The return of old-style investing
The aerospace move and the short covering are reminiscent of bygone days.
When oil goes up, the sector does well because the airlines will need more fuel-efficient planes. When oil goes down, people think the airlines will do better and therefore place more plane orders. In the absence of a trend in rates -- and we don't know the trend -- it has become the de facto trade, and aerospace is even better than biotech and high-growth retail like Starbucks (SBUX).
One of the amazing things about this market is the intense and relentless run-up of the same stocks on the same news. There is no per se news about aerospace. We just keep getting more orders, and it will keep happening because of the fuel-efficiency issue. But when is it built in? When does Boeing (BA) discount it? Right now, the answer would seem to be never.
What I think is happening is we are seeing a return to some old-style investing. Boeing used to trade in seven-year cycles. A new '87 entry would give Boeing seven long years of profits with terrific gross margins, ones that get better every year. That's precisely what it seems to be happening right now, doesn't it?
That means the discounting mechanism has gone awry.
Plus, the current crop of analysts just aren't used to a market this bullish. They, collectively, don't want to hype Boeing, because they fear top-ticking it. In fact, the only stock that analysts don't seem to be afraid to top-tick is Google (GOOG). Before that it was Qualcomm (QCOM), and before that it was Apple (AAPL), although I think Google is better than those two.
It's just that the bullishness is so pronounced that they can't get their arms around it.
Plus there are tons of stories out there that people are short, and they seem to be short/cover/short/covering every time.
Take Amazon.com (AMZN). Periodically someone says something good about the stock, but we're much more likely to hear the stock is overvalued. How many people are short that?
Then there is this pattern, too. You will have a couple of days when winners like PVH (PVH) and Netflix (NFLX) are weak. That brings in the short sellers. Then something positive happens and the shorts spend the next day or two scrambling. Again, constant pattern.
That, too, is reminiscent of the 1980s and '90s, when the bears simply couldn't believe the moves and so shorted them out of disbelief.
Disbelief is a terrible reason to short something. And that's exactly what's generating a lot of these moves.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long AAPL.
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Let the lefty spin begin !
This tells the story, why Bush was so bad at the end of his term.
Some people aren't aware of all of this. Don't just skim over this, please read it slowly and let it sink in. If in doubt, check it out.
The day the democrats took over was not January 22nd 2009, it was actually January 3, 2007... the day the Democrats took over the House of Representatives and the Senate, at the very start of the 110th Congress.
The Democrat Party controlled a majority in both chambers for the first time since the end of the 103rd Congress in 1995.
For those who are listening to the liberals propagating the fallacy that everything is "Bush's Fault", think about this:
January 3rd, 2007 was the day the Democrats took over the Senate and the Congress.
At the time:
The DOW Jones closed at 12,621.77
The GDP for the previous quarter was 3.5%
The Unemployment rate was 4.6%
George Bush's Economic policies SET A RECORD of 52 STRAIGHT MONTHS of JOB GROWTH
Remember the day...
January 3rd, 2007 was the day that Barney Frank took over the House Financial Services Committee and Chris Dodd took over the Senate Banking Committee. The economic meltdown that happened 15 months later was in what part of the economy?
BANKING AND FINANCIAL SERVICES!
Unemployment... to this CRISIS by (among MANY other things) dumping 5-6 TRILLION Dollars of toxic loans on the economy from YOUR Fannie Mae and Freddie Mac FIASCOES!
Bush asked Congress 17 TIMES to stop Fannie & Freddie - starting in 2001 because it was financially risky for the US economy.
And who took the THIRD highest pay-off from Fannie Mae AND Freddie Mac? OBAMA
And who fought against reform of Fannie and Freddie?
OBAMA and the Democrat Congress.
So when someone tries to blame Bush..REMEMBER JANUARY 3rd, 2007.... THE DAY THE DEMOCRATS TOOK OVER!
Budgets do not come from the White House. They come from Congress, and the party that controlled Congress since January 2007 is the Democrat Party.
Furthermore, the Democrats controlled the budget process for 2008 & 2009 as well as 2010 & 2011.
In that first year, they had to contend with George Bush, which caused them to compromise on spending, when Bush somewhat belatedly got tough on spending increases.
For 2009 though, Nancy Pelosi & Harry Reid by
passed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office. At that time, they passed a massive omnibus spending bill to complete the 2009 budgets.
And where was Barack Obama during this time? He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete 2009.
If the Democrats inherited any deficit, it was the 2007 deficit, the last of the Republican budgets. That deficit was the lowest in five years, and the fourth straight decline in deficit spending. After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets.
If Obama inherited anything, he inherited it from himself. In a nutshell, what Obama is saying is "I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th."
Maybe some of that "old tyme" investing never left...
Not everyone has a HFT Platform running on their Home PCs...
Only guys/gals like Regal Man(?) and Mr.Fat Cat (?) can afford those luxuries.
"Yes they are. JPM reported a 31% jump in profit."
Think this one through, America. This bank has a direct conduit to borrowed funds and a pretty stupid blanket credit buy-back program. They are an immediate recipient of Ben's $85 billion monthly QE. Yet... they can't lend right, they screw up in billions, invented- then were victims of their own derivatives and debt contracts! Through the 20th Century, it had the US Government bail it out FIVE times and accepted TARP monies in the 21st Century. JP Morgan is directly responsible for the Federal Reserve Act, which passed with only 4 (GOP) members of Congress in session, after hours. The 31% is based on a massive loss in difference... so... in spite of every odd in it's favor, JPMorgan Chase did really poorly and begs the obvious question... if you truly are doing well JPM... then you should be bribing Congress to end QE, right? Your aren't a bank, JPM, you're a blank check for corruption and the sooner we get to eat your executives and directors and shareholders, the sooner others will get it about financial tyranny in America.
If you really want to radiate wealth buy yourself a Buick Regal.
At least its not a chick car Beav.
I have trouble reading, re-reading contributions, that continually repeat or are repititious of the same agenda on a weekly or some bi-weekly basis...
We have a few posters, that suscribe to the that mantra...
And going into Political forays or rants, seldom holds my attention for long in any conversation anywhere....
I would rather sit and drink my whiskey quietly, and chat about the weather, crop yields or the price of hog bellies...Maybe even argue about Israel or the Middle East..
The name calling or inuendos in jest are tolerable, but then again some can just be clicked or rolled on by...
Life is too short, to punish yourself and others with droning on about what is,was or could be..
As you get older that realization comes into play, and sometimes it's not worth the trouble to listen or complain.....But just start whistling or singing under your breath or in your mind.
Que Sera, Sera.
Fatty Cakes, did you call me a name, did you call me a name....Think it was Racist, Buckwheat really Buckwheat?....What ever gave you the opinion I was Black..??
I don't call you bery leetle yallow man, that's the another guy.
And I didn't vote for Obama the first time he ran...
Then you wish me and other's to die...
That not bery nice, leetle yallow man.
Troubled Times...Kinda surprised if you are an investor leaning towards buy and hold along with searching out good dividends....; That you don't have some good selected Telcoms in your Portfolio.
VZ and T come to mind..I'm sure there are others, maybe even better...We hold FTR, but the depreciation has taken some toll.
Other staid and solid payers are in the Tobacco Sector...
But it also looks as if you prescribe some to Buffet....Think KO is his number one holding.
But I always relate he and Munger did this over about 50 plus some years and did it fairly well..
The problem with us or people like us, is we had to work for a living and support other endevours,
And had other obligations...Whereas they had been doing their Berkshire thing over a lifetime.
Good luck and good investing, you should do fine.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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