Does anyone care about the Super Bowl?

The Super Bowl is this weekend, but is anyone going to watch? I was surprised to talk to a lot of people who are not going to watch the game this Sunday. Not me! I will be the guy next to the bean dip....

News Worthy

Where should I start? The Fed cut interest rates another 50 points to put the key interest rate at 3%. The Fed must be terrified of all the recession talk. I have confidence in Bernanke, but this reaction may be a little overkill. The Fed has lowered interest rates 125 points in the last 8 days! The market seams to be responding positively to the rate cuts, but is it enough to keep us out of a recession?

In political news Rudy & Edwards dropped out of the race today. This was highly expected after a week showing in Florida for both candidates. This thins the race to a few candidates on both sides. Hillary Clinton, Barack Obama, John McCain, Mike Huckabee & Mitt Romney remain in a tight race that is sure to provide lots of blogging activity. Who is the best candidate for the economy? It's hard to say. A democratic president would likely pull out of Iraq much sooner than a republican. This would allow us to begin our economic recovery post war. Mitt Romney on the republican side probably has the most business experience, but he looks like a long shot at this point.

Here are some interesting links that I am reading tonight:

Refi?

Howard on todays Fed activity

Stimulus Package?

Starbucks Closing?

Who is still in the race?

Wild Ride

What is going on!

First, the Fed lowered the Federal interest rate 75 points! What does this mean? If you have excellent credit you can borrow some cash for cheep. The problem is, people with excellent credit are not going to borrow money to go on a shopping spree during a recession.

Second, can you say volatility! The market was down yesterday over 400 points then gained 300 back. The markets were down today in early morning trading then came back to end the day almost 300 points ahead. By the way, the foreign markets are getting crushed.

Finally, Apple is in the dumps. Lower than expected forward looking guidance has driven the stock down into the 130's. Apple was the best story of 2007, but it does not look like it will continue. Apple is still a great company with tremendous potential, but this setback is going to take some time to recover from.

When all is said and done, I am not sure how to interpret all this activity. We are definitely headed for a recession (or already in one) and if you still don't believe that just ask big Ben. Hopefully we will hear something soon about the stimulus package that Bush is proposing. I am going to need that check to make up for all my losses over the past few weeks.

MLK Day

The markets were closed today due to Martin Luther King Jr. day. The futures are down so Tuesday should open lower. I watched the Democratic debate on CNN tonight and the race for the Democratic ticket still looks tight. Also, the noise over an economic stimulus proposal is getting louder. Hopefully more details will come out soon.

Here is MLK's last speech...

Free Money!!

The President announced on Friday an economic stimulus package of $150 billion to jump start the economy. Economist project a cash rebate of $800 for individuals and $1,600 for couples. Here are some things you could buy with your new found wealth!

1. Crocodile skin Cole Haan Air Marley Venetian $1,200
2.Sony - BRAVIA 40" 1080p Flat-Panel LCD HDTV - Just in time for the Super Bowl! $1,699
3. Apple MacBook Air - $1,699 for Students
4. Amazon Kindle - $399
5. Nikon D80 with lens - $1,199
6. Nintendo Wii - Try & find one!

50 Stocks for 2008

10 of the "50 stocks for 2008" have lost more than 20% of there value since the beginning of the year. As a whole the portfolio is down nearly 15% with only 6 stocks in the green (5 of which are listed below).

The biggest losers are:

1. MTH (down 44.64%)
2. GRMN (34.94%)
3. CFC (33.41%)
4. FRLR (32.62%)
5. SPWR (30.58%)

The biggest winners are:

1. DNA (up 4.15%)
2. PFE (2.81%)
3. MER (2.57%)
4. NVS (1.19%)
5. DKS (1.16%)

The winner is....

BlackBerry Vs. iPhone
There is no looser here. Apple (AAPL) and Research in Motion (RIMM) both have outstanding products in a competitive market. The iPhone has the media junkies drooling with endless applications and unique touch screen. The BlackBerry is targeting a completely different "Microsoft" type user with the same effectiveness as Apple. Entrepreneurs and corporate executives can not get through the day without there handy BlackBerry. Both stocks have hit all time highs recently and look poised to go higher.

McDonald's Vs. Starbucks
I have talked about this shout out before, check here, and it is still building. McDonald's is optimistic they can steal a piece of Starbucks business, but Starbucks still has millions addicted. This one is just getting started, but McDonald's stock is in the early lead.

Euro Vs. Dollar
This one is not even a competition. The dollar is very weak right now and the Fed is concerned. I am not moving my funds to euros quite yet.

Clinton Vs. Obama
The biggest rival of them all. My money is on Obama.

Volatility! Who wins?

Gone are the days when a hundred point swing in the market was news worthy. Today, the DOW dropped 277 points ending the day at 12,501 following yesterdays rally of over 100 points and nobody flinched. Normally this volatility is great for the brokerage companies due to higher trading volume (brokerage fees), but with the credit markets dragging everything down the financials are not even going to prosper from this increased volatility. If I had time to follow the tape I would be shorting into this recession, but instead I am heavy in cash and sitting on the sideline in search of some good investment opportunities. Recession noise is still very loud, but when the recovery talk starts I will plunge back in. Stay optimistic!

Strong Day

A strong day for the market, but the general feeling is still very pessimistic. A recession is almost inevitable at this point. Financials are still in the dumps, and look poised to bring down the entire market, but we still have Macworld!

Apple (my largest position) gained 6 bucks today to close @ $178.78. Macworld is pumping the stock as the rumors continue to fly. Check out these links if you are interested in predicting Jobs next move....

Apple Matters

Mac Rumors

Apple Insider

The Mac Observer

Cowboys Season Ends

Bentley Green - Dallas Mavericks Song

BofA to buy Countrywide

Bank of America is going to acquire Countrywide for $4.1 billion. Countrywide shareholders will receive 0.1822 shares of BofA stock in the deal. This is a risky move for BofA, who already own a large stake in Countrywide. BofA invested $2 billion in Countrywide back in August for $18 a share.

Countrywide is currently trading for $6.45 down nearly 17% on the day.

Trade CFC

Sold 100 shares CFC @ $8.33 bought @ 7.50 a few days ago

I got lucky on this trade, thanks to BofA for the jump today.

Wynn Resorts (WYNN)

Wynn Resorts Ltd (WYNN)

Wynn Resorts is a developer & operator of gaming resorts. Currently, Wynn operates two resorts located in Las Vegas, Nevada & Macau, China. Two new resorts (Encore in Las Vegas & Diamond Casino in Macau) are currently under development and expected to open in the next two years. Wynn targets high end consumers offering first class amenities including gaming, entertainment, shopping & restaurants. Combined The Wynn Resorts offer 3,316 rooms with 221,000 square feet of gaming. Revenues totaling $2.54 billion are generated from the casino (50%), hotel rooms (18%), food & beverage (19%), and other ventures (13%) including entertainment and retail. Pick your side; here is the bull & bear argument:

Bulls:
The city of Macau has surpassed Las Vegas as the largest gaming market in the world and Wynn Resorts is in great position to capitalize. With two new resorts in the making Wynn has potential for exponential growth over the next few years. Steve Wynn has a proven track record producing some of the most flourishing resorts in Vegas history including the Bellagio, Mirage, and Treasure Island.

Bears:
Wynn Resorts is heavy in debt (around $2.4 billion) and high interest rates could make it difficult to be profitable. Macau is a gamble with no long term proven success in the region. The Las Vegas market is extremely competitive with all the major casinos striving for the high end players. The gaming industry is extremely vulnerable to changes in economy. With the US heading toward a period of economic downturn Wynn faces an uncertain future.

Leprechaun in Mobile, Alabama

Thanks to Skeet & Duffman for the link

Recession Update

Goldman Sachs must be reading this blog, because today they announced that they expect the US economy to drop into a recession this year. GS also predicted the Federal Reserve will drop interest rates to 2.5% by the third quarter and unemployment will rise to 6.5% in 2009.

Glad to see such an optimistic outlook from Goldman.

Merrill Lynch also reported this past Monday that they believe we are headed for a recession.

Recession?

Are we in a recession? This question has been thrown around a lot lately and everyone has a different response.

First, lets look at what a recession is. According to wikipedia "a recession is a decline in any country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year."

The only problem with predicting a recession is you can not tell when you are in one. Data has to be recorded and analyzed before a recession can be declared.

I think we are in the middle of a recession and don't even know it. The markets are slowing and the credit markets have slowed to a snails pace. There is no liquidity in the markets, because nobody can borrow. The past few years of growth have been driven by peoples ability of borrow against their homes or pull out equity to remodel, go on vacation, buy a new car, or invest in the markets. All of this spending and investing has come to an abrupt halt and the markets are going to be feel the crunch.

Institutional investors should keep the markets from dipping too low, but don't fool yourself into thinking that this market is not in serious trouble, because it is. The question may soon be, can we stay out of a depression?

Tech takes a hit!

Technology stocks tumbled today suprising a lot of investors. With the technology show in Vegas coming up, it is supprising to see tech take such a tumble. Apple is back down in the 180's after lossing over 11 points today. A lot of stocks are looking really cheap, but I think I am going to wait a few more days to dive in head first. I am heavy in cash right now and looking for a place to put it, but the market looks hesitant to move forward. This is not a very good way to start the year.

New Years Resolution

It's attitude, not aptitude, that gives you altitude. This year my new-years resolution will be to make things happen. It is my firm belief that in order to be a successful investor you have to try new strategies and techniques and follow the trends. Success is relative, except when it comes to investing. You either make money or you lose it, and this year will hopefully be another successful year.

I am going to pick up a few new stocks this week. The market looks ready to make a turn and it is time to capitalize. Research tonight, and limit orders at the open. Of the 50 stocks for 2008 only a handful are in the green after today's beating. A lot of investors must have been waiting to dump some gains into 2008 to avoid paying capital gains until 2009. Some of the winners are DKS, UA & AMZN. Some of the big losers are BIDU, GRMN, GS, MTH, & WYNN.

YUM

Bulls:
Yum brands include KFC, Pizza Hut, Taco Bell, Long John Silvers, A&W, Pasta Bravo, Wing Street, and East Dawning. They have successfully expanded into China and appear to be targeting Europe, Russia, and India next. China has been Yum's cash cow over the past few years and continued expansion should help to increase there market share. They currently operate approximately 34,000 restaurants spread over 100 different countries.

Bears:
Health conscious Americans (which make up 59% of total revenue) could impact the bottom line. The American market has been slumping lately, and it makes up over 50% of the companies profits. Competition and volatile commodity markets make profits uncertain.

Check out Wallstrip's take on YUM a few months back.