CFC Down And Out?

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Aug 15, 2007 4:20 pm

Countrywide Financial is trading around 21--way down from 45 in January.


The September 5--as in one, two, three, four, five--puts are bid .20 asked .25.


Look for clues to what the big boys and girls think is going to happen--apparently some of them think that CFC will go under in the next couple of weeks.


How long do you think it will take to hit 12,000--before the end of August?


Will they ring a bell when the market bottoms?


Is it possible the Dow could go under 10,000?


What are you telling your clients?  You are talking to them, right?


Are you telling them, "There is nothing to worry about, the market will come back.  I've never seen it drop very far in my entire career."


How do you avoid looking at your shoes when you say, "I'm a finanical advisor" when you have absolutely no clue to what to do or what is going to happen next.

Aug 15, 2007 4:23 pm

I moved all my clients to laddered cd's

Aug 15, 2007 4:25 pm

How do you avoid looking at your shoes when you say, "I'm a finanical advisor" when you have absolutely no clue to what to do or what is going to happen next.


I tell all of my clients that I don't have a clue as to what will happen next.  I tell them if I did, I wouldn't be talking to them, I'd be on my yacht. 


Clients aren't looking for me to get X rate of return or beat some index.  They are looking for help to maximize their chance of achieving their financial goals while not taking more risk than their tolerance allows.


If I started my relationship with a client by telling them about a great investment, then we'd be focusing on returns, and down markets would be a much bigger issue.  Many of my clients become my clients before we talk specific investments.

Aug 15, 2007 4:25 pm

Enlighten us, DAtoo.  I'd like your educated opinion on this.  All kidding aside, I'd be interested in what you have to say on this.

Aug 15, 2007 4:28 pm

After moving to cd's, I traded them out and put into Countrywide Financial

Aug 15, 2007 4:29 pm

I then realllllly played on their fear and moved them to EIA's...with a 20% bonus and an 8% payoff to me. 

Aug 15, 2007 4:48 pm

Enlighten us, DAtoo.  I'd like your educated opinion on this.  All kidding aside, I'd be interested in what you have to say on this.


I am not in the business of offering advice, but if I were I'd be just as confused as you are. I've been around long enough to know that it's really not much more than a lucky guess.


What I would not be doing is smiling like Alfred E Neuman while muttering, "What me worry?"


My clients would be expecting me to make decisions.  They do not pay their advisors to tell them to hold on--they can hold on for no fee.


Clients will NEVER give you credit for your successes and will ALWAYS blame you for your failures.


As this plays out your clients are going to become more and more aware of what's happening--and among the things they will hear is how Sentinel refused to allow withdrawals from the cash management account.  I dare anybody to put a happy face on that.


There is no reason to think the market will rebound by the end of the month--your August statements are going to stress out your clients and they're going to blame you.


Is that fair?  Sure it is--you were more than happy to strut your stuff when it was going up.


My attitude towards this forum was forged in the first few days.  I was supremely turned off by the arrogance fueled by raw stupidity of so many. The horrid spelling, the terrible sentence construction and the like.  Next came the boasting about not being educated.  Then there was the "I got a 90 on Series 7 and only studied for a few mintues at a coffee shop on the way to the testing center" crap.


Soon--perhaps at Dow 9,500--it will be time to earn that money you've been laughing about stealing from your clients.

Aug 15, 2007 4:55 pm
Ferris Bueller:
DAtoo:

Soon--perhaps at Dow 9,500--it will be time to earn that money


Dow 9500 can't get here soon enough for me.  Unfortunately for me and for my clients, like everything else you say, you will be wrong.  Oh well, cash is king.



So, what are you doing with all that cash?  Think you can double it into $10,000 by the end of the year?

Aug 15, 2007 5:17 pm

So you're predicting a 26% drop in the Dow?  You think the credit crunch is going to prove to be worse than the tech bubble bursting (which is what killed the S&P), 9/11, Enron, WorldCom, and the start of the Iraq war? 


The P/E on the S&P is much closer to the 25 and 50 year norm than it was then.  Earnings for most companies have been pretty good.  There were obviously some suprises, just like every earnings season. 


You must really think we tell our clients that the market has been going up for so long now that it can't stop.  I'd guess that that majority of us have been saying just the opposite.  I know the conversations I've been having include some discussion of the fact that we are well overdue for a decline in the market.  Don't know when, or how much, but it's going to happen.  So either A: start saving some cash so we can invest some more when it happens or B: let's take some steps now to capture what you've gained the last 5 years and make sure you don't let the market steal your profits. 


Most clients won't even understand what it means when they hear Sentinel refused the withdrawals.  They just look at their statement and shrug, wondering when it's going to stop and if they should call me or not.  Hopefully I can beat most of them to the punch.   I'll then remind them that times like this are the primary reason we have a well diversified portfolio.  It's not immune to the market, just not as volitile.  


Like Ferris I welcome a nice pullback.  It gets people talking and wondering about their advisor.  I've had more meetings this month with big prospects than I've had in a while.  I'm looking forward to more.

Aug 15, 2007 5:29 pm

Spiffy, well diversified and ED Jones can't coexist...Sorry..

Aug 15, 2007 5:34 pm
Ferris Bueller:
DAtoo:
Ferris Bueller:
DAtoo:

Soon--perhaps at Dow 9,500--it will be time to earn that money


Dow 9500 can't get here soon enough for me.  Unfortunately for me and for my clients, like everything else you say, you will be wrong.  Oh well, cash is king.



So, what are you doing with all that cash?  Think you can double it into $10,000 by the end of the year?



This from the piker that made $100 on his dumb option strategy.  What a waste of time.



If you knew how to read you'd know that I said that I covered 500 shares thinking it would bounce--when it didn't I put the leg down again.


Unlike most who try to lift a leg I ended up clearing commissions plus $100 it was not my strategy.


Why are you such an angry little boy?

Aug 15, 2007 5:38 pm

DAtoo, if you hate this board so much, why have you posted 200+ times?  You remind me of the geeky guy in high school who thought that he was cooler than the cool kids, but he would have given his left nut to hang out with them.

Aug 15, 2007 5:53 pm

I like DAtoo critical points of view. Sometimes we have to, or at least I do, reevaluate my knowledge and skill base. Am I an advisor or am I a broker?  An advisor should be guiding his clients through this rough patch, a broker, well, "if you have the money, you should buy some today". I'm not sure if I'm able to guide my clients through this time.  Where do I go with money?  Do I suggest moving NAV to a short term bond fund, until I feel confident to suggest moving back, or would this be trying to time the market. If I move them and the market moves back up 500 points...then what.  Tough, tough calls right now.  I don't cringe when, Put, devil or DAtoo says I haven't seen a down market in length, because guess what, I HAVEN'T. 

Aug 15, 2007 7:38 pm

DAtoo, I'm less than 2 years into the biz and I know you're an idiot.  Thank god you don't have clients; at least at this point the dangerous mindset that you represent is isolated to your own portfolio.


I'd stack my credentials up against yours any day.  Maybe your generation of brokers was made up of college drop-outs.  That isn't the case anymore, bud. 


Long-term asset allocation strategies work, and the only reason I have moved even 5% from my clients' equity portion to bonds is because my firm has been calling for this for months and tactical strategies help get accounts in (and stay in) the door.


Leave this forum and go read Reuters so that you can find your next losing day trade.  Thanks for the liquidity and the 1 cent b/a spread, sheep.

Aug 15, 2007 7:40 pm

Better yet, go work for the Harvard endowment.  I'm sure that they could use a trader like you to correct their misguided adhearance to [Nobel prize-winning] modern portfolio theory... or, wait...