Monday, January 31, 2011

#58: Market Rocks in January; Egypt; Super Bowl Pick!

Oil Prices on the Rise

Oil on the riseOil prices are near recent highs, and many are blaming the protests in Egypt as the cause.

But, oil prices were on the rise before Egypt.

The rebounding US economy should be getting credit for higher prices at the pump. As the economy improves and folks head out in their cars for the daily commute, shopping, and driving the kids around, the demand for oil increases.

Of course, the events in the middle east will contribute to the supply side. Or, the events will increase the fear premium on middle east crude.

Saturday, January 29, 2011

Super Bowl Pick: Steelers or Packers?

St Mary's cheerleaderI am up in Reno making my super bowl bets today. The weather was nice enough to get over the hill without snow nor worrying about snow.

So, the Packers are 2.5 point Favorites and the over/under is 44.5.

Here is my pick.

I took the Steelers on the money line at +1.30. To win outright!

I also did a two-team parlay, taking Steelers +2.5 and over 44.5.

Just a contrarian play. Everyone I talk to and hear are picking Green Bay. Sounds like last year when folks were taking The Colts. I went the Saints and won big.

Maybe my luck will run out. But Go Steelers!
***
And go St. Marys. I have them at Portland at 4pm! BlogBooster-The most productive way for mobile blogging. BlogBooster is a multi-service blog editor for iPhone, Android, WebOs and your desktop

Friday, January 28, 2011

Walk Like an Egyptian $$

I often write or audioboo about the reason du jour for the stock market action. Right on cue, today's sell-off is blamed on Egypt and the Nasdaq mix-up from this morning.

But this time, it was probably for real.

Yes, we've been due for a pullback. Yes, bullish sentiment has been an extreme. I think all of us have heard that the third year of a Presidential year all but guaran-damn-tees a 20% stock market return. Even the Michigan sentiment numbers came in pretty nice.

All we needed was something unexpected. Nah, not the PIIGS. The financial chaos there has been televised more than Leave it to Beaver re-runs. It's easy, maybe lazy, to blame any down-tick on the PIIGS. But it doesn't last because we already know about it.

I give you Egypt. What the heck has Egypt been up to the last 30 years? They've mostly been out of the headlines, except for a 1980's song by the Bangles. (Picture is of Susanna Hoffs, fwiw). But what does this mean for the long term?

Probably nothing - in the long term.

But in the short term, I think this and the recent unexpected news from Apple and Google are going to contribute for the reasons du jour for a little while.
***

I made the switch from DirecTV to ATT Uverse. You know, the latter is taking my neighborhood by storm. For all the fear of ATT losing iphone subscribers to Verizon, ol' Ma Bell is picking up lots of TV subscribers.

Just saying.





Selling Like There's No Tomorrow!

Whoa, here's a whoosh to the downside. $$ Dow down 142 and the Nasdaq down 62 as I type.

Whether it's Egypt getting the blame or if we just had a retest of the highs from the previous week, forming a double-top, and are now retreating will be one for the history books. But it's hard to figure it out when you're in the middle of it!

Having sold high-beta last week and rotated into low beta and cash, I'm still believing we're due for a correction. I don't think it will be too dramatic, but it may be frustrating for a few weeks.

February is not a historically strong month for the markets. But we are heading into the end of month and early month strength, where money from paychecks is deposited into 401k plans. It will be interesting to see how that plays out with those who want to take profits. And Egypt. I'm less concerned about Egypt, though.

So, if this all plays out like I think it will, we will see a trading range for a bit. And then when the bottom of the range is obvious, that's where I will recommit to high beta.

Of course, this is not advice, just my thoughts. I could be wrong. This could be a one-day wonder on a friday before the weekend where folks would rather be safe, and then when calmer minds come back to work on Monday, the uptrend resumes.

There are always at least two sides to every story. It's all opinion. Nobody knows for certain what tomorrow will bring.

TGIF
***
Picture is of Julie Benz. Yes, that Julie Benz. From "No Ordinary Family" and "Dexter" and "Buffy the Vampire Slayer." BlogBooster-The most productive way for mobile blogging. BlogBooster is a multi-service blog editor for iPhone, Android, WebOs and your desktop

Thursday, January 27, 2011

Netflix ($NFLX) Shorts Get Smacked!

Nflx 5-dayNetflix reported earnings yesterday and, well, take a look at the 5-day chart. I'd say investors reacted positively and those who were short had a come-to-Jesus moment.

I heard that there were something like 11 million shares short with. 45 mil float.

Holy buckets. There are many folks buying into the belief that either this stock is over valued or that the competition will catch up.

If you listen to the boos you know that I missed the move up and believe that at some point, Google, Apple, Disney, Amazon, Hulu, or whoever will catch up and take market share.

I think wide adaptation will require convenience. Whoever figures that out, wins.

But you have to hand it to Netflix for execution. And a great service.

I love what they do. But I don't own, and thankfully haven't shorted, any shares.

Wednesday, January 26, 2011

Dow 12,000 (almost) Randomosity

  • imageDid you watch the CNBC cast cover the 12,000 benchmark like it was the Super Bowl?  $$
  • The reason du jour?  President Obama (not pictured)!  "The speech last night created a more business-friendly environment," said Michael Sheldon, chief market strategist at RDM Financial Group. "He emphasized working with businesses to promote investment and jobs, whereas a year ago the White House was criticizing financial institutions."
  • I know my right-wing talking points like the back of my hand:  Investment = government spending.
  • Hulu management has discussed recasting Hulu as an online cable operator that would use the Web to send live TV channels and video-on-demand content to subscribers, say people familiar with the talks. The new service, which is still under discussion, would mimic the bundles of channels now sold by cable and satellite operators, the people said.
  • imageI know my talking points here, too:  Pay up, consumer.
  • Did you read where Dallas taxis are going to boycott the Super Bowl because Natural Gas cabs get to move to the front of the line?  Call me a communist, but I think it makes a bunch of sense to move America’s vehicle fleet to natural gas. We have a ton of the stuff.  It burns cleaner.  And we’d send less money to foreign countries that hates us.
  • The TV Audience was smaller for President Obama’s 2nd state of the union.  I think everyone was at the Cheesecake Factory last night.  Seriously.  It was packed.  Anyway, 43 mil saw the Big O last night, compared to 48 mil last year.
  • I know my left-wing talking points here: George W. Bush stole their TVs.
  • Yes, this is a picture of the very beautiful and talented Michelle Malkin.  Bikini. Swimsuit. Lingerie.  Smoking.  Fact check.  Snopes. 
  • I know my buzzword talking points, too.  Er, talking points memo.

***

Site notes:  I think the move to the new website domain is complete.  If you’re still going to thelearningcurve.blogspot.com, you will be redirected here to themoneygoround.com.

Tuesday, January 25, 2011

$GLD Down 6% for Year

Gold at three month lowsI have said that a 2011 theme will be investors fleeing $GLD and bonds and buying equities.

Gold is down 6% for the year.

Gold doesn't make or produce anything. You don't receive growth or dividends.

But it does make pretty jewelry.

I believe gold has been in a bubble.

If you read the CNBC article, you will see that the consensus opinion is that gold will average $1450 in 2011. We shall see.

The Lagging $JNJ

In last night's Audioboo, I wondered about $JNJ. Minyanville's Brett Chase has a column up today.

As I mentioned last night, I don't own JNJ. But it's a stock that is forever on my watch list. I always feel that it's a stock that I want to buy that churns out steady and growing dividends year after year. As the country ages, I think the company will continue to sell stuff and make money.

But I still don't own shares.

Good column at the 'ville. Check it out.

$VZ to Offer iPhone with $30 Unlimited Data Plan

Verizon to offer a $30 unlimited data plan for the iPhone. Did I just hear a giant sucking sound coming from $T?

This is kind of a big deal.

As you know, many of us iPhone owners from back in the day have been grandfathered in to unlimited data from ATT. But recent buyers are capped at 2gigs for $25 a month.

Verizon has come to the Super Bowl with a game plan. Way to step up. BlogBooster-The most productive way for mobile blogging. BlogBooster is a multi-service blog editor for iPhone, Android, WebOs and your desktop

Blame Mixed Earnings

I like my drinks mixed, but mixed earnings are getting the blame for the early malaise on Wall Street.

The market has moved up since the open. We are heading toward the end of month, which tends to see 401k money added to the market. But February has been a rough month for the market.

Maybe that's too obvious.
***

Trying the iPhone app Blogger+.

Monday, January 24, 2011

iPad: Following the Twitter Money Feed on Flipboard $$

Tired of wading through Twitter spam following your favorite money tweeters and columnists? If you have an iPad, you can sort through the muck using the Flipboard app.

It's simple and you have a few options. You can follow a feed directly. Here are two screen shots of The Economist Twitter feed as presented by Flipboard. The first presents The Economist's timeline, and the second is what happens when you choose a Tweet to expand.  As you can see, Flipboard takes the link within the Tweet and grabs the text to display on the iPad.

12But wait, that's not all! You have a Twitter list of your favorite money tweeters? You can follow that Twitter list in Flipboard, too. Here is a screen cap of my money list @muckdog/money.

3

As Miley Cyrus would say, that's pretty cool.

#57: Steelers or Packers? Market Bounces Back! $$

Sunday, January 23, 2011

Egad, the Bears Look Awful

  • The Packers look like a team of destiny. At least in the NFC.
  • In the iPad app FlipBoard, you can subscribe to Twitter lists. And not just yours, but others. Great way to read blogs and news sites. Hat tip to @leolaporte. Anyway, that means that you can read twitter without the spam to see what you want to see.
  • About three beers in and switching to Diet Dr. Pepper until the next game.
  • Todd Collins out? Who is this? Caleb Hanie? Wow. An they just scored.



SNL Rerun Randomosity

Yes. Everyone (even Jim Cramer) seems to be happy about the positive market week. Er, well, I'm repeating myself, but the Nasdaq didn't.


Ooh, wee, what's up with that?

  • Analyst Brian White says $AAPL could go to $550. I bet a lot of shareholders are glad to hear that.
  • CBS reports that many House freshman sleep in their offices. For some reason, that didn't come as a surprise to me. I wonder if the interns do the same.
  • $AAPL announces 10 billionth app download. So, that's a lot of apps. How many apps do you have on your iPhone? I think I'm around 40 apps loaded, and many more deleted.
  • President Obama gives the State of the Union on Tuesday, and says the focus will be jobs and the deficit. Er, okay. I'm sure it will.
  • Mitt Romney wins the first 2012 straw poll for the GOP. Phew, it wasn't she who shall not be named. I think Mitt is a strong candidate and comes across as a moderate Republican, but I doubt 2012 will be that easy against an incumbent President Obama. In addition, it may not be that easy to win the Republican nomination being a moderate.
  • So you heard that if you itemize your deductions, you have to wait through February before you can file your 2010 tax return, right? This was due to the late-2010 changes in the tax laws.
  • The Meredith Whitney Prediction Watch: California warns that if there are no budget cuts, the state will have to issue IOUs. Now that's nothing new here, as the state has been down this road before in previous budget years. But I heard clip on the radio where if the voters reject tax hikes in the coming special election, the state will have to cut 6-weeks out of K-12 education.
  • So many are worried about ATT stock now that Verizon is getting the iPhone. But man, ATT is making huge sales on ATT Uverse in my neck of the woods. Yours? (Uh, no NFL Ticket...)

Okay. I tried to stay up and watch all of SNL. I don't think I saw this one when it was originally on!

Friday, January 21, 2011

TGIF Randomosity and Beer

We made it through another week with $AAPL, $GOOG, $JPM, and all making big news. The market looks very wobbly. But it is Friday.


Time for a beer?

  • Did you see that the SP500's 7-week winning streak ended this week? Not even close, 1972 Miami Dolphins.
  • Yesterday's after hours saw a positive reaction to Larry Page taking over at $GOOG. What a difference a day makes! "Founder becoming CEO ... Is this like a Steve Jobs returning or a Jerry Yang returning?" Chris Dixon, a technology veteran ... tweeted.
  • Under misleading headlines: US Blue-Chip Stocks Close Higer. Yeah but... Nasdaq didnt. Listen to that last audioboo for my thoughts on that!
  • Taco Bell has decided MTV's new series "Skins" is too spicy for its taste and pulled its ads from the drama, which has been criticized as glamorizing teen sex, drugs and boozing. Ticker is $YUM. Crunchwrap and some TV? Remember when MTV used to show music videos? Do they still do that?
  • Under misleading headlines, too: The Dow snaps two-day losing streak. Sure. Pay no attention to that NASDAQ market hiding behind the curtain.

#56: The Shift into Low Beta, $AAPL, $GOOG

Dow Leads While NASDAQ Bleeds $$

When the market rallies, the Nasdaq should be leading the SP500, and the SP500 should be leading the Dow.


That's not what's happening today.

When the Dow leads it could mean that investors are selling risk (tech and NDX), and buying large companies that have a lower beta and that pay dividends.

Just a thought. It's not gospel.

Thursday, January 20, 2011

New Domain and American Idol Randomosity

It's options-ex week. Big shake-ups in $AAPL and $GOOG. American Idol returns (and seems fresh).


And it's Thursday! Just one... more... day...

  • So, seems strange to change the domain from thelearningcurve.blogspot.com to themoneygoround.com. I've been doing this for a long time here. And now, change? I blame Dr. Jeff. I read his blog about blogging, and it's been in my mind since. LOL. So anyway, once the transformation is complete, I will change the look and feel. Over the weekend probably!
  • Good column up at Marketwatch on the six lessons to learn from Jesse Livermore. I think learning how to lose is most important. It's okay. Don't stress about it. Keep plugging away. The other ones are good, too!
  • I'm pulling for both Apple and Google to make it. I think Apple has enough forward momentum and product buy-in by consumers. They have a much larger customer base than they did 10 years ago. And Google is the other major player.
  • Whatever happened to Microsoft? Oh, they still sell billions, too. But that's not who we think about when we think of innovation, is it?
  • Yes, Jennifer Lopez is very beautiful.
  • Stocks... Still think we're in a correction of sorts. But I could be wrong. Today's finish wasn't then worst thing.
  • I'm liking Jennifer Lopez and Stephen Tyler on American Idol.

New Domain

This blog is moving to http://www.themoneygoround.com



Moving to a New Site

Okay, if the blog goes dark for a bit it is because I’m moving to a new domain.  Stay tuned…

$GOOG is the new $AAPL

Larry Page replacing Eric Schmidt at $AAPL.  So, is $GOOG the new $AAPL?

The company, which has grown into the world's biggest Web company by market capitalization since its 2004 initial public offering, said it was making the changes to "streamline decision making and create clearer lines of responsibility and accountability."

Interesting week in tech with Apple and Google having changes at the top.

So, Google was up slightly after hours when I last checked. 

Wednesday, January 19, 2011

#55: $AAPL Stock, Steve Jobs, Market Correction, Regis Philbin, New Website?

Wednesday Randomosity and a New Website for Me?

The market selling off today. $$ Reason du jour? Financials! And as you know, it is difficult for the market index to go up when a large component is going down large numbers.


It is just one day. But it looks like the much anticipated correction may have arrived.

  • I may be moving this blog to a new domain. Stay tuned. And since "thelearningcurve" is taken, it will be... something else! Got any ideas?
  • Senator Joe Lieberman will not be seeking re-election. Quite an interesting career for the Senator. Most of us unawares until his 2000 run for Vice President with Presidential candidate and global warming alarmist, Al Gore.
  • Some of my ideas for a new domain name are "latinabootyandyourmoney" or "graceparkno1stalkermarkettiming." See? You just take some words and bunch 'em together for a catchy website name!
  • Goldman Sachs profits down 53%. Ouch.
  • So, quick market thoughts... I remain mostly long but much lower beta after yesterday's sale of the NDX. I think we have some work to do. If I had to guess, I'd suspect a trading range is coming that will take us down 5-10% in the SP500, and then meander for awhile, and then resume the uptrend. That's what I'm thinking, anyway. Subject to change on a moments notice.
  • My thought on Adam Sandler movies? No, that's not an idea for a new website domain name. Anyway, I think they're usually Netflix worthy. You know what you're going to get, right? He plays the same guy in every film. There will be a few funny bits, but most will have been in the previews!

Yes, that is a picture of Jennifer Lopez. That's a name that often comes up when thinking about Latina booty.

Tuesday, January 18, 2011

Tim Cook Steps up for $AAPL

$AAPL isn't losing a beat with Tim Cook. After blowing out earnings numbers with iPhones, iPads, and iPods flying off shelves, Cook (not pictured) went after the competition:




On today’s Apple earnings call, Cook characterized the competition as falling into two buckets: Windows-based tablets, which are “big, heavy and expensive” and suffer from “weak battery life,” and current Android tablets, which are “scaled-up” smart phones.


I think we all knew earnings would be fantastic. The questions remain how investors will perceive the risk in a stock priced for perfection.

The stock is trading up after-hours.

Selling $QQQQ

Sold my $QQQQ. Because of $AAPL being 21% of the NDX. Because of where we are on the calendar. Because of where we came from since August. Because of sentiment. Because a little voice in my head won't shut up.

Just because.

Rotating some into VTI and VIG. Plus a few names.

For now.

Monday, January 17, 2011

Steve Jobs Medical Leave and $AAPL Stock

Steve Jobs is taking medical leave, as $AAPL heads towards earnings report. What happens to the stock price?


It's funny (strange). Saturday I was driving to a friends to watch the NFL playoffs, and trying to record an AudioBoo (podcast) on my thoughts for Apple and their earnings report on Tuesday. I gave my thoughts, and then re-listened before I uploaded to AudioBoo. The sound quality was so bad, that I decided to wait until today to do the Boo, but then I woke up to the news about Steve Jobs.

Apple was taking a hit overseas last I looked. About 6% or so. And it looks like our futures are down. But Apple does report earnings tomorrow and the numbers will be strong.

First, I wish Steve well. He has been through a lot. It certainly reminds us that we are all vulnerable, no matter how rich or smart we are. Steve has taken Apple from $10 a share up to new highs in the mid-$300s. The company has been the bright spot in the bear market decade. We are all benefitting from his contributions to portable music, cell phones, and internet connectivity. Bravo, Steve!

The stock will report record numbers. There is a new deal with Verizon. With millions of customers, the iPhone and iPad will continue to sell new versions with technical upgrades to people who have embraced the products. There could be products in the pipeline for years that continue to grown earnings.

Apple is a leading stock. The stock is priced for perfection. Everyone is a believer. This is what makes it vulnerable to PE multiple compression. Even as earnings grow, the stock may fall a bit as folks aren't willing to pay a premium for $AAPL without Steve Jobs.

In the AudioBoo I didn't upload, I mentioned how Apple has price targets from $400, $500, to $1000. In addition, I mentioned that the Verizon deal means that more iPhones will be sold. The main benefactor to the deal would be Apple and Verizon, and the losers on that were Google and Research in Motion, and ATT. None of this changes as far as phone sales and monthly contracts go.

My thoughts are to lighten up on AAPL and the QQQQ, and put the money to work elsewhere. It doesn't mean AAPL will tank from here, but I think the odds are that investors realize the risk and that higher PE multiples will be difficult from here.

I also think that if the market is looking for a catalyst for a January correction, it just got one.

***
Disclosure: No position in AAPL

Sunday, January 16, 2011

Is Housing Crisis Still Affecting Economy?

Here is a column from Marketwatch on Housing, asking if it is still the economy's Achilles' heel.


Here's my quick answer: No.

Why do I say that? I think it's priced in. Folks who were underwater and unable to make payments have already moved on to the next thing. Either they have roomies, moved out, refinanced, short-saled, or gone to foreclosure.

Banks have moved on as well. They've received financial help from the government, and now have properties that they will slowly unload over time.

The real Achille's heel of the US economy is energy.
***

Used iPad app Art Studio to take the Marketwatch screen-cap and add a layer with the iPhone girl.

Saturday, January 15, 2011

I'm Amazed I don't own $GOOG

Just an aside, but I was thinking about $GOOG and Android phones, then everything that is Google related on the internets. Why don't I own this stock?


Wait. I did. From $110 to $112 on a day trade. A winner! (Good grief).

I use Blogger. I have YouTube stuff and photos on the Google. I use the search engine. Don't we all? Gee, another Peter Lynch fail on my part.

Maybe next pullback or correction.
***

It will be interesting to see if $AAPL's iPhone availability via $VZ will cut into $GOOG's Android sales. Are folks at Verizon buying Androids because the Apple iPhone hasn't been available? Now that the iPhone is available, what will consumers do?

$AAPL to Report Earnings Next Week

$AAPL will report earnings next week, and we will find out the sales numbers for iPhones and iPads. I think Apple's numbers will be amazing. But how much of that is already factored into the stock price?


When it comes to Apple, are folks already "all in?" Will we see a "sell the news" reaction to earnings?

The price targets for Apple have been increased. The projected price ranges from the $400s, $500s, to $1000. It almost looks like the projections from bygone days of Internet mania.

Don't get me wrong. I love my iPhone and iPad. I certainly hope the stock continues to advance, as it is a leading stock and healthy for the bull market to keep its upwards trajectory. In addition, I think that $VZ will help increase Apple's market share and bite into $GOOG's Droid phones and $RIMM's Blackberry phones. (I'm not sure if we should even mention $MSFT's Windows 7 phones here. How are they doing???)

We are now in the middle of January, and this is about where we ran into a correction last year. Just keeping a watchful eye on things...

Looking forward to the earnings report.

Friday, January 14, 2011

$NFLX vs. $CSTR

If you read this blog and listen to the AudioBoos, you know I talk a lot about $NFLX and content delivery. Today on the Boo I mentioned RedBox (Coinstar) and the sell off on the latest earnings report.


As I said, I missed the stock move in Netflix, even though I use it quite a bit. Peter Lynch would rate that a fail, right? Anyway, I don't trust the sector. I believe that there are major players in the game. Who? Well, who provides us entertainment? It's Comcast, DirecTV, Dish Network, Wave broadband, Netflix, Hulu, ATT, Apple, Google, Roku, Microsoft, Sony, Amazon, etc. I'm sure I'm missing a few. And these companies want your eyeballs on their content and advertising. So, I just don't trust investing in Netflix or Redbox (Coinstar).

At some point there will be consolidation, winners and losers, or maybe new players as the technology keeps evolving and improving.

Here is an article saying that maybe the recent earnings report by Coinstar indicating that Redbox is failing against Netflix may be overstated.

That's telling. It's probably a mistake to view Coinstar's results as a sign that Netflix is hammering nails in Redbox's coffin. ... It doesn't appear that consumers were suddenly less interested in watching DVDs during the holidays. In fact, Coinstar CEO Paul Davis said in a statement Thursday that visits to Redbox kiosks in the fourth quarter "remained strong." It's just that consumers rented fewer movies -- meaning they stopped by but didn't spot as many titles they wanted to take home.

So, they rented fewer movies or they diversified their choices? I don't know.

All I know is that there are ever expanding options to get movies to my big-screen TV. I've opted (so far) to the low-cost Roku box to stream Hulu and Netflix to the TV. I'm enjoying the content and avoiding the stocks.

Oh, and doesn't Coinstar charge something around 7% to redeem your coins to cash? Credit union, people! Credit union!

#54: Market Heading Towards Correction? Bull Sharks Swimming By AU McDonalds!

Friday Ransomosity

  • imageTGIF.  Another good week for the market.  $$ Remember last year, Santana?  We had nice gains through mid-month, and then WHAM!  Correction.
  • Picture is of Naya Rivera.  Who?  You know.  Santana on Glee!  Don’t pretend that you don’t watch.
  • I am working from home today, which allows me to sleep in.  (Don’t tell my boss).  Anyway, by the time I get up the market has rebounded.  But the WSJ still has the “Materials, Merck Lead Stock Decline” headline up.
  • Still, the market is just above flat so far.  As I type, of course.
  • I think it’s in our nature, or at least mine, to try and time the next pullback.  But one thing I’ve learned, and what works for me, is to be very patient on a pullback and wait for a light-volume retest near the previous highs.  (I say that now, but sometimes I can’t help myself…)
  • $5 Gas Prices Coming to a Pump Near You.  This article lists seven reasons why.  I think supply-demand.  And with economies improving, Santana, we’re going to need more fuel.
  • Gold prices tanking.  I think this money will flow into stocks at some point.  Same thing with the bond market.  Folks are going to start feeling a bit uncomfortable with their declining gold and bond holdings, and move to what’s working: Stocks. 
  • If you’ve read the blog for awhile, you may recall that last summer I powered through all ten seasons of Stargate.  This past week, I started watching Stargate Atlantis.  Really.  So, I’m watching the first season where the “Genii” are trying to take over Atlantis during a hurricane.  And who is on the show as a Genii Private in their army?  Cory Monteith from Glee (not pictured).  Yeah, Finn Hudson (still not pictured).  He’s almost 29 years old, playing a high school kid!
  • Naya Rivera turned 24 this past week.  In case you didn’t know, cookie.

Thursday, January 13, 2011

The After-Christmas Employment Lull

The reason du jour for the market being lower today was that the employment numbers were a bit disappointing. Basically, the number of folks applying for unemployment was up to 445,000 last week. And that marks the highest level since October.


This means the part-time holiday help at Wal-mart and JC Penney were let go.

I don't think this is a reason to panic. And the market wasn't too horrible today. Remember, we've had quite a run up since September. There will be points where the market pauses, trends sideways, and gives us all a scare.

Keep an eye on earnings and the forward-looking statements by companies as we cruise through earnings season. How investors react will determine whether we keep trending or get stuck in a trading range. And if it's the latter, it wouldn't be the worst thing
***

Been swamped at work. You know, sometimes it's really difficult to pick up momentum after the holidays. I think it's easy to get stuck in the lull. But when the boss is cracking the whip, it's not easy to have an easy-going pace.

It's going to be near 60-degrees here tomorrow. Really! Man, have I mentioned how much I prefer the warm months to the cold months!

Ben Bernanke Sees Strengthening

Ben Bernanke says that things are better. I think he's right.

“Interest rates are higher, but I think that’s mostly because the news is better,” Bernanke said today at a forum in Arlington, Virginia, hosted by the Federal Deposit Insurance Corp. “It’s responding to a stronger economy and better expectations. So I think that the policy has helped.”

...

“We see the economy strengthening,” Bernanke said as part of a panel discussion on boosting lending to small businesses. “It looks better in the last few months. We think that a 3 to 4 percent-type of growth number for 2011 seems reasonable.”

“Now you’re not going to reduce unemployment at the pace that we’d like it to,” Bernanke said. “But certainly it would be good to see the economy growing. That means more sales, more business for companies of all sizes.”

(From Bloomberg iPad app)


There you go. And a 3-4% growth rate for 2011 would be nice. It is the easy growth rate that wouldn't lead to the Fed raising rates.
***

President Obama gave a very impressive speech on the horrific shooting and reminded us why he swept into the White House. This was a return to Hope.

Wednesday, January 12, 2011

Despite Portugal… Randomosity

  • imageHere the headlines are worried about Portugal, while European and US stock markets are making bull market highs!  Not to slight the worries in Portugal and such, but I think much of this is priced in.
  • Another great day in the market.  Yes, at some point the rally will end.  The indexes will retreat and retest the 50dma.  At some point.  I remain 100% long. 
  • Honda will offer a Civic natural gas car nationwide in 2011, er the 2012 model, right?  Now there’s a great idea.  I’m thinking about getting one. It’s cleaner than gasoline.  It’s cheaper than gasoline.  When I fuel it, the money stays here in America instead of going overseas to countries who hate us.  Just waiting for the details.  $25K.  And here’s where you can refuel. Or refuel in your garage.  Available this spring!
  • Britney Spears releases new song and uh, who cares other than the Bellamy Brothers.  But here’s a pic.  Oh, I’m sure the song will sell a bunch of downloads from iTunes.  I’m not a Britney hater. 
  • Prices soar on crop woes. Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June. With yesterday's gains, prices of corn futures contracts are now up 94% from their June lows; soybeans are up 51% and wheat is up 80%.  Time to start hoarding wheat, corn and soybeans.  What gets the blame?  Dry weather in South America and floods in Australia.  Too dry and too wet, said Little Red Riding Hood.
  • Illinois raised the corporate tax rates and businesses are fuming!  With the higher personal income tax rate, people are fuming, too.  Well, if people demand services then somebody has to pay for the services.  And that somebody is you!  No free lunches!
  • So, I wonder the impact.  Will folks move to lower tax states?  Will companies relocate?
  • Oil prices up againFutures climbed to a 27-month high yesterday after an Energy Department report showed stockpiles dropped 2.15 million barrels to 333.1 million last week, the lowest level since February. Supplies were forecast to drop 1.4 million barrels, according to a Bloomberg News survey. U.S. stocks rose, sending benchmark indexes to the highest since August 2008.  Yes indeed, as the economy recovers, we will use more oil.
  • Unless folks rush out and buy the Civic GX.
  • The Fed’s Beige Book says that the economy is slowly gaining momentum.  Sometimes, when they release that, the market goes POP.  Held up today.  Add it all up, and the picture is an economy very slowly gaining momentum, with some continued pockets of distress but also definite signs of progress as 2011 gets underway. In the all-important labor market, for example, conditions "appear to be firming somewhat," though not enough to push wages upward.  I don’t think wages will go up much until we see unemployment drop.
  • If I said you had a beautiful body, would you hold it against me?
  • I haven’t written too much here or said too much on the AudioBoos about Jared Lee Loughner.  I don’t plan too, but it was a horrid event.  When I see the parents of the 9-year old girl talk, it really hurts.

Tuesday, January 11, 2011

$AAPL iPhone on $VZ: Winners and Losers

A forest has already been leveled reviewing the winners and losers with Verizon offering the iPhone. Let me add my thoughts...

First, let's look at Apple. Apple has had wild success with the iPhone and offering the 4G with a new US carrier allows access to buyers who do not wish to switch to ATT. This is simple. Apple will sell more iPhones. In addition to new Verizon users, Apple will gain buyers who switch from ATT to Verizon and buy yet another piece of hardware.

In addition to handset sales, guess what happens next? Yes. iPhone owners head to iTunes and buy music. They head to the app store and buy apps. They open the iBooks app and buy ebooks. The hardware purchase is the gateway to giving Apple a credit card for subsequent purchases.

What about ATT? This is going to be a hit to ATT. Not a huge hit, but a hit. Now, I do not plan on switching to Verizon. I'm happy with ATT. Many and maybe most are happy with ATT. But there will be some who are going to make the switch. While, at the same time, there won't be as many jumping ship from Verizon to ATT because of the Verizon iPhone, right?

ATT is trying to lock in iPhone buyers and attract new iPhone buyers with some interesting price points on the iPhone 3GS. There will be some who sign up. I don't think this will offset the number of folks who leave ATT when the 2-year contract is up.

Verizon will be a big winner with the iPhone 4. The profit margin is not with the iPhone hardware, but with the monthly subscription plan. There will be many new iPhone owners sending in monthly payments for minutes, data plans, and text messages.

Losers? I think this may be a bit of a hit to the Blackberry and maybe Windows phones. When the major carriers are offering hot products like the iPhone and various flavors of Android phones, the other phones become a third or fourth option.
***

Did you read where Governor Jerry Brown is confiscating the cell phones of most state workers? It will save California about $20 million a year. I think CA buys a lot of Blackberry phones, for what it's worth. Now there's a hit, as you know the state is paying top dollar for phones and plans.

#53: 1/11/11, iPhone, Meandering Market

Earnings Kick off with Alcoa Randomosity!

  • imageIt’s 1/1/11!  HOLY SMOKES!
  • Somebody made a rule that $AA gets to kick off earnings seasonAlcoa declined 1%. The aluminum giant kicked off the earnings-reporting season with a swing to a fourth-quarter profit on rising demand and prices for aluminum, but its sales growth wasn't as strong as expected.  Got that?  You’re not using enough aluminum!!!
  • But worrying about Europe is oh-so-yesterday.  Tuesday's stock gains came as investors were encouraged to see the European Central Bank step in to buy under-pressure euro-area government bonds for the second consecutive day. Also, Japanese Finance Minister Yoshihiko Noda said Tokyo may buy more than 20% of the securities issued by the European Financial Stability Facility in its initial round. The announcement follows reports that China is ready to buy 4 billion euros to 5 billion euros of Portuguese debt.
  • The market went up.  I guess that’s the good news.  I remain 100% long and looking for a reason to do something different.  Not yet.
  • Meanwhile, yes Virginia, there will be a Verizon iPhone.  It’s the same basic version that’s on ATT.  Don’t expect a 4G LTE iPhone until 2012.
  • Picture is of Annie from Randomsnaps.  Just sayin’…
  • Are the Sacramento Kings moving to Anaheim?  I live in Sac, but haven’t been to a Kings game for years.  I just feel that the price of sports tickets doesn’t deliver much entertainment value.  And I used to have season tickets.  The prices have just skyrocketed for mediocrity.  For big contracts.  No thank you.
  • After the Arizona shootings, Congress “readies new gun-control bills.”  These all seem a bit reactionary to me, but I suppose that’s how the government works.  I’m not sure how this stops a crazy person from hurting other people.  Sometimes I think folks feel like they have to do “something” and can’t sit idle.
  • What? No bowl games tonight?  Good grief!
  • Michigan Wolverines hire Brady Hoke to coach the Big Blue machine.  He of San Diego State Aztec fame.
  • California Governor Jerry Brown will ask voters to vote to tax themselves in a special election.  Arnold tried that.  Failed. I don’t see Jerry having much more luck.  Then what?
  • If you didn’t have a chance to listen to my AudioBoo from yesterday, please do.  I wish my dad a happy birthday.  The lesson to be learned is that I resolved our differences long before he passed, and I am sooooo glad I did.  Life is too short to hold grudges.

Monday, January 10, 2011

#52: Stocks, Jerry Brown, Oil, Happy Birthday Dad

The Early Worry

Today's market swoon brought to you by Eurozone worries. And the energy sector is selling off a bit with the Alaskan pipeline leaking oil. Although won't that lead to higher gas prices?


Meanwhile, the NASDAQ is holding up better thanks to Apple. Yes, the iPhone is coming to Verizon. I think this is good for Apple and Verizon. Mixed for ATT at this point. I think the biggest loser here is Blackberry.
***

Another busy week here at the Fun Factory.

And tonight we have the big Auburn vs Oregon game!

Saturday, January 08, 2011

Stock Market Weekly Wrap Up!

I don't normally recap the past week, but since it was the first week of the year and we all look to the January Effect and "as the first week of January goes, so goes..." something or other, here it is.

Via our friends at Yahoo Finance, of course.

DJIA: Up 0.8
Nasdaq: Up 1.9
S&P 500: Up 1.1
Russell 2000: Up 0.5

I think I linked to a site earlier that showed the past 60 years of January returns. It looked as if the highest January return was 2.5% for the SP500. There weren't very many over 1.5%. Here we are, at 1.1% already.

I'm going from memory, so you know how that goes. But I think I'm close.

Anyway, the theme from the week was that things are improving, even though the last number of the week was lower than folks wanted. Yes, employment. The experts were thinking that the number would be better than it was. But it does show that things are improving, just not "off to the races."

And maybe we're better off that way...

***
Ugh, had a bunch of Saints on my Fantasy Football Playoffs team. I was thinking they had a shot at the NFC title. Er, no.

Thursday, January 06, 2011

Are the Stocks not to Own, the Ones to Own?

Great column from the WSJ $$ on the “Pros” picks, and how they do compared to the SP500 and the least favorite stocks.

imageIf you had started with $10,000 at the start of 2006, invested $1,000 in each stock and reinvested any dividends, today you'd have $10,950. That's before trading costs and taxes.

But if you had just ignored Wall Street analysts, put that money in the S&P 500 exchange-traded fund—which tracks the entire Standard & Poor's 500—and left it alone, you'd have $11,190: slightly more. And you'd have saved a lot on trading costs and capital-gains taxes as well. Overall, you'd have ended up considerably better off.

As for the unpopular stocks? Thanks to survivorship bias, we can't be completely certain. But if you'd just bought the most-hated 10 stocks (in today's S&P) each year you'd have an astonishing $16,430 today.

That's in just five years.

That beats the most-popular list, and the index, hands down.

So, what do you think?  The article gives the Top Ten and the Bottom Ten.  Choose wisely.  Or choose the index!

Chasing performance is a tough gig.  Just ask the Lakers Girls!

Wednesday, January 05, 2011

Monthly Strength Randomosity

Yes, the stock market was up yesterday. Today there is a split tape with the Dow down and the Nasdaq up (a smidge). And we're in the monthly strength period where money is added to the 401k plans... And we're in the January Effect, etc. Good economic news is coming in as the employment numbers and manufacturing numbers are improving. Gold is falling. Bonds are falling. And oil prices are increasing as demand improves with economic growth.


(He says, repeating himself...)

  • I am cruising through George Bush's book, "Decision Points." I read about the staff turnover, and lo and behold, I see the staff turnover bug hit the Obama administration today. It's called "change."
  • This is a big week for me, as I am a tech geek. CES will be making news headlines for the rest of the week. No Apple, but other companies will be making noise about their ideas and plans. Microsoft's Steve Ballmer talked about the XBOX and Kinect. It will be interesting to see where they take that. But I'm trying not to watch the CES Twitter feed!
  • I am very big into reading books on the iPad. I think Google Books seems to have the best prices. Their app doesn't do landscape mode, though.
  • One big Twitter storm this morning is whether Miamk Dolphins coach Tony Sparano still has a job or was he fired?
  • If all CES does is show us lots of tablet wannabes and 3D televisions, I will be disappointed.

Picture is of CNBC Fast Money's Melissa Lee.

Strong Data

Just in case the reason du jour changes later, stocks are up after the weak open due to "strong data."


Specifically, strong jobs data.

The private sector added 297k jobs in December as our favorite lagging indicator is finally participating in the recovery.

The dollar is up, while bonds and commodities are down. Again, I think the money from bonds and gold will be going into stocks at some point. People love to chase performance when greed takes over!
***

What? No bowl game tonight???

Tuesday, January 04, 2011

It's Official: "The Most Difficult Time to Invest" Randomosity

It's the most difficult time to invest in Jack Bogle's lifetime, per Jack Bogle. $$


According to the Vanguard founder, there is "nowhere to hide" these days. Bond yields are pitiful. Dividend yields are pitiful. The whole shooting match is pitiful!

The answer? Low-cost index funds! Who knew? Thank you, Mr. Vanguard Founder, sir!

Anyway, some randomosity to go along with your low-cost index fund:

  • Absence of leadership is the reason du jour for the selloff. Gee, no news headlines or what? Anyway, the slide stopped and the market recovered some before the end of the day.
  • You say potato, I say... The Fed split over economic outlook. Well, gridlock gridlock everywhere, and not a drop to drink. Article says maybe this means the Fed is on the sidelines for now. But I'd think Ben can sway the vote, right?
  • Mega Millions numbers announced. $355 million at stake. I don't know if anyone won. I have some numbers.
  • Apple won't be at CES, but everyone is waiting for their next big announcement.

Worry Sinks Stocks Early

Today's early sell off brought to by the fear of rising commodity prices hitting consumers' wallets.


And gee, yesterday's optimistic outlook runs smack in to a wall. I guess they're trying to say your Cheerios are going to cost more.

Remember all the volatility that preceded the December rally? Maybe we are back to alternating optimism and pessimism from day to day and week to week.

Eh, it's early. But isn't this more exciting than the market drifting up 6% in a month and in a straight line?
***

It's just one day. Relax.

Monday, January 03, 2011

January Effect Randomosity

Whoa, Stanford in a blowout.


  • As goes January, so goes the rest of the year? Check out Woodshedder's analysis of the last 60 years and his conclusion. You may be surprised. Or, maybe you won't!
  • Hello, random walk.
  • Calculated Risk is looking for another 5-10% decline in housing prices. After all, what has gone down will always continue to go down, right? Anyway, maybe that means lower property taxes for those who own homes. That's like a tax cut! Heck, if you own your home, or can make payments, and want to stay there for awhile, why would you want the value to go up and your property taxes to increase? Riddle me that, Batman!
  • Larry Kudlow is a bit bullish. He's throwing some adjectives in front of President Obama, like "supply-side" Obama. He even accuses President Obama of reading President Reagan's memoirs and Obama's economic policy as "Reaganomics 2.0!" Gotta love KLo.
  • Global airlines soar into profits. Hmm, I wonder how they'll do if oil keeps going up...?
  • So, I guess the Carolina Panthers will be thinking about drafting the Stanford quarterback, eh? Maybe they should draft as many 350 lb. linemen as they can, who can block first. But, hard to pass up on Luck.
  • If you listen to my AudioBoo from today, I know it sounds like I'm a permabull. Well, except for expecting some sort of economic issues when gasoline gets over $5 a gallon. But I do realize that this bull market will not go up in a straight line. Just that, well, I think the last leg of this bull market will be where greed comes back in and it may be a nice ride.
  • Mark Hulbert says that maybe the January Effect thing is a small cap thing. Somebody should send Woodshedder a memo...

#51: The January Effect and Market Rally

Global Warming Rallies Stocks!

Global warming alert: Snow in Las Vegas, stock market rallies. $$


What are the odds of that?

Global Warming Deniers may cite the growing manufacturing numbers. Pfft. What do they know about climate change? Do they know the difference between weather, climate, and PEG ratios? Dumb neocons.

Okay. Got that out of my system. Getting credit today are the manufacturing numbers, and the January Effect

Overall, stocks got a boost from the "January effect" when fund managers are no longer engaged in year-end window dressing and instead focus on stocks they find attractive.

"There is a lot of money in cash, a lot of money in bonds that would like out of bonds, and it's only natural with the economic improvement it's finding its way to equities," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.


I think "money coming out of bonds" is going to be a big 2011 theme.


Sunday, January 02, 2011

Whoa, Market Timing Works!

Wake the kids! Here's a story that says market timing works!


Of course, all you really have to do is buy low and sell high. I will never know why folks try to make it more complicated than that.

So what's the deal? This article says just buy the last trading day of the month and sell the first day of the month. Because of, you guessed it, monthly strength as folks dollar-cost into the market.

But those of you who read this blog know that Norm Fosback is the guy who pioneered the intricacies of the end of month and beginning of month strategies.

Hats off to Norm!