ValuePlays

After heaping piles of BS on shareholders for most of the year, John Thain wants to kick them in the chops one more time.

Here is the news:
Merrill Lynch (MER) CEO John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the firm’s compensation committee is resisting his request. The committee and full board are scheduled to meet later Monday to hear Thain’s formal bonus recommendations for himself and other senior executives, the report said. It isn’t known what Thain will recommend, but the compensation committee is leaning toward denying the executives bonuses for this year, the report said. Merrill Lynch has been acquired by Bank of America (BAC) .

Remember when in April and then again in May Thain said Merrill was just fine and would not need more capital?

Then, in order to not raise capital, Thain instead sold assets and said he meant “through equity offerings” in his previous statements.

If that was not bad enough we get news that the assets they sold were essentially sold by them through non-recourse financing. Thain essentially paid folks to take the junk off their books.

Finally he gave up, threw in the towel and sold out to Bank of America…

I guess he is right, sounds like it is worth at least $10 million…Imagine what he would have got if he actually did a decent job?

Disclosure (“none” means no position):none
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If everyone calls a bottom, does it matter?

Here are some recent calls:

Reuters had this article that carried the following:

“Bill Miller said that all long-term investors believe that stocks today are cheap, but credit markets must regain health before equity markets can rally. It “looks as if the bottom has been made” in U.S. stocks, said Miller, who runs Legg Mason’s $7.6 billion Value Trust fund.”

“”We are in a bottoming process in the markets, but that doesn’t mean we are now entering a bull-market phase,” said Brian Gendreau, an investment strategist in New York for ING Investment Management Americas. “Things take time to work itself out.””

“”All year, people have been so pessimistic that any kind of bad news and the market just goes down,” said Chris Orndorff, who helps oversee $50 billion at Payden & Rygel Investment Management in Los Angeles. “But when the market shrugs off bad news just as it did, investors are signaling that the worst is behind us.””

On CNBC Monday morning Blackrock’s (BLK) Bob Doll called what is happening a “bottoming process”

Pick any other video on CNBC talking about stocks and you’ll here the same thing recently.

Here is a Google (GOOG) search for “bottoming process” so you can find the other 26,000 plus articles on it.

So, what to think? Nothing actually. If you watch the clips or read the quotes, this is the essential translation. “The market should go up, but it might fall more from here too, but the long term trend is up”.

Basically they are not telling us anything. Do not start buying stocks in this market because of these calls. Buy individual or sell issues based on their specific pro’s or con’s and your time frame.

You could argue that at any level the market is in the act of a “bottoming process”. If the long term trend is positive, then by default all levels before higher ones must be a “bottoming process”, right?

“Bottoming Process” means nothing…..

Disclosure (“none” means no position):None
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Simoleon,

– Here is a neat linksite that focuses on value investing

–

Disclosure (“none” means no position):
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It just should not be this cheap….thinking about the (DXO). A followup to last weeks posts on oil. Both these interviews to follow are with Saudi Oil Minister Ali Naimi .

From 60 Minutes Tonight.

Watch CBS Videos Online

A CNBC Piece from 2005, Melissa Francis interviews Ali Naimi

No matter how many holes I try to punch in it, I just don’t see a scenario where oil is not much higher at the same time next year. If it isn’t, then the global slowdown has become far worse than anyone imagined and the price of crude is the least of our worries, unless….even despite a global severe recession it is still higher.

I also think the dollar is in for a major fall. Starting to look into a long oil, short dollar trade..

Disclosure (“none” means no position):Soon to be long oil..
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Obama’s speech writer gets caught with his hand..well..on the cookie jar?

How is this “change” from that administration? LOL

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Could this be a reason for the market to rally more Monday?

Mr. Fleckenstein Writes: (Sub required)

After considerable thought and deliberation I have decided to make a major change in my life: I am going to close my hedge fund. I have several reasons for no longer wishing to run a short-only fund as I have for the past 12 years. First, my original reason for starting the fund was because of developments I saw occurring in the late 1990s that I wanted no part of. I felt that Greenspan was fomenting an environment that would lead to disaster, as consultants, financial advisors, and the public at large were losing all respect for risk. Of course, the reckless behavior carried far higher and lasted much, much longer than I ever imagined it could. However, the recent carnage in the stock market, real estate market and the financial system (as well as the job losses) has washed away those excesses to a large degree and it has violently demonstrated the risks associated with investing.

A future goal of mine, when I set up the fund in 1996 — as I attempted to step aside from the madness — was to return to the long side of the business at some point in time when I felt that investors had become more rational regarding risk and stocks offered a more favorable risk/reward proposition. I considered this option very briefly in 2002 after the stock bubble imploded, but the cleansing process was postponed due to the burgeoning real-estate bubble.

Second, though I think that the stock market still has unfinished business on the downside, I believe that 2009 is the year to prepare for a return to managing money in a more balanced fashion, with longs (and some shorts), as there are currently plenty of interesting ideas that appear to offer a margin of safety. On the flipside, compelling opportunities on the short side are not as abundant as they were just a few months ago (though there still are plenty.)

Disclosure (“none” means no position):none
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with Ford (F), GM (GM) and Chrysler on the hill begging for $39 billion, Wilbur most likely has the best solution $$

Disclosure (“none” means no position):None
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Here is a followup to yesterday’s post…$$

So, after that post yesterday, I got a bunch of options for investing in oil. Check out this chart.

I tracked the (USO), (DBO), (OIL), and (DXO) ETF’s that follow crude. The (DXO) is a leveraged fund in that it results will be outsized to the direction, plus or minus.

The takeaway is that on a percentage basis, they all, with the exception of the (DXO) track each other identically no greater than the current 6.5% differential.

The (DXO) had a near 100% outperformance of the other three as oil rose into July and the downside to it has been roughly 50% worse on the downside to the current prices.

So, what to do. If you think we are in for a very swift spike in oil in the near future, I am leaning towards to (DXO). The “on the other hand” statement is that should oil continue to drift lower, your losses look to be 50% greater than on average than you will see with the others.

When to buy? If oil drops below $40 a barrel, it is going to be hard not to buy. Consider this, rumors are out there Israel is planning a strike against Iran nuclear facilities. Want to see an oil super spike?

The thing with oil is that is only a 50/50 supply-demand equation. The other half is the nut jobs that have most of it. For the past 6-12 months they have been very quiet…..how long has that ever lasted?

Disclosure (“none” means no position):None ….yet
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This is really interesting stuff from Sears (SHLD) annual meeting..

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Disclosure (“none” means no position):Long SHLD
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Deflation, Bailout 101, Naked Shorts, Credit cards

– If inflation is a tax, then don’t we want some deflation as a tax cut?

– Everything you wanted to know about the bailout but were afraid to ask

– The trades should settle

– Credit cards the next shoe to drop

Disclosure (“none” means no position):
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