Off Topic:
Ed, Jay, and others:
I'm feel this is important enough to break silence and open it up some things for general discussion.
I feel it is now time to GET OUT OF THE MARKET and CHKPF by extension.
Why?
- Bob Bennett, "I've really got to get to this conference call."
- Bill Clinton, "Yeah, I've got to get back to Iraq."
The man, and by extension, the executive branch is paralysed.
- Duda Grapefruit, who exports 50% of their product to the far east, has seen a drop of 20% of their exports to Japan. So? Well, if domestic stocks do about 40% aggregate in exports, and if Asia will lower their imports, then domestic stocks will have lower growth, which, will be reflected in earnings.
- This has already been stated by MOT, Intel, now Micron, it doesn't take a rocket scientist to see that earnings on balance will either remain neutral and/or decline.
- Buffet's comments, if people would read what he said instead of the summary's they would know that, "Stocks are appropriately valued if earnings continue to grow." Where is the growth? GNP has already been revised downward. Earnings will NOT grow, hence prices will decline.
- Oil Prices are collapsing, short term great, this means low inflation. WRONG. This means disinflation. I follow the tenets of Ludwig Von Mises. "You don't have to see an index when you go to the grocery store." A seller of product forced to reduce his price, creates a situation where his competition must lower their price. This continues until margins get reduced to zero and companies go under (refer to 1929 to 1933). Interest rates don't rise, they decline, but still nobody takes the money. Again, if you read Buffett, he's positioning himself for a disinflationary cycle.
- Exit CHKPF, the story has changed with this stock because of NETA.
All this means GET OUT NOW!
What to do?
- Short what you have.
- Purchase puts.
- or at a minimum reduce your holdings.
This market is poised for a major correction, if not a crash.
Arguments against this:
+ Momentum is up, don't fight the tape.
Answer:
- Look at the volume, only fools are buying now, the smart money is out (refer to Value Line + Stoval).
+ Technically we could see DOW 9500
- Fundamentals say PE is out of site.
One other factor:
CHKPF may be a takeover target, so on a micro basis, you still may want to hold the stock.
Lets begin to discuss this. |
