There’s not enough blood, yet. There has to be more. Stocks haven’t fall enough to make them “steals.” For example, the Dow, despite yesterday, hasn’t fallen to its levels of June.
Stocks like AMT, HD, V, COST, AMZN and WFM are still in the clouds, not the bargains they should be.
On the other hand, here are three stocks that have cratered. At some point they’ll be “bargains.” Meantime, my inviolate stock loss rule kicked in with both Apple and Con Edison and I kicked them out. Which made my sad. I was wrong.
I’ve never owned Intel, though I clearly should have added it to my “Stocks To Short List,” which includes GOOG, AOL, Xerox, Microsoft, and Yahoo. No sense in shorting RadioShack at this point. But it’s been good.
Today, Jefferies’ Peter Misek put a $900 price target on Apple. He’s smoking something, though I do like the iPad mini. It’s much better than my new Kindle Paperwhite, which is great for reading in bed while Susan sleeps. She’s says my Lenovo ThinkPad X230 laptop is “too bright” and keeps her awake. But the Kindle doesn’t.
Con Ed got hit by Sandy. But it had started crumbling before the storm. It’s not enjoyable to see boring electricity utilities suddenly become so volatile. Something is wrong with Con Ed but I don’t know what.
Intel is being hurt by lacklustre laptop and ultrabook sales and now, recently, talk from Apple that Apple might switch to ARM chips.
In short, now is a good time to be selectively short and heavily in cash. Wait for more blood. It’s coming.
Favorite nut case interviewed: I love Marc Faber. He’s so doom and gloom. He’s so knee-jerk. Their boy loses. Obama wins. It’s disaster time.
He gets interviewed on Bloomberg TV:
“I am surprised with the reelection of Mr. Obama. The S&P is only down like 30 points. I would have thought that the market on his reelection should be down at least 50%…I think Mr. Obama is a disaster for business and a disaster for the United States. Not that Mr. Romney would be much better, but the Republicans understand the problem of excessive debt better than Mr. Obama who basically doesn’t care about piling up debt. You also have in the background Mr. Bernanke, who with artificially low interest rates enables the debt to essentially escalate endlessly.”
On where he sees the equity markets given Obama’s reelection:
“You have offsetting factors. The problem with Mr. Obama is that you get more regulation and it’s disincentive for businessmen to hire people. You probably also get higher taxes, so in terms of the economy, he is very negative in my view. But you still have Mr. Bernanke, and you still have because of money printing very high corporate earnings. They are now coming down, but they are still at the elevated level. You have money printing supporting the market and on the other hand, you have an economic slowdown globally which will affect earnings negatively. It is difficult to tell where the market will go because we have so much manipulation. I think, minimum, it will drop 20%.”
On how investors should protect their assets:
“They should buy themselves a machine gun…I need to buy a tank. Joking aside, look, we have manipulated markets. Whenever you manipulate markets, you will get unintended consequences. i think the reelection is unintended consequence of money printing, that favors the so- called 0.25%. It was easy for the Democrats to attack the wealthy fat cats of Wall Street, the elite, and the privileged people to portray them as a profiteer of the system, which to some extent, they are. Not because they wanted to but because Mr. Bernanke enabled them to be profiteers. We have a situation where you have today Mr. Obama, I doubt he will stay at the presidency for another four years. I think there will be so many scandals, but that’s another story.”
Of course, none of this relevant to you and me. Nor does it mean anything — other than 24-hour financial news sites are desperate for cheap, fun content. Faber is cheap, fun content. He’ll probably even sell some subscriptions to his newsletter. To read his entire interview, click here.
I knew Sheldon when he was Shelly, and poor. When he become rich, he became Sheldon.He doesn’t like Shelly today.
His story reflects what I call my Tarzan Theory of Career Management. Shelly started out with his sister in the travel business in suburban Mass. He noticed how they were selling a lot of airline tickets to trade shows. Bingo, he went into the trade show business. His biggest was Comdex in Las Vegas. He noticed that the hotel/gambling business was even more profitable than the trade show business. So he got into that. And the rest is history. He’s a billionaire, easily able to blow $60 million.
I have a million Tarzan stories. Another favorite is a friend who inherited his father’s literary agency. When he came to negotiate his first lease for some office space, he noticed how much he was being forced to pay… And bingo, he figured a more profitable business than being a literary agent. Now he’s both. But he earns much more from the real estate.
It’s how you organize. I found this on Mark Cuban’s blog:
The Irony of the Presidential Election
by Mark Cuban
By all accounts, one of the defining differences in the election was “The Ground Game” . The outreach by the 2 candidates to reach voters “on the ground”, in their homes, on their phones, wherever it was possible to make a possible contact. Once the contact was made, the goal was to get them to the polls to vote for their candidate
You would think that the candidate with the most business experience would be best prepared to build a national organization that ran like clock work and made the final difference in the election. You would be wrong.
In the 2008 election President Obama was able to utilize social media as a call to action and funding and gain a huge advantage over the Republican candidate who couldn’t match the online advantage that President Obama created.
In this election it appears that President Obama was able to gain re-election by putting together a national organization that only raised the same amount of funds as the Republican candidate, but was able to better use that funding to put together a ground game “business plan” that was not only better than the Republicans, but had better messaging, voter connection and was better planned, implemented, distributed and executed on than their “far better business people” Republicans.
oh the irony.
PayPal has been hacked. Change your password. It’s easy. Log in. Go to Profile.
Harry Newton, who’s excited. He’s finally finished the 27th edition. It will go to the printer in the next few days. Then he can concentrate on more important things — like finding bond alternatives, managing his shorts, finishing his estate planning and getting well. I’m sick of this cold.
Hi Harry – Have you considered looking into Microsoft. They have been doing some pretty interesting stuff on the quiet that could gain a lot of traction (More for business than consumer) in the next few years. The most interesting is their shift to selling their own hardware and merging tablets and laptops (MS Surface). This is big. I have just got one with Windows 8 (Which is not perfect but is a huge step in the right direction) and I will be getting the business version for all of my staff when it comes out next year. I feel there will be a massive shift back to Microsoft – They have released their office 365 product, with Outlook being a big winner. We are looking for options to switch from google mail, so a cloud version of exchange is a real game changer. The windows phone, though new, boring and far from amazing, could become the new business phone as again I would like our team to have everything synced and processes normalized on one platform; apple is too consumer driven to be a force in the business community. It seems Microsoft are finally getting it (perhaps Steve Ballmer fell and hit his head)…. I could be wrong, but I reckon they might be one to watch.
you are shorting google and microsoft?after they have already corrected? remember ur last big shorts- arch coal and jp morgan? both are up 30% since. ahhhhhhh, you make me want to pull my hair out.
Harry, Harry, Harry, you shouldn’t sell good stocks just because they’ve become cheaper. You should be looking for opportunities. The stock market is the only market where people stop buying as the product goes on sale. Stop thinking as a short term gambler and think as a long term business holder. If great businesses are selling at a discount, it’s time to consider buying.
If you are overly affected by market gyrations, take Warren Buffet’s advice and “turn off the market”. Do you think he’s panicking and selling right now? Not hardly, these are the times he starts backing the truck up.
Spot on. About time someone here took Harry to task for his foolishness.
I have been very concerned about the way our country has been heading… spiraling down hill at a rapid rate. Too many young people making far too much money…free wheeling drugs…sex and violence on TV…too many young people shows on TV…same sex/mixed marriages, or no marriage at all…social networks leading peoples lives…the ubiquitous cell phones and texting…technology advancing far too fast…young people taking over the political scene and the financial markets. How could they take control with so little experience? Then the thought occurs to me…do you suppose the way I have been feeling is the same way our parents felt shortly after the end of WWII? Transistors, Fax machines and computers…space travel, Rock and Roll. They eventually adapted…I guess we must too!