But first, what do I mean, "A pig in a poke?"
A pig in a poke
An offering or deal that is foolishly accepted without being examined first.
'Don't buy a pig in a poke' might seem odd and archaic language. It's true that the phrase is very old, but actually it can be taken quite literally and remains good advice.
The advice being given is 'don't buy a pig until you have seen it'. This is enshrined in British commercial law as 'caveat emptor' - Latin for 'let the buyer beware'. This remains the guiding principle of commerce in many countries and, in essence, supports the view that if you buy something you take responsibility to make sure it is what you intended to buy.
A poke is a small sack or bag and is the origin of the word pocket. The word is still in use in several English-speaking countries, notably Scotland and USA. A poke is just the sort of bag that would be useful for carrying a piglet to market.
A pig that's in a poke may turn out to be no pig at all. If a merchant tried to cheat by substituting a lower value animal, the trick could be uncovered by letting the cat out of the bag. The advice has stood the test of time and people have been repeating it for getting on for five hundred years, maybe longer. Fraser's Magazine (1858) reprinted a piece from Richard Hill's (or Hilles') Common-place Book, 1530, which gave this advice to market traders:
"When ye proffer the pigge open the poke."
As for SCA, it is in incredibly complex financial waters, but today it traded over 3.7M shares, average is 700K, and it was up 62%. This flurry of buying came on the heels of an agreement to settle claims against it by Merrill Lynch, pertaining to debt that SCA had insured but now Merrill Lynch was virtually giving away. To go any further into the complex web of financial cross currents and entanglements that SCA is caught up in would be beyond the scope of any semblance of my understanding, so suffice it to say, SCA is a proverbial pig in a poke.
Apart from the stellar performance today, here is some very basic elements of the puzzle:
First, the Market Cap
Next, the Balance Sheet
Our Trusty Technicals
The Trade: SCA is followed by some pretty savvy traders that I know. They are suggesting that as of Tuesday's settlement with Merrill Lynch, SCA is worth somewhere north of $5.00/share. There are some who even talk of double digits for this stock. There may be some bona fide hype about to ignite these shares a lot higher in the days and weeks ahead. A lot will depend on factors that I do not understand, ergo the characterization of SCA as, A pig in a poke.
The technicals are present, as is the story (murky as it may be), so the trade is confirmed, close your eyes, let us pray............