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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • The Real Villains - By Charles Payne

    On Wednesday night, I interviewed hedge fund manager Leon Cooperman, who is regarded as one of the greatest ever. We focused on his climb from the South Bronx to the Forbes 400. Much of what made him a success is his daily work schedule that begins at 6:30 each morning, which includes up to 12 hours of work, and dinner with clients and CEOs, ending at 6:30 PM. From there, he heads home and rises up in the mornings to do it all over again. He has been following this routine for the last 40 years.

    In this era where self-made men and women are looked down upon or even scorned, the notion that wealth simply drifts from one generation to the next and is never diluted, mishandled, or squandered is folly. Take the story of Vin Baker, one of the scrappiest players on the basketball court during his career in the National Basketball Association. We saw him earn nearly $100 million and now he is training to become a manager at a local Starbucks.

    His attitude is great, but his story is heartbreaking as substance abuse derailed his career. The fact is having money doesn't mean you can keep it. Society will feel sorry for Vin Baker. I even feel sorry for him. However, in the meantime, why don't we relish someone like Cooperman? When we discussed his spending habits, this is what he told me:

    "I've got four cars…my newest car I bought is a used Volkswagen Passat and I feel like a rich man. Why am I rich? Because the first two cars are so old that it doesn't have a Bluetooth; my new car, I bought used, has one and I get in there and give it instructions and it dials automatically."

    I am not sure what the future holds, but I know the past and I know the present, and if we insist on making Leon Cooperman a villain, empower politicians, and ostensibly take his money to spread to others, we are all in a lot of trouble. In fact, we would be heading headfirst into socialism, which continues to fail around the world, but it still sounds attractive when it is dripping off the lips of politicians.

    Socialism's Latest Great Fail

    Today in Venezuela, soldiers moved in to seize control of large food distribution centers run by the country's largest food companies and western businesses, including Pepsi and Nestle. The locations will turn into community housing, just days from an election.

    This move will only make food shortages worse.

    We've already heard stories of toilet paper shortages and food lines so long that a rare growth industry are professional line-waiters who are personal shoppers for the elite rich who brave the countless minutes to purchase basic items.

    The moral of the story is the central control of currency and pricing, along with the markets, which are a disaster. I continue to see civil war as the end game there, but what about the notion that such a regime could work in America.

    Bernie Sanders just pitched his single-payer health plan yesterday. Surely, a President Hillary government would endeavor to dictate all aspects of the economy. This stuff doesn't work and it's destructive since pampered people actually want more stuff until the bank is broken. Afterwards, they are willing to stand in a line for crumbs as long as it is directed from the government.

    By the way, I'm hearing Joe Biden is considering getting into the race and I'm thrilled. In fact, I was wondering if there was a way he could run as the VP on both tickets. Life won't be the same without him.

    Today's Session

    Equity futures have gained a little more oomph after the release of the Employment Cost Index, normally a mundane report that used to matter more when Greenspan was running the Fed. It's critical this morning because the 0.2 reading is the slowest wage growth on record (goes back to 1982). This is important because the Fed cannot hike rates without higher wages.

    Already the dollar has gotten softer and bonds are reacting as well.

    I know "inflation" is a four-letter word, except when it comes to our paychecks, value of our homes and other assets. The basic foundation of inflation begins with wages which allow too many dollars to chase too few goods and services. Let's not force the issue right now, but I think we are putting in a bottom to the stealth bear market and that's good news.

    But when the idea backdrop for a Fed-less rally happens, it remains inconclusive and sadly, for Main Street, elusive.

    Jul 31 11:22 AM | Link | 1 Comment
  • Lazy Summer Day? - By Charles Payne

    If the market closed right now it would be the most impressive session of the summer. Yes, if the major indices are unchanged or slightly higher that would be huge. Why? Well, we stumbled out the gate down big led by fan favorite Facebook. But, without news or warning, selling stopped and the losses were chipped away. In fact, this is the week that looks like the kind of capitulation many have looked for with the overall market in a vast number of individual names.

    We held above yesterday's low and since Monday, have witnessed a series of higher lows.

    On the upside, however, there's clear resistance around Dow 17,800. The narrow trading range would be an improvement from complete freefall or even a downward bias.

    Dow Jones Industrial Average

    The breadth is also better not belying what we're seeing on the surface. A sideways session at the close will be greeted with a yawn and written off as a lazy summer day. Maybe it should be greeted with cheers.

    Volume

    NYSE

    NASD

    Up

    838.9 million

    519.6 million

    Down

    1.40 billion

    553.1 million

    Jul 30 2:19 PM | Link | Comment!
  • Up Day But Market Still Draws Blood - By Charles Payne

    The market was higher. Yet it felt like a very ugly session, even frightening. Aside from the stock market still grinding it out, as (formerly) hot stocks have turned decidedly cold, I read yesterday about plans for a remake of the 1922 classic "Nosferatu": A Symphony of Horror.

    Touching that movie with today's lack of talent and over-reliance on special effects would be a travesty. On that note, some of the selling I'm beginning to see could also be called a travesty, but it's the bias and it's firmly positioned. However, it's too early to attempt to take advantage of this; the moves are too sharp and sudden.

    It's not to say that a lot of tech management teams needed their comeuppance. Yelp's team has been jerks, not addressing simple issues. The posture of Twitter's team was appalling as well- a couple of disconnected dudes were looking as though it was a bother to hold a conference call.

    The whole thing is just ugly and a bit scary.

    On that note, all eyes will be on Facebook today after the company beat on the top and bottom, but committed the sin of daily active users dipping to 968 million- the Street was looking for 970.5 million. (Don't laugh; also, don't cry.)

    The big shift into blue chip names might continue today. What does it mean for the entire market? Last night, I interviewed Leon Cooperman, and while he isn't a raging bull, he doesn't see a market top. There isn't wild bullishness, and there won't be wild interest rate hikes as the economy is growing, albeit at a glacial pace, but growing. Ideal portfolios will have a couple of wrecked tech names, but it's not like you're whistling past the graveyard, it just comes with the territory.

    It's still worrisome under the hood.

    Lots of losers, including names succumbing to fresh 52-week lows….

    Breadth

    NYSE

    NASD

    Advancers

    2,281

    1,498

    Decliners

    858

    1,213

    New Highs

    63

    29

    New Lows

    75

    72

    ….but volume is strong on the upside, signaling there was some dip-buying out there as well.

    Volume

    NYSE

    NASD

    Up

    3.17 billion

    1.21 billion

    Down

    845.4 million

    662.2 million

    Today's Session

    This morning the government released Q2 GDP, which rose 2.3%. The U.S. economy improved slightly after a slow start to the year. Growth was led by consumer spending on big-ticket items. A revision of .6 for the Q1 wiped out the previous contraction. This should make the Fed feel more comfortable raising rates later this year.

    All major markets are in the red this morning and is oil ticking up for the third day.

    Jul 30 10:32 AM | Link | Comment!
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