Buzz Bits: Dow, Nasdaq Have Up Day
Your daily Buzz & Banter highlights...
Thoughts on the Tech Sector - Adam Katz - 2:37 PM
Editor's Note: A day after yesterday's massive tech reversal, we asked Professor Katz his thoughts on the tech sector. Here is his response:
I have been negative on quite a few of the stocks leading the tech surge: Cognos (COGN), Citrix (CTXS), VMware (VMW), and Blue Coat Systems (BCSI) to name a few... my firm tried being short but our value longs weren't keeping pace so we stopped out and starting hedging individual long positions.
Now my firm is starting to gently put on some put spreads on some of those names that I just mentioned we don't like. This is really more a form of just defining risk in the portfolio and not because I have a lot of conviction these things will break.
In fact, I believe we move higher and if we do, these things will resume their course to the moon…which is why I'm making it a point to use puts while they are still relatively inexpensive... I'm using near month out through November because when they crack I want to be there... but the pain of being naked short has been too much for my weak stomach.
That said, I'm putting on some put spreads on my favorite momentum names: partially because I'm crazy and partially because I won't forgive myself if I'm not there when the technologically illiterate pull the rug out from under the party.
Fried Green Toddo - Todd Harrison - 1:35 PM
My Gawd, it's been a long week, eh? From what I see and hear, I'm not the only one feeling the strain of a five-session flickering freakfest. Still, this is the life we've chosen and, as such, we'll need to splash some water on our face and remain lucid for the final few hours. After all, the risk profile we decide upon will be the same one we wake up with on Monday.
As it stands and as I sit, these are the "first things" that pop into my head (in no particular order) as we suck it up and take it home:
- Trading is a lot like dieting. It's a steadfast process to make strides and one momentary lack of discipline to lose what you've gained (or vice versa, as the case may be).
- The combination of year-end (the end of October for many mutual funds) and expiration should pave the way for volatility next week. Pare your positions accordingly such that you can "sell up" and "buy down."
- Zed's dead and BIDU's red. Again.
- Remember "As goes GE, so goes the tape?" It's been years since we've said that but the General Malaise plants the seed for "selling the news" across the spectrum of earnings.
- I wonder what Kit Deluca is up to?
- Who says Sunday morning is easy (other than Lionel Ritchie). Or pie, for that matter?
- So Och-Ziff, a meaty hedge fund, is looking to go public? Maybe they should chew on some FIG Netwons as they prepare for sale?
- You think I have random thoughts? You should see the ones that don't get posted!
- BLINK and it's 2008. Before you know it, that'll be gone too. Enjoy the journey, Minyans, tomorrow is promised to nobody.
Taxes are Taxing - Sally Limantour - 10:53 AM
Food prices are up, crude oil prices higher and gold is holding above $750.
What else is going higher? Taxes!
Chicago Mayor Daley has propsed a tax on everything from property, water, sewers and liquor to telephone bills, parking fines (ouch) lease transactions and entertainment tickets. His tax proposal would impose a 10 cent tax on each bottle of water and a 15 cent development fee on every square of buildable floor area.
Cook County, which houses Chicago, has prosposed increasing retail sales to 11%!
From the Policitco: By now, everyone knows Rep. Charles B. Rangel is poised to introduce the "mother" of all tax reforms, the biggest and most expensive tax code overhaul since 1986. But what they don't know is how the New York Democrat plans to pay the more than $1 trillion price tag - and that uncertainty is fueling rampant speculation from Capitol Hill to K Street.
Argentina is looking interesting to me...
Dollar Pressures Building - Lance Lewis - 9:43 AM
We've looked at the long-term chart of the trade-weighted dollar before, but now note that even monthly moving averages are beginning to cross, with the trade-weighted dollar sliding beneath its 200-month moving average for the first time since the 1970s (which was the last time the world's monetary system broke down).
The pressure on dollar pegs around the globe (Saudi Arabia's and China's in particular) is growing, with rising inflation increasingly making the decision to depeg from the sinking dollar the "easy way out" of a very bad situation for these countries. Don't be surprised if we walk in one morning and the world has suddenly "changed" overnight.
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In the 1970s, it was the Bretton Woods monetary system that died. This time, the fiat dollar global monetary system is dying right before eyes. To deny this is to not understand what is happening. Just as occurred the back in the 1970s when the Bretton Woods monetary system broke down, the flight from paper money will be into a time-tested store of value, like gold, until the inital chaos following the death of the globe's monetary system has ended and investors begin to get a handle on what the new monetary system will look like.
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Positions in GLD, gold shares
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