Thursday, November 08, 2007


Stocks are for Jerks

HANS missed.

I sold most of my position yesterday, but this is just terrible.

Generally, beverage companies are good tells on a nations economy.

In short, this economy is in the shitter.

Buy it back @ $39.

All of their consumers must have been those who signed sub prime loans.

No home, no credit cards, no buying.

HANS still has very little inventory in KC and doesn't show a demand for their products.

Down 23%.......ouch.
Every company is missing earnings. CROX, GRMN, XOM, CVX...

Might set up some nice buying opportunities for next year though.
Everyone was jumping all over the software as a service model (aka CRM) because they thought the recurring revenue was more stable and predictable.

KNXA is blowing those fuckers up. Down 32%.
I told you 49c earning estimate was too high. I expected 45c or so. 46c is better. Anything under $45 is a steal for HANS. This will be $80 within 12 months. Growing at better than 30% annually. They are expected to make more than $2.19 a share next. Take a lowball $1.75 in earnings next year, slap on a 40 PE and you have $70 a share.
My buddy/pal Kass is turning bullish.
/bruce, where'd you here that?
Kass: This Bear Sees A Year-End Rally
By Doug Kass
RealMoney Silver Contributor
11/8/2007 8:56 AM EST

"Stay committed to your decisions, but stay flexible in your approach."
--Tom Robbins
This is a tough call for me to make because I believe the world's economy and capital markets face significant challenges. But, increasingly, many of those concerns have been recognized, and some of my shorts have reached my targeted price objectives. That said, in a roller coaster market that has no memory from day to day, successfully gaming 5% moves (or so) becomes a necessary ingredient to creating alpha (excess returns). This will be particularly true in the generally low-return setting for equities that I envision over the next year or two.

In summary, the ingredients for a market rally are now falling into place. Whether it occurs today, tomorrow or in the next few weeks, I think it is coming, albeit at far lower levels than Barton Biggs had predicted recently on CNBC's "Fast Money."

I would note that while the anticipated recovery in share prices (amidst this week's gloomy headlines) could be far more brisk than the growing ursine crowd expects, the economy and financial system face broad challenges that will likely limit the rally in scope and duration. A relatively choppy and uncertain picture should unfold after the anticipated year-end rally.

A short-term rally could now occur for some of the following reasons.
Economic: Even the most optimistic bulls now acknowledge the likelihood of a consumer-led slowdown and the likelihood that housing will not recover for several more years, two themes I have emphasized over the last year. It will now come as no surprise to most, and it might be partially discounted.

Subprime Storm: The credit event, until recently (like housing's depression), has been ignored by the steadfastly bullish crowd. No more. Media coverage and investors' preoccupation of this issue is now elevated.

I am looking for a sign of relief on the part of investors after Goldman Sachs (GS) , Merrill Lynch (MER) and Morgan Stanley (MS) have quantified their fourth-quarter credit writedowns and their exposure. Frankly, the exposure levels are less than I anticipated.

In the badly beaten down financials -- where I see the reverse of momentum compared to anointed ones Apple (AAPL) , Research In Motion (RIMM) , Google (GOOG) , Baidu (BIDU) , etc. -- some have actually done a relatively reasonable job in managing and taking down that exposure, though few have been unscathed.

Importantly, the Administration finally appears to get the severity of the subprime crisis, and the odds of an organized (and sensible) government response (in the form of a fiscal Marshall Plan to save homeowners) will be roundly appreciated by the markets. (This is something that Jim Cramer has been touching on this week.)

Sentiment: I judge sentiment more on what I see hedge funds doing (admittedly a thin-reed indicator), through my personal contacts, rather than sentiment polls of writers or individual investors. And over the last week, there is little question in my mind that shorting/hedging is dramatically on the rise. Some of those shorts are being executed in stocks/sectors that have experienced dramatic near-term drops, potentially setting the stage for a violent rally from oversold levels.

Stated simply, there appears to be too much piling on based on obviously disappointing headlines (that many of us anticipated). My experience, however, has been that when the headlines are this bad, and with sentiment from my cabal at nearly the polar opposite than when stocks hit their highs two months ago, the market typically has done a pretty good job of discounting.

Takeover Activity: While private-equity firms have been quiescent (for obvious reasons), I expect to see a flurry of opportunistic corporate takeovers (perhaps even some high profile ones!) aimed at attempting to take advantage of the recent market drubbing.

Year-End Seasonality: The latter part of the year is usually seasonally strong. According to Stock Traders Almanac, since 1950, the DJIA and S&P 500 have averaged a 1.7% gain. The Dow has been up in 40 years and down in only 16 years while the S&P has risen in 42 years and dropped in only 14 years. The gain in the Nasdaq and Russell 2000 are even better, averaging 2.0% increases since 1971 and 2.6% gains since 1979. These are historically powerful seasonal tailwinds that might even be exaggerated in 2007 as hedge funds, thirsty for performance, go all in.

Political: Surprisingly, the Republicans are beginning to catch up to the Democrats in the 2008 Presidential polls. This could be an underappreciated and constructive (at least for stocks) factor. As reported by RealClearPolitics, Rudy Giuliani (the likely Republican candidate) is actually now ahead in two of the 11 national head-to-head polls; in the others, Hillary Clinton is holding on to a diminishing lead. This is shocking to me, quite frankly, as I anticipated another Democratic tsunami. A further shrinkage in the Democratic lead will be viewed as a positive, as the trend toward trade protectionism and higher corporate and individual taxes may be less clear than I previously thought.
In conclusion, I stressed flexibility this week, and my intention is to practice what I preach and to avoid the dogma that some too often attribute to my market views. Nevertheless, I should emphasize that I am hardly a long-term bull. That couldn't be further from my view
Who in their right mind really thinks Hillary Clinton will ever be President?

Her own husband doesn't even like the prospect. (Think like an ego-maniac and introduce the term "legacy competition.")

The revived ghost of Joe Stalin has a better chance.

(thinner moustaches)
On the other hand, all my Bain buddies (admittedly biased) are certain Romney will be the GOP candidate, as Rudy is peaking too early.

Romney's got the looks, brains and squeaky clean background.

Rudy's a tough son-of-a-bitch, but his baggage would give Santa Claus's sleigh liftoff problems.

Even with extra-sincere Christmas carolling.
WTF, do you guys know how smart Romney is?

He's gotta have a 154 to 155 IQ, easy.
This comment has been removed by the author.
Ron Paul is coming on strong ... going into 2008, only Romney , Jewliani & Paul will be left

disclosure: born to jews ... so I can say that shit , cuz I'm a jigger
1st choice - Ron Paul

2nd cherce - Bloomberg/Schwarzennegger

last choice - Hillary/Romney

although Romney prob wouldn't be as bad as I think
anyone else like EBAY here? I think its reasonable .. taken down by BID
Let me get this straight... you like the libertarian first and the nanny state jacklegs second?

Do you realize how farking illiterate that makes you sound?
i don't know if hes a librarian or not

thems be my choices

don't care how itinerate that makes me sounds
Everything is in the shitter. Sell all you have and move to China!
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