Monthly Archives: May 2008

Black Holes, Cellphones, and GDP

29
May 08
“The cell phone is the black hole of 21st century technology.” I’m quoting myself here, but this insight is truer today than when I first said it a few years ago, and it is making a big difference to our investments–especially one that is a Top Buy today. What it means is that numerous functions of different kinds of electronic gear are turning into features of the cell phone. What started as a device to make mobile telephone calls quickly expanded to text messaging and then added and integrated the: personal digital assistant (PDA), calendar and contact list digital camera...

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Breakout on the Horizon

22
May 08
Last week, I discussed the most likely path for the S&P 500. On Monday, the S&P did exactly as I predicted. The index tagged 1440 right on the button and then sold off as the consolidation process began. Going forward, I expect 1440 to continue to be a barrier for two or three more rally attempts, with at least one of the failures providing the dramatic plunge I mentioned last week. Right now, I think the downside will stop at 1385, 1370 or 1366. But I would welcome a plunge to 1326 to really suck in the bears. Then we...

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Bear Market Signals?

15
May 08
I’ve just returned from the Las Vegas Money Show. I was startled by the number of investment advisers that are lukewarm or outright bearish towards the market. In one session I followed Joe Battapaglia, who gave a negative presentation for the first time I can ever remember. His litany of reasons the market is in trouble followed almost to a “T” my PowerPoint slide series that lists the bad news (falling home prices, continuing subprime write-offs, dazed consumers, high oil prices, hurricane season coming, geopolitical risks). The second slide in that series says the bears are probably right about all...

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Hold Cnet

15
May 08
Cnet Networks (CNET) will be acquired by CBS for $1.75 billion, or $11.50 a share. That’s well below my $17 target price, which I expected to see after Cnet showed better monetization of their traffic, and it’s a great deal for CBS. As I say on the website: “This could turn into a multi-year hold, or it could be bought out at any time.” Even though we are booking an 8.6% profit in eight months during a tough overall market, I am sorry to see the company sold so cheaply. But this is a done deal, unless Jana Partners, the...

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May Day!

02
May 08
May Day! May Day! On Monday, Warren Buffet said: “My general feeling is that the recession will be longer and deeper than most people think. This will not be short and shallow.” Wednesday morning, the Commerce Department gave the advance estimate for March quarter real GDP: +0.6%. That follows an identical +0.6% in the December quarter. The build-up in inventories that helped March quarter GDP will be a drag on the June quarter, but the tax rebates will help, and GDP could be either slightly positive or slightly negative. It’s hard to have any recession, much less a long and...

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