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IBM [IBM
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] comes out with good earnings and no one cares. Our parent company General Electric [GE
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] meets expectations and no one cares. The panic noise is simply drowning out all reality and because misery loves company, investors and traders alike are navel-gazing and focusing on the the negative analysis rather than the realistic fundamentals.
We had a guy on the air saying he sees "technical support" at 7,750. I hear other market technicians trying to pick a bottom. Spare me. Listening to market technicians is kind of like listening to seismologists talk about earthquakes: they're genius after the fact, telling us why a quake happened, where it hit, and how big it was; all information that would have been infinitely more valuable before the event.
In the case of market technicians, it gives us a false sense of hope that this madness might be over when the market reaches a certain low. Which may or may not be the case. Seismologists telling us that something may happen some time between now and 30 years from now might be useful, but it's more of a "well, duh!" kind of moment.
Meantime, as far as the market is concerned, it just seems to me that these are the times for the smart investor to reap big time rewards down the road. Unlike the dot com bust, which was sector driven and sent ripples through other, ancillary sectors that touched these companies, this latest market implosion is completely structural. And utterly non-sensical. Fundamentals at IBM and GE suggest strength, yet the stocks are beaten to a pulp merely because they're stocks that trade on Wall Street.
The ultimate economic version of guilt by association. The action on Wall Street is so structural right now, with so little rhyme or reason, that good deals abound for those with a little cash on hand, and the stomach to deal with the nauseating day-to-day shifts. And since investors by their nature have a longer term horizon, unlike traders, this moment to moment madness shouldn't matter, as they methodically pick their way through the great deals right now.
We're on the verge of a slew of tech earnings over the next couple of weeks. Next week alone, we'll hear from Intel [INTC
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]on Tuesday, Google[GOOG
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] on Thursday, and we'll get more details on IBM's news that day as well. The following week: Yahoo[YHOO
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], Apple [AAPL
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] and Microsoft[MSFT
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]. We'll get a far better idea of what these companies are seeing, and more importantly what they're expecting. Not like anyone will be paying attention to those earnings. But they should.
Larry Ellison's got the right idea. The acquisitive CEO of Oracle [ORCL
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] says today that things are starting to look so cheap that his company may start to go shopping again. You gotta think investors ought to start thinking the same kind of thing. Enough already! Trying to yell "oversold" in a market like this is like screaming from the bleachers at a 49er game. The people right next to you might hear what you're saying, if they're not screaming themselves, but by and large, the message gets lost in the din.
Which is too bad. Apple stores are still crowded, last I checked. Many of these companies are still sitting on mountains of cash, many of them, like Hewlett-Packard[HPQ
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], IBM, Microsoft, Cisco Systems [CSCO
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] and others buying back their own shares. Choosey investors are the smart investors.
Things might seem bleak now, but my money's on America, and ingenuity, and recovery. This will turn. Yet, by the time you notice that it has, it'll be too late to take advantage of it. And smart investors are looking for an advantage.
Questions? Comments?
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