retirement interruptus: That Was The Week That Was

Monday saw stocks drift aimless until the close and lose 22 points on the Dow. Oil and Gold off. Warren Buffett was quoted as saying he wouldn’t be a buyer of Apple because he couldn’t visualize where the company would be in 10 years. He says he knows where Coke will be, Apple no.
Sprint said ‘Enuff’ and filed suit to stop the merger of AT&T and T-Mobile. Sprint was in talks to merge with T-Mobile until someone did something that ended that arrangement. Sprint argues that AT&T and Verizon would have a duopoly making Sprint a permanent third rate player.
Coal stocks, according to ‘Getting Technical’ writer Michael Kahn, are getting, ‘Fired Up’. With unrest in the Arab world and the Japanese nuclear disaster coal is getting some respect. Collectively coal stocks have been on a 2-year Bull run. Individually Kahn charts several individual coal companies and illustrates their break-out to higher levels. I have been recommending energy mutual funds that include oil, natural gas and coal. This sector has outperformed the S&P 500 index over the past decade and may indeed do so going forward.
Anyone remember Lucent? How about Alctel-Lucent the stock that went nowhere but down? With the AT&T/T-Mobile network integration the stock should do well and Goldman raised rating from Neutral to Buy.
Two adjoining friendly countries but with different philosophies. While we wait for housing to find a bottom our Canadian friends are bidding up real estate before their banks hike rates. Canada sports low interest rates, a robust economy and labor market. Housing prices in Canada, according to David Madani economist at Capital Economics in London, have risen to 5.5 times disposable income per worker. At the height of our housing bubble the highest the US saw was 4.4 times income.
Wednesday saw markets pop 81 points on the Dow as telecomm (what else?) and energy were the leaders. No news as we wait for the Japanese to contain their nuclear plants.
According to MarketWatch’s Sean Udall writing for Outside the Box he slobbers over five ‘insanely’ cheap tech stocks. SanDisk, Cisco, Intel, Microsoft and Marvell Technology. His raves for Microsoft is for its Bing search engine which Udall says is becoming a real ‘player’ in the global search biz.
Jobs! pre-announce Private sector added 201,000 in turn the markets responded all across the board with Dow up 71 points on Wednesday. Telecom and energy big leaders of the day. The AT&T merger with T- Mobile is a done deal – all that’s left is just the ritual rite of Lobbyists exposing their plumage in Washington committee hearing rooms in the springtime.
Partner Billionaire Paul Allen dissed Bill Gates in his memoir saying Gates tried grabbing all Allen’s shares in Microsoft when Allen was stricken and fighting cancer.
Buffett’s successor resigns as its been disclosed he bought shares of Lubrizol prior to Buffett buying company for Berkshire Hathaway. Aide David Sokol, the Anointed, it was estimated he made $3 million on the deal. Experts say he did nothing wrong and by the time Sokol left CNBC in the ayem he had announced forming his own investment fund much like Berkshire Hathaway. Due diligence, Warren, do your due diligence before you hire and train another competitor. There is much more to this story and conjecture can be really ugly even supposing that Buffett was played by Sokol like a cheap violin and Buffett discovered just recently Sokol’s stock purchase and ordered him banished to the land of regular people with a promise to keep both their mouth’s shut. Stinks, this does.
Radioactive milk in Washington state.
When granny says the dollar doesn’t buy as much as it did last year she’s right. The greenback has fallen, thank you very much Mr. Bernanke, because of the Federal Reserve. Prices of commodities have indeed soared but some of the increase is due to the loss of purchasing power of the almighty dollar. Expect foreign cars to cost more. Also here’s a list of commodities gone up: Corn +6%. Aluminum +6.95, Coffee +8.7%, Cattle +8.8%, Oil +15%, Hogs +17%, Silver +20%, Heating Oil +25% and Cotton +35%.
President pushes use of natural gas and clean burning coal. Same story different Prez. We got lots of natural gas and coal and every President since Carter has stood on their hind legs and promised to wean us off foreign oil. It hasn’t happened. Consumer is getting smarter and buying more efficient cars. That has saved millions of barrels of oil per year!
Sprint down. Could be on negative news from Jimmy ( Da Mouth) Cramer or it could be just the fundamentals are not there.
The quarter ended up the bestest quarter since 1999! The Dow was up 6.7% while the S&P 500 gained 5.4% and the Naz climbed 4.8%. A positive quarter bodes well for a good market going forward, according to the newsies at WSJ, at least 80% of the time. On the morning of the first day of trading Oil futures broke through $107 a barrel.
Subprime bonds are…..back! Those rascals that lead us into a depression have staged a remarkable comeback. At a low of 30 cents on the dollar investors have bid them up to double that. These are the mortgage and subprime bonds that were bundled and sold with nary a care that they held extraordinary risk but marked AAA by the rating agencies. Now banks and investors are buying these same bonds for their fat yield and upside potential.
Harry Dent a newly converted maven of doom and book seller explains how the markets will gain another seven percent and then collapse with nothing safe but the U.S. dollar. Precious metals along with stocks will tumble according to the Wise One to possibly 3400 on the Dow. Dent managed the AIM Dent Demographics Trends Fund using principals published in his book The Roaring 2000s: Building the Wealth and Lifestyle You Desire in The Greatest Boom in History. (Ya’ll know how well that decade went!)MoneyWatch reported in 2009 that the fund managed by Dent’s philosophy lost on average 11% per year and underperformed the S&P 500 index by 9% per year. Finally in 2005 the fund was mercifully closed and assets rolled into the AIM Weingarten Fund. So much for credibility, eh?
Stocks moved up last Friday as a better than expected government jobs report send the Dow tickling 100 points but finally settling to near half that amount by closing bell. Oil was off a hair to 108 a barrel. Gold lost a few pennies. Ford outsold GM and all domestic autos were up for the month except for our ‘southern’ manufacturer Toyota. Worries about electronic parts along with black and red paint, used across several manufacturers, were in short supply due to the crisis in Japan.
Quantitative easing, or the buying of Treasuries by the Fed is half over and should be completed by June. No question that the markets have benefited by this simple move but many schmart people are asking, ‘ What next?’. Will the markets collapse when Daddy Fed removes the policy that has fueled this rally and interest rates just have to move up to curb inflationary trends? Since August 26th when QE2 was suggested the markets have grown 28.5%. Worries about a Y2K market collapse is being spread and where to move assets in preparation.
Reuters reported end of the month that newly minted ETFs by Scottrade plunged 98% of their value before recovering. Trades were cancelled but one fund fell to sixty cents from $25.33. No real reason was given.
Fed tightening by 75 basis by the end of the year? Expect something like that. Start planning on breaking loose from those bond holdings.