Thursday, January 31, 2008

Is everybody happy?

GOOG came up a penny light. Should we be upset? Because a bunch of analysts can't guess right? I don't know.

As reported in the press, it sounded like a pretty good quarter to me. Schmidt liked it, and he was right there.

Wednesday, January 30, 2008

Google Eve

The last Google Eve* seems so long ago, now. I was confident of GOOG's chances, then. But even a GOOGOptimist can suffer a doubt, now and again.

I'm not worried about the Google Brothers and their inexorable march to glory. The fear is that, in periods like these, even the best of the best will not be good enough.

But these are foolish thoughts and they give way to more strategic considerations: if they knock it down to my cost basis, I will load up the Honda.

The thought is so absurd, it's strangely cheering.

* (

Tuesday, January 29, 2008

Commonly Understood Gestures

These are fascinating times. All these peripheral devices - television, telephone, telecomputer - that we have been using and thinking about in just one way, are now morphing into one another, forcing us to reconceptualize the whole situation.

Now, we think of buying something in a store as very different from buying it on-line. But soon that distinction will fade away, when you can go to a store to buy things and the people there help you see everything - they are show people, in show business - but they don't sell you anything or ring up a sale. You do that yourself. When you see something you want, you call it up and make the transaction. You do that all day long for different aspects of your life. Two people will be able to interact without ever speaking directly to each other. They will perform simple combinations of commonly understood gestures, while each speaks only to himself.

Which way are they leaning?

I usually don't comment on intra-day GOOG movements, on the grounds that I don't know what's going on. But I also have a firm policy on making exceptions to all my rules, just to keep things interesting.

GOOG's poor action, today and recently, seems to me an anticipation of Google's imminent earnings release. Not that they are going to miss any of their marks, but that the thesis has taken hold that a domestic and, possibly, global slowdown is in the offing, which will crimp Google's style, going forward. And also, to some extent, a taking into account of the Biblical injunction that "the first will be last," and other irrefutable and inscrutable advisories of faith-based investing (all investing is faith-based).

Never mind that, in the ruminations of at least one GOOG analyst, any advertising slowdown might well be evidenced by an acceleration of the move toward on-line advertising and away from traditional media.

Since earnings will probably be good, if not great, and Google doesn't give guidance, a lot of attention will probably be given to the body language displayed by the principals.

If there is any truth in any of this, the question of the moment may be, how much of this negative expectation is being baked in prior to the earnings release?

The current period reminds me of the time when GOOG had achieved 475 and then fell to diddling lower. It diddled to the 340 area (back when 135 points was a bigger diddle than it is now), and I recall traders saying that they were waiting for the 300 marker to jump back in.

It never got there.

Monday, January 28, 2008

No Wind

These are the dog days of GOOG ownership. The doldrums. What did it do, today? Who cares? It went up and then it went down. Tomorrow, maybe down and then up, just for a change.

On TSC, there used to be several stories about GOOG every day. It used to hang out permanently in the Bullish section of "Today's Tickers". Everybody was happy. Vishesh Kumar frothed his analysis of GOOG's amazingness.

Now, GOOG is buried in the Update section, and when you click on it, it takes you to Real Money's Most-Read Stories. Last week's hash. So, you go and read it again, because there's nothing else to do.

I look at my wife.

She says, "You should have sold it when it was 747."

Sunday, January 27, 2008

Discounted Cash Flow Blues

If you had invested 30 cents in MSFT in 1986, your investment would have gone up forty-zillion per cent by now. We've all heard these stories, but I've never heard of anybody who did that.

Is GOOG that kind of stock? I'm not sure. In 1986, MSFT was a shrimp. It had a lot of growing ahead. GOOG was born already big. On August 19, 2004, GOOG closed its first day of trading at 100. From then to now, it has doubled twice. AAPL, on August 19, 2004, closed at 15, so it has doubled three times over the same span. Highly respectable returns for both, but not even close to a zillion.

Today, the highest published target price for GOOG is 900. That's just 59% from here. A double from GOOG's highest price achievement so far would put it in spitting distance of 1500. Now that's a number I could get interested in. Five years? I've got time.

Sunday musings.

Friday, January 25, 2008

Do I hear "two-and-a-half thirds"?

On March 7, last, Greenspan announced that there was a one-third chance that a recession was coming.

On May 7, he said that the probability of a recession hadn't changed.

Today, he said that he saw no clear proof that a recession had started.

Clearly, Greenspan sees probabilities better than he sees proofs. Lucky for us, we have Bernanke. Of course, he's still learning the job. But I'll say this for Bernanke: he's younger than Greenspan.

Why don't they ask me?

Reporter: Mr. Blumen, is there a recession going on, right now?

Blumen: Yes.

Reporter: What evidence do you have of that?

Blumen: It feels like a recession.

Reporter: Can you be more specific?

Blumen: It feels very much like a recession.

Reporter: But what evidence do you have?

Blumen: Well, my money has been recessing since November.

Reporter: Don't you mean "receding"?

Blumen: Yes. Thank you. I would say that the economy is definitely in recedion.

Thursday, January 24, 2008

Long Time, No See

Today, I sold that SPY that I agonized over buying, yesterday. Does that make me a trader? I hope so - I've always wanted to be one of those.

I figured I was either going to hold those shares until they reached 1600, as Abby Joseph Cohen has promised, or I was going to sell them. I sold them, and took my 6 bucks. Last time I bought SPY, it took a week to get 6 bucks. I'm getting better at this.

Cramer has called the bottom, but Rev Shark says he's nuts. Kass is acting strange. I'm in for any scenario. If it goes back down, I'll buy back that SPY. If it goes up, I won't. I'm funny that way.

And what can I say about GOOG?

Welcome back, buddy. We missed you.

Wednesday, January 23, 2008

This Little Piggy Went Home

GOOG Today: Not Good

In the morning, I went back and forth, agonizing about my SPY order. I changed it several times, going from setting-the-limit-where-it-would-execute, to setting-it-so-that-it-would-never-execute. I couldn't make up my mind. Finally, I canceled the order.

After lunch, I checked and the Dow was down 325, which was to say, excellent, for a gentleman of my pecuniary circumstances. My interest in buying SPY revived. I decided on setting-it-where-it-might-execute. I put an order in for 128.50, when it was trading sedately at 129.50.

For a couple of hours, my mind was distracted by work. I checked again around two-thirty and the Dow's progress had been reduced to the minus 80's. But my order had executed! I was the proud father of a position in SPY. In the fullness of time, I thought, that will be a good price.

Emboldened by this, I decided that the time had come to put some major skin back in the game. So, I re-established several of the mutual funds I sold, back in September. I sold high, and then bought back low. Most satisfactory.

That was enough work for one day, so I left the office, a little after three, and went home. On the expressway, I mused about the prices I was going to get for my mutual fund orders, there being the expectation of a little more in my envelope, from the drubbing that was in progress.

At home, my wife was watching Oprah, but she knew to change it to the Stock Channel, when I arrived. I looked at the screen and my jaw slipped its hinges and hung useless in the room. The picture was blurry, but it looked like "DOW +298". At first, I thought I had entered a parallel universe. But then I decided that the truth was even stranger than that - the Dow had gone from down 300 to up 300, while I was driving home! It's like I have to watch it every second!

Then, it hit me that SPY was up five smackers from where I'd bought it and, suddenly, I got the strength of ten Grinches, plus two. Then, it hit me that the extra discount I was expecting on my mutual fund purchases wasn't going to happen. And the strength of several Grinches went out of me.

Part of me says, be happy with the good fortune that you had. Another part of me says: Oink!

Tuesday, January 22, 2008

The Down That Was Good

Down was up
and up was not

One of my problems, that I'm working on, is that I get prudent, when I need to act with wild abandon, and wild when I need to be cool.

Today, I knew - everybody knew - that the market was going down big in the morning, but might come back strong in the afternoon. There's money to be made, I thought to myself. But then I became conservative. I thought, the smart thing would be to wait it out and see what happens. Preserve my capital.

If my capital were any more preserved, it would be embalmed. So I didn't make the money. But that's OK.

Now, I want in for the longer-term bounce. So I put in an order tonight for a pile of SPY at 128.01. Make that two piles. What could happen? But I don't care. Now, when I should be worried, I don't care.

Monday, January 21, 2008

The Hundred-Year Flood

If you go down in the flood
It's gonna be your fault...

Sometimes, sitting on the bank, watching the river flow, can get really dangerous. Lord have mercy, which way do I run?

If I jump in, tomorrow, I might get swept away, over the precipice. If I hang back, I might miss that great steamboat that's going to take me to Hallelujah Land!

What was said in jest before, is coming now to pass: the world is a bad place to be...

Even Cody, out in Africa, must be wondering how he got there.

Sunday, January 20, 2008

Loathing is a Four-Letter Word

I like to buy when I feel panic. Back in August, the little bristles on the back of my neck stood up and I bought SPY at 139, and then sold it a week later for 147. A quick 8 points.

The problem is, I have to feel the panic myself. It has to be in me. But with a load of cash, it's hard to summon out the feeling. But that's OK - I own GOOG.

GOOG is my canary, make that emu, in the coal mine. When GOOG sells down into the 5oo's with the rest of the market, I will, at some point, be seized with the horror that GOOG is just another word for JDSU, and that I should sell all my shares before they become worthless.

When I have that feeling, accompanied by intense self-loathing, I will buy SPY, wherever it is, and then wait for the feeling to go away.

Friday, January 18, 2008

Larry Blumen's Dream

I dreamed that, by some random act of randomness, The Google Opinion went viral one day and suddenly countless thousands were visiting the site every day and every night, clicking away at everything. And the money came rolling in. And the Victims of Katrina cleaned up, and I didn't even get a tax deduction.

Signifying 54 Cents

GOOG's chart today was a tale told by an idiot. Fooling around all day for 4 1/2 bits. Down. On days like this, I think about what Greil Marcus said to start off his review of Bob Dylan's Self-Portrait album.

He said, "What is this shit?"

My sentiments exactly. I say, let's cancel next week and get on with GOOG's earnings and the Fed. Maybe somebody could call Larry and Sergey and ask them if they could release the earnings a few days early this time.

I mean, I saw SPY down around 132 today, and I was looking for something to redeem my goof of going back in the C Fund too soon, and 132 is not far from 131, which is an even ten points better than 141, where I last sold SPY. So, I put in an order to buy back SPY at 130.97, cheating the mark just a bit to handle the worrying charges.

SPY got above 135, during the day, but 131.10 was the best it could do on the down side. Thirteen cents away from a redeeming trade.

It was a Greil Marcus kind of day.

How Thin Was My Margin

A while back, I famously (some would say "fatuously") speculated that GOOG would not penetrate 600.

Yesterday, it briefly stuck its toe in at 598.01, found the water frigid, and scooted back up. It closed at 600.79.

You know how thin a gnat's bristle is, don't you?

Anyway, this morning, in pre-market trading, it's up over 10 points. I am declaring victory, here and now, before anything else happens. My new title is "Profit Prophet". I will be starting a hedge fund soon, and next year I will appear on Celebrity Apprentice.

Thursday, January 17, 2008

That Great Gettin' Up Morning

Everybody, including me, wants to know when this worm is going to turn. Every day, I scan the expert columns of Real Money, so naturally I have no clue.

I read Cramer to find out what raw emotion is thinking. I read Rev Shark to get the perspective of a trading machine. From the good Rev, I learned that you can sell all your stocks for cash and still be a good person. Now, I want to know when I can sell all my cash for stocks.

I am waiting for that great Klaxon on top of the World Financial Center to sound, calling all us rats out of our holes, and into the sunlight.

But the best advice I have from several commentators is, forget the bottom. Wait until the bottom has come and gone. Wait until it is too late to catch the bottom. Wait until everybody knows about it, even those who get their news from the Peachtree Gazette.

Then it will be safe to venture out.

Wednesday, January 16, 2008

Hair of the Dog

GOOG Today: 615.95

The vandals charged the ramparts once again, and GOOG held at 601.93. It certainly deserves an A plus for that!

On Fast Money, the sages advised that a report of GOOG's earnings will be released at the end of this month. That and the Fed meeting are causing tongues to wag, hereabout.

Maybe somebody can explain it to me in a way that I can understand, but I don't see why the Fed is in this thing at all.

Everybody wants the Fed to lower the interest rate - a lot - the more the better, and yet there's a general recognition that no Fed action is going to solve the problem or even help solve it.

It's easy to see why - an interest rate cut is just another nip of the same stuff that got us into this fix in the first place. It'll give the market a buzz for a while and maybe draw a few more rubes into the tent, and the boys in the back will tell them all about the big city.

But that's all.

Out of their minds?

On TSC, Dick Arms, Adam Oliensis and, to some extent, Helene Meisler are all pointing to their charts and saying that stocks have reached a level of extreme oversoldness, not seen since Adam Smith was a pup. They wouldn't be surprised by a rally of any duration.

Meanwhile, Cramer says we are in a deflationary downdraft, spiraling helplessly out of control toward the cold, cold ground. Mark Manning sees no bottom, despite looking for one really hard.

Doug Kass says buy C and put it in your old kit bag.

Out of the Woods?

GOOG held above 600 and is now trading in the mid-62o's. Are we out of the woods? Shoot - we haven't been in the woods, yet. Miles to go.

Out of the Gate This Morning

Last night, I speculated that the spate of short selling after the bell would be clear by this morning and it was, thanks to eager dip buyers. I make no claim to being a market pundit, but my instincts are not bad.

GOOG is still headed lower, of course, but I'm upping the odds a point or two that we will bottom above 600. But why speculate about imponderables, when we can just sit back and watch the river flow.

Tuesday, January 15, 2008


Today: GOOG 637.65 at close

After hours: down 12.65.

GOOG kept its head, today, when all about it were losing theirs. A close at 637 is well within recent range. The 12 more, after-hours, is just short sellers, piling on. The dimmer ones. All that will probably clear before the open tomorrow.

There were riper pickings for shorts today than GOOG. GOOG was down a little over 4 1/2 %, including the after-hours. AAPL was down 9% in the same time. RIMM, AMZN and BIDU all down more. But big losers weren't confined to the horsey set. They were all over the place. But there were credible reports that big money was flowing into GOOG, today, masked by all the selling. Still, it was not a high volume day for GOOG. We'll see.

I think there's a fair chance that GOOG will be contained above 600. But only fair. The greater probability is that it goes lower. If it gets in the neighborhood of 550, I just might send the Welcome Wagon out for a few more shares. Or might not. In times like these, it is easy to become unnaturally attached to your cash.

Monday, January 14, 2008

An Ace Day (Orders of Magnitude)

Today: GOOG up 15.57

Today was pretty satisfying, in a couple of ways. I sold my SPY in the morning for 141. It went a bit higher, but I don't care. I made 300 for my pain and suffering. And then GOOG popped up smartly, without any english from me, as I was sitting in meetings, all day.

In one meeting, I said, "Why do we keep doing this ourselves? Why don't we use Google for the whole thing?"

Somebody said, "You must own a ton of Google."

I said, "Yeah."

And everybody laughed.

Sunday, January 13, 2008


Last night, I asked myself why I was owning so much Google, in a time of financial cholera. The answer is, I am a long distance runner in Google. If it goes to 450, I'll buy more.

Saturday, January 12, 2008

The Long Dark Saturday Night of the Soul

The market doesn't open until Monday. It's just Saturday night. Garrison Keillor, on the Bose, is talking about Lake Wobegon. Here, it's been raining, off and on, all day. That's really good for the drought, but it doesn't help the mood.

Barron's was in my driveway, again. On the cover, a bunch of people you've heard of before, smiling and waving at each other like the world is not going to hell. Inside, they say there's a possibility that it is going to hell, as in you ain't seen nuthin, yet. What does this mean?

Is the market going to hell, or not? I don't know. With all the cash I've got, I should be happy if it does. But the ease with which I put a large amount of cash at risk yesterday has got me shook. I need to unwind that little trade, as soon as possible, hopefully, with a small profit. But I'm not worried about my cash.

It's my GOOG shares I'm fretting about, now. What am I doing, owning this much GOOG in a time of fear and ambiguity? I put more in last week! When everybody's feeling good, GOOG can support a 50 multiple, which gets you to 750. But when every rat is looking for his hole, a 30 multiple, or worse, will take us back to 450. Or worse. I think I hate 450 more than I love 750. I need to lighten up.

But earnings are coming up. Cramer hears they had a good quarter. And Doug Kass says the Fed is going to lower rates, any day now. Don't panic too soon. Give these things a chance to work out. Then panic.

Friday, January 11, 2008

In the Air with Anvil

Today: see yesterday.

Today, for the first time, since last August, I sensed a nip of fear in the air. Some of it was mine. As a man, sitting on cash, I should have been happy, but I wasn't.

I may as well confess.

This morning, I was reading Dick Arms' blog on TSC and he said an oversold rally was coming. Then I saw a guy on the Stock Channel, saying that valuations, in general, were so extremely low as to be grotesque. He said that the tsunami of all rallies could be in the offing, soon. He expressed contempt for bears. He was not Larry Kudlow.

That was all I needed to know. Like Toad with a new mania, I was off to do a trade! After the open, I let a couple of minutes go by, to let everything settle down, and then I bought a pile of SPY. Enough to make it interesting. I paid 140.65.

It fooled around for a little while, got up almost to 142, and then sank like an anvil, with me attached to it like Wile E. Coyote. I've been beating myself up about it ever since. It's not being down that induces such self-loathing, it's the stupidity of it. This was what I had said I wouldn't do. I didn't want to do it. I'm an all-or-nothing guy. But I did it anyway.

To make things worse, in the middle of the day, I heard another guy on the Stock Channel, describing every investor's worst nightmare: you think you're at the bottom of the cliff, but it's really the top of another, bigger cliff.

The best thing that happened today was that, after being down 16, GOOG came back to close down 8.

Thursday, January 10, 2008

Bungee Basing GOOG and Bernanke, Too


The less said about today, the better. Nothing was revealed. Technically, I suppose, GOOG is seeking a level, prior to earnings, when, we hope, all Hell will break loose to the upside. So, today, it was darting up and down, back and forth, spending itself in sound and fury, having, the other day, already bungeed down to 625, just to push off back up to the neighborhood of 644, levitated by the mere force of its own antigravity. Elsewhere, Bernanke doodled while Cramer burned.

Wednesday, January 9, 2008


Today: Down and Out and Up

Hillary needed a win. I'm glad she got it. Now, we'll see what happens. But don't get me wrong - I like Obama, too, for the same reason that I like The Fourth of July.

Everbody talkin bout - Change. It's got me wondering: what's the change if Obama gets in? I know he's black, and that's good for the history books, but he acts like a damn white man. Just like the one that's in there, now.

But, if Hillary gets in, that's a big change. Hillary's a woman. There's no telling what that would be like. It might be good. Might not.

I think they both should have a turn at being President. Hillary, first, and then Obama. Maybe self-doubt will have set in by then, tempering him to the rigors of office.

Elsewhere, in the markets, today, capitulation occurred in the early afternoon, allowing time for a rousing rally into the close. I made no big investments. I bought a little more GOOG (19 shares at 650).

I thought about reestablishing a mutual fund, or two, but then I decided not to. A little bit at a time, here and there, is what I'd been doing that wasn't working. Now, I'm an all-or-nothing guy. That's my style. The all-or-nothingness of everything clarifies my mind to a point where I can have conviction about it. That, and patience. There has to be more to it than we have seen to date. This market is way too cool, calm and collected. I'm waiting for the yodel over the cliff, and a disorderly retreat.

Tuesday, January 8, 2008

Hello, I'm Johnny CASH

The man in the black.

Tonight, I'm the little guy in the Charles Addams cartoon, sitting in the theater laughing, while everybody else is having a good cry. I can't help myself.

The market really is falling off the cliff. Nothing to do now but wait for a fat pitch.

Of course, it wasn't a Niederhoffer day - my GOOG purchase yesterday, and Friday's re-entry into the C Fund took a little edge off perfection - but I'll take it. My standards and expectations are not as high as Niederhoffer's.

But, all in all, it was a great day to be holding a huge amount of cash. The world beckons.

Monday, January 7, 2008

Economicus Interruptus

Market up
GOOG down

Political goings-on have, of late, been interfering with the serious task of putting my money at risk.

My attitude about Presidential elections is this. It doesn't matter who gets in. A look at the incumbent will convince you of that. I could be President and the country would survive.

So, when I look over the list of candidates, I take other factors into account, besides just seriousness.

Republicans don't interest me. I don't like the company they keep.

I like Hillary. I have always liked Hillary. I would like to see her President. But I don't know if she really has the moxie to bring it off. Obama has been sounding better, lately. And she's beginning to avoid eye contact when she's declaiming, as though the whole thing is getting to her. Playing that game is hard to do, unless you're slick to begin with.

Obama likes to hear himself talk. He's not self-conscious about anything. But it's hard not to be affected by him. He's talking good. The only thing I can say against him is that he looks like a kid.

The rest are background radiation.

BTW, I bought 54 shares of GOOG today with the same money that I got for selling 51 shares on December the 17th.

Saturday, January 5, 2008

From the Watchtower

Sentiment has changed. Ignorant hedge funds clash by night. Denial is everywhere slaughtered. Everybody crying uncle.

The only questions now: How low? How long?

- Don't worry. Earnings are good, PE's are low, maybe a little recession, second half will be great. No pain.

- What earnings? This is not a walk in the park. This is over the cliff, Charley. This bubble is bigger than the last one. Pray for rain.

The winds begin to howl.

Friday, January 4, 2008

Down, Jones!

Dow Jones: down 256.54
S&P500 : down 35.33
GOOG : down 28.33

Let me say, first of all, that I am sympathetic to longs everywhere, tonight. I've been there and hated it.

But I have tortured myself, whined in public and played the fool, over some recent occasions when I have sold GOOG and gone to cash, contrary to good sense and the Trader's Handbook.

I beat myself up, every day, for being such a moron.

So, I hope you won't begrudge me this day. For me, today was perfect. I don't expect you to be happy for my good fortune. I wouldn't be, in your place.

But today, my former mutual funds are worth 5% less than when I sold them in September; I switched back into the C Fund, buying 135 shares more than I had before; and GOOG has suddenly become unbearably heavy, dropping below the price I got for my shares.

Neiderhoffer would kill for a day like this.

But, if you think it unseemly of me to glory in my good luck, while so many others are chewing on tables, I can only urge you to recall the words of Mel Brooks, the legendary 2000-year-old trader, who said: "Let 'em all go to Hell, except cave 76!"

Thursday, January 3, 2008

Not a Pretty Picture

The technical boys are at it again. Dodging lines and wasting time. GOOG appears to be converging on a naked singularity somewhere around where it is now. Be careful you don't step on it.

Tuesday, January 1, 2008

We Need a Weatherman

Now that 2007 is history, the pressure is off the Hedge Fund boys to turn in a good year for their annoying customers who have been demanding it. The time is now ripe for a change in sentiment.

Tomorrow will be interesting. Will the markets, in general, start off with a bang, a whimper, or a blood-curdling yoo-hoo-hoo! over the cliff?

GOOG, in the meantime, has its own cliff to peer over. The technical boys, who don't care that Google is the greatest company in the history of mankind, are pointing out that the stock has been tracing out a series of lower highs in the past few weeks.

Whether GOOG bounces off support at 675, or goes crashing through it like a water bed on a weak attic floor, may depend on what the larger market does. If the market opens down with even a little enthusiasm, GOOG may be headed for the first floor, around 650, or even the basement at 625.

A check of the corral shows that the bulls are still a little cocky, so the chances for a downturn, tomorrow, would seem to be better than even. But the problem with tomorrow is that, even when it's over, we may still need a weatherman to know which way the wind is blowing.

Reeling in the year

January 1.

The day on which nothing happens, after a year in which a lot happened, and before another year in which a lot more will happen.

The changing of the year is an opportunity to reflect on past deeds, good and bad, to see if anything can be learned. In that respect, it's like a Sunday.

2007 was a year in which I did a couple of things that would be considered stupid by market sages:
  • I sold all my venerable, old mutual funds for cash.
  • I kept in my portfolio a single stock, GOOG, amounting to 20% of my entire investable assets.

Today, I have determined that my cash has increased in value, by 1.74%, over what my mutual funds would be worth, had I kept them.

And my profit in GOOG is 60.64%.

My resolution for the new year is to do a couple more stupid things, if I can think of any.