Market Notes: Thumbs Up For Housing; Thumbs Down For Dell's Board -- July 17
The expected volatility accompanying Bernanke's grilling by Congress didn't occur. Instead, the market continued to digest recent gains with both the bulls and the bears vying for the upper hand. Sooner or later, the market has to make up its mind and we could see a move by the weekend. I mean, how many times can the Dow continue to test the 15500 level? (Today marks the fifth day in a row!)
Today's market highlights weren't really in the market but on TV. Specifically, the showcase interviews at CNBC's Delivering Alpha conference that's now taking place in New York. The first interesting interview was from hedge fund giant John Paulson who correctly predicted the subprime mortgage crisis and made a gajillion dollars by taking the short side. Now, however, he's completely reversed his position and said that real estate is the place to be. He said that if you don't own a house, buy one, and if you already own one, buy another. He's long the triple-A mortgage tranches (the opposite of subprime) as well as owning actual real estate. But if you can't afford to buy a house and want to get in on the action, consider mortgage lending banks such as Bank of America (BAC) (which broke out to a new high today on a huge profit report) and Wells Fargo (WFC). Other areas include mortgage insurers such as Radian (RDN) and Genworth Financial (GNW). Also mentioned was mega real estate service provider Realogy (RLGY) whose holdings include Century 21, Coldwell Banker, and Sotheby's International.
As informative as Paulson's interview was, it couldn't hold a candle entertainment-wise to this afternoon's interview with activist billionaire investor Carl Icahn. (I was glued to the TV watching it which is why today's blog is a little late.) Always the colorful character, his interview is well worth watching and hopefully CNBC will post it on their website soon. He didn't offer too many actionable stock tips except that he's continuing to hold his extensive long positions in Netflix (NFLX) and Herbalife (HLF) for what that's worth. When asked about the status of the Dell deal he said that he couldn't comment on it as the situation is still unfolding. He did say, though, that the Dell board is essentially a bunch of idiots. Carl Icahn is one person you either love or hate but one thing is for sure--he's rarely dull.
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