Thursday, June 12, 2008


So the market today went up, then up more, and then DOWNNNNN and then UP again!

Volatility is here to stay, and thank goodness! TECH is starting to bust down a bit, and I think we're going to start putting on some put positions for a short term trade. If you look at the action in AAPL today you'll see a perfect example of what happens when momentum wanes on stocks that went parabolic. AAPL was $120s in march, it went all the way up to nearly $200. That's a ridiculous move. You see if it a ton of these stocks.

We're in for a period where we will start to get one step forward, two back. We'll see what happens but either this quarter or next we should see some MAJOR misses in tech. The notion that tech is safe in this economy is one of the biggest fables there is. That has NEVER been the case, quite the opposite. The recession and market tankage from 2000 to 2003 saw the Nasdaq (tech laden) index drop from 5200 to 1100s. Tech doesn't thrive in this environment and even though you have the AAPLs of the world still selling tons of I-PODs and I-Phones, that doesn't mean that the stock #1 doesn't already have it priced in (AAPL's P/E is pretty pricey) and also businesses "mature", they get to the point where growth has to slow or at least level off.

Speaking of which, I think the AGs are nearly at a short term top. I would not be surprised to see POT, MOS, etc. have decent sized pullbacks. Nothing goes straight up forever. They won't drop dead, their still have tremendous earnings growth, but they could get 10% pullins, we'll see soon enough. Next week is HUGE, GS earnings are gonna move this market. Tomorrow? Well, I would suspect some sideways choppy action baring any real news. Lastly, how bad does Jerry Yang and YHOO look now? MSFT offered them over $33 a share and they said no in this market! That's just SICK! Now look, MSFT walks away (don't believe it in the end) and YHOO stock is now $23. How the hell do you explain that to shareholders? Yes, its smart we walked away from MSFT! So what the stock has dropped 40% below the offering price! Who cares? I'll tell you what, if MSFT is serious, YHOO shares will eventually drop below $10. Their business is in bad shape, there's simply no reason for anyone to own that stock unless you take into acct the MSFT angle. You see? Even smart guys get slammed sometimes! All the Ichann's of the world took stakes in YHOO thinking they could force a sale to MSFT. MSFT was smart, they walked away. This looks a lot like BEAS and ORCL when ORCL walked away and then a few months later sucked them up in a buyout because BEAS pulled back a bit. Think about it, if you're MSFT you can now sit back and watch YHOO squirm. IF MSFT then comes back and says, ok dudes, we'll take you, but here's our final offer. I mean, what is YHOO gonna do? There is no way they can make an arguement that they are worth more than the offer. My GUESS is that MSFT comes back at the same price on the dot and says take it or leave it and YHOO jumps and toasts to everyone's good fortune. YHOO making a deal with GOOG is their way of trying to force MSFT into a deal. The problem for all these companies is, they are stuck. MSFT business can't possibly go anywhere unless they can cut into GOOG's dominance and they clearly can't do it alone. I'm not even sure YHOO helps them. And, the BIGGER problem, in my opinion is that online ad market will contract shortly with the recession, it has to. Bulls like to point out that people still have to buy things, and that's true. But, its the same as any other market, if people are buying LESS, or simply just not buying more, then the cost of the ads has to go DOWN. As always lately, I hope I am wrong! Hope springs eternal, but reality is sinking in! As always, yours in heart, mind and spirit. Waxie. P.S. Next week's NJ seminar has a very nice turnout. If you are on the fence, we added Scott to the mix and he will be at the seminar doing individual coaching with all attendees. This is the single best way for you guys to jumpstart what could be a real change of lifestyle in a job environment that ain't improving for a long while more than likely. email me at - if you have any interest at all, we look forward to meeting you all there in NJ next week! RULE!


howsweet5 said...

Hi Waxie,
I would like to know your opinion about jobs (aapl) health and the effect both long term and short term on the stock. jobs has pancratic cancer. pls. excuse me for being blunt here but pancreatic cancer is fatal (my grandmother and a friends mother had it). jobs doesn't look good. what would be your strategy for aapl going foward for the short term and long term?

Waxie said...

How Sweet, thats not very sweet of you. I seriously don't like to play people's bad fortune. I do believe in Karma.

Having said that, I would sell AAPL and be neutral on it if you own it. Clearly Steve Jobs is a giant in the industry and I think that the stock was going to go down anyway, so certainly it doesn't help if Mr.Jobs has serious health issues. His demise has been rumored for a long time, I pray for his family and him that there is a recovery. Yes, pancreatic cancer is deadly, that's very unfortunate.

Money is great, we all want it, but it ain't everything. Keep the faith and please don't go out of your way to "play" someone's death. I'm not saying I wouldn't trade AAPL, I'm just saying "rooting" for a guy to pass away if you're short a stock is troublesome to me, at least.

Hope that helped. Get neutral, then you don't have to worry!

God bless.