jonreagan

Staying Defensive While Wondering 'What's Next?'

Mark--I actually found this article useful in terms of getting some perspective on the overall current "state of the union". Just a grumpy crowd on here this morning, I guess.

At some point, I'd like your take on the current dollar rally. While I've generally subscribed to the Schiff-ian school of economics. it seems he's only half right at this point: huge run-up in gold, but the dollar is holding its own. Is it just that the rest of the world currencies are in more miserable shape than ours? With the current fiscal insanity going on in DC, I have to believe that eventually the dollar will get slammed......which should be even better for gold? later, JR

Staying Defensive While Wondering 'What's Next?'

Mark--I actually found this article useful in terms of getting some perspective on the overall current "state of the union". Just a grumpy crowd on here this morning, I guess.

At some point, I'd like your take on the current dollar rally. While I've generally subscribed to the Schiff-ian school of economics. it seems he's only half right at this point: huge run-up in gold, but the dollar is holding its own. Is it just that the rest of the world currencies are in more miserable shape than ours? With the current fiscal insanity going on in DC, I have to believe that eventually the dollar will get slammed......which should be even better for gold? later, JR

McCain's Economic Plan: Um, Where's the Rest of It?

Not everyone agrees with your assessment on lifting the offshore drilling ban:

"But it's well known that it could take a decade for such efforts to alter the balance of energy we use and cut back on oil we import from "countries that don't like us very much"

I've heard several estimates that significant results could be reached in as little as five years. But either way, I find your line of reasoning bizarre. Using such logic, we would never plant trees....or begin large infrastructure projects such as bridges and roads.

Beyond that, it's fair to say that we can't drill our way out of the energy crisis....but neither can we "wind" or "solar" our way out. Because any single measure cannot by itself solve a problem, does it need to be rejected?

In short, Senator McCain favors increasing the supply of energy: pro-drilling, pro-nuclear, pro-clean coal. Senator Obama is opposed to all of those things, and declared on PBS last month that "he wanted to have a conversation with the American people about energy". At this point, most would agree we've had enough conversations on this topic. Even the Chinese Communists understand that to lower the price of oil, you have to increase the supply.

McCain is also strongly if favor of free trade, and lower taxes. Sounds like a pretty coherent economic program to me. Just this year, Senator Obama has opposed free trade agreements with Panama, Columbia, and South Korea (gotta keep Big Labor happy, ya know!). This kind of protectionism will choke off the one thing that is really ripping right now in our economy, exports.

We've obviously reached a rough patch in our economy....but hopefully people will avoid knee jerk reactions that take them toward a candidate like Obama, who babbles mindlessly about "change" and "hope". Times like these require well thought out solutions, not slogans.

The Precarious & Problematic Potash Pyramid at Potash Corp. (Part IV)

Aside from this being the most obnoxious Seeking Alpha article I've ever read, I at least enjoyed the second comment (manwithapian). He makes an excellent point, that touches on momentum and technical issues. If the Fed were to pull a surpise interest rate hike--highly unlikely though possible--people will pile out of commodities and commodity related stocks en masse. In fact, any thing that increases the value of the dollar will have that effect, so investors should be alert to the possibility.

Apple's Balancing Act: 3G iPhone vs. Jobs' Health - Barron's

Back in a Seeking Alpha article last December (12/17/2007) SA writer Alan Brochstien penned an article advising investors to "get out of AAPL before the crowd", and in the article, brought up Steve Jobs' previous illness. I thought it was creepy then, and it's creepy now. Subsequent to this so-called "article" the stock continued an upward rise from the 170's to 202 in January, before correcting. But above all, that was back in December 2007, and this is June of 2008....and the man is still kicking ass.

So it's not surprising that the same tired old garbage is being trotted out now, in advance of a major product launch....it's nothing more than money-grubbers trying to create a buying opportunity. Apple is a volatile stock; notice these cretins never peddle their lies when the stock is in a trough. They get trotted out four weeks before the launch of the 3G iphone.

It's a sad commentary on our overweight culture that someone in shape and fit is ridiculed as "skinny", and becomes vulnerable to rumors of frail health. About two weeks before Tim Russert's tragic passing, I commented to a friend that Russert was looking way too heavy, which is worrisome in a high-pressure position like his. I was not surprised when he was stricken last Friday.

Personal anecdotes may be of limited use, but I recently purchased a high-end pair of New Balance running shoes. In speaking with a rep at the company, he mentioned that this particular pair was Steve Jobs' favorite......in spite of the superb quality, he told me that Jobs still burned through two pairs in a year! No wonder he's so slender. The guy is fit, driven, a total stud, and will be with us for a long time, I suspect. This all makes you realize how ludicrous the rumors are. Apple is right to not to engage these stories beyond what they said last week; otherwise, it's like feeding the beast. ANY responses will get nitpicked and analyzed six ways to Sunday. And before long, all these shorts will be psychoanalyzing Jobs' bathroom habits....

Black Gold or Yellow Gold?

I don't know if this angle was covered--in the lengthy and great list of comments--but having the presumptive Democratic nominee consistently trashing NAFTA isn't helpful either. The oil sands of Canada have vast resources, and Canada is currently the largest supplier of energy our country. After the dustup over NAFTA prior to the Ohio Primary, Canadian Trade Minister David Emerson drily noted:

"Knowlegdeable observers should inform Mr. Obama that our country is currently the largest supplier of energy to the United States."

That Barack Obama wouldn't be aware of this tells me that having been through 8 years of the amateur hour, we're in for another four at least. The Senator's clumsy attempt to assure the Canadians that he supported NAFTA (he was against it before he was for it, I guess) was painful to watch.

Suffice it to say that if we manage to antagonize even the Canadians, we'll have pretty much alienated the entire world. Moreover, given the way Nancy Pelosi torpedoed the Colombia Trade Pact (taking care of her big labor buddies) we're well on our way to doing the same thing in Latin America--unwise given the large oil reserves off Brazil. Sorry if this sounds political--it's actually coming from a centrist Democrat.

High Steel Prices: A Preview of Peak Oil

A previous post emphasized that finding our way out of this mess will take "compromise". He's right, but I'd add the word "sacrifice" as well.

Jimmy Carter was ridiculed in February of 1977 when he made the "cardigan sweater" speech, attempting to pave the way for a national energy policy. While I disagreed with many of his proposals, it was an effort to begin a dialogue; good luck! The following week, Democratic Senate Leader Robert Byrd (king coal!) dryly remarked that the new President's proposals would be taken up sometime "in a year or so". So much for trying to be proactive on major issues. This is a reactive country, which waits for "crunch time" before taking serious action.

I'm a "recovering Democrat", exiled from the party because I believe in free trade and agressive exploration for new sources of energy. My former colleagues have a problem with just about every energy source available: nuclear, coal, oil...some of them even hate natural gas! These people don't want to hear about "compromise". They are the "rule or ruin" segment of American politics.

At the same time, my new "right-of-center" friends don't want to hear about "sacrifice". I think blowhards on Capitol Hill look ridiculous complaining about Rex Tillerson's salary...but I DO wish there would be an honest debate about raising fuel efficiency standards. But that would be difficult, and this country is more into lazy, headline-grabbing solutions than they are doing anything which might be considered "hard".

Jeff Mackey of CNBC's "Fast Money" nailed it earlier this week, in cautioning against rushing head-long into solar stocks. They move up rapidly in tandem with increases in the price of crude, but as Mackey put it, "as soon as the price of oil recedes even a little bit, everyone in this country will go back to buying their Hummers, and solar will go to the back burner again!" Unfortunately, I think he's right on.

After a bridge collapses, you hear talk for a couple of weeks about the USA becoming the "infrastructure country".....when a big story breaks about pitiful SAT test scores, there's buzz about us becoming the "education country". But again, we're essentially a country with a short attention span, that reacts to major crises, and then forgets about them two weeks later.

And don't count on any leadership from our politicians, either. I hear lots of grousing about rising grain prices, and food riots in the rest of the world. And then they proceed to pass a farm bill with an insane ethanol policy--a grab bag of "goodies" to the big Agriculture companies.

Unfortunately, the author's rather bleak forecast is right on the money.

Atwood Oceanics' Short but Sweet Beat

Mark--I sold off RIG shortly after their earnings report, and am obviously glad I did. I think what seems to be confusing a lot of us is that with the recent run-up in crude (last two weeks), drillers and oil service companies (SLB, HAL) stopped moving in tandem with the price, and seem to have stalled. Makes it kind of worrisome what will happen to these stocks if--as the pundits keep predicting--crude finally starts to move downward. Frankly, I'm not a believer in the much discussed "bubble" in commodities....I'll believe it when it actually happens.

Walter Industries a One-Stop Shop for Coal, Natural Gas and Housing

Jake2--Based on the results this week of ANR, MEE, and especially WLT, it looks like you're the one who's long on hot air. You need to concentrate on better market analysis, and less on the snarky comments. Maybe then you can start to come up with the kind of winners Trader Mark does, on a fairly consistent basis.

Mosaic, CF Industries: Fertilizer Stocks in a Bull Trend

User 175171--very good question. TNH historically seems to fluctuate like crazy....but it's been stuck in a range around between 120-128 for a while now. This stock has always made me nervous, in that earnings info and other stats are hard to come by. Beyond that, I'm mostly an options trader, and they aren't available on TNH, so it's a moot point for me.
TRA is interesting, though I've never traded it. Seems to get mostly good coverage in IBD, and recent moves, like most of the sector, have been positive. But I've mostly stuck to AGU-MOS-POT, which seem to be more solid companies.

Mosaic, CF Industries: Fertilizer Stocks in a Bull Trend

I don't know....on Friday, as the rest of the market got boot-stomped, MON, AGU, POT, and CF all actually went higher; MOS got hurt a little bit, but was still better than the rest of the market.

That's a fairly significant sign of strength; at the same time, news of food riots in other parts of the world is becoming commonplace. I knew a guy last year, who kept trying to short Monsanto, all the way from 70 to 125.....he usually had tears in his eyes when I saw him.

Apple Facing Serious Downside Risk - Morgan Keegan

Morgan Keegan did a similar downgrade on RIMM last November, about 4 weeks before they announced earnings on 12/22. It send the stock on a downward spiral, which continued until the earnings announcement. As usual, RIMM announced record earnings, and beat the street estimates in revenue, earnings and new subscribers. Needless to say, the "downgrade" was way off the mark, if not highly suspect.

Morgan Keegan pulls lots of these stunts, you have to wonder about their motivation.

The Writing Is on the Wall: Banks Today, the Rest Tomorrow

Nothing more here than the stench of a short pig. Love hearing them squeal when the market rallies like it did this week.

Apple's Valuation Is Looking Attractive Again

Last point seems to be the most relevant: whether the fundamentals are good, bad, or indifferent, the big institutional investors have bailed--and who knows when they'll come back? When the stock tanked after MacWorld, we were told that this was a buying opportunity....and then after the earnings disappointment on 1/22, same thing. And so on... I know one guy who's been buying shares all the way from 202 down to 120; sometimes he's in tears when I see him.

In an irrational market, perhaps the toughest thing for traders and investors alike is in deciding what constitutes "value". I've been told to go after "bargains" on the dips...damned if I know what they are anymore.

Abby Cohen's 4 Stock Picks for the Next 12 Months - Barron's

Above comment raises a valid point.

I've long been a fan of Abby Jo-Co, but last year she predicted the S&P would end the year at 1600. Think the old gal may be losing her touch.....