BNB - where is it heading?
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     mads
Member
Username: mads
Post Number: 79
Registered: 12-2004Rating: N/A
Votes: 0
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| | Thursday, August 16, 2007 - 01:34 pm: |  
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BNB has been savagely hit the last few days and more specifically today. The price is down to around the 61.8% Fib level. Will it go down further or will there be support at this level?
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holycow
Member
Username: holycow
Post Number: 3018
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Thursday, August 16, 2007 - 09:26 pm: |
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BNB 3-day
1) M, not sure if you are holding this one or you are thinking of buying this one. If you are thinking of buying, my suggestion is to wait and see because the sub-prime fallout over in the USA is not over yet.
2) Referring to the attached chart (note, it's a 3-day chart, so I can compress the chart to fit into the screen), if I am holding this stock, after today, my inclination is to hold on to it because it seems to be finding some kind of support at the current price.
2.1) Today's low was 17.61, close=19.21; going back last March, someone transacted about 20mil shares @ave price of 17.72 and going back to the beginning and using fibo, the golden ratio is pointing at 18.00, a natural support level.
With all these considerations, I guess you can make the worst case support this round to be @17.61 barring any more unexpected bad news which is not related to sub-prime and hedge funds.
3) Still, at all times, it's important to watch stock that has plunged in such horrific manner, and if you are holding you should ask yourself seriously what's your objective in holding on to this stock. May be you'd like to consider cutting loss if the price were to continue in its downward slide?
Cheers and good luck.
HC
"... he ain't no chart addict, but a TA junkie"
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mads
Member
Username: mads
Post Number: 82
Registered: 12-2004Rating: N/A
Votes: 0
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| | Friday, August 17, 2007 - 11:11 am: |
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Holycow,
Thanks for your comments. Timing is everything when investing (be it real estate, shares or otherwise). I am very motivated in buying BNB and MBL but reluctant at this stage because of the market meltdown. The price of BNB may go down lower but I would have thought not much lower unless there is a catastrophe of some sort. Why do you think BNB got savaged more than MBL?
mads
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holycow
Member
Username: holycow
Post Number: 3019
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Friday, August 17, 2007 - 11:38 am: |
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M,
In the current market climate, and with the new found aversion of anything to do with risk, hedge, and leverage, it's best to avoid companies such as these two, including AFG. If you are really interested in them, you should investigate further and deeper into their modus operandi - how they make their money.
Broadly and in a way I am generalising as I still do not know how they make their money (huge profit, btw) except these: a) they charge a fee in managing some assets; b) they charge a bonus/performance fee for returning above market averages; c) they revalue the assets they manage and then promptly "securitise" (if this is the right word) the additional revised value and claim their performance fee on it; d) they leveraged and they hedged, I am not sure if the market analysts are fully informed of what they have hedged and leveraged on.
Now with the new climate of fear and risk aversion plus higher and/or very high or no-lender-at-all borrowing cost, you have to ask where and how they are going to generate higher income? Aka, the performance fee through revaluation? Who is going to pay good money for their revalued assets? And over a long period of time?
I think MBL and BNB are very good proxies of the market and of the current investment climate - the chart really says it all! There is a VERY GOOD AND STRONG REASON why these stocks are getting slammed! (... if you touch them, you may gain short term, but I am not sure about longer term, jmv).
Between BNB and MBL, why BNB is worsed off - I think they are firstly an also-ran, they are a copycat and MBL is the market leader, and probably the world leader in infrastructure/privatisation play. MBL also has a more diversified portfolio (I think), on top of that they are operating as a bank plus other financial services which BNB doesn't have.
In a way I see BNB"funds" and AFGfunds to be better proxies of the current hedgefund saga (and demise). If history were to be a good teacher, you may want to look back to the '80s for a glimpse of the LBO mania.
Cheers.
HC
"... he ain't no chart addict, but a TA junkie"
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