Fly on WallStreet

Well, I have been jamming my rickshaw all across the fine internets all day, and have come up with a couple of good things. I listened to CCs of AGN, CMG, ATK, and ALB, all good. Before I dish out savory investment platters, however, I want to make an analogy most magnificent that hopefully you can use to guide you over the next week, which is sure to be tumultuous.

Investing in stocks is akin to personal wealth. I hesitate to say your own wealth, because as Shed soundly noted, I may extrapolate incorrectly about others, based on things about myself. So, my analogy is to take any stock, turn it into a person and question, “Who is this person, and would I lend him/her my expensive car?” If you look at companies like people, it makes it easier to quantify whether or not they are a good investment.

Not all people are created equal, and neither are companies. Some people are loaded with debt, others aren’t, some are risk-takers, other’s paralyzed with fear, some lazy, plenty on drugs, others save to much, some too little, some have great jobs, others poor, and on and on. Those are the companies too, and like people, it takes many years of a cumulative action to be “rich” or “poor” or whatever. Viz., Rome wasn’t built in a day.

Ok, now that you know a little more what I’m alluding to, look at yourself. Perhaps you have notable increases in wealth over a one or two year period. You got a raise, you got a new account, you won the lotto, conversely, you were fired, you got sued, you got jailed for racing dogs, etc. If you look every day, there may be little relevancy, except on the day the news hit. The relevancy occurs after the cumulative effect of your actions becomes apparent, vis-à-vis your improved or impoverished situation.

Now picture someone buying and selling the stock of you, based on news, and how potentially petarded that is, as it may not take account of the bigger picture. Shed shed (haha) light on how my car got fucked. That day my stock was smacked. Of course paying two $1,000 deductibles sure blows, but it is “immaterial to my business,” and though a short-term reason to sell my stock, not a justifiable long-term one, like, say, a massive heroin addiction. Thankfully, I don’t think that’s gonna be an issue either. Maybe you can't grow your salary at 30% a year like some companies, but you're in charge of you're business, so you owe it to yourself to try.

SDB’s stock may have popped when he started shortbabull.com, but it hasn’t turned out to be a colossal success of a site—yet—so his stock has been sold into the hype. Ragin got a job—stock was up big that day—then he quit—stock down, but analysts reitted their buy.

Maybe it has nothing to do with finances. If the CEO of a company has a personal problem that is getting in the way of achieving goals, that obviously should affect the business’s stock, but it won’t if no one knows until it is too late.

Using years as the metric, my stock, Ragin’s stock, SDB’s stock, are all fine and probably going a lot higher. However, on any day, you could take the information of the day, and use it to guide you to sell, or short my stock and that would definitely be a LT mistake. Puts new meaning to the phrase “selling oneself short.”

Nevertheless, yeah, a short trade of my stock the week of my car would have worked, but it is practically foolish to game much more than that. Then, to expect rationality on such a trivial, reactionary level is wrong. You need to find companies that are the equivalent of people you would feel comfortable borrowing your new M3. If you even look at the engine, it will kill you.

If you wish to succeed and don’t have institutional quality research (read a team of eggheads who are paid a lot to work 50 hours a week doing research on your investments) you practically have no choice but to invest for the longer term. In a LT perspective, subprime won’t matter nearly as much to the following companies as it will to other companies, which is why, even with financial Armageddon, these companies ought to fair well. I will review these more in depthly at my fan-freakin-tastic blog.

ATK – boom-selecta
MVIS - HAH! Doesn’t even have earnings to lose, you Marcus Buster.
DEO / CEDC – Alcohol; the cause of and solution to all of life’s problems. Smirnoff vodka, Johnnie Walker Scotch whiskies, Guinness stout, Baileys Original Irish Cream liqueur, Captain Morgan rum, J&B Scotch whisky and Tanqueray gin. In addition, it also owns the distribution rights for the Jose Cuervo tequila brands in the United States and other countries. All the relevant ingredients for an Irish car bomb. Unfamiliar with CEDC? Get cho learn on, sucka.
LNN – Irrigation has nothing to do with subprime, and perhaps bridge collapse will spark waves of construction, resulting in increased demand for road barriers and such. Sales overseas.
BBBB – Software for schools, where students can manage schedules, download all documents from class, etc. Basically it’s a good product—the best kind. They have it at SDSU, and webct (which they own) at all the JCs here. This company retains 98% of it’s customers=predictable revenues, combined with growth. Entering k-12…Schools are probably not fucked by ARMs resetting.
FMCN - Hey, I didn’t say they were all gravy, just subprime free. I still maintain this should be bought on dips, although a restatement would be nice. Not holding my breath on this one. Is it offensive to remind people about the Orimpics? Or has that been totally discounted already by Buelah the fat market hag? I think the estimates will be raised for 2H08, after this company kicks the shiteloft out of earnings, into the Orimpics. If it misses, watch out Nancy.
GOOG - I am glad people hate on this stock, because having haters means others are jealous of your ability to ball out of control.

Of course, the patents for all these stocks are worthless, as the true intrinsic value ranges from .94 to 1.16.

This is just a useless smattering of picks to think about buying when the market starts to recover. There are hundred of these. They are tech, they are niche services, they are staples, they are infrastructure, they are defense. Mainly the people who give these co.s money are less dependant on the credit market, but you need to have balls of big steel to buy them. If your balls happen to be made of palladium, it's best that you just end your life right then and there.

Oh, and my 2¢ on the Fed:

I don’t believe they will change rates. The psychological response will be disappointment, and much like the May 11th 2006 meeting, the sell-off was worsened by the markets anticipation of Fed action. Having Cramer sound off doesn’t help, all that effectively did was make the Fed thanksgiving dinners more awkward. What could they say to make the markets forget about stearns the rally-ruining bear?

Maybe Fugazi was ahead of the curve with these lyrics that I think describe the situation well.