Friday, April 11, 2008

GE The Terminal EPS Sandbagger

If Steve Jobs was a sand bagger like GE, Apple stock would be $700 on continuous upside surprises. GE has always gotten away with it, but not this time.It's easy to beat when you sandbag earnings, really.Which makes the case that the economy is really bad. If GE was the "tell" which I agree that it was, then beware of other companies that fall short in the coming weeks. The stage was set today as the market unmercifully sold the stock down. Where are these blue bloods on CNBC that tell you to buy these kinds of stocks because of the dividend. Well, I do like the yield today better than I did yesterday. If you are Intel or IBM and you fall short next week expect the worse. The market told you today what its tolerance is. If I was a GE analyst I would feel deceived here.
Technically we broke some levels today by violating 20 and 50 day moving averages. It's days like today that certainly encourage investors to wait before they jump in and buy. I guess the positive today, was that volume was once again light. My personal feel here is that we will be in a range and maybe even go much lower until earnings for the second quarter are over. If we do go much lower here I don't think it will be because of the financial or credit markets. I think that story for the most part has been told. Maybe a few more hiccups but nothing major. I think we go lower this time because of lousy earnings and the fact that we are in a recession. The question will start to become, how bad is the recession? I'm still waiting for credit cards and auto loans to rear its ugly head at one point over the next several months. As negative as I may sound I am still closet bullish because the Fed will do whatever it has to do to save the world, but right in here I think it will be tough to say the least. Real tough.
I had a phenomenal week being short BLK and GRMN which have been closed and I am still open short MOO and AA. I posted about MOO before and the farmer stocks hung in real tough today. Have a great evening.


About Me

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.