6:56 AM PDT, November 13, 2008 - What if they gave away money and no one took it?.....that's the scenario that comes to mind as the government is trying to figure out how best to get the economy going again....after an initial concept of buying bad assets, there's been a change in plans.....now they're working on how to get the money directly to consumers so they can spend it and create more demand for goods and services which means more jobs which means people will buy houses again and that means more jobs and more goods and services...
...once the virtuous cycle begins, the benefits increase enormously....but it has to begin.....people have to have the confidence to spend money....even more confidence to borrow it.....they need to feel their jobs are safe so that any financial commitment can be met (at least the honest ones do)....so the government can put the money out there for banks to lend but if no one takes it, it won't do the job needed.....the real answer if we want spending to pick up faster than a Nascar sprint: lend the money to students.....they will absolutely take it and spend it....
1:56 PM PDT, November 6, 2008 - How quickly things change.....the election day rally on Tuesday seems like a fond memory, certainly more than 2 days ago...of course, when your head and portfolio get hammered for 2 days straight, your mind tends to go to oatmeal.....it's getting rough out there...forget my last blog's description of some hope...right now that's all gone with nothing but black clouds covering the horizon: will GM and Ford and Chrysler go out of business?....we'll know more tomorrow as GM and Ford announce earnings and GM talks about a new business model or some other program that is supposed to be monumental....the buzz is bad for car makers unless they're from Japan or Germany, but even they don't escape the lack of demand....people are going from frightened to scared, even with a new president, riding lots of hope, going into the White House....the burden on Obama's shoulders is huge....no one person can save everybody....the main problem is that no one sees any real answers to the problems....the real answer is for everyone to go out and buy something, particularly a home, to get the economy started....but when you've lost your job or think you're about to, you're not shopping for anything but groceries and necessities like drugs....you're hoping to keep your job and preparing for the worst......some economists suggest we're only halfway through these troubled times....maybe they're optimistic, maybe they're pessimistic....no one knows....but the government isn't the only answer...it can't bail out the car makers and the banks and the thrifts and the insurance companies....no matter how painful that is....the banks are absolutely necessary for their lending capabilities, their ability to help stimulate the economy.....while the auto makers employ a lot of people, and are already receiving funds for special projects ($25 billion for more eco friendly cars), to try to save all of them creates a new problem: which other industries deserve government cash?....where does it stop and who makes the decision.....yes, we're in terrible times, times not seen since the depression, brought more quickly than anyone could have guessed....but the American people have always bounced back through innovation and hard work and they will again....the answers just haven't been found yet....they will be and they're not all in Washington....
10:22 AM PT, October 27, 2008 - There seems to be some hope coming back in the market.....witness the last three days of trading: each ended higher.....three days do not a rally make but it's been quite a while since the market had successive gains of any magnitude....maybe we've hit bottom but keep in mind that there are still plenty of mortgages on the brink of defaulting....add in the credit card concerns and the CDS's (credit default swaps) (a credit derivative contract between two counterparties, whereby one makes periodic payments to the other and receives the promise of a payoff if a third party defaults) that are still on banks' books as well as credit companies such as American Express with credit cards....it will take years to know how bad these problems become (or don't) so we're not out of the woods yet....still the magnitude of the mortgage defaults may have hit a high water mark....the sheer volume of defaults may be lessening as banks begin to offer workout solutions to delinquent payers (see the latest arrangements from JP Morgan Chase as an example).....other banks will follow and stem the tide of foreclosures....the worst, only in terms of mortgages, seems to be about over.....another issue hitting the headlines: banks are using the new capital from the government in the TARP program, to buy other banks...like that's a bad thing.....it's the efficient thing....the U.S. is totally over banked....and many of the banks are poorly managed (hence the problems)....with this new capital the efficient banks can take over the bad ones, cut costs, and serve communities better......what about competition? you ask....won't there only be a few big banks left, able to charge huge fees and take advantage of consumers?....hardly....there will always be room for well managed banks that serve customers in their communities or nationally....competition among banks isn't going away, only the bad banks....some of them will fail....as they should....but your money is safe (as long as it's in an account that's FDIC insured and is less than $250,000)....the name on the door of your local branch may change but you're money is still in there...
10:22 AM PT, October 27, 2008 - We're all waiting....most for good news...many for more bad news....don't know which is coming but we know something good or bad will move this market....with the global governments throwing money at the problem, the logjam will break....credit will become available....some loans will be made.....investors should like it....
unless they think too much money is sloshing around the system, the kind of excess that causes inflation....then those investors will buy gold, not stocks.....there's no scientific data here, but it feels like the market is trying to establish a bottom....hence the volatility around the close of the previous day.....maybe the worst is over.....with new home sales picking up (albeit after builders cut prices) more inventory goes away...and here's another factor that's positive that will soon show up: with lower interest rates, look for refinancing of mortgages to go way up..if the homeowners qualify under new lending terms.....this round of refinancing won't be as easy as the last time rates were this low....more income verification will be needed...and with lower valuations on properties, many loans can't be made at the same level as the original one....still some refinancing is coming which will help purchasing power for those homeowners.....so a thaw could be here sooner rather than later.....don't expect any kind of Christmas retail season....not gonna happen this year....everyone's getting introspective, giving less, appreciating more....still there's reason to believe the worst just might be behind us as new capital goes into banks, interest rates go lower, and home inventories decline....little by little, brick by brick, there's hope for stocks, especially the ones racking up earnings in spite of the economy.....
Here's a personal note: I was in Los Angeles last week and visited the Getty Center....if you haven't been, you must go...the sooner the better.....it's free (except for the $10 it costs to park)....but once you're in the garage, you're done...once parked, you hop on an electric tram that takes you to the top of a hill in the Santa Monica hills that overlooks the ocean and West LA...stunning view....you leave the tram and are on a campus of buildings filled with exceptional art, pieces by Manet, Monet, Tissot, Rousseau....there's a special exhibit now of Bernini's sculptures that's outstanding.....there are four or five buildings of art, each two or three stories high......we spent 3 hours and didn't have enough time to see half the collection and special exhibits.....after the museum closed, we stayed for a special Friday night concert of an excellent trio called The Devil Makes Three....made their own kind of music fusing rock, country and folk into a unique blend....that was free as well......again, if you are going to LA, please do yourself a favor and see what is a one of kind place (for more info: www.gettymuseum.com).... as Michelin used to say in it's guidebooks: worth the drive..... did I mention it's all free?
1:30 PM PT, October 20, 2008 - The market, like Lassie, is trying to tell us something.....unfortunately, nobody speaks market so no one knows.....a good guess: indecision rules the day....when price gyrations have the Dow Jones Industrial Average cover more than 1000 points in one day, things aren't normal, especially when that 1000 points is made up of 500 points down, then 500 points up....or when most of the day the DJIA is up 300 points, then, in the last hour, finishes down by 300.....most likely, investors are hoping for the best, then selling into rallies, still trying to get out with some of their wealth intact.....until there are enough positive events that prove (not just hoped for) an economic rebound has started, investors will stay focused on getting out, fearing even worse things will happen.....they might....the list of horribles is only limited to imagination.....but there is also a list of positives which runs long....things like new capital in the banking system (a fact) to help thaw the credit freeze, Warren Buffett buying stocks, a sure sign in the past that the worst was over (will that be the case again?), earnings from bank stocks not as bad as expected (for many, not all), oil trading below $70 a barrel, etc......no one knows where the market will go next....but if you're an investor with a longer time horizon than one year, it becomes obvious that certain stocks (see the Investor Guide column for examples) that are screaming bargains, ones that will endure this market turmoil and lead all stocks higher when confidence returns to investors....when that will be is unknown, but looking at a price chart for the DJIA over the last 112 years shows that is has always happened......my bet is that it will again...
1:30 PM PT, October 13, 2008 - A reprieve, a rebound and a record ...final tally: 947 points up, all in one day....we can take a breath and hope the bottom has been hit....but I wouldn't bet on it.....the concerted efforts of most central banks to inject liquidity into a frozen lending system was greeted with real enthusiasm today as investors (at least many of them) decided that maybe, just maybe, throwing money at problems will solve them.....in the short run, it definitely will.....but there have to be doubters out there.....they're the ones selling stock to the new believers (remember if you buy stock, someone has to sell it to you).....I hope this is the real thing.....we'll get more news after Secretary Paulson has met with the top bankers this
afternoon....there will also be more explanation of the government's plans for TARP (Troubled Asset Relief Program) tomorrow....as investors parse these new developments, either more money will be invested in stocks or more sellers will emerge, forcing prices lower.....this one day is great....but remember we're down over 30% from the highs of a year ago even with today's bounce.....and that's the DJIA....the Nasdaq Index is much lower (it's off more than 60% from it's highs set in 2000)......these next few days will help or hurt the market as more of the government's plans become apparent....then there will be earnings....hopefully some positive surprises await, like IBM's last week....there are lots of things about to happen, and if they're all good, maybe those sellers will go away for a while and we can see real progress in the market....but remember how much psychological damage has been done....many investors are only waiting for their break even price to get out of stocks....don't expect a straight line upward from here....too many people have been hurt too deeply for them stay in the market, especially retirees or about to be retired investors.....they want out and will sell when their prices arrive....expect some real choppiness but hopefully with an upward bias....stay tuned....
4:40 PM PT, October 10, 2008 - It's over.....Friday's ride was a fitting end to the week that will be noted as the most costly for investors since Dow Jones started its average in 1896.....as I watched the market impersonate with exact duplication a bipolar patient, it became obvious that investors have no interest in value or worth of a stock....they only want out, no matter what the intrinsic value of the investment.....companies that have equity of $9 a share sell for $4.50 with the rationale being that no one knows how many more losses are coming....that or the sellers just need to get cash because they've got margin calls or some or all of their stocks are trading below $3 a share and are no longer eligible for margin....or mutual fund holders are tired of the pain and want their money out so mutual fund managers, having used up all their cash for previous holders who wanted out, are now forced to sell more stocks to meet the rising demand for money.....there's fuel for this fire coming from every direction....it's the perfect storm of bad news....and for all the smoke, no one can see beyond the moment.....this will end...and most of us will have lost a lot of money....I don't know when the right time is to start buying but not to buy when fear is everywhere is a disservice to your well-being....certainly not in large amounts, not even in normal amounts, rather in small, judicious ways that give you the comfort of knowing that you've bought stocks that are well worth more and will be recognized as such sometime in the future.....or if you're totally pessimistic, take all your money, put it under your mattress and hope for the best....this weekend the G-7 (G-8 if Russia joins in the discussions) are sitting down to see what governments can do to stop the fear and panic....it's worldwide now and so large that only governments can address the problems....they didn't create them but they're going to be part or all of the solutions.....confidence has to be restored in the banking system first, then loans have to be made, then jobs will be created and some type of normalcy will return....but things will never be as they were and recovery will be long in coming....the world has changed and from all this darkness will come light and some good, it's just hard to believe that right now.....it always has.....if you can, enjoy the weekend.
8:00 AM PST, October 6, 2008 - Ok....the bill passed.....the market is down some more....obviously it wasn't the salve that investors were looking for, though the market rallied when the Senate passed its version, then investors took advantage of higher prices and sold when the House confirmed the new version....$700 billion isn't going to cure the credit crisis....and that's what we're in....make no mistake as to the seriousness of it either....when banks won't lend to each other which is going on right now, then money stops flowing, loans aren't made, jobs are lost, the economy slows down, way down....that's the reality of where we are.....while I've started a new column called One Good Thing, we'll need a lot of good things to bring us out of this mess.....buying assets from banks at great prices will most likely make the Treasury some profits....it will add some liquidity to the market but not enough to have banks sloshing in money.....very few loans will be made in this environment and only to the most creditworthy....buying a home may require 80% down and then a 20% loan from a bank, the reverse of the norm....and the ones lucky enough to get the loans will have FICO scores that are above the Excellent level (is there a 1000 FICO?).....the new bill will help a little in mitigating the frozen flow of capital but not much....it's a step in the right direction but the government isn't the whole answer here....losses have to be taken by the institutions that made the loans and more of those are yet to come....only when the losses have been written off and homes are starting to sell again will consumers begin to feel some confidence....until the foreclosed homes are off the market and the signs come down will consumers start spending....until then, expect more unemployment, less consumer spending, and general fear in the markets.....but it's not all bad: gas is coming down and interest rates are low with some speculation that a rate cut is imminent.....while these two elements aren't the saviors either, they can contribute to a better economic recovery.....like bricks in a wall, it takes a lot of them to make the finished product and a long time to build......the wall's been damaged pretty bad for now, and each new brick helps...
2:19 PM PST, September 29, 2008- Down 780 points....new record....total confusion, frustration, desperation.....House doesn't pass the bailout bill....maybe it's politics....maybe it's lack of understanding, that it's not a bailout for any bank or investment bank...it's about buying assets at fair prices and holding them...some will pay off, others won't....but the money's not for buying mortgages at inflated prices so investors can be made whole or that financial execs can continue to receive large bonuses....it's about getting a flow of funds into the market place to unfreeze the credit markets....right now, most people can't get a loan...if this bill (or one similar) isn't passed soon, the freeze will get worse, last longer, have even more deleterious effects.....it's not a free market solution, but it's the best one for the moment....sure, there will be consequences of putting more money into the system, money that will most likely be borrowed from foreign investors (it has to come from somewhere)....it will affect interest rates in the long run as well as inflation but most people would prefer to fight inflation from behind their desks or with hammer in hand or sales slip signed than from their couch, wondering when they'll be able to get back to work.....the statistics haven't caught up with reality....we are not in a depression but we're deep into a recession and just because government numbers don't reflect that yet doesn't make it not true....we've got to work on this problem as quickly as possible, get some confidence back into the credit markets and the banking system and help create jobs....this is a serious situation that will only get worse if something isn't done....pass the bill...stop calling it a bailout...call it a rescue plan, but it doesn't bailout anyone or any firm....put the right people in place to buy the assets, and the government can make money on this....but first, pass a bill that gives the authority to start the process....get moving before it's too late....contact your Congressman or Senator and let them know that a Yes vote is needed, the faster the better...
9:09 AM PST, September 27, 2008 - Ahhh...the weekend....sorry, that's so two weeks ago....now it's ARRRRRGGGGH! THE WEEKEND....the time when banks go out of business and brokerage firms go bankrupt...the stress is 7 days a week....the stock market beats investors for 5 days, then for Saturday and Sunday, we all anxiously await the next headline, wondering if the bank where we deposit our money is gone or has a name change or if the brokerage firm where our IRA and other accounts sit will open on Monday.....there's no rest for the wicked or the virtuous....this market doesn't care who you are, you're getting a whuppin' whether you deserve it or not....it's an equal opportunity punisher.....everyone's got their fingers crossed that the bailout bill will come together before Monday morning, ideally by Sunday so the Asian markets can find some relief from it (if they do)......as mentioned before, this is the best resolution for the economy even if it's the wrong resolution from a strictly economic, free-market perspective.....but it isn't necessarily going to cost the taxpayers anything...in fact, if they get the right professionals to manage purchasing of loans, to pay the right prices for them, there's money to be made by the government....Bill Gross has offered to help (he runs PIMCO and may be the best bond mind ever)....let him bring his staff in and there won't be anything left on the table for the sellers.....if there weren't good money to be made in this mess, he and many others wouldn't have raised billions of dollars to do exactly what the government is offering to do: buy mortgages....private buyers are doing it strictly for profit, the government's motive is to unclog the credit markets, to get money flowing back into mortgages to lift the housing market and help create jobs......and if they fund the bailout with tiered payments, progress can be measured before the next tier is implemented....there's an outside chance it may not all be needed but that's way out there because the estimate for troubled mortgages has been over $1 trillion......the thing to remember about that estimate is that it's not possible to know the depth (or shallowness) of this problem because every month there's a new scorecard....if a mortgage pays this month, it's fine, no problem....it's only when it stops paying that a holder knows there's an issue...so even if things look good today, it can change markedly tomorrow....or the last default may have occurred and no more are coming (this I doubt with every fiber)......so let's hope the bailout bill passes without too many oddities hanging on it, that it gives confidence to investors, and the frozen credit markets can start to thaw.....meanwhile, I'm watching football and trying to enjoy the weekend....
10:12 AM PST, September 24, 2008 - The debate goes on.....will the $700 billion bailout pass?.....here's what the market is saying: yes, yes, yes.....how do I know?.....look at the stocks that are going up: they're the ones with the most mortgages (with the exception of WaMu which has more problems than any 2 other banks or thrifts combined).....the first and most prominent stock moving ahead: Fannie Mae (common and preferred)....as of this moment, the common is trading at $2.65 a share....only a few days ago you could buy all you wanted at 65 cents a share....volume as this is written is 251 million shares....somebody believes the bill will pass and lots of mortgages will be bought from Fannie and capital will flow again.....look at Bank of America and Wells, Fargo....they're both headed higher.....Freddie Mac hit 25 cents a share, now it costs $2.87....investors are saying the bill will pass...if it does, look for a little more push in these stocks, but not much.....that's because stocks usually move on rumors and sell on facts....in other words, the passage of the bill is already priced into these stocks.....if it is
passed, it will take a long time before earnings make Fannie and Freddie move, while BAC and WFC may see earnings move up more than analysts already anticipate.....while the debate involves economics and politics, some resolution has to be reached to keep the economy going.....many investors have already cast their vote....
9:11 AM PST, September 22, 2008 - Try to get your head around $700 billion.....that's about $2000 for every man, woman and child in the U.S.....it's a lot of money.....but if it weren't there to bail out the banks and Wall Street, the economic collapse that would ensue would be far worse, far more expensive....without confidence in the financial system, there is no growth, no prosperity...jobs are lost, homes are abandoned, credit is unavailable....everything stops and goes lower.....yes, it's an outrage that poor loans were made and that taxpayers have to come to bail out these bad decisions.....but there's also the possibility that taxpayers can make some money on this deal....the government isn't just giving the money to these companies....it's taking an equity position....it's taking the mortgages under control....there will be money made on some of these and if it's more than the losses, the profits will go to the tax payers....also, the interest payments on the loans to banks and Wall Street will go into the Treasury....a precedent for this was set in the Chrysler bailout years ago, where the government loaned the money and was paid back in full plus interest...... if Fannie and Freddie were to get back to a profitable business model, the Federal government now owns 80% of those giants.... new management is in place (Herb Allison who now runs Fannie Mae was a classmate at Stanford and I can vouch for his intelligence and strong moral compass)....more regulations will be implemented....there will be a new order of business.....no one knows how bad this will really get since no one can guess how many more loans will default....but going forward, new loans and new procedures and new regulations should prevent this mess from happening again.....but all of it is run by humans and they do tend to repeat history.....recognize that there's no quick fix to any of this but the government stepping in was the best of the bad solutions to these mammoth problems that could have massive domino effects, domestically and internationally....so vent, rage and be upset, but know that something had to be done or things would have gotten much, much worse...
9:11 AM PST, September 17, 2008 - These are the times that try investors' wallets....and patience....and sanity.....smart investors know that when they buy a stock, they're buying a stream of future earnings.....so it makes little sense when a company is delivering those and
will most likely continue to do so sees its stock hammered along with all the other stocks that aren't making money....but there's panic in the air....not a full on panic, but most investors are moving out of stocks, some more quickly than others.....many of those stocks deserve to be sold....they haven't delivered earnings in a long time....or they've bet the farm on some bad investments that are wiping out their capital base...that's understandable.....they don't deserve investors' hard earned capital.......but the stocks that have delivered, consistently, through good times and bad, are being swept out with the non-performers.... that's when shrewd investors should take notice....in fact, they should take advantage of it.....this mess will get cleaned up.....the fear that now grips almost everyone will turn to greed once again....don't know when, but it will....the government won't let the biggest institutions fail because large failures will destroy the confidence in the banking system, even in the capitalist economy......that isn't going to happen....if you believe that premise, then buying certain, industry leading stocks makes a lot of sense, especially ones with great track records in earnings and ever higher dividends.....buying stocks with good dividends makes a lot of sense right now....while waiting out this storm, you'll get paid something......and many good stocks are paying relatively high yields, thanks to shrinking prices.....yes, these are tough times, but as Warren Buffett advised: "Be greedy when others are fearful, and be fearful when others are greedy."....It may be a great time to at least get a little aggressive....
10:10 AM PST, September 13, 2008 - Watch what happens to Lehman Brothers....it will give you great insight into how financial markets are doing as well as how they are perceived.....Lehman is the large investment banking firm that is about to go under, or at least that's the way it seems as of this writing....reports are that it's looking for a buyer, a merger partner, anyone who can take over and bail them out of their
investment portfolio, the one loaded with bad mortgage backed securities.....an announcement may come as soon as Sunday, just in time to give Asian investors some comfort or something else....here's the essence of the problem: we're getting to the point in the banking system where the trust is being tested to the ultimate....it's the trust consumers and institutions put in a bank or investment bank that they'll be there the next morning, and if those customers want their money back, they can get it.....with Bear Stearns gone (bought out with government guarantees on their bad loans), and 11 consumer banks acquired, Americans are beginning to wonder if the problems are so severe that we're headed for real trouble, the kind where lots of people lose jobs, then their homes.....this reminds me of the late '70's when interest rates were moving up every day, when the 30 year bond sold with a yield of 17%, that was the U.S. Treasury 30 year bond, not a corporate.....the world seemed to be ending....there was no way anyone or anything could stop the inflation that was gaining strength with every new price hike.....but in stepped Paul Volker, intrepid Chairman of the Fed, and said simply, "Enough"....he started to raise rates higher and higher until it finally choked off credit and stopped the madness...it took years before any kind of normal prevailed, but it did and then we had the unprecedented boom of the '90's......I believe this is the same type of economic scenario: it seems incurable, everyone has given up hope, a disaster is imminent....it may be....but I doubt it....one indicator: look at some of the bigger, well run banks' stock prices....Bank Of America is up from its lows by 83%, having hit $18.44 a few months ago....same is true of Wells, Fargo, up from $20.46, now trading at $34.29, an increase of 67.5%....if the banking system were about to fall apart, these stocks would be making new lows, not moving ahead....true, it's only one indicator but it's a good one....smart investors have been buying the best bank stocks for several weeks, anticipating that in 6 months to a year, things will look a lot better.....yes, these are tough times, but don't give up.....this is the country that went through a terrible depression and went on to the greatest economic recovery in history...
7:01 AM PST, September 8, 2008 - Talk about twisting in the wind.....Fannie Mae and Freddie Mac common holders and preferred share owners don't know what they've got anymore....the Treasury's announcement of a bailout was explicit on many things but nebulous on many others...such as: when will the new capital be injected and how much? when will it start to buy mortgage backed securities and how much? it can eventually own 80% of the company but when and will it buy all of it at once? the dividends on common and preferred shares are gone but can be re-instated if profits allow; when will that
happen?.....anyone owning the common or preferred now own options, not stock of any kind....without knowing when those options will expire, it's hard to put a value on the stock or preferred.....if the government does buy all of the 80% it announced, it's most likely because the companies needed the capital to keep going which means there isn't going to be any dividends paid to either class of stock....if it never puts any capital in because earnings are strong enough, then the dilution won't occur and dividends will resume.....so it's anybody's guess what the stock and preferred are worth...the stock is already trading as if the 80% ownership has occurred....and the preferreds are trading on everybody's best guess as to when the dividends will resume, a truly subjective evaluation....the market has spoken: FNMA and FRE are almost, but not quite, dead money....at least for now....as quarterly reports come out, or capital is infused, guesses will change and trading for both issues will adjust....it's going to be a while before all of this is sorted out and if you own any of the stock or preferred, your decisions just got tougher, not easier.....things could work out very well or they could get much worse....but there's no way to know what the numbers look like for evaluation purposes until more earnings reports are announced, under new management and accounting that gives the real picture....the fact the both the stock and preferred are trading at the worst case scenarios suggests that the most risk oriented, aggressive investors may want to take some high risk bets and buy either or both but know that the reward may be a long time in coming.....
5:32 PM PST, August 31, 2008 - September morn.....new day, new month.....Gustav, the uninvited guest of New Orleans, roars onto land with everyone watching, holding their collective breath, hoping this isn't a repeat of Katrina....the locals evacuated, caution is the order of the day....only time will reveal the devastation or needless preparation (hopefully).....oil is also in that area...and refiners...they've shut down, employees are gone from the platforms....the sooner they return, the faster flows will come....and lower oil prices....if there's a lot of damage, oil won't continue its downward trend, prices at the pump will hold, start to go higher.....energy stocks will bounce, except for the ones with large holdings in the Gulf.....nothing anyone can do but wait.....the market takes a break on this first day of September....to honor labor without which none of us would enjoy most of what we use every day....I'd also like to honor those hardworking Mexicans here in California who have made this state so much greater with their tireless effort at jobs so many others don't
want, the jobs that take more muscle and sweat than most....muchas gracias.......not that other groups don't work as hard or contribute as much, it's just that I know several of these great guys and know the lives they lead and they deserve some accolades as well.....as for the market in the coming weeks, we're all waiting for that as well: waiting for the Treasury to unveil a plan that may or may not help Fannie Mae and Freddie Mac unwind their messes without killing the equity and preferred and debt holders; waiting for more economic releases to tell us where the economy was last month or last quarter, hoping it makes us feel better than what the reality is, that we feel every day as housing prices go lower, credit gets tighter and gas goes higher (both for the car and the heater); waiting for earnings that start in October, crossing our fingers that the summer held some surprises, that sales were better than expected (certainly for exporters they were good), that profits will beat analysts' expectations....most likely won't but hope springs eternal......waiting for the Fed to give a clearer reading on what its next move will be in regards to interest rates....waiting, waiting, waiting....it's a big part of investing...that's why real success requires so much patience...most of what we hope will happen often doesn't or is postponed for a quarter or a year because of hurricanes or politics or accounting or something exogenous to the business in which we've invested...but over time, we are rewarded if we buy stocks that keep delivering increasing earnings....after this 3 day weekend (a waiting time for those of us with the stock market in our veins) we'll get some more answers, dribbled out as the days unfold.....be patient, keep your best stocks, and now that summer is over, expect a more normal market, one that has full participation from every suntanned investor returning from the holidays.....
5:10 PM PST, August 27, 2008 - Total dog days of summer.....feels like everyone is doing something other than investing.......slow times and will be for the rest of this week and the beginning of next....always happens, every year....no surprise.....still, good things can happen, even with inattention.....FNMA is starting to clean house....just installed a new CFO....look for more changes there as well as Freddie Mac.....there won't be any new capital or fresh debt opportunities with the old guard still on guard....investors want new management before they'll have confidence that things won't keep on keepin' on.....if there is
a positive announcement for Fannie or Freddie of significant nature, look for all the financials to move ahead nicely....these two giants are in the spotlight now and if they show better than expected losses, it's a sign that all financial institutions holding mortgages will have better results.....keep an eye on developments for both of these and the ripple effect they'll have, good or bad.....don't go to sleep just because things are dull.....look for buying opportunities as markets are listless....that could mean a stock you monitor is under selling pressure by one seller with no buyers around....you might be able to pick up a bargain while everyone else is on vacation....use some low ball bids to buy some favorites and don't be surprised if someone who has to sell hits one or two....
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