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By Jim Cramer
6:50 a.m. EST
Yes, this move makes banks less attractive. But banks have been dogs for a long time. They will have margins squeezed, and they will be forced to start lending. Remember, though, that if we get employment growth, we will see the gradual end to the other side of the ledger: the defaults from unemployment. Tightening has not always been a departure from owning banks, but it does make them less attractive... (We are underweighted in banks for
portfolio) Elsewhere, good give and take on rate issues with Dougie!
2. Canpotex Inks Potash Sale Deal
By Sham Gad
8:20 a.m. EST
Canpotex, an export consortium for the world's largest fertilizer companies, just agreed to sell India 600,000 tons of potash at $370 a ton. This is a good price and above the $350 per ton that other competitors were selling potash for. It signifies the continued strength of fertilizer prices today. Canpotex is owned jointly by
Positions: long POT, MOS
3. Another Day, Another Biotech
By Timothy Collins
8:50 a.m. EST
The reaction to the briefing docs for
this morning has not been positive. The stock is currently trading around $23.65. I will look to pull in profits on the Feb put combination we entered yesterday (Feb 30-22.5-15 put butterfly for 2.30) at least partially this morning. The profit here should at least cover the cost of our diagonal call spread (long Mar 30 calls, short Feb 35 calls) and may even book a small profit. I have also bought some stock at $23.75 here premarket.
Positions: Long SLXP
4. Dell: How to Turn an Incredibly Efficient Competitor Into a 'Biggest Loser'
By Brian Gilmartin
11:50 a.m. EST
since the mid-1990s, and I continue to be shocked that what was once a brilliantly managed company which was the low-cost manufacturer producer in a commodity space (a huge competitive advantage per Michael Porter) has now become a mis-directed, fat, also-ran with no differentiation and nothing resembling a competitive advantage.
Although we haven't posted the numbers in the spreadsheet, last night's revenue beat with the margin compression continues the same old song and dance where Dell tries to get the retail channel right but misses on margins, or targets margins and gives up revenue and market share.
Bob Faulkner should be commended for his call on Dell: He has always said that he never knew what the company would look like in 5 years, and the company stills seems to be meandering around the PC space.
We owe a mea cupla to longtime readers and subscribers, as there has been no turnaround with Michael Dell's return. Dell had the perfect model in the 1990s with the secular growth in tech, and then they watched other competitors take share and compete away margin, by letting them get more efficient.
Michael Dell should have stayed in retirement.
Positions: Long Dell (regrettably)
5. Treasury Market Can't Make Up Its Mind
By Tom Graff
12:15 p.m. EST
Yesterday, right after the discount rate hike, the long bond rallied half a point off its lows. At 9 a.m. EST, the whole Treasury curve was 2 basis points or so lower in yield. Now we're dead flat.
What I can't make sense of is why the two-year isn't selling off more. Not only do we have an auction next week, but the
just told you that in a year, 0.93% isn't going to look so hot on two-year notes. In the next few weeks, the two-year should rise vs. 10s and 30s as the market starts to sort out the Fed's next move. This will catch a lot of people off-guard who have been plowing into short bonds as a cash substitute.
Stay nimble, my friends.
This article was written by a staff member of RealMoney.com.