ValuePlays

If you say something is or is not going to happen, you’d better be right…

AIG’s (AIG) Martin Sullivan became the latest “we will not need to raise more capital” casualty tonight being replaced by former Citigroup banker Robert Willumstad, who was already AIG chairman, effective immediately..

Sullivan joins Merrill Lynch’s (MER) Stanley O’Neal, Citigroup’s (C) Charles Prince, Bear Stearns’ (BSC) James Cayne, Ambac’s (ABK) Robert Genader, MBIA’s (MBI) Gary Dunton, Wachovia’s (WB) Ken Thompson and Lehman’s (LEH) Erin Callan.

We’ve been having this discussion here for pretty regularly since April and for some reason, the assurances are still being made. Up until just days before she was demoted, Lehman’s Callan was still out making assurances about the company I really think only she believed.

We aren’t talking about missing EPS targets by by a few percentages, we are talking about saying your capital position is sufficient and then going out and needing to raise the equivalent of 30% of your market cap only weeks later, in the case of Lehman. It just cannot happen.

Why are the shorts winning? Because the actions of the above crew give the inclination that even they do not know how bad the situation of their company is. If those people with the most intimate knowledge cannot get a handle on it, then the people telling us it is really bad must be right. Management keeps telling us things are under control when it clearly isn’t. That doubt and the fear it causes on the part of investors will inevitably lead to an negative overreaction in their outlook.

If the bosses tell us it is going to be “x” bad the shorts will have a quick victory but when it turn out to only be “X” bad, that is it, the party for them is over. They will exit the shorts and the longs can start buying in. The longs will not buy in now because they do not believe the bosses and the shorts can keep piling it on.

One final thing. Please stop whining about “short sellers”. It is annoying and useless. How about just getting your act together and get a handle on what is going on around you…… novel idea I know but it would actually work.

Disclosure (“none” means no position):Long C,WB, None

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If you say something is or is not going to happen, you’d better be right…

AIG’s (AIG) Martin Sullivan became the latest “we will not need to raise more capital” casualty tonight being replaced by former Citigroup banker Robert Willumstad, who was already AIG chairman, effective immediately..

Sullivan joins Merrill Lynch’s (MER) Stanley O’Neal, Citigroup’s (C) Charles Prince, Bear Stearns’ (BSC) James Cayne, Ambac’s (ABK) Robert Genader, MBIA’s (MBI) Gary Dunton, Wachovia’s (WB) Ken Thompson and Lehman’s (LEH) Erin Callan.

We’ve been having this discussion here for pretty regularly since April and for some reason, the assurances are still being made. Up until just days before she was demoted, Lehman’s Callan was still out making assurances about the company I really think only she believed.

We aren’t talking about missing EPS targets by by a few percentages, we are talking about saying your capital position is sufficient and then going out and needing to raise the equivalent of 30% of your market cap only weeks later, in the case of Lehman. It just cannot happen.

Why are the shorts winning? Because the actions of the above crew give the inclination that even they do not know how bad the situation of their company is. If those people with the most intimate knowledge cannot get a handle on it, then the people telling us it is really bad must be right. Management keeps telling us things are under control when it clearly isn’t. That doubt and the fear it causes on the part of investors will inevitably lead to an negative overreaction in their outlook.

If the bosses tell us it is going to be “x” bad the shorts will have a quick victory but when it turn out to only be “X” bad, that is it, the party for them is over. They will exit the shorts and the longs can start buying in. The longs will not buy in now because they do not believe the bosses and the shorts can keep piling it on.

One final thing. Please stop whining about “short sellers”. It is annoying and useless. How about just getting your act together and get a handle on what is going on around you…… novel idea I know but it would actually work.

Disclosure (“none” means no position):Long C,WB, None

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UPGRADES
Invitrogen (IVGN)- First Analysis Sec Equal-Weight » Overweight
Hercules Offshore (HERO)- CapitalOne southcoast Neutral » Add
Apollo Group (APOL)- First Analysis Sec Equal-Weight » Overweight
Yahoo! (YHOO)- Stifel Nicolaus Hold » Buy
Continental Air (CAL)- Soleil Hold » Buy
Partner Comms (PTNR)- UBS Neutral » Buy
Yahoo! (YHOO)- Soleil Sell » Hold
Petro-Canada (PCZ)- Banc of America Sec Neutral » Buy
Old Dominion (ODFL)- Robert W. Baird Neutral » Outperform
Con-way (CNW)- Robert W. Baird Neutral » Outperform
Campbell Soup (CPB)- Lehman Brothers Equal-Weight » Overweight
MeadWestvaco (MWV)- Citigroup Hold » Buy

DOWNGRADES
PDL BioPharma (PDLI)- Credit Suisse Outperform » Neutral
McClatchy (MNI)- Wachovia Mkt Perform » Underperform
Jo-Ann Stores (JAS)- Soleil Buy » Hold
Fifth Third (FITB)- BMO Capital Markets Outperform » Market Perform
Yahoo! (YHOO)- Needham Buy » Hold
NASDAQ (NDAQ)- Credit Suisse Outperform » Neutral
Benihana (BNHN)- KeyBanc Capital Mkts Buy » Hold
Finisar (FNSR)- Piper Jaffray Buy » Neutral
Brasil Telecom Part (BRP)- JP Morgan Neutral » Underweight
Anheuser-Busch (BUD)- UBS Buy » Neutral
Brasil Telecom (BTM)- JP Morgan Neutral » Underweight
Accuray (ARAY)- UBS Neutral » Sell
Applied Bio (ABI)- UBS Buy » Neutral
WD-40 Company (WDFC)- JP Morgan Neutral » Underweight
Universal Health (UHS)- Wachovia Outperform » Mkt Perform

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UPGRADES
Invitrogen (IVGN)- First Analysis Sec Equal-Weight » Overweight
Hercules Offshore (HERO)- CapitalOne southcoast Neutral » Add
Apollo Group (APOL)- First Analysis Sec Equal-Weight » Overweight
Yahoo! (YHOO)- Stifel Nicolaus Hold » Buy
Continental Air (CAL)- Soleil Hold » Buy
Partner Comms (PTNR)- UBS Neutral » Buy
Yahoo! (YHOO)- Soleil Sell » Hold
Petro-Canada (PCZ)- Banc of America Sec Neutral » Buy
Old Dominion (ODFL)- Robert W. Baird Neutral » Outperform
Con-way (CNW)- Robert W. Baird Neutral » Outperform
Campbell Soup (CPB)- Lehman Brothers Equal-Weight » Overweight
MeadWestvaco (MWV)- Citigroup Hold » Buy

DOWNGRADES
PDL BioPharma (PDLI)- Credit Suisse Outperform » Neutral
McClatchy (MNI)- Wachovia Mkt Perform » Underperform
Jo-Ann Stores (JAS)- Soleil Buy » Hold
Fifth Third (FITB)- BMO Capital Markets Outperform » Market Perform
Yahoo! (YHOO)- Needham Buy » Hold
NASDAQ (NDAQ)- Credit Suisse Outperform » Neutral
Benihana (BNHN)- KeyBanc Capital Mkts Buy » Hold
Finisar (FNSR)- Piper Jaffray Buy » Neutral
Brasil Telecom Part (BRP)- JP Morgan Neutral » Underweight
Anheuser-Busch (BUD)- UBS Buy » Neutral
Brasil Telecom (BTM)- JP Morgan Neutral » Underweight
Accuray (ARAY)- UBS Neutral » Sell
Applied Bio (ABI)- UBS Buy » Neutral
WD-40 Company (WDFC)- JP Morgan Neutral » Underweight
Universal Health (UHS)- Wachovia Outperform » Mkt Perform

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If you are planning to watch a movie this weekend, read this post first.

Perhaps the “college analyst” can have you watching movies just a little differently.

Disclosure (“none” means no position):none

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Icahn, Google, Tilson, Child Porn

– SEC blogger

– Where are all the top employees going?

– Simple rules

– OK, why wasn’t this done 10 years ago? Are we supposed to congratulate them?

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Icahn, Google, Tilson, Child Porn

– SEC blogger

– Where are all the top employees going?

– Simple rules

– OK, why wasn’t this done 10 years ago? Are we supposed to congratulate them?

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(LEH) Lehman Brothers Discussion on Bloomberg Radio

 

Today at 9:10 am I will be discussing (LEH) Lehman Brothers and the ibanks, (MER), (GS), (MS) specifically. Where the industry now and what is next for the ibanks? I feel the opportunity for taking the high ground of mark to market and setting aside reserves in case the market deteriorates further is long gone. My call for this action along with full disclosure dates back to the fall on both Bloomberg radio and TV.

 

Tune in for the perspective.

 

Disclosure: Mr. Corn is CEO of Clear Asset Management Inc. and Clear Indexes LLC. He does not directly own any of the securities mentioned. Clear Indexes publishes the Clear Global Exchanges, Brokers and Asset Managers Index which is tracked by the ETF (EXB). Mr. Corn owns shares of (EXB).

Thank you,

Todd Sullivan

Sent from my BlackBerry® wireless device

Please let your readers know about the special event at Value Investing News tomorrow at 10:00 AM. We will have a live Q&A session with Thomas Au, author of A Modern Approach to Graham & Dodd Investing

in the VIN Forum. See

http://www.valueinvestingnews.com/blog/value-investing-news/interview-tom-au-friday-10-00-am-est4550

Please post a question for Tom at the end of the interview. Its a great opportunity to pick his brain.

Thank you,

Todd Sullivan

Sent from my BlackBerry® wireless device

Kuwait, More Kuwait, Ethanol, Ethanol

– Buy a piece of the folks with the oil $$

– Banks are a bargain is you have patience

– Cellulose ethanol, major companies looking at it

– Not really the reason for high food prices

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