Don Coxe Sounded A Bit Shaken Yesterday.
In his previous Call, he allowed that he was now wondering if the bond market was facing a 1994-type situation. But in this call, I do think the tenor of his voice and his remarks indicate that a higher dollar at least for the short-term begins to reverse the liquidity that has made all the anti-dollar trades work so beautifully. He did not refute the latest theory passing around Wall Street that Peak Earnings for the energy names may come in Q1 2005.
I refute it, but that's just me.
I would have liked to hear from Coxe a more robust defense, however, of many of the Energy Names on a valuation basis. I know that he prefers to not "name names" in the call, but he still could have referenced Blue Chips selling for PE's less than 10, and many names selling still for 5-6-7-8 times cash flow.
My point is that one would have expected Coxe, at this particular juncture, to poo-pooh the percieved Fireworks that have come since the Fed spoke (supposedly) to the issue of Inflation.
But he did not dismiss it.
In general, it seems most people have been caught-off sides to the Fed this week. Yes, it's all a bunch of hoo-hah in the sense we've been getting Inflation Data all along. But the Fed still carries the imprimatuer of "Authority" (even as they've eroded their credibility in the eyes of many--me included.)
Frankly, my personal view is that these Fed "surprises" merely have the function of producing a Smackdown, from which people can re-load the same old positions. I think this time will be no different. The dollar looks like a Juicy Short from above 84.00 and I'm pretty sure many traders are think the same thing.
Chevron Texaco and Conoco P. meanwhile selling for less than 10x **trailing** earnings is also very juicy and it's very, very funny to see people even spooked from these names over the past several weeks.
LP |
