diversified earnings in aggregate grew 146 percent in the third quarter on a year-over-year basis. These are the quality earnings which are going to help CFC grow even when the Goldilocks refinance environment recedes. CFC has undertaken a diversification initiative to reduce earnings cyclically, as mortgages provide a declining share of consolidated earnings. It plans to leverage its mortgage platform to develop its other businesses. "Our base business - home mortgage lending - has grown steadily for decades," said Stanford Kurland, chief operating officer of Countrywide. "What is cyclical is refinancing. Diversification smooths out our revenue. And diversification not only takes the form of businesses we have started, but product diversification as well. We've added or expanded to our core competencies with products like home equity lines of credit and our entry into subprime lending."

    Countrywide's Insurance segment includes Balboa Life and Casualty Group, whose companies are national providers of property, life and liability insurance (yo Adrian!).

    It really doesn’t make sense to quote the amazing financial windfall that CFC landed in 2003. No sane person, including their boss expects it to continue. "Business will shrink, no question about it," said Chief Executive Angelo Mozilo. "There was a tremendous boom in originations because of the historically low interest rates." (Do you think Angie Mo got teased when he was a kid?) The good news is that Wall Street has this priced in already with the ridiculously low P/E ratio of 7.1. Any surprises can realistically only be on the upside.

    CFC is not sitting on their hands either, as they continue to take market share away from their competitors without even cutting into their margins. An expanded sales force played a big role in building share, Mozilo says. Countrywide's tech prowess also helped. Its technology lets the company make loans quickly and efficiently, and its online loan system is a big plus with brokers. But Mozilo has said he wants to get to 30% of the U.S. market. That would put the firm's share at around $2.5 trillion.

    Big Mo cannot be stopped. He will crush everything in his path. He is making so much money, his ass is getting fat. It’s getting as big as Tennessee. It’s getting Countrywide.

    I am HUGE! Bring me your finest meats and cheeses.

    - $$$MR. MARKET$$$
  2. BSAM


    What do you want, a box of animal crackers?:D
  3. "finest meats and cheeses" to be exact :D

  4. gms


    Why bother asking when you don't really care what the answer, that others routinely are making 15% or better within a few days, is?

    And IPAR makes your 10th consecutive loss of 13.7% (average loss).
  5. gms


    Here's a post I'd like to see because it would be refreshing (what follows is satire):

    Today I'm still holding PTSI at 17.33. That's a 30.23% loss from my purchase price of 24.84 on April 15, 2002. All of this was achieved from holding the stock for just under two years. Over the same period, the S&P 500 was only up 4.5%. Would you do that? You? You?? YOU???

    That makes 10 consecutive losing trades of 13.72% on average that I'll bone up to, there have been others. No one else on this planet grasps that as you ET'ers do, the sheep on my site that follow my every word and serve up admiration and praise to me, humoring me because I routinely beg for that kind of attention, haven't caught on because up till now, they've been doing worse! So I look real good to them by comparison! I don't think about my losses as real losses because I have such an ego that I can't admit I chose poorly, which prevents me from preserving capital and costing me many, many lost opportunities. If I could only wiggle out from under my ego, like a queen termite pathetically struggling to escape from under her massive body weight, and grasp the fact that it's not all in the stock selection. Just like there are 52 cards in a deck and I like to think I can pick the winning card and that's all one needs to do, I miss the fact of what I should do when I am dealt a bad hand.

    PTSI finally rose to 28.17 some nine months after I bought it, so you can see just how great my timing is, but even after holding through ups and downs for almost a year, that 13.4% gain was still just shy of my target of 15%, so when it couldn't hold its high or even near its highs and then continually declined for weeks and weeks afterwards, I still didn't get the hint and sell it, because that to me would be like admitting the trade wasn't working out (even though the trade wasn't working out, but it really would've been like admitting it) and would've bruised my ego and lordy knows what my devotees would think of me, 'cause I think people would've thought that by selling, I was admitting D-E-F-E-A-T, and I couldn't have that because of my prideful self. So I held, even though at best, I could've preserved some profit, gotten out with a gain and entered again later, or, at worse, I could've cut the loss short and parlayed the capital into a better trade, or trades, over the past two years, instead... I am like the captain of a sinking ship down to Davy Jones' Locker I go with it, as if collapsing from the weight of my biceps, married to the stock, come better or worse, seeing it sink lower and lower still and cutting into, chipping away at and eroding my profits. So for want of another 1.5% from a tired stock showing no more signs of life, I held and held and held until now, one third of my investment is gone. Can you do that?? Am I not the clever one? Can you see how, in addition to my losses, some of my Wharton tuition money was misspent too? I must have been absent that day! I couldn't see the blackboard! I am H-U-G-E!!! (Hardly Understanding Gains Erosion).

    That's why I have to concentrate on only those trades I close out successfully and act as if they are the only ones that count. As far as any losses I'm holding, I act like an amateur as if paper losses don't count, and that they are instead profitable - it's just that don't know it yet! Who else does that? You? You? YOU???
  6. Haven't we gone thru this before? These trades aren't consecutive, they're concurrent, closing the trades on separate days is not the same as compounding 15% 52 times. Good marketing though! :)


    How's SAFM working out for you? :eek:

    I'm sure that 12% drop within two days of going long didn't bother you because YOU DON'T USE STOPS.
  8. good work

    Brilliant GMS!!




  10. Right now SAFM is trading at 35.85 which gives me a 6.7% loss. I really like the stock now..if we go another couple of weeks without any "bird flu" news, I think it will really do well. I like its earnings and revenue growth prospects, near term.

    Thanks for asking.
    #10     Mar 1, 2004