Bye Bye Banks

I got out of some of my banks and a telecom today, Citigroup (C), Bank of America (BAC) and Research In Motion (RIMM). They were killing my returns. I think the banks will rise at some point, but I think they will continue to fall until at least 1Q11 (first quarter 2011). As for RIMM, unless they got an answer to the iPhone, they're toast in the long term. And it's getting warm...

And looking at my holdings, I'll be pulling out of more stuff tomorrow. The "market" is hovering around 10,000. It dropped 140 points today, the big loser was Frontier Financial (FTBK.PK), losing 25% today on absolutely no good or bad news. I think the Dow will hit 9,000 before 11,000. Why? Because it is having a heck of a time holding itself above 10,000 and the economy is still stalled. Businesses aren't hiring (trust me, I know). The market has tried to lift itself for the past 6 months, but it can't sustain it. Therefore, I think 10,000 is an artificial level and it will slowly drift down over the next 4-6 months. Given that, I think some of my good holdings might have to be cut. Ironically, I'm only down 8% in AIG (AIG), the one who started this mess.

Run For the Hills!

Another bad day in StockMarketVille. The Dow lost 133 points, due to a huge drop in home sales, ie, "..nobody bought houses last month, I better sell all my stocks!". My big loser was Web Media Brands (WEBM), who lost 10% yesterday, they announced financials a week ago - apparently it took everyone a week to read them. They did announce a smartphone games summit yesterday. I guess nobody wants to go. No, I don't see a correlation between smartphones and home sales either.

As we get toward the end of the year, I think mutual fund managers will start trying to clean up their holdings so when they report out in December they don't have all that crap they been losing money on all year on their books. That and the housing news will make for an ugly time ahead, at least until the mid term elections in November. In my logic, that will put downward pressure across the board. I see the downside a higher likelihood than the upside, at least for a few months. I'm not going to sell everything, but I'm going to take a good hard look at RIM, Yahoo and a few of the bank stocks I'm holding and been getting my butt kicked on. I'm not making any predictions on what I think these companies will do, but I don't see their stocks going anywhere positive for a while. I think/hope today will make a bit of a recovery since the market has been dropping for a few days. But I don't think it will last, so I'm going to actually try to time the market this time. OK, let's be honest, we all do that but don't call it that.

He Giveth and He Taketh

As good as the last few days were, today is worse. "The Market" is currently down about 156 points, but so are about 90% of the stocks I follow. It ended losing 144 points for the day. The "experts" are saying it's because jobless claims were announced to day and are higher than expected. Apparently, most of the people who are trading stocks (Ma and Pa Public) are sitting around waiting for bad or good news and making their immediate trading decisions based on what they hear. Here's a new one: The Hindenberg Omen! I guess if you frequently cry doom and gloom, eventually you will be right.

The big loser on my watch list is Frontier Financial (FTBK.PK) who lost 20% today. No headlines so I can't tell you what was behind it. They were followed by Motors Liquidators (MTLQQ.PK), that quasi company that sorta kinda owns GM (article), down 14.8% for the day. Bummer news since yesterday they announced they were going to push for an initial public stock offering. I haven't decided if I would buy GM in their IPO. Chances are, if you can get in good the first few days you'll make out like a bandit on speculation, just not sure if I believe they've turned themselves around sufficiently to warrant any long term consideration.

Fannie & Freddie and GM wants us to buy it, again

Wow. Authentidate Holdings (ADAT), yesterday's big winner, is down 11.6% today. And still no headlines. This is a perfect example of the illogic of the stock market. Freddie Mac & Fannie Mae both got waxed. Probably had to do with "NEW YORK (Reuters) - The four largest U.S. banks could face as much as $42 billion in losses as they repurchase faulty mortgages from housing finance giants Fannie Mae and Freddie Mac, Fitch Ratings said on Wednesday." At least this time there was really something for the market to react to.

GM filed paperwork for an initial public offering today, meaning we'll be able to buy ownership shares in the company we bought last year. I have mixed feelings about GM. I think if they go back public, in the short run at least the stock will jump. But I haven't yet seen that they are doing anything different than what they've done the last 30 years which got them into this mess in the first place.

Read an interesting article about Google. They are up almost 389% since they went public 6 years ago, but they are down 20% YTD. That means if you bought Google on January 1, 2010, you have lost 20% - on the Google! The same company that is selling Andriod cell phones all over the place. I guess the point is you can't invest in the popular companies at the wrong time.

Back in the saddle

My apologies to the few of you reading this. Job search has been taking all my time the last few weeks. No excuse, I need to keep writing and I will definitely try harder. Now, let's look at today's market. It's 3:05 and "the market" is up 154 points. Big whoop, what's really important to me is that my holdings are up 1.4% for the day. USAToday says that the markets are up due to rising home sales. Soooooo, because your neighbors are buying houses, you buy stocks. Sorry, that doesn't make sense to me. As time goes on, I'm thinking more and more stock transactions are computer initiated, if stock X goes up, then buy stock Y. The article also said people are encouraged by higher earnings are The Home Depot (HD) and Walmart (WMT). Here's my unbelief, for this all to be true, 100 million investors would have to be glued to their TVs looking at housing starts and big name company earnings and immediately making the decision either buy or sell a bunch of stocks all over the place.

Earlier today Authentidate Holding Corp (ADAT) was up 12% for the day. It's now up just over 2%. What was the big news that caused this spike in this company with a market capitalization of $30 million? Beats me. According to Yahoo they haven't had a headline in 12 days. They have an earnings announcement in September. But they did get a new PR firm a few weeks back. I guess it's working. As I'm writing this, it's back up 11%. My guess is that when some other stock moved some computer algorithm said buy a poopload of ADAT, now sell it, now buy it again. Seriously, imagine the people who work there and maybe have their 401ks wrapped up in this company's stock. They must be going batpoop today.

Netflix (NFLX) is down 2% today, the only news I see is that HBO is going to the iPad and not to Netflix. Theroretically, 2% of the value of Netfilx was due to an impending HBO distribution deal. Um, yeah, right. Frontier Financial got a 13% haircut today. Why? Beats me. The last headline was June 9 about a shareholder lawsuit. My point is, if it was news driving this stock down 13%, we'd know. It's not people, it's Skynet....

Oh yeah, still following Fannie Mae and Freddie Mac. They're still in the $.40 range. Haven't repulled the buy trigger yet. I think they may shrink a little more.

The Return of Moe

Hey, I didn't post in July, the job search has been taking all my time. I'm still out of Fannie Mae and Freddie Mac, waiting for them to finally bottom out. I still think they are great long term plays as the government still backs them.

Haven't bought or sold anything over the past 4 weeks, my returns are finally starting to look decent again. I think in general "the market" has probably bottomed out and now is a good time to snag bargains, then again, it's always a good time to snag bargains. It was a gamble, but as of today I'm still up 2% in BP (BP). I am going to keep my eye on RIM, they got smacked down today. Maybe someone besides Priceline (up 22%) had a good day, but in general the market seems to be blah today. For all the hoopla about Android phones, the Google's stock isn't moving.