Insomniac Hedge Fund Guy

What really happened today

by

Once the dust settles, pundits and analysts will begin to start calculating what we’ve been telling you all along.  Many, many blue chip stocks are dirt cheap based on discounted cash flow analysis with the risk free rate of 2 %or even 3% on the 10 year treasury.  Stay away from cyclicals and invest in the highest credit quality stocks like Coke, McDonald’s, Verizon, JP Morgan, BP, Bristol Myers, Kellogg, Microsoft etc.  These stocks are all way undervalued.  The reason the Bernanke shot his bazooka today is that he doesn’t want to go down as the Fed Reserve Chairman that … Read more

| Mobile – CNET News

by

To date, AT&T has been the primary Apple partner when it comes to the iPhone. Even with competition from Verizon and Sprint, AT&T has sold more iPhone units. Apple’s move to support LTE, however, may change that equation. Why? Verizon CFO Fran Shammo said Wednesday at a Merrill Lynch investment conference that the telecom’s LTE footprint will be the equivalent to its 3G coverage by mid-2013. AT&T is racing with its LTE build-out and Sprint is just getting started, but neither carrier will have Verizon’s 4G coverage for months to come. via iPhone 5 with LTE could be boon for … Read more

Coca Cola is our largest holding going into today

by

With interest rates this low and the economy this bad, you want some fizzle in your portfolio without a lot of credit risk. S&P raises rating on Coca-Cola to AA- from A+ Standard & Poor’s Ratings Services raised its ratings on Coca-Cola including its long-term corporate credit and senior unsecured debt ratings to ‘AA-‘ from ‘A+’, noting that the outlook is stable. The upgrade reflects Coke’s continued strong global operating performance and financial profile amid weak global economic conditions and following its sizable acquisition of Coca-Cola Enterprises Inc.’s North American bottling operations in 2010,” said Standard & Poor’s. :theflyonthewall.com

Looking ahead September 12th could be pivotal day for two reasons

by

One thing we talk about in our Investment Survival Workshops is learning to develop a horizon further out than tomorrow.  I know that sounds obvious but it’s harder to do than you think.  Most people including myself, hesitate for a moment to recall what they did yesterday and most of us wake up and think about what we are going to do that day, not the next day or the following week.  When I moved from Eastern Standard time to Mountain Standard time zone, I dreaded getting up two hours earlier in the predawn to read the papers and analyst … Read more

The irony is overwhelming- Obama bad for markets?

by

On a day that marks the highest point in the Dow during the Obama presidency, this article is published. Four more years bad for U.S. markets: PollReprintsSeptember 6, 2012 4:09 pm Global investors are souring on President Barack Obama while still expecting him to be re- elected in November.Many investors think an Obama re-election–which they expect–will be bad for U.S. financial markets according to Bloomberg NewsRelated to this story »Study on publics view of the rich good and bad news for RomneyGOP eager to cut taxes — but which ones?An Obama win could hurt retirement plan advisers, some sayFeatured white … Read more

‘t?

by

As you can see from this chart the ratio of insider selling to buying is hitting historic highs.  The people that know their companies the best, the officers and directors, are selling stock at a rate not seen since 2007.  Do they know something we don’t? Yes they do.  President Obama will win reelection and the capital gains tax will rise dramatically.  Better to cash out now than face a certain tax hike in the near future.

‘s in big trouble

by

Forget About “iPhone 5″, Leaked Image Shows Packaging For “The New iPhone” | TechCrunch. I’m a stout Apple fan but I’m really bored with the iPhone and if Apple doesn’t produce something as good as the Samsung Galaxy SIII they will have a problem.  This phone just doesn’t do it.  It can’t be true.

” Signal Since 1985 – Business Insider

by

CHART OF THE DAY: BofA’s Wall Street Contrarian Indicator Is Close To Flashing Its Biggest ‘Buy’ Signal Since 1985Joe Weisenthal | Sep. 4, 2012, 2:51 PM | 4,143 | Here’s the latest update of a chart made famous by BofA’s Savita Subramanian.She writes:The Sell Side Indicator, our measure of Wall Street bullishness on stocks, ticked up slightly in August for the first time in six months. However, this month’s improvement of 0.6ppt lifted the indicator to just 44.4, still at the lowest level in the history of our data (since 1985) apart from last month’s low of 43.9. This suggests … Read more

Dividends Have Their Best Month Ever – Barrons.com

by

By SHIRLEY A. LAZO | MORE ARTICLES BY AUTHOR August’s cash dividend payments of $34 billion set an all-time monthly record. That tally, by Howard Silverblatt, senior index analyst at S&P Dow Jones Indexes, compares with the prior peak of $32.1 billion in November 2011. Furthermore, it was achieved despite the fact that payout ratios remain very low, with companies distributing less than a third of what they are making. Historically, the rate is 54%. via Dividends Have Their Best Month Ever – Barrons.com.

S&P 500 Target 2013

by

I’ll go ahead and put my neck on the chopping block now.  I’ve never had a target before on the S&P 500 or Dow because I never saw much point in the exercise.  Unless you were trading in futures or a passive index investor, what’s the point, right?  I liked to think I am investing in companies and business prospects not broad unknowable market forces.  The last twelve months have been trying though.  It seems that the risk on risk off trade has been the place to be.  Most stock pickers have underperformed the market.  Why is that?  Even notable … Read more

Election is basically over according to Intrade

by

If you haven’t heard of Intrade, you probably are outside leading a normal life.  For those of you that haven’t, it’s the popular betting site that concentrates on political events. According to the Washington Post ” The site’s collective wisdom tends to be more reliable than than the cadre of professional pundits when it comes to forecasting election results. (And, yes, we are including ourselves in the “professional pundit” category — for better and worse.) In 2008, bettors got only two states wrong — Indiana and Missouri. Bettors thought Indiana would go Republican and Missouri would go Democratic. Neither prediction was right. … Read more

| ZeroHedge

by

Submitted by Tyler Durden on 08/30/2012 15:46 -0400   As the charts below suggest – in somewhat stunning technicolor – that since the Knight-algo was put-to-death, NYSE volumes have coincidentally plunged by 40%! Todays run-rate with an hour to go was the lowest of the year. For those that hang on the consideration that this is due to high-priced stocks and USD-volumes are stable – err, wrong answer – futures volumes cracked in half also and that is a stable USD volume; The summer doldrums explains it – err, wrong answer – we are 20 percentage points below a normal … Read more

| ZeroHedge

by

This is hilarious!   by Tyler Durden on 08/30/2012 12:53 -0400Ben Bernanke RealityAs Bernanke and Draghi carefully try to centrally-plan navigate us mere mortals through this dismal period of market and economic reality, we thought this clip was a perfect analogy for the heavy-lifting job they are doing… and the likely outcome.Note the rather entertaining gentleman running for cover on the left – the long-only talking-heads? via Luxury Yacht Down: What Happens When Central-Craning Goes Horribly Wrong | ZeroHedge.

Setback Leads Romney to Reinvention – NYTimes.com

by

By MICHAEL BARBAROPublished: August 29, 2012 99 Not long after Mitt Romney dropped out of the presidential race in early 2008, a titan of New York finance, Julian H. Robertson, flew to Utah to deliver an eye-popping offer.   via Setback Leads Romney to Reinvention – NYTimes.com. On a personal note, this is why the NYT is really a far better paper than the WSJ.  This is a largely favorable article on Romney.  Can you imagine the WSJ doing the same for Obama?

Time to Go All In and Be Ready for the Finale

by

As we approach the start of the month of September, it’s time to remind you that the window for investing in September is rapidly closing. I have no idea what the traditionally difficult month of September will bring us but I wouldn’t be at all surprised if there is a lot of volatility and a lot of opportunity.   I have repeatedly expressed my enthusiasm for the market in numerous blog posts at the Sax Angle so if there is a September swoon we will have ample cash to take advantage of it.  You have to be ready willing and … Read more

Apple 64GB iPhone 4S trade-in offer: $345 for good condiction

by

Apple offers up to $345 for used iPhones ahead of iPhone 5 launchBy: Brad Reed | Aug 29th, 2012 at 06:45PM   AAPL next-generation iPhone hasn’t been officially announced yet, the company is providing a nice gift for users who bought the previous model. TheNextWeb reports that Apple’s recycling program is now offering up to $345 for the iPhone 4S in good condition, or $45 more than what Samsung 005930 was offering for the 64GB iPhone 4S earlier this year. The cash that users receive comes in the form of a gift certificate for Apple stores, so this current offer … Read more

Donors Invest Millions in Romney for Billions in Returns – Bloomberg

by

I expect Romney to bridge the gap in polls or even pull ahead shortly due to the expected convention bounce.  These are some ideas from Bloomberg that could benefit.  I think the biggest winner will be the defense industry but it may be practically impossible to avoid cutting the outlay for defense.  But it’s all about perception in the short term.  The most obvious winner is the oil and gas industry and Harold Hamm from Continental Resources (CLR), Romney’s key energy advisor. By Alison Fitzgerald and Julie Bykowicz – Aug 29, 2012 5   More than half of casino billionaire … Read more

‘t take much to ignite Intel

by

This rant from Cramer came up when I was searching for something on Intel.  Intel is entering oversold territory and diverging with a bullish buy signal.  It won’t take much to ignite a little rally here.  On the other hand MSFT is the exact opposite chart. Apples patent win isnt enoughIts beef with Samsung wont be over until Apple moves all its chip work to Intel. Will Apple AAPL -0.13% now use the patent to go after Samsung with everything it has and get injunctions against Samsung to block all selling of the illicit phones? Or will it just demand … Read more

The Aleph Blog » Blog Archive » How Warren Buffett is Different from Most Investors, Part 1

by

How Warren Buffett is Different from Most Investors, Part 1There was an academic article published recently on the investing of Warren Buffett.  Afterward, I thought I saw a few articles reflecting on it, but here is the only one I see now: There’s Warren Buffett — and then there’s the rest of us.Buffett is different, because he grew as an investor and as a businessman, and usually made the right moves over a 50+ year career.  When you don’t have a lot of assets, and few people are doing value investing, you can do amazing things with special situations, and being … Read more

Apple will sue Google next

by

“Our lawsuit is saying, ‘Google you f***ing ripped off the iPhone, wholesale ripped us off,’” Jobs said, according to Isaacson. “I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product.” The verdict reached today will set the stage for Apple taking down Google in the biggest shoot down in tech history.  It’s Google they’ve been after from the beginning and you can be sure the management of Apple is doing this and … Read more

Too much is being made of the death of the PC

by

I know this first hand. My 13 year old was desperate to buy an iPad.  Now he doesn’t even use it.  Instead I use it and he lives on his MacBook.  When Jobs said the iPad wouldn’t cannibalize the MacBook, he was mostly right.   CHART OF THE DAY: The Older You Are, The More Important You Consider The iPad To Be The older a person is, the more important they consider a tablet like the iPad to be, according to the chart below which comes from Deloitte. As you can see, it surveyed people of varying ages and asked … Read more

September surge postponed to middle of the month- Republican convention next week very negative for markets

by

The Republican platform is very negative short term for the market.  This talk of hard money, getting rid of Bernanke, tough talk on China is all very negative for the market.  Contrary to popular opinion, the market likes Obama or more specifically Ben Bernanke and the anticipated Republican surge could make the markets very nervous.  All you had to do was watch the action today when CNBC reported that Romney would not reappoint Bernanke.  We are lightening up and adding to our short positions. If the Democrats start to regain their polling advantage after their convention, the market could set … Read more

Microsoft Stock Poised for 30% Upside – Barrons.com

by

I agree with this article yet the short term trend is down.  Look to buy Mr. Softie at the 200 day MA at $29.52.  Patient investors can own now but you may be able to average in a little lower.   Don’t Be So Hard on Microsoft By DIMITRA DEFOTIS | MORE ARTICLES BY AUTHOR Windows 8, torrents of free cash flow and a potential dividend increase may lift the underperforming stock. Fred Hickey: “That is the lowest I have seen the multiple in years.” Windows 8 may provide a window of opportunity for Microsoft investors, but so too should the company’s … Read more

Why rates will stay low and the market will make new highs

by

I’ve written before about my belief that based on the dual mandate of the Fed to maintain both high employment and inflation protection, rates will stay low for far longer than anyone imagines.  We are entering a structural era of high unemployment where the jobs normally ceded by retirees are not developing due to socio-economic phenomenon.  This article elaborates on my thesis.   By Quentin Fottrell     After four years of college, many graduates are ending up in jobs that only require the ability to operate a cash register with a smile.Shutterstock.comAfter commencement, a growing number young people say … Read more

‘t write Intel off

by

Intel and Microsoft have a big product cycle coming up.  Also Intel powers all the computers in Apple’s lineup.  Too much talk of cannibilization of notebook computers by tablets.  The tablet is no more a substitute for a notebook than a bicycle is for a car.  It’s novel, new, and lots of fun but serious work will always be done  on a notebook for some time. Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Tuesday 31 July 2012] Intel general manager of mobile platform business Navin Shenoy at a pre-show conference before the company’s Ultrabook Ecosystem Symposium on July 31 in Taiwan, pointed out … Read more

JNJ goes ex dividend 8-24

by

I expect JNJ to bounce off its 50 day MA at $67.78 as it approaches it’s ex dividend date on August 24th.  If you plan on holding beyond the next few days, the DePuy hip replacement settlements seem to be factored into the current price.  With it’s out-sized dividend and a sizable discount to its net present value, this may be an opportune time to build a position in this high yielding blue chip. The caveat though is if it doesn’t bounce here, there’s a lot of daylight below.

Cluster insider selling is not a cluster**ck

by

I’ve spent the last two days going over cluster insider selling reports from the Washington Service.  It’s generally agreed that insider selling is not as useful in predicting stock prices as buying but cluster selling does have some onerous implications.  If the consensus opinion at a company is that management wants to lighten up, then you have to ask yourself why you are plunking down your hard earned money on their stock. There’s an obscene amount of insider selling going on right now.  I guess I say obscene because I wish I had Peter Thiel’s $450 million dollars worth of … Read more