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.