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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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  • Ok Get Ready for the Fourth Quarter Rally By Charles Payne 0 comments
    Oct 21, 2011 9:52 AM
    Now is the time to position for a major fourth quarter rally. There is sufficient skepticism in the air that totally ignores certain facts.

    * We are not in a double dip-I think we came this close in September, but businesses stepped up spending.

    * Europe's disarray makes US stronger and that will translate into opportunities that will reflect on bottom lines.

    * European leaders will figure out something on Greece, it might be smoke and mirrors, but it will send the euro higher, dollar lower, multinational profits stronger- the formula the stock market loves.

    * Expectations are low enough for "positive" surprises for remainder of the year.

    * Earnings and guidance hint at actual growth that's currently discounted in market valuations.

    * Stocks are cheap.

    * The Fed isn't done and will print more money and manipulate the stock market.

    * We don't expect anything from the Super Committee, so any compromise should be viewed as a victory for democracy because there will be universal pain. The nuclear option wouldn't hurt the market immediately, but a weaker military is the last thing we need. (I heard president Obama talk about the "collectivist" effort for the 21st century but even in the end it took American know-how and armament to kill Gaddafi.)

    * The next close above Dow 11,700 should be the technical catalyst.

    Yes, the risks that face our nation continue to hover above and could change us forever. This could change us in a way that makes us weak and unproductive. This call is for a fourth quarter rally also based in part on polls that suggest a change in the White House.

    Now the Left Admits

    The stuff that comes out of the mouths of babies we know is pure, innocent, and even innocuous, too. But, we listen even if we don't react. I also listen when stuff comes out of the mouths of partisans and diehards that contradict, or even counters, their own core convictions. That brings me to the current issue of The Economist, and its observation of the global push for solar. Here are a few quotes from that piece:

    "The rush to subsidize solar power over the past decade has been massively wasteful and squalidly political."

    "The money wasted on Solyndra, though, is as nothing compared to the tens of billions of Euros squandered on solar panels in Germany. So little electricity do these panels produce under its cloudy northern skies that the emissions from a single large coal-fired power station are enough to nullify all the benefits that their carbon-free contribution might bring."

    "As so often happens with such regimes, their excessive generosity has led to a glut of output, and their cost has risen, leading governments to cut rates. Capacity will probably shrink as a result, discouraging innovation."

    Naturally, this is an admitted left-leaning periodical, so the article goes on to point out many of the pros (the sun lasts forever, throws off more energy in a day than man uses in a year). But, the story makes the point that there is this fundamental reason the public should be up in arms. If we want to stem the tide of losing public school teachers, we should take money being wasted on crazy alternative energy projects. The article wraps up with this:

    "The application of new materials science and nanotechnology offers the possibility of cost reductions much larger than can be imagined in wind power or hydropower, in biomass or in nuclear power.
    But massive subsidies are not the way to build the business."

    Wow, that is serious stuff for a magazine that is a serious cheerleader for left-leaning economic policies. Here's the real deal; a combination of Green politics and the notion of centrally planned policies drove the gobs of money thrown at solar in Europe. It has been a colossal failure. Spain pushed as hard as any nation and in the end, every so-called green job resulted in the loss of two non-green jobs. We are so far away from the time when we make the transition from fossil fuels to alternatives the idea to pour billions of taxpayer dollars into the pot is beyond folly.

    I bet the good folks in Spain and Germany wish they had back at least half the money wasted on their pie in the (cloudy) sky dreams. So when a politician tries to make the case we are in a race and must "win" the solar war, remember this is more like demolition derby. As for beating the Chinese, that is the worst kind of setup possible. China just bought a Canadian oil sands project for $2.1 billion. They are thinking long-term. They are thinking about competing in the real world and understand those with the power will win while those with massive debts and hopes for sunny skies will lose. Sadly, this will not be the end of this boondoggle, which is still sold to the public as investments.

    In fact, now there is a different tactic being used to beat China in a game of who can make the cheapest commodity item (solar panels). A group of U.S. solar panel makers is asking for retaliatory tariffs on imports of panels from China, according to a piece in the FT yesterday. Led by Solar World, the group of seven American solar firms wants anti-dumping tariffs and countervailing duties because the panels are unfairly priced too low and get government subsidies. The group wants 100% tariffs.

    If getting government subsides is illegal or unethical, then let's not toss any stones in the house of glass solar panels.

    Chinese solar panel makers have come on like gangbusters, growing market share to 45% from 8% since 2008. Prices have come down almost as rapidly. I find it interesting this is happening right after the Senate passed a bill that could trigger a wider trade war with China.

    Love It
    By: Brian Sozzi, Equity Research Analyst

    I am forever seeking interesting thoughts or ideas from which to expand upon. For now, the EU is somewhat of a talking head's worst nightmare, that boring as hell story that never seems to just die. Everyday there are small new layers added to the puzzle that is the healing process of the Eurozone, nothing flashy or hot and steamy. Hopefully EU officials show us some leg this weekend by living up to Germany's desire to end this mess once and for all. I am not holding my breath, so this morning I am compelled to voice great pleasure in the comments by Steve Jobs on Google (NASDAQ:GOOG) that will appear in his upcoming autobiography.

    According to excerpts, the tech visionary was prepared to go "thermonuclear" on Google to crush the Android operating system, going as far as to say he will spend much of Apple's cash pile to right the wrong of not stomping on the competition earlier on. Or how about this tidbit of macho wisdom: "I'm going to destroy Android, because it's a stolen product." I personally love CEO bravado; it adds flare to going through the usual motions of picking apart financial statements.

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