Friday, October 08, 2010

08 October 2010 No News is Jobs News


08 October 2010 No News is Jobs News

Well kids, I had to drop a note and try and give my read about the jobs data since I made such a big deal about it. I was not in front of my television at 5:30 this morning, but I did peak at my iPad before I took the pooches out this morning at 6:05. When I saw the 95,000 down number I was expecting the worst and actually considered taking some money off the table before the bell. However I am a work in process and I will take a lesson from my portfolio over in the UK which is now up 21% for the year. The lesson is, the less I screw (a financial term meaning execution of meaningless trades, position adjustments, panic selling, and trades associated with boredom mixed with too much red wine) with it the better it does.

By now I am sure you have heard and seen every interpretation of the job numbers and their impact. He is mine. Yes it was an ugly number, much uglier than even I suggested and I had it pegged way below the estimate range. We had a figure of -25,000. When you look at the -95,000, it becomes a little less surprising than what you see at face value. Government jobs dropped 159,000 souls, with about 77,000 attributed to census takers as expected. The other 82,000 were city, county, and state personnel, illustrating the sad situation in 38 of our 50 states. Even worse, many of the 82,000 were teachers. Now from a macro economic point of view, most of the big money boys knew state and city payrolls were coming down. On a very positive surprise note, the private sector created 64,000 new jobs, the ninth and largest month of private sector job growth. So it was a bad number yet the market handled it well and finished up. Why?

Again, just my humble opinion. Most of the guts of the number were not a surprise (except the good news on private payrolls) and the overall unemployment remained at 9.6% and the poor number combined with the private job growth sets the stage for the Fed to move ahead with the quantitative easing everyone has been talking about which should, maybe, kinda, we hope will trigger economic growth while we are seeing signs that the risk of the double dip is subsiding. That could be my record for a run on sentence.

Good Book Follow Up

One person asked who the billionaire who signed the $25,250 book yesterday.  Ooops.  Warren Buffet was a student under Graham and Dodd at Columbia.  He signed the Copy.  So here is my new idea.  I'll get a first edition copy of the 1934 "Security Analysis" Book by Graham and Dodd (about 20,000 if you can find it), put in a bid for lunch with Mr Buffet next year.  (This year's lunch went for 2.1 Million.)  During the lunch I will casually ask him to sign my copy of Security Anaysis and violla I will have paid for most of my lunch. 

Puttem up puttem up I dare ya!

We got quite a few requests to look at stocks and strategies. We got some questions about hotels, commodities, etfs, Netflix, how many stocks should you have in a portfolio, Citigroup, Microsoft, and uranium. We will try and get to all of them over the weekend as well as reading Barron’s and doin’ the week ahead.

Ok I know I’m good, but you need some convincing.

This was a good week for picks. We had STZ Constellation Brands the big booze and wine producer. Beating by 3 cents a share from 49 to 52 cents. Go back to Sunday’s post if you don’t believe me, because they did beat and they did hit 52 cents. If you look at the Sec filing, you’ll see you had to strip out some extra ordinary items to get to the 52 cents, but a beat is a beat.

No art tonight. Have a great weekend.

Salve Lucrum


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