my stock idea for those that might be interested

[droski]

bank of america buys merril for .8595 a share. meaning at todays close merrill is worth around $22.81 a share assuming the deal gets completed. Merrill is currently at $17 a share. Meaning the arbitrage spread is almost $6 or 34%. The deal should close in early 09 and in my opinion it will definitely go thru. Also people are freaking out and the VIX is over 30. Both signs of a bottom. Tomorrow may be a big down day, but merrill is a big buy here. You make money as long as a) the merger goes thru and b) BOA doesn't drop by 30%. The arbs are worried because of the instability in the markets and the theory there might be a out on the boa merrill deal. I don't see BOA not knowing what they are getting into.

My $.02 and remember what they say about free advice.

 

[myrobbins7]

Vix is crazy right now. I look for folks to sell into ANY upside Tuesday, futures already suck (AIG just downgraded). I agree Merrill is a good buy here, by all means.

 

[volinbham]

What's the time horizon on holding Merrill?

 

[droski]

i'd hold it at least till early 09 when the deal closes. I think BOA is a buy here too, but obviously buying merrill makes more sense because of the spread.

 

[volinbham]

I assume when the deal closes, the MER will become BoA stock?

 

[TennNC]

What's the political angle here?

 

[volinbham]

What's the political angle here?

Trying to get my capital gains in before the Count Obamana sucks away all my earnings...

 

[droski]

yup it's an all stock deal.

 

[TennNC]

Trying to get my capital gains in before the Count Obamana sucks away all my earnings...

Ahhh. I see.

Just wondering if we should create a "hot stock picks" forum.

 

[droski]

What's the political angle here?

i wasn't sure what forum woudl be appropriate. it seemed like financial stuff got discussed here a lot more.

 

[myrobbins7]

Trying to get my capital gains in before the Count Obamana sucks away all my earnings...

:birgits_giggle:

 

[myrobbins7]

Droski, what's your take on GS @ $125.50?

 

[TennNC]

i wasn't sure what forum woudl be appropriate. it seemed like financial stuff got discussed here a lot more.

I was just butting in and being a weenie. I don't have a clue about this stuff. Pick away.

 

[volinbham]

I was just butting in and being a weenie. I don't have a clue about this stuff. Pick away.

So you are out of touch? Who's typing your responses for you?

 

[TennNC]

So you are out of touch? Who's typing your responses for you?

I'm out of touch with day trading. Which reminds me, I actually have a job to get back to.

PS - I'm still doing my own typing, though it's a serious grind.

 

[droski]

Droski, what's your take on GS @ $125.50?

i think the financials are buy here. a bottom is close. probably a matter of weeks, if not days. i'd buy the xlf

 

[BigPapaVol]

i think the financials are buy here. a bottom is close. probably a matter of weeks, if not days. i'd buy the xlf

Greenspan's commentary on residential and real estate valuation should spur some move from the fed to drop the heat on lenders about property valuations. that should give them a base from which to start lending again.

He might have subtly signaled the bottom.

 

[DC Vol]

I made a similar move on HP when it bought out Compaq. Can work very well if the market doesn't completely collapse.

 

[BigPapaVol]

I made a similar move on HP when it bought out Compaq. Can work very well if the market doesn't completely collapse.

BofA collapses and these trades will be the least of our worries.

Bottom line is that the core businesses of all these companies are being massively undervalued based purely upon the overreaction to their real estate portfolios.

 

[WA_Vol]

Sidebar, I think GM might be an undervalued stock. I dont think the govt will allow them to go bankrupt (see Chrysler 1980's). They have no where to go but up now.

 

[BigPapaVol]

Sidebar, I think GM might be an undervalued stock. I dont think the govt will allow them to go bankrupt (see Chrysler 1980's). They have no where to go but up now.

the gov't can and will let GM take the hammer.

 

[volinbham]

Good call on MER Droski - at least for today. Hope it holds.

 

[VolsNSkinsFan]

Sidebar, I think GM might be an undervalued stock. I dont think the govt will allow them to go bankrupt (see Chrysler 1980's). They have no where to go but up now.

Stay the F away from GM...

BAC is a straight up buy along with GE and GOOG.

 

[droski]

Good call on MER Droski - at least for today. Hope it holds.

yup looking bright so far, we shall see.

I wouldn't touch the autos. They aren't nearly out of the woods yet. The govt may not let them go bancrupt, but their common could get diluted like crazy. If you want to play those buy the ford motor credit or gmac bonds.

 

[BigPapaVol]

The Mer BofA deal is gonna be a screaming grand slam. Using cheap ass stock to buy another cheap ass stock is the way to be. Both core operations are homeruns.

As I said earlier, if BofA gets creamed in the end, the shares you bought just won't matter any more.