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Monday,
March 9, 2009
(Cont'd from
above)...
Jim (cont'd):
No, nope, not in
this market… in this
market when Proctor
& Gamble goes down…
Fed Ex or Norfolk
Southern goes down
too…. when Colgate
plummets, so do IBM
& Hewlett Packard…
that is not supposed
to happen… it is not
supposed to be like
that… and they all
hit new lows… that
never happens…
except in this
psychotic market… it
is literally as if
the whole market has
been turned upside
down and gone
insane… sometimes I
feel that I should
do the whole show…
put my down… and do
it upside down…
alright, maybe that
is not going, that
helps me with my
criticism of the
Obama
administration…
usually when the
economy is severely
weakened… and I will
do that some night,
but I will need help
from one of these
people that is with
me.
Usually people buy
the utilities
because nothing is
steadier than what
we call the utes…
not this time… they
seem to go down
nearly everyday too…
in part because they
can’t get financing,
and in part because…
here is one for you…
there is a dramatic
decline in
electricity use in
the country…
typically when we
get the kind of
aggressive insider
buying that we have
seen lately, and it
has been persistent,
endlessly
persistent… hey,
last week two huge
purses one in
Coca-Cola and the
other in
Freeport-Mcmoran, in
the last two weeks…
while at the same
time that we have
seen a dimunition of
insider selling…
that has always
produced a bottom…
that has been the
pattern… not this
time… insiders buy
like mad at GE,
parent company of
this network… Bank
of America,
Wachovia, JP Morgan…
they are all dead
wrong… whole boards
of directors buy and
they are all wrong…
the stocks just keep
getting hammered…
the buyers who
follow these wise
men and women, they
get alienated… lots
of insider buying
with a decrease in
insider selling used
to be a reliable
indicator to… buy,
buy, buy… now it is
worthless… it is
worse than useless…
it’s pernicious.
Alright, how about
sentiment… that is a
good one right…
normally when there
are so few bulls in
the market…
something that we
have seen in the
polls like the
newsletters, the
surveys, individual
investor… we have
always caught
rallies… always…
that is because when
you have so many
bears… you figure
that everyone who
can be persuaded to
sell has already
sold the market… it
is supposed to be
sold out… you aren’t
a bear and a big
holder of stock at
the same time right…
so you would expect
a rally based on
that sentiment… not
this time, not in
this market… instead
we have record after
record reading of a
true bull shortage…
and nobody changes
their mind… usually
it pays to bet
against the crowd at
this point… but now
the crowd is
suddenly filled with
geniuses… new lows…
when you see a
gigantic
conglomeration of
new lows, and so few
new highs… you can
expect to see the
pattern reverse… not
in this market… the
new low list just
grows longer and
longer… the new high
list is like a
penthouse for sale
in some pricey New
York apartment
building… nothing…
not even sight
seers.
Same goes for money
on the sidelines…
about a trillion
dollars ago, I heard
that there was so
much money on the
sidelines that they
won’t be able to get
in all at once so
you better buy, buy,
buy the stocks ahead
of time… another
trillion dollars
later, more on the
sidelines… and
things are just as
bad… although, the
arguments for why
the money should
come in from the
sidelines remain the
same.
Okay, how about this
one… it is close to
home… the Warren
Buffett indicator…
back in October of
last year Buffett
told us to buy, buy,
buy American stocks,
they were cheap….
not now but for the
long term… the Dow
has lost 2300 points
since then… that is
monumental, that is
a decline that had
to be side-stepped
not stepped into….
Buffett got it
wrong… I think he
came close to saying
that today with his
interview Becky
Quid… but, of
course, he
immediately added
the caveat that in
the long-term we
will be fine… that
is nonsense… it was
right to sell, and
incorrect to buy… of
course the long term
has become a
meaningless concept
if you needed the
money anytime in the
last ten years… what
is long-term, what
does it mean… when
we are all dead…
when the heck are
people ever wrong
who like stocks…
they will never
admit it… but I
think that they have
been wrong… and
there is a time
limit and a price
limit… I know there
is one for me… it is
daily… it is the
Daily Show, there is
an arbiter for you.
What about the
oscillator… the
fancy gizmo
jibberish term that
we use to measure
whether there has
been too much
selling… because
when there is too
much selling at once
we almost catch a
bounce right… we are
oversold… the charts
say it… we are at
levels that have
historically
produced miraculous,
miraculous rallies…
that spring up first
with short sellers
buying, and then
real money coming in
off of the
sidelines… not this
time… nada… nothing…
we do not even
bounce… anyone that
has been using the
traditional -5 in
the oscillator, that
is the sign of
extreme selling for
the past 25 years,
has been
slaughtered… as the
gauge goes to -10,
-11 today.
And then there is
the endless selling
in the financials… I
have never seen such
endless destruction
in my life… no bank,
no broker, no
insurer seems to be
able to survive… the
patterns mean
nothing… the
playbook is
worthless… companies
that are doing well
go down as much as
companies that are
doing poorly… banks
that are good get
killed at the same
pace as banks that
are bad… look at
that Hudson City
Savings bank, do you
think they are a
bunch of idiots… do
you think that they
suddenly turned into
idiots there… a
market that has been
cut in half attracts
no new buyers….
people like it less
on the way down… the
value guys have no
fire power… the
growth momentum guys
are margined out…
the hedge fund has
been blown to
kingdom come… that
is where we are…
that is why it is so
difficult… without
any dashboard,
without a compass,
without a history…
it is almost
impossible to judge
when the selling
will end and the
buying, if any, will
begin… which is why
you are not wrong…
as people come up to
me all the time… it
is too hard, Jim…
which is why it is
okay to say I can’t
figure it out, Jim…
which is why you
might just want to
say you know what…
when it gets to a
level where it can’t
get any lower, call
me.
Now, we don’t know
what level that is…
I did an analysis
this weekend for
TheStreet.com, where
I am chairman… that
said that is hard
for me to believe
that the Dow could
go below 5320... I
added up different
pieces and the price
levels… I used an
absolute wipe-out of
every financial in
the Dow… used
dividend cuts on
many of the 30
stocks in the index…
normally, if that is
all that is left to
go down, I would
tell you to put
money to work
aggressively… but it
is still a 15%
decline… even though
some stocks like
Wal-Mart, which I
own for AAPMCT, and
Verizon, which was
knocked down I think
unfairly today, and
McDonald’s which had
a good month, are at
levels where I would
start buying them
now… in the end this
markets moves are
uncharted… we focus
on individual stocks
on this show, and on
diversification… but
we are not in
denial… to say
nothing is working
to find the bottom,
is to be obvious… we
got the Marianna’s
trench going here…
and we are probing
with a pen knife and
a tape measure… we
are now down 56%
after today… do you
know that that is
now the worst bear
market since the
Depression… the only
time that it was
even worse was from
September 7th, 1929
to July 5th, 1932...
we just took out the
bear market, which
is one that I never
thought would
happen… we got hit
with a 86% decline
in ‘29 to ‘32, now
that was a genuine
pacing.
Here is the bottom
line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
Maybe that is why it
has been so darned
hard to call bottom…
maybe that is why it
is better to stay
lean… stay
diversified… and bet
that eventually
sometime in the not
to distant future we
will catch a
tradable or even a
better and
investable rally…
that is based on
facts, not silver
linings, and not
politics… and we get
some actual signs
that each day isn’t
worse than the day
before… right now
though that is the
progression… in
fact, that is the
only pattern that is
working.
Instead of calling a
bottom, I want you
to stay diversified
& invest solely by
the facts & not on
hope...
The Dow down 80
points… now we have
passed every single
bear market except
the Great
Depression… and
look, when we do
rally it will be
based on facts… not
on silver linings.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
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Q:
I am trying to with
the stock market the
way it is, and
unemployment being
at 8.1% and
climbing, is now a
good time do you
think for new
investors to get
themselves into
buying and selling
stocks?
Jim:
Well, let’s take it
case by case…
because that is
really what it is…
because I am not
going to recommend
the S&P 500, here… I
am going to talk for
a moment about the
stock of Verizon,
which I just
mentioned… because
everybody knows
Verizon, Verizon
Wireless… here is a
company, right now,
that yields 7%… the
company came out and
gave good guidance
today, people felt
that the guidance
wasn’t good… I think
it will catch a
downgrade tomorrow…
if you can buy the
stock at the 7 ¼%
yield… I think you
should start right
there… so my advice
is pick a stock, I
will pick Verizon
for you… you buy it
tomorrow.
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[verbatim recap]
[end of segment]
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