Archive for the ‘Marc Sperling’ Category
>by Marc Sperling
With the market making another push to new highs, now looks like a great time to focus on one of the lagging sectors: the solar stocks. In this market, buying new highs has not been a fruitful strategy. As a result, I prefer to search for entries that allow for a better risk/reward setup. On Friday we saw a powerful move from YGE and CSIQ, while we also saw FSLR move up off of its recent low. With the continuation of the move into this morning, we must exercise patience and allow for the sector to digest its recent action.
I particularly like FSLR, as its post-earnings selloff has not lead to a lower low in the stock’s price. This would mark a third successive higher low in FSLR and an opportunity for a good risk/reward entry. With a move through $130, FSLR can fill its gap up to the $150 area.
By SUSAN PULLIAM and TOM LAURICELLA
American International Group Inc., a symbol of the financial crisis, has morphed into a playground for speculators.
At a traders meeting before the market opened on Monday, Scott Redler, chief strategist at hedge fund T3 Capital Management, noted that AIG’s stock hadn’t moved much for days and was ripe for a breakout. Whether it headed up or down, he said, the traders should be ready.
AIG shares, trading below $40 at the opening bell, climbed within 15 minutes to $41, then above $42. “This thing’s going to $45,” T3 President Marc Sperling said, watching his six computer monitors. “It’s on every trader’s radar screen across the country.”
AIG shares rose 21% for the day, and T3’s traders did “great,” said Mr. Redler. Since Aug. 5, the shares — deemed highly risky by most analysts — have more than tripled. “The stock paid the traders’ bills all summer,” Mr. Redler said.
A year after the government sought to avert a market meltdown by rescuing some of the country’s biggest financial firms, speculative traders are feasting on these companies’ remains. Shares of two government wards, mortgage giants Fannie Mae and Freddie Mac, bounced between about 60 cents and $2 in August. Shares of Lehman Brothers, left to fail by the government and currently in bankruptcy proceedings, rose from five cents to 20 cents in recent weeks.
AIG, arguably, has been the biggest casino of all. In the past seven weeks, its common shares have careened between $13 and $55, surging past $54 on Tuesday before closing at $45.80.
The extraordinary price action is a dramatic display of an unintended consequence of the U.S. bailout of AIG. Last Sept. 16, the government propped up the faltering company by trading $85 billion in loans for an 80% stake in AIG in the form of preferred shares, which don’t trade on the market. It allowed the other 20% of the company’s equity — its millions of common shares — to continue to trade publicly.
Some analysts declared the deeply indebted company’s common shares basically dead money. Many buy-and-hold investors bailed out. That has left AIG’s common shares — $6.2 billion worth, as of Tuesday — trading most actively between short-term traders, who buy and sell based on market momentum and bet against each other in risky options trades. Often they use borrowed funds, amplifying their gains and losses.
Dominating the recent move in AIG stock were professional day traders like those at T3.