30 April to 9 May 2005 Vacation Comment
Thoughts
That’s right folks. We are heading out for a full week’s
vacation with no comments posted on the website until Monday May 9th. We
can use the time off and we are sure the markets will survive without us.
*****
We know the markets are at an
inflection point and next week is a big news week with the FED expected to
raise rates on Tuesday, retail sales on Thursday and the Employment report on
Friday.
But, we are as fully invested as
we want to be for now. The Model has less that 10% cash and many accounts are
15% or less cash. We own stocks that we think offer good value and have been
purchased at attractive prices in relation to where they sold in the last three
years.
Today we added shares of EL, NCC, EK, TLB HAIN, BSX, and ABS to increase or add to accounts that
didn’t own these stocks.
The last two hours of Friday’s
trading were as topsy turvy as the whole week. Crude oil fell $2.05 to close below $50 at $49.72. This set off a rally in stocks that had the
DJIA up 110 points at 2pm. But then,
not able to stand prosperity, stocks retreated entering the final hour of
trading as the war between the bulls and bears and month end mark-ups flared.
The bulls managed to carry
the day while the bears won the month
and the year so far. At the bell the DJIA
was up 120 points at 10190. The S&P
500 gained 14 points to 1157 and the NAZZ
closed 18 points higher at 1921. Breadth
was 2/1 positive on the NYSE and slightly so on the NAZZ. The Treasury ten-year ended the week and month at
4.20% and the five-year was 3.90%.
There were almost 400 new lows today.
We have no idea what the Fed will
do next week although we presume they will raise rates to 3% and keep the same
language. There are folks predicting the end of Western civilization if the Fed
doesn’t suggest it is going to wait and watch after this next raise. We would
be delighted if the Fed used such language but we aren’t holding our breadth.
At Alan Greenspan’s age he is happy to wake up in good health in the morning
and everything else is secondary so the words he plays with when he talks are
just his way of ‘funnin’ the public.
There are folks comparing the
present markets to 2002 and the collapse. We don’t think so, but that’s what
makes a market and so we are reviewing all the stocks we own for your reading education
and edification. We may not have purchased them at this year’s lows but we are
very comfortable with the stocks and the prices at which we own them. We expect
these stocks to lead us back to the Promised Land. We promise.
*****
Albertson’s is a large grocery chain that is Albertson’s out west
and Jewel/Osco in other parts of the
country along with other local names. The lowest
price it sold at in the break of
2002 was $19 and we own at $19.75. Between 2002 and now the shares sold as
high as $27 and at current levels the stock yields 3.7% with the share price at
15 times depressed earnings.
Boston Scientific is about
double where it sold in 2002 and at half
the price it sold earlier this year. BSX is the leader in coated stents for
heart patients but is losing share slowly to Johnson and Johnson. JNJ bought
into the coated stent business and we are guessing that another large drug
company might want to do the same. If not the shares are currently priced at 12
times this years earnings.
Bristol Myers Squibb is yielding 4.3% and selling at 20 times depressed
earnings. Nothing is going right for them and that is why the shares are priced
at these levels. In 2002 the lowest
BMY sold was $40 per share versus
the current $25.
Brocade Communications is a speculative tech stock that will survive
and will eventually get back to our cost price in the next big rally whenever
that occurs. At its low in 2002 BRCD
sold at $14 and since then the
lowest it has sold is $3.75. The company is profitable and is selling at 10
times this year’s earnings projections. Their specialty is memory and we are
guessing that the blowup of IBM
affected the share price of BRCD since IBM is a large customer for BRCD. The
company is in good shape financially with $350 million of convertible debt at
2% interest due in 2007 as its only debt. The company has net cash of about
$200 million.
Eastman Kodak is slowly making the transition to digital as are we
all. In 2002 its low price was $24.59 and we own at $27 and lower. We own for a
trade having purchased on the sell off from $32 at the last earnings report.
The shares are priced at 11 times this year’s earnings.
Estee Lauder is a high quality cosmetics company selling at 1.2
times sales and off 20% in the last two weeks. We own to trade or hold
depending. Its low in 2002 was $30
and we own at $39.
Fifth Third Bank is a Cincinnati
institution that is expanding through out the Midwest
and into Florida. It is priced at
13 times earnings with a 3.2% yield. The
lowest it sold in 2002 was $53. Banks should be beneficiaries of any
slowdown in the economy if that causes the Fed to put a hold soon on interest
rate increases.
Hain Celestial is in the organic and specialty food and teas business.
Heinz own 20% of the stock and has said it will have to write the share price
down at the end of this year or….. It is our thinking they may or….. We have
profitably traded the shares for the past few years. We would like to buy more
in any sell off next week on lousy earnings. In 2002 the shares sold at a low of $18 which is where they are
currently trading.
JP Morgan Chase Bank One First Chicago American National Lake Shore
Bank etc. is a major money center bank that has grown through and
aggressive acquisition program and is currently digesting its purchase last
year of Bank One. The shares yield over 4% and are priced under 12 times earnings.
In 2003 JPM sold at $18 but it was a
different entity then than it is now.
Lucent Technology is a low priced stock that used to be a high flyer.
At it current level is selling at 1.2 sales and earns money. One problem is
that institutions won’t buy stocks under $10 and reverse splitting the shares
would not be wise. So the stock tends to trade between $2 and $5 since the tech
bust of several years ago. LU sold at 55
pennies like British stocks do back in
2002 when the end of the world was expected.
Netflix is a speculation that provides DVD movies by mail that are
ordered online. We own in small amounts in aggressive accounts. NFLX sells at
one times sales and lost money in the latest quarter as it spends its cash flow
to increase its customer base.
National City Corp is a Cleveland
based bank that is either an acquirer or aquireree. The shares yield 4.1% and are
priced at 11 times growing earnings. $28
was the low in 2002 versus a current and owned price of $33.
SBC is one of the three Baby Bells that managed to make it to
adulthood. SBC owns 60% of Cingular Wireless. Shares yield over 5%. $19 was low in 2002.
Schwab is the largest discount broker. Charles reassumed the reins
last year and at 67 he is no spring chicken. SCH has over $1 trillion in customer assets on the books. We expect
it to be acquired again by a bank or
larger financial institution. 2002 low was $8 and we own above $10 having
traded for profit from the $8 level last year.
Talbot’s is the women’s retailer that is 50% owned by a Japanese
company. The Japanese company has been selling shares back to TLB as the
company buys in stock. That suggests that for a price….. TLB tends to trade to the mid $20s when it misses a season or two
and then run to the $40s when it is hot.
In 2002 the shares trade to $21 for a brief period.
Time Warner is the old time media cable conglomerate. We like the
unappreciated value of AOL and have owned off and on for the past few years. TWX traded at $10 in 2002.
Verizon seems to be the strongest of the grown up Bells and is
trading $10 lower that it’s high this year with a 4% plus yield. VZ traded at $28 in 2002 and we would
be happy to see it there again so we could buy more shares.
Wild Oats is a trading favorite of ours. Earnings come next week
and will be bad but the acquisition of 10% of OATS and maybe more by now by a Californian who has sold two
grocery chains in the past ten years has peeked our and others interest. We’ll
buy more on any sell off next week.
And there you have it. All the
stocks we own except for NFLX are
old favorites that we have followed for years. We are comfortable owning them
and will be happy to add to most in any sell off. We think they represent fair
value in this market and expect to make good money owning them over the next few
years.
If you are nervous next week with no posts just turn off the TV and
don’t read the newspapers. We’ll be back in a flash. Meanwhile let the games
continue.
*****
29 April 2005 Daily Comment
Thoughts
Microsoft reports after the close tonight and no one is listening.
In the late 1990s MSFT was the stock of earnings season. That no longer is true.
And as markets change so must investment methods.
We sold our TLAB
yesterday because we are trying to wean ourselves from large positions
in tech stocks. From 2000 to 2004 we made our living trading the tech area by
getting out before stocks dropped and then buying near year end to catch the
flip higher after year end. That may work in the future but it was a game
everyone played at the end of 2004 and so there were only losses in early 2005.
We learned our lesson.
Our current portfolio has been
performing a bit better than the major measures both on the upside and downside.
But if the markets tank from here so will our stocks. And if the markets rise
we would expect our stocks to do likewise.
We continue to wait for the
pre-summer rally and are adding big cap issues that we think represent value. Two
on tap for today are Estee Lauder
and Newell both of which disappointed
with earnings last night. How they trade today will be indications if the ‘sell the good and bad news’ trading
action of the past few weeks may have run its course. Bristol Myers also announced less than expected revenues and earnings
but drug stocks seem to be in a different world right now with no one
interested in either buying or selling them.
Overnight Thursday Asia was slightly
higher and Europe is mixed. Oil is off 32 pennies and U.S.
futures are indicating a lower opening for Thursday in the states.
Preview First Quarter GDP was plus
3.1%, chain weighted price index 3.3%, deflator (inflation) 3.2%. Personal Consumption was up 3.5%. Jobless claims were 320,000 so we are back
over 300,000 and that is sad for folks losing jobs. Treasuries are a bps better
on the news and stock futures are off a bit more.
Thursday’s Markets
11:41am and the major measures have been down all day even though
oil is off another $1.26 to $50.35. Treasuries are lower in yield by about 3
bps and breadth is 2/1 negative.
We were blindsided by a switch
from buy to sell on BRCD by Mother Merrill and the share price
dropped 50 cents which is major for a $5 stock now on sale at $4.50. We were
confused on Wednesday when about mid day BRCD dropped from $5.40 to $5 in about
ten minutes. Now we know why. Last week Smith
Barney cut BRCD from buy to hold and that is when the stock dropped from $6
to $5. Again the shares were down before we could act. We presume the two
downgrades mean that the May 15 earnings report is going to be unpleasant but
the 50% drop in price in a week suggests to us that we add a few shares in
larger accounts and stand pat in smaller accounts.
Mother Merrill placed a buy on Veeco
last week before earnings this week and that did no current good as the shares
have dropped form $15 to $13 in this last week. And the earnings report was
punk. So maybe Mother knows no more than
we do and is merely cleaning shop is NAZZ tech stocks because the pain is so
great.
But in keeping with our reduce
tech mantra we are selling our Micron
for a 10% or less loss to hold BRCD
with a 50% loss. We are buying additional shares of BRCD in some larger accounts
spending half the dollars raised in the MU
sale to do this so that even in buying we are in effect lowering our tech
exposure. BRCD is in networking and
MU makes DRAM chips so we are changing
the exposure but memory is an area of growth while DRAM are commodities where
demand ebbs and flows. We do like Micron but discipline is discipline and
we would rather suffer with BRCD than MU at this time.
We also added a chunk of Estee
Lauder at $39 down $2.50 on the day. We bought last year when EL dropped on earnings and made a few
dollars on the trade. We are buying in more accounts this year. EL is a quality holding and we are
intrigued that ‘Estee’ the person behind the name died last year. The company
is run by her sons but... Unilever are
you listening?
We own good stocks at attractive
prices. EL is down because sales are
only going to be up 7% this year rather than 9% and earnings will only approach
$1.90 (instead of $1.95) which will be up 15% from last year. That’s good enough for us to get our feet wet
with the stock that is down 18% in the last month.
*****
1:39pm and crude oil is now
higher on the day and the Major measures are heading lower. The DJIA is down
107 points and the NAZZ is off 20 points. The S&P 500 has drooped 10 points
to 1146 though it remains for now above the 1140 support level.
3:02pm and we’ve installed a teeter totter in the office to be able
to ride out the market’s up/down action.
At the bell the DJIA was down 128 points at 10070. The S&P 500 lost 13 points to 1143 and
the NAZZ dropped 26 points to 1904.
Oil closed higher at $51.77 after touching $50 early in the session. A ship sank
or collided in the Houston Ship
Canal and that is the reason given for the mid
day reversal in the price of oil which then supposedly exacerbated the sell off
in stocks. Treasuries rose with the ten-year down 10 basis points on the day to
end at 4.15%.
We have been able to acquire
excellent stocks in this sell off and have greatly improved the quality of our
portfolios. By eliminating tech we are giving up the potential for large gains
but we are also removing a serious thorn to our performance over the last four
months. The current correction and selling is offering us the opportunity to
buy quality stocks on sale and we plan on continuing to do so. Our strategy
will work.
And tomorrow is today and it is
the last trading day of the month and it should be interesting. So let the
games begin.
*****
28 April 2005 Daily Comment
Thoughts
Housing is hot and Consumer Confidence is waning. The Fed will have to
keep raising rates to slow housing down and since oil is high the consumer is
not shopping. That is why the markets
are in a funk according to the gurus. We don’t disagree but as always easy
answers obfuscate the dynamics of markets with a million bits of information
all of which are being individually interpreted by millions of traders and
investors.
The last few months we have been
moving in fits and starts to stocks that offer value at present prices. We have
returned to the value approach because the trading and technical approaches are
not working for us. The value approach has not immediately done well either but
the element of time when in investing in value is more open ended.
We have returned to an early
1980s investing approach that worked then and we think will work now. As we
have reminded continually since our January give back of November/December
gains; 6% of ort 9% loss in value this year in the Model Portfolio and many accounts
is basically a give back of the 8% gain made between November 1 and December 31
of 2004.
Excluding that drop-which was painful and disconcerting-leaves
us with a 3% give back with our new/old approach. That give back is well within
the bounds of the normal give and take of the markets.
We have worked hard to reduce our
tech exposure and will continue to do so. We do have a few left and that’s
because while tech is certainly not in favor there are a few issues that we
have followed and owned over the years that we thought offered a 50% or better return
potential over the next year when we purchased them. Now with 20% drops in
price for two of the remaining holdings the return potential is hopefully even
better. The majority of issues we own are all big cap names purchased at prices
well below their 12 month highs. When the markets recover we believe these
issues will provide a return that will recover the lost dollars of January plus
provide a decent year over year return.
*****
Investor’s Intelligence reports that bulls have dropped to 44% from
48% in the latest week while bears have edged up to 29% from 26%.
*****
Asia was
lower overnight with Japan
and Hong Kong both down fractionally. Oil is up a few
pennies in early morning trading and treasuries are a few bps higher on the
regurgitation of the housing numbers of yesterday when it was announced that
new home sales were up 12% in March.
For us, the deals and inventive financing
being used to make some of those house sales are the worry. Those deals and
inventive financing will be stories of woe in a few years and all will wonder
how it could have happened under the vigilant eye of the FED. Interest only and no money down work well for rich folks but they can be real downers
for ordinary home buyers who don’t have the room in their budgets to increase
payments when the banker comes calling. Hope is good for getting to heaven but
it stinks when paying housing bills.
*****
Durable Goods orders were down 2.8 % in March so the tightening argument
gets weaker. DG is a volatile number but Treasuries have rallied on the data
with the ten-year dropping 7 bps in yield.
*****
Verizon announced super revenue growth and earnings were 3 pennies
ahead of estimates.
*****
Wednesday’s Markets
10:02am and stocks opened lower on the Durable Goods number but
have stopped retreating because the oil inventory number was greater than
expected for the seventh out of eight weeks. Breadth remains 2/1 negative but
the DJIA has rallied back from down 90 points to down 35 points. Crude oil is
down $1.15 and $53.10 for now.
*****
12:02pm and oil inventories
are at their highest levels since May of 2002. Oil is now down $1.70 at $52.50.
The major measures are in
positive territory with the NAZZ just barely, and breadth has improved but is
still negative on the NAZZ and slightly to the plus side on the NYSE.
*****
12:55pm and we used the
jump in the major measures to eliminate a couple of more tech stocks. We sold TLAB at $7.77 for 45 pennies per share
profit after it backed off at resistance yesterday. And we sold Seibel in our large trading accounts
for a positive scratch ahead of tonight’s earnings. That gets us down to Brocade, Lucent and Micron as our remaining tech stocks. We
are going to hold them for now since we think all can be exited at a profit
however small within the next year and in BRCD
and LU that would be a 30% plus
return.
*****
1:56pm and the major
measures held their ground during the contra hour so the last hour of trading
should be interesting. We bought a few shares of Sara Lee in smaller accounts. SLE
has a 3.7% yield.
*****
In order to solve the energy crisis President Bush is going to build refineries
on military bases and he has offered to have the first three nuclear reactors
built near his ranch, and Tom Delay’s and Bill Frist’s homes in Sugarland Texas
and Tennessee. That‘s know as the
nuclear option.
*****
Crude oil ended at $51.61 down
$2.59. Treasuries are holding their gains above the bet levels of the day as
the five year auction was a little sloppy.
*****
3:02pm and the DJIA gained 48 points to end at 10199.
The S&P 500 rose 5 points to 1156
and the NAZZ limped 3 points higher
to 1930. Breadth was positive on the NYSE and negative on the NAZZ at the bell.
And today is tomorrow so let the
games begin.
*****
27 April 2005 Daily Comment
Thoughts
Monday’s markets lacked volume on
the upside as have all the rallies of the last two weeks including the 200
points DJIA move last week. It would be good to see a rally with over 2 billion
in NYSE volume as the stepping off point for a sustainable move higher. But the
S&P 500 is back to the 1163 level and after a dip this morning we presume
traders will see if they can cross that threshold and set off bear buy stops.
Veeco’s earnings and sales were punk and so we would expect a $1
giveback today. Management is muted going forward and we will use any rally after
the inevitable pullback to light our load. VECO
second quarter also predicts a loss. They have enough cash to survive but … are
there other places for the funds? Probably. We bought when we thought tech was
going to lead higher last month.
Sara Lee missed by a penny but we think the ‘street’ will be kind.
If there is a significant pullback we will be adding stock.
The present market is a waiting
game. Waiting to see which way the inevitable breakout goes. Till then it is
watch and trade around the corners selling disappointments and buying promise.
*****
Tuesday’s Markets
9:50am and stocks opened lower in moderate
trading. Asia was mixed to higher overnight and Europe
is higher. Treasuries are down a few bps and oil is off a bit. Breadth is
positive after being 2/1 negative in the early going.
We are selling the balance of our
CCMP for a scratch profit to $1 per
share loss ahead of tomorrow’s earnings. We are also selling VECO for a $1 to $1.50 per share loss because it is only off 50 cents this
morning. We weren’t impressed by the earnings report and are redeploying
the money to an equal number of shares of Time
Warner since we want to increase our position in TWX. With the CCMP money
from yesterday and today we are buying Sara
Lee down $1 per shares today at $20.88 on its earnings statement. We want
to lessen our risk profile and improve quality by selling tech while not giving
up gain potential and we think these switches accomplish that aim.
Our sales still leave us with
some tech exposure and we are waiting for Seibel
earnings tomorrow to decide whether to add more of that stock. We want to
concentrate on the tech stocks that we have been trading for the past few
years. We just can’t work up the confidence to own Veeco and Cabot Micro and we won’t trade them again.
*****
New home sales rose 12% in March
to a new record. No money down and interest only loans are big helps.
*****
12:25pm and stocks are back
to almost 2/1 negative. The major measures are lower on low volume selling that
is more an absence of buyers. Oil remains lower but is back above $54 again.
*****
3:02pm and the S&P 500
hit 1164 about mid day, blinked and said “not today”. It then sold off and the
markets did likewise. At the bell breadth was 2/1 negative and the DJIA closed down 91 points at 10151. The
S&P 500 lost 10 points to end at
1152 and the NAZZ dropped 23 points to 1927. Oil finished at $54.20 down 37 pennies and Treasuries were lower by 1 to 8 bps short to long respectively. Europe
also closed lower. The only slight positive
today was that volume was low. The low volume yesterday was a negative when the
major measures rose.
And today is tomorrow so let the
games begin.
*****
26 April 2005 Daily Comment
Thoughts
We have been traveling and
returned Monday at noon to find the
major measures higher. The action is the reverse of Friday. Traders can’t seem
to make up their minds.
On Tuesday Veeco and Sara Lee
report earnings before the opening. We are a bit worried about Veeco not because
we don’t like the stock but because we have no idea what the markets will consider
good news. We take some heart from the Mother Merrill upgrade a week ago since
we presume the analyst is doing his/her homework.
Sara Lee is also a conundrum because
the company is again restructuring. But this time the restructuring is
occurring with a new CEO so we think the ‘street’ will be inclined to give a
little more room for write downs.
*****
Monday’s Markets
1:12pm
and stocks were up out of the gate and remain higher on the day. Breadth is 2/1
positive, oil is lower by 56 pennies at $54.85 and Treasuries are unched. Even
with the up market is seems like a ho-hum day.
*****
This afternoon we sold our QQQQ and SPDR Tech holdings for a few pennies profit each to have funds
available to buy individual stocks over the next few days in our larger accounts.
We also sold a few more shares of CCMP
at $29.99 in smaller accounts for a scratch.
*****
3:02pm
and at the bell the DJIA was up 85 points
at 10242. The S&P 500 gained 10
points to 1162 and the NAZZ rose 17
points to 1849. Breadth was 2/1 positive and volume was light which is why we
raised a bit of cash in our larger accounts. The bulls need better volume on
these up days to make believers of the naysayer.
And tomorrow is today so let the
games begin.
*****
25 April 2005 Week-end Comment
Thoughts
After Thursday’s market action
anything can happen today. This whole week has been a conundrum and it probably
isn’t going to get any easier. It has been our thought the stock markets are in
a bottoming process and that is why we have been getting more fully invested
over the last few weeks. When the bottoming process will end and how great the
rally off the bottom will be is beyond our thinking at the present.
That’s because the process of
buying for individual accounts based on their risk/reward profile consumes most
of our thinking. Our projection of a bottom to the correction occurring at some
point soon is mainly a gut feeling gained through 35 years of watching markets.
Overnight Asia
was higher and Europe is trading higher this morning. U.S.
Futures are lower as they should be after yesterday’s run and oil is again over
$54 a barrel. Treasuries have recovered a bit of yesterday’ losses.
We would like to pick up more Time Warner even if Time Magazine did chose to have the witch
Ann Coulter on its cover. After all Time has also
had Hitler and Stalin on the cover too.
Eastman Kodak had less than stellar results today and is off a
couple of dollars. We haven’t traded that stock in a while because we wanted to
see how their move to digital photography would go. They seem to be making the
transition. The stock has been range bound between $24 and $32 for a few years
and we think now may be the time for at least a trade if the shares move a bit
lower.
So let the games begin.
*****
Friday’s Markets
Mother Merrill upped National City
from under perform to neutral based on valuation. Thank you Mother.
*****
Maytag reported lower quarterly earnings and lowered its outlook going
forward. The stock price is down $1.25 per share. Sometimes trading out of
stocks before earnings does work. We are going to avoid the stock unless we see single digits.
*****
This Friday morning traders are
calling for larger volume when the markets
are moving higher. Traders also want today to be a follow through day to yesterday’s upside movement in order to feel
confident that at least an interim low is in place. Finally, it would be nice
if the S&P 500 would blow through
the 1163 level on the upside.
*****
Thursday’s rally was ascribed to
the no stagflation comments of
Greenspan.
*****
Google had blowout numbers Thursday night and jumped 23 points. Remember
that $23 on a $200 stocks is like 23 pennies on a $2 stock.
Minyanville.com is reporting that Google now has a larger market cap
than all the U.S.
auto stocks and their suppliers combined. Times do change.
*****
Warren ‘the oracle’ Buffett has taken a
position in Budweiser. This Bud is
for Warren.
*****
At noon
the major measures are lower having been lower all day. Volume is light. The
NAZZ is getting the worst of it down almost 1% or 18 points with breadth on the
NAZZ almost 2/1 negative.
The DJIA is off 25 points and oil
is back to $55 as the big boys and girls have fun at the expense of the autoing
public.
We bought a chunk of Eastman Kodak at $27 down $3.40 from
the close and also added some QQQQ to larger accounts at $35.30. And we bought
a few more share of Netflix at
$11.10 but we are not going to make it a major item in portfolios.
*****
Yesterday we bemoaned the fact
that we sold MOT ahead of earnings
and the earnings were good and the stock rose $1. Today we are happy that we
sold Maytag ahead of earnings and since
the share price has dropped $4 today as MYG disappointed.
*****
There was a sell off in contra
hour and the DJIA is down 90 points as we enter the final hour of trading. This
weekend is Passover and it is a Friday in spring although our weather in the land
of milk and honey is dismal. We are hoping that the failure to continue the
rally can be ascribed to those two items plus the fact that oil is up over $55
AND North Korea
is reported to be ready to test a nuclear weapon. Hope they don’t blow their
country up doing it. We think the Friday before Passover and traders leaving
early theory are the most acceptable.
*****
The oil shortage is so much
baloney. As we have said, the rise in the price of oil is the same garbage that
happened in 2001 when electricity was being manipulated. We have a five year
high in gasoline and oil supplies yet the price doesn’t come down.
“Traders said a gasoline-making unit at a ConocoPhillips' COP refinery
in Louisiana would be down for another week after
failing to restart following maintenance, adding to a spate of problems in Texas, Louisiana and Kansas. Gasoline
inventories in the world's biggest consumer are 5 percent higher than a year
ago, but showed a surprisingly large drop last week, a time when supplies
should be building ahead of the peak usage summer season that starts at the end
of May. Crude stockpiles fell last week;
their first decline after a nine-week
climb put them at the top end of their five-year range.”
Where are the gas lines and
closed gas stations? Where? Where is FERC?
*****
At the bell the DJIA was off 61 points at 10157. The S&P 500 lost 8 points to 1152 and
the NAZZ dropped 30 points to 1932. Easy
come easy go. Breadth at the close was 2/1 negative and Treasuries were firmer
on the stock decline certainly not on the rise in the price of oil. The action
is the last hour was the result of a few of the big boys and girls having fun
with program trading in a thin market.
And tomorrow is today and it is
Saturday so enjoy the weekend. The next post will be April 26.
22 April 2005 Jody’s Birthday Comment
Thoughts
We wish a Happy Birthday to our brother and tech guru on number 52 and
counting. He is the person
responsible for presenting this wonderful informational website every day and
for that we are very thankful. We
are also thankful that he is our brother.
We want to thank all the clients
who are praying for us and their portfolios and expressing their confidence in
our leadership. It is accepted with thanks although we think the Holy Spirit is
busier with more important jobs. Although praying for us may be the reason the
Holy Spirit missed that conclave over in Rome
and the Conservative guy won.
Sometimes we can be too smart for
our own and client’s good. Motorola announced great numbers last night and the
stock is going to open about a point above where we sold it several days ago to
avoid the earnings news. Last quarter the news was a negative and rather than
waiting we projected bad news again.
Wednesday all news was bad news
even though most of the earnings news was good news. This Thursday morning the
stock futures are saying that the earnings news is good news that is being
treated as good news. The main question is for how long the good news from Qualcom and Schering Plough and Nokia
and Motorola in Ingersol Rand will be perceived as good news.
On Wednesday the bears found the
Fed Beige Book release as a good hook to turn stocks down as market participants
read it and saw rising inflation and falling sales and thus the dreaded stagflation word reared its ugly head
and ate the market gains.
Having restructured accounts to
our liking we are accepting of the market action and view the continued sell
off as a continuing buying opportunity.
For example SBC, JPM, NCC, VZ, BMY and BLS
all yield over 4% and the bank stocks in the group are at 10 times earnings or
less and the telephone stocks are at 13 times earnings or less.
Yesterday TLAB announced stellar results and the share price closed up 10% on
a day when the major measured fell over 1%. Time Warner and Schwab
did drop in price but that drop is giving us the opportunity to buy great value
at lower prices.
TWX owns AOL and as we
have been saying the ‘street’ gives no value to AOL in the total valuation of
AOL. Yet Yahoo sells for over $40
billion. Yahoo depends on advertising and sales deals and so does AOL. But AOL
also automatically debits over 15 million credit cards from $10 to $20 each
month. That is an advantage that AOL has that the marketplace doesn’t want to
recognize. A $10 billion market cap on AOL is not unreasonable although we are
the only folks propounding such and idea.
As we have said before, stocks go
up and down and if you buy them when they are down and sell them when they are
up you make money. That simple operation has worked for us and clients for 35
years and the rules have not changed.
JPM traded at $45 last year and are buying at $34. SBC traded at $28 last year and $40 in
2002 and we own at $22. TLAB traded
at $12 in 03 and we own at $7. Veeco
traded at $28 last year and we own at $15. CCMP was $40 last month and we own
at $30. Before last year and all through the sell of the 2000 to 2003 period CCMP never traded below $40. Verison
was $42 late last year and we won at $34.
We are not overpaying for these stocks.
We have readjusted portfolios to own stocks that give us a good opportunity to
recoup our paper losses over time. As we walked the farm last night with the
dogs we were thinking of a walk on our 60th birthday in October 2003. We were
comfortable with our portfolio positions then and with the value of our accounts.
And our assets are worth more now than then. Our farm is worth more as are many
of our clients’ real estate holdings. And so are our portfolios. The ebb and
flow of the value of accounts is sometimes tough to take, especially the ebb,
but then the flow returns and all is well.
None of our clients are in any
danger of losing their nest eggs and we all will eventually wonder what the
worry was about after we reach a new plateau of value.
*****
Thursday’s Markets
Adelphia has accepted the Time
Warner/Comcast bid of $12.8 billion in cash and a part of the new cable
company. TWX and CMCSA will also exchange some
properties in the deal. That is good news for TWX.
As the deal is structured: Time Warner and Comcast will pay $12.7
billion in cash and 16% of the stock in Time Warner's cable subsidiary, Time Warner Cable Inc, which will
become a publicly traded company at the time the deal closes, the companies
said. The stock part of the deal is valued at nearly $5 billion, but some
creditors have questioned whether the shares would really be worth that amount
once the unit starts trading.
The deal beat out a last-minute bid
by Cablevision Systems Corp., a New York-area cable-TV company. The joint bid
from Time Warner and Comcast had been favored to win.
Comcast will redeem its 21% interest
in Time Warner Cable and pay about $1.5
billion in cash, getting 1.8 million cable subscribers in exchange. Time Warner will get 3.5 million
subscribers from Adelphia.
*****
Initial jobless claims finally broke down through the 300,000
barrier at an opportune time for the markets. Last week’s claims were 296,000 versus a guru guess of around
330,000. One pundit says this will bolster the bear case of inflation. To that
we say hogwash. If fewer folks are losing their jobs it is good for the
economy. Period.
*****
Markets Open:
Zooming out of the gate the DJIA
is up 100 points and the NAZZ is up 20 points recovering all of yesterday’
loss. Breadth is 3/1 positive and oil is down 80 pennies but still over $53.
Treasuries are a few bps (basis points) higher in yield.
*****
Prudential downgraded JPM
yesterday. The downgrade was on the wire at about 2pm
which means that the large Prudential customers were able to sell the morning
rally in the stock. The downgrade has placed pressure on the stock but we
obviously disagree with the downgrade.
*****
Greenspan is testifying about
something this morning and it is live on CNBC. “The Federal Budget is out of
control. Need new discretionary spending caps. U.S may have promised more than
can deliver to baby boomers.” So may Alan. He’s the fellow who was worried
about the large surplus back in 2001.
*****
We are buying a few shares of Netflix for aggressive accounts ahead
of tonight’s earnings with room for more if the shares sell off. Netflix
started the movie DVD by mail business with internet ordering. Now Blockbuster
and Wal-Mart are joining the business and Wal-Mart is going to try and take it
over with a price war. Our feeling is that a lot of the folks who use Netflix
(3 million plus and growing) are folks who aren’t going to Wal-Mart for a few
dollars per month difference.
Netflix is priced at one times
sales and has $3 a share in cash in the company. It earns about 30 pennies per
share per year right now. Its inventory never wears out. We are buying at
$11.60 down from $36 when the other companies announced their entry and the
rice war forced NFLX to withdraw a
price increase.
*****
It’s after noon and the DJIA is up 150 points. Traders are going to
need some Prozac after the last week. 4 out of 6 down 100 days mixed in with 3
up 100 days makes interesting trading. Breadth remains 2/1 positive and volume
is strong which is a positive on an up day like this. Schwab sold down to $9.80 and we bought a few shares to add to
accounts. We also repurchased Sara Lee in larger accounts.
*****
Stocks closed on the positive side with the DJIA up 206 points at 10218. The S&P 500 gained 22 points to 1160 and the NAZZ was up 48 points
to 1962. Breadth was over 2/1 positive at the bell and volume was good.
Treasuries tanked with the ten-year down 9 bps and oil was higher.
And today is tomorrow and it is
Friday so let the games begin.
21 April 2005 Daily Comments
Thoughts
One up day does not a rally make
but with yesterday’s tentative positive action and Wednesday’s good earnings
news from Intel, Altria, UTX, Yahoo
and JPM we would guess that stocks
are in the second look period for potential bulls.
We have been able to restructure
the portfolios to our liking with more big cap stock by emphasizing banks and
the telephone stocks. We are also emphasizing dividends and slow recovery of
the portfolios. We have a few tech stocks left in which we have confidence. It
has been a difficult passage from there to here in the last few months. First
we had to extricate ourselves from losing position which is never a pleasant
task and then we had to wait for some of the larger names to come off a bit
before we purchased them.
We are thinking of adding Talbot’s under $27 and we will also buy
more Boston Scientific but in
manageable quantities.
*****
Wednesday’ Markets
12:25pm
and stocks opened higher on the good earnings news and in the face of a 0.6% CPI
increase. But when Treasuries moved lower and oil inventories were reported
lower the major measures gave up the ghost and moved to the downside. Oil
jumped on the news but now is about unchanged.
Breadth is over 2/1 negative and volume
is moderate. For now the rally is over and a retest of the downside is in the
works.
We have added shares of NCC, BSX and TLB to accounts. We are sticking with our view that the sell off
remains a buying opportunity in the big caps names we own. And our tech holdings
have surprised on the upside with TLAB reporting a good increase in revenues
today and Lucent doing the same yesterday.
As stocks tanked in the afternoon
right after the Fed Beige Book was released and said that there is price
pressure and the economy is not doing as well as expected. Treasuries closed
unchanged. At the bell the DJIA was
down 116 points at 10013. The S&P
500 dropped 15 points to 1137 and the NAZZ
lost 19 points to 1913.
Breadth was over 2/1 negative and
volume was higher than it was when we gained on Monday and Tuesday. All in all
it was a win for the bears.
The S&P 500 close under 1140
was a negative and means there is more work on the downside.
And our early morning comment
about the bulls returning sure proved wrong.
Bottoms are not easily made or
called. We own good stocks at good prices. Down markets are scary. We do not
like to lose money anymore than our clients. This is a new experience for us
and them since we the last time we experienced a year in which we have been down
over 3% at any time since 1990 when we finished the year down 10%. The only
comfort we can offer right now is that in 1991 our Model Portfolio was up 34%.
Past performance is not an indication of future performance.
And tomorrow is today so let the
games begin.
*****
20 April 2005 Daily Comments
Thoughts
In Tuesday’s early morning
earnings’ fest Lucent, Coke, Texas Instruments and EMC all reported in line or better and that has placed a bid in the
market. Asian markets were higher
with Japan up a
bit over 1% (they dropped 3% on Monday). Europe’s markets
and U.S.
futures are higher. So that sets up the up early; fade; and then what happens
type of trading day.
National City earnings
were 5 pennies better although the headline writers are saying that earnings
were lower on a quarterly comparison basis. That brings to mind the fact that IBM lost $12 billion in market
capitalization in one day and $25 billion in the previous week on a 25 penny earnings
miss. So as you pass by those pennies in the streets think if you had picked up
25 in the last year and given them to Big
Blue its shareholders would be $35 billion richer today.
In the last week we have learned
of a wonderful client and his wife who were in a terrible auto crash. Luckily
and hopefully both are doing OK. A business acquaintance died tragically,
several clients are not well physically and the Cubbies have been playing like
the Cubbies. We mention these events plus wars, and murder and rape and pillage
around the world to place in perspective the ‘trouble’ we have been having
lately in the markets.
On a positive note the markets
are catching up with our lousy performance and on the negative side it is not because
we are doing better but because the major measures and many mutual funds are
doing worse. So we are all losing money together. Misery loves company.
The sell off has allowed us to
focus again on quality issues. We found our self straying back into the ever
enticing tech land minefields that have given us trouble for the past four
months. Since some of them will eventually work we are not abandoning tech
totally but we are not doubling down on losers and we are using the SPDR Tech
Trust to limit risk which also limits upside but allow us to participate in the
area of the economy that we think has the very goood long term potential.
Keep the faith, we are. We didn’t get to this point in our life and
career by consistently losing money. We have suffered through these setbacks and
always recovered nicely. We will do so again but it may take time. Luckily time
is free and most of us have plenty of it.
*****
Tuesday’s Markets
PPI (the Producer Price Index) was up 0.7 % in March. Housing Starts were down 17.6% in
March.
The major measures have been
higher all day. At 1pm breadth is 2/1
positive. Volume is a little light. With the contra hour upon us a pullback now
might set up a firm close. If there is not pullback then the close might be
weak ahead of tonight’s Intel earnings
and tomorrow’s JP Morgan and others.
Today we added JP Morgan, National City, Verizon, SBC, Bristol Myers and Micron
to accounts. This is in keeping with our theme of going with mainly blue chips
with an emphasis on dividends. Micron is the only outlier in the group and it
is a pure chip play.
We also purchased very small
beginning positions in Boston Scientific
and Talbot’s. BSX is the leading
coated stent producer but JNJ is breathing down their necks. BSX huge sales
growth has slowed as it has 60% of the coated stent market and JNJ has 40% and
is climbing. BSX is down form $8 to $29 and is the dog house as JNJ is taking
share. We think this opens up takeover possibilities. We are only making a 1%
of portfolios bet. The same goes for TLB. Their earnings this quarter are
already announced as lower but we like it at this price (15 times earnings and
lower).
Crude Oil ended the day up $1.18 at $52.15.
We have to leave a little early
but at 2:25pm as we do the major
measures look to close higher with the DJIA
now up 60 points and the NAZZ up 20
points and the S&P 500 up 7
points at 1153. To get the bulls excited the S&P 500 has to get through
1163 on the upside since that was downside resistance last week. It may need some
more time and more sideways or down movement. But an up day is nice for a change.
And today is tomorrow so let the
games begin.
*****
19 April 2005 Daily Comments
Thoughts
Europe and
Asia caught the U.S.
flu and traders in those countries knocked their averages down 2% to 3%. The Nikkei
is under 11,000 again. A long time ago, 1989 it traded at 40,000.
The drop on Friday made the upper
fold of the NYT this morning and also most of the week-end newscasts so the markets
are back in the spotlight. Whether this fact is positive remains to be seen. Three
down 100 point days in a row has the DJIA down 6.4% for the year and the
S&P 500 down 5.9% with the NAZZ off 12%. And so the major measures are
catching up with our lousy performance. We don’t like to be leading the pack in
this category but we do think the drop in share prices is providing an opportunity
for us to pick up good quality stocks at fair prices and that is what we are going
to do today if the markets cooperate and sell off a bit more.
There comes a point as Don used
to say where it is getting too late to sell and it is time to buy. We are going
to buy good quality names by adding to positions we already hold in SBC, VZ, JPM, NCC, HAIN, and TWX.
We are going to try and reduce
our tech positions today because those stocks really are not working. We would
rather just hold the SPDR Tech position
and add to it but not today.
*****
Monday’s Markets
Stocks opened higher for about
ten minutes then selling came in but the buying returned. Tribune was downgraded and given what has happened to NYT since we sold on a downgrade we
have decided to eliminate that holding. There are other fish to fry in this
down market.
With the rally in the markets
this morning we are passing on buying stocks. We did add some Time Warner to
accounts and also bought a few shares so Seibel for a few aggressive accounts
to get our feet wet again in the stock. There have been so many software deals
lately that it just seems that SEBL has to go even with the big inside
ownership. Or at least SEBL may trade like it is going to go every Friday
afternoon and give us the chance for more trading profits.
*****
At 10:30am and breadth is back in
positive territory. There are supposedly a lot of bearish folks out there but
everyone on CNBC is bullish because the bears are out there.
Whatever, we are looking at
stocks that offer value at present prices. We don’t think the economy is going
off a cliff and so we are going to pick at these if prices move lower. Since we
already own most of them we aren’t going to cry if we miss buying a bit more
because the markets take off to the upside.
*****
10:43am
and now the sell off begins anew. The bulls, if there are any beside us, just
don’t want to buy and so the bears are getting braver.
An individual who had $100,000 invested in the S&P 500 on 12/31/99 would today have $82,000 including
dividends.
*****
We sold Motorola ahead of Wednesday’s earnings. We also sold or reduced our
holding in VECO in smaller accounts.
We also sold Unisys which blindsided
us with their loss on April 14. All three were 15% losses.
*****
The DJIA closed down 16 points at 10071. The DJIA was down because MMM dropped $4.96. The S&P 500 gained 3 points to 1145 and
the NAZZ was up 4 points to 1912. Oil
closed above $50 but down 12 pennies on the day. Treasuries were down about 3
bps across the board.
And tomorrow is today so let the
games begin.
*****
16-18 April 2005 Week End Comments
Thoughts
Well, do we circle the wagons or
dive in head first to the mess that is the current stock market. This morning GE reported earnings per share that
were 1 thin penny above estimates and we weren’t surprised. Citigroup
reported ‘less than’ earnings
but announced a $15 billion buyback of stock. CNBC is going nuts a
pplauding GE
and castigating IBM as a has been.
The tone of the talking heads is one of confusion because they don’t know how
to play the market story. They have plenty of company.
Without a doubt the markets are
at an inflection point and are either going to rally from this level or go down
another 3%. Our hope is that they move lower to get the sellers satiated and
find a base from which to begin the work of rebuilding hope and profit.
The action in the bonds on
Thursday suggests a slowdown without inflation since all maturities rallied
strongly on the lousy stock action. The Feds ‘overheating’ words of Thursday
were thrown overboard and the bond folks decided that safety as opposed to gain
was the place to be. The dollar also rallied on the sell off.
We are as confused as the next
person about the economy but we do see value in the stocks we own. The real
conundrum is what to own to take advantage of the eventual move up without
exposing ours portfolios to more downside than we are willing to endure. That
is always the dilemma at times like these.
We have been here before and survived
and we presume the wisdom or luck we have gained over the years will pull us
through again this time.
*****
Asia was
lower overnight with Japan
off 1.5% and Hong Kong down almost 1%. Europe
is also lower boy more than 1% as all traders await the US
markets and the initial selling wave.
*****
Oil is back under $51 at $50.55
down 66 pennies. We need it to break $50 to the downside. With bonds rallying
and the dollar rallying and gold and stocks lower maybe some of the hedgies are
having to liquidate either or all of the various positions they own to mitigate
wrong calls by their wonderful computers.
*****
The main problem on a day to day
basis is that a lot of the selling in stocks is to offset losses in other
trading vehicles rather than as a result of sell decisions based on fundamentals.
Such selling then affects the psyche of the weaker holders who head for the
hills. And the lesson of the last five years has been to take your lumps and
get out at what seems to be the low because a lower low has occurred.
We believe that trading tactic no
longer applies because the bear market is over. We think we are in the midst of
a nasty correction in a normal bull market. Our belief is that the stocks we
own are not overpriced but even we are not immune to the pain such a correction
can cause.
*****
Friday’s Markets
Stocks opened down and traded
down all day. At 1:15pm the DJIA was off 100 points and the NAZZ
was off 25 points. The S&P 500 was down 10 points at 1153. It was not a
pretty picture.
On day like today it is a good
idea not to bet the farm but we did buy the SPDR Technology Trust in size in larger accounts. 7% of the trust is IBM and 12% is MSFT with 6% Intel and 5% Cisco. So the trust allows us to
participate in IBM’s collapse today (down 7 points to day and 15 points in the
last 10 days) while also buying other depressed big cap tech stocks. We have
traded this trust which goes by the symbol XLK
before.
Most of the gurus are death on
tech and banks right now but we are playing tech and the banks as two areas
that the big boys and girls will come back to eventually if not sooner.
We also sold a few shares of Cabot Micro in some accounts to lighten
our position and we will do the same with VECO
if a rally or even dead cat bounce enables us to do so. By the by, Mother Merrill increased her rating on VECO to buy a few days ago.
*****
At the close
the DJIA was down 198 points. The S&P
500 dropped 20 points to 1153 and the NAZZ
gave up 40 points to 1907. Breadth was 3/1 negative again today and down volume
exceeded up volume by 8/1.
The major
measures closed on their lows for the day. It is our feeling that this is more
a 1990 type of sell off but it sure was ugly today and we can’t offer much hope
for Monday. This is a process that will have to be worked through.
And tomorrow is
today and it is Saturday. Relax; we are doing enough worrying for everyone.
*****
15 April 2005 Special Comment
Right after the close on Thursday
IBM reported earnings. They were not
scheduled to report until Monday. The
“street” did not like the earnings because they were light in the final
month as IBM said companies delayed closing deals. The ‘street” also did not like the fact that IBM reported when it wasn’t
expected.
The one guess we saw for the
early report was that IBM was afraid the report had leaked. The action of the
stock the last few days suggests someone knew.
The early reporting set off
calamity in the S&P futures pit
because IBM dropped over $5 on the
news. The OEX expired tonight and IBM is a large part of that trading
instrument. A $5 drop in IBM also
affects the S&P futures which expire
at the opening tomorrow. IBM also
affects the Dow futures and many
other tech indexes.
Thus the early release set off
wailing and gnashing of teeth and big losses. And several other tech stocks
reported ‘less than’ results tonight and are also being trashed.
All this mess is setting up a
huge down opening on today and it may create talk of the Friday before the
Monday Crashes in 1989 and 1987. Be forewarned.
At times like these it is best to
step aside and let the fast boys and girls have there fun and inflict their
pain. Good stocks survive and we have good stocks.
It may be ugly in the morning so
keep the children in.
Peace.
15 April 2005 Daily Comment
Thoughts
A client asked about the vagaries
of day to day share price movements and compared that action to the relative
stability of real estate investing and we sent him the following reply.
We were thinking last night that
your scientific back ground is a great hindrance. Unlike science the actions of
the markets are almost totally psychological on a day to day basis. Less that
1% of outstanding shares of most companies usually trade in a day and that
determines the value for the other 99% of holders.
Thus the day to day price movements
only make sense as a measure of value if the prices are averaged over time
like a year or two. But folks no longer have the "real estate"
mentality when it comes to stocks. In real estate you buy and hold and assume
that the value of your property is worth more every day.
Yet there are downturns in real estate:
in Florida in the 1930s, Texas
in the 1980s and California
witnessed a value turn down in the 1990s. And if you were living on your sales
in those times or were highly leveraged you had a tough time meeting living
expenses because real estate values did go down 25% or more and on a leveraged basis
that means you had all your equity wiped out. But in real estate as long as you
make your interest payments you survive. I doubt that your personality could survive
negative equity. Donald Trump flourishes on negative equity.
Over time real estate values rise
as does the value of good quality stocks that are able to adapt and change. That
is why Index investing is the ‘rage’ because the indexes contain stocks that
are leaders that can't all fail at once and the ones that do fail are replaced
just as the individual properties in a portfolio of real estate holdings don’t
all do as well each as the other in the same time frame.
But we really would suggest a
longer term attitude on your part. The space shot took ten years to plan and
execute. The same holds true for stock. In 23 years our Model Portfolio has had
two down years -- this year and down 10% in 1990 and a lot of years of under
performance. But the Model began at $50,000 on 12/20/93 and is now $525,000. Had the Model been
leveraged like real estate with 20% down that would be $10,000 to $525,000.
One final thought we have is that
you should only own stocks that you want to buy lower. Traders don’t have that
attitude but longer term investors and traders like us do. Then if stocks do
move lower you are happy to be able to pick them up at even lower bargain
prices
Peace.
*****
Jobless claims were down 10,000 in the latest week to 334,000. That
at least is the right direction.
*****
Friday is a triple witching day
as some options and other stuff expire. Also GE reports earnings on Friday.
*****
Thursday’s Markets
Well folks these markets are
giving us grey hair. At 12:45pm the
DJIA is down an even 100 points. Breadth remains 2/1 negative and we are
selling some of our trading positions because we think raising cash when a market fails to continue to rally as it
should have yesterday (Wednesday) is the prudent course of action.
Today we sold our remaining BMY for a $1.50 profit plus the recent
30 cents dividend, ABS for a 75 cents profit plus the 18 cents dividend and
NWL, GPS, NXTL and SLE for a positive scratch. We lost a
bit on the remaining MYG we held in larger accounts and we sold a few shares of
ANN including the 500 in the Model Portfolio for a $1 per share loss. These
were all trading positions.
We are taking this action because
all these companies have yet to report earnings and the markets are not
treating earnings kindly. Lousy earnings cause the stocks to get slammed and
good earnings encourage yawns.
It has been good luck for us to
raise cash as that usually has precipitated a rally and we own enough stocks
that we will participate in any rally while we now are back to a good cash
position in accounts.
FITB reported earnings today and the shares dropped $2. We like
this company and it fits our theme and so we added shares to accounts at
$41.25. On a net basis we raised cash today but we are not abandoning the
markets we are just keeping (adding to) our longer term holdings and selling
our trading positions.
At the bell the DJIA was off 125 points at 10258. The NAZZ dropped 28 points
to 1946 and the S&P 500 closed at the line in the sand at 1163.
Breadth was 3/1 negative treasuries rallied and oil gained 91 pennies to
$51.13.
And tomorrow is today and it will
surely be interesting.
*****
14 April 2005 Daily Comment
Thoughts
Tuesday’s rally was a welcome
respite from the down days of the past week. Wednesday will be a good test of
the bull case.
Investors’ Intelligence still has
29% bears while bulls have shrunk to 46% from 47%. One guru we follow would
rather that the S&P had reached the 1160 level before the rally and so
believes this rally needs to top 1190 in quick order or it will revisit the
1160 level.
The Japanese markets have been
having tough times the last three days and didn’t rally last night after our
markets did. Europe is higher this morning but U.S.
futures are lower. Lower is better since it suggests euphoria is not present
after the run yesterday.
Retail sales were up 0.3%, ex
autos up 0.1%. These numbers are softer than expected by about 0.5%. What does
it all mean? The ten-year is 3 bps lower on the news and the five-year is at
4.00%.
Harley Davidson warned going forward and the share price is down $6
in early trading.
*****
Wednesday’s Markets
Stocks opened lower and at 1pm the DJIA have given back all of yesterday’s gain. Breadth is over
2/1 negative. With crude oil down $1.61 to $50.25 it would seem that the
markets are falling to their own drummer. We didn’t want euphoria but the sell
off is more than we wished for. Treasuries are unchanged.
We bought a few more share of Cabot Micro at $29.80 for accounts.
*****
IBM is trading at $84.50 which is well under the $88 level that has
been support for a while.
*****
With the way the markets acted
today we decided to raise more cash. Both SGP
and MYG have moved up over 10% in
the last few days and we are ahead on the SGP and ahead in most accounts on the
MYG and we sold all our SGP and most of the MYG except leaving some shares in
larger trading accounts. SGP doesn’t
pay a dividend and Maytag while near
its low has a ton of debt and pension payments and is the diciest of the non
tech stocks we own.
*****
At the bell the DJIA was off 104 points at 10403. The S&P 500 lost 14 points to end at
1173 and the NAZZ dropped 31 points
to 1975. Breadth was over 2/1 negative. On the positive side oil lost $1.64 to $50.22.
The drop today may be setting up
a capitulation bottom but raising cash here seems prudent.
And tomorrow is today so let the
games begin.
*****
13 April 2005 Daily Comment
Thoughts
And we get e-mail:
I know you don't want to handle friends' money- BUT- would
you just give me a little FRIENDLY advice? I have about $100,000 in my
annuity, 30% in fixed, earning a guaranteed 4%. The guy who handles my
account suggests we keep it at this percentage. We are wondering if we
shouldn't flip flop it right now to 70% fixed, or at least adjust to a larger %
in fixed. What do you think? What % of your fund is in cash?
My new statement shows that I just lost $2000. I am worried that this
will keep going down. It cost $40 to fill my tank today. This
cannot be good for the economy. I'm sure it cost you a bundle to drive
back to the farm.
Regards
And we respond:
Actually our accounts
dropped by more in the first quarter and our Model was down 8%. But then even
with that 8% drop, over the last five years our Model (our money) is up 50%.
We think the fellow is
telling you that you can’t make money without risking money.
Fixed income rates are
going higher and we would think that within a year you should be able to get 6%
on the fixed income money. My only question about the fixed income portion is there
is any risk to principal. If so you should make sure you are invested in a
short term fund or in an investment that doesn’t tie your funds up for years at
4%.
You should be in a
short maturity fund averaging no more than three years maturity with the fixed
income.
The $2,000 drop – for
the first quarter- on $72,000 (if 30% or $30,000 is in fixed income) is
minus 2.7% which is a bit less than the S&P dropped in that period.
We think the markets
are going to have a rally here; sell off later in the summer; and then move
higher into year end. But that is the normal pattern and life is anything but
normal now.
Gas is high, home
prices are high (and no one is complaining about that), and folks continue to
lose jobs but folks are getting jobs, building continues, corporations have a
lot of cash and the markets are always a mixture of positive and negative news.
Your retirement is
still a few years off and so we would hold for now. We don’t think the stock
markets are over valued like they were in 2000 and so we don’t expect any huge
drop.
Interestingly, your
dilemma is the dilemma that all will face under Bush's Social Security
Destruction plan.
Keep the same mix you
now have. If the world ends it won’t matter.
Hope this helps
*****
Tuesday’s Markets
Stocks opened lower and at noon they remain lower with the DJIA off 80
points nd the S&P 500 at 1172. 1163 on the S&P 500 is the line in the
sand.. Breadth is over 2/1 negative. Even crude oil is
down over $1 and $52.05 which may be one reason that stocks aren’t lower.
Treasuries are firm and the Budget Deficit for March as well as the minutes of
the last Fed meeting will be released at 1pm
which will give traders something to munch on for the rest of the day. Supposedly
this morning’s sell off was occasioned by a record $61 billion trade deficit
for February.
We added
a few shares of Verizon to accounts
that didn’t own it and we are also picking up a few shares of Cabot Micro under $30 and Wild Oats under $9.60 for accounts that
don’t own them.
*****
The Fed
minutes rallied the markets. The dollar rallied; Treasuries rallied; and the
major stocks measures moved higher. Oil is lower. Beats us, but since we are
long stocks we will enjoy it while it lasts. It will be interesting to see if
the bulls can carry this rally into the close.
*****
Stocks
closed higher on the day in one of the better rallies of the last few months.
Treasuries rallied and oil tanked down $1.85 to $51.86. At the bell the DJIA was up 60 points at 10507. The S&P 500 gained 7 points to close at
1187 and the NAZZ jumped 13 points
to 2005 Breadth was almost 2/1 positive at the close after being more than 2/1
negative at 1pm.
We’ll
find out on Wednesday whtehr the last two hours of today were for real.
And tomorrow is today so let the
games begin.
*****
12 April 2005 Daily Comment
Monday’s Markets
We missed most of the trading day driving back to the land of milk and honey. But given the low volume and
small moves in the major measures we didn’t miss much.
We sold our BellSouth holdings in many accounts that could use a bit more cash. The share price has jumped
a couple of points in the last week on a few recommendations. That only got the shares back to a bit better
than break even for accounts but we’ll happily take that for now and look for a lower re-entry point if the markets fail to rally.
At the bell the DJIA was down 12 points, the NAZZ was off 8 points and the S&P 500 was unchanged at
1181. Oil was down early in the day but closed higher and Treasuries were firm.
And tomorrow is today so let the games begin.
*****
9-11 April 2005 Weekend Comment
Thoughts
GM did not specify what spurred it to pull its advertising, but Times
auto writer Dan Neil on Wednesday published a critical column about the
company's brand strategy and called on GM to "dump" Chairman and
Chief Executive Rick Wagoner.
"We recognize and support the news media's freedom to report and
editorialize as they see fit," Akre said. "Likewise, GM and its
retailers are free to spend our advertising dollars where we see fit."
And with the above comments GM pulled its advertising from the LA Times. The Tribune owns the LAT and so TRB
shares are lower this morning.
We would surmise that this action
by GM is another indication of the stupid management they have. It would go hand
in glove with GM’s announcement yesterday that it was building a new Hummer
plant in South Africa.
Maybe gas is cheaper in South Africa
but the world doesn’t need more Hummers and GM doesn’t need to be concentrating
on them if the oil crisis and GM’s earning’s crisis is going to be solved.
What was one column in a
newspaper is now going to become a large egg on GM’s corporate image and cost
them many more dollars of advertising to correct.
Actually given the Tribune’s
Republican leanings it will be interesting to see how they react to big
business putting the arm on them.
*****
And today we called Cingular to find out whether a Cingular
phone has roaming charges in Canada.
Well of course they do at 80 cents a minute (talk fast) unless you choose the North
American plan for your Cingular phone rate which covers Canada and Mexico and
we presume (forgot to ask) Alaska. Since our daughter Christine (Kelle) is going
to Canada for a
week and there wasn’t a whole lot of difference in the daytime minute package
we asked to switch to the North American plan since she may be going to Alaska
soon. After five minutes we were informed that we couldn’t switch because we
have a TDMA phone and you need a GSM phone. We informed the lady that GSM
doesn’t work in most of Wisconsin
and so we had to have TDMA. So we told Kelle to talk fast like the Sprint
commercial.
While we were at it we asked
about combining our 2 AT&T
phones with our Cingular phone bill since the two companies were now one. You
know the ad where Cingular allows you to talk to 50 million folks for free.
NOT.
It seems that AT&T and Cingular
have separate billing systems and are not going to combine them so folks have
to switch one way or the other to get the package rate. That means getting new
phones and an hour wait at the phone company and then reprogramming your
phones. Only in America.
And the guys who run these companies are paid $20 million a year.
*****
Friday’s Markets
It’s 12:45pm and we are coming upon the contra hour and oil
has been down all day but is off it lows. The major measures opened higher and
are now lower and breadth is 2/1 negative. The S&P 500 failed at the 1190 resistance support number after
closing slightly above that number last night and that has encouraged the
bears. Treasuries are a bit lower in price higher in yield. Crude oil is off 66
pennies at $53.45 but above the session lows.
We picked up some Tribune on the sell off today at
$39.10.
*****
We sold the SEBL at $8.95 that we bought on Wednesday at $8.30 that we sold
last week at $9.15. The shares dropped on Wednesday on 80 million shares volume
and popped up yesterday on 50 million shares. Today they are up again but
volume is only 20 million shares and we think today’s buyers may be late to the
party. Some shareholders are having a meeting next week to complain to
management about the lousy share price. We have always voted with our feet
since management seldom listens to shareholders. SEBL is an anchovy that has
worked for us recently.
*****
With the markets failure to hold
the 1190 level on the S&P 500 we sold KO
for a 60 cents per share profit in many fully
invested accounts. It never hurts to raise a little cash and we have been
trading KO for five months in accounts.
At the bell the DJIA was down 85 points at 10460. The S&P 500 dropped 10 points to 1181
and the NAZZ lost 20 points to 1999.
Breadth was 2/1 negative and oil lost 79 pennies to end at $53.32. Treasuries lost about 3 bps.
We will be traveling Monday and
the next post will be Tuesday morning.
And tomorrow is today and it is
Saturday so relax. *****
8 April 2005
Thoughts
The first time claims for
unemployment report this morning for last week was down 19,000 to 334,000. That
is the right direction.
What the bull case needs is a jobless claims report under 300,000 the
same week that oil moves back under $50. We know we have said oil needs to get under $40 but a
move under $50 right now would get the
rally going. A further drop would cement the rally.
*****
The FDA told Pfizer to stop selling Bextra
and to place a more severe warning on Celebrex.
That has PFE down in the early going but not by much.
*****
Retail same store sales were
lackluster and The Gap same store
sales were down 4% versus a strong up 11% last March. When the stock only broke
50 cents a share we bought shares in aggressive accounts. We raised the money
by selling our FON position at a small
profit. We own NXTL in the same
accounts and that gives us the FON exposure we want when the merger is
completed.
*****
We are also picking up a few
shares of OATS and CCMP for accounts and initiating a new
holding in Unisys at $7.27.
UIS is an old warhorse that we went through hell with about 10
years ago but eventually survived by breaking even. It was a real battle and
nerve tester.
The stock is trading in the $7.25
area with a 12 month low of $6.75 and high of $12 and it is priced at about 50%
of sales and 15 times earnings. Wachovia
upgraded it from sell to neutral on valuation this morning.
*****
We are selling Qwest for a scratch in our aggressive
accounts because we want to place that money in UIS. Q and VZ have become too much of a soap opera
for us and if Q wins or loses MCI we
think the share price of Q moves lower
before it goes much higher.
*****
What’s interesting today is that
downgrades of BUD and GM that were issued today have had no
effect on either stock, both of which are up.
*****
Yesterday’s Markets
At noon oil is off
$1.55 at $54.30. Stocks are higher
and Treasuries are flat to lower in
price higher in yield. Stocks opened higher even though oil was up at the opening.
Starbucks same store sales were up 6% instead of the expected 8% so
it is off a couple of bucks. Talbot’s
is down $3 per share at $29 but we aren’t interested till $25 and tat is firm.
*****
At the close breadth was 2/1 positive. Oil finished at its low for the day down $1.74 at $54.09. Treasuries were off 1 bps on the two-year
to five bps on the ten-year.
The DJIA closed up 60 points at 10546. The S&P 500 closed right above resistance at 1191 up 7 points and
the NAZZ gained 20 points to finish
at 2019.
And tomorrow is today so let the
games begin.
*****
7 April 2005
Thoughts
The folks on CNBC have been saying the last few days what we have been saying
for months-- that the high oil prices are the result of speculative buying by
all the money that hedge funds have to play with and the fewer places they have
to employ it profitably. Price movement is what traders need. Up or down does
matter but the movement is more important. So the $1 to $3 weekly swings in the
price of oil are manna to hedge fund traders.
Greenspan in his remarks yesterday
in his usual obfuscatory language echoed our sentiments. While we don’t expect
the imminent collapse of oil prices we do know that the movements of the last
few weeks seem more dying fly than fundamentally strong.
*****
Seibel has lowered revenue guidance for the first quarter by 10%.
We may get the opportunity to buy back the shares we sold last week.
*****
Budweiser missed its number and has
been in the doghouse among analysts for a while. We may buy a few shares of BUD just for the name.
*****
In our readings we are observing
that analysts are raising ratings on retail stocks. For example this morning Gap and JC Penney were raised. That is
one reason we are buying a bit of Ann
Taylor. ANN announces sales tomorrow morning and we have been gingerly buying
ahead of that number which means nothing to yearly earnings but everything to
the price action of the stock over the next week.
*****
MCI says it likes Verizon’s
offer better than Qwest’s revised
offer.
*****
Cablevison, with backing from Mother
Merrill and JP Morgan has entered
the bidding war for Adelphia Cable Systems
versus the joint bid of Comcast/Time
Warner. According to our readings the latter bid is still better by $1
billion but the bidding isn’t over.
*****
Investor’s Intelligence has bulls at 47% and Bears at 29%. Those
are the lowest and highest numbers we have seen for a while.
*****
Yesterday’s Markets
8:59am and stocks opened higher as oil is lower. Asian markets
closed higher overnight and Europe is in the plus
column. Breadth in the early going is 2/1 positive but the rally has stalled.
Treasuries are firm to better in the longer maturities.
*****
2:02pm and entering the final hour the major measures are holding
in up territory after coming under selling pressure in the contra hour. Breadth
remains strong at 2/1 positive.
We repurchased the Seibel at $8.30 that we sold last week
at $9.12.
*****
3:02pm and the DJIA closed up 235 points at 10485. The
S&P 500 gained 3 points to 1182
and the NAZZ closed unchanged at
1999. Breadth remained 2/1 positive on the NYSE but closed even on the NAZZ. Treasuries
were higher with the ten-year ending at 4.43% and the five-year at 4.08%. Oil closed lower at $55.85 down 19
pennies.
And tomorrow is today so let the
games begin.
*****
6 April 2005
Thoughts
Monday’s markets were not
discouraging to us since breadth gradually improved and the major measures held
above support. Overnight Tuesday Japan was up 1% and Hong Kong
was closed for holiday. Europe is trading higher; oil is
lower by 50 pennies; and gold is off a bit. Treasuries are flat.
This is a glass half full/half
empty stock market and in the old days of the 1970s and 1980s folks would have
gone off to play golf. But there is so much fast money sloshing around the
system and so many 20/30 somethings who have to trade to make a dime that
everyone just sits around staring at their screens awaiting any trading event.
We are happy with our chosen
stocks and will wait out the drifting since we think the sideways movement is going
to resolve to the upside for a while at least.
*****
BankAmerica raised telecom equipment stocks including Ciena. This time CIEN’s share price
didn’t pop 30 pennies (only to drop back down a few days later) as it had the
last few times analysts raised their view of this dog. And so we bought a few
shares at $1.70 for our aggressive accounts. The company can exist for a few
more years and it is probably going to be acquired by someone. We just hope it
isn’t Tellabs who buys it. It is
strictly an anchovy.
The Bell subs were strong yesterday in a weak market
and we think it is their dividend yield that is attracting buyers. Whatever the
reason we are glad to see a few of our stocks rise on what was basically a
negative day although the major measures did manage a gain.
Albertsons is higher today because Safeway reported that its sales are going to be higher. The stock
markets are assuming that ABS and
other grocery markets will be the beneficiary of better sales also. Another
point higher on the stock and we’ll let others do the assuming - of our shares.
*****
Challenger and Gray said that
layoffs were down 20% in March versus February. That is a nice piece of news
for those not laid off.
*****
Lazard started TLAB with a buy and price target of $10 and the shares are off 10 pennies. It’s that kind of market.
*****
Yesterday’s Markets
11:51am and stocks opened higher and have kept their gains all
morning. Breadth is positive on the NYSE and slightly negative on the NAZZ. Oil
is off 46 pennies at $56.55 and Treasuries are flat. Volume is moderate.
*****
Chairman Greenspan says that market
forces may cool energy prices. Thanks Alan.
*****
3:02pm and oil closed off 96 pennies at $56.04. Treasuries were firm with the ten-year
at 4.47% and the five-year at 4.13%. Breadth
was positive on the NYSE and flat on the NAZZ. At the bell the DJIA was up 35 points at 10455. The S&P 500 gained 5 points to 1181 and
the NAZZ rose 7 points to 1998.
And tomorrow is today so let the
games begin.
*****
5 April 2005
Thoughts
The consolidation begins anew in
the oil industry when oil prices are at all time highs. Chevron Texaco is buying Unocal.
Why do chief executives not buy companies
when they are cheap instead of at all time highs? The answer is simple. CEOs
and investment bankers are psychology investors who are driven by the bigger is
better theory and it is much easier to buy when oil prices are at their all
time highs than when oil prices are wallowing at much lower prices.
Maybe oil prices will never come
down again but that idea flies in the face of history and previous oil booms.
Chevron Texaco is buying Unocal’s refining capacity and paying a big price for it
but the cost will be lost in the largeness of the acquiring company.
Again we ask where the gas lines
are. If there is a shortage of gasoline there should be lines and intermittent
shortages around the country. We haven’t yet heard of them though they may
appear this summer.
Since we continue to see TV ads
for Hummers and oversized SUVs on all the sports broadcasts we presume Detroit
hasn’t heard of the gasoline shortage either.
Do you know that the Congress
that just voted to open ANWR to drilling is the same Congress that gives Tax credits-
that is credits not just deductions- to folks who buy Hummers for their
business use instead of a nice Volvo wagon or Chevy blazer? If a vehicle weighs
over 5000 pounds there is a tax credit available that in effect has the
government paying up to 90% of the cost of the car through foregone taxes.
There shouldn’t be credits for
any car but if Congress is intent on giving taxpayer money away why not give
tax credits to cars that have 40mpg ratings not cars that have 12mpg ratings?
We suppose that is too simple a solution.
*****
Smith Barney has added Schwab
to its recommended list.
*****
“The reason worry kills more people than work is that more people worry
than work.” Robert Frost, courtesy of Cody Willard on www.realmoney.com.
*****
Monday’s Markets
10:34am and stocks are lower in moderate trading. Oil is at a new
high at $57.30 but Treasuries are firmer. The selling is orderly and breadth is
2/1 negative.
We added JPM at $33.67 to accounts. It was ex dividend this morning but the purchase
price was lower than the dividend subtracted from Friday’s close. We also added
Schwab to accounts at $10.50 and we
are picking up a few shares of Ann
Taylor and Cabot Micro for our
larger/aggressive accounts.
*****
3:02pm and breadth moved grudgingly into positive
territory on the NYSE by the close. Oil
finished at $57.01 after making new highs early in the day. Treasuries softened in late day
trading. At the bell the DJIA was up
17 points at 10421. The S&P 500
gained 5 points to 1182 and the NAZZ
rose 7 points to 1991.
And tomorrow is today so let the
games begin.
*****
2-4 April 2005 Weekend Comments
Thoughts
It has been an interesting morning
with the employment number coming in at 110,000 jobs added when 220,000 were
expected. Moreover the March data were adjusted (increased) by 167,000 to
account for the month’s births/deaths model and so the employment number without
that adjustment would have been negative.
On the employment news Treasuries
rallied with the ten-year dropping 10 bps in yield to 4.40%. That rally lasted
all of an hour and then the ten-year moved back above 4.50% and is now down in
price on the day.
The major stock measures opened
higher and they have moved back toward even as the bonds have given up their
gains.
Hourly earnings increased 0.3% in
March and the ISM index (Institute of
Supply Management), which is a
measure of economic activity, was basically unchanged for March versus February
at an expansionary 55. At 9am the University
of Michigan Consumer Sentiment Index
was 92 for March versus 94 for February. We attribute that to the fact the Michigan
State is in the final four.
The markets and traders obviously
are conflicted about what the numbers mean. There have been some large gains
for some and large losses for others. Our thoughts as all this was occurring
were that the Fed said it was going to stay on a measured course of raising
rates and we think they will. The flummoxed traders had been waiting all week
to trade on these numbers and we think their emotions got the better of their
pocketbooks.
*****
Friday’s Markets
9:48am and we are going to add a few shares of Micron Technology to accounts. Their earnings on Wednesday were
better than and MU is a pure
commodity chip play on a rise in economic activity in the tech area. The shares
except for a year end 2002 blow out $8 low are selling at the lowest price in
10 years. And earnings are improving.
*****
10:03am and Wal-Mart
broke through $50 to the downside and that is a new 25 month low. Supposedly
gasoline prices are going to keep folks from driving to their friendly neighborhood
behemoth. We are sad.
We added a few share of VECO at $14.95 to accounts
underinvested in it and to those that didn’t own it. And we also bought Micron Technology in many accounts at
$10.30.
AIG, the embattled insurance company that doesn’t know whether it
overstated earnings by $1 billion or $3 billion or more is finally breaking
down and its $3 share price drop has moved the DJIA down 40 points with the
other major measures tagging along. We would guess that some hedge fund folks
who were blindsided in the Treasury rally/ collapse this morning might be
licking their wounds and selling some stocks to reliquify.
*****
Need an apartment in Manhattan? http://money.cnn.com/2005/04/01/real_estate/manhattan_apt.reut/index.htm
*****
A question from five year old princess Abigail:
Why did the spider cross the
road?
To visit her website.
*****
3:02pm
and stocks closed lower today as bonds traded all over the board finally closing
higher on the day. The ten-year ended at 4.46% and the five-year finished at
4.14%. Oil was up $1.87 to a new high of $57.27. At the bell the DJIA was off 100 points at 10403. The S&P 500 lost 8 points to close at 1173 and the NAZZ gave up 15 points to end at 1985.
Breadth was 5/4 negative on the NYSE and 2/1 negative on the NAZZ.
And tomorrow is today and it is
Saturday so enjoy. The updated Model Portfolio has been posted.
*****
 
April Fools Day 2005
Rabbit, Rabbit.
Thoughts
Elan is now trading at $3 as another case of a rare disease was
found in a patient taking Tysabri.
And so our instincts which looked silly for a few days saved us from a bitter
pill.
CS First Boston raised Fifth
Third from neutral to outperform and also raised its opinions on bank
stocks in general to market weight from underweight.
Goldman Sachs is predicting a spike in oil to $105-$110 per barrel sometime
in the next two years. Maybe Goldman bought oil futures yesterday when they
dropped $2 to $53. No, investment firms don’t do that kind of thing. Oil is
higher by $1.50 this morning to $55.30. Hopefully we will be out of stocks if
that happens. And hopefully that prediction goes the way of tulip bulbs, the
$100 oil predictions of the early 1980s and Goldman Sachs’ prediction that the
bull market would continue through all of the year 2000.
We do continue to think that a price under $40 on oil is needed for
a good sustainable bull rally. Yesterday’s up action in share prices may be
quarter end window dressing. We’ll see how today goes. Overseas markets were
higher overnight on the backs of the move higher on Wednesday in U.S.
stocks.
Personal income was up 0.3% in February. In the latest week, jobless claims rose to 350,000. That
number is going the wrong way. The big report is this morning April Fools Day
when bull traders are hoping for a 200,000 but less than 300,000 rise in non
farm employment.
*****
Yesterday’s Markets
11:01am and the major measures opened up a bit but quickly moved to
negative. Breadth has remained positive all day and is currently 2/1 positive
on the NYSE. Crude oil is now up $2 at
$56.01. Thank you Goldman Sachs.
We are adding more Brocade to accounts at $5.90.
We’ve spent a good amount of cash the last few weeks as the markets
have tanked and so to raise a little cash we sold the SPDR Tech units we own at
a scratch of $18.55.
We bought Nextel in larger accounts at $28.45. Each share of NEXT will be exchanged for 1.3 Sprint-Nextel shares when
the merger of the two phone companies takes place. The spread is about $1 per share
on the arbitrage between FON and NXTL and so we though we would buy- at a 5%
discount versus the shares of Sprint- the new company that will emerge.
We did buy some Sprint shares in larger accounts at $22.56.
*****
1:10pm and in the contra
hour the major measures remain lower with breadth still positive. Treasuries are firm again to day with
all maturities 3bps to 16 bps lower, short to long respectively.
The last three quarters’ end SEBL has popped 10% the day of, or the day
after, and then over the next week moved back lower. We sold the stock today
for a scratch profit because it jumped 10% in price and we will look to
repurchase lower.
*****
3:02pm and at the bell
breadth was 5/3 positive on the NYSE and 5/3 negative on the NAZZ. The DJIA closed at 10504 down 37 points. The
S&P 500 dropped 1 point to close
at 1179 and the NAZZ lost 7 points
to end at 1999. Oil finished up
$1.41 and $55.40. The Treasury ten-year
ended at a 5.50% yield and the five-year at 4.17%.
And tomorrow is today and it is
April Fools Day so kiss a fool and have good luck.
*****
 
   
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Summary of Business Continuity Plan
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