[Posted 7:15 AM]
Rational Behavior
Some of us have been screaming for the above when it comes to
U.S. equity markets and it would appear some semblance of it is
seeping into the nooks and crannies of investors” psyches. Oh,
“irrational” behavior is not extinct, mind you, but with the rash
of key earnings reports this past week, many began to focus on
something all of us should analyze when it comes to Wall Street,
that being the fundamentals.
And the fundamentals clearly reveal that while portions of the
U.S. economy are beginning to recover from the shock of 9/11
and the recession that was in motion prior to that day, anyone
who says a return to boom times is around the corner probably
also believes that Barry Bonds had all manner of baseball clubs
clamoring for his services.
It is also exceedingly easy to characterize the vast majority of the
comments accompanying the earnings statements, particularly in
the technology sector. “I don”t think we”ve seen any recovery
yet” (Intel), “(We don”t) see any improvement in the market as a
whole in 2002″ (British telecom giant Marconi), “(We”re)
concerned about the health of the global economy” (Microsoft),
“Business conditions remain difficult” (IBM).
Everyone talks about technology as much as they do (including
here) because this was the driver of the bubble, this was (and still
remains) where the majority of investor dollars are flowing
(when one looks at daily volume figures), and it is still expected
to be the driver of the recovery. All I hear regarding the latter,
though, is the same downbeat reality check. Revenues are off a
whopping 20-40% from bubble highs and it will be some time
before those same levels are attained again.
But when it comes to the stock market and valuations, it is hoped
that the orderly decline of the past two weeks is recognition of
the fact that equity prices simply need more time to catch up with
fundamentals. And only when that day arrives should we all be
talking about a new bull market. In the meantime, go outside,
play catch with your kids, walk the dog (I hope you didn”t forget
to do this the past few years), and read a good history book.
Even I will turn outright bullish one of these days – I”m capable
of doing so, you know; it will just take more time.
Beware of Falling Confidence
On the economic front, while manufacturing is stabilizing, with
hopes for a more pronounced upturn as store shelves and sales
rooms are restocked following a rapid depletion of inventories,
you nonetheless have key areas not cooperating, like in the case
of still declining machine tool orders. And for those looking for
a quick return to rising corporate profits, remember that capacity
utilization now sits at 74.4%, the lowest such level since April
1983. Ergo, there remains zero pricing power.
But perhaps more importantly, last week I mentioned how some
like PIMCO”s Bill Gross are increasingly worried about the
plight of the U.S. dollar. Foreign cash pouring into our financial
markets helped fuel the great stock and bond rally, as well as
financing a huge chunk of Uncle Sam”s debt. Now foreign
involvement is sliding, with most experts pointing to concerns on
the economic front in the U.S., as well as problems outside our
borders.
I would submit to you, however, that a longstanding wild card in
this space, an increasing lack of confidence in Corporate
America and our markets may well be the trigger that pricks the
dollar bubble.
About two weeks ago, Merrill Lynch”s Richard Bernstein
commented on the infuriating reliance on “pro-forma”
accounting, which excludes all manner of charges while
attempting to hide the truth. “(It) makes the U.S. appear
increasingly like an emerging market.” And it obviously doesn”t
help when a high-profile company like Enron, as well as its
auditors, will undoubtedly be found guilty of criminal conduct.
And don”t you know there are more cases like this to follow (see
Imclone).
Yes, sports fans, dollar followers have far more to worry about
than the fate of the U.S. economy. A growing lack of confidence
in our financial markets will be the feature of choice for
publications nationwide. And while capitalism has proven to be
far and away the best system man has created, history is also
replete with examples of when it stumbled. The best broad-
based one is the story of the 1920s and the resulting Depression.
Market historian Charles Kindleberger described it as “the
greatest era of crooked high finance the world has ever known.”
Of course it all ended badly back then and while I certainly don”t
forecast similar tidings, the current environment is full of
individuals who seem determined to place themselves in the
history books of tomorrow. We”ll be watching carefully and
remember, too, there is a war going on – cash is not trash.
Street Bytes
–For the week the Dow Jones lost 2.6% to close at 9771, while
Nasdaq declined 4.6% to the 1930 level. It was the first time the
indexes both declined two weeks in a row since prior to 9/11.
The aforementioned earnings pronouncements, and reduced
expectations going forward, were the primary culprits.
–U.S. Treasury Yields
6-mo. 1.69% 2-yr. 2.85% 10-yr. 4.88% 30-yr. 5.35%
On the whole the bond market was largely unchanged, the
exception being a 14-basis point (0.14%) rise in the 2-year. The
news on producer (wholesale) and consumer prices was good and
we can now put the numbers to bed for 2001.
PPI: -1.8% CPI: +1.1%
The decline in the PPI was the largest since 1986, when the index
fell 2.3%. But in both ”86 and ”01, the more visible CPI still
managed an increase (in ”86 it rose 1.1%). I bring this up
because there are two topics that are continually on the
backburner with analysts, the dollar and deflation. Neither one
has been an issue yet, and regarding the latter I argue we still
need to see ”real” declines in CPI (with real declines in wages)
for more than a few months before I”m sold on the deflation
story. But should it come to pass, the last thing you want to be in
is stocks. Actually, under this scenario, you also don”t want to
have recently purchased your dream home or bought a Renoir,
for that matter.
–Enron: Well, last November and early December I certainly
laid out the potential problems here and on 12/1 I brought up the
issue of criminal behavior. On 11/24 I also said the relationship
President Bush (and now you can include Bush 41 as well) had
with Kenneth Lay would hurt him. Thus far, however, it still
appears officials in the administration did nothing wrong. It is
telling, though, to watch the various political talk shows. For
example, last Saturday I witnessed the most heated discussion I
ever saw on the “Capitol Gang” when the subject of Enron was
broached, while “This Week” devoted its full hour to the scandal
and Tim Russert started off “Meet the Press” with, “Was there
any official wrong doing by the Bush administration?” Needless
to say, if there was, we”ll find out.
At the same time, I get a kick out of my own senator here in New
Jersey, Democrat Jon Corzine, Mr. Wall Street. He”s getting a
lot of airplay because of the whole 401(k), financial planning
angle to the story and his job history. So he knows what he”s
talking about, right? Wrong. This numskull (haven”t used this
word in ages, but I didn”t want to fallback on ”idiot”) is running
around saying that Bush officials should have warned the public
last October that something was amiss when they were being
called by Enron representatives. This is so insane, and out of
touch with reality, that it”s laughable. Oh well, you get what a
majority of the people vote for, I guess. Sometimes democracy
doesn”t work.
I”m also going to stick by my promise not to rehash the details of
the case since it”s all now so public these days. For the archives,
though, it is incredible that in 4 of the last 5 years Enron didn”t
pay any federal taxes. Put hoods over the executives” heads, ship
them to Guantanamo, and give them a prayer rug. They”ll need
it.
–Energy: Crude prices finished the week at $18.00, the lowest
weekly close since November 16. Inventories continue to rise as
winter is a no-show. We didn”t get one prolonged brutal stretch
of cold at any point in December or January (the month is over in
my book, especially looking at the forecasts) in the resource
guzzling northeast and thoughts are already turning to the
summer driving season if you are an energy producer. And for
those pinning hopes on OPEC”s recent production cuts, consider
this. All the news from non-OPEC Russia is about its own oil
and gas companies operating full bore. As for my own
remaining holdings, while still up, I ate gruel all week.
–Valuation: While rational behavior is working its way into the
price action of once high-flyers, there are some stories I still just
don”t get. For example, Yahoo. This week they announced
better than expected earnings and forecast 7-10 cents per share
for all of 2002. O.K., let”s call it 10. Then on Thursday,
Yahoo”s share price hit $20. So let”s get a price / earnings
multiple, shall we? $20 divided by 10 cents is – holy Toledo!
200!
“But, but, Mr. Science, this is a growth story,” mumbled some
supporter out in left field. What growth story?
2000 revenues: $1.1 billion
2001 revenues: $717 million
2002 revenues: $750-800 million (company projection)
Now I like Yahoo as much as the rest of you, and Yahoo and
eBay ($60 divided by 2002 projection of 70 cents is 86!) are
more than just Internet survivors. But what are people thinking
when they buy them at these levels? Do they realize what the
margin of error is going forward? It”s a centimeter, a penny, and
the next time one of these disappoints the share price will be
halved faster than you can say “Kenny Boy.”
[I”ll have more on this topic next week when I”ve given analysts
a chance to readjust their sights on some of the biggest names
that have reported.]
–Argentina: President Duhalde is pulling out all the
protectionist, anti-American rhetorical flourishes in order to shift
blame for his country”s economic calamity. So I wouldn”t
recommend wearing a New York Yankees cap or t-shirt down in
Buenos Aires anytime soon, unless you want your face ripped
off. And here”s a good example of how badly foreign investors
will be hurt (on top of the $350 mm and $450 mm write-downs
that J.P. Morgan and Citigroup, respectively, took this week).
Spanish-based oil company Repsol (which owns Argentina”s
largest producer) is going to be hit to the tune of $900 million
over the next 5 years, due to a new tax imposed on oil exports.
Said a Repsol official, “They are sticking their hands in the
pockets of many who came to the country to invest in good faith
when nobody else wanted to.” Lastly, in a survey of locals, half
said they would leave the country if they could. [New York
Times]
–Remember when we couldn”t get enough of how smart
America”s business leaders were? Remember?
–With Congress now back in session it is hoped that some
enlightened lawmakers will finally put the asbestos issue to rest.
This week Halliburton announced it was going to fight all the
cases against it (risky, but we applaud the guts), while giants like
Dow and 3-M were victims of bear raids on their stocks due to
perceived asbestos exposure to litigation. In the case of Dow and
its Union Carbide subsidiary, for the period January – October
there were an average of 31 new asbestos filings a month. Then
in November the number skyrocketed to 400 and in December
905 [UBS Warburg / Reuters]. This is ambulance chasing at its
worst.
–A piece in Business Week noted that the average household
budgets $120 per month for entertainment spending on cable and
the Internet. This is important when it comes to the cost of
broadband. Above a certain level, people just won”t subscribe to
it. Of course I muse that if the price has to come down, but the
providers still have the same massive debt levels, we have a
problem.
–For those of you who tire of Jim Cramer, in researching a
different piece I stumbled on this comment of his from 1/23/01,
wherein Cramer was speaking of the tech sector. “Things will be
better six months from now. And it is why EMC is probably a
buy up to 85 this morning because it is one of a handful of stories
that seems downright bulletproof right now.”
Nothing against EMC, but the stock one year later is less than
$16. This is also an example of why I don”t like to mention my
own specific recommendations in this space.
–Federated Department Stores is selling its Fingerhut mail order
and online retailing operation, thereby eliminating 6,000 jobs.
Not exactly a ringing endorsement of e-tailing. And you”re all
now aware of Kmart”s burgeoning problems. Tens of thousands
of jobs are at stake here.
–Barron”s is running its annual “roundtable” and noted investor
Art Samberg made the following comment on the bubble.
“In the 1990s the whole game was that corporate management
was instructed by Wall Street. You had a printed number
(earnings), and you had to beat that number. If you did that
consistently there would be less volatility in your stock, all the
volatility would be to the upside and your cost of capital would
be cheaper. And guess what? It worked extraordinarily well
from 1994 to 2000.” Then it all reversed.
Samberg also said of the current environment in general, “I”m
frightened of investing…There is a lot of unwarranted risk in the
market.”
–Also in the Barron”s roundtable was the following comment
from Marc Faber, who while hanging his hat in Hong Kong has
made some prescient calls on the U.S. market the past few years.
“The booms in car sales and housing will come to a bitter end.”
–Merrill Lynch”s new chief strategist, Richard Bernstein, is a
huge improvement over his predecessor. Of course Bernstein
has correctly been cautious the past few years, which is why we
like him around these parts, and this week he garnered loads of
publicity for his cut in Merrill”s recommended allocation to
stocks for its model portfolio from 60 to 50 percent, while
increasing the bond position from 20 to 30 (the balance being in
cash). Valuations remain “extreme” and may have crossed back
into bubble territory with the post-9/11 rally, Bernstein
proclaims.
–Tyco (G.E. Jr.) keeps getting slammed because of persistent
rumors of accounting irregularities. But late Friday the company
announced it was holding a meeting for analysts on Tuesday to
set the record straight. News of this was the catalyst for a big
rebound in the share price, though it remains well off its highs
and its earnings pronouncements have been less than rosy.
–Finally, CNBC has launched a new promotional campaign
featuring its anchors. In it, one of them (all of 26) says, “The
biggest mistake would be to count out the American investor.”
You know he”s right.
“Hit me…(thump)…hit me…(thump)…hit me…”
International
India / Pakistan: Those who have criticized Secretary of State
Colin Powell hopefully will be singing a different tune in the
near future. IF war can be averted between these two, he will
deserve a large portion of the credit.
President Musharraf of Pakistan gave a truly extraordinary
speech lat weekend. “The day of reckoning has come,” he told
his people. “Do we want Pakistan to become a theocratic state
(where government is deemed to be divinely inspired)? Or do
we want Pakistan to emerge as a dynamic Islamic welfare state?”
[You can view more of the speech on my “Hott Spotts” link.]
Musharraf has guts, I”ll give him that, and he has launched an
authentic crackdown on the religious schools, the madrassas.
Pakistan can”t allow the terrorists to operate “a state within a
state,” he said.
But, of course, he has to play to different constituencies, so he
reiterated his nation”s hard line on Kashmir. [After studying the
history of the situation, I”m on the Pakistani / Islamic side here.
India has never held the free elections it vowed to do when the
region was carved up over 50 years ago. But that also doesn”t
mean they should blow themselves up over it.]
For its part, India focused on Kashmir and maintains that
Musharraf must still turn over about 20 terrorists on India”s list.
This is the true sticking point. But bottom line, war can be
averted if Powell and the respective leaders can get the two sides
to “stand down.” We have to get back to the point where a
terrorist attack killing 5 in New Delhi is viewed as just another
event, and not the trigger to disaster.
Turkey: Prime Minister Ecevit rolled into Washington with high
hopes and, instead, the Bush administration gave him the shaft.
Oh sure, both leaders said the right things but the fact is he goes
home empty-handed.
At least his arrival spurred some editorials and op-ed pieces.
Turkey? Oh yeah, they are kind of important so maybe I”ll write
a canned piece, which is what we mostly received. I end up this
week less optimistic that the West ”gets” what a huge opportunity
it has to begin to reshape the Islamic world. Hell, the U.S. didn”t
even commit to paying for Turkey”s eventual leadership of the
Afghan peace-keeping force.
There are two important issues when discussing Turkey. First,
regarding the economy, I don”t necessarily disagree with those
who feel we should stop the flow of IMF dollars to Ankara and
that the only way for the nation to get out of its economic mess is
to do it on its own. These folks (like the Journal”s editorial
board) point to countries like Russia, which left to its own
devices seems to be finding a workable formula, while former
IMF wards like Argentina go down the crapper. Yes, Turkey has
to eventually find its own way, but now isn”t the time to totally
abandon them and the IMF has had successes, as in Brazil and
South Korea. [Turkey will receive more IMF aid but no
additional U.S. support in the way of trade. And this newly
formed economic committee between the two is a sham.]
But when it comes to the foreign policy side of the story, we
should be wholeheartedly embracing the secular government and
its kick-ass military. Some bleeding hearts say, oh, Turkey is so
strict with those who want to openly practice Islam. Tough.
And praise Allah for this. It”s a new world, boys and girls, a
return to the days of Jeanne Kirkpatrick, whether you like it or
not. Some “rights” may be trampled on but as long as those
cracking down are on our side, I say, roll on.
Two other items on Turkey: The controversy over the Ottoman
castle that Saudi Arabia destroyed in Mecca is growing in
intensity. This week a Saudi government-controlled newspaper
(I guess they all are) criticized Turkey”s ambivalent attitude
towards Muslims, as well as its ties to Israel. See last paragraph
for my reaction to this. Meanwhile, 300 Turks marched in
Ankara shouting “Down with the Saudi dictatorship.”
And on the peace front, Greek and Turkish Cypriot leaders are
stepping up the pace of negotiations. A true breakthrough here
would be a huge positive for the entire region.
Saudi Arabia: Speaking of the guys who I wish were under a new
Ottoman regime, according to the Washington Post, Saudi rulers
want the U.S. military to find another home for its major Gulf
operations. While this isn”t a huge surprise, some congressional
leaders have been increasingly calling for the U.S. to do the same
because of a real lack of cooperation from the Saudis post-9/11.
Over the coming weeks this will become a much bigger deal.
Afghanistan: While fashion types are all agog over interim leader
Hamid Karzai and his stylish dress, the bottom line is that his
country”s warlords are as bad as ever and the U.S., for instance,
is rightfully miffed that dirtball Pashtun leaders are not
cooperating in the hunt for Taliban and al Qaeda. Unfortunately,
actions like these only prolong direct U.S. involvement.
Israel: I saw the following headline in the Star-Ledger
newspaper. “Arafat says Israel wants all Palestinian leaders
dead.” This was Thursday, before the latest horrific attack. I”d
say he”s very perceptive. And you”re not likely to see me
disagree with regards to Israeli actions going forward.
Iran: Early in the week a reformist figure in parliament was
imprisoned by the clerics. The House Speaker then quit, saying,
“I announce that the judiciary (the clerics) has committed
aggression against parliament.” Two days later, supreme leader
Ayatollah Khamenei pardoned the man. And so it goes, back
and forth, as Iran”s revolution claws its way to a final
denouement.
China: The commies are upset that Taiwan has put “Issued in
Taiwan” in English on its passports, which China interprets as a
step toward independence. [It currently says “Republic of
China” on the document.] Of course China is offering Taiwan
the same arrangement it has with Hong Kong, “one country, two
systems.” For its part, Taiwan appears to be inching towards
declaring formal statehood.
Nicholas Kristof had an interesting op-ed piece in the Times
Friday, his opinion being the U.S. should be increasingly worried
about China”s “chip-on-the-shoulder nationalism.” While
Kristof wasn”t addressing the passport issue, he could just as well
have been. What you and I may view as small problems are
highly magnified between the two sides in this potential conflict,
let alone the broader, more dangerous issue of China”s relations
with its other neighbors, as well as the U.S.
[As I go to post, I am just learning of the plane delivered to
China for use by President Jiang Zemin. Reports are that it
contained 27 listening devices (it was built by Boeing). While I
don”t like to comment unless I have more facts, if this is true, it
should send chills down your spine. It did mine when I first
heard this an hour ago. It would be a mistake on our part of
disastrous proportions.]
Philippines: Over 600 U.S. forces will soon be on the main rebel
island, but there is enough opposition to our presence that they
may never see action. Over 20 Philippine soldiers and rebels
were killed this past week as former policemen, who had gone
over to the side of the Muslim extremists, started firing on the
military.
Colombia: First, peace talks broke off between the U.S.-backed
government and the rebels. Then a ceasefire was declared, but
hours later rebels blasted through a prison, freeing 39 of their
comrades. The peace talks started up again and now President
Pastranas has set a new deadline for a ceasefire.
Balkans: According to U.S. News, U.S. and French special ops
forces are close to launching a climactic mission to arrest
Bosnian Serb leaders Radovan Karadzic and Ratko Mladic. For
six years these two have avoided being brought to justice, solely
because of fears of casualties on the allied side since both
dirtballs have heavily armed guards. Now, President Bush and
French President Chirac agree the time has come. [However, the
incident on Friday, where the U.S. arrested some suspected al
Qaeda members in Sarajevo after they were set free by the
Bosnian courts (on purpose), with the large Muslim
demonstration over the action that followed, may force a delay
on the U.S. / French mission.]
Zimbabwe: The 14-nation Southern African Development
Community got together, grilled President Mugabe behind closed
doors and emerged to say Mugabe had promised fair elections
(March 9-10). Africa”s leaders are such a bunch of bumbling,
corrupt idiots. Let”s face it, Mugabe needs to be removed.
Germany: The parliamentary elections are not until September
but it is clear already that unless the economy picks up here,
Chancellor Schroeder will lose to the conservative Edmund
Stoiber. Stoiber hails from Bavaria, that bastion of anti-
immigrant fervor, and he has said things like, “With 4.3 million
unemployed, we can”t have more foreign workers coming to
Germany.” Of course when you look at the demographics and
the dearth of newborns in much of Europe, the only way the
continent will grow over the long-term is through immigration.
Admittedly, though, this creates its own tensions, as I have long
argued in this space. Europe has a history, you know. A real
lousy one. [Though I love the artwork!]
Russia: Sorry, I need to hold off on my analysis for another
week.
Random Musings
–The BBC led off its broadcast the other day with a story on
how U.N. human rights groups were concerned at how the al
Qaeda prisoners were being treated at Guantanamo. Of course
this is one of the infuriating features of the network, the leftist tilt
it often takes, but it also covers the world far better than our own
do so you put up with the bad to view the good. As to the issue
itself, thankfully, the vast majority of the American people don”t
give two hoots about how we treat those who seek to kill us.
–I liked this comment by Capitol Hill newsletter writer Charles
Cook on Senator Lieberman. “Lieberman is good at appearing as
though he”s earnestly seeking the truth rather than seriously
exploiting a situation – even if he is seriously exploiting a
situation.”
–I”m anxious to watch Alan Keyes”s new show on MSNBC
(10:00 PM weeknights). But my guess is that after two weeks,
he”ll have the show cancelled because no one will want to be his
guest. There is simply no way you can win a debate with him,
he”s just too good.
–Historian Victor Davis Hanson, author of a new book, “Culture
and Carnage: Landmark Battles in the Rise of Western Power,”
wrote an important piece in the current issue of American
Heritage. Among some of his comments:
“Instead of parading pictures of bin Laden in the streets, the
Taliban would have done better to study the history of the names
of the American ships off their shores: USS Peleliu, Enterprise,
and Roosevelt.”
And…
“The civilians of Afghanistan are in large part noncombatants,
but they are not all completely innocent…Our goal is not only to
replace the Taliban and dismantle terrorist networks but also, by
the annihilation of the Afghanistan government, to teach the
misguided and misled in the region that when they let slip the
dogs of war against America, it can be a dangerous thing indeed.
Only that way will they be vigilant in the future against
firebrands who want to take their countries down the same
disastrous path as did the Taliban.”
–Ordinarily I dismiss anything written by Paul Krugman of the
New York Times, but his piece this week on the Carlyle Group, a
defense holding company which features former Defense
Secretary Frank Carlucci, should give Republicans pause,
particularly since Bush 41 appears to be enmeshed in this
example of “crony capitalism” run amok.
–William Safire on Enron and the auditors: “These no-account
accountants seem to forget the ”p” in C.P.A. means ”public.””
–Dear Chairman of Wal-Mart:
My friend Jimbo, age 43, finally went into his first store the other
day and he can”t stop telling me just what a great shopping
experience it was. I mean to say, it”s getting mighty
tiresome…emails, phone calls. So please, Mr. Chairman, please
give Jimbo a commercial. He”ll do a fine job for your company.
–Congratulations to the “Today Show” for its 50 years. And
kudos to 93-year-old Pat Weaver (father of Sigourney, by the
way) for creating this great program.
–If it”s January, that means it”s time for Jesse Jackson to appear
on Wall Street for his annual shakedown, disguised as the
Rainbow / Push Coalition. Actually, come to think of it, Jackson
and Wall Street are made for each other.
–Drought Watch…exclusively on StocksandNews.
Forget this little weekend storm in the mid-Atlantic, sports fans,
the drought in the New York area, in particular, is only getting
worse, as reservoirs at last reading were at just 43% when they
should be 79% this time of year. And Harry K. up in Canada
reports that the St. Lawrence Seaway faces a summer crisis of its
own.
Stay informed…read “Drought Watch” each and every week.
–There is no truth to the rumor that Martha Stewart is going to
be selling her line of merchandise on StocksandNews now that
Kmart is near collapse. Frankly, I”m scared of the woman.
–Transportation Secretary Norman Mineta. Now there”s a dim
bulb for you. But couldn”t we shift him over to Housing and
Urban Development, and then finally shut that department down
for good?
–Did you see the pictures and videos released by the Justice
Department of those 5 al Qaeda suspects? And folks like
Norman Mineta are not for profiling?
–And how about those al Qaeda members who were found in
Pakistan, attempting to hide under Burkhas while passing
themselves off as women? All I know is that if I see an
individual wearing a burkha at my local grocery store, I”m
tackling them. These days, ask questions later.
–There seems to be a misperception concerning the
StocksandNews “Dirtball of the Year” award. Folks, there is no
cash prize involved. And I”m trying to figure out why three
weeks into 2002 we already have a flock of candidates; like
senior partners at Arthur Andersen, Kenneth Lay, perennial
favorite Robert Mugabe and Yassir Arafat.
–So we now have two new game shows, “The Chair,” and “The
Chamber.” Both participating networks are suing each other for
ripping the other guy off. What”s my idea (which I figure I”d
document here for legal purposes)? “The Cage.” Contestants
will be thrown in one, hooded, fed Fruit Loops, given a prayer
mat, and forced to answer questions from the Koran, all while
U.S. Army Special Ops hover overhead with a daisy-cutter.
–Say a prayer for the folks in Congo.
—–
Gold closed at $283 – the rally fizzled, for the 20th time.
Oil, $18.00
Returns for the week, 1/14-1/18
Dow Jones -2.2%
S&P 500 -1.6%
S&P MidCap -2.2%
Russell 2000 -3.2%
Nasdaq -4.5%
Returns for the period, 1/1/02-1/18/02
Dow Jones -2.5%
S&P 500 -1.8%
S&P MidCap -2.2%
Russell 2000 -2.9%
Nasdaq -1.0%
Bulls 51.6*
Bears 24.7 [Source: Investors Intelligence]
*Last week”s reading of 52.6% on the ”bull” side was the highest
since 7/27/01, when the Dow was at 10416. Back in Feb. ”01,
the bull reading was 61-62% with a Dow of 10864. That”s just
an example of the contrarian nature of the survey. The bear
reading of 22.7 last week was the lowest since 4/3/98, with a
Dow of 8800, on its way to an August ”98 low of 7640 (weekly
closes).
Have a great week. I appreciate your support.
God bless President Bush and the men and women of our armed
forces.
God bless America.
Brian Trumbore
