Top Takes From RealMoney

The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.

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1. MI Prices Secondary
By James Altucher
8:59 a.m. EDT

Financial Marshall & Ilsley ( MI) priced an 87-million-share secondary last night at $5.75. The stock had closed at $6.14. In the premarket, the stock is trading around $6. I'm short the stock and may cover or trim around the open to take gains. However, I do think the stock will trade lower from here and may even break the offering price.

Last week Fifth Third ( FITB) priced at $6.33 and now trades at $8, after a GS upgrade, but this situation is different. Fifth Third's secondary was only 20% dilution. After the underwriter allotment, Marshall & Ilsley will suffer a little more than 30% dilution.

While the company plans on using some funds raised to pay back TARP, their balance sheet and prospects still won't be as strong as FITB's. If stock hits $5, I might attempt a short-term long to play a snapback; like I said, I probably (against my gut instinct that it will go lower) will take some gains on the short at open.

Short MI.


2. Let's Interpret Things Negatively
By Jim Cramer
10:00 a.m. EDT

A Michigan consumer number comes out. It is exactly what we should expect, and immediately the futures get hit, then the media says the number was not what we were looking for, and then regular selling begins. I have a piece coming up momentarily that says I want to take the other side of the trade. Maybe take in some Amazon ( AMZN) or Apple ( AAPL) as it gets closer to $135, although I have said it could trade as low as $130, I don't want to be too greedy...

No positions.


3. Corporate Bonds Still Firm
By Tom Graff
10:09 a.m. EDT

Stocks are lower, but once again the corporate bond market doesn't really care. Offers remain hard to come by, and investors who want to buy must pay a price high enough to convince sellers to sell. I went in for some five-year Verizon ( VZ) bonds yesterday, $1 billion issue, and couldn't get a live offering at all.

Among credit ETFs, investment-grade iShares Investment-Grade Corporate Bond ETF ( LQD) is in line with the Treasury market (i.e., no tighter) while the high-yield funds, iShares iBoxx High-Yield Corporate Bond ( HYG) and SPDR Barclays Capital High Yield ( JNK), are slightly lower. HYG shows green on the day, but it mysteriously dropped 25 cents in the last 15 seconds of trading yesterday.

So ignoring that oddball trade, both are unchanged to slightly lower. Still like high-yield for a trade, and LQD isn't a bad way to get access to the corporate bond market, especially given how hard it is to get offerings.

Long LQD, HYG, JNK.


4. Clean Coal
By Tim Melvin
12:07 p.m. EDT

The coal industry has been cleaning up its financial act. Ratings agency Fitch said this morning that the credit outlook for the coal companies was stable in spite of the headwinds the industry is facing. Demand is still soft in the weak economy as steel producers and electrical plants have cut back in the face of a weak economy. The specter of a cap-and-trade or other carbon tax still looms over the sector as well. However, the coal companies have been cutting costs aggressively, cutting capital expenditures and reducing capacity.

As capacity is reduced and expansion plans are delayed, the path to growth will be acquisition. We are already seeing the start if this activity. Last month, Alpha Natural Resources ( ANR) made an offer for Foundation Coal ( FCL). I think this will continue well until next year.

No positions.


5. Nikkei Odometer
By Howard Simons
12:35 p.m. EDT

I see the Nikkei went back over 10,000 last night. I don't know whether they passed out "Nikkei 10K" hats back on Jan. 9, 1984, when the index first crossed that mark, but they should have. A child born on that day would be 25 today.

I bring this up out of a nervous glance at our markets and out of a lingering cringe about the bad-taste-fest we had when the Dow Industrials first crossed 10,000 on March 16, 1999, and first closed over 10,000 on March 29, 1999. Perhaps there is a 10-year-old in your neighborhood born on those days.

Would anyone in 1984 have bet the Nikkei would be crossing 10K from below in June 2009, or would anyone have bet the Dow Industrials would be below 8,800 today after putting in the sharpest three-month rally since the 1930s?

I wrote a magazine article back in 1998 on gold, noting its long bear market. I got an e-mail from a retail commodity broker who wanted to know whether I thought gold would ever cross $500 again. My response was, "'Ever' is a long time. If you asked me in 1981 whether I thought long bond yields would 'ever' be below 6% again, I would have said yes, but I wouldn't have believed it."

Will the Nikkei take out its 38,957 high made in 1989, 20 years ago again? Will the Nasdaq 'ever' cross 5,000 again in my lifetime? "Ever" is a long time, but I don't really believe it.

No positions.


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This article was written by a staff member of RealMoney.com.

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