Reasons To Sell Financials Now

Now that the Fed has cut rates and looks like they are going to be pausing through the summer the conditions seems right to sell financials.  The sector has recovered recently as the solvency of many firms has been confirmed.  Also, many firms have been able to secure additional capital.  While confidence in the sector [...]

Crude Awakening? Oil Arbitrage and Speculation

Today the WSJ sparked The Prince’s interest with its story about sky high analyst projections for oil.  The story reminded him of an arbitrage opportunity some of The Prince’s friends had brought to his attention.  These friends originally heard about the trade a few months ago from Gary Lucido at InvestingMinds.  Gary wrote about the [...]

Featured Trade: BAC and CFC Drama Continues

On its face this deal seems like a merger arbitrageur’s dream.  The deal has tacit/implicit government support, the two companies stand to gain in both the short and long term, there hasn’t been any negative news from the top counterparties regarding the deal, another suitor for CFC hasn’t materialized.  However, opposition to Bank of America’s [...]

Platinum Equity’s Purchase of Covad

This was a buyout related trade that I was originally turned onto by The Intelligent Speculator.  Here is some background on Covad and The Prince’s rationale for why this makes sense as a 6 month trade.  This is basically a merger arbitrage opportunity without a public acquirer which could generate a pretty sizable return over [...]

Undressed: Trouble in Women’s Clothing

It may be time to get short women’s clothing retailers until they report earnings in January.  The New York times is out this morning with a story on an ominous economic sign.  Women’s spending on clothing is down 6% in the first half of the Christmas shopping season compared to last year. 
My short ideas [...]

Goldman Trading at 8.8x P/E & 10x Forward

In anticipation of Goldman’s earnings release on Feb 18 I have been buying the stock between $200 and $210.  GS’s price to earnings is absurdly low for such a high quality asset and well managed company.  I’m also expecting that GS will surprise on the upside when they announce earnings since they have navigated the [...]

Buy SKF to Short U.S. Financials

I have been trading in and out of the ProShare Ultrashort Financials ETF (SKF) for the past two months.  For more info on the index please go to the ProShares site.

The index is 200% of the inverse of the performance of the top financial firms in the U.S. found in the DJ U.S. Financials [...]