Not a lot of exciting stuff in Barron's but a nice interview with Birinyi- whose market expectations are about in line with my own(Lots of volatility but not much headway in either direction).
Also, an interesting article on bonds (get out now!) by Andrew Barry.
What does Laszlo say:
You spend a lot of time looking at various market indicators. How have those indicators changed in terms of what you think is important?
There have been huge changes. For example, when I came into the business, we still looked at the odd-lot indicator, if only as an indication of what the individual investor was doing. No one has mentioned the odd-lot indicator in the last 10 years.
Likewise, once upon a time we looked at mutual-fund cash positions. No one looks at mutual-fund cash anymore because funds are so large that to take an 8% or 10% position in cash is not making a market bet. Instead, it is making a business bet, because funds are so big that if they are wrong, they can't invest that cash in a matter of days like they could, say, 25 years ago.
What are you paying attention to these days?
An indicator that we developed is the number of stocks that are down 50% from their highs. At the market bottom recently, 322 of the S&P 500 stocks were down 50% from a year ago; that's an extremely oversold condition. The previous record, which was set in July of 2002, was 130 stocks. To us, that's a very useful measure of whether the market is oversold or overbought.
You published a note last month titled "S&P 750: The Bottom." What led to that conclusion?
A few things caught our eye. One was that we started to have some very bad days in November but the market still recovered. On Dec. 5, the unemployment news was really terrible and yet the market recovered that day, with the S&P closing up 3.7%. To us, those are signs of a positive market where people are starting to look beyond the bad news.
We also like it that stocks such as ExxonMobil [ticker: XOM] and Chevron [CVX] are starting to do very well, even though oil prices have dropped. That suggests to me that people were trying to get into the market via the back door, because you could put a lot of money to work in an Exxon or Chevron.
What else caught your eye in calling a market bottom?
We did an analysis that came out of our cycle study, and it showed that the greatest amount of decline in a bear market is always at the very end of the bear market. As we saw it, if indeed the market did bottom in November, as we suggested, a total of 70% of the decline occurred in the last quartile of the bear market. We also noticed that financial stocks were starting to show some stability, as well as large-cap stocks.
Where do you see investment opportunities today?
One thing investors, especially even institutional investors, should think about is not so much strategy but tactics. This market is somewhat similar to the fourth quarter of a football game where you are behind by only four points. You are not going to complete a 60-yard pass. So you have got to go for six 10-yarders or whatever. What we focus on is taking small bites.
How about a few quick stock picks?
We have a little bit of a different perspective on General Electric [GE]. Given that it pays an 8% dividend, it has limited downside, though it is probably not going to make us a whole of money in the next three to six months. But if we don't make money on GE in the next 12 or 18 months, then we've got some real problems.
What else do you like about GE?
They have global reach and a number of different business units. And they've said the dividend is going to be solid, so it will be a huge credibility issue if that changes.
And we still like Amazon.com [AMZN]. It's a controversial name and the stock has had a difficult time, but we're encouraged by the success of its product known as the Kindle, an electronic book.
Another name we like is Hess [HES], an oil company. It's a solid company, and it has a very nice trading pattern between 42 or 43 and 50. We buy it low and try to sell it high.
Andrew Bary's article on the bubble in Treasuries-
THE BIGGEST INVESTMENT BUBBLE TODAY may involve one of the safest asset classes: U.S. Treasuries. Yields have plunged to some of the lowest levels since the 1940s as investors, fearful of a sustained global economic downturn and potential deflation, have rushed to purchase government-issued debt.
The chief risk to the Treasury market stems from the potentially inflationary impact of both the Federal Reserve's super-accommodative monetary policy, which has dropped short rates close to zero, and the enormous looming fiscal stimulus from the federal government. It also may take higher yields to attract investors -- particularly foreigners -- as the Treasury seeks to fund an estimated deficit of $1 trillion or more in the coming year.
ONE SIGN OF TROUBLE FOR TREASURIES is the resilient price of gold, which has risen $150 an ounce since late October, to $880 an ounce, despite weakness in most commodity prices. Investors rightly see gold as an appealing alternative to low-yielding Treasuries and virtually nonexistent yields on short-term debt as the government cranks up its printing presses. Gold was up $45 an ounce last year, while oil was down 50%. Another worrisome indicator: The dollar has weakened recently, losing 10% of its value against the euro in the past month.
If you want to sell Tresuries short - TBT and PST.
Long-term corporate bonds with investment-grade ratings of triple-B now yield an average of 8%, nearly 5.5 percentage points more than Treasuries of comparable maturity. They rarely have yielded more than four points above government debt. Preferred stock of financial companies such as Bank of America (BAC) and Morgan Stanley (MS) yields 9% or more, and many preferreds carry tax advantages because their dividends, like those on common shares, are subject to a 15% federal tax rather than rates on ordinary income.
"The only part of the bond market that you need to be bearish on is Treasuries," says Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "The other sectors are attractively priced."
Barron's mentions junk and investment grade corporate bonds as a way to play since they are at very depressed prices- HYG FAGIX LSBRX and convertible bond funds from FIDO VANGUARD and Putnam.
MUCKDOG- following the FOX Business Block and their picks from 2008- about in line with the performance with most other stock gurus:
Tobin Smith: Emcore (EMKR $15.30 to $1.30)
Pat Dorsey: American Express (AXP $52.02 to $18.55)
Gary B Smith: Bank Of America (BAC $41.26 to $14.08)
Scott Bleier: Marteck Biosciences (MATK $29.58 to $30.31)
Patricia Powell: Potash of Saskatchewan (POT $143.96 $73.22)
Gary Kaltbaum: Oracle (ORCL $22.58 to $17.73)
Charles Payne: Washington Mutual (WM $13.61 to $0)
Jill Schlesinger: BLDRS Emerging Markets 50 ADR Index (ADRE $55.04 to $27.31)
Peter Schiff: streetTRACKS Gold Shares (GLD $82.46 to $86.52)
Wayne Rogers: BE Aerospace (BEAV $52.90 to $7.69)
Matt McCall: CNH Global (CNH $65.82 to $15.60)
Jonas Max Ferris: Nakoma Absolute Return Fund (NARFX $23.06 to $22.06)
Jonathan Hoenig: CurrencyShares Mexican Peso (FXM $91.98 to $73.81 )
Finally, VIX+MORE- With Schaeffer's and Connors view of the VIX;