Nike’s earnings displeased. I dumped it. ICO pleased but was ebbing. I dumped it.
Stops are critical, and cheap. It costs me $7.95 to sell a bundle of shares on Fidelity. It also costs me $7.95 to get back in. Low brokerage costs have changed the nature of stop losses. You can afford to be skittish.
Scott Udine, money manager, writes today:
I just want to get out a quick reminder to everyone that while, yes, the markets are acting great right now, this is the time to be making sure that your risk parameters are in place and you are ready for a pullback if/when it comes. Why am I writing this now, when things are going so good? Because that is exactly the time to prepare! Why do they say in sports, “that defense wins championships”? Because it is true and more importantly, that defense, is worked on at all times and being fine tuned constantly, not just when it is needed.
The reason I say this is because right now, we are getting a lot of year-end window dressing type trading on especially light volume. It will be interesting to see what the “big boys” do when the new year starts. I wouldn’t be surprised to see an initial spike higher and then towards the middle and end of the month a nice severe pullback and consolidation. I think a much better buying opportunity is coming our way after a pullback that almost always ensues when investor sentiment (call or email me if you would like to discuss this indicator further) reaches the levels of complacency that we are currently at. In addition, EVERY single economist, technician and market strategist that I speak with is bullish for 2011. Last week, the USA Today had a cover story about now being the time to buy equities and every magazine cover and financial talk program is touting the upside potential for equities. All of that makes me dubious of a market that will continue higher without trying to shake out the retail investor in the very near term. We shall see, but I promise you, we will be prepared for it.
With the above said, we still own over 20 positions that are up nicely and acting great. We are not selling them all here because as I always say the markets price and volume action are the most important indicator and all the others are secondary. But, I have tightened up our stop loss orders on all of our positions once again, raised a little more cash and taken some partial profits of the recent big winners. That is called prudent and disciplined portfolio management. I hope that I am dead wrong and the market continues to climb the proverbial “wall of worry” (which I think it will after we get a quick short-term shakeout). We will participate greatly as our positions are all leaders and we will continue to add to new ones. My main point is that while we are doing all that, we are keeping a very close eye on the exits and looking once again to protect our precious capital in the event of a much needed and healthy consolidation.
Everything goes better with software. Get the kids to learn how to write software. An engineer who can write software will get hired long before one who can’t. Ditto for lawyers, investment bankers, doctors, etc. Make this their key resolution for 2011.
Microsoft shuns me. I’ve been shunned by worse. Emailed their PR agency:
“After connecting with my colleagues we will be unable to provide you with a review copy of Office 2010.”
Of course, I never really wanted a copy of Office 2010, since I heard it lacks any great improvements over Office 2003 which I continue to use. But I wanted to see. You’d figure they’d call and explain their reason.
You judge a company in many ways. Key is how it responds to you. This one sucks. And so does its stock price.
I read the computer trade press (or what’s left of it). Latest fashion is to write articles on how to avoid paying Microsoft any money for anything. One key: the free Google Docs. Another key: use a Mac. Once upon a time — in different times — I wrote a 7-page ultra-complimentary cover story interview with Bill Gates. He’s a real mensch. But he is gone. And Steve Ballmer who runs the place now is a jerk.
Good investment rule: When the founder leaves, sell.
But don’t sell Microsoft’s stock short. There are still enough Wall Street houses angling for its investment banking business who issue disingenuous reports praising the company.
Elizabeth Warren: Held to Account. Nice profile in Vogue. Click here.
Elizabeth Warren is one smart lady.
I cannot put Griftopia down.
I mark or underline the bits I want to share with you. There’s so much. I keep reading. Please read this book.
The best quotes about Christmas
“Santa Claus has the right idea. Visit people once a year.” – Victor Borge
“I once bought my kids a set of batteries for Christmas with a note on it saying, toys not included.” – Bernard Manning
“I stopped believing in Santa Claus when I was six. Mother took me to see him in a department store and he asked for my autograph.” – Shirley Temple
“You know you’re getting old, when Santa starts looking younger.” – Robert Paul
“Oh, for the good old days when people would stop Christmas shopping when they ran out of money.” – Unknown Author
“What I don’t like about office Christmas parties is looking for a job the next day.” – Phyllis Diller
“The one thing women don’t want to find in their stockings on Christmas morning is their husband.” – Joan Rivers
“Christmas at my house is always at least six or seven times more pleasant than anywhere else. We start drinking early. And while everyone else is seeing only one Santa Claus, we’ll be seeing six or seven.” – W.C. Fields
“Mail your packages early so the post office can lose them in time for Christmas.” – Johnny Carson
“The worst gift is a fruitcake. There is only one fruitcake in the entire world, and people keep sending it to each other.” – Johnny Carson
“Aren’t we forgetting the true meaning of Christmas? You know… the birth of Santa.” – Bart Simpson, The Simpsons
“The proper behaviour all through the holiday season is to be drunk. This drunkenness culminates on New Year’s Eve, when you get so drunk you kiss the person you’re married to.” – P.J. O’Rouke
The three wise men
They came, bearing gifts. As they entered the manger, one tripped.
“Jesus Christ,” he yelped.
Mary looked up with a smile and said, “That’s great. We were going to call him Moishe Finkelstein.”
Harry Newton whose kids are coming in today. And paying their own way. I’ll suffer them to bad Christmas jokes. No column tomorrow. Markets are closed. Goldman employees need a day to figure how to spend their bonuses.
The chewing gum that's actually good for your teeth is Trident with XYLITOL
Thanks for your column, Harry.
Best wishes over the holidays and in the coming year.
The only real improvement of office 2010, is Outlook 2010. It was redesigned and has better support for searching and imap support.
For searching on Outlook 2003 I use a brilliant piece of software called Lookout, which Microsoft bought and promptly killed. If anyone would like a copy of it, email me. I use in at least 20 times a day. It works flawlessly and ultra-fast.