Don't Let the Times Stop You from Taking Action

[The following is excerpted from Bill Cara's Daily Report]

Long-time members of this community know how strongly I opined two years ago that the shares of Wal-Mart (WMT) had reached a value point for purchase. That worked out better than any of the other shares in the DJIA index since then.

Now I am going to recommend Dell (DELL) as a Long Buy this (Thursday) morning. Unless the world collapses... patient accumulation appears just right for this Cara 100 stock. The prudent buy would be on a breakout above $17.25 however.

I will be looking for more Buy recommendations from among Cara 100 stocks today and through the weekend.

Wednesday evening one of my favorite analysts, Marc Faber, had pretty much what former Wall Street commodities trader Jim Rogers had to say this morning on Bloomberg TV, which is, “Clean out the system and let’s start over.” Yes, they say, this is a normal Bear market, and that’s where I disagree. If you want the first global depression in 80 years, then have at it. This time, the Credit Derivative Swaps have broken the financial system, and there must be a backstop plan to provide the monetary authorities time to clean up the mess, and for legislators to restructure the system.

Common sense must prevail here. I, personally, have no time for emotion-pumping sound bites from entertaining people with axes to grind, people like Jim Rogers. Like any story teller, there is an element of truth; but then they settle back into their biases and we hear the same old, same old. It’s not helpful if it stops you from taking action.

I give you DELL, a quality company with a good product and an industry-leading competitive position whose shares are trading at very low prices.

Remember; those other people are story-tellers, while traders are actors, not listeners. It’s time to act.

Comments

[MarvinMBA:]

When excess liquidity is created visa visa the housing bubble sooner or later the excess liquidity disappears by devaluation or loss of buying power. We are experiancing both. The bailout will just create more excess liquidity as it trys to start the bubble process all over again. Trying to solve our problem by throwing money at the losers is sure to create more losers. In this case we are creating new losers(the taxpayer that can ill afford this) and going to be losing more and more. At this stage there is nothing this administration can do and there certainly is nothing the average guy in the street can do except go bankrupt.

2008 Sep 25 12:22 PM

[Errol:]

Jim Rogers has been right about EVERYTHING over the past several decades...oil, financial stocks, agriculture. Putting him down only makes you look bad...really bad.

2008 Sep 25 02:53 PM

[redqid:]

Jim Rogers one of the all time great traders. I would pay attention.

The credit derivatives mkt is 62 trillion. US going to waste $700 billion trying to prop it up by buying mortgages. Total waste.

2008 Sep 25 06:27 PM

[Bill Cara R...:]

What should I do about your recommendation that I load up on shares of Crystallex, your "Stock of the Year for 2007"? I'm down 90%, should I hang on?

2008 Sep 26 06:48 AM

[sleepy:]

There is nothing to recommend Dell. Business model that used to be unbeatable but doesn't work any more. So they're tearing up the floorboards and selling them for "cost savings". Product design, manufacturing, support, everything sold off and rented back. Last quarter accounts payable $15.5B; net tangible assets $0.3B. That's one low flying jumbo you're recommending. With undisclosed sub-prime exposure, apparently (see last conf call).

Dell never was a computer company, just the biggest screwdriver assembly and financial smoke and mirrors operation in the market, crucially dependent on growing sales and negative cash conversion cycle to milk the business of delivering Microsoft's monopoly to the world. Microsoft monopoly is dying; netbooks are killing revenue growth, and Apple is taking most of the high margin business.

Far from Michael Dell turning the company round, it was the CEO and CFO who bailed out, who had created the financial smoke and mirrors for Dell, and they set him up with a 2-year cushion to execute his fantasy of a turnaround. Time's up. Expect more bad news.

2008 Sep 26 03:05 PM

[bassmaster17:]

I'll go with Roger's not some moron that thought Wal-Mart was cheap on valuation and had no clue of the penny pinching times...I bet the author had soured bank stocks a year a go...IBM, HP and Apple have and wil be crushing Dell...let go dude. It sucks everytime Dell reports a garbage quarter..Apple must go down in sympathy.

2008 Sep 28 01:35 AM

[DanLucetti:]

Somehow I ended up in this website and I was shocked to read the disrespectful comments about Jim Rogers. Calling him storyteller? This is a guy who called this crisis many years ago and shorted all these suckers when trading at much higher prices! ... He's been right for years and I am sure he is also right about letting the system clean itself out. You show your complete ignorance by repeating the same "depression #2" BS that we have been listening for the last several days .... whoever buys this BS is a market ignorant for a very simple reason: "Nobody can cheat Mr. Market" ... only fools can think that Mr. Market can be cheated ... so if we were heading to Dow 1,000 or 500 or 100 on September 18th (before Paulson's and Bernnke's intervention) .. then Mr. Market will eventually take us there (together with your WMT, DELL, and any other picks you may have).

2008 Sep 28 06:29 PM