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Thursday,
March 12, 2009
(Cont'd from
above)...
Jim (cont'd):
You see this week
has been different….
oh, boy has it ever
been different… see
because business has
gotten… oh boy, this
is unbelievable… I
am going to use this
word… it is the
first time that I
have used it in
many, many months….
business has gotten
better… and that is
why we tacked on
another 239 points
today, keeping a
fabulous rally going
for a 3rd straight
day… why is it real…
because we have seen
those material facts
that make us feel
that things have
truly gotten better…
not just anecdotal
irony like so many
articles about Dow
going to 5000... or
to much money on the
sidelines… or too
many bears… or the
fact that I am
appearing on the
Daily Show tonight…
check that… and
historically we have
rallied whenever Jon
Stewart has used my
head as a mop to
clean up the dirt
linoleum floor… and
I have got to tell
you it smarts, thank
heavens for make up…
if I had his hair it
would be an easier
job.
Now, we have got
real positive news…
a magnificent seven
positive data
points… this market
may not have Steve
McQueen, Uyl
Brenner, Eli Wallach,
not to forget
Napoleon Solo, of
course that is not
his real name… but
it has finally got
good news… enough to
repulse the short
sellers who deal in
lead and give the
longs, regular
investors, a real
victory… in this
rally is coming in
huge volume… with
many more stocks up
than down… many more
than I can recall…
because in the past,
well, this move is
based on
fundamentals not
just technicals so
you get more than a
one day rally… how
many times have we
had 5%, 6% gains and
then you gave it all
back…not this time…
if you sold at the
end of the 5% to 6%,
you are a loser.
Now, let’s tick them
down…
#1
First, today we got
a retail sales
number that wasn’t
down as much as I
thought it would be…
come on retail sales
they have been
horrible… this macro
number confirms the
micro trend that we
have seen at
Wal-Mart and at
convenience stores,
and at casual
restaurants that we
like, like Brinker
and Darden… Olive
Garden them, you
know where I stuff
the rolls in my
pockets because they
are unlimited, I
crush those guys
every time I go… now
I think that is a
function of
gasoline, because
gasoline is staying
low… and it is also
a function of
discounting… the
enticements are
working… the
consumer has risen
from the grave and
can be lured into
shopping again… that
means places like
Lowes, and Cosco,
and Cramer fave
Wal-Mart, so beaten
up, looks tempting
to me right here…
you know what I
would even take a
flyer on a JC Penney
or a Ralph Lauren,
two truly crushed
equities… not to
say, well spent and
spindled.
#2
Second, maybe I
should have put this
first because it is
so important… Bank
of America, a stock
that discussed and
recommended on
Tuesday nights Off
the Charts segments,
announced that it
too is profitable…
that makes Wells
Fargo, Citigroup, JP
Morgan, now Bank of
America… that is the
big four… two is
company, three is a
crowd, four… that is
a trend worth
following… I think
the BKX, the bank
index, could go up…
are you ready
ski-daddy, 15% to
20% from here… it
means that these
banks are starting
to make money when
they turn on the
lights every
morning… they are
borrowing for next
to nothing from you
and the Fed… and
making loans at much
higher interest
rates, which makes
them make up for a
lot of the losses
with those profits…
and beyond that, now
we are hearing that
the banks are going
to get less scrutiny
from the Federal
government on bad
loans… at least that
is what Ben
Bernanke, the Fed
Chairman is saying…
if Tim Geithner gets
on board, and I am
not sure, he may let
the faz be handled…
but if he gets on
board, get this, we
have a huge rally in
front of us… that is
how big that this
could be… especially
because President
Obama in the speech
he gave tonight and
the other talks this
week, has definitely
cooled it… he has
stopped demonizing
the bankers… and he
has stopped his not
the time for profits
rhetoric… and that
is really huge… I
say when I hear
that, I say…
hallelujah.
#3
Third tangible
positive… General
Electric, parent
company of this
network… got its
long awaited ratings
downgrade… and what
did the stock do… it
soared… do you know
that this is the
first time that
since the economic
Tsunami began….
where bad news is
actually baked into
a stock price… so
when the big bad
event occurs… the
stock actually
rallies… I can’t
tell you how big
this is… I have told
you over and over
again that you can’t
get a rally that
works until the bad
news is in the
stocks… baked in…
called discounting…
until it is already
factored in… it has
taken us a while…
but we are finally
there.
#4
Fourth, at long
last takeovers are
back and they are
big… with $193b in
pharmaceutical
takeovers just in
the last month…
dramatic and
positive… think
about this week…
Merck buying
Schering-Plough…
Gilead taking over
CV Therapeutics…
Hoffman Laroach
acquiring the rest
of Genetech… that is
amazing… we haven’t
had deals in a year…
it is amazing…
companies have
finally realized
that they can make
acquisitions at
bargain basement
prices… now that MIA
has had her baby… it
is really this one…
they are finally
listening to paper
planes and realizing
that shot gun
weddings make them
money… pharma is in
full-blown yenta
mode… make me a
match, catch me a
catch, make me a
mode, buy me a
stock… we love it…
and it is more than
just takeover
activity… people
take their winnings
from these deals and
they pour them back
into the market…
giving us the fresh
tender we need for a
robust rally… the
first new money in a
year… notice that
every single drug
stock that was up
huge today… and that
is because of new
money flowing into
the group from
everything from
Abbott Labs, to
Amgen, and AAT
Celgene, which
exploded today… it
was up huge… that is
bio-tech money going
back into other
bio-techs.
#5
Fifth material
positive, makes me
feel real good… tech
upside surprises…
those three words
haven’t been put
together in about
two years… as I said
last night we
learned that Taiwan
Semi had an upside
surprise, I would
still buy that stock
here… I cannot
recall another tech
upside surprise
during the downturn
except for IBM… I
mean come on, that
is a dramatic
change… and this is
a chip company,
those have been
awful.
#6
Sixth… mortgage
rates have
plummeted… I
actually saw a 4%
and change rate and
mortgage
applications are way
up… and at the same
time new housing
permits are lower
than I have ever
seen… that tells me
that the housing
bottom is coming… I
say that is a real
improvement over the
way things are… I am
sticking by my
summer prediction
that housing will
have bottomed in
this country… the
majority of the
country, it is not
going to bottom in
New York yet, that
has got some time.
#7
Seventh… GM,
didn’t need the last
$2b… this is the
first time that an
automaker hasn’t
needed a couple of
billion… so what if
$2b is chump change
vs. what we have
already given them…
we will take it… we
will take it where
we can get it.
These are the
magnificent seven
new substance
economic changes
that have come out
just this week… it
is only Thursday…
that is incredible
for one week…
incredible… and
these seven things
tell me that the
rally will continue…
remember, we don’t
care whether it is a
bull market rally or
a bear market rally…
either way you are
going to see money
being pulled in from
the sidelines by
underinvested mutual
funds and over
shorted hedge funds.
So here is the
bottom line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
I want you to stay
the course… I got
you out of 10,300...
I’m telling you that
this one is real…
for the last three
days that I have
been saying it…
normally I would
tell you to fade it,
to sell it… no, I am
telling you not to
do that… this one is
real… this one has
got legs… we are not
done yet because we
have real positive
economic news… not
just irony, touch
stones, trading
totems, and short
covering… if Tim
Geithner joins Ben
Bernanke in fixing
the banks… if Obama
focuses on beating
unemployment and
keeping people in
their homes, and
dropping the
rhetoric… I know
that is a lot to
ask… the next 1000
points will
certainly be up, not
down.
Based on positive
economic news this
week, I think the
rally could last...
We got seven
magnificent and real
reasons why this
rally could last…
and remember, the
magnificent seven
did prevail over the
bad guys.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
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Q:
Where is the
consumer in all this
market positivity
this week?
Jim:
I think the consumer
is starting to be
heard from… I heard
that from Brinker… I
heard that from
Darden… I am
starting to hear it
from various
retailers… but most
importantly I am
hearing it from
convenience stores,
this is a good one..
I have a convenience
store indicator… I
talk to a lot of the
companies that
aren’t public… this
decidedly incredible
decline in gasoline
is making people go
outside again, and
shop again… are they
shopping expensive…
no… the sales have
been big, it doesn’t
mean that the
retailers are making
a lot of money… but
the consumers have
been heard from… the
consumers are
starting to shop
again because the
bargains are there….
and I say….
hallelujah.
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Q:
How can the average
working person buy,
buy, buy into the
stock market, or
spend, spend, spend,
when banks and
credit unions are
drastically raising
interest rates, and
lowering credit and
cash advance limits
as we speak?
Jim:
I have got to tell
you, this is why I
say that Obama has
got to focus on
banks… because we
are not out of the
woods… I have given
you a 1000 points
that I think we can
have… substantive
fundamental change
will have to be when
you and I will not
have to go thru
hoops to get credit…
when there will be
home equity loans
again… although,
with reasonable
terms… that has not
happened yet… I hope
that it does…. I
think that the
Federal Reserve has
many things in place
to make it happen… I
am not telling you
that the situation
is fixed… I am
telling you where
the stock market is
going.
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[verbatim recap]
[end of segment]
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