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Columbus Day Action: Ryder, McDonald's and Putin's North Pole?


There are better ways to place economic bets than buying equity.

Greetings from Horse Country, where I'm amazed at the volatility-crushing impact of removing those who celebrate Canadian Thanksgiving and/or Columbus Day from the daily trading. A 7-point move in the Dow? Really, can't we just close up shop early and go get a maple syrup pizza or something? Other thoughts...

  • Ryder System (R) is getting smoked today after taking numbers way down. The stock doesn't look particularly cheap but, as I say all the time, it's tough to want to be long stocks blaming the economy for their woes. It isn't an aversion to "excuses"; there are just better ways to place economic bets than buying equity. If a company can fall apart that badly at the first whiff of a slowdown, I'd rather own almost anything else.

  • For example, McDonald's (MCD), ahead of Yum! (YUM) numbers tonight. Or even Yum! itself, as it exclaims 5% higher today. More expensive than Ryder, sure, but neither spends a great deal of time mentioning the economy. Too busy beating numbers and taking up estimates, I guess.

  • Roger Ailes is concerned about Erin Burnett getting tired, yet doesn't even give the Lone Wolf a shout-out. "I guess it's pretty much 'On' then, huh Roger?"

  • If it's Columbus Day here, is it "Putin Day" on the North Pole?

  • Another way in which a weak dollar is (on the margins) favorable for U.S. Equities: From a financial management perspective, U.S. corporations need to get cash off their balance sheets. Think about it; if you're a CFO how do you justify holding a shrinking asset as a "safety net"? Sure, they can hedge it. They can also use the cash to throw money at buybacks and M&A projects. IBM has been doing this for years. Microsoft (MSFT) has started to but it still has a lot of cash left to burn.

  • "What an amazing Stanford football game!" I was there 11 years ago and last weekend, when Stanford took down the mighty USC, was the first time I've ever had cause to mention "amazing" and "Stanford Football" in the same thought. Congrats to the Cardinals.
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No positions in stocks mentioned.

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