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What stock would you buy and why?

mike23w said:
So you took your own advice and are a millionaire now?!?!
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No, I was kidding when I gave that advice. The risk was far too great and no one could have reasonably anticipated that AIG would actually jump like it did.

Blankpage - let me clarify: penny stocks as a term generally refers to small cap illiquid stocks that trade OTC. Their relative illiquidity, the high probability of pump and dump schemes/insider trading, and general lack of transparency make them extremely risky investments. I wouldn't call SIRI a penny stock - even though it technically trades within that general price range - because it trades at very high volume with tight bid/ask, and is a large well followed company. As for your personal strategy, I personally believe that SIRI has an unacceptable risk vs. potential return, but aside from that I have no way of knowing whether you are extremely talented, plain lucky, or some other mixture of the two.
 
mike23w said:
How long have you been trading played penny stocks?
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We may never have another opportunity in my lifetime to make money like we had this past 6 months in the stock market. There was panic in the market and everything was oversold. There ended up being some high market cap penny stocks unlike the ones we generally think of that trade below a buck.
I don’t have a history of buying penny stocks but I did take a gamble on IRE and SIRI. Only because I felt they had more going for them than the stock price reflected. They both had good reason to be beaten down but not as much as they were, I felt there would be a big rebound. The future looks rough for both still and I may unload at anytime but right now I’m well ahead on both. I just got lucky. Nobody on here has any idea of where a stock is going.
 
If you are twenty and want to trade penny stocks ( or day trade) you are fine. If you are fifty and want to trade penny stocks, I suggest you just pile your bux into a big pile and burn them, it will be less painful.

Blankpage, if you are way ahead I will give you the same advice any rational person will. Sell part of your position, and recoup your original investment. Hold the rest. You can't lose that way... Don't make the mistake of thinking you will market time ANY stock on sales. ONE bad press release will KILL a penny stock in two hours.
 
Owensdad said:
However, these types of distributions impair capital. If a company distributed 80% of its capital every year, there'd be no capital left after the first quarter of year 2. Their FAQ is quite misleading in this regard. It probably also makes them a "tax shelter" within the meaning of the Treas. Regs.
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Understood, but in the case of PVR, what they mean is that depreciation charges on its capital assets are sufficient to offset 80% of the quarterly cash flow distribution, but if your capital assets are incredibly costly (like an oil pipeline, for instance) it could be a very long time before all your capital assets are fully depreciated. I do not believe that PVR is stating that they distribute 80% of their capital every year as that would be completely unsustainable.

Owensdad said:
Upon selling a limited partnership interest, the selling partner is treated as selling his share of each class of asset owned by the partnership: capital property and ordinary property. Depreciated capital property is subject to depreciation recapture (as ordinary income) and ordinary income assets generate, you guessed it, ordinary income.
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Ok so I didn't know that but I guess it makes sense. So, it would seem that you would have an entry basis and exit basis for each class of asset, and then (taking into account capital depreciation already received against your initial investment) the differences for each at time of sale constitute ordinary income gain or loss.

but how do we then account for the fact that a unit purchased in the open market can, ostensibly, have a value that is subject to extreme fluctuations vs. underlying partnership assets it might tangibly represent? If that unit increases in value because of normal speculative activity it seems that should constitute a capital gain.

Anyway, interesting stuff. It seems to me that if you take the time to understand this stuff, it can be very profitable.
 
mercurial said:
but how do we then account for the fact that a unit purchased in the open market can, ostensibly, have a value that is subject to extreme fluctuations vs. underlying partnership assets it might tangibly represent? If that unit increases in value because of normal speculative activity it seems that should constitute a capital gain.

Anyway, interesting stuff. It seems to me that if you take the time to understand this stuff, it can be very profitable.
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Fluctuations in value simply represent unrealized gain/loss. The fact that the issue is publicly traded makes its easier to value and sell. When you do sell, you will still be required to allocate the proceeds between capital and ordinary (inventory, unrealized receivables) assets.

I replied to your PM, btw. :)
 
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Blankpage said:
Would you go to the Wall Street Journal for motorcycle buying advice?
But since you asked, try: SIRI, HTE, PCX, and AGQ.
Remember nobody knows what direction the market will go or what will drive it there. People think the DOW is up huge this past 6 months but less impressive relative to the Euro the British Pound or the Canadian dollar.
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HTE up 36% since I mentioned it. Not the slow growth some on here like but I’ll take it however I get it.:|
 
Blankpage said:
HTE up 36% since I mentioned it. Not the slow growth some on here like but I’ll take it however I get it.:|
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HTE WENT UP $2.25 today on news that it is being acquired by KOCA the Korean National Oil Company. They have suspended future dividends. The sale price is around $10 canadian. Which basically means HTE will remain around $9.30 to $9.50 unless the deal falls through, in which case it will probably fall back to the $7 range. In any case, the Canadian government suspended the tax break Canadian trusts were getting as of 2011. At that point trusts must pay corporate taxes prior to dividend distribution, which will have the effect of reducing dividends around 30% depending on a number of factors, including the tax breaks the companies have booked since the Thanksgiving Massacre.
 
afm199 said:
HTE WENT UP $2.25 today on news that it is being acquired by KOCA the Korean National Oil Company. They have suspended future dividends. The sale price is around $10 canadian. Which basically means HTE will remain around $9.30 to $9.50 unless the deal falls through, in which case it will probably fall back to the $7 range. In any case, the Canadian government suspended the tax break Canadian trusts were getting as of 2011. At that point trusts must pay corporate taxes prior to dividend distribution, which will have the effect of reducing dividends around 30% depending on a number of factors, including the tax breaks the companies have booked since the Thanksgiving Massacre.
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Yeah I know about the energy trust changes. Every stock is different, In this case time to take the money and run.
 
our company stock when down about 50% of its value.. now its up again where it was more a 25% loss.. good thing is we just bought company stock at the price where it was sitting when it hit 50% and now i got a lil smile :) but its not like im investing a crap load.. ive also lost some cash on other stock purchases that were purchased before the 50% drop.. small loss.

im sure we get closer to where it use to be at... but everyone is right.. the time to really buy did pass a few months ago.. cant go wrong still as most stocks havent gotten near where they once were... still room for the stocks to go up!
 
Marlowe said:
It's not really that dependent on the US economy.

They've been posting 400-600MM a quarter in free cash flow, for the last couple of years. Even in this, they are making money, and not from investments -- from their operations. Why?

Read their statements...record coal shipments and the like. Anything they lose in consumer good shipping, they gain elsewhere. They are also very good at hedging their fuel expenses.

Everyone thinks it is, yet it just keeps on rolling, year after year. Keep in mind, the Class Is all survived the great depression, too. We're not there yet :p

Also, the less money shippers have to throw around, the cheaper solutions they look for -- rail is the most efficient. As a result, they take some business away from air cargo and trucking operations.

Now, SIRI, is entirely dependent on people's entertainment budgets, and demand, growing, because they sure aren't making money now. Which do you think is more exposed to this economic climate?
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Apparently Buffett was thinking the same thing, he just went with BNI instead of UNP (Although Berkshire does own %2 of UNP)

http://www.nytimes.com/2009/11/04/business/04deal.html?partner=yahoofinance

Anyone thinking of buying any Berkshire B when it splits?
 
Marlowe said:
UNP.

Reasons:
- Well managed. Traditional blue chip, asset based company.
- Tons of free cash flow.
- Book value nearly as large as their market cap (i.e. worth as much dead as alive.) When I bought, their book value was actually higher than their market cap.
- Energy demand is driving record coal shipments for them, which is offsetting fewer goods being shipped.
- Still the most efficient means of moving goods -- combined with decades long experience hedging fuel expenses.
- If you bought in 1980, you'd be up about 90% PER YEAR.
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Yeah good call, it looks like you were on to something. Not wise to bet against Buffet. I think I'll play that one though on a pullback in PCX if oppertunity should present itself.
 
He's a smart guy, but you need to be careful with Buffett...these days he can make a ton of money just by jumping into something, letting the lemmings follow, and liquiding his position when he feels like it.

Obviously that's not the case here, but as a rule I don't pay too much attention to what he's doing. My investment philosophy may be similar, though -- I do look for a lot of the same traits.

Also, BNSF is the logical choice for Berkshire. They'd have to dig even deeper to try and buy out UNP, and I don't think he wants to borrow that much. My sense of their management is also that they aren't shopping the UP around right now, anyway.
 
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Marlowe said:
He's a smart guy, but you need to be careful with Buffett...these days he can make a ton of money just by jumping into something, letting the lemmings follow, and liquiding his position when he feels like it.

Obviously that's not the case here, but as a rule I don't pay too much attention to what he's doing. My investment philosophy may be similar, though -- I do look for a lot of the same traits.

Also, BNSF is the logical choice for Berkshire. They'd have to dig even deeper to try and buy out UNP, and I don't think he wants to borrow that much. My sense of their management is also that they aren't shopping the UP around right now, anyway.
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Yeah, it sounded like the BoD of BNI agreed to sell to Buffett pretty easily. I think UNP would have been a tougher sell.
 
Their stake in BNSF was also much larger IIRC than the other two... If he was going to buy any of them, it was pretty clear that was going to be the one, but they're also (while still very strong) slightly weaker and easier to come by.
 
Marlowe said:
Their stake in BNSF was also much larger IIRC than the other two... If he was going to buy any of them, it was pretty clear that was going to be the one, but they're also (while still very strong) slightly weaker and easier to come by.
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True, they already owned 22%.
 
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