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Tuesday, March 17, 2009

Where's my bubble dude?

I have maintained for quite some time that 7300 was the appropriate support at this time. This assertion was made repeatedly. There comes a point where a company like Comcast becomes cheap when you consider that it is the 3rd largest phone provider in the united states, is ready to go 50m/s in internet speed, and has not even scratched additional markets like home security systems like alarmguard, smoke detection, "or help I've fallen and I can't get up" with the remote control. There comes a point where opportunity and price converge and an appropriate response is not fear.. but a focus on investing. Nope Comcast is not 'sexy' and can't be talked up or down by a TV investment schill, but for growth and return at the oversold market price was a buy.

That leads me to the title "wheres my bubble dude?" I mean we spent all this money on AIG and why isn't my 401K reflecting it? I mean the figure was a trillion and that ought of bought me something or so the reasoning goes.

Well it's gone is the answer.. probably not coming back for quite some time.. and in reality was only there in paper initially irrespective of what you paid for it. I mean you buy a Furbie doll for a ridiculous sum.. doesn't mean that there is a buyer.

That is why markets fall so quickly and fast.

If we can wrap around the fact that global markets lost 50 trillion we see that it will take quite some time for that bubble to return, that inflation is not an immediate risk, and that the actual bailout amount in respect to losses is "relevantly small" when considering the size of the global market that the US market constitutes. But there nonetheless is a public relations issue with bonuses and how this works out is that there will be a means to dissuade banks from crying poor-mouth for the free lunch.

Now.. let me get real honest.. I was opinionated with many of the mistakes that the Bush Administration made, butal and never the panderer.. that is not my personal history... and I didn't take the positions based on the popularity index either..

I actually give some credit to Ben Bernanke, think he made the very unpopular but correct moves, and that the chances for systemic default have been much reduced barring an event not directly related to the finance markets. In particular I see the next real swing up at 9-15 and then a possible XMAS rally... but where is my bubble dude????

If you spent 150/share on redhat will you get that money back??? I doubt it. Do I like RHAT where it is now?? yes.. Again I see a formula for growth that doesn't need a BS story at this price.

Citi.. hmmm.. at what price does CITI have growth potential, I mean what makes something "cheap?" I know that credit card deliquencies are up.. and know that new management notably: Anthony Santomero. McKinsey & Co. is the top shelf of consulting and all my encounters with these people in the past on numerous occasions leads me to 'know' that this was not a position of being 'tapped' to a board position, but that the best and brightest was sought and procurred.

For the record: Ben Bernanke and I share the optomism that this fall will be a turning point.. however I want to make a few succint points.. first the dow will take a long-long time to revisit some of the behavior and prices that it did during the over-valuations, that home prices will take some time to return where what you paid will be paid in turn for a home, that unemployment will be problematic barring innovation and new technology, but that the end of civilization, the great depression, or needing to buy seeds at I mean really... for $129 there is a market for fear...

The point here is that there is opportunity but expectations is the key. If you are an investor, then the market has opportunity. If you want to gamble safely go to Vegas.. play the pass-go line, you can win big... or lose big...

I think that the narrative that the "economic crisis" is over when the stock bubble comes back, or you can refinance your way to prosperity will return, is a false expectation.

I think that 6800 to 7800 is a reasonable trading range and again I stress I'm optomistic. I have traditionally been VERY conservative with investing and have always sold early and taken a profit.. and I get up and walk away a winner if I gamble...

But heh.. stocks are cheap, and there is value out there.. and if you can buy and hold there is value to be had...

In closing bears make money, bulls make money, and pigs get slaughtered.. so you execs taking bonuses while at the public taxpayer trough.. he don't get slaughtered for being pigs.. ya all hear now????

I'll post very soon on rotations.. I'm still a bull with the dollar, bear gold, recommend sell China.. (they are over-valued) and transparency is an issue... their economy is contracting and they are not as adept as the US economy to deal with it..

The US is sort of screwed, Euro gang-rapped to use metaphor.. and when the US gets a flu the world gets phenomia..

But not as an apologist to the greedy execs at AIG.. but to put things into context..

50 trillion has been estimated lost globally.. and of all the economies on the globe.. you should be thankful that the US economy is as resilient as it has been, and that the FED, Treasury, and especially FDIC has done as well as they have.

The US will be the first out of the ditch.. but don't expect your bubble back anytime soon.

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