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Alcoa Looks Set to Miss Estimates By a Mile

Jeff Macke Jul 08, 2009 11:31 am

Alcoa Looks Set to Miss Estimates By a Mile


		Company will show you ways to lose you never knew existed.

Here’s what I’m watching to kill time before the aluminum giant figures out a new way to surprise me:

There are 2 guys you can spend your life paraphrasing and still be considered at least fairly witty: Mark Twain and Casey Stengel. I went ahead and did a “mash” -- isn’t that what the kids call mixes? -- of the 2 of them in a few of the paragraphs above. Hey, it’s less pompous than going with "sic temper glorious" again.
Yesterday Las Vegas Sands (LVS) announced a plan to raise $3 or $4 billion. In a wild coincidence, Sands CEO Sandy Alderson announced that May and June “exceeded budget expectations.” One method of raising cash is taking the company’s Macau assets public. Think of investing in an island where your company has spent billions, yet where traffic is 100% controlled by the Chinese government! Have you ever wanted to get shaken down by organized crime? Here’s your chance, baby!
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I got several emails pining for snarky cynical comments -- really. I don’t much consider myself either, but to those of you who consider me both, I’ll offer this: The current administration spent roughly $2 trillion, and what we’ve gotten so far are fewer jobs and a statistical uptick in April and part of May.

We also have a bunch of less snarky, less cynical traders trapped long just under 950 on the S&P. You bought the top in June and you’ve lost 7%, give or take. To be clear in our definitions, once fund managers “give” those results to investors, those partners will “take” their money elsewhere.
I haven’t been remotely long stocks in donkey's years. When I was a young man, I was taught -- the hard way, of course -- to sell rallies, buy slides, and minimize your book when you aren’t going to be focused. So, I went to the Bahamas long some stock but still over two-thirds uninvested.

Without picking up a phone or turning on a TV, I came home even less long. Setting stop-losses isn’t going to impress hard-core traders, but they have their function. Specifically, they make certain you don’t ride stocks like Apple (AAPL) or Agrium (AGU) into the gutter. You use your experience, gut feelings, and wontons to set the levels that mark a breakdown in a stock; you enter the stop, then forget the position until you get home.

It’s trading for idiots but I’m not particularly insecure about being mocked for stupidity. I’d happily use a Magic 8-Ball if it made me money. Or, even cooler, a stock-picking chicken. Or monkey knife fights where one chimp is wearing a “buy” T-shirt and the other a “sell” shirt. Last monkey to bleed out defines the strategy of the day.
I’m a media hussy and a professional trader. I may seem smug, but honestly, I checked my pride at the door when I entered both professions. Taking a smallish loss on Research in Motion (RIMM) but limiting the pain to 1.50 Loonies per share without lifting a finger? I’d rather have won. But limiting losses with a proactive, albeit simple strategy works as a way to minimize the pain of the inevitable losses.

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Comments (11)

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D Durham

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07-08-2009, 4:44 pm
why so cynical, not to worry, we will all most surely be saved by Goldman's illustrious upcoming earnings reportâ�¦.. thanks uncle sam (oops, that would be us) Read More

David Fitzsimmons

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07-08-2009, 4:45 pm
My first car was a '78 Dodge Dart. I was planning to paint "Gloria Mundi" on the sides, and save the rest of the quote for the back end.. until the bottom fell out. Yes, friends, as we have learned.. Every day the buc Read More

Jeffrey Macke

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07-08-2009, 7:15 pm
To the extent I had a point regarding Alcoa they were these: 1) Their earnings don't matter b/c the company isn't well run. 2) You want a prediction from me on a company I think is utterly inept in both it's ope Read More

Jeffrey Macke

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07-08-2009, 7:22 pm
Loosely, it means "all glory is fleeting". Modernized it means "don't get cocky or you'll get smoked". The fact that there was a malapropism in the article itself translates into "bad editing&q Read More

Michael Schwartz

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07-09-2009, 3:19 am
You see, plenty of cynisism and snark in but a few words. I especially like to see the earnings of poorly run companies in trying times to see what sort of accounting manipulation they employ in order to hit thier mark or better their prediction. Aft Read More


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