Monday, July 13, 2009

Good Luck Goldman Owners/Monday Observations

The market rallied strongly on the back of Meredith Whitney's upgrade of Goldman Sachs. Boy that's really going on out a limb there. Yes, they are going to report a great quarter (massive secondary issuances, not to mention Goldman's other trading activities). But they better blow the doors off if you expect the stock to go up again tomorrow. A lot of this "great quarter" is priced into the stock, but who knows in this market. Not much surprises me anymore.

American Railcar (ARII) was up another 8% today. I bought it Friday at 7.05, and the entry was almost pure luck as it almost instantly rallied and is now up about 14% in less than two trading sessions. When this happens, I often take the profits, but I've still got the shares. Its been trading in a fairly predictable range with 7.00 at the low end, and until it breaks that, I'll look to trade the range. I would like to hold some shares a bit longer though, as I feel the company is undervalued and I think Carl Icahn can pull some extra value out for shareholders in spite of the difficult environment for a company like this.

As for Natural Gas, I found this little story:

US Oil And Gas Drilling Activity Fell 46% In 2Q

The more they continue to shut off drilling activity, the better it looks for oil and gas prices to go up.

Disclosure: Long ARII, UNG

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