I don't really understand what was happening today on the stock market...

Look at this:

[url]http://marketrac.nyse.com/ot/ot.html[/url]

Were companies buying their own stock back???

I just don't get what drove the 498 point rally.

Ben

Corporate thieves being dragged away in handcuffs. Bet that had something to do with it.

What he said

I guess so.  I don't know.

Are you serious? If you are, man, you got a pair of big brass ones.

Here's what happened:

1.  Most important thing was that the market is heavily oversold. It was more oversold than the week after 9/11, with higher levels of fear and volatility.  This made it ripe for a reversal when things get that extreme. Usually the market varies one day to the next in an almost random up-and-down way.  But for the last 11 sessions, it has always ended lower.

2.  A lot of the downward pressure is coming from short-selling, or selling stock you don't actually own but promise to buy back later.  Hedge funds used to do most all the short-selling, but now retail investors (like Hielo) are doing it more now as well.  When these short positions are closed, when you want to take your profit, you buy, creating upward pressure.  If everyone's profit taking on the short side, then the market goes up.  It's called a short-covering rally.

3.  The constant downward trend of the market is freaking the hell out of mutual fund holders, who are watching their money evaporate.  They're (finally) losing faith, and throwing in the towel over June and July. This is where probably most of the downward pressure came from, and explained why the selling was so broadly-based in all sectors.

Most savvy traders know that these regular investors are almost always wrong in whatever they do in the market.  The market moves in a herd mentality.  Since the herd is always wrong, and now the herd is selling, now is the time to buy (cover their short positions).  It picked up steam as short sellers' stop losses were hit, begetting more buying-to-cover.

Raven that I understand , Thanks.  But yesterday and the previous 30 day average the short sell was hanging around 20%. Which I took to be a quite normal percentage for a down market.  Hmmm, I guess we will see what happens tomorrow. The sellers were still outnumber the buyers by about 10% on average.  People on the floor said this was probably a one day surge.

Hmm.  I want to check something.


Ben

What is the percentage of the market bought on Margin?? Anybody have this figure???

Ben

I bought 5882 shares of Worldcom today myself. Theres a great opportunity to make some serious green[:D]

Bought some yesterday. Where are you guys gonna sell.....

I bought in today at .17  What price did you get it at? How many shares do you have? We'll see how it goes tomorrow. I might buy another 500 shares. I'll be happy when it hits $35.00 a share. I'll probably get out then and reinvest some of the proceeds in the next big thing[:D]

Why are you guys convinced that they won't just cancel your stock and do a new IPO?

So should a guy with, maybe a coupla grand cash laying around, jump on it short term? Are you that confident?

Lifes a risk. The way I look at this stock is if I go to Las Vegas for the weekend I'll blow $1,500 gambling. Each time I pull the lever on that one armed bandit it costs me .50-1.00 for a chance at a payoff. Worldcom stock right now (I and many others believe)has much better odds an it only costs .17 a roll. Sounds like much smarter gambling to me[:D]

Many stocks are way under-valued. Value being the key word, price per earnings and such. But many people are also in a panic. So we're stuck in rollercoaster ride until "confidence" in the market is restored. Good buying opprotunities if you know what you are doing?

I was thinking about buying some of these "penny" stocks too. Not a lot, but at just a few cents a share, I could buy a butt load with just 100 bucks.

Does anyone think that the "World Coms" and "Enrons" will eventually pick themselves back up or are they forever f-ed? I'm talking long run, like 10-20 years out. Any tips on those that will probably bounce back?

I am. When I can buy 5882 shares for $1013.00 of a company that has traded at over $60.00 a share in the past, It sounds like a deal to me. Looks like it can only go up from here. The stock was at .09 a share 2 days ago. Its at .17 a share today. One cent short of doubling your money in 2 days.

I don't think you'll make any money at all on Enron. Worldcom definately has great earning potential. I'm even going to look into Adelphia tomorrow. Who know what the future holds?

I'm intersted in hearing reasons why you think the odds are better. From what I can gather, they have no obligation to stockholders while in bankruptcy? Is this true? If so, what sort of things would motivate them to hang on to you guys instead of cancelling the stock and doing another IPO? Conversely, why would they want to do somethig like what I've described as opposed to hanging on to the current stockholders (Even though they can dump them). I have very little understanding of how this stuff works, but these are the things i've been hearing people talk about when the topic of worldcom comes up.

you're crazy

if they have 3 to 1 assets to liabilities, does this mean that if they really went tits up and did chapter 7 there would be some left over for the stock holders?

anti-gov-tinfoil-man, I agree with Dave 100%. Worldcom has way more assets to debt . They aren't gonna turn thier backs on thier stockholders, if they want to continue doing business.

To quote from [url=http://www.ar15.com/forums/topic.html?id=134390&page=3]another thread[/url]:

Learn about options.  On highly volatile days, or with severely inflated/dragged-down stocks, you can make a fortune.


Edited to add the link to the chain page:
[url]http://finance.yahoo.com/q?s=msft&d=o[/url]
Damn, I knew I forgot something.

how does this additional 2 billion in loans play in to the "asset to debt" ratio?

interesting stuff

i wonder who did the accounting on those 120 billion in assets!

I'm not buying until after August 14th. SHTF is possible when all the CEOs are forced to certify their financial statments, and we get the true numbers. Things could tuen sour fast.

Although, WorldCom at $.17 sounds interesting.

When it comes to WCOM, "they" don't care about stock holders, employees or customers. "they" have their own agenda that has only to do with lining their pockets as much as possible as quickly as possible. "they" buy viable companies and run them into the ground, stiffle innovation and virtually stop the purchased company from going forward.  

The only thing that has barely kept WCOM alive all these years was the "revenue" generated from one WCOM owned company "paying" another WCOM company for services. Ledger reads 'left hand paid $10 for services to right hand, cost $5. right hand paid $20 for services to left hand, cost $10. Profit of $15' but yet there was never really any money involved.

Chapt 11 will go as planned but unless WCOM changes its ways it will go Chapt 7 within a couple years.  Only way to save it is let the companies within WCOM innovate. Have leaders that can give direction (which has been severely lacking)and have a little luck.

2 cents
(MCI 9.5 yrs, not buying WCOM or MCIT and working to keep my company afloat)

I'm not looking really long term. Only about 6 months, so I don't care what happens to the company after I cash out [:D]

The Market is schizophrenic and needs Prozac.  If the wind blows in the wrong direction it affects the market, if someone gets a cold the market reacts, it is ridiculous.  How is a free market suppose too flourish in this mess?

I have been following the treads on stocks here on ar15.com and I thought I would just let everybody know I am here. I have a lot to learn about this stuff but I did buy into the worldcom stock on Monday and it has been kind of fun for me. I hope you guys don't mind me checking in now and again.

I don't mind at all. Keep abreast of the situation [:D]

I don't want to be the bearer of bad news to all you WCOEQ latecomers, but the opportunity is over for now. In fact, if you are in for the long haul at the moment, you are really running the risk of losing value in a re-issue through the restructure. When the reorg was announced on last Friday, there was sure to be momentum selling by those who still maintained long positions in the company. That is why it went from a low of .07 to .17 in a single afternoon.

The reorg committe is to be announced on Monday, and there MIGHT be opportunity to gamble some more. But not as much as the initial filing announcement. It's a risk situation from here on until the reorg plans are submitted and approved.

The factor now working against long position (buy and hold) investors is the fact that reorg plans have not been announced. There has not been any trustee assignment announced. There has been mo management team announcement.

Any Chap 13 reorg will involve the restructuring of payout to creditors at the expense of any equity share holders. There are several strategies that you can read about how equity investors can get whacked. Williams Communications is a prime example of this.

If you are in for a long position right now (at least until the reorg plan is announced) you are seriously throwing down the gauntlet. Major balls or major absence of information.

I have made a lot of money playing in bankruptcy equities, but it's a different strategy than the average retail investor has time to research and understand. The formula is pretty simple though... buy within 1-2 hours of the opening bell following a Chap filing announcement. Not earlier, not later. Sell everything but 25% of the amount of your gain when the price crosses the 30% gain threshold (or wait for a bit if there's heavy volume and upswing momentum). Take 50% of the profit in cash. Take the remaining cash and reinvest in other issues. This is not by any means a fail-proof strategy though. Certain fundamentals have to be in place (asset value, etc...)

;-)

cross posting this in the WorldCom thread too...

I thought only certain types of people are allowed to trade options. Just like only certain types of people are allowed to trade shorts or have margins.

is there any reason they would not do a re-issue, assuming there are no legal obsticals?

I think it's a big friggen scame. Who here said "a system built by thieves for thieves"

would Jesus tell you to buy?