Wednesday, November 4, 2009

Asleep at the Switch: Georgia Gulf (GGC)

I think I know why Georgia Gulf (GGC) has flatlined this week: the bond funds are asleep at the switch. Everyone with a clue sold out on Friday.

This happens all the time.

Towards the end, Downey Financial (DSL), would release monthly non-performing asset (NPA) statistics which would always cause a selloff due to the"unexpectedly" sharp increases in NPAs. Credit Bubble Stocks created a model that mined California county recorder records to predict the NPAs in advance. We tried to sell these reports to the largest holders of DSL; funds that owned tens of millions of dollars worth the stock. Not interested. Asleep at the switch. No one disagreed with us. They just didn't care.

These funds have too much money and consequently hold too many positions. That's why they weren't interested in buying good intel on their $40 million dollar asset. Imagine not buying insurance on a $40 million dollar office building.

Fortunately, there are two near term catalysts for GGC that will roust these funds from their slumber!


eh said...

The 3:25 mark

CP said...

Nice - although I prefer Laurel and Hardy.

I will be posting analysis of GGC earnings tonight.

Anonymous said...

Will be interested to see your analysis of the Q3 GGC earning release.


CP said...

It's posted.