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PMI Group Inc. Message Board

  • mctr_dangerfield mctr_dangerfield Sep 23, 2010 6:07 PM Flag

    For non-idiot longs : PMI strategy

    It boggles the mind how stupid some can be.

    So here's the thing...I am not a short, I am a fellow believer in PMI...well let's translate that to America, and its ultimate ability to recover.

    But the reality is, it's going to take far longer than folks would have hoped and for all those players who have been sustaining losses, whose capital levels continue to diminish, there is a real question as to whether they survive or not.

    We have already taken out the mortgage brokerage industry, mortgage insurers my be next. A kind of financial natural selection if you will.

    All the hoping and wishing won't change the outcome. Which leads me to a strategy I would advocate for my fellow longs.

    Don't shoot until you see the whites of their eyes. Translation, don't get ahead of earnings, wait for the quarter in which PMI reports not only positive earnings but a positive outlook with debt obligations well in hand.

    On a macro level we are about to go over a cliff, in which we will see many days of tripple digit drops on the DOW. Don't waste time trying to track my record because my calls have been spot on except to the "literal idiots", who deserve to be stripped of their funds. Point is, the correction will be steep. And we will continue to get these swings that simply suck more folks in, before pulling the legs out from under you. Not all in a row...there will be up days, but the breakage at the S+P level is in the cards.

    Go to cash and wait for the light to shine. If the companies you like survive(assuming you are playing these high risk turnarounds), then there will always be plenty of time to get back in. Risk now is getting back in too soon and catching the knife.

    S+P may break 1000 before the next meaningful retrace upward. I think there is a high probability of a real double dip at least in stocks if not in the real economy.

    So be patient.
    All I can say.

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    • Don't worry about him ... he is wishing his triple digit decline back to the 2.50 levels and will rationalize it any way he can.

      Bottom line, last time it dropped to 2.60 was in a down market with worst than expected results. May happen again, may not.

      Home builders are posting ok results, unemployment is leveling off and private sector jobs are improving, durable goods are marginaly up, AND THE DEMOCRATS still control the all three branches of the executive!! Power to the little people!!

    • My biggest problem with your comments is that you are merely reflecting the bearish consensus among investors that is all too prevalent at this time. I don't typically find the biggest investing rewards by joining the consensus.

      You can wait for your crash scenario. As for me, I'm happy to accumulate on weakness and wait for the receovery to unfold.

      Good luck...

      • 1 Reply to quasardr
      • unfortunately, the bearish sentiment peaked at the bottom(prior) of the recent run. That was why it ran up. As of the last week the bullish sentiment rocketed abnormally high. This is according to CNBC. We had weak volume on the advance, we will likely have weak volume on the pullback. I think there is some systemic change there (lots of folks stepped out for good..especially baby boomers). But I think the downside will seek a classic blowout bottom, which may take a while given the lack of retail participation. So your consensus assessment is actually backward or off by a few weeks.

        Let's say we repeat March of 09, would you be comfortable adding to your position all the way back to 26 cents? And the more important question, can these companies rebound a second time around with business still in the toilet and cash evaporating as fast as it is?

        I actually wished I was wrong...which is why I do cash by the way, rather than short. I don't wish to debate this any further. Ultimately if I helped anyone avoid serious destruction in their personal wealth, then my motivation is satisfied. I will leave you all to your good judgements...


    • Well spoken..

      However, all you have said is opinion and nothing to back it up. This sounds no different than all the crap we have heard since the market started its way back up. The economy has been improving ever so slowly since July 2009. Company upon company has turned to profitability, including MI's. Every month the private sector jobs has been improving. Every month the debt load of Americans is dropping.

      Can you really say that this translates into a market slide? Why do you have to sound like such a ding bat Do you really think that anyone on this board follows the buy and hold strategy. Why would they be here if they did. We can take care of our selves. If I only followed know it alls like you I would not have made 120 grand last year; not bad but getting better. Last Quarter institutions increased their holdings by 33 percent. Any down day will give you the opportunity to increase your share count. Enough up and down days will make up for any loss on your core shares if you coose to hold some.