Steve Reitmeister's  Instablog

Steve Reitmeister
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I am the Executive VP of Zacks Investment Research in charge of and all its services for individual investors. I have a top down investment approach with a focus on value and upward earnings estimate revisions. And there is nothing I enjoy more than sharing insights with fellow investors.
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  • The Pause the Refreshes? 0 comments
    Sep 23, 2010 7:33 PM | about stocks: AAPL, GOOD, EPI, SPY, DIA, QQQ
    Thursday investors started to realize that if the Fed is ready to support the economy again, then it means we are probably in more trouble than previously understood. Bond investors got the point immediately Tuesday afternoon as got busy pushing down Treasury rates once again. Stock investors finally got the hint on Thursday with a more precipitous drop in equities. A weaker than expected Jobless Claims report certainly did not help matters.
    Looking ahead I expect a bit more weakness. Gladly there is strong technical support about 2-3% below current levels and that might be all the house cleaning we need before earnings season comes around in October.
    That is why I don’t see any need to add more to the short side of the ledger as that is a pretty tight space to operate in. Of course, if there is new information that would lead me to believe we will be headed much lower than that, then I will reconsider that position.
    Speaking of earnings season. If Corporate America delivers strong profits and solid guidance for the future, then we might be able to take a shot at previous highs before the year is out. If earnings season is poor, then things won’t be so rosy. How “un-rosy”? All depends on the extent of negative revisions to current outlooks and what is showing up in Q3 GDP #s.
    For now, let’s just assume a healthy little pullback is all that is in store. Some might call it “the pause the refreshes”. We’ll take the rest as it comes.  
    Today’s Train of Thought
    (After the market closes is when I like to kick back and read the important investment articles of the day. Here are links to them with my 2 cents added underneath).
    10 Scary Charts, An Update
    In absolute terms all 10 charts tell an ugly tale about the US economy. If there is a silver lining its that almost all of them are showing some sign of improvement...barely.
    Both Google and Apple can be winners as most industries need at least two strong players. In some arenas one will lead and the other follow. And visa versa.

    The best bet is to have both in your portfolio. I do with Apple shares originally purchased at $88 and Google at $185. So far, so good.
    Yes, the stock market has produced a 0% return the last 10-12 years. This has happened before in history and the results in the 10 years afterwards are quite good. In fact the returns in the 20-30 years afterwards is exceptional.

    So to borrow a phrase from every investment product marketing piece "Past Performance is Not a Guarantee of Future Results".

    So to those afraid of the stock market because of the past 10 years, please stay away and I'll be glad to keep the profits to myself.
    I happen to own EPI, but like most emerging markets they go through feast or famine periods. So if the headlines read "making new highs", then maybe time to take some profits off the table.

    Disclosure: I own shares in AAPL, GOOG and EPI
    Stocks: AAPL, GOOD, EPI, SPY, DIA, QQQ
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