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Tuesday,
March 24, 2009
(Cont'd from
above)...
Jim (cont'd):
So, what will they
do between now and
the end of the
quarter, I will tell
you what they are
going to do… they
are going to jump in
frantically… do you
know what they
remind me of… they
remind me of starved
greyhounds who
jumped on a
mechanical rabbit
that fell off the
rails on some broken
down Monticello, GA
dog track that I
used to frequent
before I discovered
the wonder of
stocks… and what
will they come up…
probably about as
much as the
greyhounds did… I
doubt they will get
much bank stocks if
they wait for it to
drop back to last
weeks levels… some
of these mangy dog
portfolio managers
got lucky at the end
of today… when many
of the banks pulled
back after going
strong… but once the
profit taking is
finished… they won’t
be so lucky in the
future… those trying
to buy Morgan
Stanley, a stock
that I own for
my charitable trust,
ActionAlertsPlus.com…
they never even got
a chance, it
finished up .61
cents… I think that
it is going to come
in… but not as much
as they want… I say
welcome to the world
of big time money
management… it is
all about
weightings… it is
all about exposure…
how exposed to
equities, how
exposed to sectors…
and if you are a
hedge fund, it is
all about shorting
the worst and buying
the best… see we
have reached a point
where the losers for
so many months of
bank stocks… have
started to win… the
game for the hedge
funds is no longer
trying to knock down
the financials with
endless short
selling… now, it is
about trying to buy
the stocks…. and
profit from the
rally.
Mutual fund managers
who kept their money
on the sidelines now
find themselves
desperately trying
to get in on the
action… so that
their competitors
don’t leave them
looking like dopes…
and why is it all
happening… because
of the coordinated
effort by the
Federal Reserve and
the Treasury to make
us all more
confident… and why
shouldn’t we be…
after all most of
the major banks have
told us that they
are profitable this
quarter… no way that
they are going to
start telling us
otherwise now… and
the quarter is
almost ended… it is
the group to be in…
with public money
being thrown at
them… with private
money being thrown
at them… why would
we think that they
would be getting
worse… they can only
get better… it is
probably tough for
many of the big boys
to believe… I mean
think about it,
going into Monday’s
session… the hedgies
were shorting the
heck out of these
bank stocks…
literally buried
them on Friday… and
the mutual fund
folks were doing
their best to ditch
them.
Why, what were they
so fearful of… why
were they betting so
heavily against the
group… simple two
word answer… Tim
Geithner… back on
February 10th,
perhaps because it
was my birthday,
Geithner revealed
his first plan… that
was the beginning of
one of the greatest
bank sell offs since
the Great
Depression… they
figured why wouldn’t
history repeat
itself… that is what
the big money guys
were all expecting…
but it did not
happen… Geithner
once poisonous to
stocks… he is now
the cover of the
Federal Reserve… how
do we explain this…
we have to maligice…
that is right, it is
right now all about
investing luminary
Beyonce… who I often
confuse with Sasha
Fierce, probably
because I am a 64
year old man who is
much more
comfortable
referencing any of
the Dylan’s, Bob,
Thomas, Ratigan… you
can see what
happened with
Geithner, why he is
no longer as toxic
as the bonds that he
wants you to buy…
why the market can
rally when he
speaks… it is
because he is not
totally aligned with
Ben Bernanke Beyonce
style… that is
right, Beyonce…
everywhere Geithner
is looking now he is
surrounded by
Bernanke’s embrace…
baby he can see his
halo… and Bernanke
is his saving grace…
the halo effect
turned a warmed over
version of the
original Geithner
plan into an event
that not only
created a huge
rally… but also
changed the very
dynamics of the
market… and one that
I pray won’t fade
away.
The bottom line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
Nobody else is going
to tell you this…
but the market has
changed… the hedge
funds and the mutual
managers that hated
the banks, they are
now desperate to get
in on the action…
these guys matter…
what they buy and
sell matters… and as
of now, the bank
haters are being
created into bank
buyers… and on any
weakness in the
banks between now
and the close of the
quarter, next week,
you will be fighting
with the crazed
greyhound portfolio
managers for
Bank of America (BAC),
Wells Fargo (WFC*),
JPMorgan (JPM*),
Morgan Stanley (MS*),
Goldman Sachs (GS*), and,
yes, unbelievably,
Citigroup (C)… that is
how bright
Bernanke’s halo has
become… it is
written all over the
faces of every
frightened portfolio
manager in the game.
The game has
changed, consider
getting in on some
of the action while
you can...
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
```````````````````````````````````````````````````````````````````````````````````
Q:
The Case-Schiller
index is a widely
followed indicator
of national real
estate prices. Yet
??% of the index is
vacation and
investment
properties, more
importantly the
index overweights
quick sells. Short
sells, short
interval purchases
and sells. Short
interval purchases
and sells, in my
opinion, are
attributable to
flipping,
speculation, or the
inability to pay a
mortgage. Doesn’t
this overweight
distort real estate
prices? And more
importantly add a
great deal of
volatility to that
index?
Jim:
Yeah, I think that
it does… I use it as
one of the many ones
that I look at… the
National Association
of Realtors has one…
the federal housing
finance has one… it
is like a pastiche,
it is like a mosaic
of numbers that I
put together… this
is one because of
the bearing of
Case-Schiller that
there academics…
well you know, they
have got bearing…
they do have
bearing… it is
concentrated on… but
it is not the only
one.
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[verbatim recap]
[end of segment]
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