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Mini Bull Market, September 21st, 2003 :: Ben Turner's Soapbox

 

the soapbox @ benturner.com
archived soapbox: September 21st, 2003
"Mini Bull Market" [permalink]
    keywords: stock market, bull, bear, inflation, bubble, real estate, productivity
    soapbox #: 361
    written: September 21st, 2003
    words: 906

"Mini Bull Market", an Essay

Don't know if I'll make this a more permanent feature...

My position is still bearish. I think we just had a relief rally. I have no confidence in the real estate market. It's ridiculous. Car prices are up, gas prices are up, productivity is up, debt is up. Someone care to explain to me how all this shit is being paid for? Oh, right, on credit. That's gonna work out REAL well.

The worker is stuck in a soul-numbing job, which has a skillset that can be filled by anyone else. Therefore he's replaceable, and by extension, exploitable. Meanwhile, the worker goes home and spends what little disposable income he really has on stuff that he thinks will make him happier: homes, appliances, cars, fast food. What happens when the worker, Dr. Jekyll, finds out that he's also Mr. Hyde, the consumer? What happens when he realizes how large his debt has become?

Prudent Bear's charts are interesting; debts continue to increase dramatically.

The Dow's trendline is just under 5000 or so. While this would cut the Dow about in half, the Dow's long trendline would still be fine.
Dow chart

The Nazzy broke its long trend upwards and is rallying up to resistance for the next bear leg.
NASDAQ chart

The S&P has some problems.
S and P chart (1980)
S and P chart (1930)

Microsoft bounced off its trendline and broke upside through a triangle. Problem is, it hasn't bounced very hard yet. But the company continues to come up with popular products, and its existing products seem worth buying. Plus, MSFT is diversifying into other branches, like phones/PDAs, gaming, and hopefully, wireless apps.
MSFT chart

Time Warner's trendline is still intact, but the company took a hit after the merger. I bought this one in my fantasy portfolio a while ago, even though I had doubts about whether the merger would work. Doh. At least they dropped the "AOL".
AOL chart

Don't like NVDA. Chart is messy but inconclusive. I think ATYT (ATI) is giving them a run for a money though. No more free lunches.
NVDA chart

Sony lost a major trendline. I don't know why I want to own this stock. I guess it's just because I know them as the ultimate cool sleek gear company. The Nikkei might be bottoming out -- I'd take this as a sign that SNE will fall soon. The big caps always fall last.
SNE chart

Making up for AOL, I had a ton of EBAY in my fantasy portfolio. Adding agreements, marketshare, and protection, plus demolishing their opposition with low overhead, EBAY's stock zoomed up. I think it could still go much, much higher, with further unexplored applications for the service (the much heralded B2B ideas) but I sold it for 50% profit.
EBAY chart

The SOX (companies making silicon chips and PCB microprocessor boards) is putting up a fight. But desktop processors have stalled out in importance, as laptops are beginning to. All that tech is going to be transferred to PDAs/phones.
SOX chart

Citibank seems to want to go higher. Good to watch for signs of weakness in broader market.
C chart

Broke major trendline. When people can't afford to take on more debt to remodel, what will HD do? What will it do if real estate suffers?
HD chart

McDonald's got villified by "Fast Food Nation". It's trying to adapt to a growing distaste for fat food by offering more healthy options. Sorry guys, that chart is bad. And no one ranks Mickey D's very high anymore -- why go there when you could go to In'n'Out or Carls, Jr.?
MCD chart

The common man shops at WMT. There'll be a lot more common men soon.
WMT chart

I chose two Indian stocks because of an article I read about India's faring much better in business planning and policy than China. The stocks don't reveal too much about the future.
INFY chart

WIT chart

GPS is going to be huge. It hasn't quite hit a price-point for receivers that enables consumers to gobble them up, and there's still some wrangling with signal strength and the fact that the US government controls most of the satellites. But there's going to be a boom in this area, I know it. It'll affect so many industries. And you know there'll be some really popular Internet killer apps that use GPS, especially when combined with PDAs/phones. Don't have charts for these, but GRMN, TRMB, and LEIX are enjoying high profit margins while sales prices are high and the big boys like MOT and MSFT haven't moved in yet.

SymbolPriceShrsPaid% GainP/E
ADBE41.37-3,50039.977143-3.48%43.90
AOL16.282,50024.554-33.70%N/A
BA35.79-1,50035.43-1.02%102.26
CHKP18.36-1,00043.00+57.30%18.83
HD33.10-1,50033.75+1.93%19.94
INFY69.223,50065.78+5.23%43.53
IP40.96-1,50040.46-1.24%124.12
JNPR16.41-1,00021.25+22.78%N/A
MACR26.49-2,50026.444-0.17%164.38
MCD23.92-2,00023.43-2.09%31.06
MERQ50.93-2,00033.15-53.63%67.87
MO44.591,50040.46+10.21%8.61
MSFT29.966,00028.435+5.36%32.47
NVDA19.84-5,00039.10+49.26%68.21
SNE37.392,50036.36+2.83%71.63
WIT28.913,50028.475714+1.53%39.99

 
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