Comments on: Moody’s Corp. (MCO)

By: boris

boris — Tue, 07 Aug 2007 19:31:41 +0000

SINA dip expands 47 > 38 $9 or 18%. if you have no inventory the price point is attractive.

By: boris

boris — Tue, 07 Aug 2007 15:49:33 +0000

2 day STP starter bounce expands 36.60 > 40.60
+$4.00 +11%

By: boris

boris — Tue, 07 Aug 2007 01:58:59 +0000

yeah that coach hit bottm near $44 this morning. i would cover.

By: Ron

Ron — Tue, 07 Aug 2007 01:41:24 +0000

Zach,

Good call on Moody’s puts.

With the abrupt drop off in debt securitizations, rating agencies will get hammered. This is from Moody’s 2006 annual report:

“Approximately 80% of Moody’s revenue in 2006 was derived from ratings, a significant portion of which was related to the issuance of credit-sensitive securities in the global capital markets. The Company anticipates that a substantial part of its business will continue to be dependent on the number and dollar volume of debt securities issued in the capital markets. Therefore, the Company’s results could be adversely affected by a reduction in the level of debt issuance.”

Let’s take a closer look at Moody’s recent revenue growth. In 2002, prior to the huge wave of debt securitizations, Moody’s revenue was $1.0 billion with net income of $289 million. By 2006, revenue had doubled to $2.0 billion and profits jumped to $754 million.

Certainly, there is a significant risk that the Fed drops interest rates to keep this crack-up boom running along, however, it is doubtful that the easy debt securitization days are over for CMBS and LBO financings alike.

Finally, who is going to take the fall for all of this? Investment banks and retail investors are going to target groups like Moody’s.

Full disclosure: we own 2009 put LEAPs on MCO.

By: boris

boris — Tue, 07 Aug 2007 00:53:02 +0000

CHINA. touching SunTechpower and SINA …. the major Shanghi indexs rose 3% on friday to a new 52 week record. for monday they opened with priced strength in the morning and closed with further gains of 1.5% to 2.0%.
the Shanghi Chinese indexes are climbing very well during this 11+ days in the USA major averages / Index downdraft lead by finacials. i have 88,000s of sina priced at $42.00 and its falling $2 – $3 as of afterhours monday. stay or go?

By: boris

boris — Tue, 07 Aug 2007 00:44:11 +0000

some drawing board ideas. monday may have seen the worst of the 11+ day index selloff. iam glad that financial industry index chart meltdown is exhausted for the short term.
the nasdaq closed 60 points off the lows. i would not be surprised to see this as the beginning of a steady multi day reflex rally. already Goldman Sas c has bounced +$12 off the $175 low point and American Express has bounced $5 off the $55.50 low point. SINA earnings were boring and the dip from $47 expanded to $7+ into the $39s. my oversized 88,000s long position averages $42 per share cost, and are 5% priced premature or perhaps worse tommrow. iam in a expanding state of >$200K+ MELTDOWN PANIC!! lesson belief this is a google of china caused greed on seqentials potential. not this quarter!!!! SUNTECHPOWER… STP found a $36.60 low point, where the dip maxed out for $7-ish this morning. i hope you got it in 36s/37s with slick limit orders, otherwise get on the bounce band wagon tommrow average in at market and slight pullbacks , and dont stall with unreasonable low limit orders. Broadcom- BRCM has offically blocked all Qualcomm imports, so i expect BRCM 1 month bounce off $29 to start expanding soon. Coach- should start rallying with the market and indexs. cover. most old economy consumer franchise stocks on my screen today, like McDonalds , roared today with 2%-4%. True Relgion Guru denim soared 6%+, another negative red flag for your short position danger. Crox- down $9+ to the $52s. a deep dip long position in crox would help hedge the Coach short.

By: boris

boris — Mon, 06 Aug 2007 14:57:32 +0000

monday morning… crox is slammed. the dip is $61s > 52.50 or $9. i have zero and iam opening longs with limited buying power.

By: boris

boris — Mon, 06 Aug 2007 03:39:25 +0000

if cmg cools off, where would you dip buy? when are you going to open STP?

By: boris

boris — Sat, 04 Aug 2007 14:38:17 +0000

yeah. i am going to west palm today and wont be able to post much until tommrow. if you didnt make much long profits this week hopefully you did make it when the gettin was good, april-july. to me the nasdaq index has been washed out by the financials and is oversold. it should not go much lower cause its priced in deflating dollars. SINA – sina reports after the close monday so i like this $5+ dip very much. competitors Baidu had Q2 ‘07 +47% top line sequentials and smaller SOHU had +11% top line sequentials. weaker SOHU forcast about 28% sequentials for the 3rd quarter. SINA is positioned to do very well and has june’s google deal in hand when reporting and issuing guidance. you ought to consider opening a long or some lowish priced $40 calls. after sina iam going to back off trading. sunpower traded down to $38.03 friday the dip is $5.50+ so thats exciting. Broadcom was upgraded on thursday and the analyst pinpointed 4 catlyst for the small bounce off $29 to expand $11 to $40. i have no chip exposure and want to have some represtation in technolgoy rally. i will building up broadcom long inventory next week after sina earnings, aim to price below $33 in market is weak. key- make sure you are DVR-TIVO recording fast money every day. if you dont have a box comcast and the others rent them for $10 a month.

By: Zach

Zach — Fri, 03 Aug 2007 21:55:55 +0000

Good luck with the SINA – sorry I didn’t get to it this week for you. It’s been a bit hectic as you can imagine.

My exposure is light. Today I made enough money to buy gas for the weekend but thats a far shot better than losing my shirt in this volatility. Enjoy the weekend!

By: boris

boris — Fri, 03 Aug 2007 20:09:55 +0000

i agree about the danger. i just wanted to dabble in such a low price point on the charts. i will probably pass. Beside i finished my work on sina and iam gonna stick to that.
i have already bought up a more preferred dip, SINA 42s/43s, in front of mondays earnings report. BAIDU and SOHU have good reports and good market reactions…. upgrades… and i hope SINA, as a better grade industry player, will benifit from some of the same trends.

By: Zach

Zach — Fri, 03 Aug 2007 18:45:13 +0000

Goldman is a great name with strong fundamentals with the best management money can buy. It’s definitely not my forte to pick lows in stocks but I would be one willing to leg into some exposure on a day I begin to see strength in the name. If you’re disciplined about selling if you’re wrong, this may be a fine time to get involved, but I am just not good at picking low spots. Good luck!

By: boris

boris — Fri, 03 Aug 2007 18:41:44 +0000

hey zach, i have zero exposure to financials and realize they have problems… is now a good time to dip buy Goldman Sacs – GS 182s up 1% off 180s lows friday? the dip metric is hot: $55 off $235s.