Tech & Oil

Technology stocks were on fire today thanks to Google posting stellar earnings last night. My fruit of choice is Apple which jumped 6 bucks putting me well back into the green on this stock. I bought Apple in the 120's and up to the 170's so my cost basis is around 150. Financials still look gloomy, but tech and natural resources are looking strong. With gas prices well above 3 bucks a gallon look for Exxon to post record earnings on May 1st. XOM has been hovering around $90 a share for a while so look for some movement when earnings hit. It may jump above $100 a share. All and all a pretty strong week for the markets. Hope we can keep this momentum heading into next week. Have a great weekend.

Moving Forward

It is always important to reflect on the past to learn from mistakes and to understand how to react if encountered with a similar situation. With hindsight I would have liquidated with the dow at 14,000 and reentered when the dow hit 11,750, but how can you tell when the market is going to turn? With so much noise it is hard tell how the market is going to react in a volatile market. A month ago I was sure we would be sitting around 10,000, but the market has been surprisingly resilient and if you had sold at 11,750 you would be in a world of pain right now. When the market stays relatively bearish for a long period of time any glimmer of hope can cause a huge rally. Everyone wants to be bullish especially in a bear market. As a whole I believe most investors are intrinsically optimistic, but sometimes the few pessimists can ruin the party.

Google announced stellar earnings after hours today and the stock has bounced in after hours trading (currently up $76.42 or 17%). The news from Google should give tech a great jump in the opening tomorrow. Congrats to everyone holding GOOG!

Recession Proof Trends

RIMM is blowing up in after hours trading! RIMM posted surprising quarterly results that blew away analysts expectations doubling prior years sales and profits.

Is RIMM recession proof? Hell no, but I love seeing stocks blow up on a day when Bernanke is scaring everyone with recession talk. RIMM is a great company with great products. They are getting a lot of attention from the consumer market thanks to the release of the Pearl and residual Apple customers. This is what Forbes has to say:

Riding on the coattails of Apple's iPhone, Blackberry maker Research In Motion late Wednesday posted surprisingly strong results for its latest quarter as consumers cottoned to smartphones of all stripes.

Research in Motion strategy is to expand into the retail consumer market and move away from its traditional dependence on corporations and government agencies. It has been seeking to woo general consumers with multimedia-heavy handsets such as the BlackBerry Pearl.

Instant Classic

Nike ID & Apple Update

I just got back from my first run with the NikeID (follow this link to see my latest run) iPod. I needed a reason to get off my couch and go for a run and the NikeID did the trick. It has been over a month since my last long run, so I was a little rusty.

Apple teamed up with Nike to produce the Nike ID. Let me take you through the process. First, you put the sensor in your shoe. You can use the Nike ID shoes that already have a slot for the sensor or you can cut a slot into any running shoes. Then you connect the adaptor to your iPod. That is about it, you are ready to go running. I ran only 2 miles at a snails pace of about 10 minutes a mile. The fun comes when you get home and get in front of a computer. After I stopped panting and chugging water I synced my iPod to my mac. It prompted me to go to the nike website and set up a profile. The site is really user friendly and shows your data in a pretty cool format. You can set goals and challenge your friends to competition.

So while I was out running I started thinking about apple and the recent downturn. What has changed in the past few months to substantiate such a downturn? The answer is simple, nothing! The management is still the same, the growth potential is still bright, and the product line is still elite. I am going to sit on my position, until I see a reason to sell (or it hits 200 bucks a share again). Tax day is almost here so I will be back up and blogging shortly. Sorry for the delay in posts.

S**t Happens

Sorry for the lack of posts. Work and wine have gotten in the way. I will get back in the grove soon. This article is hilarious! check it out...

Thanks to Skeeter for the link.

Stuff the Mattress

Raising oil prices, crashing housing market, skyrocketing inflation, tightening credit, increasing unemployment, weak dollar....

It is really hard to be bullish in this market, unless you are long oil or the euro. I unfortunately am not.

Apple and Google are trading at unbelievably low forward p/e ratios. Google was trading close to $750 just six months ago and today it closed at $473! Apple was up over 200 not long ago and is now trading around $120. Lets look at the fundamentals and see if this is a good time to buy or if we should go to cash and stuff the mattress. Apples forward p/e is around 19! That is incredibly low for a growth company like apple. Net income has increased from 1.989 billion in 2006 (fiscal year end 9/30) to 3.496 in 2007! That growth is unbelievable. Analysts were projecting a one year target estimate at $250 a share a few months ago. Jobs said yesterday that he believes apple will hit the 10 million iPhones in 2008.

Earnings

There are some big companies reporting this week with almost certain volatility. Long or short?

Monday-
Lowe's Corporation (LOW)
Nordstrom (JWN)

Tuesday-
DISH Network Corporation (DISH)
Domino's Inc. (DPZ)
DreamWorks Animation SKG, Inc. (DWA)
Home Depot Inc (HD)
Radio Shack (RSH)
Target Corporation (TGT)

Wednesday-
Dollar Tree Stores (DLTR)
IHOP (IHP)
Limited Brands (LTD)
The Washington Post Company (WPO)

Thursday-
Dell, Inc. (DELL)
GAP, Inc. (GPS)
Hansen Natural (HANS)
Kohls Corporation (KSS)
Omnivision Technologies (OVTI)
Sears Holdings Corp (SHLD)

Intuit

I finally got around to filing my taxes today! TurboTax makes it so easy to file a simple W-2 return, although it has it's limits. Intuit (INTU), the producer of QuickBooks, TurboTax, and Quicken, crashed on Friday (dropping over 9%) after releasing poor second quarter earnings after the bell on Thursday. TurboTax sales came in strong, but increased costs caused the bottom line to hurt. Increased competition from Microsoft's (MSFT) Office Accounting and Sage's Peachtree concerned Intuits management enough to cut earnings guidance for the remainder of the year.

Is this a buying opportunity or is this a turning point for a software giant? When Washington procrastinates on passing legislation to extend tax relief, the window to adjust, produce, package and ship the tax software shrinks. This process takes months of preparation so when a change comes in at the last minute the costs are going to be substantial.

Intuit has great products that are extremely user friendly. They are not for everyone, but for the average W-2 employee they do the job. I will keep my eye on this stock and if it drops down into the low twenties I may pick up a few shares.

Disclosure: No position

Valentines Day

Optimism

The market may be turning more optimistic with two days in a row with gains over 100 points. Buffett is buying and Yahoo is not selling indicates they believe the market is undervalued, or at least means there are some deals out there.

Retail led the surge today with both of my largest positions doing very well. AAPL & TASR both showed signs of strength today producing gains of 3.64% & 10.67% respectively. I am happy with the turn, but cautiously optimistic about claiming a turning point. Historically the market is very resilient, bouncing back quickly from downturns. My portfolio is still in the red YTD, but hopefully things will change in the second quarter.

Slopes

Sorry for the delay in posts, I just got back from the slopes! It was a beautiful weekend and we had a blast. Catching up on some reading. Should be up to speed soon.

Limbo

How low will the markets go? Super Tuesday was not so super if you were long the market. The Fed suggested that they may be done lowering interest rates for a while due to inflation concerns. The Fed should have spread out the interest rate cuts over a period of time. Why drop the rate 125 points within eight days? I bet they would have achieved the same results by cutting the interest rate by 50 points on the scheduled meeting date. When the Fed shows its hand they better be prepared for the chaos to follow. The Fed should calm the markets while keeping inflation under control. We may be entering a period of stagflation which would include slow economic growth with rising unemployment. Stagflation coupled with a recession could lead to more crummy market days like we have had this week.

So, where am I going to put my money? I have been advised to stick any remaining funds under my mattress by a trusted source, but where is the upside to that? There are some bargains out there if you are willing to ride out the waves. I have made money in the past with these companies and still like them all.

1. Adobe (ADBE) - Tech has been taking a hit recently but adobe has some great products and should come back strong whenever this market turns.

2. Texas Instruments (TXN) - whenever you can get this stock under $30 buy it and hold it. Easy 15%.

3. Southwest Airlines (LUV) - this stock has a lot of buzz around the office and it has historically been a good earner

4. Garmin (GRMN) - approaching its 52 week low, this may be a great entry point on a strong growth stock

And a couple to gamble on:

5. Baidu (BIDU) - taking a dive now, but if you can find the bottom you may be in luck

6. Dicks Sporting Goods (DKS) - Trending upward, should go higher

Have a great Weekend!

Let's Make a Deal!

Microsoft has made a bid to purchase Yahoo for 44.6 Billion! This could be the acquisition of the year. The purchase price of 44.6 billion values Yahoo shares at $31 a share. Yahoo stock closed on thursday trading at $19.18. Yahoo stock is up 59% in after hours trading while Microsoft is down 5%. Microsoft has been looking for ways to compete with rival Google for search users, and this acquisition would help them gain some ground. Google is down 8% in after hours trading.