Two Ways: Google Still Cautious, Despite Brighter Outlook
Strengthen your portfolio in good times and bad.
In a story by Dow Jones, Schmidt said the worst period was in the spring, but "things have stabilized though, and that's good." According to Schmidt, people went from buying houses to buying lawyers for bankruptcy. Now, "they are largely using the Internet to help solve their problems," he said.
Despite his optimistic remarks, Schmidt says Google continues to run its businesses very tightly to weather the current climate.
Furthermore, while he was surprised to see an increase in the US savings rate during the crisis, he doesn't believe the addiction to credit cards will end.
Speaking of weathering the current economic climate, see Professor Smita Sadana's Five Reasons Why Buy-and-Hold is Dead.
From the Bull Pen: Being one of the 4 horsemen, Google is always a stock to keep on the radar. For bulls, consider setting an initial position here, with a sell stop below recent lows (near $400).
From the Bear Cave: In tech, bears can consider a downside play in Palm. Dr. Janice Dorn laid out her reasoning on today's Buzz and Banter:
"Shares of Smartphone maker, PALM, traded up some 16% intraday after a better-than-expected quarterly earnings (or lack thereof) report. With shares up over 1600% since last October, a 2009 rising trend-line coming into play and a habit of giving back a large portion of these extreme gap-up openings, I'm taking a risk on the short side of this high-beta tech stock.
"The question: Is this for real or the magician's sleight of hand?
"PALM's daily chart shows another extreme gap-up opening with today's 16.45 intraday high coming near the 2009 rising trend-line (approximately 16.50 for today). Let's move to the scientific portion of our study and assess how PALM has handled these extreme gap-up openings.
"I looked at all previous occurrences of PALM's extreme gap-up opens where there was at least one big gap-up (Wednesday) within 2 days of the extreme gap-up (today). I found that in 11 of 14 cases, price was down by an average of 22.1% by 19 trading days after the tested event. Assuming a close near 16.20 today, a repeat average sell-off of 22.1% would put PALM back into support at the $12.65 area by about Friday, July 24 2009.
"The Trade: Short PALM at $16.20-16.45 with stop at 17.15 and profit target of 12.65 by Friday July 24, 2009.
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Hope you had a great week, Minyans. Time for me to go fire up the grill. Send me your best recipes and have a good weekend!
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