Why Bear Stearns And Every Other Brokerage Are Nothing More Than Scummy Peddlers
Normally I shy away from writing about all the “established” stocks out there, companies like Bear Stearns (NYSE: BSC), especially when they’re covered by the WWF of financial media—CNBC (c’mon guys have me back on, I’ve been working on my eyebrow trick!!!) but this Saturday article speculating BSC will get taken over at $15 or lower or facing bankruptcy really hits home. Not because I have stock—I’d never—or because I know a bunch of people who work there—I know just a few (sorry, my heart truly goes out to you!!)…
No, I bring this tragedy up for three reasons—1) considering the stock tanked from $90 to $30 in less than a month, a $15 takeover will kill those who “bought the dip” on Friday, aka why you should NEVER buy falling knife chart patterns, especially financial / mortgage plays, 2) no matter the final buyout price / bankruptcy, it shows how quickly these “rock solid institutions” can come crashing down, aka they are nothing more than scummy peddlers
and 3) since stockholders are the last to get paid, you gotta realize “investing in a company” is a figment of your imagination, you’re doing nothing more than getting a receipt saying you’ve spent a ton of money on something that isn’t real, aka why it’s so dangerous to “invest” and you should instead think of stocks as chips on a table in Vegas.
Like boiler rooms, maybe they did something illegal, maybe not, but that’s not why I make the comparison—no, it’s because ALL these firms Goldman Sachs, Merrill Lynch, J.T Marlin, the lot of ‘em, they’re all just peddlers. Peddling deals, stocks, bonds, whatever. Some environments are better for peddling than others, some companies are better at peddling than others, some of the crap they peddle is better than others—no matter the variables, they’re all playing the same game. Once investors and other peddlers lose faith in a peddler’s ability to do their job, that being to peddle—especially when highly leveraged, as nearly all peddlers like to do—the jig is up.
No matter how well produced their commercials are, how glossy their marketing materials well trained, experienced or brain washed their peddler employees are—none should be trusted. BSC started back in 1923. 1923 for God’s sake! And now it all comes crashing down in a few weeks.
PS I’m glad their King Peddler was caught lying on national TV (c’mon prison sentence, big prison sentence, get your prison sentence here!!)—this didn’t happen in 24 hours. They dug themselves this hole over many years. Read this damn book and you’ll see how leverage destroys. Leverage is the enemy. Marketing leverage is even worse, now that’s the true enemy.
Now this is coming from somebody who has no corporate experience whatsoever, few corporate contacts, blah blah blah, I’m just a cynical guy who’s learned—the hard way—not to trust anybody or any firm whatsoever. See my cool new video bio, straight from my similarly no BS PennyStocking DVD:
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1Tony Ellis(TIMBUCKS: $24)
March 15th, 2008 at 9:33 pm
Guess how I’m spending my Saturday night?
2Enough Wealth
March 15th, 2008 at 10:04 pm
Another lesson from this is that even sucessful investors can totally cock things up. Just look at Joseph Lewis, the second-largest shareholder of Bear Stearns. He was the world’s 369th-richest person, according to Forbes magazine’s 2007 survey (not any more), with a a fortune estimated at $US2.5 billion at that time. He accumulated a 9.4% stake last yearwhen the stock declined 47%, at an average of about $US107 apiece for his 11 million shares. Friday’s drop means the stock is now trading around 72% below his cost, meaning he’s lost around 0.85 billion dollars in less than twelve months.
It also shows the benefit of diversification - investing 47% of your net worth in one distressed stock was never a smart move. Perhaps at 71 years old he’s too old to handle his own financial affairs.
Ref: http://business.smh.com.au/bil.....-1zlv.html
3Mike
March 15th, 2008 at 10:10 pm
The Spitzer girl is cashing in, http://www.nydailynews.com/new....._200g.html
4JJ(TIMBUCKS: $72)
March 15th, 2008 at 10:34 pm
funny, I thought NV was the only state where prositution was still legal. I think Spitzer needs another term to change all that for NY. surely heff and flint would show some lobby support. as for Bear Sterns this could be the beginning. birds of a feather flock together. we’ll have to wait and see what other SOB CEO’s are in on all this. it’s not over yet…i say take them all to the cleaners.
5OrdinaryAmerican
March 15th, 2008 at 11:39 pm
Right you are! It’s just gambling.
6Hugh E. Rexson
March 16th, 2008 at 12:59 am
Tim, your site is about cutting the BS, so I will do so here and for the benefit of your readers. This may sound like gloom and doom but people need to be prepared. You won’t see this on CNBC, altough Jim Rogers nailing Lips was about as close as you’ll get.
We are probably 1/4 of the way into the single greatest financial disaster any of us will see in our lifetimes. Think about the Dow back down to 8000 type of disaster. Bear Stearn is actually bigger than just a simple cash liquidity issue with Bear Stearns (BS for short, how apropos). This is US Govt backed effort to prevent a global meltdown of the global financial system. BS is a primary dealer in US government Bonds. If BS completely went kaput, then the global financial market would lose complete confidence (and for good reason as there are $500 trillion dollars in derivates ready to meltdown) in banks that deal with US Bonds. Think about this, the govt keeps dropping the prime rates to increase liquidity, yet no one wants to take on additional risk and have been tightening their lending standards. So, the government keeps printing money and inflation goes through the roof, and the dollar declines further against most other currencies. Bond Rating agencies get propped up, so that the toxic shit on the books doesn’t have to written down further if they drop to AA status. Govt creates a 200bn bank out of thin air, when the Fed is actually negative on money it could lend out. Why? To create a 28 day float to push out reporting of all this shit to delay further immediate writedowns, which would then create compounding writedowns because of the ridiculous leverage used, and thus simply exascerbating the problem in a few months. Because the banks sure as hell ain’t lending that money back out. But get ready for another jump in the markets on Tues when the Fed drops another .50 to .75 of prime. Or maybe the markets will finally wise up to the fact that we are getting fucked by Ben? Nah, of course not. So get ready with some Ultrashort ETF ideas on the jump of the market, and you might pull in a good 12-15% in 2-3 days
I like your site, I’ve learned quite a bit on the microcrapper daytrading side, and I will cut through the BS too for long term folks. Gold is going to at least 1650, probably higher, while the dollar keeps dropping. Gold will be turbluent but that is where it is going, so you had better have a strong stomach. So the smart money long term is in gold and stable foreign currencies such as swiss francs or aussies, and probably shorting the entire market for a loooong while. PRPFX was a good rec by you, by the way.
PS: I want my free DVD’s, please check my post on that thread. Deal?
PPS: Just for laughs… http://www.break.com/index/sto.....ammed.html
7Michael
March 16th, 2008 at 2:45 am
check this video out
it’s funny as hell
http://www.youtube.com/watch?v=3YbjQSQwIcY
8Farsighted
March 16th, 2008 at 10:02 am
Ashley is just 22; she’s a girl who had some men and money problems; I really doubt she’s a typical hooker; seems like a nice girl who was a little naughty…
I bet if you did a survey of girls her age, and ask ‘em if they would do a hookup for $4k with the new york governor you would surprised to see how many would do it….
glad to see she can cash out; most likely no one she knew had any idea what she was doing…
9Reality Bites
March 16th, 2008 at 1:38 pm
sykes–NEWS ALERT– Crane crash in NYC kills and destroys lives–
Time for sykes to exploit the situation by pretending to have a facebook conversation w the crane co.
Tim e for Sykes to show once again how stupid he is ie thinking that a FAKE facebook profile is actually real all for the purpose of getting web hits. No wonder you are and will always be a LOSER!
10timsykes
March 16th, 2008 at 2:02 pm
haha nah the crane crash isn’t that interesting, kinda like a microcrap up only 20%, u gotta learn to think big!
PS Don’t hate the game, learn to play it, it’s fun and more importantly, EASY to profit off hype!
11JJ(TIMBUCKS: $72)
March 16th, 2008 at 3:31 pm
nice…i forgot to mention…Spitzer brings a whole new level the penny stocking term, pump and dump! ouch and it’s true that BS (Bear Sterns) handles trillions of $$’s for the Gov’t so of course they have their own incentive to see it through. you know times are tough when gov’t intervention is needed to keep businss honest. talk about calling the kettle black!
12Reality Bites
March 16th, 2008 at 3:49 pm
Sykes–admit you were taken and are stupid for believing (even for a second) that the FAKE profile on facebook was real. If you are man enough to admit you had been had, you may earn some respect.
13Reality Bites
March 16th, 2008 at 3:52 pm
BTW sykes, you bragging from all the “views” you got for trying to be a pseaudo tabloid is a JOKE. Check out the thread on ET where there are 18,000 views, yet it sits in chit chat. It’s obvious 17,500 of those views were you. And i’m sure you have pumped your view count here, not that it matters. You’re a failure and a fraud.
14timsykes
March 16th, 2008 at 4:15 pm
Like I’ve posted several times, it doesn’t matter if the the AA Dupre I was talking to was real or fake…just like it doesn’t matter if a company’s news is real or fake–you gotta buy into the volume/interest and sell short when that interest fades. this is why it’s a perfect example of my trading strategy
and if u think I clicked 17k times on ET, LOL, well, I can multiply all the stupid things I’ve ever said and done times 1,000 and it still wouldn’t even come close to .000000001 to how stupid u r. let me guess, you’re a fat pimple faced 19 year old virgin who’s great at guitar hero and nothing else. or maybe you’re 40. it doesn’t matter, MY BUSINESS MODEL WORKS ONLY IF I’M BRUTALLY HONEST YOU FREAKEN MORON…yet another guy who exemplifies the kind of idiocy in finance, thanks for helping me prove my point!
15eric
March 16th, 2008 at 4:30 pm
You go Tim!
16Reality Bytes
March 16th, 2008 at 4:42 pm
“MY BUSINESS MODEL WORKS ONLY IF I’M BRUTALLY HONEST YOU FREAKEN MORON”- what business is that - losing money on penny stocks… too bad you now have to live on the google (welfare) ads checks each month!
17timsykes
March 16th, 2008 at 4:45 pm
exactly how have i lost $ on trading penny stocks? poor poor lil ole me only has 600k left to his name. how will i live? LOL, do some DD before u start typing again.
PS publishing is niiiiice, don’t worry, specifically for inbreds like u, i’m gonna start posting ALL my monthly earnings
18Zykosis(TIMBUCKS: $9)
March 16th, 2008 at 4:52 pm
19reality strikes
March 16th, 2008 at 5:17 pm
sykes says “Like I’ve posted several times, it doesn’t matter if the the AA Dupre I was talking to was real or fake.”
OK sykes, it’s good to know how easily you can be duped, and even more retarded, you leave the FAKE conversation on this site as a badge of dishonour. It was obviously a GUY. But then again based on the way you proudly leave your chat with a GUY on this site, you prove that you are probably into chatting with GUYS on facebook. Keep leaving the FAKE conversation up on this joke of a site, what a pathetic joke! Just shows how stupid and gullible you really are.
20timsykes
March 16th, 2008 at 5:21 pm
Hey inbred, what didn’t u understand about me saying it doesn’t matter, hype is hype. Posting, promoting and leaving that convo up there teaches everyone how to profit from hype. You mistakenly believe I’m a journalist when I’m really more of a teacher–I teach how to profit from hype. And you’re just helping me prove my point, gratzie!
21Reality Bytes
March 16th, 2008 at 5:52 pm
Can you start posting all your monthly earnings? Are you going to be on WSW anymore?
22Investing911
March 16th, 2008 at 6:28 pm
And I thought I was so savvy by buying on the dip Friday. Thought I was getting in low! Ugh!
Capitulation may have begun because I’m considering pulling it all out. Might as well play poker with it!
23Hugh E. Rexson
March 16th, 2008 at 7:48 pm
911 - You should in fact consider pulling it all out, although you should do your own due diligence for whatever makes you comfy. You think this is low? We haven’t seen anywhere near low yet. People making money in this market will probably be shorting on the spikes, selling stupid buy holds on the spikes, investing in francs and aussies like the Timster says, and buying oil etfs (not oil stocks) and gold (again it will fluctuate as margin calls keep rolling in) but will ultimately go to 1650 and beyond. Oh, and shorting microcraptastic shit stocks. This market is gonna shit on a lot of otherwise smart people, that think they are seeing a bottom. They’re not.
And Tim, I live about 20 blocks from you. Walked near the crane accident today. Half a freaking penthouse apartment was crushed. Gotta suck for the owner, maybe it was a BS exec. lol
24Noneya Bizness
March 20th, 2008 at 1:23 pm
I lost any respect for the book you wrote after seeing your website….what a load of SHIT!!!!!!!
YOU SUCK. You aren’t an investment guru, you are a frick’in retard Cramer wannabe. Dip shit.