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In the Aftermath of Activision


The solar stocks are this month's ethanol fad.

Greetings from New York where a flat tape, non-stop W coverage and my position in the year have me hard-pressed to stay in the saddle. So far, I'm fighting complacency with the dual weapons of greed and sugar-free Red Bulls but I make no promises as to how low I can hold out. Here's what I'm hoping will stem the tide to keep me from Steppin' Out with my babies:

  • Disney (DIS) was simply perfect from both a parent and shareholder perspective. My beefs with the Disney machine in 2005 (egregious fleecing and apathy towards service, to name two) have been fixed with an increased focus on the parks. It was a magical few days.

  • The morning-after reviews of the Activision (ATVI)/Vivendi (VIV) deal seem positive, judging by the stock today. As I mentioned yesterday, the structure is far too complicated but the idea behind it is ambitious and smart. I remain an ATVI shareholder.

  • Gaston Najarian pings me a heads up on Solarfun (SOLF) as "something that's happening." The solar stocks are this month's ethanol fad (i.e. "an old idea morphing into bubble-icious stock action you can play any way you want, as long as you have an exit plan"). Pete's been bullish these stocks for weeks and, as he is wont to, he's trimming strength.

  • The airlines are weak today after Delta (DAL) announced that it sees operating margins around zero or slightly negative. The company blames jet fuel and a possibly weak economy. Not to be all "Mr. Fancy Pants MBA Guy" or anything, but airlines can control neither fuel prices nor the economy; meaning the industry has little to no control over its own destiny. Again, you can trade anything you want but a total reliance on luck seems like a tough headwind for a business model.
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Positions in ATVI and DIS.

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