Articles

Here is how I anticipate the big trials out of the AHA panning out and how you can trade based on these projected results

We may have more vcrs, tvs, ipods, and computers but our standard of living is in the toilet. A look at some common stats will make that clear. The first step to fixing the problem is recognizing that we have one.

The market plunge today resulted from trader panic over more bad news about credit (surprise!), the Fed’s reservations about further cuts (surprise!), and Exxon’s missed numbers (surprise!). Surging oil prices and profit declines by the big Oils would have been enough on their own to cause panic among market movers. It is hard to understand why the obvious always catches the markets by surprise, but it sure does. Trader concern is largely knee jerk, and worry about Exxon is hardly rational; the company’s dip in profits will shake out in a relatively short time as the “crack� or spread between producing and selling widens. This is an opportunity for the investor, not a time to short or run for cover.

I am not sure that Garmin is headed in the right direction.

The Fed has cut the Fed funds rate again.

In one corner you have the fact that more adjustable rate mortgages are due to reset, the economy is slowing, and home prices continue to decline. In the other corner you have banks who say that the worst for them is over and next quarter should see a rebound. What do you think? Who do you believe? Have the banks fully marked down their assets to reflect reality or are there more skeletons in the closet - excuse the Halloween pun?

Debate over the rapid rise in oil prices ranges from blaming geopolitical events, Arab producing nations, big oil companies, hedge funds and the like. All have something to do with the rise, but hedge funds are surely pulling more of the strings than the others. Nothing else explains the extraordinary jump in prices in the last days. In fact, hedge funds are far and away the principal actors behind the oil bubble we have seen of late -- and they are about to profit even more handsomely when the Fed drops the interest rates tomorrow.

The New York Times stock has gotten pummeled over the last three years as heavy competition from online has eaten into profits. But the company has bottomed-out. It is a web-savvy company that will profit as more revenue moves online. It will survive and thrive.

Oil has reached a new record - $93 per barrel - despite plenty of supply. The news will tell you that it's because of geopolitical tension between the Kurds and Turkey but neither of these areas supply much oil. Traders are using that as an excuse to drive up the price of oil and make a killing.

A big headline in the Wall Street Journal today declares "Slower China Growth Suggests Peak is Past." That is as silly a headline as The World is Coming to an End. I don't know what the journalist (Andrew Batson) was drinking, but China's growth in the second quarter was 11.9% and 11.1% in the first quarter. We should all be so lucky as to have quarters like that -- including this last one. Give us a break, Andrew Batson, and start reporting responsibly.

It never ceases to amaze me how volatility plays out in the markets – how easily people forget one day only to rediscover the next. One has to believe that the market movers are all senile – that they can hold an idea in their heads at most for a day, forget it entirely the next, and then embrace it as new two days later. I am convinced that everyone buying and selling stocks these days suffers from some form of Alzheimer’s disease. The symptoms are clinically the same in the market and in the nursing home.

Not surprisingly, China’s wireless telecom carriers are growing by leaps and bounds, far more rapidly than fixed-line operators. Any country developing as rapidly as China cannot wait for the old technology. In fact, wireless telecoms are leading the way for huge economic development throughout Asia, the Middle East, and South America. But, in China’s case, the growth is nothing short of spectacular. Investment in China Mobile, the major wireless carrier in China, is one of the surest bets in the midst of China’s unprecedented growth. And, safer still, is to buy shares of FXI which bundles the best of China and where China Mobile is the ETF’s largest holding.

Amazon reported earnings today that showed the company is finally starting to live up to its potential. But somewhere along the way, Amazon stopped being the poster child for the Internet. The problem is that while Internet companies have PEs of 30+, retailers have PEs of 10-15. What will it be for Amazon?

As I surveyed the carnage from last week’s market drop, I tried to focus on those stocks that actually moved up. Of these, the most interesting to me are CVTX, BSX, and ISRG. I have written about the first two before, so I will be brief here.

It is hard to imagine Google going substantially further and more imaginatively than it has already. It is hard to imagine Google’s shares going much higher. But, Google is on a course that will take it to another level entirely, and its share price – as a consequence – will continue to soar. It is more than likely that we will see Google shares going for $1,000 in the next three to six months.