McDonald's to Burger King: Now Who's the Clown?

Greetings from New York, where -- in honor of the start of pool season next month -- I’m dipping a toe in the frigid waters of the sell-off pool. I've been timid about leaping in early, but I'm beginning to give in to the lure of “bargains.”

Specifically, I bought a wee baby increment of Goldman Sachs (GS) and Wal-Mart (WMT). The former based on the fact that, just 2 days after hitting $130, Goldman Sachs is sitting right around the thick uptrend line formed by the purple crayon running through the middle of the one-teens. Convictions are for the brave and Bernie Madoff. I’m identifying with neither at the moment, so I bought small with a tight stop.

The other buy o’ the morning has been an addition to my more or less full-sized position in Wal-Mart. Two reasons: One, the news out of Capital One (COF) made me turn my head in horror. A little credit exposure rising from the grave of Bad Things oughta balance out some of the recent outperformance of Target (TGT) vs. Wal-Mart. Two, Wal-Mart CEO Mike Duke told the Today Show this morning that “there’s still a lot of stress” in Consumerville. Wal-Mart has earned the benefit of the doubt in terms of being able to outperform in times of economic stress.

Here’s what I’m watching when not slathering on the sunscreen and blowing up the 18” floaties:
 

• I’m already long it, and believe me I score no corporate brownie points for saying so, but you’ve gotta respect the price action of General Electric (GE). The mysterious and evil “they” tried to break it into the close yesterday and again this morning but the proud American stalwart is currently in the green for the day.
  
  
• I'm hooking up with Dougie Kass in Vegas over the weekend; which strikes me as both exciting and vaguely dangerous but is worth noting.
  
  
• BKC may call itself Burger King (BKC) but the fast-food number 2’s warning this morning has to be worth a chuckle to McDonald's (MCD), the once and future King of all things fast food hamburger-based. Burger King may not be a joker just yet, but there’s a space between it and Micky D’s that takes more than a Whopper to fill.
  
  
• The New York Times (NYT) says ad sales fell as much as 30% in the first quarter of 2009. A few points from this data: 1) I bought a very speculative position in Gannett (GCI) today, as the stock dropped 20% on speculation of something everyone knows (ad revenues are dropping, papers are in trouble). Gannett reports tomorrow and I expect the results to be terrible. I also suspect this news will have no impact on Gannett's stock. 2) Google (GOOG) reports Thursday night. While Google is “taking share” in ads, methinks such gains are built into the $115 billion market cap. Not built into Google’s stock? Losing endless millions on YouTube.com (which has been surpassed in quality by Hulu and popularity by Tweeter but still has the Ken Norton - Duane Bobick fight for the millions of those still interested, though that seems pricey for a company losing $1.65 million a day), a space program, a nascent television ad service, a shuttered radio ad service and countless engineers riding Sedgeways all over campus.
  
  
• It may not happen Thursday. It may not happen next quarter. But everything I tell me says Google is going lower. Feel free to take the other side. If Google doesn’t have a two handle on December 31, you win, I lose.
  
  
• Also reluctantly purged this a.m.; a good chunk of Apple (AAPL). The stock deserves a rest and it’s taking out an extremely sharp uptrend. Live by the crayon, sell by the crayon and never get emotional about stocks.

With that, I’m off to watch fights for free (in fairness, for $1.65 million a day, but Google pays) on YouTube.com (“Like Skype in the future!”). Make it a good day, Minyans, and set your TiVO’s for HBO's 24/7 documentary on the build up to Pacquiao versus Hatton. As a fight fan and documentary head, the inventor of the 24/7 series is officially a dude I’d love to have a brew with.