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Tuesday,
April 7, 2009
(Cont'd from
above)...
Jim (cont'd):
Here are some that I
heard today… just
today… on this one
down 186 day… tech
is breaking down,
cause the stocks
have over shot the
fundamentals… hold
it, hold it… over
shot the
fundamentals… they
have overshot the
fundamentals for a
month now… but have
they all reflected a
possible turn in the
economy, which seems
to be in the offing…
I think not… with so
many tech stocks
selling with price
to earnings
multiples that are
about as low as I
have ever seen since
I trading 30 years
ago… not to mention
when I started the
show… 999 shows and
beers on the wall
later…. people also
blanched when
IBM (IBM)
walked away from
Sun Microsystems Inc. (JAVA)
yesterday…
questioning the
worth of tech after
that aborted merger…
I say please, what
the heck was IBM
doing in the first
place… we like IBM
because it has moved
away from hardware
into software and
consulting… we
salute the walk
away.
I heard that the
collapse in oil, is
a sign that you have
to sell, sell, sell…
and sell hard…
because it shows
that we are sinking
right back into a
depression… it
doesn’t help that
shipping rates
globally have fallen
for about 19
straight days… I
don’t know… oil back
to $50 after a
straight line from
$35... hovering at
this level…. not
that bad… does
anyone believe that
the stock market
could do better with
oil at $60 then at
$50... something
that could spike
gasoline prices to
well above $2... and
therefore cut into
the nation consumer
spending rally that
has caused a
fabulous run in the
restaurants and the
retailers… think
Darden Restaurants (DRI)…
think even Cramer
not-fave
Gap Inc. (GPS)…
although I did buy a
nice pair of Jeanos
there… how about
Kohl’s, we know that
for fat pants for…
never mind… and
Costco (COST)...
hey, I am a member
of Costco… how about
Cramer-fave
Brinker's (EAT),
preannounce a better
than expected
quarter this
morning… we all love
Chili’s, right… but
only if you are not
so negative to let
yourself believe
that something good
can happen in this
country… not to
mention
Bed Bath & Beyond Inc. (BBBY)…
which just crushed
the estimates… after
the bell… up a
couple of smackers…
no doubt because I
bought a new house
and got some nifty
bath mats and trash
cans there.
I heard some chatter
about how gold
rallied $13... oh
my, another scary
event… I agree that
I never want to see
gold rally because
it signifies either
inflation or chaos,
or both… but gold
has been down
straight from… a
$100... a $100
straight down makes
sense that we have a
bounce… even this
bounces.
How about this one…
oh this is the one
that I heard all
day… the Geithner
plan’s are working…
they aren’t going to
work… hey, can we do
a little wait and
see before we
condemn the man and
the multi-faceted
plan… and hey
believe me, I have
been the king of
condemnation… so I
have the right to
say that.
Or how about this,
the Dow
fell 186 points
today, the S&P
almost 20 points on
fears of first
quarters earnings…
tell me that you
have not heard that
one… I don’t see
problems with the so
called fears of
first quarter
earnings reports…
any company can
report any number
right now and say
that things look
better in the
future… on a clear
day I can see
forever… and that
pretty much ends the
worry about the past
right there…
sometimes it does
not even matter…
Emerson Electric (EMR)
the big industrial
maker of motors,
flow controls and
insinkerators… bet
you can’t get your
hand stuck in one of
those… actually
missed estimates
today… slashed its
outlook for the year
gigantically… and
what did the stock
do… nothing… unch…
genuine
Wall Street jibberish
for unchanged.
Cisco
(CSCO*)…
weak for two days…
uh oh, scary again…
it could talk all
about the great
online
infrastructure boom
and wireless build
outs… including $30b
announce last night
in Australia… hey my
Outback Steak just
closed… I don’t
know… sure this
quarter is awful for
Cisco… but that
might not be the
case 6 months from
now.
Alcoa, Inc. (AA)…
serial destroyer of
value… I always say
that Alcoa can wait…
just reported a not
so horrible number
to kick off earnings
season… something to
pad in after hours.
Which brings us to
the one reason for
today’s sell off
that no one will pin
the tail on… the
right one… it is
simple… you have to
be nuts to take
profits after a 20%
gain… even if you
are not up for the
year… as your
trading and
investing coach I
would be remiss, if
not crazy, to tell
you that you should
stay the course and
hold onto all of
your positions
because after all
buy and hold is all
that matters… this
is classic bad
information… classic
retro thinking by
academics and mutual
fund managers alike…
the former because
they have not
updated their models
that shows that no
money has been made
sitting in the
market for the last
decade… something
that puts the lie to
buy and hold… the
latter because
mutual funds do not
make any money if
you are in cash…
sorry to reveal how
self interested
everyone is… but you
are much better off
knowing the truth…
even if the big boys
prefer to keep you
ignorant… and in
your stock chains.
So what does not fit
in the headline…
what does not fit…
what doesn’t make
for catchy catch
alls that seek
falsely to explain
why we sold off…
baseball season just
started… with a
hideous and perhaps
inauspicious
clobbering of my
beloved Phillies in
the hands of a
revamped Atlanta
Braves club on the
opening day… that is
a classic reminder
that sometimes
players, sometimes
whole teams are
simply due for a
loss… the Phillies
were due for a loss
after a monster
finish last year…
the big bats were
silent, although Mad
Money fave Jimmy
Rollins got a hit…
remember though,
even all-stars like
Rollins can’t bat
1000... nor can
stock markets like
this one… today’s
decline was a
reminder that the
big money has been
made… that the easy
money has been made…
and that we were due
for a sell off… the
easy money has been
made though… but you
try to create a
headline that says
stocks after a big
rally were due for a
fall easy money
made… too dull, too
dry, and, yes, too
right… just to keep
things in
perspective the
volume today was
very light… and it
is a vacation week
for heavens sake…
and I suspect the
market could go
lower even still, on
the same light
volume… because of
the vacation.
The bottom line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
Do not be
discouraged by
today’s negative
action… I expect a
little more of it
tomorrow… we are off
1400
Dow
points off the
bottom… it doesn’t
mean anything other
than the fact that
the stocks have
moved up so far so
fast… fast and
furious… that the
only reasonable
course for most
investors was to
take profits… we
were due… we still
are… even with
today’s sell off…
because we have just
experienced the
greatest rally in 70
years… and all the
headlines… just a
bunch of tales told
by idiots full of
sound and fury
signifying nothing…
except the needs of
reporters trying to
placate their
editors by
fabricating sexier
reasons for the
decline... Don’t be
discouraged,
corrections are part
of the market & not
always a bad
thing...
Let’s play pin the
tail on the sell
off… I want you to
learn to read
between the
headlines… I want
you to be able to
put this on even
with the blindfold.
[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 thinking about
defense stocks. I
see three different
ways to play them, I
can go with the big
traditional, I can
go with one that
also produces
products for law
enforcement, or for
civilians such as
Garmin Ltd. (GRMN).
We have summer
coming up, lot of
camping and fishing
going on.
Jim:
I don’t know… I like
your traditional
approach… I like
Raytheon Co. (RTN)
very much, I think
that they are
delivering…
Northrop Grumman (NOC)
is coming down too
after a big run
yesterday.. the
interesting thing
about defense stocks
is there were no big
cuts… and that means
that the group can
still rally… it was
a heavily shorted
group, it can still
go up… I prefer to
wait for a more
substantial pull
back… it was the
strongest group
yesterday… I think
that it has a 2 day
rest period… and we
revisit the group…
perhaps on our 1000
show… which happens
to be tomorrow.
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Q:
I bought some
Freeport-McMoRan (FCX*)
in the low $20’s. I
have almost doubled
my investment. I
don’t want to be a
pig here, but almost
everyday I see the
price of copper
increasing which is
warning me to hold
Freeport.
Jim:
Now wait a second,
listen up… bulls
make money, bears
make money, hogs get
slaughtered… you
have a huge, huge
gain… copper is the
only commodity that
is still going
higher… I think that
is suspicious given
the Baltic Dry
Freight Index… sell
half the position…
you are going to be
playing with the
house’s money from
now on if you do
that.
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Q:
With your call about
the economy that it
is no longer in a
depression, that the
market’s bottom is
for real, and that
you want to be in
stocks like the
winning coach when
the market rebounds.
I was looking at
trades where the
consumer trades up
and where the stock
has been badly
beaten down and
still growing like
Tiffany & Co. (TIF).
While the whole
sector was beaten
down, Tiffany and
Company is opening
13 stores, and
cutting costs, and
still turning a
profit. Is it time
to buy?
Jim:
Look, understand I
have mixed emotions
here… I said that we
are going out of a
garden variety
depression… that is
the way that I could
distinguish it from
the Great
Depression… but we
are going back into
a recession.. and in
a recession I don’t
know if I really
want to own Tiffany…
I mean if the stock
came back to $18,
after it had that
better than expected
quarter… but I think
that this the kind
of sell off where
you want to pick up
a
Darden Restaurants (DRI),
where you want to
pick up a
Brinker's (EAT),
where you want to
pick up stocks that
I think are not
representative of
expensive
situations… I
thought
Coach Inc. (COH),
it had about
bottomed off the
low… again I want to
be very clear… we
are going into a
recession out of a
depression… that is
not a reason to get
excited about
consumer spending…
unless it is
inexpensive retail
and inexpensive
restaurants.
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[verbatim recap]
[end of segment]
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