Hey O Jerry, i've been reading you for 9+ months since Truffie told me how smart you are.... ok, now (since i turned 15 yesterday) i'm confused: Is the surprize rate cut part of a LTCM rescue plan? (cutting 45 min before the close Thursday before exp seems funny to me, and i don't usually believe manipulation stories)
Are big banks now safe? Is everything now going to be ok or will it blow up in the next couple of weeks?
What do you think of this snip?:
Wrong! Tactics and Strategies: A Rate-Cut Game Plan
By James J. Cramer
10/18/98 2:00 PM ET
You just woke up from a 72-hour nap. You missed the Fed's
magnificent ease. You see the airlines and chemicals and
papers and financials have just had monumental moves. Is it
too late? Should you just go back to sleep?
Every fund manager in the country is faced with this
dilemma, particularly those who will now be inundated with
cash that had been piling in from the sidelines. Heck, big
money just came out last week from the market.
I have no doubt that this rally will bring in huge amounts of
money. Especially because short rates are headed down
dramatically and will not offer that terrific return that they
have been. So what can you do? I like to buy stocks with
intact fundamentals that have some cyclicality, so when the
Fed restarts the economy with its series of eases, I will get
a nice bump.
That brings me back to technology, which does better with a
weak dollar that comes from rate cuts, and may do better
with more confidence in the system. Any cyclical company
that is the low-cost producer of something that can be
shipped overseas interests me. So do the drillers, although
their move Friday took away some of the upside. And every
savings and loan intrigues me because with each ease, I get
an immediate number bump.
Unlike the other groups, the savings and loans are hated.
The analysts hate them. The hedge funds hate them. They
were being downgraded this week. The swirl of prepayments
has damaged them severely, and the funds that invest in
them are all kicking them out because their performance is
so bad.
And the insiders are buying like crazy. Get the insider
buying runs. See which ones are being accumulated. They
are your best bets.
What doesn't work? If you think the Fed is going to ease
aggressively, as I do, the drugs don't work. At all. Nor do the
foods. If they rally, it will only be because the economy is
even worse than we thought, but I just think the Fed will
simply ease more aggressively, making these painful to
own....
Jerry, in plan words, what can be bought?
Thanks |
