You Don't Bring Me Flowers

sums up 2008.

What a day!

http://www.youtube.com/watch?v=PLlqCEmQJsA

Two Dogs that could be Lions!

IBI, as I have harped on, is located in Uganda and now Tanzania. Mr. Sinclair, a famous precious metals investor, has called Tanzania the best place to explore and mine. Don't take his word for it, but look at how well his stock is doing, Tanzania Royalty Exploration, of late. But his company's market cap is 363 million dollars.

Another dog, in a relatively unfriendly place is, Mano River Resources, in Liberia. But Severstal, from my understanding, is paying the company 12mln dollars for a 68% interest in an iron ore property located there. 12mln dollars is Mano's market cap so you are paying nothing for the future of stability of Liberia, which is already occuring; as well as paying nothing for future royalties and the potentially lucrative appreciation of commodities. And now we have the full backing of one of the largest steel companies in the world, who I would assume, did their due diligence.

I like buying strong healthy companies like the next guy or gal, but you pay a premium for that. These dogs may never do anything, but what happens if they do? Just buy in moderation, as Ben Franklin has said, and be patient like a monk and meditate on 'Good Vibrations' as the venerable Beach Boys put it.

Israel vs. Wall Street Leverage

From the IHT website: "UN Secretary General Ban Ki-moon has called for an immediate ceasefire. Mr Ban said he was "deeply alarmed" by the escalation of violence in Gaza. While recognising Israel's right to defend itself from militant rocket attacks, he condemned its "excessive use of force"

Lets replace Mr. Ban with the SEC and Treasury Secretary and Israel with financial institutions and escalation, with leverage. "The Treasury Secretary has called for an immediate cessation of new derivative products. Mr Cox, of the SEC, said he was "deeply alarmed" by the escalation of debt on Wall Street. While recognising financial institutions right to defend itself from competition, he condemned its "excessive use of leverage"

The above paragraph was never said nor mentioned until after the fact. Not in Israel's case.

So being a contrarian, I would assume that when comments like this are made, one should believe the opposite and when they are not said, run for the hills. Ultimately, it is up to the individual to make up his/her mind. I don't know Mr. Ban nor his politics, so how can I base a rational opinion from a highly political organization such as the UN, with a relatively unknown figure.

The same goes with the uncharted territory we are heading for in the US. But it doesn't make it bad, just brave...new...

Brains in Washington

This article says that the next biotech revolution may occur in the garages of mainstreet USA and with that maybe we'll be able to design a gene for...

http://www.usatoday.com/tech/science/genetics/2008-12-26-diy-dna_N.htm

AHCI

If hospitals are closing and downsizing and the ones that are open are burdensome to be in, would that imply a growing business in home healthcare?

If that is the case, AHCI, may have nowhere to go but up. Currently, they make their profits in the UK, but located in the US, so growth may be in the cards for this micro cap stock.

http://www.usatoday.com/money/industries/health/2008-12-28-hospitals-ailing_N.htm

Twisted Logic

The fact that we have time to watch and follow the Israeli-Palestinian conflict may signal that the economy is picking up.

Because notice for the past 6-7 months, there was nothing of note to mention except for the elections and the economy.

Technically Crude Oil

is in free fall, but the idea it is up 0.94 instead of a buck or two with the Israel conflict in headline news, I believe, is a positive step to find a positive footing for this commodity.

But make no bones about it, anyone buying crude at these levels is trying to bottom fish. And there is nothing wrong taking out the ole fishing rod and sticking it into any water hole trying to get a nibble, but don't expect to capture a trout!

One key thing to remember

when going to corporate websites is where it puts its investor relations tab. If it is prominent then their primary business is to sell their shares and if not, well, they have a company to run and they do it.

Last year Goldman, this year

my holiday gift was Rohm and Haas.

This is the last time I trade on buyout rumors. The stock went down for a reason and Im going to face the consequences Monday morning as Dow Chemicals loses the support of Kuwait.

The question to me is if I hold on like I did with SanDisk or run for the hills? I am inclined to believe that the buyout will occur, but at a lower price.

If not ROH shareholders know that their stock is going to teens.

Utility Panic

Utilities are down today because of First Energy. Commercial Real Estate has rallied because of a short squeeze and possible bailout. If GM can only get a bridge loan, I am going to say that the components of IYR are not going to be bailed out and come the first of the year begin their sell off once again. Of course, looking for ways to reduce risk, I am going to say that utilities offer better relative value because of the inherent demand of its product and the expected growth of energy demand.

Lets say there is a bailout. Do you honestly believe Commercial REITs would be able to payout dividends? That is the whole point of owning them. Maybe they won't go out of business but that doesn't imply a rally to their previous highs either.

And judging by the 3 month chart, Utilities have held their own in the sell off and rally, while IYR has been digesting its massive sell off.

Though I want instant gratification, this pare trade may take awhile, and I have been sniffing around seeing if anyone has been mentioning this type of trade and cannot find one. So does that mean its wrong, or nouveau?

It looks like the markets

have put in a short term top and we are just going to fade away into the new year. But that may imply a classic pop, like the champagne bottles, when the news year comes rolling along. So if you got some conviction on some items, pick em up, they are on sale.

Logic

CEG, at one time, was trading at $120 a share, and fell as low as 15. Berkshire Hathaway offered, I believe, 28 for the company. But determined to stay independent, CEG sold 50% of its nuclear business to EDF. And the company's share went back down to about 22.

I bring this up concerning logic and longer term perspectives.
1) EDF already had a big stake in the company, so not only is it knowlegable of the company it is now more deeply entwined in CEG's business.
2) CEG's shares sold off due to liquidity issues. By having both Berkshire and EDF interested in the company would imply to me that they are fundamentally cheap. And liquidity issues are not currently a concern.
3) Hedge funds, and now there is talk of commercial real estate developers, can now access loans from the FED, so why can't something essential as power?
4) Hugo Chavez was quoted recently in his want to nationalize a new mall, I believe, in Caracas because it take up too much space in a limited area, which can better be used as a school or hospital. Once again proving that most commercial real estate properties are, in essence, not essential.

CEG is up today and I don't think we will see the low set this year, in this stock in the year ahead and the several ensuing ones as well.

And on a similar note, NRG is trading below EXC bid for the company. Both NRG and CEG are in the nuclear power business, and while cheap, the efforts by three big players in utilities for these assets show their expectations of future results. So these two issues should prove to be excellent investments as the years roll by and my hair gets greyer.

Will GM, Ford, and Chrysler make it...here is my answer...

Thesis: Isn't it funny how sports reflects business sometimes...
Thought of sharing it in my blog when I read in God and Gold that the Duke of Wellington mentioned that the battle of Waterloo was won on playing fields of Eton. I understand the Duke to mean that physical competition in a tightly controlled atmosphere breeds success.

Ancient Example:
a) The Greeks love of athletics paralleled their exertion in mental exercises that has led to the foundation of Western Society.
b)The Romans liked spectator sports where the loser didn't go home in a sports car, but in a hole in the ground. "Give them bread and circuses" was the phrase back then. It was a way of release for the common citizen and hence reflected his/her emotions.

Modern Example:
a) The steroid scandals in baseball definitely reflected the juiced up earnings on corporation's balance sheets; though we aren't asking the players to hand over their money.
b) After 2000, the Yankees, who represent US corporations, couldn't win the big one; even after all the money that was thrown at the team. And had an abysmal year, as did Wall Street.
c) The New England Patriots, who represent Wall Street, had an impeccable record, where last year we learned that they cheated via videotaping the opponents' practices. And against 'all odds' they lost to the 'bad news' Giants. Following my metaphor, the gig was up for the establishment.
d) The Madoff Ponzi scam put into question the SEC oversight, as there were several complaints throughout the years concerning his fund. The same can be said of the NBA refereeing, where last year a referee was indicted by the FBI for fixing games, not the NBA; even after coaches and players complained about him.

Conclusion: The DETROIT Lions, located in the Motor City, and owned by the grandson of Mr. Ford himself, may have the worst record of all-time depending on the outcome of the Green Bay game. The management of the Lions can be reckoned to the management of the automakers. If that is so and they finish the year winless, then they are going to go broke, if not there is still hope.

Of course, the Detroit Pistons, Detroit Tigers and Detroit Red Wings have put in some stellar seasons and have won some championships, but the Detroit Lions stick out as just being horrible.

Fear

Now that the short squeeze has done its effect, a sell off and a serious one at that, may have begun yesterday.

The past four Fridays the market rallied into the close and I would argue that if the market is not down 200 points into the close, then that would show signs of strength; since that would be a sign of non-capitulation. And since the news is skewed currently to allowing an "orderly" bankruptcy for GM and Chrysler, then I don't believe that traders are going to be very long this weekend. Additionally, oil didn't follow this market higher and has reached new lows on this sell off, which would imply that it, ie oil, knew that bankruptcy is looming for the US automakers.

Look for an afternoon rally that fails. But realize in sum the market has rallied 1300 points from the Dow low, so profit taking isn't unreasonable.

ALSO COMMERCIAL REAL ESTATE, IYR, HAD A REVERSAL DAY SO I AM GOING TO ASSUME REALITY IS NOW THE KEY WORD IN THE MARKETS AND TO FOLLOW ACCORDINGLY!

ADDENDUM: TODAY IS OPTIONS EXPIRATION ON A BUNCH OF STUFF, SO UNLESS ONE KNOWS THE PRICE AND VALUE OF A PURCHASE, STAY AWAY FROM TRADING TODAY.

Simple Math

First, at Mike's Place, by the Mediterranean, a guy told me that eBay has competition from the free site Craigslist, but that is the nature of competition...it exists, but so does eBay.

Let me break it down.
10yr Treasury yields 2.06%
eBay yields to shareholders equity 18%, Earning to Price is 5.3%

eBay has no debt, and stated book value is 8.4/share. eBay is trading at 14.62 or 1.74x book value.
Amazon and Craiglist pose challenges to eBays business model, but inversely, eBay poses problems to the others as well. If one was to get into business now with minimal cost and an infrastructure in place, why not invest with eBay?

Treasury Top

Not timing this one either but look at this beautiful chart. And now look at the bottom of it and notice how the commercial interest is drastically reducing their commitments as the price of bonds keep shooting to the moon.

The market is obvious

in the sense that it wants to go higher and the US government would as well; judging by the FED's interest rate policy.

But like a race car going around the track, it needs to take a pit stop now and then. Usually, that occurs when the market has the best outlook and it does with the public spending bill by Obama. Additionally, the year is almost over so I'm inclined to think that distortions that are hard to follow may occur.

Of course, distortions are good if one know the value of what he is following and not trading it!

The Lucy Football Syndrome

Don't chase this rally. Unless you are buying dogs.

It appears to me that the market hysteria is like Lucy placing the football down for Charlie Brown to kick. Everytime she gives a different excuse, but the outcome is the same, Charlie Brown misses the ball and winds up entangled in a tree.

What will be interesting is the digestion of the gains this week.

The Reason ? Ponzi Schemes will Survive

Quoting from Bloomberg and referring to Goldman Sachs:
``They've performed better than their peers, as only recently have they begun to post some losses,'' said David Killian, a portfolio manager at Valley Forge Advisors LLC in King of Prussia, Pennsylvania, which oversees $700 million and owns Goldman Sachs shares. ``The volatility of the returns is an important component, and the more volatile the less people are willing to pay for it because they can't predict it.''

And when they can predict earnings, it's either a ponzi scheme by an individual, a credit report by SP or Moodys, a "guaranteed insurance" product by AIG and its ilk, or no money down loans.

Volatility will be with us like the storms in the sea. And with that goes the old saying, "go with the flow!"

Forbes is Covering the Messed up Drug Trade in Mexico

http://www.forbes.com/magazines/forbes/2008/1222/073.html

Besides US dollars going to the Mideast via oil.
What unreported amount is going to Mexico via the drug trade?

I'm more aghast at the amount of drugs consumed by US citizens then the oil consumed in the spirit of consumption and growth. Of course, with oil we want to punish Exxon and build some government-subsidized ethanol plants and windmills, but we can't seem to get our hands around something more worse and vile then carbon emissions, drugs. Legalize it and lets get this 20year sordid affair into our past. ALSO THERE IS FEAR OF NUCLEAR PLANTS, BUT NOT CIVIL WAR IN OUR BACK YARD!!!

Anyways, buy Altria and wait. Or the Mexican Peso, which I don't think is accurately portraying the strength of its currency in relation to its precious metals underground, untapped oil, and cash flow rich drug barons.

I hate Monday mornings

Markets, as work is, are very tenuous on Monday mornings because who wants to work after a pleasant weekend.

It's pleasing to see the market up but it can be illusory. This will be a telling week for sure!

Real Estate related companies have outperformed the market and I am concerned that utilities may be lagging a bit too much. Watch utilities, they need to pick up from here.

Yes, there is a contracting economy, but it should effect the least what is in the most demand, like energy.

So this is mere speculation but UTILITIES, if the market holds, SHOULD HAVE A GREAT WEEK.

The Carbon Trade

Carbon trading is getting a lot of hype and for an investor who has no idea, like me, what the hell these entrepreneurs and reporters are really saying then I would argue to buy utilities with low carbon footprints.

That would involve natural gas and nuclear power plants. The coal operated ones would need to purchase the credits from these.

While traders fuss and fight, you will be getting a dividend and a cushion in these trying times.

Needs studying

on why the market went up on Friday, based on the past year's performance, it should have tanked on Friday on both the 50bln ponzi scam as well as the looming GM bankruptcy.

There are some that have been saying that the 50bln dollar ponzi scheme had a lot to do with naked short selling. If that is the case, we may be seeing the greatest short squeeze in history. And make the Porsche/Volkwagen one look like a blimp on a chart.

Plus all the money being pumped into the financial area, we could be setting up for all time highs in the Dow.

Shifting of Psychology

When I was a mere lad, end of the world pictures, had massive destruction and deaths. Yesterday, in "The Day the Earth Stood Still," only parts of NYC and New Jersey were destroyed and Central Park was once again filled with letter. And in the end, the aliens realize there is hope for the human race.

When people have hope as the classic movies have, good things can happen even when they don't add up.

Today I'm turning off my computer

and am going to enjoy the weather here in Israel. I usually make dumb mistakes on days like this so if I have learned anything since I started blogging - sometimes doing nothing turns out to be quite profitable.

Just for the sake of keeping tab, the last few Friday afternoons turned out to be very profitable for anyone long. If ever there was a perfect set up for an afternoon rip, it would be today. As the weekend may have two outcomes: immediate bankruptcy or Presidential intervention. Or of course, they pick option three, like me, and do nothing.

But who in power, doesn't want to exercise it. And besides, doesn't Bush want to have people cheering for him; even if it's temporary?

Harry Reid , a great leader and

someone that biographers will wax over in the decades ahead, due to his insightful comments such as:

“It’s over with,” Majority Leader Harry Reid said on the Senate floor in Washington. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”

FedEx vs. 10yr Treasury

FDX dividend is 0.7%
Treasury is 2.63%

FDX Earnings/Price is 5.6%
Treasury is 2.63%

FedEx earnings power is backed up by a core demand of transportation of goods. Trading close to its cyclical low. Has a duopoly with UPS.
Treasuries are backed now by more and more toxic elements of this recession. And at all time highs. Basically, treasuries are the financial backbone of the US monetary order.

FedEx cash-LT debt = -400mln compared to 18bln market cap - market is saying it has a viable economic model with real assets spread globally.
Treasury debt is in the trillions and backed by the good faith of the US government, not hard currency. Pushed to all time highs, the market is saying nothing else is safe.

I write this to show that as the market heads lower into the open, that does not mean one should panic, but logically plan out his order of attack. And recognize by saving money, and this is odd in this deflationary shock, in the intermediate to long term, the money would have been better saved in a corporate stalwart such as FedEx.

Predicting the Future

I cannot but see patterns. The non-GM bailout will be interesting to see how the market reacts. Technically it is very strong, currently, and to see it absorb this shock would be tremendous and fly in the face of everyone that says we are dependent on GM. Of course, those pundits can be right. Hope not.

Natural Gas buy - no stops and no time frame -

Natural gas is in free fall. But I do know that from the records given, the commercial interest in natural gas is not only high, but extremely so. The chart appears to be giving a mirror image of natural gas prices and the commitment of commercial users. I realize that there are more distortions in the COT reports but an aberration like this has to be bullish. Additionally, natural gas won't go broke, so as long as one has patience like a commercial user, one ought to do well.

Everytime

the market has had this panic sell off into the close, and this time with light volume, it was the time buy the markdowns.

GS has stayed strong today, unlike the financials and GM. It is GM, solely, that this market has rallied from the abyss and can still fall over itself if the auto maker is not baled out. And I think that is what the market is saying today. Lock in profits until it's more clear what the Senate is going to decide.

Eastman Kodak

is not going to 0. They have great technology and a great international brand that someone like FUJI would want to incorporate into their organization. Or what about a Russian or European or even Chinese firm buying Kodak. It's getting to a level that there will be a bid for it.

FedEx redux

Sometimes there is a lag in success, unlike the 100 yard dash. FedEx from a technical perspective shows a great amount of fear, but from a fundamental perspective a great entry point to a wonderful franchise. Usually, that adds up to a winning formula.

With Oil and Gold up in overnight trading, FDX may not get the attention today, but is a great time to accumulate.

30% stop on this one due to its wild range.

Follow up on Sun Communities

First, I want to kick myself for not buying American Land Lease at depressed prices. If you go to any financial website, you'll see that ANL which crashed from around 22 to 2, rebounded back to the 12 range on a private buyout. I was more focused on commodities and why my utilities/short real estate weren't working, then to give my notions that mobile home park REITs will outperform commercial REITs.

To get back to SUI, they generate tremendous cash, has a basement price due to the buyout of a similar company, and is still an auto maker bailout play, due to its concentration in the MidWest. Another one is UMH.

Long SUI and UMH and, if you want, ELS/ short Commercial Real Estate (SRS) ???

Irrational? Not really.

GS was acting weak today which signaled that the market needs a break. It's a good time to hedge and put on SDS but albeit temporarily.

And Pier One reports December 18.
On Yahoo Finance, they have more cash then debt.

0.33 stop, and blue sky short term pop.

The Deere Play III

DE sold off then has rallied to 38 after earnings.
TSN sold off then has rallied to over a buck after earnings.
FDX sold off a huge $10, and...

will it rally henceforth?

CapLease, LSE, is a way of playing what Bill Gross said

is the bullish case in corporate bonds. As I'm studying in my CFA book, many corporations take debt off the balance sheet, by placing debt burdens on other companies, but in fact are indebted to them as if it were a corporate bond. CapLease argues that their leases are from A graded firms, as a result they should weather the financial storm that is upon us. Or a company to hedge against SRS.

CapLease, Inc.
1065 Avenue of the Americas
New York, NY 10018
United States - Map
Phone: 212-217-6300
Fax: 212-217-6301
Web Site: http://www.caplease.com

GSS STRANGE

GSS wasn't up yesterday when gold was up , but today when gold is down, GSS is up. Penny stocks are something else.

Gold to 400s?

I don't agree, at least short term, with this assessment and in fact stated bluntly, unlike Mr. Bolser, gold and silver are going to rip this week. But his argument is striking and his technicals are convincing.

http://www.stockhouse.com/Columnists/2008/December/8/Horrific-gold--dump---Is-this-guy-for-real-Thom

So want to give myself pause to dwell on what he has to say and hope you will as well.

Texas Instruments?

Like Deere they are just not as profitable, but unlike DE, TXN has no debt. The stock is down in after hours. It is reasonable, I believe, to put a 52 week stop on it and let this baby rip.

Utilities did not join this rally

and that is disturbing to my account and to the trend at hand. I still believe commodities have a long way to go to correct the sell off, but the market in general needs a healthy rally in sectors that are in need of real financing and a real demand, such as utilities.

The idea that people would flock to commercial real estate before utilities kind of surprises me. NRG which is a buy out candidate is down on the day! WEC which sells assets is down on the day! But not KWK, in the oil sector, which is up on asset sales.

And how can financial institutions that have been around for over a hundred years go bankrupt, GM be close to bankruptcy, Ross Perot's, the famous presidential candidate and savvy businessman, real estate hedge fund go bust, the Tribune file for bankruptcy, but not one of the dominant REIT players?

Additionally, real buying comes incrementally, not explosively. This is short covering, but will the short convert to longs?

Granted the market has

swished higher to the tune of +1000 points. It can go higher just on short squeezes. It wouldn't and shouldn't be a shock to people to see the market up +700 points.

Bill Gross said that markets are undervalued in a leveraged environment which he believes is over. From my perspective, the amount of money being pumped into the economy is a leveraged event, and from that fact alone stocks should rip to the upside.

If that is the case 1998-2000 will look like a mini-bull market as to what commodities will do this coming year.

Obama's smoking issue, what?

http://news.yahoo.com/s/nm/20081207/pl_nm/us_usa_obama_smoking_3

I guess some US citizens care about this, but EXCUSE ME this is the most absurd concern at this current juncture.

"The White House no-smoking rule was imposed by former First Lady Hillary Clinton, now Obama's nominee for secretary of state." That is what I call statesmanship. I would think curbing no money down loans is more dentrimental buy anyways...

Before we curb China's human right's abuses, maybe we should have Senator Clinton, as Secretary of State, spearhead an anti-smoking campaign in China. It will build a healthy relationship with the Leninist country, if not a long lasting one.

It also shows our nation's obsession with stimulants: in both directions. And like my previous blog, Obama will legalize drugs. Just not in the White House.

I wrote on Sunday about oil and gold

and this Monday morning not only are markets ripping, but so are commodities. Will they last? Or will this yet be a one day wonder?

Mr. Dines has used this wonderful phrase oft times "buy fearlessly."

Of course, I can be wrong, but we know what a route is. Why not in the other direction?
Now it will be telling to see how everything plays out through the day.

But remember GS and GM need to be up.

Minyanville mentions legalization of drugs

http://www.minyanville.com/articles/MO-pot-TAP-SAM-Mexico-war/index/a/20242/from/yahoo

SLOWLY THE TREND WILL CHANGE IN THAT DIRECTION. IF WE CAN ERADICATE DTT YET ALLOW PEOPLE TO DIE BY MALARIA, WE CAN LEGALIZE MARIJUANA, AND ALLOW FARMERS TO PROSPER.

As mentioned before MO will be in the drug business by the time nuclear power is accepted. The fact is that common sense takes time to develop.

Drugs are not healthy and effects people's personal, family, and possibly the public at large, lives. But the fact is that illicit drugs are prevalent in the US and the money does not stay in our economy. And the amount that the US spends on its eradication is mind numbing and ultimately futile, or at least from my understanding.

MO has a monster dividend and products in demand: beer, junk food, and nicotine.

The Gold Rush

I emailed my friend, so wanted to share with you, my loyal following, some thoughts. Last week was a pounding on anything commodity related. I believe, that this week, we will see a nice rally on the upside, if not vicious. I admit I am timing this, but the odds stack up favorably and if I am wrong, at least, I believe, there is value at these levels to hold onto.

1) At the close, some penny stock miners like HL and GSS were up. Possible foreboding.
2) Oversold nature of most stocks in this arena, and CPO was up over a buck on Friday.
3) Gold had the worst weekly selloff since the beginning of the 80s, at least that is what the headlines said.
4) Oil looks to break, no fall, through the $40 level and may do so, but it has already gone from 60-140 in half the year, and 140-40 in the other half, so I would like to think that I'm not the only who would like to pick away at it.
5) Corn cannot find an uptick and has that railroad track look that went off course, bigger down move than normal, on Friday.
6) Steel had a nice mini rally on Friday which reflected the auto bailout. Steel also follows the energy market, can this be reversed?
7) I believe China withdrew its support of the market to scoop up bargains. They were upset on how the West held a gun to its head on the gouging it got in commodity contracts and has sent them reeling, look at FCX. So they will need to start buying again.
8) Russia will fall back in turmoil and Putin will not be known as the strong one who kept Russia together but see it fall apart if nat gas keeps declining in the winter yet.
9) Ultimately, a few dogs hit it big and gold, oil, corn were and have been dogs for six months. So a little Manna from up above isn't so much to ask!
10) Oh, and the shippers like DRYS and EGLE have been rallying off their lows last week.

Regards :)

Putting the A in USA

AUSA is a wild and woolly penny stock trading at 0.28. But ALHC is buying AUSA in shares, 7.25 million of its common stock to be exact. Currently ALHC is trading at 0.95 a share which is a $6.89 million market cap. AUSA's market cap is $5.68 million and trading at about a 20% discount to ALHC.

The stock dropped on Friday on the expected buyout and is now arbitrage material.

I think these two companies have a very bright future due to the fact it is so cheap with limited debt compared to the blue chip variety and the impending insurance boom that I see happening in the US, much like the real estate boom, but more confusing to the layman, which is why we'll need service providers like these two.

This is a casino stock and requires much additional homework, but there is now a catalyst to owning it. Of course, ALHC share price can go down which would make AUSA an even lower priced stock. But if you have been watching the daily share action on it, it is not stable, both on the up and downside.

The idea

that GM was up this morning is positive. I don't care how the rest of the day ensues. The fact that after the non - surprising ugly jobs report, stocks didn't crater and GM finding an uptick shows that finally there is some support at current price levels.

Gold is currently being hammered, but is in an uptrend don't forget, and as Bill Murphy from LaMetropole keeps hammering, gold does not go up on bad economic news. I bring that up because commodities in general are selling off to such a degree that makes no sense. Unless of course, commodities were ONLY supported by hedge funds, imagine that. Just from where I'm standing, I cannot quantify their impact, though I try, and see that such a sell off would imply a serious rally, even if it is only temporary, but not just a week or two, but months.

Of course, we'll see.

Thoughts on Technical Analysis and the Stock Market Crash

I'm walking in the evening time in Raanana here in Israel as I overhear two older gents speak about how fascinating technical analysis is over fundamentals and how it predicted the collapse. Two years ago, like the shoe shine boy giving tips to Wall Street types in the 20s, I overheard in a bus in NYC, two Hispanic kids from Washington Heights, talking about how easy it is to make money in the markets. Of course, I give these kids credit for thinking of ways to better their situation in life in what I believe is a healthy activity. What they have in common is their understanding of the market's seeminngly predictibility on the upside and downside and with minimal effort profits can be had.

The wealthy as represented by hedge funds were all using the same methods for "easy" income. The patterns were endless in all walks of life. Technical analysis was not needed, just a refresher on history.

As Graham and Dodd, 1940 edition, puts it:
"Because of this fact it follows that there is no generally known method of chart reading that has been continuously successful for a long period of time. If it were known, it would be speedily adopted by numberless traders. This very following would bring its usefulness to an end."

But there is a fundamental law of trading that my succesful trader friend says is mathematically impossible to lose at, as long as you are willing to take small losses. "Buy when no one wants to, and sell when everyone wants in" and in order to master this core principle patience is required and the gall to put money on this principle.

And Graham and Dodd, and my CFA course material for that matter, do not say that technical analysis, ie measuring price action, won't work, but is a field of endeavour done by individuals and cannot be transmitted to any great extent without having its merits become meaningless. I personally liken it to gambling, but of the poker sort. You can put the odds in your favor, but that's all you can do.

Response on IDT from previous posting

Yes, they reported a profit 5 years ago. But what is interesting here is their ownership of FCC bandwith that is being used in the wiMAX rollout (real estate in the sky) and possible energy play (it appears they are using the same business model that they have applied to teleco).

I just found out about the company yesterday searching the internet and found that the Kahn Brothers have been buying up lots of shares while dumping most of their portfolio. I remember at the beginning of the last bull market that began around 2003, Irving Kahn gave Barrons some stock tips that went up over 1000%. So if indeed the market will rally, I assume this stock will as well.

And it's a cheap option since their cash assets pays for their debt, so you pay to wait for a turn around. Don't take my word for it, let Mr. Graham and Dodd sum it up:

"In dealing with other types of security commitments, we have striven throughout to guard the student against overemphasis upon the supficial and the temporary. Twenty years of varied experience in Wall Street have taught the senior author that this overemphasis is at once the delusion and nemesis of the world of finance."

IDT?

This goes for about 40 cents a share. At one time it was $23 a share. Yeah that's not exactly shocking in the market environment, but they are loaded with cash and a strong value investment community behind it. And technically it bottomed.

A quick move to $1.20?

UnAmerican

First, I have been making notes so I can write in more detail, but in the meantime stocks are so jumbled up, I need a sounding board for my thoughts.

Anyways, the Chrysler exec is who I am referring to when he makes this comment

Chrysler exec: Failure could spark depression

All we hear is depression this or depression that, and always ending up at the Great Depression, and what was so great about that?

Anyways, third day in a row where we are seeing extremes in GM and GS in relation to the market. Today is no different as the market is tanking and GS is up on the day by $2. I think this is a standoff between moronic comments by a Chrysler exec vs. shareholders of GS.

The positive is that it is not a see of red. I am neutral, but the cheaper stocks are holding their ground. Look at CBG, C, NCC, AMD, SNDK, TSN, JNS, LGF so we'll see.

I say: WHAT WON'T MAKE US DEPRESSED, WILL ONLY MAKE US STRONGER!

Follow up Men's fashion change to suits...

Jos. A. Bank had great earnings. This company sell men's suits. And it is up today. I'm adding this to my men's suits vs. NKE play.

MW may have hit bottom, but JOSB definitely!

If you want to bet on the automakers then

bet on the financially healthy steel makers.

I was stopped out of AKS.

So I'm going with the big boys: US Steel and Nucor.

Nucor first target is 40.25 and risk is to 25.25. It's currently at 32.49 so 24% up move for 29% down move. Basically 1:1.

X first target is 28.50 (expect it to hit second target of 41.17) and risk is to 20.97. It's currently at 27.87, so 3% up, 33% down, 1:3, which is not good initially, but expect the second target to be hit which would make it 48% up, 33% down, 1.5:1.

I'm buying Goldman

on the logic set forth here. GM was up yesterday then sold off as it was the only stuck up on such an ugly day. Today is the opposite and GS is down on the bearish expectations of its quarter, BUT GE is up huge today in the midst of their financial problems and so is MS so it's a buy.

Like I said GS can't be down while the market rallies.

That Guy from Black Eye Peas says it best

http://www.youtube.com/watch?v=uCHBLt-w9wE

Here we got a great argument on Bill Maher's show between Andrew Sullivan and Naomi Klein; only at the end through Bill Mahr intervention does Will-i-am put in a few words, that I believe sum it up.

Who said entertainers don't know anything.

PS for full disclosure I have a crush on Naomi Klein

Tis The Summer of Giving

Gamestop is a retailer that chomps the competition.

Of course, retail has been slaughtered in the markets of late, but some should rally here as Christmas time comes rolling around the bend. I write this now as I see that video sales are expected to be up year over year.

http://www.usatoday.com/life/lifestyle/2008-12-01-video-game-gifts_N.htm

And if one cannot afford a new game then you can buy used ones as well at this retail establishment or if need of cash GME will buy the game back.

GME, according to yahoofinance, is trading about $6 over book value, but this is a growth stock in a deflationary environment, where a cash rich company is king, so I would assume that if GME begins to trade below book value then I would get out of this trade because something is seriously wrong.

My expectation is that, first, it will outperform the SP500, which would imply as the chart shows, a 20% gain. The loss of $6 (going below book value) is around 30%.
So first target is 2/3, 67%, risk/reward.

Caveat on this is that my mind, pumped up with caffeine, is all over the place so may not follow up on it, as the markets are doing some tricks that Cirque de Soleil should take a cue from.

Since we are in a recession

are we already out of one?

Positives on a trashy day

1) Natural gas was up and I think that is important since commodities were bombed today.
2) The dollar was not that strong today, which would imply inflation.
3) Gold stocks were not hurt like the physical commodity was.
4) Markets are hard to gauge on a day when the treasury sec and fed head talk.
5) And related to energy, uracan resources and urg, both uranium miners, up on the day.

BUT

1) Panic exists and any further rallies will have down days because of fear like we had today.

Cannot be more exciting than this

GM is down $0.20 going into lunch. GS is down a big $10. And the market is already down 386 points.

This may be unbelievable, but this market can be down another 386 points and possibly close today down limit.

There is no way that GM

will be up today and the market down.
GS needs to tank $20 for this rally to say "game over."
With GM up, I think the market may be down today but possibly half of where it is now.

Surprised?

By the ugly Monday morning sell off? Even when it happens and I expect it, I freeze. Is it too late to short today or should I buy on dips? Today I am going to do nothing, but watch. Probably write protection on the QID since I don't believe it's going to reach its 52 wk high this month. And gold, if one was to average today appears to be that day. Still, it takes guts.

Follow up notion...could be a winner...WARNING AND CAUTION IS ADVISED, THOUGH!

I made my argument for utilities (XLU or UPW) in relation to commercial real estate (SRS, IYR) but I want to follow up on my previous thoughts concerning the FED and Treasury bailing out the 'too big to fail' banks and not the commercial real estate sector. Is it possible that long financials (XLF, UYG) and short commercial real estate is the trade to be in? As shown, commercial real estate has outperformed finance during this carnage, is it about to change and significantly?

WARNING HIGH RISK AND POTENTIAL BANKRUPTCIES CAN CAUSE STOCKS TO GO TO ZERO! LIKE BEAR STEARNS AND LEHMAN!!!!!!!

The real estate tell

The market was up on Friday though I do believe it is a fake out due to the fact that real estate, as measured by IYR, was down. And the Nasdaq was virtually unchanged. But as long as GS and GM keep up their out-performance, all is well with the world.

The market is interesting currently (when is it not) because it is financials that are acting strong as is the precious metals and the dollar, and most importantly, the treasuries are surging; usually, these asset classes don't move together. Is this a new paradigm? Or one is a short squeeze, and the other truly in demand?

I would argue that financials and real estate need to go up lock step to signal true demand. Most financially related companies finance or own debt related to commercial real estate, and I assume now, the Fed as well. But no government is going to bail out commercial real estate so if there is true demand it will come from the market place and then seep into the financials since what they are holding will be more valuable.

An aside, I'm looking at the crash in CBG stock, a very good company but loaded with debt, and wanted to know what the bonds were priced at. And wouldn't you know it, the bonds are priced at a premium. That would imply that bondholders are not concerned with repayment but stockholder are worried about bankruptcy. I believe a hedge fund would buy the stock and short the bond in this situation.

What would it be like...

Indiana woman dies at 115 as world's oldest person

115 years on this planet; especially the last 115.

Do Gooders Do Bad

Just thinking here on this Thanksgiving, trying to find at the local video stores in Israel Charlie Brown's Thanksgiving special, and a striking thought occurred to me, as Mumbai, formerly Bombay, is under terrorist attack and Thailand under military order.

We are in a global and union-free economy. Two issues that well meaning individuals the world over have been trying to address.

But what if in the global recession, the terrorists and well meaning individuals drive away global industry and leave a vacuum in its place. These former stable countries will implode, as we are seeing now in Pakistan.

But it will probably make labor and unions stronger in the home country as demand for them increases and averts a depression, which in turn make people forget the plight of the people in the third world and have the well meaning people termed "extremists" or "nuts" as they are usually known as.

Oh, and I found Charlie Brown's Thanksgiving special on YouTube.

Just to be clear

there was one year, can't remember when, I shorted the Thanksgiving rally and the trading day after the holiday, the market tanked.

So if one is too jolly over unrealized profits then...

BOOK 'EM!

And you call me quirky?

First, is today the beginning of buy dips mentality?
Second, the SP500 was up and the Nasdaq down, a reverse today?
Third, gold and silver still strong!
Fourth, GM up and GS down a buck
Lastly, happy thanksgiving. It is truly the one holiday to reflect upon. And this is as good a time as any to do that.

Sincerely

Muscles

The past week the market has been acting as a man in cardiac arrest. Today was very promising in the fact that the market managed to hold its ground and not collapse. The liquidity that the government had arranged this weekend appears to have provided a jolt that might make this market and hopefully the economy kick started again.

1) Gold stayed strong even through expected sell off after two strong days
2) Goldman was up over $4 at one time
3) GM almost made it to positive territory
4) Over 50% of issues advanced
5) The SP500 far outdistanced the Nasdaq which implies a short squeeze in the financials and possible the oil stocks as well.

The negative is that bonds surged today. Usually with market strength bonds sell off.

Natural Gas

Looks like a buy at these levels.

UNG is an etf that relates to NatGas. 52wk low stop which is 26.
NBR relates to NatGas as does SWN.

My worst calls

currently was made last year and still shocks me.
Novagold. It is now at 50cents and falling.
Still, their properties are golden, but their financial stewardship has been horrendous, to say the least. This was a company that made it imperative to read the financial statements. An article in Barrons even mentioned how it was trading below book value. Currently, I look at CDE and think that if this is to rally, the numbers better add up. And again reinforces the concept of diversification in speculative activities in one sector of the economy.

Also, though I did mention how it is wildly speculative, is Northern Sun Explorations. It is now at 1cent a share. I bought it at .70, .50, .20, .25, .14

So the moral is homework, homework, homework.

Market

has GS up 16 points. Close to 20.
GM is up...
Things look good, but there isn't a consensus of bullish opinion as judged by the lack of 90% advancers and up volume.
Today is the continuation of a short squeeze. And can continue until it doesn't, but

SRS has dropped over $100 bucks in 3 days. Financials definitely are bailout material. Autos are possible bailouts, but commercial real estate are dogs waiting to be put to sleep. SRS went up on panic and now there is fear of a short squeeze, but not a continuation of the previous bull market in real estate.

Checkup on market rally

1) Gold is up
2) The financials are up, but GS needs to be up $20 in a day
3) GE needs to see a relief rally
4) GM should stay up.

Clarification of Debt Forgiveness

Happy Joel (of www.happyjoel.com and Jay Leno fame) wrote to me: "I mean, why is debt forgiveness such a viable option to massive American companies who have squandered an industry advantage through years of stuck-in-the-past decision making, but such a taboo thing to talk about when referring to nations that have no real means of making back the money they owe something like the World Bank?

Debt forgiveness is fine when it's tethered to a forced change in behavior. You forgive 20 bucks from a child as soon as they prove they can get a job and start earning for themselves. You forgive billions from a company when they prove they'll stop giving massive send-offs to CEO's that have run them into the ground."

First, debt forgiveness that I'm talking about is to the individual, not the corporation. But the individual is indebted to a corporation, not a loan shark, so ultimately the road will lead to the corporation.

In a free market, one can do as he pleases. But as Rodney Dangerfield put it succinctly in Back to School, ideals can only be placed in "fantasy land." The idea, or notion, that I have is to prevent panic, depression, global failure, or World War IV. Everywhere that I turn, the news is pointing the blame at someone, or questioning the merit of one bailout to another and offering no solution. So that is my goal- a solution. I figure the easier it is, the more palatable it can be.

The bailout as it currently stands to my way of thinking is still the trickle down theory where if we help the institutions on the top it will trickle down to everyone else. First, as Naomi Klein (of naomklein.org) brought to my attention the goal of the bailout was for banks to start lending again, but it wasn't written into the new deal, unlike in Britain, and banks are saving their money and looking for acquisitions. Secondly, and most egregious, was the way the bailout was sold to US taxpayer - if you don't pass it, financial Armegeddon is upon us. Very similar to how we gave carte blanche in Iraq - if you don't allow me a free hand in Iraq we're going to have another attack here at home (congress gave up its constitutional role to wage war). Lastly, Paulson is an unelected official who was formerly the head of one of the largest financial institutions involved in this mess and given in writing that he is unaccountable for his actions. A far step from Eisenhower when he accepted the fact that D-Day could have been lost and the failure he would have accepted upon himself. And in conclusion, the market dropped approximately 30% (I could be wrong on this number) after the passage of legislation and is one of the worst sell offs in stock market history and Paulson has changed his mind on what he is going to use the money for. So no, I am not supporting the bailout out package.

My logic is if everyone is in debt, then no one is in debt. But if we start paying off some people and not others with our own taxpayer money then some will be indebted to others. This may not be true capitalism, but how we got to this point wasn't exactly free markets either by the media to the President supporting explicitly the real estate bubble. Yes, free markets should reward and punish those that take risks but when officials who we rely upon for impartiality and accurate information give false statements and are unaccountable then why should the borrower?

The other logic is three subtle items that have been overlooked and need to be considered. A couple of years ago, congress (led by Joe Biden) passed a new bankruptcy law which forbad you to file bankruptcy on credit card debt. And this before we know now what is going on with the consumer and leads me to question the surprised look upon consumer finance companies (the ones that are still in business). The right to file bankruptcy is one of the principles that has made America great, giving an individual a chance to start over. Taking away that right harkens to Dickens and debtors prisons in the UK. Second, getting rid of the uptick rule on the stock exchanges. It's subtle, but our economy is fueled through values placed on equities on a daily basis, so when buyers are deluged with sellers, it's hard for the market to correct itself on a rational (if there is such a thing) basis. Lastly, mark to maket accounting, the way it has been executed appears to be draconian. Not all things deserve daily pricing and if so should have been thought out before this mess began. It is not a shock to government officials that an event like this could occur. A book thAT Henry Kissinger wrote in 2001 described the thought that a financial breakdown could occur. So why wasn't there legislation for a backstop against this occuring?

The US automakers have done everything they could to stay in business. They have large legacy costs due to an inflexible union while their competition is union free. The cost of union labor is backbreaking and led to many industry bankruptcies. I believe the unions are more determined for the automakers not to file for bankruptcy then the automakers themselves. The problem as we have seen is that once unions are broken then the next ring on the latter is human right abuses that we see occurring in developing nations. The rampant inflation that occurred in the 1970s needed to be stamped out and I believe the decision was made to stamp it out through demeaning the labor force. That was the stage that has led to rampant deflation in the cost of goods. If it wasn't for the shift in our economy, downsizing of the government, increasing debt loads, and the creation of the internet and computers, we would have encountered deflation a long time ago. Put shortly, free markets lead to deflation not inflation, which is fine. But if an entire generation is taught to expect higher prices which in turn makes debt cheap and then the rules change, as they are now, it is scary and unethical to allow debts to hang over an entire generation that is not of their choosing.

The good thing about deflation is that things can only go so low. The lowest it can go is to the barter system. While inflation can get as high as it wants and create pandemonium as seen in Zimbabwe and Weimer Germany. I hope this clarifies my current thoughts, which are alway subject to change as nature and the economy are wont to do.

And as Russell Crowe's Ed Hoffman tells Leo Di Caprio's Roger Ferris, in Body of Lies, "Nobody's innocent in this shit"

The idea

of debt forgiveness rings true in my ear.

From a biblical perspective, which is not coming from a bible thumping individual, but from the idea that our Western culture has derived several of our cherished beliefs from this Good Book, is the concept of a Jubilee year where all debts were forgiven. As the market attests too, there comes a time in a person's life where things get out of hand and a clean slate is in order. And then things can begin again. It also brings up the idea of brotherhood and common interest which I believe has made the US great.

Of course, the converse is the Egyptian model where everyone becomes indebted to the state and eventually slaves to Pharoah. You don't need to take my word for it, just think about what is going on and the ramifications at hand, or read a good blog or newsite filled with controversial ideas. It's all there.

For a sustainable bottom

we need
1) a miracle or debt forgiveness (it was done in the bible)
2) Goldman Sachs up $20 IN A DAY!
3) news on short sellers being squeezed mercilessly
4) General Electric over $20
5) Gold over $1000 an ounce

Follow up on MW and NKE

This shows the breakdown of a retailer and brand vs. just a brand with no locations (except for flagship stores). As mentioned before, with Obama in office, the trend since I was a kid of dressing down should reverse. When the performance of these two switch, it's an all out buy in my book.

Follow up on KRSL and GE

KRSL is slightly outperforming GE and should be sustainable. If that changes, it's my cue to GET OUT!

Buy Silver, Short Oil?

Silver just started to outperform oil. The last time that occurred there was a nice profit to be had. Place a 10% stop.

Trying to find my voce

I was trying to write to think my thoughts through, but believe it is counter productive. So will be blogging less, but with better content, as I can see roaming the internet how many blogs, webposts, news outlets, and paid content is out there. Though Im not trying to compete with anyone, it is a pleasure to have people read my blog, and as such, want it to be as entertaining as possible.

I will let the other site guarantee profits. I want to be thought provoking. Thank you for your interest.

Frozen in headlights

GS was staying strong till now as the market evaporated. It looks like the shorts want to take it down but it , like GM, has stayed resilient.

Before update on autos

Stats:

Issues-Adv--23%
Volume-Adv--83%
52 low--1468 issues

The issues that are advancing are doing it in heavier volume.
Euro and Precious Metals stabilized as well, should be bullish for both.

AS of 1pm GS and GM are up

That would imply an up day?

IF

the blue chip names are not trading at a premium to its peers then simply buy the SP500. If the SP500 has to much debt, then buy the comparable Nasdaq100, who has minimal debt due to its heavy exposure to technology, but not as diversified.

Washout days

James Dines refers to sell offs that began, yet again, yesterday, as watershed waterfalls. Cramer, in his book, mentioned that everything he bought soured during this market environ. Joe Granville says, as Cramer's wife did, to keep buying! Of course, she was looking at shopping catalogues as she did (Im sure some traders are as well but for different reasons).

Usually, the Fed or some government official in a day of crisis will do something to stir this market.

Lets see what happens. Personally I want to be out drinking and flirting with beautiful girls.

And Oil

I am wrong. The option buyers were right to buy the $50 puts. Can it go lower?

Apparently Jana Partners have been reading my blog!

http://biz.yahoo.com/indie/081031/1510_id.html?.v=1

Yahoo commented that they are down for the year but their stakes have been in companies with virtually no debt.

As mentioned before,
Long equities with 0 Debt/ Short the general market...

Company with 0 debt can't go lower than a company with debt! Both companies can be valued at 0 but at that point the creditors will probably own the debt laden company while you'll still own the other.

The idea of auto mergers

is something that I believe is humorous because once they merge they will lay off more people than if they filed bankruptcy.

If that is the case, the Justice Department should just allow all three to be one company. Sell off all foreign subsidiaries. Ban manufacturing without a union presence. Sell one car and it can be any car as long as its that one. Convert remaining plants into prisons and operate them at profit. We can start by everyone in on all these financial shenanigans. Once the plants are operational they can sell them to Corrections of America.

I think this is what is spooking the market

The right to organize unions in an easier way has probably stirred disorder amongst the unionless.

http://www.washingtontimes.com/news/2008/nov/20/unions-sure-organizing-bill-will-pass/

That would mean to me:
Long X/ Short NUE
Long KR/ Short WMT

If that is the case WMT will be in the teens by the time this is over. Nucor in the 70s made its name besides being a mini mill as the no union success story. US Steel just renewed its union agreement, AKS is cheaper, but has not historically had good union relationships. Kroger just worked out its union issues.

That would also mean Honda and Toyota are untouchable due to their unionless laborers.

The Euro has reached a short term bottom

The FXE is what I use and I am placing a 124.10 stop.

The Euro should have tanked as well as the overseas market, but it didn't. What I mean by tanking is in excess of a 5% down move. Market chaos or closure.

The markets aren't in free fall

The overseas markets have remained quite stable in the face of what occured on Wall Street. I have no illusions of an immediate rebound, but maybe things are stabilizing at a lower price level? We will see.

Buy Kreisler, Short Chrysler, or GE

I have been a fan of GE since its top in 2000. I have been in and out of this stock and always on the long side, but today when I read that they are looking for Asian investors, appears to me that they have been late to the party to acknowledge how bad their financing is. I have owned it for one reason, their manufacturing prowess. Not their lackluster financial division.

KRSL has a 10mln market cap and manufactures products for customers, I believe, such as GE. These are the true manufacturers and as such should profit if there is an infrastructure boom as I expect. 6mln of cash. You are paying 10mln for the company. If they closed up shop, you would get 60cents on your dollar, not including inventory, and assets, and a 100year reputation. If a large corporation is looking to expand, I think this is the way to go - buy a franchise.

I said tongue in cheek to short Chrysler, but here a fabled brand saddled with debt and looming close to bankruptcy for the second time, so it is fitting to say "the king is dead, long live the king" or better yet "Chrysler is dead, Long live Kreisler"

Market will not open tomorrow

Have a good night sleep, kiss the wife, hug the kids, look at the sky, but what ever you do don't look at the market.

It's ugly and who the hell wants to be married to that hag!

A Cramer quote:

I'd risk having to buy higher for the chance to buy lower.

Late to the party

so buy the Yen and the Dollar...it reflects the payment of debt.
There is always risk but the possible violent movement downwards in equities can sustain some beautiful moments in these currencies.

Whole Foods was a tell

on Starbux but it took time. They both cater to the upscale hip crowd, both have the healthy green look, and both are monopolistic in their own way.

Wal Mart and McDonalds stole their thunder.

QCC

This one pays 17% and is tied to the Canadian Mortgage market.
It is doing healthy and has a healthy balance sheet.
Treasuries are yielding about 3.5%
Pay to wait...

Hedge Idea???

Buy companies that have 0 debt, like my favorite GROW, and short the general market who generally has debt.

Oil

and no price recovery is a great indicator. Forget all the fundamentals and technicals look at the price action. It's that simple.

So why the hell do we go to school? To look smart, it's the idiots that run things because they don't realize how messed up things really are.

The chaos theory at work

Market over time to plant apples

For every seller of stock there needs to be a buyer. There have been buyers at 50% discounts to what the SP500 was formerly trading at. But who will step up to buy now? There is no reason to buy, only to wait. The market is going to 0 or it will shut down.

All ideas are on hold until there is some traction

to this market...1 up day and 5-6 down days is not the way I like to invest.

GS and GM are

down the market should be down 500 points.

There is nowhere to hold the market up if it falls below resistance.
This could be the day the market closes.
Gold is up big surprising people and is saying imminent danger.

Of course I could be wrong.

A GM no go broke play and Obama stimulus check one as well

ANL is going broke, so this is definitely high risk, but SUI is a mobile home park operator with operations throughout the midwest.

People need homes and mobile homes have provided that, with minimal debt involved; though as a REIT, SUI needed to expand through debt which is why they have a high debt load, but unlike other businesses this a very cash flow rich type of enterprise. If they can weather it the next few months then I think these dividend checks will be safe (over 12% currently).

If the automakers can keep the labor force the way it is or god forbid actually start hiring again, especially in the midwest, then I think this is a winner.

Triple Bottom

Technically the market should implode here and anyone that is long is basically holed up in the Alamo as the Mexicans come charging in.

But silver looks cheap here.

Californication

is one long series take on that little known masterpiece by John Ritter called Skin Deep. I feel like those frustrated writers sans the female companionship in both my trading and my screenwriting.

Market is ugly and looks to be down 2-300 points...I mean what's the point of owning anything...if that is the case the market is going to be down limit this week...where's the salvo...

I'm just an optimist. Markets can be lopsided but it comes a point when following the crowd gets you hurt!

Update

Ok it is 10:30 and GS is up 2 bucks but GM is down. GS is in no man's land, it needs to be up by 4 to 6 points today. GM can languish but cannot go down any lower.

If yesterday was a prelude then today the market should be up 2-300 Dow points.

Also LVS is down which bodes well for the market since the players are getting out of spec and into the blue chips today which really drive the market. LVS will have its day in the sand, but today the general market has the possibility of a rip roaring up day in the tooth of the worst PPI, but last week, when it was announced Germany was in a recession was the day the market was up 600 points.

From Frank Holmes at US Global

"The rolling 20-day intraday volatility reached 7 percent and is currently running around 5 percent, as noted on the above chart. JP Morgan says that level has to come down to 3 percent to attract institutional investors who are now sitting on the sidelines."

But we are not institutions, we are buyers of first resort, and at much lower prices then the institutions who will snap these shares up as a short squeeze will preclude stability.

US Global

Cash on hand is 2.11 per share, 0 debt.
The stock is trading at 3.76
Lets simplify...
3.76-2.11= 1.65 which is what we are paying for the business

About15m share outstanding, so paying about 25mln for the company, which generates about 28 cents of earnings a year, if averaged over 9 years and includes years where gold and foreign markets were lousy. So about 13PE which is on the lower end of its PE range when the company showed profits and they didn't every year.

.28 * 9 years is $2.52 in earnings, so on a discounted cash flow basis (Present Value=Earnings (avg of 9 years)/Rate of Return) we know the present value(share price) is 3.76, earnings are .28, but not the rate of return. The rate of return currently factored (Rate of Return=Earnings/Present Value) is 7.4% and the expected earnings is .90 more than the share price, so if this were a bond we get 7.4% and a .90 appreciation to our shareholding. A ten year bond is paying 3.65% with a government that has in excess of a trillion dollars of debt so we are getting paid as a shareholder 102% (just factoring in Rate of Return) more than owning t-notes.

All these factors are excluding the fact that the business can grow and it won't be poorly mishandled and languish or go broke.

Cons:
Their flagship business is an Eastern Europe fund (EUROX) that is in a worrisome area such as Russia and their precious metals fund (USERX) can always be argued to have as a diversification tool, though the dollar is on a roll currently.

Pros:
Competitors funded by the government bailout may buy into this well managed company. Highly regarded due to its transparency. Has the ability to weather the storm due to ample liquidity and no debt.

Home Depot up in pre market trading

Today, HD needs to stay positive. There is some production number that may cause some stir today as well. GE, GM, GS are other key markers. Yahoo's new management may stir the beginning of a round of tech buyouts/mergers.

Remember we don't need a wash out day, since there is no one left buying! There is 0 and I repeat 0 reason to own stocks. Every piece of heretical notions, comparisons of past busts, bumbling governments, and bad financial reports have been aired out, smelling like a tannery on a hot day. And who wants to step into that?

I'm reading about the car manufacturer

bailout and thinking about the past 26 years. Why are the domestic companies bankrupt while the foreign ones are not? I think it boils down to a social contract that was made with employees as opposed to the foreign firms and newer entrants that have no labor contract. No union=growth, expansion, and a strong franchise. We as the consumer liked that, since our products were cheap but we were in fact feeding off ourselves. When labor increased at the non-union shops, manufacturers went overseas, and we fed off ourselves with ever increasing debt loads. Someone told me that it used to be punishable by a beating to drive a Honda to work at a domestic auto plant. Unfortunately, that's what it takes to have a community with the same rules being played by everyone. What has occured, as has always occured, was wealth distribution. We have ourselves to blame as well as our leaders.

If this is our reckoning for what has occured since Reagan was in office (probably more likely since Nixon or LBJ) then we should be happy that this washout is happening rapidly. And remember what the Psalms say "the wicked grow like weeds, so they can be cut down." What remains of the past 26 years will make us stronger and create a thriving atmosphere for the next 26 years.

The importance of sales

Though I like to hedge, I haven't been very active in shorting and in fact enjoy the process of looking for sales. I haven't been making fat profits since the up days in this market are one day fireworks and few and far between, but it has been intellectually challenging and a joy to write my blog daily.

But I want to stress that people make no sense sometimes. They will go out of their way to buy stuff on sale and go extremely wild when a store has a going out of business sale; like my local CompUSA did. When this type of occurrence happens in the billion dollar marketplace, people flee. Many of these companies are trading at levels significantly below their true economic value. While most sales have us overspend (like the dollar store business plan) and the clutter becomes worthless, stocks don't become worthless - they either stay in business or they don't.

Technically, the market is in free fall. Bloomberg today posted
http://www.bloomberg.com/apps/news?pid=20601087&sid=afseqpJK0p2E&refer=home
that the market internals have the SP500 drop an additional 200 points to the 2001-2002 lows. Anything one touches keeps fading into red. People are selling selling selling.

Fundamentally the picture keeps fading and expectations are being reduced.

No one wants to buy, especially after big one day moves since we have been conditioned of late to fade them, and now people are waiting for others to make the first leap in. This is a one way market downwards and obvious to everyone. The picture is cloudy and scary but has to be to prevent people from buying. As mentioned before, to make money you buy things on discounts and sell at a premium. The rate of acceleration that has come with this pessimism shouldn't lead to a gradual uptick in price but a stampede probably caused by short sellers needing to close their books.

The risk is on the upside, but so is the greater return.

GM stayed in positive today

I am not trying to talk about the market everyday like a newspaper recap but the daily action has absorbed me of late and am sharing my thoughts in that regard.

GM stayed up but the market whimpered out as it did on Friday. GS retraced its low for the day. I picked up some HD before the earnings announcement. I would like to believe that any negativity facing this one has been factored in already. Lost on Gamestop today. And bought some more ID with the intraday happy face that I thought would conclude the day. WFMI and GE retraced close to unchanged. LVS held strong. CA and KR were down close to a buck!

Bag me

Don't forget about the grocers!
Krogers was up on Friday, selling off today. Great time to buy.
Whole Foods is rocking today, going from negative to positive.
I hedged, I admit, by buying TWM.

and I swallowed my pride and got into the Men's Warehouse mix with the idea that this may take awhile to play out and that my investment may go down to the $1 level like Crox.

GM

The past two weeks I belabored the fact GS shouldn't be down if the market is up. GS is trading down huge. But I'm going to add one more to the list, GM.

GM is currently up and I think this is a tell on manufacturing.

Today GS looks like a bottom feeding exercise and a buy. The market can and has gone done in a straight line, but I think the panic has set in this morning and it is not down any more which is positive. Or just buy UYG which is ultra financials.

And LVS is up and will this be the beginning of the short squeeze???

So that conclusion should lead to the heretical trade of ...

Long MW / Short NKE ???

Just a recap on my hedges...Long MAT / Short DWA isn't currently a resounding success, but the Long Utilities (UPW) / Short Real Estate (SRS) has been strong. And Long CMG/ Short MCD has been hanging out.

Buy Suits!

I was reading this weekend how Obama will inspire people, in particular the ones in baggy clothes, to wear presentable clothes, like a suit and tie.

If that is so...

Men's Wearhouse, MW, pays a dividend, trades around book value, focused on affordable but fashionable men's wear and off of everyones radar.

Nike and Reebok made their fortune charging people to dress in track suits that cost the price of a suit. Cycles change. And if James Bond's monster box office will attest, current consumers are in the mood for looking sharp.

Hello I am away from my desk

I have been travelling and of course missed the big move yesterday.
Must have known it internally since I was sick all day and my body told me to stay at the computer monitor and work.
I hate missing opportunity costs like yesterday even though the market can still tank, I was waiting for that nice explosive moment.

CA PER LVS LGF

Buying

Im buying today with the realization I can be wrong.

Bought GS, KR, LGF, LVS, CA

Market technicals

are ugly as lunch ends. In one of Cramer's books he mentions how in one day he just panicked and then the market rose and never looked back. This could be one of those days.

What reason should stocks go higher?

Lionsgate actually is positive now. GS was positive earlier. And Las Vegas Sands is getting financing.

GS and WFC are up today

does that mean a market rally into the close.
It is setting up to be one, but will one occur?

Las Vegas Sands

Go to Bloomberg and watch Larry Haverty of Gamco talk his book on LVS. He claims there will be a classic short squeeze on the stock. I believe he is correct, but look how the argument for investing in a company is currently-we need to buy because of a short squeeze. Of course, the reason for the short squeeze is that the worst is factored into the company, but the compelling reason to own it is for the quick money. Please note another argument he gave was that Wynn is now going to be a part of the SP500. Things bode well for this speculative issue and once again reaffirms that unlike in the casino, the odds are better in stocks.

Also, Mr. Haverty really put his reputation out there by being so bold; especially since in after hours the stock is down. I'm going to give him the benefit of the doubt and be a buyer today on what appears to be an ugly opening.

I would say the same arguments are for LGF.

Goldman Sachs...I was stopped out but

GS tanked yesterday and I preceded to immediately short the market. I believe, currently, it is a microcosm of the market...we need it to go up.

Currently, lemetropole is terming it Goldman "Enron" Sachs, and until proven otherwise it is. Also, if one studies what occurred during the Enron fiasco, the onus was more on the bankers than the executives at Enron in the leverage and false accounting. Because the bankers knew what was going on but were making so much money they didn't care.

And I think these bankers are getting their comeuppance for making a public mockery of financial responsibility.

Things Pay Off

My friend is going to be appearing on Jay Leno tonight and it appears that he was featured in the NY Times with a picture! It shows that if you are persistent and have a niche ... things can pay off!

His website is www.happyjoel.com

While Im at it

Im buying LVS for tomorrow as well.
50% drop in the stock is possible, look at GM acting, but lets give Sheldon the benefit of the doubt.

Dogs of the day are:
LGF, LVS, DWA

Things may change

but after two years trading I'm finally listening to myself and shorted the market as GS couldn't maintain an uptick.

I wrote last night that DWA is bullish and still maintain that as long as the double bottom is in place. The market didn't know that Madagascar 2 would be a hit, but this market has shown another indicator on how weak it is for DWA to be down today on such great news; especially for a sequel of a film nowhere nearly on the level Shrek was.

I am buying it today as well as betting that LGF has a relief rally, but I don't have my hopes up.

Blog 1000

Who will it be? I am excited to reach that plateau. Sticking with something brings a certain satisfaction.

I don't know

the market is up big this morning, but I have my doubts. If it is up big then people expect it to be up bigger.

1) Watch GS, if that sucker can be over plus 5 then I think we got something. 2) If Gold can stay about $10/ounce then we got some strength in commodities.

On an individual basis stocks should outperform their indices so buy individual issues/short index?

Remember the reason, at least from my perspective, the market was down heavy was because of Ford and GM. The market can reverse on a differing perspective of that.

Don't Mess with Technicals

Look at Dreamworks double bottom. And look at their blockbuster in Madagascar II. While Mattel and Hasbro cannot find an uptick. As well as Lionsgate lingering.

Don't fight the trend!

steven schwarzman

Not sure what type of man he is but I do know he sold billions of his Blackstone shares at the top of the private equity boom. That type of business looks out for #1, which he did. But he is still in business, which cannot be said about others.

I wouldn't write about him, but I just read a profile of him in the Economist and how people , such as himself, lost the market's credibililty. There is scepticism now.

I just wanted to say to give him the benefit of the doubt, since I saw that he hired Rod Stewart for his 60th birthday party for about a million bucks. Anyone that likes Rod can't be that bad.

Lionsgate announces earnings on Monday

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2008/11/lionsgate-to-sl.html

Here is a webposting on the company.

Two Headlines on Bloomberg

China Unveils $586 Billion Stimulus Plan as World Heads Toward Recession
G-20 is Ready to Act `Urgently' to Support Growth, Draft Statement Says

The economy has had a 15 month spiral trajectory, why is this time different.

It's Pleasing

to see people other than myself read my blog.

On Thursday, grocery stocks were strong while the market was bearish. Not sure if that was a one day move (.ie shorts covering), but on Friday KR and SWY stayed up, though not on a percentage basis as the S&P, and WFMI, which was up over a dollar at one point on Thursday, was down about 20 cents.

One would think that people need to eat and eat cheap so these companies should stay solvent. They do have debt, but it was issued at a very low rate, and who can borrow now like they did in the past? This bodes well for their franchise as their markets bar new entrants; of course, I will be looking at their margins (haven't yet). And they had union problem which they seem to have settled. In conclusion what I'm saying is that the main issues they encountered and investors fret about are in the past. Of course, they need to keep their debt ratios in check due to lack of liquidity out there....

But the government and the new one coming to power are looking at several ways of pumping the economy with new, freshly minted, greenbacks. And a percentage of that always flows into the grocery stores, but will it be at a profit.

I'm a shareholder.

I didn't write yesterday

because I kept getting stopped out of stocks and wanted to average down on others, like GS, which of course could be as foolish as buying Bear Stearns before it tanked. But I'm going to give myself the benefit of the doubt.

Anyways, I want to keep it simple, and I'm thinking if there were 3 investments to make they would be Gold, Goldman Sachs, and Uranium.

Gold and Goldman are almost a pare trade. Gold should go up or at least stay stable in a deflationary or inflationary time. As well as a possible derivatives bomb in this commodity. Goldman is a play on the health of financial system which is in the eye of the storm.

And uranium due to the short supply, limited investor knowledge and ownership and flat out fear.

All are classics...

Buy on dip mentality in order

Market is close to being down 350 which can lead to 400 which can lead to down 500!
Come on. People are getting back from lunch, realize the fabulous run we have, wait for the sellers to finish and then run the price up into the close.

Of course, volume was light the past few days, but I'd say rally into close. And you?

PS if the market does cave in the market should rally tomorrow.

I'd say today is profit taking and if that is the case

the market probably won't go positive but will have at least a mini rally during the day. GS shouldn't be down over 3 points.

My heart beats thinking about what Mr. Obama just said.

`If there is anyone out there who still doubts that America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still questions the power of our democracy, tonight is your answer,'

Whole Foods and Bill Clinton

A Republican in office had the nation eating McDonalds, drinking beer, and smoking cigarettes. Now, the health conscious democrats are back in office and Whole Foods may get its step back.
Its hey day was under Clinton.
Trades at reported Book Value.

John Maynard Keynes and Obama

Keynes noted in Preface to Essays in Persuasion, 1931 that "if we consistently act on the optimistic hypothesis, this hypothesis will tend to be realized; whilst by acting on the pessimistic hypothesis we can keep ourselves for ever in the pit of want."

And that is why Obama overwhelmingly won the election and also speaks to the merit of the US that we are looking for sunshine, always have.

Proud to be an American--got this from a friend's forward

If you had purchased $1,000 of shares in Delta Airlines one year ago, you will
have $49.00 today.
If you had purchased $1,000 of shares in AIG one year ago, you will have $33.00
today.
If you had purchased $1,000 of shares in Lehman Brothers one year ago, you will
have $0.00 today.

But, if you had purchased $1,000 worth of beer one year ago, drank all the beer,
then turned in the aluminum cans for recycling refund, you will have received
$214.00.

Based on the above, the best current investment plan is to drink heavily &
recycle. It is called the 401-Keg.

A recent study found that the average American walks about 900 miles a year.
Another study found that Americans drink, on average, 22 gallons of alcohol a
year. That means that, on average, Americans get about 41 miles to the gallon!
Makes you proud to be an American!

As mentioned before

as long as GS is up there is nothing to fear.
Buy the dogs currently...adv issues are 70% while up volume is 80%
This day has potential for at least an 80/80 day.
Dogs are...
LGF, LF, PER, HPQ

GS came back from a 3 point down day

If it can remain in positive territory, oh boy.
LGF is screaming to be bought.

Don't buy stocks on who win elections

As the shadow says, "who knows what evil lurks in the heart of men."

But the Democrats appear to have locked up Congress, the Senate, and the Presidency. The ball is in their court. The US went extreme Republican and now extreme Democrat. If this fails, there won't be uniform consent in a long while. Which to be fair, is probably a good thing because dictatorships work on uniform consent. I will be 35 in the next election, a full fledged man by then. What will the future be like then?

Hard to think about that when the market is about to open.

GS part IV

GS was up then down a shocking, for me, $3.80 and it did reflect what occurred in the general market yesterday - slight uncertainty. GS is a bank now and that alone is bullish for this equity. A hedge fund subsidiary lost close to a billion dollars, but on a percentage basis it has outperformed the SP500. I'm not saying back the truck up on it.

But this issue is playing chicken with investors. I don't know about timing, but I would say any big moves in the market will cause an even bigger one in this equity from an additional short squeeze to momentum traders to long term investors who finally feel the bottom is in on this one.

At around $90 a share, it is very hard to own it with any confidence after seeing how other blue chips have behaved of late. There are 1000s upon 1000s of cheap shares out there, but there is only one GS and that is why I harp on it. One may disagree, be envious, hate them out right, or lust after a job there, but the fact remains they hire the best and get the most out of their employees.

Yeah, they made mistakes, but this was a systematic issue and not on an individual basis. Should they have know better? The're still in business, which cannot be said of others.

Only in Israel

does a political party use someone pulling out a condom with the party logo on it to say "vote for me."

I was surprised, but not shocked. Are my senses being numbed? Is anything sacred?

A friend mentioned that back home in the states, he voted early. I believe that elections have set dates for a reason and if one can vote early and in the comfort of one's home then all kinds of stimulus from tv to a day at the office can effect one's voting. Granted, most politicians are commodities and have no intrinsic value from the next, but you have to believe, that something should be held up on a pedestal, like voting for your representative in government. Holidays aren't pushed up a day or two to work into ones schedule. Even the Superbowl is played on a Sunday; of course, the World Series changed a few rules and look how happy the fans are.

HASBRO IS NOT A HAS-BEEN

Please look at a four year chart of Hasbro. It is bullish. The last sell off in this company was in Jan 08, 11 months ago. Granted, it has sold off, but it can be argued that it has in a long term bull market in this equity.

This was an ugly October and Hasbro did not make a 52 week low, nor a secular one. Common sense would dictate that toy companies would be the first to be hit in a consumer slow down, yet it hasn't.

Things can change but the trend is your friend and this trend still says up!

I have no logic to say to buy this except that it makes absolute no sense to own a toy company but as Paul Arden says, "whatever you think, think the opposite."

AKS it's a buy

AK steel.
I used to own it way back when at $14 a share. I sold it at 2.10 a share. That was when everyone told me it was going underwater. They can still be right, but their financial picture is much healthier.
The stock cratered from 55 till 9 bucks a share. Lets give it the benefit of the doubt that a nice mini rally can occur in this company; even though it is not a mini-mill.
Target is at 200day MA 21.50, we'll see.

Another GS update

GS is up to day while the market is selling off.
GS has not been an indicator for the bullish case in a long while.
Today that can change.
GS up a buck would indicate an up close for the SP500.

Only in Israel

does the beautiful financial journalist interview a businessman in jeans, tight might I add.
http://tv.themarker.com/

As if we didn't know and still we are not in a recession!!???

"Jean-Claude Trichet is extending the European Central Bank's powers just as it gears up for what may be the fastest round of interest-rate cuts in its 10-year history."
--From Bloomberg

If James Bond wasn't 007

He would be 005. As in the S&P, he likes his markets shaken not stirred. If you are going to trade there are going to be a lot of adventures like Bond. Some good some bad. But it builds character, now I'm waiting for part when I get to spend quality time with ladies who need nothing but a simple dress and a wry smile to finish the day.

Reread the Ian Fleming novels, it's not just about adventure, but about economics, politics, and what it right and wrong in our society. I think these are qualities a good trader needs to have.

Not grammar skills.

Who will be the buyers?

Lets say the value of companies are undervalued, does that mean they will return to value? Only if there are more buyers than sellers of the assets. But if this is a liquidity crunch that has threatened everyone, who will be the buyers? Sometimes technical natures of markets trump fundamentals.

Everytime Archie Andrews went over to visit Veronica Lodge at Mr. Lodge's mansion, he always kept knocking over his precious collectibles. It would appear that individuals selling off their mutual funds and liquidation of hedge funds could result in our blue chips, as they have already, getting knocked down lower. Of course, not last week.

I think last week it was short sellers closing positions and possibly encountering short squeezes. Also, will it be time for foreigners to back the truck up? And maybe the Americans who just didn't undertand the past 4 years economic boom, now see things on the bargain counter. But how does one measure these thoughts?

The penny stocks do not have the support by institutions nor funds due to their low cost and were the first to be knocked down. The Blue Chips are the last ones standing and have share prices in the two digits as well as millions upon millions of shares outstanding. So is it possible to put on a trade of penny stocks/short blue chips. Or just forget about shorting and go long the Abe Lincoln stocks.

I mean Obama is the symbol of what Honest Abe fought and died for.

From First Eagle Fund website

"In order to be a reasonably successful investor over the long term it doesn't take a high IQ, it takes temperament." - Jean-Marie Eveillard

And maybe a few good cups of coffee - addendum by me

James Dines best comment

"If you have enough money to be in the stock market, you
have enough to aim for the best possible health by eating
organic as often as possible."

Ultimately what do you have in the end? I have seen so many sick millionaires, it makes you wonder.

Another Tyson revival?

Tyson is on the move. Could it feed off of Pilgrim's weakness? It sure looks like it. TSN to $11?