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Friday,
April 3, 2009
(Cont'd from
above)...
Jim (cont'd):
And while I don’t
think that you
should necessarily
buy, buy, buy up
here… I also don’t
believe that this
rally is over… and
as of here, right
now, this very
moment I am
christening this "the
Monkey’s rally"… yes
you can call me Micky Dolenz or
perhaps Peter Tork,
maybe even Davy
Jones, not Mike
Nesmith… but I am a
believer, and I
could not leave this
bull if I tried…
They think I am nuts
for believing… I
think that you have
to be insane not to
believe… look, I am
not a young guy... I
have been trading
since 1979, and I
think that I have
developed some
credibility over the
years… not to
mention some decent
change… although the
critics won’t even
give me that… send a
check to the
critics…
So, let me
tell you what I know
about bottoms in the
market because I
think we have
definitely seen one…
I have never in my
life, ever in my
life at the bottom,
heard an all clear…
I have heard this...
dive, dive, dive
(sound effect)...
It has never been
easy or obvious to
pick out bottoms…
and the biggest
turns always happen
when things seem
darkest… not when
everyone is
positive… of course,
you always hear the
same things from the
naysayers… every
time the market
bottoms, it is just
people right, they
are just short
covering, right… how
many times?...
It can’t
be real... they are
just short covering…
Well, you know what?…
All bottoms start
with short
coverings… every one
of them… because the
shorts were the guys
who were smart and
got it right on the
way down… they are
also the first to
get it right on the
way up… At this
point, you can’t say
that it is just
short covering… it
can’t be… There just
aren’t that many
shorts… Frankly, the
move that we have
seen feels more like
the typical
beginning of the
quarter buying today
that we used to get
in the mid 2000’s,
and even more like
the 1990’s… A new
quarter comes in,
and
people contribute to
their 401K’s… We
have not seen that
action in years… but
it sure feels like
it this week.
You will hear people
tell you that the
earnings are bad
right now… so you
can’t buy… oh, wait
until we get to
earnings season… oh
scary… That is
another myth about
why it can’t be for
real… to them I say
that stocks forecast
for 6 months in the
future… so we need
to think about where
the earnings will be
in 6 months not the
ones that are around
the corner… and with
all the stimulus
money… yeah, they
will be better… The
gloom and doom types
will tell you that
the Fed doesn’t
matter… please…
The
Fed is faster than a
speeding bullet… and
is more powerful
than a locomotive…
it is able to leap
doubting short
sellers in a single
bound.
Or how about this
myth?… you need to
wait until housing
bottoms before it
can be for real…
Well, guess what
people?… The housing
market is having a
rolling bottom
around the country…
It is happening,
right now… in any
area where prices
have fallen 40%… I
think my housing
bottom call… once
wildly reviled…
almost as wildly
reviled as I am… and
of course, a comedy
channel staple… has
now become a "Johnny
Come Lately" call...
Finally, you will
hear those who think
they are being
prudent… wise… when
they say well wait
until the market
comes back before
they test the
waters… yeah, like
it is waiting for
them… yeah, I will
come back so you can
get in because you
missed it the first
time… do you think
that is how it
works… wrong… at the
beginning of bull
markets they don’t
come back down…
because only the
brave are willing to
take advantage of
them… mark my words,
this rally is real…
I don’t think we are
going to roll at all
back… this is the
best stretch since
we started bouncing
back from the great
crash in the 30’s.
Now, I remember that
rally in 1938, I was
in cloth diapers…
but it was darn
exciting… I could go
into detail about
all of the programs
that the
administration have
rolled out… but the
main thing that
matters is that we
are not repeating
the mistakes of
Herbie Hoover…. we
are not entering the
Great Depression
part 2... and the
Garden Variety
Depression is indeed
over.. the
government is doing
the exact opposite
of what Hoover did…
no one plan, not
Geithner’s banking
plan, not the
relaxation of mark
to market, not the
Fed’s TALF, every
one of these is
poo-pooed by the
way, every single
day… it is like none
of them are working…
they are all working
incrementally just a
little bit.
How about the fact
that they brought
rates down to zero?…
There are no silver
bullets… there are a
bunch of old
fashioned copper
bullets, brass… that
just keep getting
shot until something
gets thru… You have
to think of what the
government is doing
to fight this
recession and
prevent a
depression… as being
like the movie, the
“Predator”… think
about how much fire
power they had to
throw at the
Predator before it
went down… although,
if you recall
correctly, Bill Duke
drew first blood,
before he met his
untimely death… we
have embraced that
strategy… it is the
Predator’s/ Malcolm
X "by any means
necessary" plan… to
merge two powerful
movie icons.
Does that mean that
you should buy right
here… No…
The thing
that keeps me from
telling you to buy…
even as I believe
that it can, and
will go higher with
all of the money
coming in… is that
we have stocks like
Research
In Motion (RIMM),
which are up 69% off
the bottom in a
blink of an eye… but
what keeps me from
telling you to sell
is that we are still
so far down from our
highs, that it
doesn’t make sense
to leave the party…
just as we hated it
much higher… and
liked it much lower…
we can’t just come
in guns blazing at
this level and start
buying… so what is
your game plan… you
have no reason to
ring the register,
unless you own
stocks that are up
40% to 50% in 6
weeks… then you
must… otherwise you
are being piggish…
otherwise you have
to say, if you are
waiting on the
sidelines… one of
those guys who kept
saying I am not a
believer, I am not a
believer, even if I
tried… no doubt from
the Michael Nesmith
theory… you can’t
just say, I want in.
Here is what you
should say… "I missed
this move"… a painful
quartet of words
that must be
tattooed to your
forehead during this
weekend's Final Four
(basketball) competition… the
easy money has been
made… it was made
when we came out and
said there was
little downside at
Dow 6500... I
believe in this
move… but I can’t
count on us buying
anything here unless
it is like a
Celgene (CELG*), which I
recommended
yesterday… or maybe
the consumer
staples, I have got
one for you later in
the show…
Stocks
that simply haven’t
moved or are down a
lot because they
have gotten out of
favor… our strategy
of buying accidental
high yielders has
been fantastic… but
if the yields are
now at 3% or lower
after you bought
them at 5% or
higher, then you
have to sell half of
your position…
again, you don’t
want to be a pig…
ring the register.
Here is the bottom
line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
I don’t want to buy
up here, but I don’t
want to sell either…
unless you own
stocks that have
moved 40% to 50% off
the bottom… The
rally is for real… I
am a believer… I
don’t think that it
gets to be repealed…
The easier money,
though, has already
been made. This
rally is real, but
consider holding off
on buying right
now...
Alright, I saw this
rally’s face… I am a
believer… the easy
money has been made.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
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Q:
My question is about
Comerica Bank (CMA)...
You were talking
about the banks this
week. And I have
held onto this like
forever, and I am
wondering it has
gone down to $9 and
today I think it is
like $19. So buy or
sell, hold, get rid
of, buy more, or
what?
Jim:
I like the bank
rally, but I am not
going to recommend a
bank whose
fundamentals I am
not crazy about… and
Comerica is one
where I am not crazy
about the
fundamentals… I
don’t like the
regional banks here…
I am not going to
endorse Comerica… I
free you to take a
little off of the
table, even if it is
a loss… remember,
just because it is
unrealized, doesn’t
make it a loss.
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Q:
Yesterday you
mentioned that the
United States Oil (USO) is a bad way to
play the oil. And
you mention quite a
bit about how
against the
UltraShort ETF’s you
are. And my question
is, if you think the
PowerShares DB
Crude Oil Dble Long
ETN (DXO)
works? And if not,
what the best way to
play oil is?
Jim:
Okay, the best way
to play oil is, I
have been saying
over and over again
is an integrated oil
company or you can
buy one of the
worldly trusts.. I
think the integrated
oil companies are
the best… I have not
done the tracking
work on the DXO… I
only did the
tracking work on the
USO… I totally want
to reiterate again,
I was doing some
work on the
UltraShort Financials
ProShares (SKF)
today with Eric Ohlberg, who writes
at
TheStreet.com,
where I am chairman,
he used to be a
managing director at
Goldman Sachs in
derivatives…we
cannot believe the
underperformance…
these products are a
joke, they must be
repealed… they must
go away… they should
be part of the Uptick discussion…
we are going to
hammer away all next
week on that…
because we are tired
of seeing you, the
regular guy, lose
money on a
sophisticated
product that was
meant to take you
money and give it to
the bad guys.
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Q:
On April 1st, you
talked about the
credit markets
driving the stock
markets. Where can
we get more
information on one,
lending happening?
two, fixed income
securities being
bought? Is there a
government report or
website that we can
get more information
from?
Jim:
The Federal
Reserve’s sites are
unbelievable, I
regard the St Louis,
the Federal Reserve
Bank of St Louis,
you can Google, you
can get on it, that
is a bank that puts
out the best data…
otherwise, I am
going to send you to
a guy, you have
probably seen him,
he is a regular on
CNBC, his name is
Tony Grezensie, if
you want to see, he
writes a daily
column on
RealMoney.com,
it is a paid site of
TheStreet.com, I
find it
indispensable, he
has every single
piece of data point
that you need… Tony
Grezensie is the
single best when it
comes to fixed
income writing.
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[verbatim recap]
[end of segment]
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