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Questions, Answers and Gimmick-Infringing Randoms


Is Dell's in-line today HPQ's miss next week?


There's a market axiom that the Thursday before options expiration is a day-long "Contra-Hour" for the week that follows. That rule (and I would love to have any or all of the 'Ville's quant-jocks test the idea to see if the chestnut has any validity) suggests that next week will start slow prior to falling off a cliff.

And no, that's not an investable thesis.

Remaining cognizant of trend-changing catalysts is trading 101. That's not the same thing as being a perma-bear, an enemy of American prosperity or a grouch in general. It doesn't even necessarily mean you're short and talking from pain. You can be skeptical of a tape even while you benefit. It's not about fear-mongering; it's about raising the collective conciousness by questioning common assertions. Around the 'Ville, it's about doing it with respect for the other side.

With that, let's flop some thoughts out there and see if we can't offend someone.

  • The technicals look insanely good.
  • The fundamentals, in general, are less than spectacular.
  • I'd rather have the former on my side for a trade but for "investments" the fundies rule.
  • I can't speak for others but the divergence between the fundies and the technicals are "the rub" from where I'm sitting.

Privatizing Social Security is a terrible idea and I'll believe that until anyone can convince me that:

  1. Any plans to "hold people responsible for bad investments" won't crumble under political pressure the second the first ad documenting a silver-haired lady eating cat food because she made a lousy investment and can thus afford nothing else runs.

I had a list but then I realized that #1 is all I need. Not to be overly blunt but Social Security is, by definition, antithetical to "personal financial accountability". As long as #1 is the case (and we have a rich national tradition of bailing people out) the details are irrelevant. Whether we can "afford it" or not, the country will be forced to bail out any generation with the misfortune of turning 65 during a bear market. That alone makes the idea a bad one, for the country.

In terms of saving the country money, we'd be better served by mailing seniors scratchers.

  • Besides, isn't it about time for the Boomer-Me-Generation to take one for the team? Suck it up and raise the retirement age, folks.
  • The "Closing my Fund" thing I wrote seems to have struck some nerves. (Collins, be a love and send that fella an autographed 8x10 glossy)
  • Don't hate the (openly retiring) player; hate the game.
  • The action in Dell (DELL:NASD), Cisco (CSCO:NASD) and Hewlett-Packard (HPQ:NASD) today, shaking off yesterday's bad news/ downgrades, is impressive.
  • If Dell delivers tonight it will likely be at the expense of their competitors as opposed to a portent of booming IT recoveries to come.
  • ASPs, extra-items (currency et al), and margins will be decent ways to tell the difference between "Dell specific" and "Macro tell"
  • I don't expect the nuance to matter much tomorrow, if Dell beats and raises "a real blow-off top" will be on the radar.
  • I thought Coke (KO:NYSE) stopped giving guidance last year?
  • My pal Jordan "Ghengis" Khan offers that "oil is going lower" is hard to consider a contrarian stance at this point. Agreed.
  • For those playing the housing bubble popping aggressively, a guy I know just got an entirely unsolicited offer for a house purchased 4 months ago. From people who'd only seen it from the street.
  • Dell: In-Line. Agilent (A:NYSE) whuh-ifffs.
  • If the tape were a wrestling match and Boo was Hulk Hogan the moment where he suddenly became impervious to abuse and began "Hulking Up" would be past-due.
  • Then again, Boo is looking a lot like Duane Bobick to Hoofy's Ken Norton these days.

Quick-Take potential flies in the Dell ointment:

  • Accounts receivable are tracking well ahead of sales; growing 15% q/q and 33% y/y. By comparison, sales are up 6.8% and 17.7% respectively.
  • The company spent ~$350M to offset dilution.
  • Those nits having been picked, Dell is a flat-out fantastic company, regardless of what you may or may not be willing to pay for a share of the stock.

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Positions in Dell, CSCO, HPQ

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