Thanks Jeff M.

After a recent post Jeff M. pointed out what happened with United Airlines. United Airlines went into bankruptcy and while they were there they cancelled their common stock and reissued it.

Basically, the people hanging onto UA's stock lost everything when the cancellation and reissue occured.

So, I called Delta Airlines Investor Relations and I asked them if a cancellation of there stock was planned. Sure enough, as part of their reorganization Delta plans to cancel common stock and reissue new stock--this will occur sometime between now and March 27, 2007.

In other words, Delta's stock is a ticking time bomb. Investors rarely do their research--that statement includes myself--the reissue is written into their bankruptcy plans, and at some point the 150 million shares outstanding will be worthless.

So, I sold 10,000 shares of Delta Airlines today for $1.24 a share. So, I only made a 93% profit on the trade when I was hoping to make 1000%. LOL.

Thanks Jeff M.

Delta Update

OK, that last post was rambling.

Delta closed today at $1.50.

It's still looking good.

Delta Update

Like I said in an earlier post, I own Delta Airlines stock--10,000 shares to be exact. I bought it at $.65 cents a share. Today, it closed at $1.10. As far as trades go, I say I have a pretty good trade on my hands.

Ultimately, I'd like to hang onto this position until Delta begins climbing near an area of its former glory--It was as high as $40 dollars a share at the beginning of this decade. 40*10,000 is $400,000. To most people that's serious money. I'd be happy with $100,000, and it only needs to go up to $10 a share for that to happen--that's more realistic.

American Airlines went down to $.50 a share a couple years ago before it shot back up to $28 bucks a share.

Let's say you were a savy investor with some capital--you could have taken advantage of American Airline's dip. Let's say you had $50 grand and bought 100,000 shares. Today those shares would be worth about $2,700,000.

There aren't very many people in this world who couldn't retire off of $2,700,000. This was just one trade and it only took about 2 years for this to happen. The funny thing is--this happens all the time.

Every year I get 2 or 3 great ideas. I don't do anything special. I just follow the market. I paper trade a lot.

The beginning of this year I was looking at Delphi when it was $.30 cents a share. It's at a buck eighty right now. It's trending nicely. Do the 100,000 share scenario on this one.

Kmart was the same thing.
JC Penny the same thing.

I guess if you haven't figured I like companies that are in Chapter 11--probably NOT the most intelligent way of investing, but sometimes it pays off big. It goes along with the old saying--buy low-sell high. Well, if a company's in Chapter 11, it's going to hit it's low--probably its all time low. The trick is determining which ones are going to hit -0-. You don't want to own stocks that go to -0-.