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Friday,
May 1, 2009
(Cont'd from
above)...
Jim (cont'd):
Yesterday, the
Chrysler sideshow
had its moment in
the sun... a total
distraction,
magnified by
President Obama's
finger pointing...
Given how small
Chrysler is, and
irrelevant it might
ultimately be to the
economy, it really
is a shame, because
there are so many
good earnings
reports that you
could have missed...
And, yes... I wish
the President could
have been more
elegant in his
finger pointing
about why Chrysler
had to file for
bankruptcy...
Most of the big
banks were
pro-Obama. Only some
banks and hedge
funds held out. We
now know them as the
non-TARP banks...
And, to them I say,
what the heck were
you thinking?...
Those holdout banks
and hedge funds -
not Obama - were the
bigger problem...
and I bet they make
out far, far worse
than if they had
played ball, and
agreed with the
President's plan...
It's clear now that
Obama was more
disgusted with them,
than with Wall
Street, so I'm
inclined now to
believe that the
entire Chrysler
issue was a
sideshow. Obama
really should have
said, "I stand with
the good banks who
recognized they were
benefitting from a
government-led
bailout, but I would
be remiss to say
there weren't some
greedy folks out
there who should
mind their manners."
That would have
gotten the job done,
and wouldn't have
distracted us from
the prize... of
profits!...
The day before it
was Ken Lewis and
Bank of America...
Like Chrysler, when
the smoke cleared,
we realized it was
much ado about
nothing... Who cares
if he's still
chairman or not? It
doesn't matter one
bit! But it
dominated the
headlines, and it
made for "real good
TV"...
Why the heck do I
even care about
these sideshows?...
Because they kept
you from making good
money!
Even today, with
the Dow
rallying 44 points
right into the
close, and it would
have gone even
higher, if it
weren't for that
darn 4pm (closing
session) bell...
There was a ton of
good money to be
made, if you didn't
get distracted by
the stress tests, by
Chrysler's woes, or
by the Ken Lewis
odyssey...
You see, these
sideshows obscured
the biggest, if
least reported on
story out there...
And that story is
the turn in the
economy...
They obscured the
turn in consumer
spending that we saw
on Wednesday. They
obscured the turn in
state-by-state
federal reserve
surveys that I read
as part of
my homework,
that showed a
definitive turn up
in economic
activity. They
obscured a bottom in
Florida real estate
that we brought to
you earlier this
week. And they
obscured the turn in
the most sensitive
indicators that I
know of: copper,
oil, railcar
loadings... and, my
personal favorite,
corrugated boxes.
That's right. Take
if from a kid of
someone who sold
corrugated boxes...
You only buy this
stuff to ship
things... Corrugated
buying is a huge
tell of the
direction of the
economy, and it's a
positive one...
The problem, from
the newsperson's
point of view, is
that a turn isn't
newsworthy... No
face, no set of
factory workers, no
one government
figure out there
telling the story...
You see, I know
this... I know it,
because I happen to
be from both
worlds... I was a
journalist, and I
was a hedge fund
manager. I worked at
Goldman Sachs, and
I've worked at Dow
Jones, ABC, NBC,
CBS, Fox, and the
New York Times.
I know how hard it
is to tell that kind
of story... but it's
what I paid
attention to at my
hedge fund. It's
what I want you
paying attention
to... the turn.
Because the turn is
an incredible
opportunity to make
money...
The pin action off
the turn is
extraordinary.
That's how you catch
big runs... the runs
in anything related
to housing... as the
rallies in
Fortune Brands (FO)
and
Black & Decker (BDK*)
showed... despite
big dividend cuts...
They cut the
dividends, and the
stocks soared...
It is how you get in
on the ground floor
in
Nordstrom Inc. (JWN)
and
Kohl's (KSS)...
and
Darden Restaurants (DRI),
which you know as
Cramer-faves, Red
Lobster and the
Olive Garden...
It is how you call
the turn in oil...
which means big
profits in
Schlumberger (SLB)
and
BP plc (BP*),
which I own for
my charitable trust...
and
Transocean Inc. (RIG),
and another
charitable trust
name,
ConocoPhillips (COP*)...
as we saw this
week...
It's how you make
money in
technology... from
the stocks that I've
endlessly
championed...
Research
In Motion (RIMM),
Google, Inc. (GOOG),
Apple (AAPL),
Amazon.com (AMZN),
Skyworks Solutions Inc. (SWKS),
QualComm Inc. (QCOM*),
IBM (IBM),
Cisco
(CSCO*),
Hewlett-Packard (HPQ*)...
and so many others
that I do like...
It's how the
market's are
embracing the cost
cutters like
Dow Chemical Co. (DOW)
and
NYSE Euronext, Inc. (NYX)
and
International Paper (IP)
and
Starbucks Corp.
(SBUX)...
It's how I knew to
tell you to get more
aggressive and buy
Frontline Ltd. (FRO),
the oil tanker
company, because the
tankers are coming
back... and I hope
you caught the 35%
gain since I
recommended it on
Monday... or at
least
Nordic American Tanker (NAT),
up 15% since then...
Perhaps more
important, for the
short-termers out
there... not that
there's anything
wrong with that...
it's how you know
how to stay away
from the
Bristol-Myers
(BMY)
and the
Procter & Gamble (PG),
no matter how well
they may be doing -
or say that they're
doing - because they
are the stocks that
people sell when
things are improving
in this country.
That's why they can
be so hated, while a
company like FO can
slash its dividend,
say it just had the
worst quarter ever,
and go much higher.
When the economy
starts to turn, the
macroeconomic
picture trumps
everything else. And
there's nothing you
can do to fight
that...
So, even though
Procter and
Bristol-Meyers both
reported very strong
quarters, they are
now known as
"sources of funds,"
meaning that big
institutions are
liquidating them, in
order to buy the
steels, the metals,
the oils, the techs,
and all of the
groups that come
into style when
there's a turn
coming...
What happened this
week?... Think about
it...
Bristol-Myers
(BMY)
got pancaked (down)
on great earnings,
and
Fortune Brands (FO)
vaulted (up) $2.74
today on a really
crummy quarter... I
should add that
Procter said the
quarter was good.
When I parsed
through the quarter,
I didn't like it...
Here's the bottom
line...
▼ ▼
▼ ▼
▼
 The Bottom Line!:
I need you not to
get thrown off by
the sideshows, even
when Obama is
unwittingly a part
of them. Don't fall
prey to the woes
that throw you off
the scent like the
Lewis story... Stop
stressing about the
stress test... We'll
buy the winners.
Keep your eye on the
prize, the
profits... the
recognition of who
is making them, and
who is squeezing
them out of fewer
revenues. Pay
attention to the
profits, not the
personalities. And
always, always...
remember... things
are getting
better... Look, I'm
urging you not to
get thrown off by
the sideshows. Keep
your eye on the
prize, which is
profits! Things are
getting better.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
```````````````````````````````````````````````````````````````````````````````````
Q:
Earlier this week, I
was trading
Dendreon Corp. (DNDN),
in anticipation of
the halt... I know
you know what
happened, and some
of us were caught
with our pants down,
and had to cover
margins, because of
those so-called
erroneous trades.
Two brokers told us
then that those
erroneous trades
would probably be
busted. Two short
questions, Jim...
Why didn't the
Exchange bust those
erroneous trades?...
And won't this
encourage others to
try similar tactics?
Jim:
I absolutely agree
with you. I thought
they should have
been broken. I don't
know the
circumstances, but I
know that was
someone trying to
"paint the tape"
negatively... "paint
the tape" being the
classic art form of
literally, literally
trying to confuse
people, throw them
off, and make them
seem worse. I don't
know, I have always
felt there have been
many times in my
career where it
seems like there
should be trades
that should be
broken... that
somehow the
Exchanges didn't do
the right thing. So,
here's what we're
going to do... We're
going to get Bob
Greifold on... He's
the CEO of
the Nasdaq
and we're going to
find out what
happened to
Dendreon. Rather
than just speculate,
let's get him on the
phone, or get him on
the show next week,
and I bet you he
gives us a straight
answer. And you know
why?... Because he's
a straight guy...
```````````````````````````````````````````````````````````````````````````````````
Q:
We've heard a whole
lot about how all
the big money is
sitting on the
sidelines waiting
for something to
happen, while us
retail investors,
you know, we're
starting to stick
our toes in the
water... sometimes,
to get them chopped
off. Who all are
considered retail
investors, and what
percentage out of
all the money out
there is in our
hands. Are we a
player, or are we
just along for the
ride?
Jim:
John, the retail
investor... they've
been leaving... The
retail investor is
going the other
way... they're going
the wrong way...
They are fleeing
from this market...
We see this
regularly... It's
one of the reasons
why the drug stocks
are down, because,
if you go buy the
cyclical stocks, you
need to sell
something. There's
no new money coming
in. That's one of
the reasons I remain
quite bullish. The
average person is
still pulling money
out of the market,
and not believing in
it. If you don't
believe that, you
should go back and
look at the
NYSE's (NYX)
earnings report,
where they talk
about how there's
still no real
turn... no real
money coming in...
They made that point
again and again...
So, it's why I think
it's a shame. It's
why it's still my
mission to get
people in.
```````````````````````````````````````````````````````````````````````````````````
[verbatim
recap]
[end of segment]
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