mymeohmoneyblog

my comments on market-dispatch's friday week-end - week forward review

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Link to msnmoney'smarketweekendwrapupandweekforward(p)review:

Market Dispatches - MSN Money

sorry no trades, no stock ideas or tips, just putting something down on screen to justify time spent reviewing marketnews.

Google's market cap jumped to about 200billion on friday. Has anyone reading this ever spent a cent on google yet? Google is my primary search engine, i use it all the time to find information, but i've never once responded to an add, or bought something because of using google. When one googles something they get a list of often hundreds of thousands of results, with the first page of 1 to 10 results showing. I surf to the article that looks most relevant for me, and i dont recall ever having spent a penny on any of the adds on the side of the page, or on any click-through sites. Buying Wendys has made me start to think about marketcaps. I think its odd that there's an intangible company out there called google worth 200 billion that i've never spent a cent on, and a company like wendy's worth only 3 billion but which has fed me for years.
Of course google's ad revenue continually jumps higher, and its only recently (like today) that i've begun to accept the virtue/power of add-presence/name-recognition. When i was a little kid i used to wonder why mcdonalds advertized on tv, since i already ate there anyways. i love these sort of innocent/nacent questions/curiousities, and stick to them forever as a sort-of guiding light. But honestly, i've never jumped up and ran out to anywhere because of a commercial. If you see a mcd by the side of the road..... well back to google; i dont see myself ever taking a position in it. it has troughed out for quite awhile relative to itself, and so i suppose it's time for it to start making its way up to 700, but it's for the large-institutional investors, not for me. I would, however, on the contrary, no doubt love to play with a 200bil market-cap stock if I were incharge, wouldnt u? just think of the possibilities: googlephone, googleOS, googlesoft, googlefax, googlebroker, googlerealtor, googlegps, googletravel, googlemail (nextphase snailmail virtual transport/fax/dump), googlebay, googletv, googlepedia, googlephoto, googlechannels, gagglegoogle/ooglegoogle (social networking), googleflight, googlevote, googlegov, googlecreditcard, googlepay, googlecomp, googleauto?(to compete with the I-car?...), googlemusic, etc. ... Barring regulatory prohibition, anythings possible for a 200bil virtua company right? Lets compare google to wal-mart for a second. Wmt also has a 200bilion market cap. Now that makes sense, doesn't it, instinctively? In a way, it seems a shame that wal-mart stock has flatlined ever since 2000. Anyone not buying wmt last month just missed a great opportunity to buy it at its 7-yr-flatline-trending-low of 42 climbing right back to 47. I think that wmt management strategy the last coulpa years has been to start growing up instead of out, converting to supercenters rather than mass-expansion, hoping to improve comps. They're still eeking out sales gains, even in this recessionary-wary environment. Perhaps its not fair that they've been blocked by regulators from moving into banking, and i certainly would or could trust and support them on such a move (in house credit processing for sure!). Now google at the same market cap can expand into any industry it sees fit with its play money, but wmt is confined to its original business, despite the competive and ever-changing world we live in. I like walmart, and have given them thousands in revenue, despite the many naysayers among my peers, especially in a liberal college town, whom boycott wmt on principle. (as an aside, i've been boycotting target/tgt since 2003, when i had applied to help them with their seasonal rush in a measley shipping/receiving job, and had been put through 3 interviews and a piss test, and offered the job, only to have it rescinded due to a credit report, as i had never used credit at that point based on my fundamental christian upbringing. and i will continue to boycott them indefinately, giving wmt all my big-box spending, and that of all my family and friends whom i turn from tgt. rule #1: customer relations) As another aside, is it fair that wmt cant do in-house procesing of credit, like tgt can? is it fair that they're denied further entry into the banking/credit arena, when S & L's get bailed out in the 90's, when B&B's (banks and brokerages) today get bailed out with a rate-cut, when both smallcap and largecap transaction/credit/data/ companies proliferate and/or merge and/or go public, and in an era when the big boys mastercard/visa/discover/etc take advantage of going public too?
wmt should at least be able to have a say in their and their customers own transaction costs, right? Where are the lobbyists worth their salt? Well it seems wmt has decided to undercut again, in reports this week, to get a head start on the holidays, a strategy which has worked well in previous years. But as i've alluded to in earlier posts on small-margin discretionaries, i woulndt be suprised or at least would think that small-margin discretionaries, such as a wmt or wen, would try to incrementally increase there prices to counter decreased unit-volume expectations. I would find it very unusual if retailers across the spectrum didnt/havent noticed that somehow with bush's 'keep-buying-to-do-your-civic-duty-and-ignore-the-war" mantra and the concurrent massive rise in oil and pump prices that consumers are willing to pay anything for anything, or at least have not changed there driving habits, engendering the thought of 'why not me too'. Honestly, if you're a seller of any product and you look over and see the energycomplex gouging consumers who don't respond, why wouldnt you raise your prices too? If we begin to see upticks in inflation over the next year or two, it will have much more to do with the 'inflationary well-hell me-too-then' mindset and the bush antiwarawareness strategy of go-about your-business and buy, rather than half or quarter point fed drops.
My advice to wmt, raise prices on anything that isnt already priced psychologically at "?.97c" and get some better lobbyists.

Moving along, it seems that owning anything that carl icahn owns might be a good idea. the marketdispatch article mentions not one but two separate companies in which he has stakes which have gone up friday due to his activist pressure to sell: biogen idec, biib up 18%, and later in the same article bea, BEA Systems, still jumping after Oracle's offer. Even GM was mentioned in the article moving up friday 6%, without mentioning Icahn but to which if memory serves Icahn was mentioned a lot with regards to GM back when GM was under 20 a year or two ago. A quick google search of "icahn holdings" leads one to this page .

The market dispatch wrapup also highlight some key earnings reports this week and some economic data to be released. Based on this limited info i will attempt to make a daily prognostication for the upcoming week, somthing i havent done for a long time but which i used to be able to do like clockwork back in high school. Monday we should open up on follow through buying from friday and somewhat of the general year-long merger-hope psychology. Citigroups earnings should be discounted, and Mattel might take writeoffs for their struggles, i.e. 2 irrelevant earnings reports. the market will come down from it's monday high and trend down right through into tuesday, which should open down but finish higher on the day. Decent earnings from intc, ibm, jnj and yhoo will relieve people, and the financials wfc and tma, however they'll report, should be somewhat discounted already. Buying should increase into wednesday, with JPM and KO at worst balancing/cancelling out their earnings reports (KO up - pep report and falling dollar) and relatively tame and/or discounted tuesday/wednesday industrial production and cpi data, and wednesday housing starts data bad of course but perhaps in more in line with recent applications. Thursday and friday should see a repeat of this week, down thursday on underperforming expectations on goog and bac news, and friday up on postive earnings from industrials like mmm, cat, hon, and slb.

The marketdispatch article also mentions that MCD reported same store september sales rose ~6 percent. Outstanding and mcydees continues to impress. Don't know how they do it. Hopefully i'll get a followthrough pull on wen. Looking at wendy's options today, Wen at 34.35. 1week 35 calls at ~30cents. Nov30 calls at ~4.6 (only .3timevalue). Dec30calls at ~5. Mar30calls ~5.6 and Mar25calls at ~9.9 (time value ~.55), and finally Jan09-20 &25 calls at 14.5/10.1 with timevalue decays of only .75/.15. Stay away from out of the money calls as you dont know how low a price an lbo could lock in. The later months' ops could help protect against an autumn market dip, if any.

GE reported strong earnings and revenue, which bodes well for PHG in my sloport, a longterm international hold for anyone.

In other news, VTSS, a joke stock one dollar stock added to my sloport last week in a very tiny test fraction, has bumped up on thursday and friday on news they are entering settlement talks to end all of their litigation over mismanagement and backdating options scanals. The stock went from about ~90 cents to a buck-ten, and would be a neat one to play with for some short term action. The fundamenls are poor, of course, but i have traded this one personally in the past with some success, and perhaps it will get a third-day bounce on the news, and perhaps even some mellow sustained higher trough action as weeks go by, and maybe even catch an overall tech bid before next spring if they could ever report in the black. It's not like anyone can short a one dollar stock.

Think ill look into berjaya.com for the ticker symbol on berjaya, to see the price and fundamentals of berjaya, a malaysion exchange co which recently entered into an agreement to run some wendy's chains in malaysia. (do muslims eat beef :?). malaysian conglomerate with several business branches...

In personal news i finally updated to Microsoft Internet Explorer 7, after being forced to adapt to Windows Live Hotmail last month, and the whole experience just sucks, and makes me want to go out and buy some redhat, RHAT, the underdog linux co. Like the linux story for years and have looked at rhat on occasion the last coulpa years but for whatever reasons didnt see the price-entry points i woulda liked. Think i heard they recently reported some good numbers. WindowsLive makes my mouse-scroll action all jumpy and limits how many messages i can display in my inbox and removes the quicklinks on the page to msn.com, etc., etc. Now with IE7 i can no longer right-click on the backward and forward arrows to return to previous pages a heck of a lot quicker than just doing Alt-arrows repeatedly. To make matters worse upgrading to IE7 alphabetized all my hundreds of links and favorites and there's no way return the organization to 'by date created', the way i have it organized chronilogically in my mind and life. Have wasted many many hours tinkering with these probs and searching for help and of course msft is such a behemoth its unrealistic to expect any help or changes. I'm just about the only person i know left still using either hotmail or IE for a browser.