Don't you love it! Well, the "2 Minute Drill" has begun (see December 29th post). The Dow, S&P, and the Nasdaq kicked off the New Year with a bang after the Federal Reserve signaled that they may be close to the end its of rate hikes. In the minutes of the Fed's December meeting they said the number of rate increases left is "probably not large".
Oddly, among the best performers for the day were Energy stocks as oil jumped more than $2 per barrel to a two-month high of $63.14. Gold stocks also leaped higher as investors felt that the Fed was not serious about tackling the underlying inflation problem. At the close, the price of gold rose 2.6%, its biggest gain since May of 2003.
Shares of Wal-Mart (WMT) continued to decline after the company said that its December sales came in at the low end of estimates. Needless to say, we are happy that we unloaded WMT on December 15th above $49, and Best Buy (BBY), above $50.
MORE GOOGLE HYPE
Maria Bartiromo interview the Piper Jaffray analyst who initiated Google with a buy, and a $600 price target. Maria actually did a really good job grilling this investment banking, merger & acquisition seeking analyst. She asked the analyst "would you buy the stock". His response was, "If I were buying an internet stock, I would buy Google".
Ok, here's my follow up question since he is not buying Google. "If you were not buying an internet stock, would you buy Google?" Oh, by the way, before you answer the question, remember the stock has a valuation higher than:
3M-$59.5b, Abbott Labs-$59.2b, Boeing-$55.8b, BellSouth-$50.5b, ConocoPhillips-$$85b, Hewlett Packard-$85.8b, Home Depot-$89.9b, Pepsi-$99.2b, Texas Instruments-$51.5b, Time Warner-$83.3b, UPS-$86.6b, Verizon-$88.9b, Disney-$50.4b, Wachovia-$84.5b
Oh, one other thing. Apparently the Google insiders don't want it either because they have been selling in mass almost everyday.
Everytime you hear one of these investment banking seeking bozos talk, keep this disclaimer in mind (by the way, this came from Piper Jaffray website):
"Disclosures: Piper Jaffray was making a market in the securities of Google Inc. at the time this research report was published. Piper Jaffray will buy and sell Google Inc. securities on a principal basis. Piper Jaffray has received compensation for investment banking services from or has had a client relationship with Google Inc. within the past 12 months. Within the past 3 years Piper Jaffray participated in a public offering of, or acted as a dealer manager for, Google Inc. securities".
"Piper Jaffray research analysts receive compensation that is based, in part, on overall firm revenues, which include investment banking revenues".
Ok, now that we have laid the cards on the table, you can choose to do whatever you wish.
My advice: Be careful out there
Comments (1)
Housing stocks were up today and so was gold. If the Fed announces soon that short rates are peaking, maybe they will both be market
leaders. Long rates are steady as she goes.
Posted by alan | January 3, 2006 7:52 PM
Posted on January 3, 2006 19:52