“On Monday the 24th at Noon I’ll reveal the next major Bank Stock set to CRASH.”
That’s the big-letters headline from Dan Amoss in a new teaser ad for his Strategic Short Report — and since this one is getting a lot of attention from my readers, and the Strategic Short Report has been a top-ranked newsletter on the reviews site for quite a while, I thought we ought to give it a gander. Here’s some more of the hyperbole to get you into a nice profit-hungry lather …
“On Monday, August 24th, at noon, Dan Amoss will expose the biggest banking lie of the past 64 years.
“Given the past 21 months of market action — that’s no small claim.
“If recent mainstream headlines make you believe that banks have weathered the storm…
“You better think again.
“Dan’s caught another major bank he thinks is lying about being able to pay their massive $1.5 billion dividend scheduled for 2009.
“He believes this bank’s using every shady accounting trick possible to hide losses from their shareholders. “
Now, this is not really the way I’d like to return from a two-week vacation — I’d much rather be telling you about some top-secret biotech company that’s going to give you 1,000% returns by next Tuesday [even if, of course, it won’t] … but we’ll have to settle for this.
And hey, we can even beat Dan’s subscribers to the plate, since he apparently won’t be revealing this to them until his next newsletter comes out on August 24.
It will probably not be shocking to most of you, given the name of the newsletter and the tone of the headline, but Amoss usually focuses on betting against stocks for his Strategic Short Report — and today is no different. He’s teasing us that he’s picked out a put strategy (that’s an options trade) that will give you a profit of 50% or more … and that he thinks privately, but of course would never promise, that his idea should triple your money. We can look at the mechanics of that in a moment, but first we have to figure out what the stock is … clues, please!
“With a 192 year old history and 37,000 employees, its crash would drop like an A-bomb on unsuspecting shareholders…”
So there’s one clue. Or two, I guess. And we already know their annual dividend tallies up to about $1.5 billion. Some more?
“A major rating agency just cut this bank’s outlook to negative.
“And, in a warning sign I’ve never seen before, this bank’s own employees are speaking up — questioning management about the fudging of numbers on their most recent earnings conference call.”
Perhaps you’d like to hear a bit more about the rationale? Of course you would! And the Gumshoe can cut and paste with the best of ’em:
“Here’s Why Dan Thinks This Bank Will Get Slammed
“It all boils down to a few very simple things.
“This bank made risky loans to people who, unfortunately, are losing their jobs quickly…
“Without jobs, these people won’t be able to pay the bank back…
“The bank management is using accounting tricks to hide these losses from their shareholders, while some of the same executives even appear to be quietly dumping their own shares at peak prices…
“But they can only ‘fake’ it for so long…Are you getting our free Daily Update
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“If those loans finally default, it’ll set off a cascading effect of losses… lower earnings… and a draining of cash…
“With no cash, regulators could force this bank to cut their massive dividend. And this dividend cut would force their share price to plummet — maybe as much as 50-75% in a day — as folks race for the exits.”
OK … so, we’ve got a few clues about the company, and we know that Amoss believes they’re essentially cooking the books with their loan losses and such, and that he seems to think that a collapse is imminent. What’s the stock?
From those clues, thrown willy-nilly into the Thinkolator, which is still covered with dust from a long layoff, I can tell you that the stock must be …
BMO Financial Group, usually better known as Bank of Montreal (trades at BMO in both NY and Toronto)
This is one of the venerable Canadian banks — and it is about 192 years old and has more than 37,000 employees. And it did have a Bank of Montreal analyst asking somewhat snippy questions on the last conference call about the expected losses and the accounting thereof. I have no idea if that’s unusual or not, I’m not a habitue of bank conference calls, and I don’t know whether or not analysts who are employed by the bank giving the call typically kowtow to the CEO and CFO or ask tough questions.