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Thursday,
May 28, 2009
(Cont'd from
above)...
Jim (cont'd):
Yesterday I heard we
sold off hard
because oil rallied
big… could be
inflation… today I
heard that we went
up hard because…
well, oil shot up
big… shows real
growth in the
world’s economy…
frankly, if you are
like me… you find
all of this
shorthand for
defining the market
maddening… you
search for something
consistent in this
incoherent, memento
market… which is as
easy to understand
as that movie was
when I played it
backward for the
fourth time…. what
you need… you need
touchstones… you
need something that
can point the way…
and let you know
what is really going
on… you need to know
what is truly
pointing you in the
right direction…
what tells you the
real market from the
phony one… you need
to know what the
visible stocks in
this market are
doing… or more
likely, what the
three sectors are
doing… three
sectors… three in
one market… hence,
the three-in-one-mid
that we labored hard
to build here to
continue the inane
but funny theme of
the milk-amid, the
mac-n-cheese-amid, a
lister-mid,
cheer-amid, and, of
course, the original
beer-amid.
Which three sectors
make up the
direction of the
three-in-one-amid…
it has been the same
since the market
bottomed in March…
the same
three-in-one
formula… the oil
stocks… the tech
stocks… and the
financial stocks…
and as along as
these three in one
sectors keep
roaring, keep
jugging ahead
forward, blasting
their way higher…
you will be able to
tell the real
direction.. which I
think is higher…
from the phony
direction which
looks like
yesterday’s market…
basically the
three-in-one-amid is
your compass.
Here is why… we want
to see a recovery in
the worlds economy
and there are tons
of ways to measure
to how close we are
to something like a
recovery… some look
at gold… I think
that is too
convoluted… and
while you know that
I like the precious
metal… I think
higher gold prices
are indicative of
worry… and not much
else.. if you were
not worried about
something then you
can join my friend,
buddy, pal the chief
and Nurse Ratchet in
your own dream
world… some,
including almost all
of the people that I
hear all day
yapping, yapping
about bond yields,
think that they
know… I find these
people hilarious… as
the bonds are singly
the worst tells of
the market… because
they are signaling
that the Fed has got
it wrong, that the
government has got
it wrong… now I am
not just saying this
because I am now the
biggest fan and suck
up of both Ben and
Tim… as I
affectionately call
Chairman Bernanke
and Treasury
Secretary Geithner…
you know that I am
not a kiss up…
because I used to
put Ben’s face on a
box of rice… and I
compared to Tim to
the Keebler Elf…
during the dark days
when they were
confused about the
chaos around them…
finding order where
there was none…
these guys were
looking in a Jackson
Pollack and they
thought they saw a
Dutch Master, or at
least a Van Gogh.
Now, getting back to
how we measure a
global economic
recovery… and thus
determine where the
market is headed…
why not use the
bottom of the market
as a gauge… because
all you hear about
that yields are
roaring up… but last
I looked they were
hugging levels so
historically low
that if anything
they hide the true
direction of the
economy… unlike the
three-in-one-amid,
also known
affectionately as
the loom-amid… when
I was a sales person
for Goldman Sach’s
in the 1980’s…
slopping around
Syracuse, Rochester,
Saratoga Springs,
and Horseheads… I
kid you not… I used
to call in to find
out what the heck
was going on… I
always had my tell
stocks… the ones
that gave me the
real direction of
the action… that was
before cell phones,
I was Mr. Pay Phone…
back then it could
have been
Merck (MRK),
or
Coke (KO),
or Amoco, or to
really date myself
General Motors
(GM).
Now, now I just want
to know where
Apple (AAPL),
Research
In Motion (RIMM),
and
Google, Inc. (GOOG)
are… and each one is
charging ever
higher… daily
breaking out of
their ranges.
For oil I would as
about
Schlumberger (SLB),
Transocean Inc. (RIG)
and
Anadarko Petroleum
(APC)….
they are the oil
markets leaders… not
the integrateds like
Exxon or Occidental…
because those have
fallen out of step
with the price of
crude… seem to be
trading in their own
defined, yes Kirby’s
fourth world… these
three, the largest
oil service company,
the biggest deep
water driller, and
the excellent
natural gas company…
which I recommended
just last week,
about 4 points ago…
thank you Dan
Fitzpatrick, from
Real Money
part of
TheStreet.com,
where I am chairman…
they are flashing
bright green… they
break out almost
daily.
Finally the last of
the three in ones
are the financials…
and here the three I
care about are
JPMorgan (JPM*),
Bank of America (BAC),
and
Goldman Sachs (GS*)…
Bank of America is
so busy issuing
stock, I just want
to hear that it is
unchanged frankly…
and if this one is
going higher than I
know that it is
going to be a
beautiful day…
JPMorgan, classic
example of how
stupid and clueless
this market is from
day to day…
yesterday JPMorgan
put on a show in
true improvisational
Jamie Dimond style…
they told us that
business is much
better than anyone
could expect right
now… oh that is not
the message that got
thru to you… no… the
bears color the
media, color me
mime… so you get to
hear them tell you
about credit card
defaults instead…
perhaps the least
important swing
factor in the
panoply that is
JPMorgan… I think
this one is about to
break out… break out
to where it offers a
ton of stocks… 4
points from here…
diamonds are a
stocks best friend.
Finally there is
Goldman Sachs… which
is the pure
financial play… the
one without
defaults… which
shows you just how
positive this moment
really is… as
Goldman has more
than doubled off of
its bottom… and
continues to churn
higher and higher… I
am glad that I have
a load of both
JPMorgan and Goldman
Sachs in my
ActionAlertsPlus.com, charitable trust
portfolio through
thick and thin…
because they are not
done… if you had to
pin me down… and
said Jim what are
the three stocks
within the
three-in-one-amid
combination that
really greased the
market… I would say
get me G.A.S.…
Goldman (GS*),
Apple (AAPL),
and
Schlumberger (SLB)…
as long as G.A.S.
goes higher we are
going higher
regardless of any
other indicator…
housing starts,
durable goods, PPI,
CPI, all
inventories,
unemployment claims…
oh, and unlike
natural gas… these
are neither silent
nor deadly… they are
noisy and full of
life.
The bottom line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
As long as you have
got G.A.S. you are
good… if these
stocks stop powering
higher, I will
rethink my bullish
views… and I will
knock over the
three-in-one-amid…
right now though the
three-in-one-amid
stands… and I stand
with the markets
true direction…
which is, higher.
Alright, I want you
to pay attention to
three sectors… oils,
techs, and
financials… they
make up the one and
only,
three-in-one-amid…
or as we call it in
the clubhouse… the
looma-mid.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
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Q:
I own this company
Cubic Corp. (CUB),
I was doing a search
for a company with
the technology to
implement this
online newspaper I
came up with, which
by the way is being
totally ignored and
discounted at this
point, anyway that
is their funeral,
the newspapers.
Anyway, they do
transits, smart
cards, and I
understand that they
are a defense
contractor as well
apparently. I know
this as I have been
watching CUB, it has
been popping lately,
I am wondering what
is causing it to pop
so, of course, I
came to you. What
can you tell me
about CUB?
Jim:
I will tell you that
CUB actually
captures this moment
and the military
budget and what
Obama wants to do…
this is like an
incredibly smart
military play… I
have seen these guys
do anything from
turn styles to
avionics… I have to
tell you, that Cubic
which at a 52 week
high today is
emblematic of what I
see going forward…
fabulous American
technology replacing
humans… everywhere
it goes… this is
literally like,
whatever humans are
doing they can do
better… I like the
stock… I hesitate to
recommend anything
at a 52 week high…
but, oh boy, you
have got a winner.
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Q:
I have a question
regarding
Linn Energy, LLC (LINE).
I bought the stock
around $16 for its
incredibly high
yield, and hedged
commodities position
and now it has been
on a nice move.
Obviously, the
higher the stock
price goes, the
lower the yield.
Although the yield
is really high, it
is now coming down
to levels in line
with other energy
and LP’s. I am
wondering what price
point I should pull
the trigger and sell
the stock. Book the
capital appreciation
vs. waiting for
lower and lower
yields, which makes
it less attractive.
Jim:
Alright, first of
all it has got a
huge yield…
secondly, remember
we had Michael on
and we said, hey
listen partner… do
you have the wear
withal to offer that
yield… he gave us a
couple of years
grace period… you
are still getting
about 13% for that
one… I do not want
you to touch it
until it gets about
8% or 9%… and at
that point we will
swap into
Kinder Morgan Energy Partners
(KMP)
or
Enterprise Products Partners
LP (EPD)…
which is Enterprise
or Kinder Morgan.
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Q:
Now for
General Motors
(GM),
the government says
that the existing
shareholders will
not get anything in
the new plan. And
still the stock
opened higher. What
is behind that move?
Jim:
Why did the stock
open higher… because
suckers are born
every minute… I
mean, it happens in
this market… and
this is why I think
that it is
reprehensible… one
of these that is so
reprehensible is
that nobody knows
anything about this
thing… and people
say, hey look at
that, the
bondholders agreed
to something… that
must be good for the
stock… it is
actually terrible
for the stock… but
because our
government allows
this kind of thing…
and the New York
Stock Exchange does
not want to lose the
big, wants to make
the money… and the
brokers love it…
this travesty
continues… and all I
can say is… shame on
all of those that
continues to let
this version of GM
continue.
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[verbatim
recap]
[end of segment]
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