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Friday,
May 29, 2009
(Cont'd from
above)...
Jim (cont'd):
Look, I've got to
tell you
something... that is
primo, bullish
action... and I see
no controversy in it
at all... just money
being made by those
who are focused with
a clear head, and
don't get distracted
by the journalistic
Jeremiads...
Unfortunately,
that's not the
mission of most of
the people whose job
is to talk about the
markets. In fact, if
you look at the
panoply of stories
they produce every
day, or blog about,
or come on air and
be interviewed
about... it seems
like the mantra of
the media is this...
"There are always
bear markets
everywhere, and we
will work tirelessly
to find, or
manufacture them,
for you!"...
The most common
bogey-man the media
has been ginning up
lately is that the
bond market
vigilantes are
back... the people
who are pressuring
the government by
bidding up bond
yields, because they
don't like the
risk/reward of the
10-year Treasuries.
Over and over again,
I heard that rising
bond yields... a
rise that was
frankly barely
visible on the
10-year chart...
could choke off the
recovery. Funny how
the same people who
parrot that line
don't even seem to
believe that there
is a recovery. I
mean, but who cares?
A foolish
consistency is the
hobgoblin of little
minds, right?
The hilarious thing
about that entire
ridiculous storyline
is that the
allegedly big rise
in bond yields that
everyone went crazy
about... those
yields went right
back down at the end
of the week, erasing
much of the move.
But nobody talked
about that. I mean,
that would kill the
good story, right?
It would be
incredible it they
talked about that.
Now, I would call it
irresponsible that
they didn't, if I
didn't want my
journalistic card to
be revoked. I've got
to keep that
Journalist Card...
because you know
why? It gets me into
really cool dance
parties to play Lady
GaGa...
No... They were onto
the next
controversy... the
greatest rise in
commodity prices in
37 years... stirring
up the hornet's nest
of pundits, talking
about how inflation
must be soaring. Of
course, the problem
with that is that
most of the
commodities had been
bid up by hedge
funds, since there's
nowhere near that
level of actual
demand... as any
fool would know if
they bothered to
check.
Unless the margin
rates rise for
people who trade
commodities, this
will keep
happening... but
that would mean that
the government would
have to govern...
and, at least on
this issue, the
current
administration seems
as clueless as the
last one.
What kills me about
this impulse the
media has to
generate negativity
and create
controversies out of
the tiniest, most
insignificant
things, is that
there are in fact a
lot of really
fabulous stories out
there, happening
right now, that are
too important for
you to miss. But
they happen to be
positive and, for
the most part
therefore, unsexy...
so you don't hear
about them...
I've got a list of
10 of them, right
here... 10 stories
you're probably not
reading, because
they haven't been
written... and, if
they have, well...
they don't move the
needle.
▼ ▼
▼ ▼
▼
Story #1...
First, all I heard
today was how scared
I should be about
the weak dollar...
that I should be
shaking with fear
about what it could
all mean. And all I
could say is, the
stock market
obviously loves the
weak dollar!...
judging by the
furious rally that
we had this week,
including today, as
the greenback got
completely pasted!
Don't people realize
that a weak dollar
is part of the
Federal Reserve's
tonic to revive the
economy, by allowing
us to export more
goods cheaply, put
more people to
work... How can that
be so hard to
understand?
Frankly, I think
it's fantastic that
the dollar's going
down.
▼ ▼
▼ ▼
▼
Story #2...
Second... Even as
everyone's saying
foreclosures are
rampant and home
values are
plummeting... you
can't fight the fact
that California's
had two straight
months of increasing
home prices.
The Wall Street Journal
at least had an
article about this
today. I'll explain
that later... This
is important. It
should be making
headlines
everywhere, and
constantly discussed
on cable.
You might want to
know that the demand
for mortgages is
increasing and
remains strong
around the country,
even with these
slightly higher
mortgage rates. The
so-called "big run
in mortgage rates"
just made people
jump off from the
sidelines to buy
existing homes...
not flee back to
their rental
apartments.
▼ ▼
▼ ▼
▼
Story #3...
Third... Have you
heard that shoppers
aren't shopping?...
That the consumer's
dead?... I think
they're shopping at
places that offer
better values...
You've only got to
look at
J. Crew Group (JCG),
up 26% today, to see
that. And you can
listen to (CEO)
Mickey Drexler on
the conference
call...
read the transcript...
because you won't
hear or read about
it much from the
press... The
consumer is not
dead... just "dead
smart." You look
just as good in a
Crew as you do in
some of that
expensive stuff you
see in Vogue...
▼ ▼
▼ ▼
▼
Story #4...
Fourth... We are
experiencing the
greatest, most
broad-based tech
rally since 1999...
in 10 years... and
it can't buy an inch
of media coverage.
There seems to be an
endless number of
smartphones and
other
devices/gadgets
coming on and,
somehow, the demand
for them remains
incredibly strong...
People must be
buying these gadgets
hand over fist...
yet all I hear about
is the coming
smartphone glut, or
that
Dell (DELL)
- such an also-ran
company - says that
PCs aren't
bottoming...
Meanwhile, we could
have made Mad Money
for you here,
recommending the
stocks that make the
gadgets and the
chips that go into
them. Because we're
positive, I think we
put you into those
stocks...
▼ ▼
▼ ▼
▼
Story #5...
Fifth... How about
the fact that stocks
embrace bad news? At
Procter & Gamble (PG),
it went higher
today... It lowered
its forecast
brutally earlier in
the week...
I've got a half
dozen stocks that
are soaring from
levels where they
allegedly
disappointed us...
including the stock
of the
NYSE Euronext, Inc. (NYX),
Coke (KO)...
what a horse that
is... and how about
Monsanto (MON)?
It just let us
down... it's
climbing right
back...
▼ ▼
▼ ▼
▼
Story #6...
Story #6 that you
don't read about...
Runaway commodities'
markets do not mean
hyperinflation...
Look, I fear higher
gasoline prices for
certain; I don't
like the rise in
crude. But it hasn't
dented retail sales.
I don't want oil
much higher. I don't
like gold screaming
upwards... But there
are some legitimate
reasons having to do
with some real
powder-keg areas
that could erupt...
Commodities are also
manipulated up... as
I mentioned... by
hedge funds. Some of
them are using ETFs
(i.e.,
exchange-traded
funds) of mass
destruction...
Others are short
squeezing some
smaller funds out of
existence... I'm not
buying that there's
any real inflation.
That's the real
story that no one
else will tell you.
▼ ▼
▼ ▼
▼
Story #7...
Seventh... The media
doesn't seem to care
a wit that the stock
market just absorbed
$70 billion in new
bank equity without
a hiccup... We had a
great month of May.
It didn't matter.
That's astounding to
me after all the
stock issuance...
Why doesn't anyone
talk about all of
these banks that
were supposed to be
going under that
were able to raise
tens of billions of
dollars? They
flooded the market
with supply and yet,
it went higher...
Isn't that the real
May story? Not the
roaring silver and
palladium markets,
for heaven's sake!
▼ ▼
▼ ▼
▼
Story #8...
The eighth item that
might be worth
noting if the market
reported some
positives... Foreign
markets... totally
unstoppable. They
can be used to
replenish credit
coffers.
Almost every single
foreign market is in
wild bull market
mode... dozens of
them up double
digits. Can we
really be that far
behind? What does it
take for people to
realize the bear is
no longer at our
door?
▼ ▼
▼ ▼
▼
Story #9...
Nine... and this one
is supposed to be
scary as all get
out... the so-called
"next bomb"... the
next alleged crisis
waiting to happen...
the blowup of
commercial real
estate...
Can I tell you, this
hasn't produced much
stress to the system
at all... even
though we're coming
out of, and not
going into, a
depression... Right
here, right now, for
the first time, I'm
going to recommend
the real estate
investment trust,
the ETF... because,
with the exception
of
General Growth Properties
(GGWPQ.PK),
they're all holding
up fine. It's just
too positive (for
the media outlets)
to mention. You
should be buying the
IYR -
iShares Dow Jones US Real
Estate (IYR)
- just to spit in
the faces of these
real estate Kodiaks
(i.e., bears).
▼ ▼
▼ ▼
▼
Story #10...
And finally... this
reality seems hardly
worth a headline,
but you know I think
it's great...
We've had 10
straight weeks of
money furiously
flowing into mutual
funds. That
seemingly legendary
"money on the
sidelines" that we
heard about all the
way down... Well,
it's for real. And
it's finally coming
back in. This
fantastic May will
only embolden more
people to throw
their money at the
market.
Remember "sell in
May and go away?"...
Well, if you sold in
May, you should be
going away, you
moron... I think
there's a new one...
"Sell in May, and
get the wedgie of a
lifetime... "
Now, do you really
think that not one
of these things
matters as much as a
quarter-point move
in the interest
rates, or a drop in
the dollar back to
like where it was
last year... or,
still one more...
gold's assault on
$1000 (an ounce)?...
Me neither.
Here's the bottom
line...
▼ ▼
▼ ▼
▼
 The Bottom Line!:
Right now, I wonder
if the press could
find a bull market,
even if it was
rammed by a Texas
Longhorn... so don't
be misled by the
endless misdirection
plays... There are
plenty of positives
in this market. You
just don't get to
hear them, except on
Mad Money...
[verbatim recap]
[end of segment]
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