existing home sales are counted
upon the closing of a home sale, which usually takes several months after folks
commit to buy an existing home. New home sales are counted at contract signing,
which means the day the commitment is made. And so the weak new home sales are
a more current indicator of the current trends in the housing market.
*****
At mid-morning
Gold is up $9 to $559 and Oil is also higher again today at $64.35
up 44 pennies. Treasuries are lower in
yield with the two-year at 4.72% down from 4.77% last night and the ten
year at 4.68% down from 4.73% yesterday. The major stock measures are all
higher with the DJIA at its high for the morning up 35 points.
*****
The NYSE reported that Program Trading accounted for 35% of all trading
volume last week. Program trading is trading generated by computers based
on various parameters be they technical, fundamental, hedging, or wishful
guessing. That’s why we call it the Big Casino.
*****
The guess is that twenty million shares of Google ($ 7 billion) will
have to be purchased to fill the portfolios of various investment vehicles
that are constructed to mirror the S&P 500.
*****
3/24/06 marks the 637th day since the FDIC last provided assistance
to a failed or failing bank--the longest such streak in the history of the
Corporation.
*****
Gold ended at $559.80 up a bunch. Oil was $64.25 up 40 pennies.
*****
Treasuries were lower in yield on the favorable lousy housing
numbers. The two-year finished at 4.71% and the ten-year at 4.67%.
*****
The DJIA closed at 11275 up 5 points. The S&P 500 ended at 1303 up 2 points and the NAZZ gained 12 to 2312.
Breadth was 5/4 positive and volume
was moderate. There were 350 new
highs and 50 new lows.
And the Casino is now closed for
week-end cleaning. Next week brings the
Fed meeting and April Fools Day. We’ll be here for the first.
*****
23 March 2006 Daily Comment
Thoughts
We get e-emails:
Bud:
For the
period 01/01/2006 to
03/22/2006 my
portfolio had 29 trades of which 16 had gains and 13 resulted in losses.
However, in dollars terms the net result was a loss of over $1, 810. The trades include
stocks that were held for 3 days to approximately 45 days. The
numbers are not significant. The question is (at least as I see
it) why all this activity? The need to be in the market is one answer
but not the reason for such less than impressive results.
My best
Evan
We reply:
Evan:
Our
less than impressive results are why we moved accounts to cash yesterday. 3.6%
from the money fund is better than the trading results we have been obtaining this
year and we are obviously out of touch with the markets. When we are as out of
touch as we currently are it is best to clear the accounts and our head and get
liquid. This year marks twenty years in the management business and forty years
in the stock business. We have created sizable nest eggs for ourselves and our long
term clients. Our main goal is to maintain those nest eggs, grow them if we can
but make sure we keep them safe.
We manage
all our accounts as we do ours-with adjustments for size and risk taking
ability. We can’t provide the retirement home in
Monte Carlo and 100 foot yacht that Morgan Stanley and Mother Merrill
promise clients in their ads. And they won’t either. (And in 2002 their managed accounts probably dropped
15% in value while ours rose 9%. That is when performance really mattered.)
We believe
in what we are doing and that presently stocks are overpriced, that the country
is going to hell in a handbag, and that in the current Casino atmosphere in
which stocks are traded that only short term trading at certain times of the
year makes sense. In the woulda, coulda, shoulda market we may have held a few
of our year end stocks longer than we did but all folks are much richer in the hindsight
world than in the real world. In and out
trading worked for us in the big downturn from 2000 to 2003 where we made up
for 6 years of underperformance in the 1990s and pulled ahead of the S&P
500 by a large margin just as Aesop’s turtle did to the hare. We think the same
scenario is playing out now and so we are concentrating on preserving our
capital. We will continue to flip in and out of a few stocks when we think the
risk/reward warrants and hope for the best but take our losses if we must and
lick our little wounds awaiting the next good risk/reward trading opportunity.
Other
than that everything is hunky dory.
My
best, also,
Bud
*****
Don Evans, the former Commerce Secretary
is on CNBC expounding on the wonders of Free Trade. Yesterday, Jim Cramer was
on CNBC expounding on the wonders of Free Trade with China.
Do we detect a theme here?
*****
Jobless claims for the last week
dropped to 302,000 poor souls. We know most are happy to have the opportunity
to seek lower paying less rewarding employment with no benefits at Wal-Mart or
the local golf course.
*****
Japan
was a tad lower overnight and Hong Kong recovered half
of the previous day’s loss in overnight trading. As our trading day beings Europe
is lower and U.S.
futures are higher.
Gold is off a few dollars.
Treasuries are lower in yield higher in price and oil is back to $62.01.
*****
GM has begun selling parts of
GMAC to raise funds and get a better credit rating for the GMAC paper to reduce
borrowing costs. In our younger years we would have been all over this. Now we
would rather watch the soap opera than live it.
*****
Existing home sales for February
were at a 6.9 million annual rate when a 6.5 million annual rate was expected.
*****
And what is Mercury telling us?
Go to http://www.astrologycom.com/mercret.html
*****
Treasuries are trading higher in
yield at mid-day as the housing numbers have placed a scare in traders. The
two-year is at 4.76% and the ten-year at 4.74%.
*****
The major stock measures are
lower at mid-day in light trading.
*****
It’s time for refinery overhauls
at Exxon Mobil, with the company panning to close its largest refinery for a
month and maybe another also and that coupled with a loss of 200,000 barrels a
day exports form Nigeria because of the unrest there gave traders reasons to
push the price of oil up $2 per barrel near the close of NYMEX trading.
*****
Oil ended at $63.80 up $2.03. Gold
finished the day at $550.80 down 90 pennies.
*****
Treasuries were higher in yield at the close with the two-year at
4.77% and the ten-year at 4.74%.
*****
At the bell the DJIA was down 48 points at 11270. The S&P 500 lost 4 points to 1301 and
the NAZZ dropped 4 points to 2300.
Breadth was 5/4 negative on the NYSE and flat on the NAZZ and volume was moderate. New highs exceeded 250 and new lows were
65.
The games being again tonight and
the Big Casino has one more day for the big boys and girls to spin the wheel
before a week-end break.
*****
22 March 2006 Daily Comment
Thoughts
At about 1pm yesterday
INTC was up 70 pennies with strong buying of about 80 million shares. Then
within fifteen minutes the buyers evaporated and the stock gave up most of its
gains to close up 15 pennies on the day. The same type of trading action
occurred in Symantec and Applied Materials and we presume it also occurred in
other tech stocks that we don’t follow as closely.
After the close Microsoft announced that it was delaying the shipment
of its new Vista operating system until early 2007 instead
of for Christmas 2006. Could some big boys and girls have received the news
early? Certainly not in the Big Casino.
*****
Today is oil inventory announcement
day for the last week and the boys and girls await that announcement with bated
breath and fingers on the buttons ready to buy or sell. As we have commented before
and will again, the whole up and down move in natural gas this past six months
was an event created by the hedge funds and oil companies. There never was a
shortage of gas; in fact there is a large surplus. But the big boys and girls need
their homes in the Hamptons,
vacations in the Caribbean and fancy cars and NYC condos
and so the rest of America’s
working dolts have to pay to provide them with that luxury.
*****
Japan
and Hong Kong were lower overnight and Europe
is also down. With MSFT bad news tech should take a hit this morning and then
we’ll see how events unfold.
*****
Oil is down near $62 and gold is
off over $3 and trading under $550 as the trading day begins.
*****
According to our guru Tuesday was
a key reversal day which means that the S&P 500 which
is a reversal from a new swing high that takes out the prior day's low and
closes near the low of the day. That isn’t good if one is a bull. He also makes
the point that March has seen significant turns every year since 2000. In 2000,
2001 and 2002 they were negative. Then 2003 the move was positive. Moreover
there is a solar eclipse occurring on March 29 which is one day after the Fed has
its first meeting under its new Chairman. The confluence of events is almost
too much to contemplate. 1295 is the line in the sand for today. With Mr.
Softee’s news last night it should be interesting.
*****
With the Microsoft news we are selling Intel. With the delay of
the Vista system we think that over time the share price
will move lower. We bought it as a trade and our rule is never let a trade
become and investment.
For the same reason we are selling the AMAT for a scratch. Its
fortunes are also tied to Vista in traders’ minds.
Finally we are going to sell the Symantec to close out all our positions.
We have been wrong for a while and it is easier to eat humble crow in one
sitting than over a few days. Moreover all three stocks are higher than they
were last Friday even if they are losses for us. And now we retreat to lick our
wounds.
*****
Crude Oil and Distillate inventories dropped last week when they
were expected to be higher. Oil futures are a bit better on the news but still
in the minus column.
*****
After an hour and one half of
trading the major measures are higher and tech is holding its own. That
explains how out of touch with the markets we are. When we are that off in our
views, cash is a nice place to hide.
*****
A suspicious package was found on
the White House lawn and all the undocumented lawn workers have been evacuated
as a precaution.
*****
A correction from the Washington
Post:
A headline in earlier editions of
this story incorrectly described the comments of Federal Reserve Chairman Ben
S. Bernanke in a speech. He did not say that further Fed interest rate hikes
are uncertain. He said it is unclear whether unusually low long-term interest
rates mean the Fed should raise short-term interest rates more than it would
otherwise.
*****
During the noon hour the major measures are higher as traders shake
off the MSFT news and plough ahead.
In thinking about our first post
about the action in Intel yesterday the thought came to us that maybe the run
up in Intel in the morning was caused by the same MSFT news except that the
early morning buyers thought the announcement on Vista was going to be positive
as to time instead of the negative that eventually was announced.
*****
In reviewing our accounts most
are about 2% to 2.5% for the first quarter. If we could do that every quarter we
would be up 10% for the year which would delight us. But we don’t expect that
and would guess we are going to be cash for a while and so earn only about 1%
per quarter until we reach the fourth quarter and October decision time. But we
are way ahead of last year at this time (when we were down 6%) and even the
first quarter of 2004 so hope springs eternal in the spring.
*****
Oil closed down 60 pennies at $61.77. Gold was off $1.50 at $551.70.
*****
Treasuries ended the day unchanged on the short end to slightly
better on the long end with the two-year at 4.73% and the ten-year at 4.70%.
*****
The DJIA is on track to close on
a five year high but it is still 10% below its closing high six years ago. That
means if you are a buy and hold investor
and you bought the DJIA five years ago you are finally getting back to even on
your investment.
*****
The bulls chased the shorts into
the close.
At the bell the DJIA was up 80 points at 11315. The S&P 500 gained 8 points to 1305 and
the NAZZ rose 10 points to 2303.
Breadth was 2/1 positive but volume
was lower today than yesterday. New
highs contracted to 210while new
lows expanded to 90.
And there are two more days left to
place bets at the Big Casino.
*****
21 March 2006 Daily Comment
Thoughts
Fed Chairman Bernanke spoke last
night and from reports he was every bit as obfuscating as Greenspan at his
best. The take away from what we read is that he is hawkish on short rates and is
inclined to let long rates will do what they will do.
*****
The Producer Price Index was down 1.4%. Ex all human essentials it was
up 0.3%. Treasuries didn’t like Bernanke’s speech or the PPI number and are now
a bit lower with the two-year back up to 4.69% and the ten-year inverted at
4.67%.
*****
Europe was
lower overnight and Asia closed lower. Gold is down 43
pennies and Oil is trading under $60.
*****
Oracle came in with a penny better earnings and expected sales.
ORCL doesn’t impress or move tech or the markets as it did seven years ago.
*****
Bush is having a press conference
at 9am and the markets usually sell off
during that event.
*****
Our guru continues to point to
the 1309 level on the S&P 500 as resistance.
*****
Three weeks ago SGP rallied from $18.50 to $19.30 before
backing off to $18.25. We almost pulled the trigger at that time even though it
would have involved a slight loss in many accounts. Today we are going to pull
the trigger at $19.25. The upgrades yesterday were not the bang the table type
and we want to raise some cash as the S&P stalls below 1309.
*****
Moody’s says that four out of ten
jobs created in the last four years were housing related.
*****
The Bush press conference is over
so now the markets can start to climb again.
*****
Treasuries are lower at mid-day
as traders are now factoring in two more increases to at least 5%. That is the
result of Bernanke’s speech to The Economic Club of New York last night. At
mid-morning the Treasury two-year is at 4.73% and the ten-year at 4.71%. A more
pronounced inversion will begin to affect the bank stocks which have been the
leaders and solid rocks of the recent markets move to new highs.
*****
Intel is up 60 pennies this morning and we see no news. Part of the
gain may be the result of the work off of the expiration shenanigans. Also, Dell said this morning that they are going
to increase computer sales at better than expected rates and since Intel is the chip supplier that may be helping.
*****
Charles Prince was elected
Citigroup Chairman succeeding Sanford Weil. We wonder if there is room fro
Prince Charles on the board.
*****
Oil ended at $60.35 down 7 pennies. Gold lost $2.90 to $553.20.
*****
Treasuries finished lower with the two-year at 4.73% and the
ten-year at 4.72%. Inversion is back.
*****
The S&P 500 moved up to 1309
again today but couldn’t get above that number. It then reversed and moved down
to 1296 which is a point above 1295 support. The S&P 500 must close above
the 1295 number or...
*****
The action today was not
encouraging for the bulls. The failure at the high and rollover into the last
hour means there is probably more work on the downside before the big boys and
girls attempt to run stocks up into quarter end. There is a Fed meeting next
Tuesday and Treasuries dropping today helped the negativism that has developed.
Also traders caught buying the high today just had their week ruined. Today is
the down day we should have had yesterday.
At the bell the DJIA was down 40 points at 11235. The S&P 500 lost 8 points to 1297 and the
NAZZ dropped 20 points to 2295.
Breadth was 2/1 negative and
volume was brisk. There were less than 300 new highs.
And there are three more days
left for traders to try their luck in the Big Casino this week.
*****
20 March 2006 Daily Comment
Thoughts
Spring begins at 12:26pm CST today. Goodbye winter, hello
spring.
*****
Japan
was up 1.7% and Hong Kong 0.8% overnight and Europe
is higher in early trading. There is not much happening early this morning on
the gold and oil front and Treasuries are weaker in early trading.
*****
There were two analysts’ upgrades
this morning on Schering Plough from
sell to hold. We would have liked a buy recommendation but we’ll take what we
can get. Both upgrades were on valuation.
*****
The Index of Leading Economic Indicators was down 0.2% for February.
*****
The S&P 500 was up six days in a row as of Friday and so a pull
back is to be expected. 1295 on the S&P 500 is the line in the sand.
*****
In our larger/aggressive accounts we are selling SGP for a small
profit. This is an aggressive sell because we may buy the shares back in the
next few days after the upgrade wears off and the share price pulls back. We
are holding the shares in our smaller and our larger less active accounts because
we think the shares will eventually move higher. Hopefully we aren’t being too cute on this trade but we are flat
to profitable in the larger/aggressive accounts and may even sell in the other
accounts on a move higher tomorrow.
*****
Crude oil ended down $2.47 to $60.30. Gold was up $1 to $556.10.
*****
Treasuries ended flat on the short end to a bit better on the long
end with the two-year at 4.64% and the ten-year at 4.65%.
*****
Luckily the DJIA and S&P 500 were
down slightly so the storing of up four days in a row and six days in a row respectively
were broken. At the bell the DJIA was
down 5 points at 11275. The S&P
500 lost 3 points to 1305 and the NAZZ
was up 9 points at 2315.
Breadth was negative and volume
was moderate. New highs exceeded 400.
And the casino is open for
business as usual tomorrow.
*****
17 March 2006 Daily Comment
Thoughts
Japan
was up 1.5% overnight and Hong Kong was also higher. Europe
is trading higher as the trading day begins. Gold is up pennies and Oil down pennies
and Treasuries are a bit weaker this morning.
*****
Tech stocks are underwater again
as the markets open. Our guru is negative on the markets.
*****
We are going to sell our Ford position today for a 2% loss. With
the markets at all time highs we think that in any general market correction Ford
goes lower to the $5 range. This is a stock we should have waited for purchase
in the autumn.
*****
Intel is down on a report from Taiwan
that major notebook buyers like DELL and HPQ are cutting their orders for INTC CPUs because of slow sales of
notebooks this quarter. Interestingly DELL
and HPQ are not lower.
*****
We bought Applied Materials at $17.50 in many accounts. We sold the
stock two weeks ago at $18.80 and it is down like all the chip related issues.
But we also think it may be being pinned
to the $17.50 strike price today. If stocks are going higher the tech stocks
have to join the party. We have made money trading the shares from this level
before.
*****
Gold ended at $554.90 down 30 pennies and Oil closed at $62.80 down 78 pennies. Treasuries were a bit weaker all day with the two-year finishing at
4.64% and the ten-year at 4.67%.
*****
At the bell the DJIA was up 25 points at 11280. The S&P 500 rose 2 points to 1307 and
the NAZZ closed 6 points higher at
2306.
Breadth was slightly positive and
new highs exceeded 440. Volume was active because of expirations.
The casino is closed for the
week-end so we all can enjoy the basketball tournaments.
*****
16 March 2006 Daily Comment
Thoughts
Gold is at $555 and Oil is
down 6 pennies in the early morning going. Japan
was down 1%, Hong Kong up a bit and Europe is lower.
Housing starts in February were down 7% which was better than
expected after the rip roaring January. The Consumer Price Index for February was up 0.1%, ex all the important stuff it was still up only 0.1%. Jobless claims
for the prior week were 309,000 but the four week average remains under
300,000.
JP Morgan downgraded Ford from overweight to underweight with the shares at $7.85.
This same analyst had upgraded Ford
to overweight in 2004 when the shares were at $14.50. We’ve had those kinds of
stock calls too. Sometimes the pain gets so bad that it is better to start with
a clean slate. Since we bought Ford at a different time with the troubles
already apparent we are going to hold for a while at least.
*****
Hedge funds now control $1.5 trillion in assets and that number increasing
everyday. Multiply by ten (because of the leverage they employ) and you will
get an idea of the power now in the hands of the hedge funds. Total household wealth
in the U.S. is about
$50 trillion.
*****
The government boosted the
testing for mad cow disease from 55 cows per day to 1000 cows per day. Now they
have found a third cow with the disease but are planning on reducing the daily
testing. That is because the purpose of the testing was not to find cows with
the disease but to placate the public.
*****
We sold our Xcel holdings for a 60 pennies profit which is 3 quarters of
dividends.
*****
The games have begun, trading
slows.
*****
Gold ended up $1.20 at $556.40. Oil closed $1.41 higher at $63.58.
*****
Treasuries gained with the two-year finishing at 4.62% and the
ten-year at 4.64%.
*****
Today’s markets were interesting.
Oil rallied in Iran
bombing rumors, Treasuries rallies on the end of tightening rumors and gold
rallied. Cyclical stocks rallied as tech stocks sold off.
At the bell the DJIA was up 550 points
at 1255. The S&P 500 gained 3 points
to 1305 and the NAZZ dropped 128 points
to 2300.
Breadth was over 2/1 positive on the NYSE and flat on the NAZZ. New highs exceeded 600 and volume was
moderate.
Tomorrow is expiration day and
the Casino will be open on its last day of business for the week. And the games
continue tonight and tomorrow and seemingly forever.
*****
15 March 2006 Daily Comment
Thoughts
After a 60 degree day on Saturday
we are expecting 6 inches of snow tonight. The land of milk and honey is an
interesting place to live.
*****
Our guru liked yesterday’s action
and has now set targets of 1309 soon and 1330 by April 9 as targets. We are
agnostic.
*****
This morning Oil and gold are off
pennies after their big moves yesterday and Treasuries are also a tad weaker.
*****
Hong Kong
was up 1% and Japan
half that, while Europe is fractionally higher across
the board as the trading day begins in America.
*****
The WSJ reports that Fed Chairman
Bernanke wrote a letter to a Congressman saying he was quite concerned about budget deficits… because deficits hold
down the growth of national savings. We wonder what his position was when
he was serving as Head of the President’s Council of Economic Advisors in 2005
when tax cuts were proposed that have continued the deficits about which he is
now worrying.
*****
The WSJ reports that Ultimate Fighting (thin glove boxing,
kicking, judo, rabbit punches and other such mayhem) is replacing boxing as the
“sport” for the blood thirsty in Las Vegas
and on pay for cable. This month 10,000 folks paid between $50 and $450 to
watch a match at the Mandalay Casino in that fair city in the desert that
exists because of free government water supplied by U.S. taxpayers. Can anyone say
Roman Coliseum?
*****
Intel announced a new server named Sossaman
which is a low voltage kin of its Xeon server and uses one third to one fifth
the power of most current servers.
*****
Oil inventories were up again
while gasoline and distillate inventories were lower. At mid morning gold is up
$4.70.
*****
European stocks closed mostly
higher.
*****
With the North Fork Bank takeover and the rally in interest rates we are
going to begin to re-establish a position in New York Community Bancorp
by buying shares in our large/aggressive accounts. NYB yields over 5% and we think there is a good risk/reward trade
possible in the shares.
*****
Gold ended up $1.40 at $554.40 and Oil finished at $62.17 down 93 pennies.
*****
Treasuries surrendered part of their gains of yesterday with the
two-year ending at 4.67% and the ten-year at 4.73%.
*****
At the bell the DJIA was up 60 points at 11210. The S&P 500 gained 6 points to 1303 and
the NAZZ rose 15 points to 2310.
Breadth ended over 2/1 positive and new highs expanded to over 400 which is more like it. Volume was moderate.
There are two more days left for
the Big Casino players this week and only two more days until St. Patrick’s
Day.
*****
14 March 2006 Daily Comment
Thoughts
Gold is down $3.60 in early trading and Oil is over $62 as Iran
talks about cutting of companies that provide oil to countries that vote
against it in the U.N.
*****
The Washington Times has a story
about Venezuela
selling uranium to Iran.
Far Out.
*****
Retail sales for February were lower but added to better retail
sales for January the numbers are a wash.
*****
Japan
and Hong Kong were lower overnight and Europe
is mostly lower. U.S. futures indicate a down opening.
*****
We get e-email:
Thanks for the news about the recommendations
from the HHS bureaucrat. I hadn't heard that. For some reason it reminds me of the
situation of friends of ours in San Francisco. They followed the advice and stored a lot of bottled
water etc. in case of an earthquake. In the big earthquake of - I think it was 1987- the only
damage they had was that all the bottles of water fell out of the cupboards and broke.
*****
Our guru thinks that today’s
direction will govern Friday’s close, and that the direction after Friday’s
close into April 9 which is 6 months from the reaction low last year will tell
the tale. If stocks run up into April 9 then that will be a high and if stocks
move lower into April 9 that will be the bottom and stocks will move higher.
*****
Mexico
just announced a huge oil find. Can the U.S.
invade Mexico?
That would solve the illegal immigration problem since Mexicans would become U.S.
citizens and the U.S.
would pick up some large oil reserves without having to destroy the Alaskan
tundra. And it would be late payback for Mexico
invading Texas back in 1837, or
so the story goes.
*****
In mid-morning Treasuries are rallying on positive
trader talk about the Fed stopping at 4.75%. Supposedly a NYC Consulting firm
in the know says that the Fed is going to stop there or at 5%. The two-year is at
4.69% and the ten-year is at 4.71%. The major
stock measures are mixed in light trading with no conviction.
*****
An era passes as the NY Times says that it will stop printing daily
stock quotations.
*****
Oil ended up $1.48 at $63.25. Venezuela
is in the picture again and, unlike Iran,
Cheney and the boys in the Pentagon may think they can take them out or may be
fomenting a coup. If it doesn’t work then ….. No oil. It seems strange to even
suggest something occurring but after the last five years and with a weak kneed
Congress anything is possible/
Gold was up $5.50 at $553.
*****
Treasuries staged a nice rally with the two-year finishing at 4.65%
and the ten-year at 4.70%.
*****
The DJIA closed at 11151 up 75 points, a new 4 year plus closing high. The S&P 500 gained 13 points to 1297, a
new 4 year plus closing high, and the NAZZ
rose 26 points to 2293. The S&P 500 outperformed the DJIA because of
GOOG, EBay and the oil stocks.
Breadth was 2/1 positive and new
highs were a bit over 300. Volume
was moderate.
Today was a win for the bulls but the new highs and volume were not super.
Tomorrow will be the test of whether the bulls can get two days in a row.
The casino will be open for
business at the usual time.
*****
13 March 2006 Daily Comment
Thoughts
The bluebirds arrived on Thursday, the red-wing blackbirds on Friday and the robins on Saturday. Usually all three species arrive around the
Feast of St Joseph on the 19th or St Benedict which is the 21st. so they are
early this year. The geese are honking and the ducks are quacking and the herons
are yelping from the ponds in our neighbor’s valley. And the turkeys are gobbling
up a storm so hopes are bright that spring has sprung.
We purchased two horses over the winter
and rode one of them, Whitney, for the first time on the week-end. She has a
wonderful gait and except for a rein breaking and trouble getting her to take
the bit on the second day everything went well.
*****
Stocks opened higher on Monday continuing
the trend from overseas where Japan
and Hong Kong closed higher and Europe
which is also trading higher. Treasuries
are a bit lower in early trading and gold
is up $4 while oil is back above
$60.
*****
Say What?
Over the weekend, Secretary of Health and Human Services Michael Leavitt
recommended that Americans start storing canned tuna and powdered milk under
their beds as the prospect of a deadly bird flu outbreak approaches the United
States.
Why not the pantry? Are folks going
to be to sick to get out of bed? And what about the masking tape?
*****
According to Reuters, Oil is up
$1 because of worries by traders about supply disruptions caused by the Iranian
situation. And it is also Monday of expiration week and the big boys and girls
need volatility to make money.
Approaching 1pm the major measures are off their highs with the DJIA
down 10 points.
*****
We bought more Intel for our large/aggressive accounts
at $19.76. If the share price moves lower we will add to more accounts.
We also purchased Symantec at $15.75 in accounts in which
we sold HSY last week. We have had decent luck trading SYMC in the past.
*****
Oil ended at $61.85 up $1.89. Gold
was up $6.20 at $547.50.
*****
Treasuries closed unchanged on the short tend to up down a tad on the
long end. The two-year finished at 5.73% and the ten-year at 4.77%.
*****
At the bell the DJIA was unchanged at 11076. The S&P 500 gained 2 points to 1283 and
the NAZZ rose 6 to 2267.
Breadth was positive and new
highs exceeded 300 while new lows were less than 100. Volume was light.
And the casino has two more days
before attention turns to basketball
and Quintuple
Witching.
*****
10 March 2006 Daily Comment
Thoughts
Asia was
mixed overnight. Gold is down $4 to
$544 and Oil is 8 pennies lower at
$60.40. The Jobs report at 7:30am is
the number of the day for the boys and girls to play with until the basketball
games begin again at noon.
*****
Our guru from www.realmoney.com has the following to say about
the recent market action:
Moreover,
keep in mind that, bearishly, the S&P has carved out a bearish Minus-One,
Plus-Two daily sell pattern. In other words, the three-day chart turned down on
Tuesday for the Minus-One part of the equation, with three consecutive lower
lows. That was followed by two consecutive higher daily highs for the Plus-Two
part of the pattern. Additionally, a reversal of a reversal on trade below
Wednesday's low sets up the expectation for accelerated momentum lower.
So there you have the words of
wisdom. He is suggesting that a move to 1240 from the present 1275 may be in
the cards.
*****
Non Farm Payrolls for February increased by 243,000 souls. That was
30,000 more than expected but January was revised downward (the January report was
revised to 170,000 from 193,000) so the overage comes from the revision which
of course may be revised again next month. The Unemployment Rate was 4.8%. Average
Hourly Earnings were up 0.3%. Average hourly earnings year over year were up
3.5%.
*****
U.S. Households total net worth increased to
$52.3 trillion in the Fourth Quarter of 2005. We wonder who adds up all the
numbers to come up with that figure.
*****
The Dubai ports deal is dead but Dubai
is going to hire an American company to run the ports. Can anyone say Halliburton or Bechtel brokered by The Carlisle Group?
In fact the WSJ reported today that:
Washington-based
private-equity firm Carlyle Group is raising a $1 billion U.S.-focused
infrastructure fund, the first buyout house to create such a fund specifically
targeting infrastructure projects in the U.S.,
people familiar with the matter said.
The fund will be
co-headed by former Bechtel Group Inc. Senior Vice President Robert Dove, a
well-established figure in the industry, and will invest in projects such as
toll roads and other public-infrastructure developments through competitive
bidding, by means such as public-private partnerships.
*****
After an hour and one half of trading
Treasuries are lower across the board and stocks are higher with the DJIA up 95
points. We don’t know the reason except
that maybe it was time for a rally since so many bulls were wearing sad faces.
*****
Europe is
trading higher into the close.
*****
By selling shares at $7.82 we
reduced our Ford positions in larger
accounts where we realized we were a little too heavily invested for our tastes
after we had to ride the stock lower this week. We are taking a small loss on
the sales but we have a more comfortable position in our larger accounts now
and will be a more inclined to buy stock at a lower price- which we hope we
don’t have the opportunity to do.
*****
Google has been down all day even
with the DJIA up 100 points.
*****
Oil ended at $59.95 and Gold
lost $4 plus to finish at $543. Treasuries were marginally lower with
the two-year at 4.73% and the ten-year at 4.75%.
*****
At the bell the DJIA closed up 102 points at 11075. The
S&P 500 bounced off support to
close up 10 points at 1282 and the NAZZ
gained 12 points to 2262.
Breadth was 2/1 positive and new
highs exceeded 200 but new lows once again approached 100 and volume was
light. That makes the rally suspect but a Friday rally is a plus and the fact
that the rally didn’t fizzle in the last hour as it did last Friday is also a
plus. Next week is Quintuple Witching so today’s action may be related to that. And
with the Witching, the Ides and the NCAA lotteries next week should be
interesting.
The Casino opens bright and early
Monday and we’ll be here.
*****
9 March 2006 Daily Comment
Thoughts
After yesterday’s tepid rally the
major stock measures need a good day today to overcome the negative bias that
has been evident for the past week.
Japan
was up over 2% overnight and Europe is also higher. The
Japan bounce came when the Bank of Japan (BOJ) said that it is going to affect
the economy in the future by switching from its strategy of
using money supply ( by injecting vast amounts of money into the system)
to using its discount rate (which currently is 0%) to affect the economy. This policy change suggests that the BOJ has decide that
deflation is dead and that sustainable economic growth in Japan is possible and
that it will use interest rates to accomplish that goal.. In the U.S.
that overnight rate is called the Fed
Funds rate and is what the Fed moves up or down to affect other interest
rates and thus the economy. While the BOJ said it was going to switch to this
rate measure they did not raise it. Since it is at 0% the Japanese markets breathed
a sigh of relief that the rates would not be raised and all the talking heads
are saying that in effect the Bank of Japan tightened. Go figure, only in the
world of economics would move from 0% to 0% be a tightening.
Gold has bounced up $3 overnight
and oil is 20 pennies higher after the $1.80 sell off on Wednesday.
*****
Our tech guru says that
yesterday’s action created a Lizard Buy Signal because the S&P 500 made a
ten day low and then tailed up to close near the high of the session and above
the 1275 mark. The guru has wonderful names for market movements but he has
been on and off the fence for the past month as have we. Anticipating a move is
a dangerous game in this market environment and the rotation among stock groups
makes stock picking especially difficult.
We are in the mood to preserve
our positive beginning to the year for this quarter by keeping large cash
holding and look to the autumn when more reliable patterns usually emerge
before we commit any major funds. We
will continue to try and scalp gains as with the XEL purchase in larger
accounts but only in solid companies.
By the by, Applied Materials dropped $1 yesterday on a downgrade so our
correction by selling at a scratch profit of our misdirected buy of last week
saved us from further consternation.
*****
Initial claims for unemployment were 303,000 for the last week
which is the first time over 300,000 in four weeks. The January Trade Deficit was $68 billion.
*****
Richard Bernstein, chief analyst
at Mother Merrill is on CNBC saying that consumer staples are where money is
flowing. That suggests a flat or down market because consumer staples are the
refuge of mutual funds that need to be fully invested while mitigating risk.
*****
The Palm Casino is letting bettors place bets on individual plays or
events in a game, such as which team will score the first basket, opt the first
three pointer etc. That’s almost as good as the daily trading in the big Casino
although the commission is greater because the odds on winning are only 50% on
most of the bets. Ancient Rome had
nothing on the current appetite in the U.S.
except the payers aren’t killed at the end of the game.
*****
Natural Gas inventories are 50%
above what is normal for this time of year. So the American consumer was again this
past heating season disadvantaged by speculators and the gas companies who knew
there was no shortage of gas. That was why utilities were regulated when they
were created. Deregulation has made investment banks and CEOs rich and
consumers the poorer.
*****
Europe
closed higher with Germany
doing the best up over 1%.
*****
Once the Big East tournament came
on ESPN there was a noticeable slowdown in trading. We would guess that the
gambling on the games is taking action away from the Big Casino.
*****
After being 40 points higher in
the morning the DJIA dropped to down 40 points and at 1pm is now down 20 points.
*****
In 1998 Intel earned 90 cents per a share. This year Intel will earn
$1.35. In 1998 shareholders equity was $23 billion and it is now $38 billion. Working Capital was $8 billion and now it is
$16 billion. The net operating margin was 43% and now it is 46%. Sales were $26
billion and this year they will be $34 billion. In 1998 Intel closed the year at $30 per share. In the nutty years it
ran up to $60 per share in March of 2000. Today it traded at a twelve month low
of $19.75.
*****
Gold closed up $2.70 at $547 and Oil was up 38 pennies at $60.40. Treasuries were unchanged with the two year at 4.72% and the ten-year
at 4.73%.
*****
At the bell the major measures
were lower. The DJIA closed down 35
points at 10970. The S&P 500
lost 6 points to 1273 and the NAZZ
dropped 18 points to 2250.
Breadth was 5/4 negative but new
highs did outnumber new lows by 2/1 and volume was light.
The bulls lost their momentum today and the S&P 500 closed at
support. Traders probably won’t want to be long over the weekend so tomorrow at
the Casino may be ugly.
*****
8 March 2006 Daily Comment
Thoughts
Overseas markets were lower again overnight with Japan and Hong Kong
both down almost 100 points and Europe is trading lower as are U.S. Futures.
*****
The New York Stock Exchange is now a publicly traded entity under the symbol
NYX.
*****
Investors’ Intelligence had 42.7%
bulls and 31.3% bears.
*****
Next Thursday and Friday are Quintuple Witching as well as being the
Ides of March.
*****
Goldman Sachs lowered its price target on Google from $500 to $490. Say what? Google is lower this morning
after inadvertently posting internal financial comments that were negative on
its website.
*****
The last rally came after down 7
days in a row. The markets are currently down five days in row going for 6. The
S&P 500 has held at the 1275 support level for the last few days.
*****
Gold is down almost $4 and oil
is pennies lower while Treasuries
are firmer as we begin the trading day at the big casino.
*****
The Bank of Japan is going to
make a decision on raising interest rates over night.
*****
Crude Oil inventories rose again
for the umpteenth week and Oil is off $1 on the news.
*****
Gold is down $12 at 11am and other commodities
are being taken to the woodshed also.
*****
We sold our Hershey position for a scratch loss to raise cash for deployment
into more volatile issues. When we bought HSY
we thought we would get a $3 pop as we did from ASD and EL. Instead we
got a $2 drop. We are now close to even and with the volatile market HSY ties
up too much cash. We want to maintain and maybe add to our INTC and SGP holdings
and this cash will give us the ability to do so without raising our overall
equity exposure.
Intel may trade around $20 till options expiration next week and Schering Plough may very well go to
$17.50 which is the closest strike price. Finally we want to add some SYMC to accounts but we think that the
$15 strike price may act as a magnet if there is no rally and so we are holding
off for now.
As options expiration approach
stocks often are pinned to the
closest strike price because of all the hedge fund activity and institutional arbitraging
of options.
*****
Oil ended at $60.05 down $1.53 and Gold finished down $10 at $544. Treasuries were firm on the short end as the curve is essentially
flat with the two-year at 4.72% and the ten-year at 4.73%.
*****
With an hour and one half to go
the major measures moved to the plus side and held into the close. The bulls
saved the day but not by much. Internals were nothing to bray about with breadth slightly positive and new highs and new lows about equal at around
125. Volume was moderate.
At the bell the DJIA was up 25 points at 11005. The S&P 500 gained 3 points to 1278 and
the NAZZ was down 1 point to 2267.
The bulls need good follow through
tomorrow to make a case.
The casino will be open for trading
as usual with two days left in the week.
*****
7 March 2006 Daily Comment
Thoughts
Dana Reeves, the widow of Christopher Reeves, Superman, died yesterday
of lung cancer at the age of 44. Perspective is a word that comes to
mind.
*****
Asia tanked
overnight with Japan and Hong Kong down over 1%. Europe
is lower this morning as are gold and oil and many commodities. U.S.
futures suggest a lower opening and Treasuries are continuing to move lower in
price and higher in yield.
A few reasons for this action are
hedge funds unwinding positions that are going the wrong way for them. When one
position is unwound another needs adjustment and then another and these
adjustments affect other hedge funds creating the general malaise we see today.
The major measures have been in a
funk for a few days so maybe the down opening will wash out some of the gloom
and lead to higher prices later today or tomorrow.
We have reduced our exposure to
less than 15% in large accounts and may go all to cash and relax. Time will
tell.
*****
We get e-mails:
Hi Bud,
Hope
all is well.
1. This
year in May I hit 62, which is my bogie for starting to think about edging
into retirement. (Where did all the years go?) I'm not exactly sure what
this means about my investments--I'm giving myself some time to figure this
out, but it may mean that by next year I'll want to draw down some of $ you are
managing. Just wanted to give you a heads up, so I wouldn't take you by
surprise, if I start asking for $ or start consolidating assets.
2. On
another track, I was just doing my taxes (which I hate) and trying to figure
out my basis for the hp that you sold last year. In the process I took a peek
at the accounts. I was glad to see we have a large cash position right now.
This made me think about where you saw the market going and what your
investment strategy was going to be this year.
In the
"good old days" when you communicated with clients via the monthly
newsletter and the market had less volatility, I used to enjoy reading your
once-or-twice a year perspectives on the market and how your "buy and
hold" approach to investing was being applied. In our "e"
age when technology offers you the ability to communicate with us on a minute
by minute basis, we learn of your thinking throughout the day, but I
miss the periodic "big picture" view you offered us. You might want
to consider a special e-gram of your big picture "e-thoughts"
twice a year.
3. in
my readings, I seem to find these schools of thought to investing---not
counting those who are advocates for a bull or bear market:
1)
Avoid the market by taking advantage of TIPS (no risk; inflation adjusted
return)
2)
Don't try to beat the market--just create a diversified
(passive) portfolio of low cost index funds or ETFs to ride with the
market (based on Modern Portfolio Theory)
3) Try
to beat the market either by informed (or non-informed) stock picking or mutual
fund picking (i.e., so called "active approach")
4)
Speculate
5) Do
something totally different (like buy real estate)
I think
I'm a bit schizophrenic (inconsistent) in my approach, spanning 1, 2 and 3
but believing more and more in 1 and 2 as I get older. Someday maybe I'll
figure this out and get myself "aligned." As it is I'm a bit confused
and keep flopping around in my thinking. One day thinking I should be mainly in
TIPS, another day in index funds, and another wanting to beat the market.
Frankly, it is uncomfortable mentally to keep swinging around on this (my
problem, no?). I'd guess I'm searching for an investment philosophy that I'm
really comfortable with and that actually matches how I'm invested.
I know
you've modified the "old stock broker's" approach to buy/hold value
over the last few years given today's market instability. Some years we've
"won." In some years we've "lost," as my interpretation of
"Modern Portfolio Theory" would suggest should happen. I'm
wondering how you see the "big picture" and if you are ever
tempted to move from a stock picking approach to a more index-oriented
approach.
*****
We respond:
We too are thinking about
reducing our commitments by continuing to manage only a small number of
accounts. Those thoughts are especially present when we are stuck in markets
like we have been for the last few years.
Our underperformance of the
S&P 500 was by a total of 5% in the last two years. And we have had only
one down year in the last 15 and that down was 3%.
As of year end 2005 over a
five year period the total return of The Lemley Model Portfolio was plus 56%,
for the ten year period the total return was plus 213%. For the S&P 500 the
five year total return was plus 1% and the ten year return was plus 135%. Those numbers for the Lemley Portfolio include
an up 44% year and down 3% year. We try and take what the markets give us
always with a risk/reward mantra. We
don’t think we will perform as well over the next five or ten years and of
course past performance is not an indication of future performance. There is
reversion to the mean in investing although we like to think that we do better
than the mean. Even our performance in the mid 1990s was on a par with the
S&P 500 for the dollars we had invested. We underperformed on an absolute
basis because we kept a large amount of cash or short term bonds in portfolios.
We think part of your
dissatisfaction has to do with when you gave us the bulk of your funds which
was late in the life of our five and ten year record. We would guest that some
of those funds came from other investments that had not performed as well in
the preceding five years. At the end of 2004 we said that there was no way we
were going to continue to outperform the markets. It may be called the
efficient market theory but our thought was that the risk reward matrix had
changed. We are in a cash preservation frame of mind right now and that has to
do with Fibonacci retracements, overbuilding of condos, Dubai and Las Vegas as
the two examples of the excesses of the Arab and Western worlds, the world political situation, the Avian flu
threat, and the incompetence of our government. We don’t think we are going to
get out of this funk for a while.
It is our belief that clients and
readers of our Daily Comments are much better served by daily communication
than by a monthly letter. Our thoughts as the markets are moving contain longer
term outlooks while at the same time we comment on immediate happenings and why
we have done what we have. Our guess is that folks don’t have the time to read
on a daily basis and keep with the flow, but we would then suggest reading on a
weekly or monthly basis.
As to our investment philosophy
we would suggest that the world has changed since the days of the old stockbroker. It is our belief that
we now live in a casino society that has been conditioned through advertising
to believe that whatever financial return is needed to provide a wished for
life style upon retirement can be had by a certain type of investing and presto
the millions of dollars are there. Bunk, double bunk.
Rapid trading helped us survive
the year 2000 downturn/bear market. We have been considering a longer term
approach and will admit that had we stayed with some of the stocks we bought at
the bottom in 2002 we would be a lot wealthier. But at the time the trading
made sense and allowed us to survive a very difficult period. If you go back
and look at our record prior to 1998 you will see that we underperformed the
bull market that began in 1994. We have always underperformed bull markets
because we maintain large cash positions in bull markets. That is because since
the Crash of 1987 we have always been quick to raise cash when we smelled
danger. We won’t change in that regard.
We have had several long time
customers remove their accounts over the last year. They have said they want to
consolidate their assets or that they wanted to try a different style. We have
assisted them and thanked them for their confidence over the years. Clients
dying and moving on is part of the process of life in our business and our main
concern is that our clients are content in their investment programs. If they
believe they or others can better meet their needs we understand and encourage
movement.
In the process our work/worry
load is lightened and we all benefit.
Bud
*****
More e-mail:
Bud:
You
mentioned that buying AMAT to recapture losses on VOD was not a good
reason for buying a stock. If so, why buy AMAT in the
first place since "hindsight" is not in play here? I notice
that VOD is now above the price we paid for the stock. I believe
we are holding on to SGP for a potential buyout. Nice if we had some Bell South
for the same reason. As for GE, I had assumed that the purchase of this stock
was a long term horizon purchase. If not, why buy it in the first place?
It is at least a dividend paying stock. Answers to these comments
and questions may help me to better understand the remarks made in
the 5th paragraph of your letter.
Our response
We are as confused as you are.
That is serious. The Vodaphone
purchase was the mistake. Sold the AMAT
because we didn't want to hold another chip related stock and because upon
reflection it is never a good idea to immediately buy a stock AMAT to recover a
loss in another stock VOD.
We did have Bell South, heck we have owned every stock on the Big Board over
the years. We just didn’t own it when the takeover offer came. We may not
own SGP when the offer comes either.
We do our best.
GE is a down and out stock that is being sold. If the rally doesn’t
occur GE isn’t going to rally and if it does occur GE will rally less than Google if at all. That is what we
realized, that to participate in the March rally we need to own the Googles of
the world. We can’t and so probably won’t participate.
The markets are not treating our
out of favor stocks kindly. Our premise was that a rally was in the cards for
March. Now we are not so sure. And so we are reducing holdings.
Wish we had done better but such
is life.
Bud
*****
We added more SYMC at $15.90 to large/aggressive
accounts that already own it. We also bought Xcel Energy, the utility, at $18.07 for those accounts. XEL yields
4.8% and will go x-dividend at month end. We have traded this stock off this
level for the last year and it is down from $19.20 a month ago.
*****
After two hours of trading breadth
is punk and the markets looks sad. Treasuries have stabilized but gold is down
another $3 and oil remains over $1 lower.
*****
In the final hour of trading the breadth
remains very negative and the major measures are having a hard time.
Gold was down $2.30 to $553 and oil ended down 96 pennies at $61.45. Treasuries were firmer at the
close with the two-year at 4.76% and the ten-year at 4.73%.
*****
At the bell the DJIA was up 18 points at 10976. The S&P 500 lost 3 points to 1275 and
the NAZZ dropped 18 points to 2266.
Breadth was over 2/1 negative and there were 120 new highs and almost 100 new
lows. That is the first time new lows have approached 100 for many weeks.
Volume was moderate.
And the casino is open for
business again tomorrow.
*****
6 March 2006 Daily Comment
Thoughts
We had a beautiful snowstorm
yesterday and are now enjoying the calmness after the storm. March snows are
the best because we know they won’t last long. It is supposed to be fifty
degrees by Friday.
*****
The NKU Norsemen
finished their season at 17-11. They missed the NCAA Division II tournament by
a hair but will make it next year. The Lady Norse are the number 2 seed in the
NCAA Division II Great Lakes region and have a great chance of going to the Elite Eight. Their record is 26-4.
*****
The merger of AT&T and BellSouth has finally come to pass. All the other telecoms are up
on takeover speculation. The prices to be paid are not as nuts as back in the
1990s but we would much rather own the acquired than the acquirer. We don’t own
any right now after our unprofitable fling with Vodaphone.
But we have suffered from bad
timing before and survived and we will survive this time too. Our scenario had
us repurchasing the shares at $15 this summer. We may still have the chance but
our only solace is that we would have been out at even. The reason VOD is
higher is that there is now speculation that Verizon will buy the rest of Verizon Wireless (48%) that VOD owns.
That is an especially good rumor because VOD is going to sell its Japanese
Wireless unit to Soft Bank. The difference is that the Japanese unit isn’t as profitable
as the VZ unit. Verizon is going to have to pay a big price for it. That is why
VZ is selling off today. And then we would guess that VOD will make an offer for
Sprint after Sprint spins off its
land lines business. Rumors are the stuff of great profits and losses and even
better paper profit dreams.
*****
Oil is down 60 pennies and gold
is down $2 in the early going.
*****
We are selling our AMAT holdings for a scratch profit
because we bought the shares to try and make back the loss in VOD. That is not a good reason for
buying a stock and over the week-end we decided not to compound a mistake with
another. With the chip wars and supposed slowdown, our Intel holdings are enough exposure in the chip area. We are also
trading out of CSCO since we would
guess that at some point an analyst will posit that the telecom mergers are going
to increase the competition in the router area by lessening the demand. And we
also sold MSFT for a scratch profit.
The risk and reward on MSFT seems even to us and as the S&P 500 struggles just
above support we would rather raise more cash. In keeping with our cash raising
theme we eliminated GE for a scratch
loss. GE is buying www.iivllage.com for $600 million which is peanuts for them
but reminds us of the NYT purchase of www.about.com
. We think both of those dot coms are a waste of money and wonder where GE is going.
*****
On www.minyanville.com we read
that Indonesia
sold $2 billion of 10 and 28 year debt with orders for $8 billion. The debt was
sold at around 7% which is a spread of 250 to 300 basis points over U.S. Treasuries.
That is too little reward for the risk involved. There is more risk than that
in Indonesian debt and suggests that risk/reward metrics are out of whack in
the bond markets too.
There is a bunch of speculation in
real-estate, stocks and bonds by the IPOD generation and folks are reaching for yield and return
and ignoring risk.
*****
Foreign markets closed higher on
the day with Japan up 1.6% and Europe up about 1/2% across the board.
*****
This afternoon gold is down $15
at $555 and Oil is off 41.67 at $62. Guess no one is going to bomb Iran
tomorrow.
*****
With an hour to go the major measures
are on their lows for the day with the DJIA down 80 points.
*****
Treasuries closed lower wit the
two-year at 4.75% and the ten-year at 4.74%. The inversion in the yield curve
is almost gone.
*****
No rally today as the DJIA finished 63 points lower at 10959.
The S&P 500 lost 9 points to
1278 and the NAZZ dropped 17 points
to 2286.
Breadth was over 2/1 negative and new highs were under 200. Volume
was moderate.
And the casino will be open again
bright and early tomorrow.
*****
2 March 2006 Daily Comment
We will be traveling tomorrow so there will be no post
until Monday March 6, 2006.
*****
Thoughts
A very dear friend who is our age and whom we have known since
childhood died today. He was a good father and husband and friend.
We offer the following from Steven Dietz,
the author of the play Lonely Planet,
to express our feelings:
In the midst of a world that is too big and
too fast, a world where information rules like a dictator and news travels like
a virus, it is easy to be overcome by the hopelessness of the world and the
helplessness of we, its keepers. What impact can we hope to have? What traces
will we leave behind?
History is not the story of grand acts and
masterpieces. History, instead, is the inexorable accumulation of tiny events -
footsteps and glances, hands in soil, broken promises, bursts of laughter,
weapons and wounds, hands touching hair, the art of conversation, the rage of
loss. Historians may focus on the famous familiar names - but history itself is
made, day after day, by all those whose names are never known, all those who
never made a proclamation or held an office, all those who were a handed a
place on earth and quietly made a life out of it.
So what do we affect during our time on
earth? What ultimately is our legacy? Our legacy is our friends, we write our
history onto them, and they walk with us through our days like time capsules,
filled with our mutual past, the fragments of our hearts and minds. Our friends
get our uncensored questions and our yet to be reasoned opinions. Our friends
grant us the chance to make our grand, embarrassing, contradictory
pronouncements about the world. They get the best, and are stuck with the
absolute worst, we have to offer. Our friends get our rough drafts. Over time,
they both open our eyes and break our hearts.
Emerson wrote: “Make yourself necessary to
someone.” In a chaotic world, friendship is the most elegant, the most lasting
way to be useful. We are, each of us, a testament to our friends’ compassion and
tolerance, humor and wisdom, patience and grit. Friendship, not technology, is
the only thing capable of showing us the breadth of the world we live in.
*****
Asia was
mixed overnight with Hong Kong up a bit and Japan
down a bit. Europe is also trading mixed this morning.
*****
Oil is over $62 up 60 pennies and Gold is $565 down 60 pennies.
*****
We are going to sell the Treasury bills today since we think that
with the presumed FED Funds target being raised at the end of March that their
yield will increase (value decrease) and we will be better selling now and
having cash available if we wish to extend maturities. We would guess that we
will see 5% on 18 month bonds within the next month and the time and yield
ramification of a discount rate move suggest it is better to get back into the
money fund than hold the Bills so we can move when we wish.
*****
Jobless claims rose 15,000 to
294,000.
*****
There were a group of dead
flamingos found in the Bahamas
yesterday. It turns out they didn’t have bird flu. But when the bird flu
arrives in the U.S.
what will be the ramifications to the markets.
Shouldn’t we be more worried about this than Al Qaeda? With spring
migrations about to begin the possibility of birds with the flu being found
dead in the U.S.
are a given.
*****
Cisco broke out above the $20 resistance level that ahs been in
place for at least a year. We are buying shares for our aggressive accounts and
we are also purchasing at a bit more SGP
at $18.30.
*****
Tech is lower but has buyers around while retail is lower on lousy February sales and high P/E ratios.
*****
Europe ended
lower on the day after the European Central Bank chief issued hawkish comments
on interest rates.
*****
Google held an analysts meeting today and as the talking ceases the
stock has begun to move higher pulling along other tech stocks. The major measures
remain lower and volume is moderate. Breadth remains 2/1 negative.
*****
Oil is up at $63.57 as Bush heads to Pakistan.
Gold was up $1.60 to $571.
*****
Treasuries closed lower on the European Central Bank interest rate
increase. The two-year ended at 4.72% and the ten-year at 4.64%.
*****
Ford is off today because Dana Corp. missed an interest payment
which means bankruptcy is the next step for Dana. Ford is not going
that route.
*****
The bulls tried to rally them in
the last hour but weren’t able to push the major measures to the plus side. The
DJIA closed down 23 points at 11032.
The S&P 500 lost 2 points to
1290 and eh NAZZ gave up 3 points to
2311.
Breadth was negative but improved
all day. Volume was moderate on the selling. New highs contracted to 300.
We’ll be traveling tomorrow but will be here
bright and early Monday morning when the casino reopens for the week.
*****
1 March 2006 Daily Comment
Thoughts
Rabbit, Rabbit
*****
Personal Income was up 0.7% in February and Personal Spending was up 0.9%. The year over year inflation indicator was 3.1%.
*****
Investors’ Intelligence has 42% bulls down from 45% last week and 30% bears up from 29% last week. That
is a contrarian positive.
*****
JP Morgan has negative comments
on Intel and doesn’t think it will
make its quarterly $9.4 billion sales number. It says that AMD is taking share,
PC sales re slowing and Dell is not selling as much.
Since Dell is beginning to use
AMD chips that should also affect AMD. INTC
is cheap although it may get cheaper.
*****
Oil is beginning the day up 47 pennies to $61.88 and Gold is also up at $566 which is $2
better than last night.
*****
We bought Ford today for many
accounts at $7.98. With the Ford family owning stock and running the company we
are not worried about a bankruptcy filing. The equity in the company is priced
at $14 billion. We are buying to trade and/or own.
*****
Oil and distillate supplies on hand in the U.S. rose for the umpteenth week in a row.
*****
Ford beat estimates for domestic car sales at 84,000 (80,000
estimate) and truck sales at 145,000 (142,000 estimate) in February. Ford sales
world wide were down 4%.
*****
The DJIA has been up 65 points
all day long and breadth ahs been 2/1 positive all day. Markets that are up all
day going into the final hour of trading tend to close on the plus side.
*****
Oil ended at $61.90 and gold finished at $565. Treasuries slipped on
the short end and ewer down on the long end with the two-year at 4.70% and the ten-year
closing at 4.58%.
*****
The DJIA closed up 62 points at 11054. The S&P 500 gained 10 points to finish at 1290 and the NAZZ rose 32 points to 2313. Breadth finished better than 2/1
positive, volume was active and new highs moved back above 300 on the
day.
There was rotation to tech stocks
today. Whether that lasts for more than a day is the reason the casino opens
every day.
*****
 
 
 
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