Posted on 11 June 2009 by BobL
Man, it feels like oil has run to about where it should. Why isn’t there a fight to the downside? Too much money to be made on the upside? Are we going to see $140 again? I get the feel, a short of oil while it is in this $72 / barrel range could yield about 10% in a few weeks. However, my recent experience is making me a bit gun shy when it comes to fighting the momentum of the market, or a name. I dislike what high oil will do to the economy. Well, at least the folks in Dubai will have more cash to build more continents.
The world of Dubai
Posted on 10 June 2009 by BobL
When I was looking to get deeper into the banking sector a couple of months back, but didn’t want to take on all of the risk that came with the individual names, I bought an ETF as a proxy for the sector. The ETF is XLF.
In my opinion, this is the best way to buy the banking sector with minimal risk. Banks could still go bust. The “too big to fail” mantra may begin falling on deaf ears if new capital is needed and unavailable in the open market. Buying individual names such as Citi or Bank of America could be dicey. The XLF tracks the good and the bad and you will profit as the sector moves up.
The XLF is up 73% in the past three months.
Posted on 15 April 2009 by BobL
Perhaps not a bargain, but Celgene, is a very attractive acquisition target at these levels ($38.70 at the time of this post). I have owned CELG for a few years now (bought in the low to mid teens). It has been a great performer. I would recommend a buy of Celgene for a number of reasons.
- Major consolidation in the drug / biotech / pharma sector. Many companies have blockbuster drugs that are losing their patent protection in the next couple of years. Celgene will give them a company whose cash flow can cover the cost of the acquisition and stock their pipeline.
- Sitting on more than $2.2 billion in cash (some claim that it stands at closer to $3 billion)
- Low to no debt ($26 million)
- Nearly recession proof market/business
- Solid pipeline of new drugs and/or new applications for existing drugs
- Expansion of existing portfolio into new markets / countries
Let’s not forget the major negative
- The Obama Administration
If health care reform takes hold it could mean big changes in the pharma sector and the prices that they are able to extract for their treatments/products. However, Obama and his administration have much more to worry about right now.
I will be looking to add to my position in CELG. However, I don’t know that I see this as a trading vehicle. It could turn into one with a juicy offer, but should that fail to come, I would be a buyer at these levels. Long term options (LEAPS) might be a good way to play this right now.