Wednesday, December 29, 2004

American Workers enrolled in Flexible Spending Medical Accounts will forfeit $210 million this year. This is money put away paycheck by paycheck for projected medical expenses during the year. The workers are given a tax deduction similar to that of an IRA. If the funds are not used they are forfeited and started anew. On average, workers contribute $250 to $3000 annually to these programs. So the US Government gloms this $210 million from "healthy Americans" and offers $35 million to the victims of the Tsunami. If the US Government conducted all its business this way, we would never have to worry about deficits and the demise of the Social Security System

Monday, December 20, 2004

For 2005 a basket of 5 contrary plays to buy. You have to buy all of them because some will be duds, but as a group, these should outperform the market. Pfizer $25 area (PFE) way over done; Time Warner $19 area (TWX) is this the year they finally spin off AOL?; El Paso $10 (EP) a natural gas company with financial problems; Rite Aid (RAD) $3.75 maybe someone pulls an Eddie Lampert with this one; and Lucent (LU) $3.75 the best of the worst in this beaten down telcom sector.

Friday, December 03, 2004

Has the hands free cellphone law been repealed? You would think so just driving around. Two years ago headphones were all the rage. Now that people have broken, lost, or misplaced them, they feel its their right to drive with one hand and talk on the phone with the other. The replacement cycle apparently never materialized. Plantronics (PLT-NYSE) is the leader here. The market has not fully discounted this trend yet. Short PLT here at $43 and add to your positions with any rally to $45-$46 with a stop over $48.

Monday, July 26, 2004

We covered our IGT short on Friday for a $10 profit!  Any time a stock gaps down on big volume in the direction of your trade and the low for the day is established in the morning, its time to cover.  IGT can rally to the mid 30's and if it does, it will be time to put out the short again.

Thursday, June 24, 2004

Our IGT short sale has so far produced a $5 gain, we will monitor this closely as good news will propel the stock higher today. SGP is turning out to be a big winner, yet TWX is still sleeping. All eyes are on the June 30th confluence of events. HDI continues to make new highs as well. On July 1, we will recap the first half of the trading year and summarize how our picks are performing.

Sunday, June 06, 2004

More evidence of a massive top in real estate prices---Carmella Soprano has convinced her husband Tony to invest in a spec house in New Jersey.

Tuesday, May 25, 2004

Grasso will lose his case, bottom line, Spitzer is right on the law. Grasso can rant and rave in the Wall Street Journal from today until tomorrow. His lawyers can spin the media for all its worth. But, when the case ultimately gets to the courtroom, in front of a jury, he is toast.

Friday, May 21, 2004

A new investment idea in the face of rising oil prices--Harley Davidson (HDI) trades for around $56.50. Harleys have growing popularity with yuppies, wannabes, white trash, and aging baby boomers going through a mid life crisis. Now they can use the better fuel economy arguement to justify their purchase of a new Harley which they have been putting off for whatever reason.
The Dow Transports did not confirm the sell signal. The lowest the Transports traded was 2785 and rallied each time. The transports failed to take out the March lows below 2750 on a closing basis. There is still hope on the upside. Things to look for next week, falling oil futures (which of course helps the transports) and GE closing above 31 a very key level.

Thursday, May 20, 2004

Further anectodal evidence that the stock markets rally from Dow 7700 to Dow 10,500 this past winter is fizzing out---The news item about a wall street banker running up a $28,000 tab at Scores, a New York Strip Joint.
Three people ordered several bottles of a $3200 champagne, and spent $7000 on 350 lap dances at $20 per. Anybody with a clue knows that these stories don't come out at the bottom, but always at the top. I am still waiting for a story about Mexican cab drivers quitting thier jobs to become day traders!

Monday, May 17, 2004

Some special situations in this dreary market. LEXR just signed a deal with Kodak (EK) for digital memory. LEXR is very, very oversold and at a good value around $9. SGP is close to FDA approval on a cholestorol drug. SGP sells for $16.50 and could in the next 6 to 18 months trade in the high 20's or more. TWX is a classic beaten down, turnaround situation. At 16.30 TWX management will do something in the near future to enhance the stock price.

Sunday, May 16, 2004

Short IGT, the slot machine company, one of the markets best performers over the past years is now on the verge of being a broken stock technically. Short it on any rally to the 40 area, add to your position, below 36. Cover your short for a loss above 43.25. The downside target is 24. I looked at this chart after reading a NY Times Magazine Cover Story about IGT and the slot machine craze last Sunday. Of course the article proclaimed IGT to be the "Microsoft" of slot machine technology. Of course this is a non-financial publication making a call on a national mania, well after the mania has been fully recognized by the stock market. They don't ring a bell at the top, but this article is as good as the December 1999 Time Man of the Year article on Jeff Bezos CEO of At the time of that article AMZN was 116, it fell to 12 over the next 2 1/2 years. Need I say more?

Monday, May 10, 2004

Dow theorists now have half their sell signal, the Dow closed below 10,000 taking out its March closing low of 10,048. Now the transports must close below 2750 for a full blown sell signal. It closed slightly above 2800 today. I found some value today in MTF a large Japanese bank. It has fallen 30% since mid April. I believe in the turnaround in Japan after 23 years of malaise. Enough is enough already. Even though I feel good about buying the low on the opening today at $7.40, I will be wrong if MTF should close below $7.15. Always know where you are wrong when establishing any new positions.

Sunday, May 09, 2004

Gasoline prices up 15% this week. A gallon of regular is now $2.20. 30 yr. fixed rate mortgages approaching 7%, Health Insurance, Car Insurance, Insurance rates in general up double digits, college tuitions increases out paced inflation, New lows on the NYSE and NASDAQ now dwarfing new highs, food prices in the supermarket (milk especially) going through the roof. Inflation is back witha vengence!!! And this cannot be good for the economy. So much is tied to the price of gas, so many home equity loans tied to the prime rate, so many families barely getting by under the old prices, how will they survive under the new higher price environment??

Tuesday, May 04, 2004

Phony mortgage default rates---The media and housing experts will trumpet how low the mortgage default rates are by historical standards. This is misleading. The refinancing boom has masked the true underlying trouble many borrowers are in. After all, when you refinance out of a loan in default, or sell a home with a mortgage in default, that defauted loan is removed from the statistics in favor of a new fresh up to date loan, and so on. This game of mortgage musical chairs will soon play itself out as climbing interest rates, slow down the mortgage origination process. When the music finally grinds to a halt, then people will actually have to keep their payments up to date with (here's a novel idea) "Their Own Money!!" Only then will we see historic high mortgage default rates.

Thursday, April 29, 2004

Today, the NYSE had more 52 weeks lows than 52 week highs. I can't remember the last time this has happened. Gas prices are above $2 per gallon; 30 yr mortgage rates are at 6 months highs over 6% and Google has announced a $2.7 billion offering. All these factors weigh heavily on the market. The failure of the market to rally at the end of the month is further bad news. Today, fund managers who have to be invested were forced to hide in GE, while dumping all small cap and mid cap stocks.

Wednesday, April 28, 2004

Look out Below!!! We are heading into the mean season, the historically week period for stock prices (May to October). All the last minute IRA deposits have been sucked up by the funds. Where will the money come from for the new IPO's???? With interest rates trending up, oil prices trending up and an uncertain outcome of the Presidential election in November, the market is dazed and confused as it should be.

Sunday, April 11, 2004

If you don't think the real estate market is not at the top and at the verge of a long term decline, just notice the popularity of Donald Trump. He is everywhere and the media profiles are so out there you would have to be in a cave not to notice. Does the media flock to Trump at the bottom of the real estate market? No! It all comes out at the top!!

Thursday, January 08, 2004

Everything is rallying, the Dow and S&P are at 2 year highs, there were over 300 new highs on the NYSE and 2 new lows--MAT and KSS, 2 stocks you definitely do not want to own. Although some moron will go on CNBC soon and tell you what a great retail stock KSS is---Wall Street has been touting Kohls for years, never a negative thing said....What crap analysts are!