Friday, January 23, 2009
(Cont'd from above)...

Jim (cont'd):    Google, Inc. (GOOG)’s better than expected quarter confirms the pattern that we saw with Apple (AAPL) earlier in the week… and with RIMM… Research In Motion (RIMM)... which I told you is breaking out…. all three of these stocks is up big… why… because they are cool… now that may sound like an adolescent explanation… but it is true… cool tech tops old tech… that is the big take away for the week… tech’s not a monolith any more… there is tech that we want… and there is tech that we could care less about… just compare Sony, which was taken apart this week after it reported a huge loss… with Apple’s earnings peak… Sony take a walk man… look at Research In Motion vs. Nokia (NOK)… Nokia by the way is back to just being a river in Finland… meanwhile I got a Blackberry this week because I am the coolest man in the room… second coolest after the President… and he gets to keep his.

Now, the most telling comparison though is Google vs. Microsoft…
...talk about a product that people love vs. a product that people hate… and why does Microsoft always ask me if I want to send them a note when my outlook breaks down… it does endlessly… does anyone even read those…. does anyone send them… meanwhile Google so cool I use it 30 times a day… I mean think about it, how the heck do you think I learned who Notorious B.I.G. is… let alone… indeed, a subscription to Word Up magazine… tech it’s hot and it’s cold… it’s in and it’s out… it’s up and it’s down… heck it is… Katy Perry should be a Wall Street analyst… by the way, Katy, listen to me… I kiss girls… heck, I kisses all the single ladies… I like it too (i.e., referring to her hit pop song, "I kissed a girl and I liked it").

The second thing that could cause a recovery is oil…
...when oil goes up… the market goes up… take a look at Exxon Mobil (XOM)… do you know that Exxon is now 5% of the S&P 500... it is bigger than all of the big banks put together… the index is so changed that you can’t compare it with where it was 4 months ago… no stock has ever dominated the S&P 500 the way that Exxon does now… if you can get it moving higher… than you got a rally on your hands… especially when you pair it with a Google led cool tech Nasdaq rally… now I don’t know if oil is the chicken or the egg here… but as long as Exxon is anchoring the S&P I just don’t think the bears can take this market down to were they want to go… and when Exxon faltered today the market did fall back… if oil just stays here for a couple of days… it can put a tiger in the tank… for a while anyway, this market didn’t mind that Black Gold’s sister … real gold… roared… and you know that I always favor owning a gold play as insurance in a diversified portfolio.

The third thing that could bring us back…
...the double whammy out of pharma today… on the one hand the Pfizer (PFE) - Wyeth Pharmaceuticals (WYE) merger… David Faber (on CNBC), totally on that one all day… both literally it could be a $60B deal… and figuratively as it means takeovers might be coming back… Wyeth, by the way, should have been up a lot more than it was today… I think it will be up on Monday… on the other hand, little stem cell player Geron was up 36%… hey Geron… if you want to learn more about that, that is my friend Mike Huckman, he has got a terrific blog… after getting approval from the FDA for the first ever human trial of an embryonic stem cell derived treatment… the potential consolidation among the drug stocks could radically change the group… also gives you a chance to try to make Mad Money… next week is pharma week… Bristol-Myers (BMY*) which I own for ActionAlertsPlus.com, my charitable trust reports on Tuesday… Novartis AG (NVS) and Pfizer on Wednesday… AstraZeneca plc (AZN), Eli Lilly & Co. (LLY), and Wyeth report on Thursday… which gives added significance to the merger talks between Pfizer and Wyeth… no wonder they broke… they got to do it ahead of this quarter… they gotta admit it… your game plan for playing pharma next week… instead of trying to gain the earnings… remember that everyone of these companies need partners to develop drugs… if I were you I would go back to the Forest Labs, which we talked about yesterday… it has got a knack for finding great partners… how about Bristol-Myers… they may find it difficult to stay single too… what a hottie.

The fourth piece of the puzzle…
...the final reason that I think that we can rally back… Goldman Sachs (GS*) and Morgan Stanley (MS*), both stocks that I own for my charitable trust, ActionAlertsPlus.com, and Northern Trust (NTRS) are breaking out… neither Goldman nor Morgan, or Northern Trust for that matter… has mortgage exposure.. something that the street is finally waking up to… they don’t lend to consumers… they don’t have credit cards or foreclosures that are overwhelming deposits… and let’s throw in that the fact that the fabulous custodial bank, Northern Trust, pants-ed State Street Corp. (STT) big time… for so long these three were collateral damage from the ETF’s of mass destruction the SKF… which are used to bring down the financials… I think Goldman especially is now down with that bad quarter nonsense… it’s advising on every one of these bank deals… it has lowered costs and compensation dramatically… all of its’ competitors have been wiped out… if the stock keeps going higher, which I think it will… then Goldman should be able to do an equity offering to pay off the TARP money it took…not yet… the banks need new capital to pay off TARP, they are not allowed to do it with earnings… Goldman can be the first to rally hard enough to fix itself… I call it a virtual circle which makes the stock even more attractive… oh by the way, I am part, I always play with an open hand, of the powerful gabool of ex-Goldman associates that controls the world… along with the Council on Foreign relations, the Trial Allot Commission, and of course the Queen of England… not to say the Bevarian eluminate.

Here is the bottom line…

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The Bottom Line!:     Today’s recovery didn’t last long in the Dow, but the Nasdaq kept the faith… if we rally again… it will be because of cool tech… oil… everything that is happening in pharma… and the fact that we finally have some winning financials...
… like Goldman (GS*), and Morgan Stanley (MS*), and Northern Trust (NTRS)… remember to own the cool tech stocks as well…
... as a pharma play, Forest Labs (FRX)… and of course Goldman… now that it has entered the virtuous circle.

Today’s recovery was led by tech, oil, moves in pharma and a few winning financials


[verbatim recap]

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Jim went on after this segment to take questions from callers, and responded with his comments...

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Q:    I am wondering why you are not bearish over the intermediate term given that we are experiencing the most deflationary forces since the Great Depression?

Jim:    I want you to put your bank hat on, Michael, and imagine that you are PNC Financial Services Group Inc. (PNC), the old Pittsburgh Nat, and you want to give a loan to someone against collateral… and every day that collateral is going down in value… you would be nuts to give that loan.. I don’t care if the money is from the government or not… if the collateral goes down everyday… you don’t get the loan… and that is what we are stuck with, it is deflation… I saw gold go up today.. I think that is because of chaos… don’t you think it is because of the stimulus package… will you wake up and smell the coffee… we literally are going to be guaranteeing $3 trillion… and it still hasn’t stopped the deflation… so, deflation is my worry.

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Q:    I own US Bancorp (USB) at $22, now it has fallen to $14, to what to you attribute this devastating downturn of USB considering how well it has held up throughout this economic crisis?

Jim:    Well, I have to tell you that you need to go on that conference call my friend… because on that conference call, the CEO was the guy who made everybody feel bad… it was literally his words that knocked the stock down… and Warren Buffett, by the way, owns that, and he owns a bunch of other banks… and Warren has been very, very silent too…. US Bancorp shot itself… and when you do that you can’t expect the stock to go up.

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Q:    I am trying to put a game plan together for next week, I am thinking about Tyson Foods (TSN) ahead of earnings on Monday?

Jim:    No, what are you out of your mind?!!… What are you smoking there partner?… I mean listen, I like their chicken, I like the little chicken cutouts you know, I mean those are real good, you know the ones that they put a little bread crumbs on… but no, all that stock is worth is bread crumbs… if you want a chicken play.. .you gotta go CAG - ConAgra… I really want to emphasize that Tyson… along with all the other pilgrims pride plays… you cannot own chicken plays… you cannot own chicken plays… hey, listen you are near Biovail, which is a town in New Jersey, I would rather have you own some seafood.

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[verbatim recap]

[end of segment]

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