SubscribeCan financial bloggers collect unemployment benefits?
August 15, 2007
“I rant and therefore I am”… Andrew Horowitz
Of Mice and Anal-ists
It is awfully irritating to read and listen to the post game shows. FELLAS: we already know that the market tanked! What we need is prediction and pre-market assessments! Unfortunately, it seems that the art of forward thinking is all but dead. This struck me hard as I listened to one of my favorite podcasts yesterday and heard strategist David Goertz from HighMark Capital give his best advice for this market. He went on to give two examples of stocks to own now; Intel and EMC.
Does he think we are idiots? EMC, the stock that spun off one of the hottest IPOs that day. EMC, who would benefit from the 90% ownership of VMWare that opened at $50 from an IPO pricing of $29? Fortunately, he did go on to predict that it would be light during the day and dark at night…
Just a few weeks ago, anal-ists and rye-ters were all singing the praises of this market. They were chirping a lovely tune about the immense amount of liquidity and opportunities ahead of us. Little was said about the growing chinks in the armor that seemed as apparent as the “pink-on-cramer.”
Now, the “experts” on sites like bloggingstocks.com are busy telling us how the market may move lower and it seems that bullish commentary is hush. Thanks! These are the same amateurs that make the same mistakes time and time again only to find themselves out in the cold with no jackets during the winter months.
To be honest, I really wonder if many of the folks discussing the markets are simply out-of-work real estate moguls, now turned investment advisors. Whatever they are, I think that if THE Donald were here, he would surely say…YOUR FIRED!
The Numbers Don’t Lie…
This time around (which by the way is no different than any other time, even though they always say: “it is different this time…”) we are seeing a spike in the number of financially oriented websites along with a slew of bloggers who are benefiting no one. Their hyperbole and hysteria surrounding names like Baidu (BIDU), Apple (AAPL) and Croc’s (CROX) is enough to make anyone feel sorry for their misguided optimism. These are not bad companies; we are simply seeing bad analysis of these companies.
I recall a time that we saw an amazing increase in the number of Series 7 registrations in 1987, Real Estate Agents in 2005 and the record breaking number of CFP applications in 1994. What these have in common is the simple fact that people want in on the action. Greed and Fear, the two most talked about words these days are always at work in the financial arena.
ARMs For The Poor
Now, the record number of financial blogs, podcasts, wiki’s and television shows along with the countless number of money related sites should have been an enormous warning flag. When we allow ourselves to believe the talk of the time and buy into what we know to be counter-intuitive (right, so you believed that 100% financing and interest-only ARM loans posed no long-term problem) a light bulb should go off (actually, 50,000 volts should pass though our body) to remind us that something is not quite kosher.
In the end, these types of market corrections help to wash out the excess. That excess pertains to stock prices as well as the hot-air blogging fad. Watch and wait… I hope at least, for their sake, they will be able to collect unemployment benefits.
* Note: Discussion is somewhat limited to those “part-time” bloggers who write for THEIR own benefit. You know who you are….
China Conspiracy Continues
August 15, 2007
Well, if you are still unconvinced about a convert and concerted effort by US manufacturers and/or our government against China, take a look at these few items that hit the news today..Do I sound paranoid?: (also see previous post on TDI)
COMMENT on this please on what you think….Look for Poll on this later
New York Times Slideshow of China Recalls
Sinkhole Alert - Watch out below!
August 9, 2007
Don’t forget to subscribe to The Disciplined Investor Podcast
(TDI Podcast #21 - Markets in Disarray)
“From tulip bulbs to 1929 through to Asian contagion and the dot-com boom, the bubble crash cycle can be traced back to novelty gone bad.” - Clem Chambers, ADVFN
That just says it all! He goes on to recently say:
“Hello there, trillion-dollar derivative debt markets. If in a couple of years time I’m writing a book called The Crash of 2007, the first chapter is going to be about how these marvelous new debt instruments ended up making a very large financial smoking crater of the world markets. There will be a large section on fraudulent dealings and how billion-dollar swindles were perpetrated and who got thrown in jail forever, who jumped off the skyscraper, etc.”
The problem now as I see it is the developing sinkhole. Underneath the “street” there is a gigantic fizzer that has been quickly eating into the underpinnings and support beams that have been holding up the road above.
The credit crunch that we are aware of has caused many to look around at the bad decision making that has gone on over the past few years by the financial companies involved in the mortgage markets.
Then, the perceived liquidity has started to change as sub-prime lenders have been sucked up by the earth. Early this morning, BNP hedge funds announced that redemptions on 3 of their funds will be HALTED . That is bad. This is on the heals of the Bear Stearns announcement last week. NEVER NEVER NEVER tell investors that they cannot have their money back from an investment. That is a sure fire way to start a classic “run at the bank”. Just a hint of this has been enough to historically create panic. This is now surely going to be the spark that will be heard round the world.
Now for more problems; The ECB announced that they are injecting, or at least is ready to add liquidity if need be to the European markets. How much? UNLIMITED according to the announcement. This caused the EURO to slide overnight. Said another way, the EURO slide will create problems for exports.
Remember, exports have been one of the main reasons that we have seen companies continuing to show good sales numbers. Shut that down and eventually there will be an effect on Earnings.
This and the share buybacks problem is going to sink this market. It is going to swift and painful. We have moved significant money from positions in equities to the sidelines starting July 27th. Each of the “dips” did not seem to be reason to buy, rather more hints that the markets are setting up for more, much more.
Tom Gardner, Motley Fool Co-Founder commented on CNBC this morning that (paraphrase) “even though the credit problems may cause significant problems related to the financial industry. He went on to say that “there are many other sectors that will not be affected by these problems.” HOGWASH!
That is the stupidest and most irresponsible statement I have heard of late. Is he proposing that if liquidity dries up and there is a implosion in the financial sector that it won’t be felt by other areas? Bombs blow up and Read more
Crocs - Riding the Rollercoaster
August 6, 2007
I am starting to think I am a Croc’s (CROX) hater or something. Actually, that is not at all true, I am only looking to assess the landscape to see if there is an opportunity to profit on the move of a stock. These days this is the one that has caught my eye with great interest. Many are not happy with me. That is okay. In fact, the more comments and replies that are linked to my rants, analysis and posts, the more I think that there are many shareholders whose engines are revving to high about this.
And for Pete’s sake, it is a stock, not a child or spouse or a parent. DO NOT FALL IN LOVE. That is one of the most important rules out there. Sure, I have been stubborn and negative on this through a nice rally. During that time, shorting into the peaks (as opposed to buying on the dips). The eventual covering has turned out to be generally profitable. Would a buy and hold have been MORE profitable?… YES YES YES.
But, I am still inclined to believe that this stock is running on fumes even with the tremendous quarter they just had. There is a great deal of “love and lust” that had been moving this stock recently. Just look at the real action of the shares after the earnings announcement.
As many predicted, the shares shot up after the earnings came out. If you look closely, the stock initially traded towards $62 that night. That was for a brief moment though. From there, Read more
CNBC Cheerleader Poll
August 6, 2007
This morning (Monday 8/6), three guests on CNBC, Farell, Santoli and Barbera talked openly about the credit markets and that the markets may go through a rapid adjustment of the credit markets and ultimately the equity markets. All the time, Joe Kernen was giving the contra view and continually injecting that the markets could move up. He was almost searching for a positive spin no matter what was said. Siss-Boom-Bah, Go Markets Go Markets Rah-Rah-Rah!
In the TDI Podcast 21, one of our guests told us that his firm has “outlawed” CNBC in the office.
My only other observation on this is one of regarding the morning comments on market futures. It seemed that as the futures were up ad moving higher, the pre-market morning host would give updates quite often. As they moved sharply lower throughout the morning, the updates were discussed less and less. Now, don’t let me sway you, tell us what you think….
How do you feel about CNBC? Are they reporting the news or market cheerleaders?
[poll=4]
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