Well tomorrow (Thursday) is the big day supposedly. It's the day when the Financial Accounting Standards Board (FASB) determines the accounting methods with which financial institutions determine the value of their assets. This is most often referred to as mark-to-market (m2m). There is quite a bit of speculation as to whether this will rally the markets, cause them to drop or to have little affect at all.
This is the time for me to realize the potential of my 1250 shares of FAZ to drop drastically in price. If it does start to drop I will be selling off all my shares with the hope that I can buy FAZ at a lower price since I still believe Financials will be much lower at some time in the future at which time the price of FAZ will rise.
Some may ask why I didn't sell earlier since I the first price I bought at was 43 per share. The price didn't go straight down and all at one time like the potential of tomorrow. It even went back up to 34 after being much lower. However, Geithner announced that the goverment would be buying up toxic assets and that brought the price down. By the time I would have been able to sell the price had already taken a hit since this was announced after the markets had closed.
Now I may have to face the realization that due to decay, FAZ may never get above 43 if it goes down to 8 tomorrow. If I see too much movement after an announcement I will sell at a loss. But that's ok. I will take that same amount of money and reinvest at a lower price. That will give me more shares and eventually FAZ will go up again. When it does I hope to recoup most, if not all, of my losses.
This is the time for me to realize the potential of my 1250 shares of FAZ to drop drastically in price. If it does start to drop I will be selling off all my shares with the hope that I can buy FAZ at a lower price since I still believe Financials will be much lower at some time in the future at which time the price of FAZ will rise.
Some may ask why I didn't sell earlier since I the first price I bought at was 43 per share. The price didn't go straight down and all at one time like the potential of tomorrow. It even went back up to 34 after being much lower. However, Geithner announced that the goverment would be buying up toxic assets and that brought the price down. By the time I would have been able to sell the price had already taken a hit since this was announced after the markets had closed.
Now I may have to face the realization that due to decay, FAZ may never get above 43 if it goes down to 8 tomorrow. If I see too much movement after an announcement I will sell at a loss. But that's ok. I will take that same amount of money and reinvest at a lower price. That will give me more shares and eventually FAZ will go up again. When it does I hope to recoup most, if not all, of my losses.
I see it went up and down and up and down.
Take a look at a post I read on a Yahoo! board. If FAZ goes down on Thursday it might be time to switch to SRS. I can't verify the accuracy of this statement. It's just for further research:
"Banks have been postponing foreclosure to avoid more pain. Once M2m is set in stone they can begin hammering on the defaults without damage to the REVISED balance sheet. M2M will allow the postponed destruction of CRE to take off over night."
I may regret this decision, but just picked up another 300 shares of FAZ at $17.50. I believe that M2M decision has knocked this down about as far as it will go, at least I hope. Too much grim news on the horizon and once people have had an opportunity to digest this FASB decision, they will realize that it has done nothing but cultivate more uncertainty/mistrust in financials and the chefs that they will be braising their books.
M2M was a big dud! Financials jumped up 3% after the M2M announcement but held ground troughout most of the day and actually went down a little. Most financial institutions were claiming that M2M was not significantly different.
Unemployment numbers due out at 5:30am Pacific so I'll be getting up early again tomorrow morning.
~~:<<
I'm about ready to start investing in FAZ again due to the perception I have that the rally is getting tired, especially Financials.
I'm seriously considering bailing on FAZ for the time being and that includes taking the loss that I've incurred up to this point. I've stated a couple times already in this thread why I haven't done this already. That reason is because I never know when it will go up again.
However, with multiple ETF's they can degrade so that they never recover to the price which one paid for them. I have to have some safeguard in place to take the loss and attempt to make it back again.
I do believe FAZ will recover and quite likely double in price again or even more. However, it could to to single-digits if there is some market force driving Financials higher. I'll continue to monitor it throughout the week to see.
However, with multiple ETF's they can degrade so that they never recover to the price which one paid for them. I have to have some safeguard in place to take the loss and attempt to make it back again.
I do believe FAZ will recover and quite likely double in price again or even more. However, it could to to single-digits if there is some market force driving Financials higher. I'll continue to monitor it throughout the week to see.
The last couple days FAZ has gone up to 18.05. I really believe Financials are still in for a big drop. I wish it weren't so. I would rather have our economy recover but I have taken this position based upon what I believe will happen.
Tomorrow (Wednesday) we have another potential big down day for FAZ. The uptick rule may be re-implemented. This rule mandates that a stock price must go up a tick before that stock can be shorted. This is to prevent a stock's price from being shorted several consecutive times causing the price to plummet. It was done away with on July 6, 2007.
This should not affect FAZ directly since FAZ doesn't rely upon shorting for its price. However, there may be a public perception that the uptick rule could be bad for so-called "short" stocks like FAZ that people will buy financial long stocks.
I'll be watching the market carefully on Wednesday and may sell all of my FAZ stock if it starts to lose price dramatically.
Tomorrow (Wednesday) we have another potential big down day for FAZ. The uptick rule may be re-implemented. This rule mandates that a stock price must go up a tick before that stock can be shorted. This is to prevent a stock's price from being shorted several consecutive times causing the price to plummet. It was done away with on July 6, 2007.
This should not affect FAZ directly since FAZ doesn't rely upon shorting for its price. However, there may be a public perception that the uptick rule could be bad for so-called "short" stocks like FAZ that people will buy financial long stocks.
I'll be watching the market carefully on Wednesday and may sell all of my FAZ stock if it starts to lose price dramatically.
Well the uptick rule was much ado about nothing. Nothing was really resolved today and the market reflected that as it closed slightly up after falling off a cliff.
Futures up 77 points as I post this but as we know from this morning things could be different Thursday morning. Easter/Passover week usually has low volume toward the end of the week and that leaves it open to market manipulation. I may be thinking about selling my most recent 750 shares of FAZ that I bought at 16.70. It closed at 17.84 today but I expect it to be lower than that by market open tomorrow.
Futures up 77 points as I post this but as we know from this morning things could be different Thursday morning. Easter/Passover week usually has low volume toward the end of the week and that leaves it open to market manipulation. I may be thinking about selling my most recent 750 shares of FAZ that I bought at 16.70. It closed at 17.84 today but I expect it to be lower than that by market open tomorrow.
I cut and ran today.
Lost a wholbunchalot of $$$ on SKF and SRS. But I saved several thou by gettin' out when I did.
Damn Wells Fargo. Just adding insult to injury. Wachovia, who they bought several months ago, is one of my biggest accounts. Wouldn't be surprised if they shake me out once they get their claws into things.
Damn.
Lost a wholbunchalot of $$$ on SKF and SRS. But I saved several thou by gettin' out when I did.
Damn Wells Fargo. Just adding insult to injury. Wachovia, who they bought several months ago, is one of my biggest accounts. Wouldn't be surprised if they shake me out once they get their claws into things.
Damn.
