|
Friday,
April 24, 2009
(Cont'd from
above)...
Jim (cont'd):
Geithner and
Bernanke issued a
statement that said,
nobody has enough
capital, everyone
needs more money… a
scary tough
statement which
blunted the
so-called sham
criticism… but they
refused to order
anyone to actually
raise capital… and
they did not seize
or threaten anybody…
which gave the bears
nobody to short…. I
tell you, I have got
to hand it to these
guys… they have
become diabolically
brilliant… they are
using the Cramer
forbearance play
book… good for them.
So what happened, it
left the hedge
funds, the bears,
with nothing to hide
behind… nothing to
explain to their
investors why they
are not buying
anything in this
rally… and they
aren’t… the only
excuse that they
have left now that
the stress test
excuse is gone… is
valuation…
valuation… how much
a stock is worth…
but here is the
problem for the
shorts… valuation is
in the eye of the
beholder… or more
specifically,
whoever is the
majority of the
beholders… and right
now the big time
beholders are the
huge mutual fund
managers, that like
stocks, that buy,
buy, buy… not the
beleaguered hedge
fund managers that
short, short, short…
this market is now
defined by two
perspectives… the
hedge funds who are
making their bets
against stocks
because they think
they are expensive,
having doubled off
of their bottoms…
and the mutual funds
who are saying that
we are buying stocks
that have been cut
in half and are
cheap… the mutual
fund view is
winning, the buyers,
because the mutual
funds have more
money behind them
than the hedge
funds.
The bearish hedge
funds are thinking
about where stocks
were just a few
months ago and
consider them now
way too expensive…
but the mutual funds
are looking at where
stocks were a year
ago, or two years
ago, and they are
thinking… wow, wow
this is it… we are
able to get Fortune
Brands or Honeywell
with accidentally
high yields that
they can pay… the
mutual funds are
thinking we are
buying companies
that are leaner and
better run… where
gross margins can
explode when things
get better… and we
are buying them at
half, or two thirds
the price of where
they used to be in
2008... so what if
they have doubled
off of the bottom,
the bulls say… they
have still been
halved from where
they were at their
peak… and we are
coming out of a
depression, so what
is not to like…
there are so many
stocks where this
plays out…. the
bears say that Ford
has just doubled,
count me out… the
bulls are saying
Ford has been cut in
half from a couple
of years ago… count
me in, especially
now because GM and
Chrysler were still
viable those days…
now you can buy what
will be the premier
American car
company, the one
that is not
bankrupt, for half
of what it costs
when it was still in
a dog fight.
How about Whirlpool…
bears are saying
wait a second,
doubled off of its
low from March 9th…
bulls are saying
down 50% from its
high… Fortune
Brands, doubled from
a month ago, the
bulls cut in half
from its highs… the
bears, doubled…
bulls see Microsoft
as a stock that is
at $21, off of a $12
move just a month
ago… the bulls say
Mr. Softie has done
nothing since 1999
so what the heck why
not buy it up $2
today… the bears see
Bank of America as a
stock that has
quadrupled from
$2... the bulls see
Bank of America down
from $40 to $9, and
they say yeah… for
the bears
Schlumberger up $3
today from a bad
quarter has moved
too much from $35 to
$49... in the eyes
of the bulls the
stock is cheap it is
down from $111.
Bulls think that
these stocks went
from being
outrageously
overvalued to being
cheap, and then
cheaper, and then
cheapest… but all
the bears can think
about is that they
have doubled off of
the bottom, and that
is too much too
soon… they are
treating each stock
like it is a car
that went 40 in a 20
mph speeding zone…
but there are no
speeding tickets in
this game… why am I
siding with the
bulls… does it all
just depend on your
time frame and your
orientation… no, no…
it has absolutely
nothing to do with
what you think… that
is not why I am
siding with the
bulls… it depends on
the big money
orientation… who has
the money coming in
and who has the
money coming out…
right now the mutual
funds are going with
the tape… it is
called the tape, the
action… and they
have money coming in
because they are
winning… the hedge
funds, they have
money coming out
because they are
losing… they are
underperforming… and
because people now
fear hedge funds, as
they should, because
they are not for
everyone… the
investors are
thinking why am I
paying these hedge
fund clowns 1% to 2%
of the assets and
20% of the gains
when the dumb old
mutual fund managers
and the long lonely
funds, guys who
don’t short… well
they are shooting
the lights out for
1%, and no
percentage of the
gains.
This is like
Watergate… you need
to follow the money…
the money is going
to the bulls not the
bears… the bears do
not have the stress
test alibi as a
reason not to buy
anymore… this
weekend the bears
will go over the
charts, they will
look at the earnings
reports, they will
swear to themselves
that they are not
going to copulate…
and then they will
get in Monday
morning after 7
fabulous weeks and
begin to take calls
from clients about
how much money they
have made this
month… the clients
want to know, have
we cleaned up… and
when the answer is
nothing, nothing,
nothing… when you
tell them stocks
have doubled and I
am not chasing them…
you know what the
partners say the
investors, remember
I was in this
business… they say
that is all well and
good, wire me out
every penny at the
end of the month… I
want to give it to
someone who got it
right… they will say
that my managers are
overpaid morons, get
me to the optimists…
the ones making the
money.
Here is the bottom
line about the
market…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
And this week it was
up, the market was
up 6 straight weeks,
it did not finish up
this week just by a
tad… but the bottom
line.. the bullish
mutual fund managers
are already winning…
and thanks to the
pressure of the
business… and the
business that I am
talking about isn’t
performance, it is
gathering assets…
big money is all
about getting money
under management…
because that is how
they make their
profits… the big
money will keep the
bulls on top… and
who gets the money
in determines the
direction of this
market… it is going
higher... The bulls
are raging, I think
you should side with
the mutual funds &
consider these
stocks cheap... The
Dow up 119... mutual
fund managers
getting money in…
hedge fund money
going to be going
out… they are going
to capitulate and
take you out at
higher prices.. that
is right.. the bull
lives on.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
```````````````````````````````````````````````````````````````````````````````````
Q:
I know that you hate
the casino stocks
because the balance
sheets are dismal.
But as recently as
yesterday you
knocked LVS again,
which by the way had
a monster day, but
can’t this be a good
place for a 3 to 5
year investment
because don’t we all
know all too
painfully that
casinos always win?
Jim:
First of all we have
what is known as
animal spirits… a
lot of companies are
going up that
shouldn’t… second of
all I should have
known better… I did
two things right
here, I told you to
sell LVS, WYNN, and
MGM very, very high
in January… and I
took them out of the
sell block at the
absolute bottom… so
while you are right,
I did not say buy
Las Vegas Sands… if
you go back into the
tape 3 Thursdays
ago, you will hear
that I released Las
Vegas Sands from the
sell block… as far
as I am concerned…
it is very difficult
to get more right
than I got on these
different stocks…
there are a lot of
stocks that you can
take me to the
cleaners, you could
give me a 1 hour
martinizing… not the
casino stocks.
```````````````````````````````````````````````````````````````````````````````````
Q:
Every sporting good
store in the country
is selling out of
fire arms and
ammunition. While
the Obama
administration does
not yet appear to
have its cross hairs
on the gun industry,
my question is… with
a 45% 3rd quarter
increase in hand gun
sales and the stock
climbing off a 2
year low, if I buy
Smith & Wesson, will
it go ahead make my
day?
Jim:
I like that Clintism…
look I was, I
recommended Smith &
Wesson during the
first month of the
show… I caught a
double, I told
people to sell it… I
never looked back…
frankly, what you
are saying is right
I know that gun
sales are very
strong… I will
endorse going with
Smith & Wesson, and
I also, let me just
say… that if you
like that another
stock that I hated
for a long time that
I understand is
doing well because
of gun sales is
Cabella’s… so I will
go with Cabella’s
and I will go with
Smith & Wesson
because I am
basically agreeing
with your Clint
thesis.
```````````````````````````````````````````````````````````````````````````````````
Q:
I own General Growth
Properties (GGP) as
part of a long term
hold strategy.
Jim:
You have to remember
that is a bankrupt
company...
Well, I think that
Bill Ackman owns
the, he is doing the
debtor and posession
financing… and it is
not clear whether
the equity will
survive… we know
that he will make
money on it I
believe coming out
of it… I am a big
believer that the
real estate
investment trusts
are coming back… but
the only one that I
am recommending
right now is Federal
Reality which has a
4.6% yield and is
run Don Wood, who is
probably the single
best… no offense,
Steve Routh, no
offense, Mike
Frostertaly… the
single best real
estate investment
trust CEO in the
business.
```````````````````````````````````````````````````````````````````````````````````
[verbatim
recap]
[end of segment]
Read Jim's next Segment
here
Read Jim's next Segment
here
|
