| Market Commentary |
| Market Volatility and Hedging/Speculating |
 Post by webmaster on Thu, 09 Oct 2008 @ 09:32 EDTNews: This has been a historic period of time for investors. After the failure of several major financial companies, Congress initially blocked the $700 billion bailout package designed to buy up rotten mortgage assets. However, the resulting 778 point drop in the Dow Jones Industrial average appeared to change the minds of many people in congress who did not want to see additional trillions of dollars disappear from the market and people’s retirement accounts. When the market declines did not stop after the bailout package was passed, the Federal Reserve made a 0.5% cut in interest rates yesterday that was coordinated with similar rate cuts by central banks around the world. This move was designed to get more money into the market and begin to thaw out the frozen credit markets. Investors did not appear to know what to make of the rate cuts, and they watched the market seesaw up and down the rest of the day with the Dow closing down 189.01 points (-2.00%).The reaction To the rate cuts was mixed in other markets as well. Japan’s stock market, the Nikkei closed down 0.5 percent earlier this morning (http://www.reuters.com/article/marketsNews/idUST8461020081009). The MSCI Emerging Markets Index rose 2.9% while Russia’s Micex index rallied 17% (http://www.bloomberg.com/apps/news?pid=20601213&sid=amt4Z0pF3J6M&refer=home). As we learned from the technology stock bubble a few years back, trying to identify the market bottom can be like trying to “catch a falling knife”. However, the number one rule for investors is “Buy Low and Sell High”, and stocks are definitely priced lower now than they have been for the last few years. In the future, we may look back on this as a great buying opportunity especially if you plan to be in the market for the long haul (20+ years). However, it is extremely difficult to predict how the market will perform in the future, so if you plan to buy, you may want to look at hedging your investments. There are several ETFs that are designed to move in the opposite direction (inverse) of a particular index (see Pro Shares for a full listing http://www.proshares.com/funds). One example is UltraShort S&P500 ProShares (SDS), which moves at twice the inverse of the S&P 500 (double short), so if the S&P500 went down by 1% for the day, SDS would be up 2% for the day. If you think that now is a good time to buy stocks, but you are worried about the possibility of the market declining further, you could buy a mutual fund or an Exchange Traded Fund (ETF) that tracks the performance of the S&P500 (like SPY) and then hedge your position with SDS. For example to hedge your potential gains or losses by 50% you could buy 100 shares of SPY at $100, which will cost $10,000 and then hedge your position by also purchasing 25 shares of SDS at $100, which will cost $2,500. If the S&P500 went up by 10% your shares of SPY would be worth $110 each for a total of $11,000 (gain of $1,000), but your shares of SDS would be worth $80 (down two times the inverse of the S&P500 change 2*10%=20%) for a total of $2,000 (loss of $500). Your net gain would be $500 or a 5% gain instead of 10%. If the S&P500 dropped 10% then your shares of SPY would be worth $90 for a total of $9,000 (loss of $1,000) and your shares of SDS would be worth $120 for a total of $3,000 (gain of $500). Your net loss would be $500. This hedging strategy works to limit the fluctuations in the market. However, if you were to buy these shares without also owning the underlying index, you would be speculating and your potential gain or loss would magnify the market fluctuations and increase the chances of appearing on the SmartStocks.com stock market game Top 100 and Bottom 100 rankings.
Disclaimer: Be careful with the Pro Shares ETFs as they use options to attain their desired results. Options are much more volatile and risky unless you also own the underlying index on which the ETF is based and are using this investment to hedge your position. SmartStocks.com's stock market game is provided as a virtual stock exchange for educational purposes and is not responsible in any way for losses incurred by individual investors. |
| Smartstocks.com Improvements |
| Post by webmaster on Sun, 25 Nov 2007 @ 04:17 EST News:
[ Read more . . . ] |
| Expanded Rankings and Stock Beta Values |
| Post by webmaster on Thu, 22 Mar 2007 @ 10:27 EDT News: Smartstocks.com has changed its monthly user rankings from the Top 10 and Bottom 10 to the Top 100 and Bottom 100. This change will give stock market game users a more realistic view of the best and worst investors using the site. In addition, it will give more users the chance to see their name appear on the site - for better or for worse. Rankings will only be calculated for users who have logged into their account within the last 30 days, so be sure to login periodically to keep your account active. Due to the short nature of the ranking period (one month), traders who buy and sell a small number of more volatile stocks have a better chance to appear on the Top 100 or Bottom 100 lists. A stock’s Beta is a measure of its volatility with respect to the market. A Beta of 1 indicates the same volatility as the whole market. A Beta of 0.5 would indicate a stock that is only half as volatile as the market. Low Beta stocks typically have consistent earnings that are not affected by consumer confidence or the direction that the market is moving. Utility companies are generally low Beta stocks, since most people will continue to pay their Utility bill in good and bad times. A Beta of 2 would indicate a stock that is twice as volatile as the market. Technology and biotech companies generally have high Beta values, since a successful new product release could move the stock way up, and a failed product release could move the stock way down. The Beta for each stock is calculated using regression analysis, and is generally available on detailed stock quote sites. Buying volatile stocks in a stock market simulation game may be exhilarating, since there is no risk of real financial loss. However, real investors are generally more risk adverse and are willing to forego some potential gains in return for a lower potential loss. Most successful long term investors are successful by following the conventional investment advice to buy and hold a diversified portfolio of stocks and bonds. |
| Smartstocks.com is Selected for Google's Video Ad Pilot |
 Post by webmaster on Sun, 11 Feb 2007 @ 02:05 ESTUpdate: The pilot will run for 4 weeks through Thursday March 8. This pilot is limited to users within the United States, so visitors from outside of the United States will see AdSense ads in place of video content. [ Read more . . . ] |
| Smartstocks.com Upgrades its Web Server |
| Post by webmaster on Wed, 31 Jan 2007 @ 03:44 EST Update: Smartstocks.com recently upgraded its web server and moved to a new data center. The new server has dramatically more processing power and RAM memory than the old server. It includes two 1.8 GHz CPUs, 4 GB of RAM, and two 160 GB redundant raided hard drives. The new data center provides fully redundant high-speed internet connections that are centrally located in the Midwestern United States to reduce latency to the east and west coasts. Physical access to the data center is restricted and constantly monitored. Environmental conditions including temperature, humidity, etc. are closely tracked. The backup power system (UPS and diesel generator) is designed to sustain an indefinite power outage and to deliver a guaranteed uptime of 99.999%. This upgrade adds capacity to support many more smartstocks.com users, and during the middle of the busy trading day the faster response times will provide a more realistic virtual stock market game than in the past. The upgrade was completed seamlessly with minimal downtime. Users should see quicker page loads without any other differences in the stock market game functionality. However, if you do notice any problems, please report them to webmaster@smartstocks.com. Thanks for using smartstocks.com. [ Read more . . . ] |
| Smartstocks.com Selects New Email Application Service Provider |
| Posted by webmaster on Wednesday July 12, 2006 @ 00:36 EDT smartstocks.com Update Smartstocks.com recently implemented a new sponsored email solution from the leading third-party email service provider, Everyone.net. This service will provide anyone a free email address with yourname@smartstocks.com by simply signing up at http://www.smartstocks.com/email.html. Prior Smartstocks email users must re-create their accounts with our new service provider. Everyone.net has provisioned over 30 million mailboxes since its inception, and provides a scalable, full-featured email service. All accounts are web-based and accessible from virtually any computer connected to the Internet. For additional security, login sessions can be completed using 128-bit SSL encryption. In addition, all hosted mailboxes include full backups and redundant storage. Features include 25MB of storage, address book, automatic email sorting rules, and the following composing options:
[ Read more . . . ] |
| Market Forecast: The Rest of 2005 And Beyond |
 Post by stockman on Fri, 08 Apr 2005 @ 01:31 EDTCommentary: The Ten Year Treasury Bond's yield backed down to 4.43%, from recent highs above 4.6%. However, the easy money of low interest rates will continue to fade. I am forecasting that this benchmark yield rises above the 5% level this year. It does matter to you--even if you've never touched a T-bond. Home mortgage rates move up nearly in tandem, and WILL continue to do so as we move to year end 2005. Watch for the 30 year fixed rate (currently just under 6%, up from 5.2% in early February) to cross through the 6.5% threshold and finish the year just shy of 7%. How does this effect the entire economy? Deeply. Just ask the British. Their central bank has been set on nearly double our benchmark rate, as they attempt to fight off inflation. However, most British mortgages are variable (they go up and down with the market), not fixed...so it's starting to chill the housing market as well as broader economic growth. Rising rates are particularly known for cooling consumer spending for lower-income folks (also most impacted by rising gas prices) and therefore GDP and stock market growth. As the refinancing boom spawned by 45 year lows in interest rates during 2002-2004 ends, we approach the mid-years of the interest rate cycle in the U.S. History tells us that there's always a bull market somewhere--and always a bear market somewhere. While I don't see a recession in 2005, we almost certainly will have a slowdown of some significance before Mr. Bush's successor (Hillary vs. Condi or Hillary vs. McCain) takes office in January 2009. U.S. Equities have started 2005 slowly, as they did 2004, but look about fairly valued right now, and should finish the year with a total return in the 10 to 20% range. The Morgan Stanley World Index (the two dozen developed countries) should fare even better than the U.S. as it did in both 2003 and 2004, so make sure your portfolio is not U.S. only. Countries with steep yield curves and favorable trade prospects stand to significantly outperform the U.S. and world averages. Last year, China cooled and Brazil roared. This year, watch Latin America and India to outperform the U.S. and world stock market indexes. Try one of the various ETF country index funds to diversify your portfolio. Foreign stocks can have higher dividend payments and move in ways less correlated with your U.S. stocks, so it will have a smoothing effect on your portfolio year after year. Often times, you can buy this non-U.S. exposure right here on our markets--without changing currencies. Observations: Oil is NOT in short supply. $58 a barrel, at least $15 of that is pure fluff that will not last. It's refining capacity that is in short supply, and that will take years to fix. We literally have hundreds of millions of barrels in excess crude sitting around unrefined. The Saudis are cutting crude prices, forcing others to follow, as you would expect in conjunction with a visit to President Bush's ranch in Crawford, Texas. Oddly enough, we should see persistently high gas prices all year, and declining oil prices. Recommendations: Equally weight the U.S. to the world index (just over 50% of world value). Underweight Europe, Australia and especially Japan. Go with a light overweight on indexed emerging markets in South Asia (India, Thailand) and Latin American regional indexes. Don't miss out on Brazil, Chile, and Mexico, Colombia, Thailand, and India. Stay away from Venezuela (property rights and Cuba-esque dictatorship forming) and China (the world's greatest rights violator has a long way to go in terms of openness and investor protections...good growth but still too much risk) Be prepared for yawn after yawn of boring returns in the U.K. and Western Europe as they continue to stagnate, stagnate, stagnate. The growth and excitement is NOT Germany/France/Italy/Spain, which I place among the 3 most troubled markets in the world over the next few years. I call their anti-business governments the "Marxist Quartet." Poland, Hungary, Romania, Denmark and the Nordic countries are a little more interesting... but just a little. The world's second largest economy is Japan. You can't ignore it, but it's pretty much dead money. Japan's highly touted recovery is overhyped. You should not zero weight it (far too much deviation from the world index), but you can underweight Japan significantly for next year. It has a shrinking population, 100% dependence on imported commodities, which are rising in cost, and an awful financial system. Koizumi has done a good job of starting to heal the most screwed up banking system in the world, but he is too little too late (like the Governator in California.) EWJ is the ticker, but Japan overall will not likely perform as well as the World Indexes. India, Brazil, Russia and China are the 4 most important emerging markets in terms of GDP and GDP growth. I'm overweight on all but China, where communist dictatorships trounce investor rights all the time. Watch for Colombia (President Uribe's finally brought security after decades of chaos and civil war) and India (the regime of Prime Minister Singh is really committed to privatizing and growing the economy) to be the surprise gems of the developing world this year. Among the rich countries (where your benchmark ETFs will allocate most of your funds), watch for Europe to fall short of a slightly above average U.S. economy. Don't try picking individual stocks in India or Latin America--just stick with the index Exchange Traded Fund. [ Read more . . . ] |
| UCLA Economists Warn of "Housing Bubble" |
| Post by stockman on Sun, 26 Dec 2004 @ 00:52 EST Commentary: True, California is the land of fruits and nuts. But the Wall Street Journal is reporting that this particular group of Californians—specifically, a batch of UCLA economists—announced this month that the U.S. and most distinctly California are “beset by a housing ‘bubble’ that will depress construction next year” and will not return to 2004 levels for years to come. Now we all have a healthy skepticism when Phd’s start predicting things, don’t we? And we should. However, this particular group of fruits and nuts has got it right. Why do I say that? The same group was one of the first to predict the 2001 recession. And, once again, history is on their side. Let’s take a walk through history. Some of you who have read my column since I first opened Smartstocks.com in 1998. Suffice it to say that I know something about bubbles—about euphoria and overvaluation of an asset class. First, some common sense observations…very unscientific, but quite meaningful if you have learned the hard lessons of investing history as I have. Then we wrap up with the facts and data and you can email me and tell me if you think these guys are right in saying that U.S. housing returns have peaked and certain areas are wildly overvalued in December 2004. As a stockbroker at Merrill Lynch in 1999 and 2000, I was a member of an army of 15,000 who was trained to shrug off the notion that we were in a bubble. I had more than quadrupled my little portfolio on the internet, as many did. It seemed everybody knew that technology couldn’t go down. Tech IPOs went up 500% their first day on the market. “This is a new economy. Only idiots can’t see how new technology is never going away. It’s different this time.” The most dangerous words in investing are “guaranteed returns” and “It’s different this time.” I bought it, and so did 80 million other Americans who happily leapt into the stock market. Only a handful of major players called it a bubble, in writing, between January 1999 and January 2000, when the NASDAQ almost doubled in one year. Ironically, it was really only those investment advisors tenured long enough to have passed through the energy bubble of the early 1980s or the LA housing bubble of the early 1990s. Between March 2000 and March 2003, I learned a hard lesson. The Nasdaq went from 5100 to just over 1000 in 36 months. Being all of 24 years old with two years of above-market returns gave me enough overconfidence to miss some red flags. Talk about eating crow. I lost most of my life savings. I made lemons out of lemonade, getting an MBA, doing the CFA exams, put on the hindsight-learning goggles, running small businesses, and hitting reset button on my investment philosophy. With the grace of god and the power of options leverage, I am one of the fortunate ones who was able to climb his way back above pre-bubble levels in the last year, even though the Nasdaq could take until 2009 or 2010 just to recover its losses and to regain that notorious 5,000 level. But oh, to have seen the writing on the wall. I think it’s fair to say I know something about bubbles. Red Flag #1: Historically Abnormal Returns. Over the last seven months, I have flown back and forth between the Bay Area in California and my anonymous red state. Somehow, I got stuck next to, behind, in front of, or across from a real estate nut on every single one of those flights. High fives are followed by long stories. Everyone in California has heard the same phrase this year umpteen times in Calfornia, “My friend____ bought a house ____ months ago, and she’s already made ____ thousand dollars.” First, she hasn’t made a penny until she sells it and counts her cash in the bank, net of her 3-6% realtor fees, and taxes. Second, most Americans have refinanced, cashed out, and spent over 50% of their home equity for the first time since World War II. History doesn’t lie…and it gets worse in the hyper-speculative, overbought markets like LA and San Francisco. In the Bay Area of California, local media now reports that over 70% of new loans are adjustable rate mortgages…what happens when all those adjustables ADJUST from 4.0% on average to their historical average floating rate of 7 or 8%? Some Bay Area families are rich enough to pay double their current mortgage payment, but how many of them won’t flinch when their mortgage payment doubles? Remember the crazy uncle who told you to buy Yahoo at $200 in 1999? Where the hell is he now? He’s buying up a slew of plain-vanilla, two bedroom condos like the one I scouted in San Francisco for the bargain price $750,000. I watched the bidders actually fight over the damn thing until the price went up so high, it exceeded the bid price by $30,000. Does any of this sound familiar to you? People fighting to get in a bid on a house and saying things like, “we better move fast, or the price will just go higher next year.” Red Flag #2: Housing costs in Bubble Areas Exceed Wage Differences. “But the wages are higher here…San Francisco is never going away, baby…and besides…I can make the payment.” True, I just bought a nice two bedroom condo near Salt Lake City for $92,000, and priced out a similar one near Denver for $170,000. Do San Fran jobs pay ten times the wage in Salt Lake City or five times? Assume wages are 40% to 50% higher in San Fran vs. Salt Lake or Denver. They are all little starter homes, almost exactly the same. The national average for a two bedroom condo with 1200 square feet is between $100 and $150 per square foot. Yet in Malibu and San Francisco, they are paying $550, $650, $750 per square foot on average and even more in the posh zip codes of California. Bond ratings are boring to most people, but California’s state debt has been down graded by every major firm that rates debt to the lowest rating of any U.S. state. In other words, in the unanimous chorus of the bond market, California’s is the less likely to continuously pay its debts by creating new businesses, jobs and tax revenue than Wyoming, Vermont, or any other state in the country. It’s a new topic for a new day, but California’s soaring debt, punitive taxes, and anti-business wacko regulations have caused businesses to flee at the rate of 500 to 5,000 small businesses per month, depending on whose numbers you read. Who is left to sell these $750,000 condos to in 2005 in San Francisco? 30 year fixed mortgage rates, according to Economy.com should rise from this week’s rate of 5.3% to 6.5% in 2005, then to 7.5% in 2006. Red Flag #3: Investor and Media Euphoria. “It’s a real asset. People are always going to want a nice house in (Vegas, Malibu, San Fran)!” It’s true. Those are posh areas with great weather and night life. Not nice enough, however, to avoid the inevitable laws of supply and demand. The average home in Las Vegas went up 54% in the last twelve months, more than ten times the return on a 10 year U.S. Treasury bond. Those types of returns are simply not sustainable and it is only a matter of time. I don’t know when, but I know how a bubble deflates. It deflates painlessly and slowly during the first year, because the losses are small and not noticeable. Stubborn money even buys more, and passes it off as a buying opportunity. Does that sound familiar? In 2000, for example, a lot of people blamed mild losses on Al Gore and the election recount and ignored calls to sell amidst what we now know was the “gentle beginning” of the bubble’s burst. Imagine if only one of ten prospective homeowners decides to hold off for better rates or better prices or a better job in a market where homebuilders have years’ worth of inventory on sale or already under construction. Can housing prices go down and stay down in pretty areas with great weather? Ask the poor folks who bought a home in Southern California, for instance, in 1990. It took seven years for the average home to simply climb back to its pre-bubble levels. After 3% inflation, buying and selling at the same cost means these millions of homeowners lost over 15% of their mula, while the stock market doubled. To be fair, housing prices are less volatile than stock market indexes. Also, a house has the intrinsic value that a stock doesn’t—you can live in it, as long as you pay the mortgage and property taxes on time. However, housing prices are not as steady as you might think. You just can’t see the volatility because it’s not traded every day on an exchange and announced every night on the news. Long-term U.S. average housing has gone up around 4% to 6% per year since World War II. Take out 3% for average inflation, and a bit for property tax, and you can expect a modest 1 to 3% real return annually. In short, most markets will crawl back to average housing appreciation rates, while hot markets like California will navigate through a bear market that is already staring, then will likely stagnate for a couple years before the interest rates give these areas a painful end to a decline that could last 4 to 6 years in San Fran and LA, in my view. The deflating bubblets in these areas will experience only slow declines for the next 12 months…nothing bad…until that mortgage rate gets high enough to make the average buyer worker say, “no thanks, we’ll just have to wait for now.” Then, probably sometime in 2006 or 2007, 30 year fixed rates will rise above the critical 7% and 7.5% thresholds and 70% of those overbaked adjustables trigger an effective doubling of mortgage payments for millions of homeowners. It has been said that the last year of the bear market is the one that really ravages you. Only when it’s too late, the commentators will note the drop in housing prices and suggest that we all run for the exits…just like they all did at the stock market bottom in early 2003. Unfortunately, many get out right at the bottom, when the pain is maximized. Avoid the hyper-borrowing techniques. I try to keep at least 20 to 25% equity in any property at any time. Thank you for visiting us at Smartstocks.com and enjoying our stock market simulation game over the past six years. Supporting Articles: New Home Sales Plunge 12% in November—Steepest Drop in 10 years http://money.cnn.com/2004/12/23/news/economy/home_sales/index.htm WSJ, 17 December 2004, “Are You Living In A Bubble?”, 8 December 2004, “Sizing Up the Threat of A Housing Bubble.” |
| Our Weaker Dollar |
| Post by stockman on Wed, 21 Jan 2004 @ 13:16 EST Commentary: Everybody is talking about the Euro rising above the dollar. As I have continued to actively pursue opportunities in U.S. and international capital markets over the last 12 months, I have noticed an eye-popping 24% decline of the dollar vis-a-vis the Euro. Basic economics, which I remember getting drilled into me years ago by BYU's famed Dr. Kearl, teaches us that an orderly decline of our currency usually causes U.S. exports (and has actually done so) to decline in price, and therefore increase in volume to the full extent of the dollar's decline. Assuming Ceterus Paribus (this is a surreal condition referred to by economists that means if all others but this one variable remain equal), Dell, Caterpillar, Coca Cola, GE, Boeing, and Alcoa now can undercut their European counterparts by 24% in price without cutting a red cent from their dollar prices and profits. Now, if the dollar were to experience a series of large rapid shocks to the upside or downside, that would rattle confidence of foreign investors. Any large, rapid swings would be harmful. However, the decline thus far has been very orderly--not a single 24 hour period on my charts have shown any kind of volatile moves. It would be foolish to compare the 1% per day moves of dollar/Euro exchange rates to the wild moves that are seen in trading the currencies of Mexico, Brazil, Venezuela, Russia, and so on. The dollar is still the most widely held currency in the world and has attached to it the 227 year perfect credit rating of the U.S. treasury, along with a Fed and Economic system that are the envy of the world. What was Sadaam carrying in his spiderhole? Ben Franklins. Ben Franklin is simply retracing some of the gains of recent years in a very rational way, and a single Euro go to $1.30 or $1.40 (up from $1.26 this morning) if the clueless guys in the Bundesbank don't pull it together and cut their lofty interest rates to boost their stumbling, overregulated, socialist European economy. The dollar's decline has actually been a net positive for our trade deficit AND America's small and large businesses who export to Europe. What we've seen over the last 12 months is a relatively modest realignment of currency that is perfectly appropriate, given the silly resistance of the European Central Bank to keep its interest rate more than double that of the U.S. My experience with foreign currency markets over the past couple years has taught me that relatively low interest rates (real interest rates are those adjusted for inflation), or the anticipation thereof, will almost always mean a depreciating currency valuations. Are we witnessing the downfall of the U.S. currency? Is the world pulling everything out of the United States'? Nope. The noise is no more than pundits who are looking for a news story. The ones who should be worrying are the Europeans, whose export sector has been slapped by the surging Euro. The Euro is a more colorful currency than our dollar, by the way. So, no, the Greenback is not in trouble. It just means that we may have to put up with a few more French tourists spending their funny, colorful bills in America. On a personal note, I am pleased to say that Smartstocks.com has entered its sixth year of operation. I am so pleased to be part of a team that survived the dot com phase. I want to thank you all so much for you continued support these last five years, and for making my idea and my dream as a college senior in 1998 become reality. Be sure to watch out for our newsletter, coming out soon. Please note my email address has changed, and I will be taking your questions and emails once again when the newsletter is in place. [ Read more . . . ] |
| Satellite Radio Starting to Take Off |
| Post by stockman on Thu, 03 Apr 2003 @ 04:02 EST Commentary: Is it possible to find a fast-growing, strengthening, subscriber-based business in these troubled times? Barron's says that XM Satellite Radio (XMSR) is ready to deliver faster than expected subscriber growth--and I think they have got it right. I will be adding a couple thousand shares to my portfolio now that its leadership and funding has been clearly established. Sure enough, the company beat its own estimate for new subscribers this quarter. It's competitor, Sirius (SIRI) suffered a blow when the world's largest automaker, General Motors, chose to use XM satellite radio exclusively. Honda and others have also joined XMSR, propelling it to grow much faster than the weakened SIRI, who may not even be able to hang onto its supply deal with Ford, and may not be viable as a standalone business. Sirius (SIRI) has some 'serious' problems--it offers fewer channels and fewer options to subscribers, and is just not picking up momentum in revenue or new subscribers. XM needs about 3 million subscribers to breakeven, and has already exceeded the 500,000 mark in just a few short months. Consensus (although only few are covering the stock) estimates about one million subs at year end. I believe this number will come in around 1.3 to 1.5 million, given the accelerating dominance over its only weakening competitor, the cheap ad environment, as well as the growing non-auto and rural user base XMSR is executing by lowering subscriber acquisition costs, hitting faster than expected subscriber growth, and by having secured a competitive dominance that will be extremely difficult to displace. I feel the stock has some significant risk, but will likely hit $12 or more in the next 12 months--double its current price. The increased analyst attention to the emergence of a winner will follow as XMSR will continue to exceed revenue and subscriber estimates. [ Read more . . . ] |
| Nasdaq's Surprises With Relative Strength In First 10 weeks of 2003 |
| Post by stockman on Sat, 08 Mar 2003 @ 20:31 EST Commentary: It seems all day every day all we hear about is Iraq worries. North Korea's Kim Jong Il is spewing threats, enriching uranium, pointing more and more artillery shells and missiles at its neighbors--yet another worry. As a result, the stock market has been pounded in the first quarter of 2003. However, let's look at some interesting facts. The Dow Jones has lost around 8% of its value this year, while the S & P 500 has lost over 6%. However, the NASDAQ is only down 2%. The "most volatile index in the U.S." has actually shown a relative decrease in its volatility while the Dow and S & P have melted down in 2003's first quarter. Obviously, the Nasdaq took more losses than its peers in 2001 and 2002. Does this shift mean anything? It will if it continues. The last time the Nasdaq outperformed its two peers was--hang on to your seats--in 1999 when it almost doubled. I think it's fair to say that the nervous money and the weak stomachs are ALREADY out of the Nasdaq. This premise is evidenced by the diminishing volume of trading. Volumes declining to a trickle indicate that the massive block selling and wholesale dumping of the big tech leaders may be waning. After Sadaam's removal, which now seems imminent, the market will see a relief rally combined with some short covering which could powerfully combine to form a powerful upward move in the coming weeks. Potential upward kicks could also include any capture of bin Laden, improving consumer sentiment (can't get much worse than it is now), improving hiring environment, return to normal capital expenditures (which have largely been on hold since Sept. 11, 2001 and haven't been robust since pre-Y2K). With some reasonable geopolitical closure, by year's end we could see the Nasdaq at 1700 or higher, with the Dow and S & P 500 showing similar gains. |
| Nextel at $10 Is A Bargain |
| Posted by stockman on Wednesday October 30, 2002 @ 19:47 EST Market News (Disclosure: Author owns NXTL securities) 90 days ago, Wall Street consensus put Nextel's 2003 earnings at -$.26 per share. 60 days ago? -$.06 per share. 30 days ago? $.01 per share. 7 days ago? $.11 per share. Today? $.32 per share. The #5 U.S. Wireless provider's 10.3 million customers and its #1 customer growth rate imply its passing #4 Sprint PCS is almost a given during the next few months. While Sprint PCS shrunk last quarter and Verizon's growth is slowing, Nextel has been adding over 100,000 customers per month. It's churn rate (2% customer loss per month) is the lowest in the industry, solidifying it's long-term market share gains. More good news. Nextel is the only major service with one button "walkie talkie" direct connect services that come free to most customers. Customer service ratings are improving, and its network of independent dealers is bloodying the nose of competitors--particularly Sprint PCS. Nextel brags the top spot with corporate customers are businesses who sign up scores of employees and don't churn easily. Nextel's $71 average revenue per customer per month is 30% higher the industry average. In 2003, I feel that Nextel consensus number will continue to rise above $.50 per share, giving it a current multiple just north of 20 times 2003 earnings. It's not a stock without its risks, so an inexpensive protective put may be a good idea for large positions. I am looking for a rise 50% to 100% over the next 12 months. Investor's Business Daily's Reinhardt Krause summed it up best, "Nextel, which focuses on business customers rather than consumers, added 480,000 net subscribers in the third quarter. That's about par with the year-earlier quarter. The company is doing better than most other U.S. carriers. No. 2 Cingular Wireless and Sprint PCS both lost customers in the third quarter, and subscriber growth at AT&T Wireless fell 73%." [ Read more . . . ] |
| WSJ: Here Comes The Double Dip |
| Posted by stockman on Monday September 23, 2002 @ 10:37 EST Market News The Wall Street Journal reports this morning that, for the first time in 15 months the index of leading indicators points to negative economic growth over the next six months. Corporate warnings have been hitting the market all month long, even though overall earnings are still expected to rise 9 to 10% over the same quarter last year. A 2002 recovery now appears to be out of the mix. [ Read more . . . ] |
| Irrational Pessimism: NASDAQ Plunges to Five Year Low Despite Evident Recovery |
| Posted by stockman on Tuesday July 02, 2002 @ 06:24 EST Market Commentary Despite the continuous hum of economic statistics indicating that the economic recovery is already underway, U.S. equities opened July with another sharp decline. In a strange twist, U.S. markets are shaking off a better-than-expected manufacturing report. Also lost in the noise of WorldCom, Enron, Andersen, investor distrust and terrorism is the fact that U.S. corporate earnings this quarter will rise--albeit slightly--after declining for six consecutive quarters. GDP growth, which slid into the negative in 2001, has returned to sustainably positive growth... over 5% during Q1 and around 2.5% during Q2. Mortgage rates remain at 40 year lows. Housing starts are ahead of schedule. Unemployment increases have abated. Politically motivated (Arab) selling has largely finished having its impact. The 10 to 20% weaker dollar exchange rates actually helps large, exporting NASDAQ companies like Dell, Sun Micro, Microsoft, and Oracle by giving them an instant price advantage versus their competitors. Monetary policy continues to be positive; fiscal policy continues to be stimulative. Yet companies with real cash and real earnings such as TYCO (TYC) are trading at a ridiculously low one-third of their sales. We pierced the September lows and the remainder of the year should see some buyers return to the markets as reality overcomes emotion...just like it did in the opposite direction in early 2000... and as it always has. The selling on the NASDAQ is overdone. [ Read more . . . ] |
| Buffet Betting Big Bucks Against U.S. Profits Recovery |
| Posted by stockman on Monday May 20, 2002 @ 02:06 EST Market News The most recent copy of Grant's Interest Rate Observer says that "Warren Buffett disclosed that Berkshire (his company) has bought S&P 500 put options on more than one occasion in recent years. In clinically specific detail, the Sage of Omaha said Berkshire holds an options-related investment on which it stands to gain $600 million if the S&P closes below 1,150 on June 3." [ Read more . . . ] |
| History Says 2002 Should Be A Good Year for U.S. Stocks |
| Posted by stockman on Monday March 18, 2002 @ 13:37 EST Market Commentary Only on two other occasions this century have we seen back to back declines in the U.S. Stock Market. The Great Depression's lowpoint gave us two years of consecutive declines. The prolonged, "stagfaltion" recession of the early 1970s gave us two blue years in a row (1973-74). And now, we are coming out of 2000 and 2001, both negative years for U.S. stocks. Are we worse off economically than we were during these two catastrohpic and prolonged depressive periods? No, we are not. In my opinion, the S & P 500's earnings recovery in 2002 will be significant and widespread. The forward Price Earnings ratio over the next 12 months puts the current price of the index at a very reasonable multiple of around 20 times earnings. If companies start to report positive earnings surprises, and if the tame inflation and interest rate environment continues for another quarter, then, Bears...cover your shorts! stockman@smartstocks.com [ Read more . . . ] |
| Andersen Admits It Destroyed Enron Documents |
| Posted by stockman on Friday January 11, 2002 @ 01:09 EST Market News WASHINGTON (CNN) - Arthur Andersen, the auditor for Enron Corp., admitted Thursday that its staff destroyed documents related to the probe of the bankrupt energy trader. The global accounting firm notified the Department of Justice and the Securities and Exchange Commission that individuals in the firm "disposed of a significant but undetermined number of electronic and paper documents and correspondence relating to the Enron engagement." Andersen said it has notified authorities and suspended its current records management policy effective immediately. Andersen's discarding of documents occurred before it received a subpoena from the SEC, the company said in a statement. [ Read more . . . ] |
| Smartstocks.com Surpasses 30,000 Active Subscribers, Records Highest Traffic Ever in November |
| Posted by stockman on Tuesday December 11, 2001 @ 04:10 EST smartstocks.com Update None of us could have guessed that the experiment a restless college Senior in Utah in 1998 would have grown as it has. After reaching dozens of countries and millions of ads sold, we are still a free resource to educators and the learning investor. Despite the fallout of many dot coms, we have thrived relative to our competitors recently. Thanks to all of you--from the High School groups to the corporate contests--for using our stock game and making the ride so much fun. We'll see you on the trading floor... |
| The Year-End Tax-Loss Two-Step |
| Posted by webmaster on Wednesday December 05, 2001 @ 01:57 EST smartstocks.com Update By James B. Stewart smartmoney.com WITH THE HOLIDAY season upon us, it's time to think of Uncle Sam's gift to you in a bear market: tax losses. True, the bear market is officially over now that the Dow Jones Industrial Average has risen more than 20% from its Sept. 21 low (the Nasdaq is up much more), but all the major averages are still down from the beginning of the year. If you don't have any losses in your portfolio this year, then you are one lucky investor. Now is when those losses can actually work to your advantage, since the bigger the loss, the bigger the potential deduction. (Of course, having no loss is far better than taking even the biggest deduction, but let's concentrate on the silver lining.) The time to act is this week — no later than Nov. 30 — since that leaves a full month before the end of the year. [ Read more . . . ] |
| Fed again cuts rates 1/2 percent |
| Posted by webmaster on Tuesday November 06, 2001 @ 17:50 EST Market News By Martin Wolk MSNBC The Federal Reserve cut interest rates by a half-percentage point Tuesday, bringing the cost of short-term loans to their lowest level in 40 years after a flurry of grim economic reports. In cutting rates for a third time since the Sept. 11 terrorist attacks, the Fed cited “unusual forces restraining demand” and left the door open to even more rate cuts. The Fed's 10th cut of the year brought the benchmark federal funds rate to 2 percent and signaled that Fed Chairman Alan Greenspan and his colleagues will continue acting aggressively as they try to reignite an economy that by almost all accounts has slipped into its first recession in a decade. [ Read more . . . ] |
| The Bull Market of 2002: Steep, Indiscriminate Selloffs After 18 months of A Bear Market Should Hasten Reversal |
| Posted by stockman on Friday September 21, 2001 @ 11:35 EST Market News The scope of the tragedy of September 11, 2001 clearly will decimate 2001 earnings as they have already U.S. stock prices. Even before this incident, though, without a crystal ball, we could not have predicted how long and deep the current downturn would go. The terrorists may have actually deepened and shortened our recession. Trillions of dollars of wealth have disappeared thus far this week, as we enter into the 19th month and most terrible quarter yet of our 2000-2001 Bear Market. Let us learn from history. The long, terrible Bear Market of 1973-74, into which I was born, lasted around 23 months. Imagine going back to the day of the lows of that recession, and liquidating all your stocks during the very week--right at that low. Unfortunately, I know someone who has just done exactly that foolish disservice to their family and their retirement in our day. Liquidating an IRA, diversified mutual fund or index fund at 3 year lows? What a stupid idea. Friends don't let friends liquidate everything at multi-year lows. The September-October window of 2001 will be looked upon as one of the scariest periods yet one of the greatest buying opportunities for long-run investors in the history of the United States of America. Unemployment increases now appear to be accelarating through year's end, as they typically do toward the LAST leg of a recession. Capitulation selling is now taking every U.S. index to multi year lows--on heavy down volume that we have not seen. Over the past few days an extremely rare event occurred: All major stock indices plummeted on heavy volume in tandem with U.S. Treasuries. The 30 year Treasury yield spiked an astounding 20 basis points over the last four days. What does that mean? Hoarding cash out of fear. Investors are running from both stocks and bonds at the same time. That capital is flying into cash & equivalents, which are now piled up at record levels. Granted, we cannot say the day or week or month! of the coming Bull Market. However, the evidence that it's near is stacking up. History will prove that, as earnings begin to show a bottom & reversal of their 7 quarter downtrend in 2002, so will U.S. equities. I have no way of being sure nor do I care to predict if President Bush's strong speech or something stronger than it will be enough to serve as the catalyst. Frankly, I don't care which event it is, because we're already staring into the face of a near worst case scenario for 2001 earnings, which the market has been discounting this week. Anyone with a pulse can see that now. I'm talking about a reversal rally of such historic intensity--whether it comes in six days, six weeks or six months--that any long-term investor should be scared to miss it. Regards, - stockman@smartstocks.com [ Read more . . . ] |
| The QQQ Will Rise from The Dead |
| Posted by stockman on Saturday August 04, 2001 @ 04:27 EST Market Commentary Yes, the bubble burst. The market got ahead of itself. We know. That now infamous "irrational" peak was 18 months ago. Everything was up. Now, any stock associated with technology--and most other industries--is down. Manufacturing in the U.S. has declined every month for twelve months. Capital Spending is way down, as is Venture Investing. Nothing lasts forever, I say. That is not to say that the Webvans or Theglobe.coms or the Mary Meekers of the world will be riding high anytime soon. However, those short sellers who pronounced the NASDAQ dead at 1619 on April 4 are now themselves beginning to bleed. Shorting Microsoft and Cisco at multi year lows? That's a pretty stupid strategy. Even the normally mum Treasury Secretary is saying the worst is now behind us. Irritational pessimists: Better cover your shorts, guys. With a historic six rates cuts in a row (and a seventh on the way this month), $43 Billion flowing out from the Treasury, inflation benign, 4 quarters of bad to worse to terrible to awful corporate earnings...No one knows precisely when, but a spark will hit the NASDAQ 100 (QQQ) and we could be in for a rally that any fund manager who understands history should be scared to miss out on. The smart money has stepped back in and is buying stocks now--the sheep will come later after they miss most of the upswing in exchange for "seeing that it's ok." |
| Watch The Last Hour, One Pro Says |
| Posted by stockman on Thursday June 21, 2001 @ 01:31 EST Market News A veteran money manager, Don Hays, explained recently in his daily newsletter how he calculates that the last hour of trading is the most indicative of smart money trends. This comes in contrast to the first half hour, which is plagued by the emotion-based trading of smaller, less disciplined investors. So pay more attention to the last hour movements during the trading day, and time will tell us if the theory holds water. His newsletter is available through www.haysmarketfocus.com. [ Read more . . . ] |
| Write Me: Who's The Best & Worst Online Broker? |
| Posted by stockman on Monday April 30, 2001 @ 11:51 EST smartstocks.com Update I'm a veteran to online trading. Since 1996, with clients', friends' and my own accounts, I've used Schwab, Merrill Lynch Online, Etrade, Ameritrade, Fidelity, American Express Online, Datek, and many others. I have my experiences and opinions on which online broker is the best--now I want to hear yours. Which has the best value per dollar of fees? Some are getting better while others still don't get it. Some have great execution and great services, while others are overpriced and put you on hold for 30 minutes. Tell us the good, the bad, and the ugly and you'll be entered to win a full color photo of our very own acting CEO Dave Christensen. Sound off to: stockman@smartstocks.com. [ Read more . . . ] |
| The Coming Recovery: I'm Buying Equity Subindexes |
| Posted by stockman on Wednesday April 25, 2001 @ 23:13 EST Market Commentary The emails have been pooring in this week. "Have we bottomed?" you ask. I have been buying the NASDAQ leaders since we hit 1619. I don't think we'll break that low--the market is oversold. We're going to come out of this downturn. I wouldn't be surprised to see the NASDAQ hit 2800 or 3000 before New Year's. Yes, I'm moving cash into select tech leaders and packaged securities (spiders and bundled indices). I sold my 2nd car. I'm selling a rental property to access my equity, my friends. I'm pulling every asset I can into cash to buy equities on the dips. I suspect we're in a trading range through May. I'm buying up 2 subindexes on downticks this month--aggressively if we drop below 1900. Drop me a line if any of you 20,000 smartstockers are interested in these subindexes. Don't forget to sign up for an email account at smartstocks.com if you haven't already. --stockman@smartstocks.com [ Read more . . . ] |
| How Low Can We Go? |
| Posted by stockman on Thursday April 05, 2001 @ 02:52 EST Market News The NASDAQ headed south again, approaching a 3 year low. We've seen the tech-heavy index go from over 5,000 to 1600 in just 13 months. We are at 52 week lows on the S & P 500. Interest rates are being cut and we're due for another 75 or 100 basis points of cuts. Last time I checked, times like these in history are for smart buyers, whether it takes 5 weeks, 5 months, or 5 years to get some sanity back into this market. On a brighter note, Dell Computer reaffirmed its earnings guidance for the quarter, saying it will hit targets for both earnings and revenues. Barron's ventures in its most recent edition that we should now be overdue for a rally on the NASDAQ. What do you think? Email me: stockman@smartstocks.com [ Read more . . . ] |
| Panic Sellers Carry NASDAQ to Lowest Point Since December 3, 1998 |
| Posted by stockman on Tuesday March 13, 2001 @ 03:07 EST Market Commentary Owch. The question is, will it sink lower? "NASDAQ 900", some are saying. Hogwash. "People who were looking for capitulation - well, we're getting it. You should be careful what you wish for," says Tony Dwyer, chief market strategist for Kirlin Securities. Monday's selloff was a textbook example of capitulation or "panic selling." We had decliners outnumber advancers by 5 to 1-- which is historically quite rare on active volume. Indeed, the baby was thrown out with the bathwater on Monday. Literally every sector was pummeled--no exceptions, despite the fact that interest rates are falling, mortgage & construction businesses are on an upswing, and a global, thermonuclear war has now been priced into many stocks trading BELOW book value. No major economic or earnings news came out today to justify the carnage. Yes, 5,000 on the NASDAQ last year was irrational, but today was irrational as well. For example, D.R. Horton (NYSE:DHI), one of the country's biggest and fastest growing homebuilders, is in reality growing earnings quite nicely. It trades at 8 times trailing earnings, yet today it gets knocked down 3.8%, in addition to getting blasted by over 10% last week. Oh yeah--it beat earnings the last 4 quarters and has been upgraded half a dozen times as it loyally announced a cash dividend. Irrationality is not sustainable upward or downward. Stick to your guns. You'll regret joining the irrational panic selling. [ Read more . . . ] |
| Stocks Spiral on Intel's News |
| Posted by webmaster on Friday March 09, 2001 @ 20:15 EST Market News By CNBC.com staff An earnings warnings out of Intel rocked technology stocks and pulled the major indexes lower Friday. A mixed employment report released this morning dashed hopes the Federal Reserve will cut rates before its next meeting on March 20, adding to investors' dismal mood. The Dow Jones industrial average closed off 213.63, or 2 percent, to 10,644.56, the Nasdaq Composite dropped 115.19, or 5.3 percent, to 2,053.54 and the Standard & Poor's 500 inched off 31.22, or 2.5 percent, to 1,233.52. [ Read more . . . ] |
| From Stockman's Email Bag |
| Posted by stockman on Wednesday February 07, 2001 @ 21:50 EST Market News Leo writes: << I heard about this stock, HFCI from a friend and I thought you could offer your expert opinion. It's an OTCBB company that sells mortgages and I guess they are supposed to have a big press conference or something. Could you tell me if this is a good company? Thanks, Leo >> Leo, I would answer by saying, first of all, that I avoid OTCBB (Over- the-counter-billboard) stocks. Thorough research is not usually available and they don't make sense for me or my clients. There is a reason they don't qualify for listing on a major exchange. I am not familiar with the particular company, but I would offer extreme caution to the tens of thousands of registered Smartstocks.com members: Avoid penny stocks and OTCBB stocks. You can do well without them. --stockman@smartstocks.com [ Read more . . . ] |
| Is The Worst Behind Us? |
| Posted by stockman on Monday January 29, 2001 @ 03:29 EST Market Commentary At least one prominent Wall Street money manager thinks so. "Lower interest rates are almost always better for stocks," said James Floyd, who helps manage $180 million for Leuthold Weeden Capital Management LLC. "Investors are willing to forgive what's going on in fourth quarter -- it's old news -- and they're taking a chance on things being better out on the horizon." Historically, the evidence supports Mr. Floyd's claim. So, if history holds true, then 2001 may turnaround the carnage of the year 2000. [ Read more . . . ] |
| Compaq, Broadcom, & Siebel Beat Expectations |
| Posted by stockman on Wednesday January 24, 2001 @ 03:07 EST Market News Three large tech names beat expectations after the closing bell on Tuesday. Investors could take the news as a glimmer of hope. Is the worst is behind us? Siebel's quarter was particularly strong, blowing away estimates by 33%. Still, many tech names have yet to report. Maybe the long boom isn't over after all... [ Read more . . . ] |
| The Landing May Not Be So 'Soft' |
| Posted by stockman on Tuesday January 09, 2001 @ 21:01 EST Market Commentary The pundits are using words like "soft landing" and "slowing growth" to describe the economic downturn. The reality is, friends, that we are already in a recession in the telecom, auto and semiconductor industries, for example. You can't read about it because we only have economic reports from the past. Consider the following: the Post Presidential Election Bounce, although consistently following victories by either party in the past, fizzled. November through January, historically the 3 healthiest months for US stocks, handed us the worst market performance in 10 years. The U.S. retail industry had its worst 4th quarter since 1990. Not one of the world's major equity markets actually closed higher in 2000. So much for the world wide wealth effect. December's consumer confidence--a self-fulfilling prophecy--proved the worst in two years. Unemployment has reversed an 8 year downtrend and is now rising. Two months ago, consensus estimates called for 19% year over year earnings growth--now they call for zero to 3% earnings growth on the S&P 500, and that number weakens everyday. Instead of the "soft landing" or "gently slowing growth", maybe we should call it the "NASDAQ corrected, Greenspan Waited & Florida Recounted" Recession of 2000-2001. Got a better name? Email me: stockman@smartstocks.com [ Read more . . . ] |
| Recession Already Here |
| Posted by webmaster on Tuesday January 09, 2001 @ 20:29 EST By Jeanne Burke New York Post One of Wall Street's most respected economic teams lowered the boom yesterday. Morgan Stanley Dean Witter's chief economist Stephen Roach and U.S. economist Richard Berner notified clients in their morning report yesterday that the U.S. has officially entered a recession. The Morgan Stanley economists said that U.S. gross domestic product will contract at an annualized rate of around 1.25 percent in the first half of 2001 - and two quarters of a slowing economy means a recession. [ Read more . . . ] |
| Stocks Slide as Old Fears Return |
| Posted by webmaster on Friday January 05, 2001 @ 18:11 EST By Stephanie Mercurio CNBC.com Investors wanted to keep celebrating with the Federal Reserve, but troubles among financials, lowered earnings estimates and a mixed employment report have put a damper on the party and driven stocks down.The Dow Jones Industrial Average has lost 245 to 10668, the Nasdaq Composite has fallen 136 to 2430 and the Standard & Poor's 500 is off 28 to 1305."All in all, there is just still an enormous amount of negativity," says Will Bertsch, listed technology trader for Merrill Lynch. "The Fed easing doesn't instantly turn around negative earnings. For the long term it's positive, but at the same time nobody wants to be the first guy in." [ Read more . . . ] |
| Surprise Rate Cut--Surprise Rally |
| Posted by stockman on Wednesday January 03, 2001 @ 14:25 EST By Noam Neusner and Vincent Del GiudiceWashington (Bloomberg) -- Federal Reserve policy- makers surprised investors by cutting the overnight bank lending rate a half-percentage point today, four weeks before their next scheduled meeting, citing ``further weakening of sales and production.'' Stocks and the dollar surged after the Fed's policy-setting Open Market Committee cut the overnight bank rate to 6 percent, the first rate cut by the Fed in two years. ``These actions were taken in light of further weakening of sales and production, and in the context of lower consumer confidence, tight conditions in some segments of financial markets, and high energy prices sapping household and business purchasing power,'' the Fed said in a statement. [ Read more . . . ] |
| Investors Pummel Tech Shares |
| Posted by webmaster on Tuesday January 02, 2001 @ 18:48 EST CNBC.com Market News As far as stocks are concerned, 2001 stinks, so far.Technology stocks have tumbled on this first trading day of the year, pulling the Nasdaq Composite down 5% and the Dow Jones Industrial Average off more than 1%, as investors worry about earnings growth and a decelerating economy and analysts continue to downgrade technology shares.The Dow industrials have dropped 136.22 to 10650.22, the Nasdaq Composite has lost 138 to 2332.52 and the Standard & Poor's 500 is off 29.65 to 1290.63."We continue to see pressure on the technology stocks," says Alan Ackerman, market strategist for Fahnestock & Co. "There is no apparent catalyst to take this market higher at present." [ Read more . . . ] |
| Stocks End Day, Year Lower |
| Posted by webmaster on Friday December 29, 2000 @ 18:22 EST CNBC.com Market News Tax-loss selling hit technology shares on the last day of 2000, pulling stocks to close the day -- and the year -- lower. The Nasdaq Composite closed off 85.78 to 2,471.98, the Dow Jones industrial average dipped 87.97 to 10,780.79 and the Standard & Poor's 500 was off 13.69 to 1,320.55. This marks the worst year in the history of the Nasdaq. The tech-heavy index dropped 40%, the Dow lost 5% and the S&P was down 9%. Analysts hope the market turns around once tax-loss selling is over and bargain hunters come back to the market. [ Read more . . . ] |
| Internet Retailers Switch to Clearing Merchandise |
| Posted by webmaster on Tuesday December 26, 2000 @ 14:33 EST New York Times: Business Market News EToys and other Internet retailers are cutting prices as much as 75 percent to get rid of unsold merchandise after a mixed holiday sales season. KBkids.com and Smarterkids.com, two other Web toy sellers, are also looking to clearance sales to move scooters and Barbie dolls. Amazon.com, the largest Internet retailer, plans to open an outlet store Thursday, while Bluelight.com — the Internet unit of Kmart — expects to reduce prices as much as 70 percent on Tuesday. |
| US Supreme Court Stay Could Give Uptick Monday Morning |
| Posted by stockman on Monday December 11, 2000 @ 03:56 EST Market News Indicators from U.S. securities trading in overseas markets overnight are pointing to anuptick in U.S. equities Monday Morning. Bloomberg.com credits the uptick to the U.S. Supreme Court halting yet another handcount in Florida. Will the uptick fade out? Will it last or will it be knocked down by another post-election squabble extension? The Florida Legislature and the U.S. Supreme court could finally put an end this week to the"Election from Hell" as one Florida restaurant owner calls it. [ Read more . . . ] |
| Is It Too Late for a Year-End Rally? Can A Battered Market Recover? |
| Posted by stockman on Tuesday December 05, 2000 @ 03:46 MST Market News Many analysts think the post-election recovery is not going to happen. Yet, Al Gore's conceding the election seems inevitable. Rex Nutting at Market Watch noticed a series of "Bush" mini-rallies recently. As a student of the Constitution and politics, I was drawn in by this rare, historic phenomenon. Today, for example, a "Bush" bounce came "after two election rulings greatly boosted Texas Governor George W. Bush's chances of winning the White House," says Nutting. Apparently, most sectors of the market surge when Bush gets a ruling and decline on Gore's appeal or new uncertainty. This spectacle is unparalleled in the history of the U.S. and the history of markets. When Gore announces his concession, traders are saying, we could be heading higher. [ Read more . . . ] |
| Al Gore's Legacy to U.S. History: The 2001 Recession |
| Posted by stockman on Monday November 20, 2000 @ 16:55 MST Market Commentary We are all saddened, fellow smartstocks members, by this month's events. I read email after email from thousands of you--teachers, realtors, senior citizens, contractors, moderates--and they are in essence the same. The Al Gore recession is getting started, and it's costing us much more than he was ever worth. Some $1 trillion in market capital has been destroyed since he took back his concession call to G.W. Bush on that fatal morning of November 8. Instead of thinking of the country,the retirees and workers with 401k and stock plans, or our well-being as a nation, he battles still even after losing two recounts. I voted Nader so I don't have a bias for either of these two mediocre men. I can objectively see what happened, and, as an American I want the destruction over with. This episode is tragically fatal because it killed the Long Boom of the 1990s. "We need some political certainty," Linda Jay, floor trader at RPM Specialists, told CNNfn's Market Call. "This political uncertainty is killing us," she said. More painful than our sacred democratic institutions failing is the fact that more people will lose their jobs or be forced out of retirement because Al Gore gave us this gift.The worst year for the S&P 500 since 1981, right about the time that Al Gore invented the internet. Ask him to call off his lawyers and stop this destruction of our economy we worked hard to build-- townhall@algore2000.com. Disagree? Sound off at me: stockman@smartstocks.com [ Read more . . . ] |
| USIX Allies with Microsoft; Lands $300 Million from New Investors |
| Posted by stockman on Wednesday November 15, 2000 @ 02:36 MST Market News Recent uncertainty over USinternetworking's cash flow appeared to beresolved Tuesday. The firm announced $300 million in outside investment, including a $50 million cash injection from Microsoft. The company's backlog and sales growth have been surging, but uncertainty about growing too fast for cash flow have been pressing the stock downward for months. The business looks solid through breakeven in early 2002 and USIX stands as the now well-funded market leader among the booming Application Service Providers. With the news, the stock surged and Merrill Lynch upgraded the stock to "Buy." I'm glad I never sold a share, although my shares are down over 80% since earlier this year.I'm adding to my position in USIX. Now that the Florida situation has the end in sight (Saturday), most of the bad news is priced into U.S. stocks and we could hit the usual November-January uptick. Disagree? Email me:stockman@smartstocks.com [ Read more . . . ] |
| U.S. Election Chaos Bludgeons U.S. & World Capital Markets |
| Posted by stockman on Friday November 10, 2000 @ 03:20 MST Market Commentary George Washington's and Wall Street's worst nightmare came true on Tuesday. Instead of a democratic order for the transfer of power, the U.S. election results gave us collective chaos. The country is fractured. From an investor's point of view, no scenario could be worse than weeks or months of emergency recounts and court battles. The market will worry until one of these two goobers emerges as the undisputed, legally valid winner--if that ever happens. The U.S., ironically held up as the bastion ofdemocracy to the world, now faces a long, destructive string of court battles now challenging election results in at least 6 states. Campaigns are not only suing each other, but the networks that arrogantly and erroneously declared Florida for Gore, tossup, Bush, then noone. These corrupt media channels sought ratings and revenues by being the first to call the election, and they openly admit they influenced millions of late and West coast voters, costing us a valid election. This arrogance, if History repeats itself, will come back to haunt the political juntas at CNN and the networks for tainting our election. The spin clearly hurt Bush in the West Coast voting, which was only half done when the idiots at CNN were calling the election for Gore by calling Florida. We need a law preventing such media manipulation of Presidential elections. Historically, we usually we get a nice post-election bounce after Presidential Elections no matter who wins because uncertainty is washed out of the market. The current legal firestorm could last for weeks or longer and, you heard it here first, could catalyze the first U.S. recession in a decade. No, I'm not joking. The painful destruction of capital swept across the Pacific Rim and Europe Wednesday, deepening further Thursday. Major IPOs and capital issues are being cancelled or postponed, drying up new capital spending. The ending legacy of the battle of "I invented the internet" Gore and "I am not that dangerous" Bush changed from "Liars and idiots, take courage. You could be President someday" to "The world's leading democratic system failed." Until we get a definite winner, this bloody uncertainty will continue to weigh down on world capital markets. For U.S. investors, this is the most tragic Presidential election outcome in the nation's history. [ Read more . . . ] |
| A Bounce Around The Corner? |
| Posted by stockman on
Thursday November 02, 2000 @ 21:03 MST Market Commentary After all the uncertainty of the closest election in 40 years is washed out next Tuesday, the market will have a reason to rise. Barring any dramatic changes in market conditions from today, I feel comfortable with the projections I'm seeing from analysts at Prudential and other top tier firms that the NASDAQ could shoot back over 4,000 and the Dow over 11,800 in the next 60 days. November, December, and January are the healthiest months of the year, speaking historically. A non-gridlock, Republican sweep of the White House and both houses of Congress would be perceived positively by the markets. Bush's plan to pump Social Security money into stocks and tax cuts point to an even longer list of stock buyers in the coming generation, feeding more fuel to the fire. |
| Market News |
| Posted by stockman on Saturday October 28, 2000 @ 11:46 MST Market News Thank you again for your two years of support of our grass-roots revolution of investor education. These are amazing weeks. A little market history would serve us well. September and October are historically weak months. A lot of my friends think I'm crazy saying "fall, NASDAQ, fall!" when the vast majority of my assets are invested in NASDAQ stocks, packaged securities and subindexes. So, am I crazy? Well, those of you have been joining my newsletter by the tens of thousands must hope I'm not insane. =-) I'm not insane. I just happen to know that a good sharp correction (10 to 25% decrease from 52 week high) can be a great reality check on a bull market:
--It drives out daytraders and speculative money. If you haven't learned by now, daytrading is a good way to underperform and ruin your peaceful life. Wade Cook is an idiot and is now defending himself against some serious criminal allegations. You shouldn't be concerned with timing the market, but time in the market. Looking to enter for the long run? Hey--late August through late October have been the best months to do so on average according to Ibbotson, the famous market research gurus. Follow me here skeptics: 5 or 10 years from now, what will you be glad you owned? Chevron or Cisco? Coca-cola or Sun Microsystems? Where there is no vision, the investor perisheth. You'll notice that Sun Microsystems (the largest holding in my portfolio) killed expectations this quarter. Earnings grew 88% over last year, blowing away expectations as they have all decade long in the face of some loud, academic naysayers. You should never have everything in the stock market. A 6 month emergency fund in a cash management or money market account is what I recommend to clients. And if individual stocks stress you, then buy an index and go golfing! Just remember to buy and hold. A word of warning: be cautious with the Krispy Kreme Kraze. I'm not buying the stock--it was pricier than Cisco, the godfathers of U.S. Technology, last time I checked. This consumer stock has nowhere to go, although I love the donuts. Makes a great short sell. Think I'm wrong? Say so! |
| Nasdaq Drops 5.5% |
| Posted by webmaster on Wednesday October 25, 2000 @ 23:56
MST Market News This was the steepest drop since May, and the ninth worst point drop ever. The Nasdaq cannot seem to decide if it wants to go up or down, and we are seeing big swings in both directions. Earnings seem to be driving the latest swings with Nortel Networks' disappointing results. The Dow Jones escaped much of the selling happening on the Nasdaq by only closing down 66.59 points. [ Read more . . . ] |
| Nasdaq Reaches Third Biggest Gain Ever! |
| Posted by webmaster on Thursday October 19, 2000 @ 18:50 MST smartstocks.com Update Third quarter earnings surprises from Microsoft, Sun Microsystems, and Nokia helped boost the Nasdaq 247 points, a 7.79% gain only slightly outdone by last Friday's 7.87% increase. The Dow Jones industrial average also surged 168 points to close once again over 10,000 after dropping below the mark on Wednesday for the first time since March. [ Read more . . . ] |
| E-mail is now working again |
| Posted by webmaster on Tuesday October 10, 2000 @ 15:10 MST Market News Smartstocks.com e-mail is back up and working again. However, you will need to re-create your account. Sorry for the delay in service. [ Read more . . . ] |
| smartstocks.com E-mail Temporarily Unavailable |
| Posted by webmaster on Tuesday October 03, 2000 @ 12:40 MST Market News smartstocks.com is having temporary e-mail problems. smartstocks.com e-mail service will be unavailable until Friday October 6th. We are doing everything we can to get it up and running as soon as possible. everyone.net, our current e-mail hosting service is removing the smartstocks.com account due to a disagreement over advertising. We will be setting up another e-mail hosting service by Friday that will provide the same mail functionality with the same usernames and passwords, so your future e-mails will be received without any problems. However, none of the mail that is in your current folders at everyone.net will be saved. If you would like to send a letter of complaint to everyone.net or to request information from your e-mail folders or address book (No guarantee they will comply) then enter a message through their e-mail form at http://www.everyone.net/main/html/webforms_gen.html or send an e-mail message to support@everyone.net |
| Packaged Securities: Why You've Never Heard of 'Em |
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Posted by stockman on Sunday September 24, 2000 @
00:02 MST Market Commentary No one tells you about a lot of good things in life for one simple reason: it's not in there best interest to tell you. That is the case with bundled or packaged securites. They are not as boring as they sound.Did you know you can buy whole sectors of the U.S. Economy and literally own the sector rather than trying to pick winning companies? My friends, let me explain... Ticker symbols like xlf and xlk trade like stocks. They are actually sectors of the S & P 500, America's most prosperous large companies, bundled together for your trading convenience. XLF is the financial sector spider, while XLK represents the financial sector. IIH, BDH, HHH, IAH, TTH, BBH, and PPH are a unique variety of packaged securities called "HOLDR's." They represent the top few companies of their industry:Internet Infrastructure, Broadband (those were my two favorites), General Internet, Telecommunications, Biotechnology and Pharmaceuticals, to be exact. Bad news: These only trade in lots of 100 shares. Good news: They give you ownership of the industry with 1/10 the fee of a mutual fund. More good news: If you have an account with Merrill Lynch, then you can even exchange these "HOLDR's" for the stocks they represent--with no tax change--allowing you to dump a loser or stock up on more of a winner of your choice. You can do better than the S & P 500 by picking the winning industries and dumping the low growth mining, cigarrette and logging stocks that most index holders (including you) probably don't even know are in there.Want to know more? Write me a note: stockman@smartstocks.com [ Read more . . . ] |
| Intel Drops 21% on Warning |
| Posted by stockman on Friday September 22, 2000 @ 01:02 MST Market News Intel fell sharply today after a negative preannouncement on its third period earnings due to European weakness. The chip stocks were dragged down with it. Is this panic selling justified? After all, many believe the Euro problems cited in Intel's warning are temporary and will pass. What do you think? Drop me a line: stockman@smartstocks.com [ Read more . . . ] |
| Sun Microsystems: A Strong Buy Indeed |
| Posted by stockman on Friday September 08, 2000 @ 00:59 MST Market News Now my largest stock position, Sun Microsystems has been on a tear. Some ask me why I'm not selling. I see the company as a dominant player that serves up proprietary technology to an exploding industry. No one can beat Sun's Solaris line in the high-end server & network space. Management is proven. Sales growth is strong, and each sale scaling nicely into fatter and fatter margins each quarter. [see zacks.com for financial statements]. These guys are the arms dealers to every serious company waging war on the web. [ Read more . . . ] |
| Smartstocks.com: 2 Years Running |
| Posted by stockman on Tuesday August 29, 2000 @ 00:40 MST smartstocks.com Update In a couple short months, we will commemorate 2 years of running smartstocks.com. I want to use this event to say thanks to all of the students, programmers, professors and investment gurus (Kevin, Jeff, Dave, Ross, Dan, Matt, Norm) who have given us support & advice (Josh & Joe at First Capital), and especially the thousands of you who use our site. You helped make my dream come true. We are planning another get together like last year...details to come. [ Read more . . . ] |
| Semiconductor Equipment Stocks Look Good: Applied Materials Announces It Doubled Earnings |
| Posted by stockman on Wednesday August 09, 2000 @ 17:39 MST Market Commentary The Big Daddy of Semiconductor Equipment companies today beat the Street's expectations on earnings. Applied Matierals (AMAT) showed earnings that have doubled since a year ago. Additionally, they rose their gross margin from 50.1% to 50.9%. Higher sales and more profit per sale--that makes for happy investors. Also, this stellar performance indicates strength across the industry. [ Read more . . . ] |
| Roaring Productivity: Fed Interest Rate Hike Very Unlikely |
| Posted by stockman on Tuesday August 08, 2000 @ 14:34 MST Market News The productivity numbers released today could not have been better. The indicator rose to an astounding 5.3 per cent annualized rate from a 1.9 per cent rate in the previous quarter. In yet another boost for tech shares, Cisco smashed revenue estimates after the bell and beat earnings expectations, as they have done every quarter since going public over a decade ago. Conclusion: if you doubted Alan Greenspan, me, John Chambers, Harry Dent, or other widely-criticized proponents of the hyperproductive New Economy, you were on the wrong side of history. [ Read more . . . ] |
| Chip Equipment Sales Soar |
| Posted by stockman on Tuesday July 25, 2000 @ 13:00 MST Market News A Japanese report indicates that Semiconductor Equipment Sales more than doubled this year over last year. This news bodes well for holdings in my sample tech portfolio such as PMC-Sierra, Altera, and Atmel. Separately, housing continued strength, surprising analysts with a 2.8% surge in June. [ Read more . . . ] |
| Stockman Here, Checking In From The Middle East |
| Posted by stockman on Thursday July 20, 2000 @ 13:12 MST Market News Hello there, fellow smartstockers. I am currently touring the Middle East. I found a net terminal in my hotel here in Galilee, Israel. I just wanted to say hello and thanks to the thousands and thousands of you who have made this site such a tremendous success for nearly two years. Ma Salama! [ Read more . . . ] |
| NASDAQ Blows Through 200 Day Moving Average |
| Posted by stockman on Saturday June 03, 2000 @ 15:14 MST Market News This week's record 18.9% rise in the Nasdaq was capped friday when the Nasdaq surpassed its own 200 day moving average, setting off rumors that the spring downturn may be finished. [ Read more . . . ] |
| smartstocks.com Services Updated |
| Posted by stockman on Wednesday May 31, 2000 @ 10:43 MST Market News The bandwidth update has been completed without a hitch. We have switched service providers to increase our traffic handling capacity and speed. We have also updated some site functions like the send password function which some of you reported was not working. Keep on sending us notes with things you find that need work or suggestions on how we can improve. |
| Three key reasons for the recent Nasdaq fall: |
| Posted by webmaster on Thursday May 18, 2000 @ 16:17 MST Market Commentary According to Robert J. Froehlich the Vice Chairman of Kemper Funds Group, the three key reasons for the recent Nasdaq fall are: 1. Margin Calls. 2. Capital Gains Tax Lock and 3. Tax Day. (Click "Read more" link for the entire article from CNBC.com) Margin Calls -- Buying on margin sounds great until there is a little correction in the market. Once the market finally started going down all of those investors out there who were investing with other people's money had to sell, even at great losses in order to cover their margin calls. Capital Gains Tax Lock -- In 1999 the Nasdaq was up an unprecedented 86%. In Q1 2000 when the market dropped 30% investors feared further drops in the market, so they sold to lock in their 56% gains for the 1999 tax year. Tax Day -- Those who owe taxes generally do them early and then wait until April 15th to send off the check to the IRS. In the past, these people would leave their tax money in the bank, or a Money Market account. However, this year these tax-paying investors decided to get a little more return out of their money by leaving it in the market before sending off the check to Uncle Sam. Unfortunately the market went down, so these investors had to sell more than they were planning in order to cover their tax bill. Fortunately, this correction is not due to a slow economy or lower than expected earnings. This correction is an entirely market-driven correction that has no time-line associated with it because it is not due to earnings or economic data. In the past few market-driven corrections, the market rebounded as fast as it fell, so don't miss the coming rebound. [ Read more . . . ] |
| Quarterly Tech Earnings Fly Higher Than Ever |
| Posted by stockman on Wednesday May 17, 2000 @ 15:59 MST Market News Despite the Nasdaq's decline, earnings growth within the tech sector is double that of any other sector. Take a look at a packaged security I like, ticker IIH. It is a bundling of the 20 largest internet infrastructure copmanies, and it trades like a stock or a sector spider. Smartstockers, packaged securities are worth investigating as they are not managed and have little or no holding fees. The growing earnings momentum in tech firms prompted Morgan Stanley to announce in a letter to investors this week that 73% of tech companies beat consensus Wall Street expectations this quarter: "Over 85% of the companies in our tech universe have reported. The universe consists of 373 primarily US technology companies. 73% of these companies beat expectations, a historical high for our study. 11% reported in-line results, while 15% reported earnings disappointments. The 15% miss rate is a historical low for our study. For the sixteen rolling quarters ending in Dec 1999, the average miss rate was 28%. Last quarter the miss rate was 19%. Sectors with the highest upside surprise rates were: Semiconductors (85% vs. 57% in C1Q99); Semiconductor Capital Equipment (80% vs. 68%); and Internet & PC Software (78% vs. 70%). Sectors with the highest miss rates were: Technical Software (30% vs. 23% in C1Q99); Data Networking/Internet Infrastructure (28% vs. 27%); and Server & Enterprise Hardware (22% vs. 30%)." This report is more evidence supporting the case I've been making since I started this site in 1998: the long-term growth investor cannot outperform without core technology holdings. Even conservative analysts' projections now indicate that tech earnings growth will not dry up through at least 2003. And you thought the tech party was over... --stockman@smartstocks.com [ Read more . . . ] |
| Waiting for Greenspan |
| Posted by stockman on Friday May 12, 2000 @ 09:00 MST Market News All major U.S. indices have been trading sideways so far this month, as investors await the anticipated interest rate hike on May 16th. The futures markets have already priced in the 70% chance of a 50 basis point increase in the Federal Reserve's benchmark interest rate. Trading volumes have been notably light, leading traders to attach little meaning to wild ups and downs of late as many players are simply not playing. Higher PPI numbers have been giving hints of inflation in the first quarter of this year. [ Read more . . . ] |
| Mary Meeker Speaks Out On Amazon |
| Posted by stockman on Friday April 28, 2000 @ 11:47 MST Market Commentary It looks like Mary Meeker, Wall Street's most influential tech analyst, is touting the first mover and other advantages driving Amazon.com's successes that I've been criticized for believing as a shareholder since 1998. Today she said, "AMZN reported C1Q00 revenue of $574MM (up 95% Y/Y, down 15% Q/Q in a seasonally weak quarter), ahead of our estimate of $541MM. Gross profits were $128MM, with a gross margin of 22.3%, ahead of our 19.5% estimate. Operating loss was $99MM, better than our $105MM estimate, and significantly better than the $175MM loss in C4Q99. Operating EPS of $(0.35) was better than our estimate and the First Call mean of $(0.36). We believe that C4Q99 was AMZN's worst quarter in terms of operating loss, and the key thing to watch for going forward is improvement relative to that performance. That said, we are encouraged by the C1Q results -- operating loss declining $76MM Q/Q to $99MM -- although we do not believe AMZN is out of the woods yet. A key challenge for AMZN going forward will be reducing operating losses Q/Q as a percent of revenue and in absolute terms. Two customer lifetime value indicators improved nicely in C1Q. 1) Trailing 12-month sales per active customer (one who purchased during the past 12 months) was $121, up from $116 in C4Q99 and $107 in C1Q99. The success of AMZN's long term business model is highly dependent on increased wallet share, and we believe we're starting to see the first signs of this. 2) Customer acquisition costs (sales and marketing expenses, excluding fulfillment, divided by new customer adds) declined from $19 in C4Q99 to $13 in C1Q. Note that these costs are among the lowest of any major Internet commerce company and demonstrate the power of AMZN's brand and first-mover advantage. AMZN's position is one that few e-commerce companies will ever be able to achieve. We maintain our Outperform rating. [ Read more . . . ] |
| Techs Looking Better |
| Posted by Large_Cap_Man on Thursday April 27, 2000 @ 08:35 MST Market News The techs are starting to look better and we may have established a short-term bottom in the market. However we still need to proceed with caution in the market. All eyes are looking over the strong GDP and ICE numbers. How the market reacts to these numbers will give us a good idea if this most recent rally has legs. Large Cap Man is begining to scale back into some positions, while still remaining cautious. |
| Infrastructure Over Content: Gold Rush Winners Sell Picks, Shovels, and Levi's |
| Posted by stockman on Wednesday April 26, 2000 @ 19:01 MST Market Commentary As I've said before in this column, the smartest people of the Gold Rush of 1849 weren't gold miners--only a few of those scraped together a profit. The biggest winners were those companies selling the picks and shovels and Levi's that every miner bought and used. The analogy is not so distant from today's Internet Gold Rush. It's easy to spot some high-profile losers. Pull up a chart on KOOP, MPPP, TGLO, SEEK, or XCIT. All these guys try to sell ads on top of their non-exlusive, commoditized content. GOTO, Ivillage, and GNET will soon follow. How many search engines do we need? There are 9,000. Yahoo gets about half the searches, and the other 8,999 divide up the rest. On the other hand, the "picks and shovels" salesmen of our day are those leaders who provide the software (like ORCL), Server Hardware (like SUNW and DELL), Routers, Hubs, Switches & Networking Equipment (like CSCO), Commerce Software and Hosting Platform Providers (INSP and EXDS), High-end Chip, customizable Application Service & Transatiction software providers (like SEBL & USIX) Programmable Logic and ATM Hardware Providers (like PMCS, ATML, XLNX, MXIM & INTC), Broadband & Optical Equipment providers (like Qwest, LU and JDSU), Wireless infrastructure and software leaders (like QCOM, NOK, NXTL & RIMM) and storage software and hardware providers (like EMC). That's why I, as the CEO of Smartstocks.com, Inc., repositioned our offering months ago as a software builder and hoster rather than a content play. We build the stock games and stock quotes for those web businesses and institutions who want it on their site. This game is merely a successful sample of the huge, scalable community that can be added to any corporate or educational website. --stockman@smartstocks.com [ Read more . . . ] |
| The Volatility Era |
| Posted by stockman on Tuesday April 25, 2000 @ 20:32 MST Market Commentary The Nasdaq successfully tested the 3500 support level monday, and gave us a sizeable bounce today. And the buying is not irrational--two thirds of the S & P 500 companies have now reported earnings, and 71% of those have exceeded expectations. The earnings in "Old" and "New" Economy stocks have given us factual support for the continuation of the longest Bull Market in U.S. history. We're not out of the woods yet, though. The summertime is seasonally weak, especially for technology stocks. So, we will probably retest the 3500 and 3300 support levels again this year. In other words, I expect the NASDAQ to continue its bizarre 5 or 6 per cent daily swings in both directions. It may be a while before another NASDAQ runup. Now you know why financial professionals get nervous when 2 or 3 years worth of gains come in 3 months. It's all about earnings. Earnings, baby, earnings. Everything else is just fluff. My tech sample portfolio is still up for the year, by the way...even with all this techno turmoil. [ Read more . . . ] |
| Morgan Stanley Dean Witter's Comments on Texas Instruments |
| Posted by stockman on Wednesday April 19, 2000 @ 15:21 MST Market News TXN has enjoyed a short term rally from a medium-term oversold situation. We look for some additional strength at these levels and anticipate resistance near the 160 area. We see support near the 140 level and consider it important for the medium term. A break beneath support extends the recent correction and gives a new downside target near the 120 level. We look of period of rallies and tests as TXN stabilizes and watch for the emergence of a new base pattern to cue the end of the correction. |
| Don't Get Cut! |
| Posted by Large_Cap_Man on Wednesday April 19, 2000 @ 15:14 MST Market News We saw a very tough day in the market on Friday with possibly more to come next week. Wait for signs of strength before jumping back into the market. Remember how bad you can be cut when trying to catch a falling knife. |
| Research in Motion Is A Bargain |
| Posted by stockman on Wednesday April 19, 2000 @ 15:04 MST Market News RIMM's recent drop from its high of 175 to 44 1/4 has been painful for me to watch. It was a major holding. However, I don't plan on selling anytime soon. Why? 1. 10 major Wall Street firms cover the stock--8 of those still give it a strong buy, 2 give it a buy rating. 2. The fundamentals are there. It's proprietary Blackberry product's sales are growing faster than PALM's--it's main competitor. |
| "Is The Correction Over?" Nope. |
| Posted by stockman on Wednesday April 12, 2000 @ 13:23 MST Market News Not in the Nasdaq, anyway. Despite last week's volatility, we did not crack below the Nasdaq's 200 day moving average. This break will happen sometime during the summer months, which are seasonally weaker for technology anyway. To crack below the 200 day moving average, we will have to go back below 3800 and close there for at least one day. Then, watch out bears--the foundation is laid for a new rally. Response to readers' emails: GE is overvalued and will have trouble rallying now that its prized CEO Jack Welch is leaving. No, Oracle is not in trouble. B2B fears don't apply because Oracle is an infrastructure play, not a content or market maker. I believe the stock is fairly valued now and will do well over the next 12 to 24 months. U.S. Internetworking is still a compelling company. They own a 36% market share worldwide in the emerging ASP arena. The company has renowned management and a bright future. Buy into its current weakness, which is driven more by sentiment than fact. Remember, oh smartstockers, to get a smartstocks.com webmail account and to buy internet infrastructure rather than content providers or e-tailers. stockman@smartstocks.com |
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