Monday, April 23, 2007

The emperor's new clothes

No, it is not about retail or agriculture,
it is about dreams inspired by fairy tales some of us came to love when we were kids,
it is about ability to be able to have own opinion and not to be afraid to express it,
no matter how foolish it seems to others.

Kids don't read much nowadays, too bad...
Inventor of penicillin is not as well known as inventor of James Bond...
( Let say - this is a "trivia question" )

Well, enough of "sugar was sweeter" talk - lets talk money, most of modern people enjoy it way better than fairly tales. ( Unless it is about money :)

Lets talk falling all mighty dollar, lets try to convince ourselves that it is good since foreigners are going to invest more money in America and therefore stimulate American economy.
Lets forget about budget and trade deficit ( especially - trade deficit, which did not look good even while dollar was not that ... what is the word? well, let just say - when it was double of that what it is now. What? It is still not 1/2 of what it was? You just wait and say nothing - it'll happen. )

Lets talk 13K on a Dow, it is nice to talk about "good number". Or may be we'll talk about "ten commandments" - TEN is a good number, right?

Who really gives a wooden nickel about as CNBC calls it "significance" of 13K - what is it going to prove? How about that - we are at the top of the hill - where do we go from here?

You know, I have not been overly pessimistic since February correction, most of the trades I've done since then - are on a long side.

Now it is time to realize that we are still in "P/E bear/flat market", we've been there since 2001 based on historical returns of S&P there is nothing to be excited about - unless someone wants to be excited about flat ( according to long term historical data) earnings.

There is nothing exciting about companies strangling to beat unreasonably lowered estimates.

There is nothing exciting about "consumer is strong" propaganda - tell it to the guy who wanted to flip the house, well tell it to anyone who wants to sell the house...

Tell it to private equity firms who use stagnant stock prices ( yes, stagnant - in spite of some pockets of strength ) to grab anything and everything - why not to buy now - money is cheap!

May is getting closer, I think market has priced in rates cut - well, we do have a NEW Chairman - he does not want to make mistake - let me ask - who makes more mistakes? I think the one who is concerned about making it.

Have you noticed the latest NEW BIG THING?
Green day stocks? Entire sector exploded, traders cheered, bought in and dumped the very next day - so much for a moment of glory.

Tops are not formed in one day, tops might be flat - I think this is where we are now.
"Proceed with extreme caution"


P.S. For those of you who are still reading this post written "while under influence of bad market day" - I thought this article might be of some interest and of partial explanation of "what the hell that guy ( A.K.A. DavidDT ) was talking about )

That Permanently High Plateau by John Mauldin 10/20/2006