How'd you like the recent run up in MSPG and ELNK? Or even ICGX?
Somebody cut ICGX from Buy to Outperform today I think. As for MSPG and ELNK, I've been seriously tempted to short ELNK (I think both are seriously overvalued, but what isn't).
ELNK rose on the Sprint news, which was a great deal for ELNK IMO, but part of what the Sprint deal ends up being is a way for certain insiders to cash out $56mm of stock without anyone questioning their motives (not that I would question wanting to pocket some cash after the run it's had) since they are required to tender regardless of the stock price while public investors won't if it's over $45. Sure beats trying to sell through a secondary or open market with 144s and 4s to file.
Anyway, I don't expect ELNK to spend much time trading below the tender price of $45 (short of a market crash) until after the tender closes March 20, but from $53-54 I was tempted to bite.
I chickened out because I'm thoroughly dumbfounded by this market. No matter what the news, it won't break. Not Asia, not Zippergate, not the threat of war (none of which has really gone away BTW). Not even a 25-26 PE with 6-8% earnings growth worries anyone but, apparently, me. Organized fraud on the floor of the NYSE doesn't even shake things up. Greenspan says the same things two days in a row (it's not like he might have changed his views in one day) and the markets react negatively one day and scream to new highs the next. If someone threatened to nuke NYC at 5PM tomorrow, the market would go up because everyone would be afraid they wouldn't be able to buy anything again until the radiation levels subside.
I don't know if you follow any of the short threads on SI, but many of the biggest bears are "caving" (pun intended), covering positions, going into hibernation until sanity returns. Then we have a bunch of jokers wandering SI and popping up on any thread remotely internet related to hype a penny stock called ZULU-Tek (backwards, it's U LUZ). With no audited financials (actually no financials at all for the six months they have been public), not even any idea how many shares are outstanding, they have run this stock from 25 cents on Monday to as high as $1.42 today on nothing more than press releases denying supposed rumors about a buyout and trying to link their name to recent IPO DoubleClick.
This bubble has gotten so big, the excesses so - well - excessive, that instead of looking forward to the fall back to where I'd like to buy (and possibly profiting from puts on the way down), I'm seriously getting scared. Instead of 20% to get PEs under 20 again, I'm afraid we might lose 30% (or much more) and push the economy into a recession (or worse) from the UN-wealth effect.
Sorry to be so gloomy MK. My faith in the market and its ability to self-correct for excesses has been shattered. I needed to vent.
Good fortune to you and any lurkers tolerating my gloom.
Bob |
