Jan

23

The Bulls and the Bears, from Craig Mee

January 23, 2008 |

5 Comments so far

1. gabe on January 23, 2008 8:30 pm

   jeff matthews had a good observation over at his blog: the difference between 2007 and 1987 selloffs is that not one company announced share buybacks during the madness.

2. George Parkanyi on January 24, 2008 2:05 am

   Well we WERE going over the falls at 1:30 PM this afternoon, when a convenient ledge suddenly appeared. Not only that, but somehow we magically end up back on shore.

   Reminds me of that scene in Monty Python’s “Life of Brian” (there I go again) where the Romans chase Brian to the top of this tall, narrow tower. He loses his balance, falls, and then as he’s plunging to his death, this spaceship full of silly aliens catches him, whisks him into outer space for a bizarre joy-ride, loses control, and crash-lands back to earth just metres away from the original tower. Brian climbs out of the rubble, dusts himself off, and as he’s walking away, a bystander who witnessed the episode call out to him “you lucky bastard”. That was today.

   Stocks I think should rally fairly sharply here led by the financials. These have all pretty much finished announcing, which I believe was collectively and carefully orchestrated. They laid out all the major toxic news at once last week with the Fed standing behind the curtain ready with a 75 or maybe even 100 basis point rate cut. Clever really.

   With no more financials announcing super-sized writedowns for a while, you’ll get some nuisance “disappointments” from other companies still reporting, but nothing that remotely compares. THAT reminds me of the scene in Austin Powers where Dr. Evil had been frozen in space for 30 years and missed out on a lot. When, in a broadcast to the U.N. he threatens to destroy the world with a ray-gun unless they pay him - “a MILLION dollars!”, they all just look at each other and burst out laughing.

   So now when some sorry telecom reports they lost a $billion last quarter, with guidance that all their customers hate them and are about to defect to dial-up, the market’s response will be “A billion dollars; uh-huh; that’s nice. Now just fill out these forms; hand them in when you’re ready; and someone will bet back to you as soon as we have a reaction for you.”

   So there’s some breathing room now for the Fed and the bankers to figure out what to do next. And perhaps party time for the rest of us (longs) for a couple of weeks.

   “Always look on the bright side of life …”

   Cheers

3. david on January 24, 2008 4:22 am

   …..and if one were to use the magic formula of Joel Greenblatt, one would find that most of those stocks be it 50 million or 50 billion market cap are near 50% below their 52 week high. So with just a little rise, that 3.5 % can be beat with little risk over a years time, I’d bet…………….dh

4. steve leslie on January 24, 2008 10:28 am

   There are battles and there are wars.

   The battles that I see today are extremely volatile unpredictable and potentially dangerous. One can be winning a battle one day and suddenly the tide turns which ultimately costs one the war. This is to the longs and the shorts.

   In poker parlance, It is similar to winning the small pots only to lose the all-in bet and get wiped out.

   Perhaps to err on the side of caution now is the key to winning the war.

   Seems that the 3 boys who were attacked by the Siberian Tiger in San Francisco were taunting it before the tiger had had enough and it climbed a 20 foot wall and proceeded to exact its revenge on the hapless youths. One killed and two severely wounded.
   Sometimes it is best not to agitate wild animals be they lions, bulls or bears.

   sl.

5. George Parkanyi on January 24, 2008 1:21 pm

   Morituri te salutant. I HAVE bet, David.