pep boys will be a great buy in 10-15 years the problem is big time liquidity run going on. hope carl was hedged as all the big boys have to do. he makes money up or down buys more when down rinse repeat until broken
Really picking some rotten fruit from the bowl over the past year as is reflected in the IEP price tag as well. His nonsense about high risk must have been subliminal reminder to himself. Lately, he has been doing LNG, RIG, FCX, CHK, HTZ, to name a few and with substantial losses if not complete loss as in CHK. Maybe his time has come and now gone.
Sentiment: Strong Sell
CHK is only a very small percentage of IEP's holdings. Carl has
hedges on many of his holdings as well. The dividend is safe because
90% of IEP is held by Carl who collects shares instead of a cash dividend.
The dividend will continue to be paid just like in 08. This stock never stopped paying dividends even when cash flows dried up. How? Carl owns 90% of the company.... Carl takes his dividends in stock. IEP gives him depository units instead of having to pay it's cash flow out to him. That's a huge safety net. When the volatility subsides, the company can make additional activist acquisitions.
It's a beautiful thing to be able to buy IEP at these levels and lower because he is highly hedged. I imagine he has credit event binary options on all of his latest riskiest acquisitions in the energy sector. If these companies default, he's going to profit big time.
He came forward in several interviews through July-September 2015 explaining that he is has made large bets against the S&P 500 and the high yield market. People laughed and said the old man is crazy. The high yield market and the S&P 500 is starting to fall off a cliff (see ticker HYG, SPY). Carl booked a billion in profit in the scenario in 08. This time his net exposure is significantly higher. I have a feeling he may be seeing legendary profits from his derivative contracts, similar to Paulsen's bets against the housing market in 08.
I don't know who is making decision to buy large positions in companies, but whoever he is, he needs to be fired.....what a disaster. A blind monkey throwing darts at the Wall Street Journal stock page would do a better job, and cost a lot less in salary.
I've been following trade alerts from the "TopMarketGainers" newsletter, and I've been consistanly beating the market. If you want to get an early jump on the fastest moving NASDAQ & NYSE stocks signup now. Just got an email stating they have a new pick coming tomorrow, so move fast and join! Just type "TopMarketGainers" on your yahoo search engine!
I hope this is the last washout before heading back up. Every time a sharp drop is followed by a sharp rebound, The target is still much higher at 90.