Drop seems to be stabilizing and close to 50DMA. Wondering if a small purchase might be in order at this point.
I am (buying)…
But because of a weird reason. ( i know this isn’t the options board)
I owned BOFI shares.
I wrote a couple of puts on BOFI as well.
To “adjust,” I wrote some April $20 Calls awhile back. (more calls than I owned shares, so the calls were “naked.”
They were very In the Money (underwater) yesterday.
But they were exercised last night, so I was short the BOFI shares, at a sale price of $20.
So I have to Buy to Cover my short shares this morning, and with BOFI down ~14% right now, I was able to Buy my shares back at $19.95, making a nickle a share!
Very weird. but yes, I am going to buy to reestablish my shares that were called away.
Brian
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I may rue the day that I bought more of this stock, but I did buy some when it was down 11% and when it was down 17%.
I have read everything on this board and on another board since I bought.
I see Paul has posted a second time today but I haven’t read it yet. My deed (that I might rue) is already done. Here’s hoping that we are looking at sound and fury signifying nothing with regard to the growth and profitability of this company. We will get an answer to that on April 28.
Corrupt managagment is a different story. If true ( it certainly seems it might be true with regard to past behaviour ). Then I have a bad feeling and a belief that those who do corrupt things are themselves corrupt in their very nature. People don’t often change who have this character trait IMO.
A certain Fool who I respect has recently written a positive outlook for the future of this stock’s performance. Again, their upcoming earnings report will be a very big deal.
Frank
3 Likes
Drop seems to be stabilizing and close to 50DMA. Wondering if a small purchase might be in order at this point.
If you are going to use that standard to supplement your buying bias, than you need to adjust you understanding of some charty things. Granted, I am writing this on 4/15 with hindsight, but had I seen this post 2 seconds after it was posted, I would say the same basic thing, to wit:
Yes, it is nice to see support at the 50dma, but when you see a stock drop like a rock on huge volume, then the first stop at the 50dma is NOT a buying opportunity. It is not like you could expect the stock to go up 10% the next day, so what is the rush. Take a breath and see if it really is support. Big ups and downs tend to be 3 day events in the same direction. The first day is smart money, the second is herd mentality and the third is “late” money. So you were buying at the 50dma while only the smart money had left. Today the herd got out. Maybe money it is a small down day as there are no more sellers to capitulate.
Now if, your thesis was to buy because of support at the 50, then the corollary MUST be to sell if that thesis fails. Did you sell on 4/15? If not, you are just using a subset of rules that fits your bias and thus lying to yourself.
Apart from charts, you have to ask yourself, if “everyone” is selling (large volume), then what makes you think you are so much smart than them and will catch a quick bottom? But wait, let’s assume you are much smart then them and will eventually be right, then you have to assume they are just panicking and selling irrationally, and it that is the case you cannot outsmart an irrational person, you have to wait until they all leave and stop selling. Try to tell a brainwashed suicide bomber to do the right thing - it cannot work, just get out until the bomb is done going off. Apologies for the gross and insensitive analogy.
The best thing you can do now is right this episode down in an investing journal and read it every 6 months.
Pete
7 Likes
Corrupt managagment is a different story. If true ( it certainly seems it might be true with regard to past behaviour ). Then I have a bad feeling and a belief that those who do corrupt things are themselves corrupt in their very nature. People don’t often change who have this character trait IMO.
I follow this board closely and read earlier remarks about the BOFI sleaze factor, how many of the execs had played significant roles in crashing the economy in '08. That was my takeaway, at any rate. When Saul recently issued his reassessment, I was intrigued, reviewed all the new data and considered taking a small bite.
In the end, I didn’t. I just couldn’t get the bad taste of past sins and recent “skirting the edge of illegality” out of my mouth. Forgive me if I sound self-righteous, but I am not okay with becoming part owner with liars, cheats and thieves. Such people aren’t working to enrich me.
Jackson
4 Likes
Hi Jackson,
In the end, I didn’t. I just couldn’t get the bad taste of past sins and recent “skirting the edge of illegality” out of my mouth. Forgive me if I sound self-righteous, but I am not okay with becoming part owner with liars, cheats and thieves. Such people aren’t working to enrich me.
Please do not take this as an attack on you but a discussion on “skirting the edge of illegality”.
I am out of BOFI but not because I believe any of the lies the shorts are spreading. But I do have a problem with some of the words being bandied about. Now do not take this wrong, everyone has a right to their opinion but skirting the edge of illegality? I know Saul has said this before but I just have a real problem with that terminology. Either it is legal, and you should be able to do it, or it is illegal. If I am driving 65 miles an hour in my truck and the speed limit is 65 miles an hour, couldn’t you say I am skirting the edge of illegality? If I am allowed to give 3500 dollars into my IRA every year, and I put 3500 dollars in, am I not skirting the edge of illegality? Every time I come up to the edge of the law, but stay on the right side, Someone that is looking to impugn my integrity could say that I am skirting the edge of illegality. So if what I am doing is legal, why use words such as skirting the edge of illegality? Obviously it is to make someone look bad. That is what is going on with BOFI but even though I do not think BOFI has done anything wrong the company is more risky because of these accusations. Knowing that I understand the stock will go down and I do not need to stay in to watch my portfolio go down. But in the future, if the stock gets low enough, the risk reward will be enough for me to get back in. But if the company does not reach that point I have no problem letting it go.
All this being said I do not believe the lies being put out on BOFI and when Erhart finally goes to trial we will find out the truth. It is easy to impugn a company’s integrity with lies and innuendo’s, anyone of us could do the same to anyone. But if there isn’t any proof, than how can anyone state that they have done something wrong.
Andy
Waiting on the risk reward to get much better.
15 Likes
Hi Andy,
Please do not take this as an attack on you but a discussion on “skirting the edge of illegality”.
If I am driving 65 miles an hour in my truck and the speed limit is 65 miles an hour, couldn’t you say I am skirting the edge of illegality? If I am allowed to give 3500 dollars into my IRA every year, and I put 3500 dollars in, am I not skirting the edge of illegality?
Thank you for your thoughtful response. Your understanding of BOFI is clearly far greater than mine, if only for the simple reason that I got a bad taste early on and dropped my examination. However the examples you give are quite black-and-white – 65 or 66 mph, $3500 or $3501. While I don’t pretend to know the truth of what did or did not go on at BOFI, I do know that the allegations against BOFI’s practices or execs’ past behavior are far more murky than your cut-and-dried examples. There’s just a lot more room in which to “skirt the edge of illegality" in, to borrow from Saul’s earlier post:
…giving insiders huge loans at preferential rates…
…one of their senior vice presidents is a convicted felon…
…BOFI insiders were connected to two banks involved in the biggest scandals and bankruptcies in California…
…helping this shady company evade banking laws by opening loans for them and selling them the loan after 24 hours…
…one of their ex-internal auditors is suing the company with a huge list of irregularities…
…hiding risky loans in mortgage warehouse loans, a usually safe category of loans…
than there is in your examples.
I know, all of that is allegation at this point; there’s not a speck of proof. But, just as I don’t hang out in “shady” bars or clubs that may be involved in drug or human trafficking – no one knows, there’s no proof – I prefer not to invest my money with a company that is facing such allegations.
It’s a big stock market out there; surely there are other investment opportunities to be found that aren’t carrying this baggage. I’d rather spend my time and energy finding them.
Best wishes, and
Good hunting!
Jackson
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