Mosaic (+83%) and Countrywide (+47.8%)

Published on January 9, 2008

Mosaic (+83%) and Countrywide (+47.8%)

January 9, 2008

Before market open I mentioned about MOS-

Mosaic (MOS) is announcing earnings before market opens. For beginners, The Mosaic Company engages in the production and marketing of crop nutrient and animal feed products worldwide. It operates in four segments: Phosphates, Potash, Offshore, and Nitrogen. MOS has risen almost 5folds in past 52wks. Either they will be crushed or rise to new heights. I am interested in MOS’s outlook for finding weakness in other high fliers.

mos-1st-round-jan-9-2008.png So here we are, Market didn’t like what MOS said in it’s conference call and shares are punished. From a intraday high of $93.5 to low of $80.5, a good $13 range, all within a day and it was good enough for me to secure a +83% returns from MOS itself, without looking for rest. I like it.

I like bankrupts, especially the arrogant ones. Countrywide Yielded a +47% for two days holding period. Check out my Dec 10 post? did I say CFC is not too far from bankruptcy?

Is countrywide (CFC) too far from Bankruptcy? My bet it’s not but let’s see. Ok forget countrywide, what about Fannie Mae (FNM) which backs mortgages. If a homeowner defaults, FNM is required to buyback these loans at the original price, not the current value. They backed bad loans and must now buy them back. Just look at the current balance sheet: $600 billions in long-term debt out of $760billions debt. Yeah, you may show $782 billions in Assets, but where is the bulk of investment? You guess it right. So how do you find money to buy back those loans? do you get the picture? The picture is not so much different for Freddie Mac (FRE) either. Have fun exploring their balance sheet and fine prints and I am sure you are about to decode interesting insights. Don’t tell me I am being too pessimist and too early, etc

cfc-jan-9-2008.png I might have sold it too early but hey +40% is not bad either. Check out IVs for CFC, it’s going to the moon. So I don’t want to give back my hard earned $$. One may argue still far, yeah I know. Enron, Worldcom, New Century all kept saying the same thing while the smart money was offloading shares. I wish I am wrong as this will save jobs.

Profitable trading, OPИдея за подарък

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