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Macke's Movers: Resist Wal-Mart For Now


Retailer has history of failed runs up to $60.


Greetings from inexplicably frozen New York, where I'm re-thinking last week's decision to throw away all my long pants. Here's what else I've got warming up as the world slowly recovers from the zesty thrill of yesterday's Fed Day:

  • Microsoft (MSFT) is reportedly still meeting to decide what to do about the Yahoo (YHOO) bid. Rumor has it MSFT is opting between Higher Bid and Hostile Bid as the two choices, neither of which would be good for Microsoft's stock from where I'm sitting. On the off-chance the company has somehow avoided my advice so far: Walk away, Microsoft. Just walk away.

  • Starbucks (SBUX) has announced slower domestic growth and smoothies as a way to compete with McDonald's (MCD) et al. Since knee-jerking is my business: We knew about the slower growth already. Starbucks is playing the wrong game competing with McDonald's and smoothies are the single worst idea on Earth for a coffee chain wrestling with high costs and long lines.

  • Activision (ATVI) is "concerned" about the Electronic Arts (ERTS) dominance of sports titles if or when ERTS acquires Take-Two (TTWO). While I'm a little confused as to how dominance in a category as abstract as "sports" would constitute a monopoly, Microsoft could take a lesson from Activision's strategy of "heckling and rabble-rousing." Making fun of Yahoo's inept board is much cheaper than going hostile, MSFT.

  • Both television's Karen Finerman and Dougie Kass made it known last night that they've gone bullish on Citigroup (C). C's cost of capital is going down, the financial crisis is stabilizing and Citi is way, way, off its highs. I see the trade and I want to like it. Alas, I simply can't get my arms fully around stocks that keep diluting the shareholder base with no end in sight.

  • Why am I not giving into my urge to chase Wal-Mart (WMT)? Pull up a 10 year chart. Since the blow-off top of last 1999 (I was there, it was a crazy time), Wal-Mart has made seven or eight failed runs at the $60 level. Now it's up 22% YTD and knocking on $60 once again. I love the Bentonville Bullies but the best thing that can happen for the stock and my sanity is having it take a rest in the mid to high 50's for a few weeks.

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Positions in MSFT, ATVI.

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