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To: Paul Senior who wrote (28160)9/20/2007 10:51:03 PM
From: Spekulatius
   of 72180
 
Bill Wexler - you seem to have a bias to shorting stocks. Each it's own.
asensioexposed.com

Regarding BBY the fact is that in a climate that is considered difficult BBY is beating the numbers and burying the competition (CC). I do not know more bullish circumstance. I have been on the short side of BBY and it was no fun. Todays valuation is undemanding considering the cash on hand and the growth avenues that BBY has available.

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To: Bill Wexler who wrote (28161)9/21/2007 1:06:15 AM
From: pcyhuang
   of 72180
 
re: Consumer discretionay spending

Bill:

I am surprised that a person like yourself who has been in the market for decades still insists on his own opinions and does not listen to the signals from the market.



pcyhuang

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To: Spekulatius who wrote (28165)9/21/2007 3:10:37 AM
From: Bill Wexler
   of 72180
 
The asensioexposed web site is complete bullshit. It's simply a smear campaign started by a group of promoters that were upset when their stock fraud was exposed. My name is not "Mike Wilkins", and I have no clue who he is. I have no business relationship with Asensio, and the majority of my wealth was made on the long side.

By the way, I have met a couple of members of SI and they'd be happy to confirm this. I would also be happy to meet you face to face (if you're willing to travel to South Florida).

Oh - and as an interesting aside, I invite you to check out the stock charts of all the stocks mentioned on that site...assuming that they're not already delisted.

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To: pcyhuang who wrote (28166)9/21/2007 3:13:43 AM
From: Bill Wexler
   of 72180
 
I read your post re: Goldman

Message 23900270

You know what I find fascinating?

If a guy who makes $25,000 a year discovers that his bookie fixed a game and took the other side, he'd introduce said bookie to a baseball bat.

But a guy who makes $2.5 million a year and invested in a Goldman hedge fund, will probably never understand or admit that Goldman pulled the exact same scam as the bookie.

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From: pcyhuang9/21/2007 3:19:40 AM
   of 72180
 
Value in Mortgage Securities?

WSJ. Online reports: I read recently that Pacific Investment Management Co., the big bond-oriented money-management firm, has launched a distressed-mortgage fund. A Pimco spokesman said this is a "private fund" unavailable to the likes of individual investors like me, but if not, I'd be in line to invest.

This may seem foolhardy, given the recent subprime-induced credit-market turmoil and the Federal Reserve's decision to cut the federal-funds rate, suggesting that the broad economy has indeed been harmed. August foreclosures jumped 36% from July, suggesting things are continuing to get worse.

Still, I have the distinct impression that when it comes to mortgage-backed securities, in many cases the baby has been thrown out with the bath water. Some triple-A-rated securities went overnight from being gilt-edged to something impossible to value because there was no market. True, there were plenty of excesses in lending practices, many only now coming to light. Bond-rating agencies may have been overgenerous with their triple-A designations. But that doesn't mean all mortgages or all mortgage-backed securities are worthless.

I was raised to believe that homeownership is a linchpin of the American dream and that the mortgage payment that makes it possible is an almost sacred obligation. I'd give up just about anything else to make that payment. I know plenty of people who feel the same way.

This isn't a notion that's been showing up in recent stories about people failing to make their mortgage payments and facing foreclosure. I'm convinced that most of these people are trying desperately to make their payments and stay in their homes.

Mortgage defaults aren't the equivalent of the savings-and-loan mess. During work on my book "Blood Sport," about the Whitewater affair, former Clinton backer and Arkansas S&L operator Jim McDougal (now deceased) told me how he'd squandered millions on Campobello, a resort in chilly New Brunswick, Canada, primarily because his hero, F.D.R., had vacationed there in the days before air travel made warm, sunny climes accessible to almost everyone. The development made little or no economic sense, and no federal bailout would ever recoup the losses. By contrast, most residences have value, even if they have recently been sold at inflated prices. Over time they will appreciate. And the vast majority of borrowers will make their payments.

Apart from Pimco, I know of several funds that are buying distressed mortgages. This takes extensive research and is labor-intensive but seems far more efficient than a congressional bailout. The approach seems likely to help ease the crisis, help struggling borrowers, and reward investors. Unfortunately, I haven't heard of any of these funds that are open to individual investors.

Amidst all the talk of congressional bailouts and interest-rate cuts, let's not forget the millions of homeowners who are dutifully making their mortgage payments even if it means giving up an evening out or a vacation. These are the hard-working, responsible people who make the American economy the greatest in the world, and I'd buy securities backed by their mortgages any day.

Full story: online.wsj.com

pcyhuang


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To: Spekulatius who wrote (28165)9/21/2007 3:29:26 AM
From: Bill Wexler
   of 72180
 
Your profile says you're a physicist. In that case, I want you to do a thought experiment:

You're an institutional money manager holding a million share block of BBY. You've been watching the bond market over the past few days, and the activity in PG, BUD, and MO.

Perhaps I'm wrong. Let's revisit BBY and the U.S. retail sector mid-2008.

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To: Bill Wexler who wrote (28170)9/21/2007 5:51:48 AM
From: Shtirlitz
   of 72180
 
1. You didn't pay for that BBY with your own money. You are managing OPM.

2. BBY has nothing to do with Bond market, PG, BUD, MO. They are subject to their own dynamics. Consumers want electronics and they are beating the crap out of CC competition.

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From: Junglekings9/21/2007 5:57:47 AM
   of 72180
 
File this under "What about Dairy Queen and Box Office Receipts" -- no offense to Mr. Wexler (although I thought you were not allowed to post messages by law, anyways...lol..) I like Asensio's picks, but I think you are way off on "retail" In my opinion, the dollar may drop, but buying a dollar for 50 cents is always prudent. Look, if interest rates stay low, consumers will always shop. If they go higher, its america, consumers will still shop. Look to lower end retailers with low price to book values. Some trade for FAR under their liquidation value. All the macro mumbo jumbo aside (and I have owned commodities as a 15% position since 2004) retailers below breakup value are a gift from Mr. Market. That's where I see value. Insurers scare the hell out of me, banks, investment banks, technology (way overvalued), and the Russell all scare me, but retailers (honestly DDS but even CC looks kinda cheap here) look fine. Whenever EVERYONE agrees that something as basic as a bookstore or a best buy is going under, the shares are probably "puked" out enough to buy. Still long my HAST and loving it as the video game, dvd sales, and discount markets are all on fire.

That said, I would be wary of high and middle end retail more than lower end..... Who owns houses? Not the poor, "we" -- I say we cause I was very poor for a long time -- are renters. When housing goes down, our $9 an hour job doesn't seem so bad. Also, as oil rises dollar falls, its the people selling stuff at the retailer that cuts prices, but even there the move overseas means cheaper labor makes goods cost less anyways. All in all, American's are gonna lose money as Uncle Ben lights the dollar on fire, but its not the great depression and a dollar for 50 cents is still a great buy. I think in a DDS that you can beat inflation with covered calls, and eventually make your way back to book value in almost all these "scary" retail stocks.

That said, I am looking overseas myself. Not to bash your "short all retail" hypothesis, but its a crowded trade. Housing was more sudden. You had to be a contrarian to short it as all other "real asset" trades were on fire (oil, gold, etc...) so that took real smarts.... I would argue that the Balestra guy is a great macro trader for calling that. I thought it too "risky" as the stocks were already below book. But retailers can always just wind down, sell building, and liquidate. Plus, most trade for 4-5X EBITDA meaning that if they can survive for 7 years they can more than pay for the entire business -- see Sun Capital's purchase of Kellwood. I would not be short the American consumer, just the American Dollar! I still like GOT. EOM.

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To: James Clarke who wrote (28157)9/21/2007 7:45:41 AM
From: Wallace Rivers
   of 72180
 
James, thanks for your report on BBY's conference call.

Comparing BBY to CC:
I'll confess to not liking shopping very much, except going to Costco. I have, however, been to both CC and BBY, and one can see why BBY is beating CC.
CC's stores, at least the ones I've been to, IMHO aren't laid out nearly as well, the flow and merchandising is not as effective as at BBY. The lower ceilings at CC don't do it for me, I much prefer BBY's ceilings which extend to the top of the warehouse.
Small things, but I would be willing to bet there are folks in BBY HQ who analyze stuff just like this.

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To: Wallace Rivers who wrote (28173)9/21/2007 8:24:55 AM
From: Neil H
   of 72180
 
I also agree on the CC vs BBY. I have had very poor customer service almost every time I have been to CC. From waiting in a line of 2 for 15 minutes to pay for an item while the only cashier took her break (South Houston) to waiting for approx 15 minutes to have a sales person explain some laptop features (Raleigh). To wandering through the store for about a half hour to find someone. Not enough sales people.

I have no doubt why CC is having problems.

Neil

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