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Brandon Matthews (pseudonym) is the founder of SatwavesPro.com, which was borne of his desire to help retail investors after witnessing the continually changing ways that Wall Street can cheat them. Brandon has worked for Monroe Parker Investment Bankers, Morgan Stanley Dean Witter, American... More
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  • Mel Karmazin & Howard Stern Creating A Radio Classic

    I've had some time to review all of the evidence surrounding the Howard Stern drama that is playing out on a national scale. In the end, I believe there is one word to describe it all; "SUCKERS!" That's right. I said it! I believe that what we are seeing is one of the greatest radio stunts ever performed, orchestrated by two of the industry's masters, Mel Karmazin and Howard Stern.

    It is my belief that this radio classic that is developing before us, is as planned as creation itself. I believe that Sirius XM and Howard Stern came to terms earlier this year, yet decided to hold off on an announcement so that the current media frenzy could be used to the benefit of Stern and the company. These are masters of radio. Mel Karmazin and Howard Stern know the value of this drama, as both have long histories of witnessing the effects that these public negotiations have.

    Consider the fact that when Stern signed with Sirius back in 2004, he did so a full year in advance of his contract expiring, and did not take the Sirius microphone in hand until January of 2006. Why then would Stern wait until the final hour of his contract this year, before making a decision about his future? The answer in my opinion, is that he simply wouldn't. He is far too smart for that no matter what your opinion of him may be.

    In the first week of February of this year, we began to witness Stern talk of leaving Sirius XM to join American idol, as well as suggest a possible return to terrestrial radio. This is the time period in which negotiations should have actually occurred, and which would have allowed Stern the freedom to explore other possibilities. Suddenly and without any warning, nearly all talk of Stern leaving Sirius XM ended. In the first quarter conference call this year, Karmazin made the statement that any announcements relating to Stern's future at Sirius XM would come from Howard on his show. This of course has increased the popularity of Stern's show all year. The media waits on pins and needles for the announcement, and many no doubt have generic articles ready to be published at a moments noticed. 

    This past quarter, Karmazin had to answer a question that was not asked by any anlyst, offering instead a surprise announcement that a resolution regarding Stern would come by the third quarter's conference call. I wrote an article at the time, which suggested the deal was probably already done. It seemed to make as much sense to me as the New York Knicks announcing that they would have an announcement regarding LeBron James, three months before they were supposedly to sit down to speak. It makes no sense whatsoever for Karmazin to assume a deal or no deal would be announced by a given deadline, unless of course he knew the answer already.

    Part of Stern's existing contract includes sharing of advertising revenues attributable to his show, and this was Mel Karmazin's bread and butter act. Karmazin knows that this drama will increase listenership of Stern's show, and drive ad sales in the process. To make an announcement void of any drama, is an absolute waste of a golden opportunity for both Sirius XM and Stern.

    The markets are often about speculation, and to some extent this is speculative. The facts however point to scripted drama that is unfolding. The time frame of this act does not jive with the historical record. This drama has played out before, and always well in advance of Stern's decision to leave his current employer. Stern has always taken the road of the average worker, condemning management with every breath. With regards to Sirius XM, he only states that he'll badmouth them after he leaves. Again, it does not fit with the historical record. I'm not typically a betting man, but I'm willing to bet on this.

    Position: Long SIRI



    Disclosure: Long SIRI
    Sep 08 1:50 PM | Link | Comment!
  • Market & Sector Report

    Don't let Friday's short covering, "sucker rally" fool you, market indicators continue to weaken. I'd be willing to bet that if you pulled up a chart of any of the stocks you follow, that most if not all would be lower as of Friday's close than Monday's open.

    One week ago, I reported that a "slow-bleed" market sell-off was under way. As bad as last weeks report was, it pales in comparison to this weeks. A week ago, there were 25 individual sectors out of 40 that were still in a column of X's on Dorsey Wright's Point & Figure charts. That number dipped to just 11 this week. Weakness can be seen in nearly every sector, as money continues to flow out of equities.

    Out of the 11 that remain in a column of X's, 8 are lower than a week ago, with 2 sectors remaining unchanged. There was only one sector that remained in a column of X's and ticked higher, over the past week. Protection and Safety actually ticked higher. Stocks within this sector include companies that provide safety and protection in "armageddon-like" scenarios such as ICXT, which makes sensors and provides technology services to the Department of Homeland Security.

    From my perspective, it is apparent that the "slow-bleed" sell off is accelerating. Here are the individual sector results: a column of X's.

    WALL STREET: Wall Street stocks continued their decline and column of O's, falling from 35% a week ago to 25.64% this week.

    STEEL: Steel stocks took another beating and added to its column of O's, dropping from 44.74% to 26.32% over the last five trading days.

    BUILDING: Building stocks reversed to negative and a column of O's, falling from 34.17% a week ago to 28.33% this week.

    LEISURE: Reversed to negative and a column of O's, falling from 38.61% a week ago to 33% this week.

    TRANSPORTS (non-air): Reversed to negative and a column of O's, dropping from 42.86% a week ago to 32.20% this week.

    BANKS: Reversed to neagtive and a column of O's, falling from 39.32% to 33.66% (forming a double bottom on the chart)

    DRUGS: Sector remains in a colum of O's, falling from last weeks 36.77% to 32.90% this week.

    ELECTRONICS: Reversed to negative and a column of O's, falling from 36.30% last week to 32.96% this week.

    METALS (non-ferrous): Reversed to negative and a column of O's, falling from 42.17% last week to 34.57% this week.

    SAVINGS & LOANS: Remains in a long column of O's, falling from 34.38% a week ago to 32.81% this week.

    BIOMEDS: Remains in a column of X's after a recent positive reversal, yet fell from 35.14% to 33.15% this week.

    BUSINESS PRODUCTS: Continued decline and column of O's, falling from 39.44% a week ago to 34.43% this week.

    HEALTHCARE: Remains in a column of O's, falling from 36.14% to 34.89% this past week.

    TEXTILES/APPAREL: Reversed to negative and a column of O's, falling from 40% last week to 35% thuis week.

    PROTECTION/SAFETY: Remains in a column of X's following a reversal to positive in July. Ticked up slightly from 33.33% last week to 34.38% this week.

    RETAIL: Remains in a column of X's following a reversal to positive in July. Fell slightly from 33.88% a wee ago to 33.52% this week.

    SEMICONDUCTORS: Continued its decline and column of O's, falling from 39.87% last week to 36.05% this week.

    FOREST/PAPER: Ticked down another notch adding to its O  column, falling from 45.65% last week to 38.30% this week.

    MACHINERY/TOOLS: One of the biggest drops of the past week, the group fell from last weeks 50% reading to just 38.19% this week.

    INTERNET: Ticked down another notch from 43.09% a week ago to 40.98% this week.

    INSURANCE: Continued to decline and add to its column of O's, falling from 50.67% last week to 42.18% this week.

    AEROSPACE: After reversing negative a week ago, the groups decline accelerated as it fell from 51.55% a week ago to 43.30% this week.

    HOUSEHOLD GOODS: Reversed to negative and a column of O's as it dropped from 51.25% last week to 45.57% this week.

    OIL SERVICES: Went negative and confirmed this week as the group fell from 49.29% to 44.60% this week.

    PRECIOUS METALS: Remains in a column of O's, relatively unchanged from last weeks 47.87% reading to 47.83% this week.

    TELEPHONE: Reversed to negative and a column of O's, falling from 46.67% last week to 42.79% this week.

    RESTAURANTS: Remians in a column of X's, yet fell from 45.76% last week to 42.11% this week.

    WASTE MANAGEMENT: Added another O to its latest column, forming a double bottom as it declined from 47.27% a week ago to 44.44% this week.

    CHEMICAL: Reversed to a column of O's, turning negative as the sector fell from 58.40% a week ago too 49.19% this week.

    MEDIA: Remains in a column of X's and positive, relatively unchanged from last weeks 45.52% reading to to 44.70% this week.

    OIL: Group turned negative into the O column, falling from 52.59% a week ago to 46.29% this week.

    SOFTWARE: Remains in a column of O's, falling slightly from 51.96% last week to 50.74% this week.

    COMPUTERS: Remains in a column of X's follwing a recent reversal to positive, falling however from 47.02% to 45.87% over the past week.

    REAL ESTATE: Remains in a column of X's, despite falling from 50% to 46.03% this past week.

    FINANCE: This sector also ticked up slightly and remains in an X column, yet rising to 50.45% from 50.44% last week, I can only call it unchanged this week.

    AUTOS: Reversed to negative and a column of O's, falling from 60.20% last week  to 54.64% this week.

    FOOD: Remains in a column of X's, falling slightly over the past week from 58.07% to 56.28%.

    ELECTRIC UTILITIES: Remains in a column of X's at 61.40%, falling slightly from 62.07% a week ago

    GAS UTILITIES: Remain overbought and in a long column of X's, falling slightly from 79.60% last week to 79.31%, relatively unchanged.



    Disclosure: No positions

    Disclosure: no positions
    Aug 31 9:35 AM | Link | Comment!
  • Serious News For Sirius XM Investors

    I received an email yesterday which politelty suggested I write at least one article a day specific to Sirius XM Radio. One of the advantages however to converting to a subscription based format rather than ad based model, is that I can focus on quality of content rather than quantity. There are enough Sirius XM sites out there which fill the quantity void, which publish redundant and useless information on a daily basis in a never ending quest for google ad clicks. Sirius XM perma-bulls love them as they make outlandish claims as to the exaggerated "fair value" of Sirius XM. Others are quick to promote only the most bullish analysts and fund managers and just as quick to avoid those with a bearish outlook, for fear of alienating their fanatical audiences. If you are looking for that kind of investment advice, you will not find it on Satwavespro and should simply move on.

    Just as there is useless information provided by perma-bulls, there is an equal amount of useless negative press published regularly by "perma-bears." The naysayers will consistantly rewrite and republish the same arguments against the equity with the same goal of generating site traffic and increasing ad revenue. They focus solely on Sirius XM Radio's debt and market cap as the basis for their bearish outlooks, rewriting the same nonsense over and over and selecting only those facts which support their argument. One such laughable indicator is the Altman-z score.

    Back in October of 2009, TheStreet.com published a fear mongering article which reported that Sirius XM's Altman-z score was -15.4 which in their view, all but guaranteed the demise of Sirius XM Radio. Of course, Sirius XM shares have dramatically increased in value since that time, and TheStreet.conm (con-em? Typo? I like it! I'll leave it in) even took Sirius XM off their "sell block." This past week, one writer from  The Motley Fool decided to reach back into the Altman-z playbook in pointing out Sirius XM's current Altman-z rating of  - 1.3. Despite couching the article by pointing out the uselessness of the Altman-z indicator, it is enough to steer less informed, potential investors away from the equity. Likewise, if you are looking for this kind of investment advice, you will not find it on Satwavespro and should simply move on.

    What I will report on is the potential of the stock at any time, based on both the fundamental and technical aspects of the market, the associated sectors of Satellite Radio, and the equity itself. For instance, there is a potential anomoly occurring on the Sirius XM Point & Figure chart that I use.  While most technicians can see a clearly defined trading range between .96 to $1.06 that developed in August, I see a repeat of a pattern developing which catapulted Sirius XM shares from a low of .56 to a 1.18 high last January.

    Sirius XM has now formed a triple bottom at .96, which for this equity is very unusual. This typically bearish pattern has not been seen since last November

    When we look at a wide snapshot of 2010, we can see a quick rise, followed by a sideways trading range leading up to the current triple bottom pattern. A comparison of the Sirius XM's price action in 2009 is surprisingly similar. The stock traded up through August of 2009, then sideways. As investors grew weary, many sold and the quintuple bottom broke down which to any analyst on the planet would trigger a sell signal.

    After dipping just five cents, Sirius XM shares then soared over the next two months. Could this be a case of deja vu with regards to Sirius XM? Market sentiment is the same, the patience of weary retail investors is reaching its limits. Will there be another spike or will there be a significant breakdown of the .96 support level. It is certainly worth watching, and I'm sure there are plenty of sites ready to keep you updated on this, now that I have given them some material to work with....

    Positions: Long SIRI



    Disclosure: Long SIRI
    Tags: SIRI
    Aug 31 9:31 AM | Link | Comment!
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