Tuesday, January 27, 2009
(Cont'd from above)...

Jim (cont'd):    Historically…. these companies told us to abandon all hope before hand… so when they reported everyone then went out and bought, bought, bought…. or in the case of short sellers covered their coolats… because they knew that the worst might be over… and the companies didn’t do worse than we thought… U.S. Steel which had fallen from $196 from it’s high… to $20 in November… about the same decline that it saw during the crash leading up to the Great Depression… actually managed to earn $2 a share for the quarter… when the analysts were expecting it would be crushed… they were hoping for just .71 cents… the result… the stock is up 6.9% today… U.S. Steel got the grim news out of the way… so when they reported they could surprise to the upside… steel stimulus orders will just be gravy on the I-beam…. Nucor same story… even though we expect the best from Nucor since it has the lowest cost structure of any steel maker… not to mention great management… and uses scrap not expensive ironwork… the company still managed to trounce estimates… because the streets expectations had gotten so low… I mean these analysts were looking for new quarter to earn .12 cents…. it earned .34 cents… sales only declined by 6%… hey, look it wasn’t a great quarter by any means… except the one that Wall Street was expecting… and that is what counts.. if you were too negative… what did you do… you missed a 6.3% move in the stock today… and, in fact, with scrap and energy costs down since the quarter… it is possible that Nucor could deliver better numbers going forward… even in this miserable, horrid environment...

And again today, despite believing that Old King Cole was a merry old sat… we saw Peabody Energy deliver earnings that were extraordinary 50% better than expected… cause the street had totally given up on coal… courtesy of our new President… coal is not dead… it is literally, and figuratively on fire… the industries outflanked Obama… and as Peabody told us today… there are 30 new coal plants under construction in 19 states in this country… they will require 70 million tons of coal annually… aren’t we supposed to be closing coal plants and building wind mills… remember that Don Quixote thing, all the earnings power… forget it… we are addicted to this poisonous stuff.. there is nothing that Obama can do to truly derail coal in this country… oh, and let’s not forget the demand in China is huge… but the demand in India this quarter was off the charts.

On Monday we saw the same thing happen with copper giant Freeport-Mcmoran… the company reported a $13.9B loss… billion dollars… the whole market caps only $10B… but because FCX had warned that things would be real bad… because it had already slashed its dividend before hand… and because the stock was already in the lowly teens… it rallied off the quarter… stock closed at $22.81 on Friday… it reported before the bell on Monday… and now it is at $25.63.. you should have tried to get that 12.4% from where it was before the quarter… but you couldn’t because you were blinded by negativity… the negativity out there is creating tremendous opportunities… and when you allow yourself to get too pessimistic… you miss out on them.

Hey, here is the best example of all… Research In Motion (RIMM)… RIMM… here is a case where reading a newspaper could be hazardous to your financial health… on Monday the Wall Street Journal came out with an article that threw you off the scent big time… the headline “Blackberry Storm Is Off To Bit of a Bumpy Start”… that article which made it sound like the launch of the first touch screen Blackberry was a disaster… knocked RIMM down 2 points… it was a pummeling… they put it threw the meat grinder… the Journal compared the Storm’s launch to the iPhone 3 launch…. oooohhh… where 2.4 million of the latest iPhones were sold in the first quarter… but you know that is not an apples to apples comparison… since the Storm was not the Blackberry reiteration to be released this quarter… then today we find out from Cramer fave, Verizon, although not market fave Verizon… the sole distributor of the Storm in the U.S…. that this particular Blackberry has sold more than a million units thru January… since it’s launch on December 31st… the result, if you believed the Journal… you missed a, maybe an opportunity of your life… or you didn’t buy it yesterday because you thought that the story had credence… but if you took that story of an example of the press getting too negative… sending you on a disinformation… sending you basically on a misdirection play… to use a football term… and you bought that stock that I have been recommending endlessly… you got a sweet quick 6.3% rally in RIMM today… thanks for nothing Journal.

Here is the bottom line…

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The Bottom Line!:     We are a long way away from the land of a 1000 bull dances… but just because we are negative… we don’t want to get too negative… or we will miss great moves like we just saw in United States Steel Corp. (X), Nucor (NUE), Freeport-McMoRan (FCX*), Peabody Energy Corp. (BTU), and Research In Motion (RIMM)… don’t believe everything you read… and never, never be blind to opportunity. and  today… or

Being too negative on the market could cause you to miss opportunities, keep your eyes peeled!


[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 know nobody ever made a dime panicking. But the rallies that we are getting seem to be light volume, shallow, and choppy in nature. Most of it seems to be short covering, or when President Obama shows his face on T.V. toting the stimulus package, the market’s natural movement, or path of least resistance seem to be down. Would you be concerned if we broke those November lows?

Jim:    Steve, you have got horse sense… I think everything that you have said is true… which is why we have not joined the land of a 1000 bull dances… nor do we believe that this market is in good shape… we do believe that there are opportunities on bounces… but overall… I think you are right… and if we took the lows, no… because I am a case by case guy…. but that would be pretty chilling.

I think Steve is right… we are trying not to get carried away… we remain negative on the show… but not so negative… not such a negative Nancy… to call my incredibly negative sister… but we will miss opportunities to buy great stuff… like letter X, Nucor, FCX, and RIMM… and it is our job to find opportunity… even in a bear market.

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[verbatim recap]

[end of segment]

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