Thoughts from an analyst/trader......
I am co-trader/analyst for a small regional firm. We do not market-make, we don't even inventory shares. This allows us to think without an "ax to grind". For the most part, I believe most "Wall Street" analysts are extremely overpaid for the services they actually provide. Now I also realize that their clients have a "choice" and if they don't like the service, they may go to the many elsewheres in this country. But, obviously, these guys/gals do have a very real impact on the market and individual issues. Where, as an example, was Robbie Stevens at 54 last month???? Do they really want a guy like me, who has been in this biz since 1981, to swallow that horsepill of bologna???? Now, I am not suggesting any "conspiracies" here, I am only suggesting that people should do better homework when investing, because these guys/gals obviously ain't doin' what I call a Good Job!!! We were out of every share in the 50's last month. WHY? Not because we stopped liking the co., we felt it was overbought on our charts! Now, admittedly, we started nibbling at the 37 level the other day, with the idea that it may hold the 52-wk low of 36.125. When that failed, we stopped nibbling!!! We were looking for 20% once it failed. This puts the stock at 28.875. I am not going to wait for EVERY LAST PENNY, this stock is already terribly oversold. But, I do feel it will hit 30, and possibly 28. I will nibble again below 30, and buy with all my might in mid-twenties. At 30 the stock trades at only 20x next year's low estimates, this is comfortable for us. Traders should be very careful in here (especially shorts!) but, what a great chance to own next centuries best tech sector at such a discount. In some ways their short-term memory (the street) is opportunity for those who are willing to do some homework! As for our clients that bought some at 36.25-37, we don't think they'll mind buying a bit more down here, especially in a couple years, when the stock has quadrupled, and they can't even remember their cost basis w/o calling me!!!!!
As for Warren Buffet buying bonds:
1) lower interest rates are good for bonds....AND STOCKS!
2)This is an excellent diversification move on his part (he hasn't sold axp, ko, mcd, nke, etc...as far as I know)
3)For the first time in decades we are close to a balanced budget, without deficit spending real interest rates should come down! (I guess that explains our buy rec on long bonds)
4) YES there are global economic problems! Is the contraction of the Japanese economy GOOD?? Germany having inflation problems in a mediocre economy is GOOD?? The U.S. will continue to be the safe haven !!!!!!!!!!!!! IMO. Good Luck To All!!! |
