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Thursday,
May 14, 2009
(Cont'd from
above)...
Jim (cont'd):
This is what
happens, they start
with the strongest
groups when they
throw in the towel…
and they end once
that group is able
to make a stand… so
I think that techs
strength today
showed us the
pullback might be
over… which makes
this a great time to
ask whether the
great leadership
that is taking us up
now is different
from the leadership
that led us out of
the morass in March…
I think it is… do
you recall the
heroic rally that
began in March… it
started with a big
surge in the
semi-conductors
stocks… which
reflected companies
restocking their
inventory after a
period where they
had simply stopped
ordering anything…
for example, Cramer
fave Taiwan Semi,
had a huge move, and
that was mooch
destocking… mostly
by customers who
sold by yes, once
again, the Chinese
market… you see the
Chicoms are gadget
happy… and cell
phone happy…
remember Skyworks,
the cell phone chip
company, that was
roaring… the sector,
it was being dragged
down by the semis
from the state of
hibernation.
Now I see something
totally and
completely
different… we have
moved forward to a
rally powered by
increased tech
spending… in a bunch
of different areas…
when I see Verizon’s
sale of lines for
$8b to Frontier, it
reminds me that
Verizon has spent
very little on
capital equipment
this last quarter… I
think that that is
about to change…
which is why I like
the Tekelecs… why I
like STAR, and
perhaps even Ciena…
as plays in tech
messaging , cell
phone equipment and
hardware that makes
complex video play
over the net… these
stocks could take
off based on the
increased spending
from the Verizon's
of the world.
Get this, I also see
the drive toward
cloud computing…
something that
should boost Cramer
fave Salesforce.com,
which I think could
have a gigunda
quarter… I do not
know why Oracle does
just not buy it… I
also think there is
a cyclic turn going
on in advertising,
which could be
significant… are you
listening ski-daddy
to the Yahoos and
the Googles, as they
are going to get
more than their fair
share of ad dollars,
because of the rapid
implosion of
magazines and
newspapers… stick
with Cramer and I
will tell you some
more about that
trend later in the
show, not now
though, as I am
trying to improve my
skills as a complete
and inveterate
tease.
Then we read, today,
in the Wall Street
Journal that
spending on
information
technology has
bottomed… and it is
about to roll… by
the way, of out of
436 stories in the
Journal this week,
that was only the
one that was
positive, because
they are really on
board… it makes me
think about Cramer
fave and
ActionAlertsPlus.com
Cisco and Hewlett
Packard, plus IBM…
the last of which
gave you a nice
breather today, to
bring it in… and the
heat up in m&a, that
is mergers and
acquisitions… which
started with Emulex
and SunMicro, symbol
JAVA, could now be
headed for real
quality with the
larger players
making bids for
decent companies…how
about this idea, how
about maybe VMware
gets a bid, or its
parent EMC, I would
buy Vmware for the
charitable trust… I
think that it makes
a juicy take over
target… I think
Hewlett Packard,
Cicso and IBM would
all like to buy VMW
or EMC… now, of
course, I would
never recommend a
stock based on take
over speculation,
unless the
fundamentals were
sound or improving…
and I think that the
worst is over for
both Vmware, bad
quarter last, and
EMC… and once the
gobbling starts, can
a tech spec like
Brocade be far
behind.
Okay, we do not want
to overlook the
semis entirely…
after all Intel
announced a pick up
on a down day so
nobody focused… AMD
is taking share, you
know I liked it at
$2, I like it at
$4... and I do not
care how often I
have to repeat it…
Amazon, Apple,
Google and Research
In Motion, the four
horsemen of tech,
all did quite well
when the economy was
in deep decline… who
could imagine how
well they could do
if we just
stabilize… let alone
get a real, a real
return to growth…
no, I am not saying
that caution isn’t
warranted, when it
comes to this group,
or any others… the
winds of Washington
are blowing a stench
up to Wall Street… a
stench that says gas
masks on, and do not
be afraid to nail
down some profits…
but after the
breathtaking
negativity that we
have heard over the
last three days, you
should know to be
careful and be
skeptical of the
bear on the down
days… as much as you
much question the
bull on the up days.
The bottom line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
In my 30 years of
trading, I have seen
this progression
over and over again…
big sell offs start
when the hottest
group tanks… which
then crushes
everything else… big
sell offs and when
the first group that
got slaughtered
begins to make a
stand, and we saw
that stand in tech
today.. I believe in
it.. and while I
cannot be sanquin
about Washington, I
am feeling that the
valley of the shadow
of the bull may just
be Silicon valley by
another name... Big
sell offs end when
the group that took
the first beating
comes back to
life...
Dow up 46, NASDAQ
much stronger… I
think tech strength
is the beginning of
a tech come back…
and do not write it
off.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
```````````````````````````````````````````````````````````````````````````````````
Q:
I bought CLF about 2
weeks ago, and now I
am down about 30%.
So I am wondering
with that
announcement that
they made yesterday
about cutting their
dividend in half,
cutting salaries,
and the secondary
offering. Should I
keep holding onto
it? Or sell it and
cut my losses?
Jim:
Cliffs was
recommended by a
technician, and it
did not work… this
is one of the
problems with
recommending stocks
just based on
technicals, now what
do we do… the chart
was good, now the
chart is bad… when
we do off the charts
on Tuesday it is
important to know
that one of the
reasons that I am a
fundamentalist and
not a technician, is
that if the chart
goes bad what do you
fall back on… I read
thru the Cliffs
Natural Resources, I
read what they did,
I read the dividend
cut, and I was not
pleased… I would not
sell it down here…
but it is a constant
reminder when I see
that, that if you
just rely on the
technicals and the
chart goes bad… what
do they tell you to
do…. sell, sell,
sell.. it is their
major weakness, and
why when I do off
the charts, I always
point out that I am
a fundamentalist.
```````````````````````````````````````````````````````````````````````````````````
Q:
I have got a
question on
Ferrellgas Partners,
which currently has
a 13.5% dividend at
this level. They
made an acquisition
today, where they
took over a company
that has 1700
customers. Wanted to
see if this was a
good do? a bad do?
and where you see
this stock going in
the future?
Jim:
I thought they had
plenty of coverage,
Ferrellgas, I like
this company… I see
that they are
constantly buying
little niche propane
companies, I like
this company… have I
checked this company
in the last 4 or 5
weeks, I have not…
but I think little
niche acquisitions
like this are good…
now lets understand
the pecking order of
these… I like Kinder
Morgan Partners(KNP),
is my favorite… and
then Enterprise(EPD)…
those are preferable
to Ferrellgas, even
though their yield
is appreciably
lower.
```````````````````````````````````````````````````````````````````````````````````
Q:
I think that the
bears are full of
bull. If you look at
the recent argument
for shorting the
market, this market
has gone up too far
too fast, the bears
have a selective
memory bias. All one
has to do is view
the Dow Industrial
Average over roughly
a 3 month period
following yesterdays
close, the rise in
the Dow over a two
month period nearly
matches a drop in
the preceding
months. If you note
the decline from
February 6th to
March 6th, it nearly
matches where we
closed yesterday.
Jim:
Okay, here is the
deal… 50 companies
in the S&P 500 have
doubled in the last
2 months… so the
bears are saying
that that is too
far, too fast… I am
saying that for that
particular, for
1/10th of the S&P
that could be… but
you know what, I
listen to the bears,
they come out of the
woodwork only when
the market is down…
when the market is
up, you cannot see
them, not a hide nor
a hair… I say that
when the market is
up, lets be
skeptical… and when
the market is down,
lets pick among the
rubble... that is my
opportunistic state…
and bears take that.
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[verbatim
recap]
[end of segment]
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