MoneyMiser Picks

Well, an ice storm delayed me from getting into the game on its opening date. 14 hour day at work because of it. Still, the MS offer for Yahoo! helped get my blood pumping early this morning while watching CNBC (which is the really only good thing on in the mornings anymore besides SportsCenter reruns)..

But then an interesting thing happened to end the day with MS, it closed below its support level of $32 by nearly a buck and a half. Now the traders on Fast Money have been harping to buy MS on the dips around and at $32. This looks like a better than hoped for entry point. I'd estimate that MS will rebound once the deal naysayers go away, to at least $35 per share by the end of March, if not sooner.

Can't talk about MS without mentioning Google. Man they got slaughtered today. I mean this is GOOGLE we're talking about here. Just as super high confidence rode their stock price WAYYYYY up, so will the shaking of that confidence in this fickle market help it fall. Around $513-515 has been support for Google lately. I think the value traders will note this, and let the weekend sort out the hype from the MS Yahoo offer. I'll be the option markets are already buzzing with $550 calls for March being snapped up. Google is almost a steal at $515, and should deliver about a 15% ROI trading range for the next month or so.

Another tech pick that's been beaten down, EMC. Sure the VMWare earnings hurt a bit, but EMCs overall outlook for fiscal 2008 looks promising. I think EMC fell slightly out of its recent $16-19 trading range this past week due to the market's fickle nature as of late. EMC looks to be a strong performer for 2008. We may not get back to $24 like we saw near the end of 2007, but $19.50-21.00 should not be too far out of reach. At current prices, the low end would be a ROI of 20%+.

I'm not going to chase Buffet's or Ichan's plays. They've already been exploited before the game began. Perhaps on a dip the railroads may beocme interesting, but I don't think they'll lose much of their current gains until maybe the end of Summer. Motorola looks like a trap waiting to be sprung on anyone who gets in here. Selling off the handset division is a poor move imho. Why would you chop off a healthy limb to keep diseased ones? I'd rather buy Samsung and deal with their bribery investigation, than play with a poorly run former cell phone giant.

Anyone else think this best week for the S&P 500 in nearly 5 years is done with? I think the next freefall begins in the next 2 weeks. How far we plunge is anyones guess. But there's too much exhuberance over this brief run-up. I'm really tempted to put the max 25% in the inverse S&P 500 ETF, but it's really difficult to argue agains the double inverse power of DOG in the dow. Perhaps I'll split it up, I haven't made up my mind on that one yet.

Man, the 10 stocks with less than 10% looks tougher than I thought. I hoped to get in on GE, and some other more stable dividend stocks at a relatively cheap level. But I may have to rethink that strategy, given current prices.

I tend to agree with Jim Jubak's thought process about accumulating cash right now. It feels like the calm before the storm. And when the storm hits, buying opportunited will emerge. So what does one do in the meantime, other than being forced to lose money due to the rules of the game? The inverse ETFs only let you recoup some of that. I had hoped Pfizer might be a safer defensive play, but with the FDA putting out the alert on Pfizer's anti-smoking drug, I'm not sure what damage that will have.

Well, I'll hit the books and web this weekend before the big game. I think the score will be closer than the so-called experts believe.

Comments: View Comments |  Friday February 1, 2008