My son loves Home Depot. He’s just bought a new house. Whenever he wants something (washing machines, carpet, blinds, etc), he beetles over to Home Depot. He loves the people; “they’re so knowledgeable and helpful.” He says the prices are “incredible.” They always seem to have what he wants. Home Depot stock has done well in recent months.
But the metrics look basically awful. This is from the Wall Street Journal’s site:
My son buying experiences with Home Depot are ultra-positive. The numbers are not. But… the big but — the economy is bouncing back and Home Depot (HD) yields 2.57%, even at its present high price. If this market firms more, it could run a little more.
Cramer is banging the table for Morgan Stanley. It won the Facebook IPO and should win others. Its acquisition of Smith Barney is a positive, etc.
Financials aren’t good, as with most investment bankers. Culd it run a little more based on winning Facebook and some others? Probably.
So, where’s the market going? Latest from VectorVest (you see their ads on BubbleVision).
The Price of the VectorVest Composite gained $0.72 per share since last Friday for its fifth consecutive weekly gain. This week’s gain was the largest since 12/16/11 and the VVC’s Price is within six cents of reaching the $28.69 resistance level cited last week. That’s the good news. The bad news is that the MTI closed today at 1.65, its highest level since 11/08/10 and a level at which it begins to lose momentum. Even so, the Price of the VVC continued to rise for six months after 11/08/10, while the MTI hit lower highs. So the “blast-off” phase of the rally has been essentially completed, and now the market is in the “glide” phase. Let’s see how long it will last. With three green lights and an UpUp situation:
Prudent Investors may continue to buy stocks long on up days. Aggressive Investors and Traders should play the market to the upside.
One subscriber emailed me “I think the market is getting overbought and I’m raising my cash position for a pull-back. Up 7% YTD. “
Devastating lead article in Sunday’s New York Times business section: “A Mortgage Tornado Warning, Unheeded.“
After his own experience dealing with a mortgage mess, Nye Lavalle set out to learn all he could about the mortgage industry, traveling nationwide to dig into records. In 2003, he compiled a dossier of practices at Fannie Mae. In hindsight, the problems he found look like a blueprint of today’s foreclosure crisis.
Most devastating statement:
“From my own personal experience and 20 years of research and investigation, nothing – and I mean nothing – that a bank, lender, loan servicer or their lawyer says or puts on paper can be trusted and accepted as true,”
Read the entire article here.
Is it safe to resume ignoring the Prophets of Doom? Maybe yes. Maybe no. The earliest was Nouriel Roubini (Dr Doom) in 2005. He was right. The New York Times looks at others more recently. It concludes:
The mainstream view now reflects more gloom. The Blue Chip forecast – the average of 50 top economic prognosticators – predicts that the United States and world economies will inevitably recover. But the growth won’t necessarily feel like growth – it will be slow, and millions will stay unemployed for many years. The big difference is that in 2006, most were blind to the impending disaster. Now it’s all we can see. The most fringe forecaster today might be the relatively unknown economist Ed Yardeni, who says that corporation are about to start spending again and that the economy will start growing at a healthy clip. Let’s hope that the fringe is right.
I agree with this conclusion and with Yardeni. My biggest fear is slower growth in China and no-growth in most of Europe — especially if the dumb IMF keeps imposing austerity on already austereeconomies.
The U.S. will do OK, especially with the boom in natural gas and the resulting slide in energy prices — a free dividend.
Five years of the Dow:
For the entire New York Times piece, click here.
It makes sense for Greece to quit the Euro, and go it alone. I personally believe so. For more, click Argentine as a blueprint for Greece.
How to bargain on Rodeo Drive, or wherever. Shops will bargain. Keys:
+ “If I open a credit card account with you, will I get 15% off?”
+ “Do you have any discount coupons in the drawer under the cash register?” (They always do.)
+ “I don’t live in California, can I not pay the California tax please?”
+ “If I give you cash, can I have it for $XXX (15% less).”
+ Be prepared to walk away in disgust and impatience. “Honey, you really don’t another .. Bag, shoes, dress, coat, etc.”
Gizmodo’s 100 Best Tech Products. One I liked from their list:
+ Netgear’s new WNDR4500 “left us grinning from ear to ear. This is the fastest router we’ve ever tested, and it’s packed with new features. Not cheap $180.”
Full write up in Gizmodo.
Logical.
Genuinely beautiful video. Of mountains, skies and amazing athletic tricks. Click here.
Harry Newton,who savors “broker talk.” I actually heard this last week:
“We have identified a stock that is poised for a significant move on the upside.”
OH yes, the stock? Kodiak Oil and Gas (KOG). Here’s one year in Kodiak:
Why do the brokers always turn me onto stocks that have just had a nice run? I bet there’s a reason…
Answer to your question: when a stock has had a strong positive run, the big guys are frequently owners and happy. Time to sell, so the investment firms “push” the stock to others, perhaps like Harry, as the big guys clear their position. Or so the big guys get a further upside. Maybe, just maybe, that explains it, so might a Wall Street skeptic think…
you believe cramer about anything ?
Sometimes.