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Google Shoots for Style Over Substance

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Chrome outside of company's expertise... and it shows.

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Greetings from New York, where my daughter, Lou, has left for her first day of kindergarten. A lesser man would have spent his morning fighting the dual urges to weep like a ninny and squeeze his daughter tight enough to keep her from growing anymore. A weaker man would have considered taking out his gun and using it to gesture for the school bus to just "keep on moving" when it arrived this morning to whisk away his daughter's pre-school innocence.

I am exactly that weaker, lesser man. I won't tell you which of the desires I warded off and which I gave into. Suffice it to say, I didn't get arrested and my allergies seem to be kicking in early, judging by my red eyes.

Here's what I'm watching as I try to rebuild a veneer of manhood prior to making my TV comeback this afternoon:

  • Crude pushes toward $105 because a storm named like an extra from The Sound of Music didn't gut the drilling infrastructure of the Gulf? The quick money trade is likely on the long side via something like the USO ETF. Bigger picture: If you held up a mirror to the types of upward thrusts we saw when crude was going to $200 it would look exactly like $10 downward moves based on a storm acting entirely normal (Katrina was the exception, not the rule. If it wasn't, New Orleans wouldn't exist.)

  • The entire Global Growth story is getting absolutely battered this morning as steel's (ArcelorMittal (MT) and US Steel (X)) and Ags (Potash (POT) and Mosaic (MOS)) drop, in part on news that MT cut prices for the first time in a year. Shouldn't lower crude prices reinforce the Global Economy theme? Fundamentally, sure. In reality (where smart traders try to live), the international story is deader than Gustav as an investment theme. Yup, the BRICs (Brazil, Russia, India, China) are still growing at a decent clip. So is the Internet. You can fill up a book and a ton of airtime arguing the bullish case for growth. Or you can keep it simple and hold on to your gains by noting that the stocks are acting horribly and the global economy is slowing in a way not "in the stocks." It's your choice, but you can guess where I sit.

  • Today's best performer in the DJIA is General Motors (GM), despite the fact that GM yet again expressed caution this morning. In today's trading game of "Rock, Scissors, Paper", falling crude oozes over terrible fundamentals. It makes me long to get hedged on my losing Toyota Motors (TM) short with a GM long on a pullback.

  • Speaking of "just a wee bit short," my staycation allowed upstate locals to witness my end of the season efforts to do a decent front 1 1/2 flip dive over the weekend. Dive #1 was a something akin to a forehead belly-flop. Leap #2 was more like a 1 and 3/8 but, since we don't trade fractions anymore, I simply rounded up and declared diving victory. My "Mission Accomplished" decision gave considerable relief to both Mrs. Jeffmacke and the teenage lifeguards playing rock, scissors, paper to determine who was going to drag me out of the pool, had I opted to dive until I achieved no-splash-entry perfection.

  • Need a graphical visual of my diving efforts? Check out Wal-Mart (WMT), gamely smacking its face against nearly 10 years of resistance just over $60. For perspective, Wal-Mart hasn't traded much higher than this since sometime prior to the 2000 Olympics in Sydney (when I golfed instead of diving, since I didn't have a daughter to swim with and bad golf is annoying but doesn't hurt as much as a face-flop). I'm staying long Wal-Mart, despite the coming seasonal drop in sales of aloe for my face.

  • Google (GOOG) announces a browser. Microsoft (MSFT) is still toying with expanding on-line ad sales. Both efforts seem a bit like my 1 1/2 dives: a post-peak entity pursuing a goal well outside its core competence. Of course, in my case it was an idle summer fling with only some additional facial damage on the line. For Google and Microsoft it's expensive flailing for want of the ability to do much else. I'm surly about my Microsoft but it has so many ways to win almost by accident that I stay long the stock. Google continues to sound like the "Internet stocks will grow forever" stories being told during the Sydney Olympics.
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Positions in WMT, MSFT, TM, UUP.

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