Wednesday, July 14, 2010

July 14, 2010 Say Hay Nay Say Nay Sayer


July 14, 2010 Say Hay Nay Say Nay Sayer

If you ever wanted proof that this is the goofiest market around, the market closing mixed today makes no sense. All evening we have been looking for a reason for the slightly up (DOW) slightly down (S & P) market today. Yeah the fed said the recovery might be a robust as hoped, but this was based upon meeting minutes for last week. Read the earnings report from Intel. It reeks of more Corporate IT spending. More boxes being sold. More internet infrastructure. Give it up, the Intel report should have been a nice kick in the backside to get this market where it belongs which is at least 7-9% higher than it is now.

I was reminded a couple of times recently that this blog is cool (Chapter 7 The Prince “Beware of the Flatterers), but does not really help people make money. First, please remember the purpose for the blog is very self centered. It really is for me to keep my thoughts about what is going on in a place where I can find them, refer to them as necessary, and keep myself honest. If during that exercise I discover a new strategy or disprove an old one, it is a good tool for me to track that. If I visit an equity in November and it does not seem to be the right economic climate to pull the trigger I can go back and review the logic for looking at it in the first place. You all know I am a fan of Cramer. I was just reminded of how much I spend on his Actions Alert Plus subscription to I had to go back and ask, is it worth it. Using my blog to go back and see what he thought versus my research, I came to the conclusion that it is worth it. As I have said here I do not always agree with the picks and or the timing, but his logic and market understanding is almost always spot on. He does get pressured to get a story on air probably before it is timed appropriately. In other words in his vast research he might discover some linkage and need a 15 minute slot to fill tomorrow night, so he does a segment on Drones for the military, or natural gas storage facilities, or FILL IN THE BLANK. That does not make it the right time to buy buy buy, or that the companies he chose are right ones for that day or week. This blog does not have that pressure. (OK PNG was a great call and looking better by the minute, Thanks Jim).

Also this blog was a way for me to communicate to the handful of people I felt comfortable sharing ideas and schemes for minimizing their losses. As I have mentioned I would tell people something or send them a note and then 3 months later I would be bragging about the score and they would say I never told them about it. (Actually that happened this week with some bond issuance and I could find no less than 4 e-mails where I had told the individual about GMAC Smart Notes, Citigroup Bonds, Zion nat bank Bonds and FMAC Bonds).

I really wish every paragraph could be filled with stock tips and how to make a million on those tips. This is about learning along with me if you care, me doing some of the heavy lifting on research which I enjoy, and how to look for the linkage before the next guy finds it. Besides that, it just a little entertaining I hope.

Here is a tip that might make you some money, but again it does require homework. Every once in blue moon you can find a company that has positive income and more cash than their current market cap. (We have a few new readers so for their sake market cap is nothing more than the number of outstanding shares multiplied by the the current value of the stock Play a long with me.. ABC Company has one million shares outstanding, and is selling for 10.00 a share. Their market cap is. . . waiting. . . .That is correct 10 million.). If you find one of these gems, it is ALMOST impossible to loose money on them. How do you find them? Use a stock screener. Yahoo is free and very effective. I just spent about an hour and found none. That does not mean they are not there, it means I must spend more time on my vacation hunting. When I find them you will be the first 34 or so people to know. I read a blog today and a guys spent three weeks last November and found three companies. 3 month return on the companies in the fisrt quarter 2010, over 700%.

In closing and much to my surprise, one of my good buddies who I poke fun at here from time to time actually read one of my posts. It was actually a repeat of a November Post called Investing step by step. He indicated that he thought it was entertaining, but pointed out most people do not go through the trouble it takes to do the homework I suggested. He is right. My suggestion is to anyone who feesl that step by step analysis is too much work, then don’t invest in stocks. Choose a highly rated mutual fund or ETF, They have teams of people who do this all day long for you. You have to love the numbers the research and the learning. If not leave it to someone who does.

I GOT Marriot wrong. There I admit it. We were suggesting a weak performance today from Marriot of 20 cents a share. They blew by the 28 cent consensus and solidly nailed 31 cents a year. This too makes the market reaction today even more confusing. All night I have been searching for the weakness in the market and except for the ill timed comments from the fed and a slightly depressed retail sales report (If you take petrol out of the report it was .1% below last month. Come on that is about 3 hours sales at Wal-Mart.)

We must rest now as we have a big earnings day tommorow. If you have any equities you want me to do the heavy lifting on, let me know.

Salve Lucrum


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