Thursday, January 24, 2008

Earnings Update

Posted by TraderMark at 5:58 PM TweetThis
Quick look through the names yesterday mentioned

Nokia great, Broadcom great, Juniper great, Microsoft great

I thought the world was ending? Hmm... that's what the pundits told me. Strange to see otherwise. Or at least not until 2 weeks from now when we can begin hand wringing and panic cycle all over.

MEMC Electronics should put a spark under the solar names

Drug research outsourcing is just incredibility hot - Parexel (PRXL) is the last to just explode with great earnings. These stocks really interest me, but I've held off due to valuation for the past 8 weeks; they just continue to go up and held up very well in this last selloff.

Tomorrow is a quiet slate, with some companies I am not too hot on, but Microsoft's report should buoy the market.

Caterpillar (CAT) could throw a wrench due to construction business, Harley Davidson (HOG) has been in a tough spot and is the prototypical consumer discretionary stock that this economy will hurt but in "Fed cuts solve everything" thinking we have the past 2 days I guess it might say something people will like (but needs to be shorted on each spike), and then another solid industrial name in Honeywell (HON). Nothing too exciting here but some big names certainly in CAT and HON.

I'm going to stay relatively constructive through the Fed meeting next week but from there will be going to a more cautionary stance. We've used up a lot of catalysts here in the past few days, and within the context of a bear market the spikes will be very violent but still need to be sold. So we'll look to build up the Ultrashort and cash positions more next week, and start being more cautionary. I don't really want to do wholesale selling in the long positions for a bit more since they dropped to such panic levels that valuation are extraordinary (and nonsensical) so they still can make very large moves just to get back to a "fair level" value.

It still will remain a very interesting upcoming months and I think "buy and hold" investing right now is not going to work very well; it surely hasn't since last summer....

Posted by TraderMark at 5:58 PM Comments (5) | Edit This Post | Create A New Post

5 comments:

d said...

I did not think it would come to this, the government is going to inflate us out of a recession before we are even in one. With prospects that the FED (helicopter Ben)will lower again next week and the Congress and President (both clueless)literally throwing money at the economy we will avert a housing depression and get rampaging inflation sometime in the next 12-18 months. I figure that the the stock market will be zooming higher starting today, using good earnings from MSFT & ATT as an xcuse. Why worry be happy. An aside: Would Paulson be welcomed back to GS if he was responsible for reducing market capitalization?

January 25, 2008 6:12 AM  
d said...

Additionally, look at today's price increases for gold and platinum; as of 6:40AM EST they were up $22 and $57 respectively. Inflation anyone?

January 25, 2008 6:42 AM  
Pankaj said...

Would like to share this piece and seek thoughts in general -

India Min:India,China Unlikely To Offset US PlungeLast update: 1/25/2008 6:59:52 AM

(Adds details and background on sovereign wealth funds.)
DAVOS, Switzerland--India and China are expected to post healthy economic growth rates this year, but it's unlikely the two Asian economic giants can offset a major downturn in the U.S. economy to keep the global economy going, Indian Finance Minister Palaniappan Chidambaram warned Friday. "We (India and China) can help, but I don't think we can make up for all the lost consumption in the U.S.," if America's economic woes deepen, Chidambaram said at the World Economic Forum in Davos. U.S. domestic consumption amounts to around $9 trillion, towering over Chinese and Indian internal consumer demand, which together are just $1.75 trillion, the minister said. Chidambaram said he still expected the Indian economy to grow by 8.5% this year. "I don't think we will be hurt unless there is worldwide catastrophe," he added. India has no plans to launch a state-run investment vehicle to invest in overseas assets, Chidambaram later told reporters. "We still have no plans for a sovereign wealth fund," the minister said. Chidambaram said India had plenty of other uses for its billions of dollars worth of foreign exchange reserves other than a state investment fund. India is one of the few fast-growing economies not to have a sovereign wealth fund. Such funds, in China, Russia, United Arab Emirates and other countries, have been investing a fast-growing amount of their nations' big foreign-exchange reserves in higher yielding overseas assets, like U.S. banks, relative to traditional investment tools like U.S. government bonds. Countries with sovereign wealth funds have accumulated huge foreign-exchange reserves in recent years of over $2 trillion, according to a number of market estimates. The role of state-run investment funds has come under the scrutiny of Western governments and institutions, like the International Monetary Fund, due to concern about their transparency and motives. The U.S. and European governments also want assurances that their investors have equal access to countries with state-run funds that are investing in America and Europe. -By Spencer Swartz, Dow Jones Newswires, 44 7909 527 892; spencer.swartz@dowjones.com

Cheers.. AJ

January 25, 2008 7:12 AM  
TraderMark said...

d, these are things predicted since blog inception. To get out of a slowdown caused by credit implosion, one opens the spigot to more credit. Inflation be damned. Those on the lower rungs of society will be sand blasted out of this economy with inflation.

AJ, I believe I have been saying that same thing for a long time ;). I do think their domestic economies will still be fine (Chindia), but just slow down from current pace. In no way can it offset Japan, W Europe, and US slowdown. But each year that passes more of world GDP will pass to those countries and less to the former group. So when this happens in 20 years it won't matter quite so much. Or maybe when China sneezes the US will catch a cold ;) But for now, still the reverse.

January 25, 2008 9:49 AM  
TraderMark said...

Hi, if you believe the economy will turn up in 6 months, it would be a perfect time to buy HOG. I don't really believe that so I think mroe downside to go.

January 27, 2008 7:45 PM  

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