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InvestBaboo

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  • Is the Powerful Market Rally Running Out of Steam? [View article]
    Funny.

    I saw articles with almost the same headline and same theme 1 month into the rally, 2 months into the rally, 3 months into the rally..

    I suspect we will see more of these 4 months into the rally, 5 months into the rally, 6 months into the rally....
    Jun 7, 2009. 01:56 PM | Likes Like |Link to Comment
  • Microsoft's Great Week [View article]
    With BING I tried Phx to Mia. (Phoenix to Miami). Nothing useful turned up. (True, the search worked as the author stated for NYC to Denver). Google returned information by far was useful. What Microsoft is really doing is putting a better interpreter for ecommerce type queries. Not all but most popular ones. How hard is it for Google to do this? I think about 4 weeks with 10 programmers and you will have most of these eCommerce type queries covered. Be careful here and look under the surface.
    Jun 7, 2009. 01:52 PM | 1 Like Like |Link to Comment
  • The Bull Is Back...on So Many Levels [View article]
    Trader Mark's gripes about the fundamentals aside I have been screaming here on Seeking Alpha and my InstaBlog that the charts have exhibited a strong Buy signal since mid-to-end March of 2009 and that the rally has continued week after week after week. The ONLY TIME I thought the rally may come unhinged was when that moron Michael Mayo downgraded the bank sector. That is when the charts developed some serious strain however the crisis passed and the rally continued on its course. Trader Mark is right that we have handsomely beaten the SDMA (Simple Day Moving Average) for the S&P and Nasdaq and only the Nasdaq is over its 200 EDMA (Exponential Day Moving Average). If S&P breaks and closes above its 200 EDMA then TraderMark is right that more cash may come flowing in from the side as many chart-watcher fund managers will pile their money in not willing to sit on the sidelines any longer.

    Now to the fundamentals. Who in hell really knows what the market is seeing a few months out down the road? While TraderMark gripes that P/E is out of whack it is because he (or I or anyone for that matter) can not really figure out the "E" part of P/E going down the road. If you use an optimistic number for the "E" then you are way undervalued and if you use a pessimistic number for the "E" then you are way overvalued. The market appears to be betting on a much larger "E" then what the bears seem to be forecasting. The next quarter earnings period will shed a more clear light on this picture.

    However, I hasten to point out something important. It is the action in markets in China and India. I had noticed that the three markets (U.S.A., China and India) were pretty much in lock-step until a few weeks back. In other words, the old adage that when the U.S. sneezes China and India have caught the flu used to be true but no longer. Both China and India markets are making new highs as if they are unhinged from the U.S. markets. Does this mean that the theory that the China stimulus is going to drag us out of this rut has some validity to it? If consumption picks up substantially in China and India and the U.S. consumer is not as bad off as we thing he is then it is possible that the "E" part of our multi nationals will improve more significantly than we have given them credit for.

    There is hope when you look at the fundamentals with the colored glasses I wear when I look at them. The only danger I see is if the next Q numbers don't validate to the market that the "E" picture is improving substantially then this rally may run into a wall. If however the "E" picture as envisioned by the street seems to be on track then we are looking at the Dow plowing pas 9000 and S&P past 1000 to new heights. Doom, death and despair that you see in the air aside what the market really cares is if the "E" is solid in the "P/E" and so far there are signs that it is.
    Jun 7, 2009. 12:22 PM | 6 Likes Like |Link to Comment
  • The Coming Economic Collapse, Part 1 [View article]
    One more comment to my post above.

    #5 The U.S. dollar will continue its downward trend due to natural market forces all of which I think you can find in the plenty of criticisms that Graham has levelled against the U.S. economy. It is for these very reasons the dollar is falling. The dollar's fall will naturally increase the price of commodities because they are all priced in dollars. The prices for oil, crops, just about any commodity will increase significantly. This will incenticize production of more oil, more green energy, more crops, more metals, etc., most of which will happen in the U.S. because:
    -- The falling dollar will reduce the cost of U.S. labor.
    -- The falling dollar will increase transportation costs so much so that production of goods needs to happen close to where it is being consumed.
    -- The cost of imports will rise so much because of the falling dollar and increased transportation costs that more people will consume Made in America goods. Which in turn will increase jobs here.
    -- The cost of debt service will fall because of the decline in the value of the dollar which in turn will reduce the burden on our deficits which in turn will allow for the govt to pass on the savings to reduction in taxes and such.
    Jun 6, 2009. 02:06 PM | 6 Likes Like |Link to Comment
  • The Coming Economic Collapse, Part 1 [View article]
    Ok, I am glad I didn't read this article at end of March because I would have been so pessimistic that I would have missed the rally. Fortunately for me I am a chart follower and posted on SeekingAlpha and in my own InstaBlog the change in trend and benefited tremendously from the upward surge in equity markets. As of today it still does not show any signs of slowing down and I am continuing to make money. I have decided that I will not let articles like this or the ever-optimistic Jim Cramer or just about anyone dissuade me from the money making mission or the exiting strategy when the trend hits the bend (as all trends eventually do). At the end of the day there are millions of perspectives such as this but the market does its own thing. My advice to readers is to follow the charts and ride the ups of the market and when charts hit a bend get the hell out and cheer authors like Graham from the sidelines because he would be right. The nature of the markets is such that both optimistic bulls like Jim Cramer and Permabears like Graham will be rewarded. Investors such as us need to be nimble enough to know when to be in the markets and when to be out of the markets.

    That said let me comment a bit on Graham's article:

    #1 While it is true that the many jobs have moved to China and India it is the U.S. companies that own these labor forces and are running the show. The American labor force is quickly figuring out that the value-add does not come from the tail of the dragon but from being in the head of the dragon. The smarter labor force is moving to the head of the chain and let the body be filled by labor force from the likes of China and India. I am in the tech industry and I am increasingly making my living by managing projects in other countries rather than being one of the individual producers on the project. I understand not everyone can do this but as the younger workforce that is replacing the current generation is getting more and more adept at getting into the head of the chain and not the body of the chain.

    #2 The U.S. has created or is in the process of creating several new industries where we lead and even staff the labor chain because the third world is yet up to par in terms of technology and skills. These industries lie in high tech, pharma, biotech and the new Obama initiative of clean energy. There is a ton of venture money flowing into clean energy. Of all industries the one that offers the best hope for the larger left-behind displaced manufacturing type labor force is clean energy. If the Obama initiative works then a movement of the labor force from the erstwhile auto and other ruined industries will begin to move into clean energy. Think -- you can't create energy in China and power a building here in the U.S.! You have to create the energy here which means jobs will have to be created here!

    #3 The United States is vast and has a significant amount of natural resources. The steel, the metals, and different mining companies will have strong incentives to reopen their mines and start digging this stuff out of the ground because now we have a 2 billion plus consumers with cash (China + India) that need these raw materials so that they can improve their lives. Why do you think the stock prices of mining companies (ex. Freeport McMoran) is going through the roof? It is just a matter of time before the Obama administration comes up with a scheme to approve safe drilling because the demand for even conventional energy will be so high and offshore and onshore drilling pace will increase dramatically. Oil companies that own leases that are already approved will start drilling. (The price of oil rising to $70-$80 level is therefore a good thing for both traditional energy industry and new green energy industry) This will lead to significant job creation. The irony of this all is that we made the people of China and India richer and now we will work for them to improve their livelihood while pocketing an income doing so. So making people of China and India rich was not a bad thing. Now they can afford to buy the ipod, the Cisco routers, the Brocade switches, the Amgen drugs, the Freeport copper, etc. So you need to literally think of all the jobs we moved overseas as a sort of investment in that we created a new economy into which we can sell our products into!

    #4 DO NOT UNDERESTIMATE the agricultural prowess of the United States of America! Do you understand that there is a serious land shortage in China and India and that farmlands are scarce and getting eaten up by an ever increasing population? We have millions and millions of acres of fertile farmland on which crops will be grown to feed these people. Why do you think the stocks of companies like Potash and Agrium are going up? Back to basics now -- a large amount of jobs will be created in agriculture in the U.S. while China and India will produce less and less agriculture products. Why do you think the famed investor Jim Rogers is buying farmland and is producing crops??? Land is more plentiful here than in the third world. Europe has zilch farmland -- it is so small!

    Don't give up on the U.S.A. yet! The free enterprise system that we have here which is way better than China and India will figure out exactly what competitive edge we have and exploit them to once again rule this world as the leading economy. I suggest you look at just how big of an economy the U.S. is as compared to any other country in the world. We are not going away -- not by a long shot!
    Jun 6, 2009. 01:27 PM | 9 Likes Like |Link to Comment
  • Another Sign of Recovery: SPY Breaks 200 Day MA [View article]
    The bears are correct when they paint a picture of gloom and doom (foreclosures, unemployment, etc.) but they forget that the stock market is looking a few months ahead and is forecasting a recovery. The reason you have missed the rally and will continue to miss it going forward because you are stuck in the present and the past. I know it is difficult to look to the future therefore the best alternative is to look at the charts and follow the technicals because in that case you are following the market and not trying to out-guess it. I have been right on almost every single call I have made about this rally, the resurgence in techs, resurgence in small caps, resurgence in gold, etc., over the past several weeks and my dated blog posts are a testament to that. And I did this while being surrounded by gloom, doom and dyspepsia. I had to literally hold my nose and close my eyes and buy into the market based on charts when everything around me seemed to be crumbling to the ground.
    Jun 2, 2009. 01:26 AM | Likes Like |Link to Comment
  • Ignore the Investment Advice You Hear on TV [View article]
    Yes, put CNBC on ignore as well as articles such as this one. Do what the charts tell you. Doing this has enabled me to catch this rally from the very inception and even the most recent rally in Gold. What is tragic is when the markets don't follow through the rationalization that individuals like author work up in their minds they become bitter and self-defeating and publish even more asinine analysis such as this. They would rather go down with the ship than admit that perhaps they may be wrong and maybe they should just ride the trend and rationalize the trend and get off when the trend hits the bend at the end.
    May 31, 2009. 07:50 PM | Likes Like |Link to Comment
  • Can Microsoft's Bing Actually Take Search Share from Google? [View article]
    Bing is cool but how long before Google takes the best of Bing, refines it evern further, and then puts the refinements it its search engine? It is sort of like Apple reinventing smartphone through iPhone. Palm was there before but did it matter? Google has the Search DNA and Microsoft doesn't.
    May 31, 2009. 07:15 PM | Likes Like |Link to Comment
  • Rising Interest Rates Signal 'Hyperinflationary Depression' [View article]
    I agree with the serious (note - I say serious and not hyper) inflation theory but the rest of the article is bullcrap. It is the same bullcrap that has been peddled around repeatedly on SeekingAlpha while rally begin in March and through almost every day of the rally. These articles will continue to be published as the Dow and S&P continue to surge and cross the levels of 9000 and 1000 respectivley in very short order.

    While things are never as good as they seem they are also never as bad as they seem. The author says with a straight face that the commercial real estate debt coming due is $178 billion as if this will torpedo the economy! This is in the context of words such as "gigantic" and "huge". Excuse me, is $178 billion not chump change compared to the trillions of dollars in debt problems we have been talking about?

    The day that the housing prices reach a bottom and start climbing up (indications are that this is very near) the economy will recover. Due to the enormous amount of money being put in the recovery will be much faster. Inventory levels have fallen so much that sooner or later companies have to replenish it and this will begin the cycle of hiring. Spending is at an artificial low because even the 92% that have the jobs have been affraid to spend. When they see signs of recovery they will start spending at an increased level which in turn will lead to more manufacturing and additional creation of needed services and this will feed itself into increased employment. The good that has come out of this economic meltdown fiasco is that America and its people have learnt a big lesson and when we remake the nation we will emerge as much better and smarter people. Therefore, the foundation we are laying for the next bull market rally will be a strong one. All will end well but only a few will see the end for it will be and profit immensely from the ensuing recovery rally. Don't let articles like this dissuade you from taking advantage fo what is likely to be one of the biggest recovery rallys everyand a once-in-a-generation wealth creation opportunity.
    May 31, 2009. 03:12 AM | 3 Likes Like |Link to Comment
  • Does Sprint Have Any Steam Left? [View article]
    The subscriber cost acquisition is pretty high in the wireless industry. Sprint with the number of subscribers it has is a juicy acqusition target. Its network may have some value as well. Expect Spint to be taken out by one of the big players in a few months down the road.
    May 31, 2009. 02:53 AM | 1 Like Like |Link to Comment
  • The Undefinable, Unstoppable Bull Market of 2009 [View article]
    Jesus! Isn't the answer as simple as a market finding its correct level because it OVERCORRECTED in March due to unjust fears of total and complete financial meltdown and the incredible mayhem caused by the attack of the shorts on the banking industry? How can you call this rally unjustified when we are still not close to the point where we fell off the cliff? I suggest you look at the market from the perspective of WHERE IT WAS before it fell off the cliff and not measure it by the rapid climb it is doing to get back on the cliff! And then everything will seem pretty rational and the rally numbers are not far fetched or unjustified by any means!
    May 31, 2009. 02:51 AM | 3 Likes Like |Link to Comment
  • Gold Off to the Races [View article]
    Gold charts look glorious. I took a big position in Gold after publishing the chart readings in my blog just a couple of weeks back. Where it goes I don't know but if I were to guess I would say there are enough factors this time for Gold to break the $1000 barrier and keep heading north. Look at it this way -- when last time Gold tried to break the $1000 barrier the markets lacked faith in the economy (and thus the possibility of inflation) but now they do. Therefore you have two big mondo engines that will propel the price of gold -- first, it is the endless printing of money and when there is too much of something it devalues. Second, the market believes the economic fundamentals are improving and inflation is just a matter of time.
    May 30, 2009. 03:24 PM | Likes Like |Link to Comment
  • Sell in May? Not This Time [View article]
    You say equities are overpriced but the market thinks otherwise. It is boatloads of crap articles like this that has made SeekingAlpha readers miss the rally. Don't outguess the market - just follow it for God's sake! When the market changes direction get the hell out with your gains. I made huge returns from the rally that began in May and when Gold showed signs of life a couple of weeks back I published it in my blog and took a big position in Gold and benefited there too. I did not ask why -- I just followed the market. My advice is when the market turns just follow it and come up with reasons why it is doing what it is doing. Don't try second-guess it.
    May 30, 2009. 03:19 PM | 5 Likes Like |Link to Comment
  • Reload on Gold stocks on any pullback [View instapost]
    Needless to say -- these stocks are strong buys based on both Daily and Weekly charts. I would not buy a stock no matter how great the fundamentals if the chart metrics don't tell me to do so!
    May 26, 2009. 11:45 AM | Likes Like |Link to Comment
  • Dollar Chart Tells a Much Different Story than Pundits Do [View article]
    What I did right when Gold charts showed a buy was investing in Gold.

    What I didn't do was short the dollar! It should have been an obvious trade!

    On May 22 09:23 PM InvestBaboo wrote:

    > Correctamundo!
    >
    > Here is what I did right but what I also didn't do that I should
    > have done.
    >
    > A couple of weeks back for some strange reason out of the blue Gold
    > charts started yelling buy! buy! buy! So I started checking various
    > Gold miners and every one of them suddenly had developed technial
    > metrics that yelled strong buy! Since I am a chart follower I did
    > an immediate reallocation of my portfolio and gave a decent % to
    > Gold miner stocks. So that you know I am not making this up I also
    > published this in my blog. I was rather surprised by this because
    > the equity rally appeared intact and inflation wasin check. Equity
    > market continued deterriorating during the week and then comes this
    > S&P wallop out of the blue and Gold made yet another strong leap
    > upwards. The markets saw this coming a couple of weeks back and this
    > also warns of something serious possibly developing like a global
    > monetary crisis. Whether it does or not you can't go wrong investing
    > in Gold because Gold acts as a great hedge againt any possible monetary
    > crisis.
    May 22, 2009. 09:25 PM | 2 Likes Like |Link to Comment
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