Seeking Alpha by Adding Beta

Obama gave an exceptional acceptance speech which would make even skeptics vote for him. Democratic party made an excellent choice as their presidential candidate and I fully support Obama for President. America needs change and who is better than Obama ? Now coming to main topic - I have been calling market bottom for some weeks. With today's GDP report, I can confidently say that market have reached bottom few weeks back and it is on its way towards 12500 by end of year. Most promising part of today's market move was that financials have come back in a big way. I was glad that my call on mortgage insurers was so on the mark with 4 of my recommendations up by 20-50% in last few days. Since these stocks are still down by 80% from their peaks, I would recommend staying invested in these stocks or making positions when they come down little-bit (check out my recommended entry points in previous post). I see scenario playing out exactly like 1992. Even though I was not in USA, fr...

Since I have been writing about mortgage and financial insurers, here is another interesting post which I came across on seeking alpha which provides even more detail analysis on ABK , MBI and RDN . Risk/Reward Analysis Makes Financial Insurers a Buy Looks like more folks have started noticing recent run-up in these companies. Even today when Dow was down nearly 250 points, ABK and RDN made a nice upward move. While I am cautiously optimistic on these companies, one may want to wait for some time to take positions in these companies. My recommended price to take positions in these companies is ABK less than 6, MBI less than 10-11, RDN at 3 and PMI at 3. At these entry points, these companies have potential to give returns of 50-100% in next 18-24 months Good luck and good night ! / Shyam

What a see-saw in crude price last week. With Goldman predicting oil to reach at $149 by year-end, I am taking opposite stance and predicting that oil would touch $100 before it touches $149. It would be interesting to watch how it plays out. And I am betting on my prediction with by taking some positions in airline companies like US Airways ( LCC ) and United ( UAUA ). If oil touches $100, these stocks would be up by about 50% from Aug 21 lows. If it goes above $140, these stocks would be down by 50% (and provide another buying opportunity). Recently my investing has been on macro-level - would a company survive or go BK. If my analysis shows that despite all dark clouds, company would survive and eventually prosper, I would recommend (and possibly invest if I have cash). This thesis proved to be quite correct In July-Aug while I was on vacation. Two sectors which provide ample examples to try out my thesis are - financials (including insurance sector) and airlines. Here is this week...

Summer is almost over. I just came from my long vacation to India and London (that's the reason there were no posts on blog even though lot of events were happening in market). Had fun in India and London (would publish some photos in later posts). With Freddie and Fannie down by about 40% in 4 days, what an exciting week to start writing again. So what's the future for these GSEs ? If I have to make a prediction, they would be recapitalized by government some form leaving small value for existing shareholders about same as current stock prices of these companies. So what's best way to play this sector ? Now that all bad stuff of monoline and mortgage insurance companies is published (hopefully), it may be good time to make small bets on ABK, MBI, RDN and PMI. These stocks are up by more than 100% already in last 3-4 weeks but since they have been down from double digits to below 5, there may be still 50-100% upside in these stocks (disclaimer: I may have position in some ...