The Hardest Trade - Fast Money Recap (7/24/08)

by: Joan Wickham

Recap of CNBC's Fast Money, Thursday July 24.

Thursday brought on the bears as the major indices took on losses. The Dow shed 2.43% to 11,349.28; the S&P 500 lost 2.31%, ending at 1,252.54, while the Nasdaq dropped 1.97%, finishing at 2,280.11.

Sometimes the Hardest Trade…

Dylan Ratigan moaned the stock market today was “miserable.” He said that Ford's (NYSE:F) data were lousy and that consumer discretionaries were not good. Ratigan turned to the traders for insight.  Joe Terranova said investors were “back to defense today -- that's what happened.” He said that he bought gold as a defensive measure and that “we're right back where we were.” Karen Finerman said that the financial rally “was so powerful.” She added, “I would not continue to short the XLF (NYSEARCA:XLF),” though she feels “financials have room to go lower.” Jeff Macke said the “rally ran out of excuses to buy financials” and right now we have to realize that “sometimes the hardest trade to make is no trade.” He continued saying “right now we're in speculative no-man's land.” 

Washington Mutual (NYSE:WM)

Discussing financials, Finerman said that she added Washington Mutual because she saw two scenarios. Either the company “goes out of business or they muddle through.” She continued saying “you know what you can lose and the upside is unlimited.”

Pick One at Five Bucks: Crocs (NASDAQ:CROX), Ford (F), WaMu (WM)

Shifting to Crocs, Ratigan said that it is “tumbling,” and that half of its value was taken out today, again.  Finerman added that the last time it blew up, the company did not have a handle on the business. Terranova offered a different situation, asking which one the traders would pick: Ford, Crocs or WaMu. He asked, “What do you feel best about buying at five bucks?” WaMu was said to be the clear cut choice. Tim Seymour said that he would pick Ford because its South American and European numbers “look great.” He said that brand value is there and that he's “been buying it down.” Finerman said Ford is all debt and no equity. Macke took a different approach, saying that “these guys are really hard to fix,” and don’t forget that investors “always have the option to do nothing.”

Microsoft talked to much: Microsoft (NASDAQ:MSFT), Yahoo! (NASDAQ:YHOO), Google (NASDAQ:GOOG)

Ratigan said Microsoft dropped 4% today and asked for the traders' opinions. Macke said the company has no idea where they are going and that it has thrown its money away. Terranova said that he is “stuck long Yahoo!.” He continued “being long Microsoft and being long Yahoo!, it is a struggle.”  Microsoft plans to spend $2.5B to compete with Google.

Amazing: Amazon (NASDAQ:AMZN)

Ratigan pointed out that Amazon jumped 12% and introduced guest, Jeffrey Lindsay of Sanford Bernstein. Lindsay said that it has had 41% year-over-year growth and that it “can keep going for quite some time. The economic bad news has not reached Seattle.” He said that the company has locked in its delivery rates and should not be affected by high energy prices. Lindsay wrapped up with, “People are buying online more than ever before,” and that although it is very volatile, “it's not done.”

Oil Price Manipulation?  Nymex

Speaking to the President and CEO of Nymex, James Newsome, Ratigan asked about some more color on the talk of traders manipulating oil prices. Specifically the Commodity Futures Trading Commission charged global trading fund Optiver Holding with manipulating the NYMEX oil market in March 2007. The complaint charged that three employees of the Netherlands-based fund made about $1 million through manipulation of crude oil, gasoline and heating oil futures on the Nymex (NMX). Newsome said, “The markets are converging very efficiently,” and that there “are no signs of manipulation.” He continued saying that the Nymex is a very transparent and regulated marketplace. “We’ll continue to monitor it but right now there’s no signs of manipulation.” Newsome then moved on to discuss his company's stock performance, saying that the exchange sector has had “unwarranted downturns,” and that “people have to start paying attention,” to the great job management is doing in the exchange sector.

Cash Cow Cash Out? Potash (NYSE:POT), Alpha Natural Resources (ANR), StreetTRACKS Gold (NYSEARCA:GLD)

Questioning whether the commodities “cash cow” has been cashed out, Ratigan asked the traders for their opinion. He used stocks like Potash, Alpha Natural Resources and StreetTRACKS Gold as examples. Potash and Alpha have had steep climbs and recent precipitous drops. GLD did not drop off as much. Seymour said that in the case of Potash, “earnings have been extraordinary,” and it will continue to grow. However, he cautioned, the “chart is very scary,” although “a lot of these guys have been oversold.” Terranova weighed in saying that “natural gas is in a freefall,” and that the resource stocks need some time. He said that investors will be “getting nothing more than a quick trade.” 

Cult CEOs: Apple (NASDAQ:AAPL)

Discussing cult CEO issues, Macke brought up Apple, which has made recent headlines due to its CEO.  The CFO refused to answer a question about Jobs’s health on their conference call. Macke said that Apple CEO Steve Jobs' “health is material,” and it is “very hard for a stock to recover.” He said that people ride these stocks to the ground and if you are a part of one, you “end up pushing up daisies.”" Macke gave advice to investors, “to have the discipline to get out.”

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