Warren Buffet will be interviewed Wednesday on CNBC at 8 ET. He will address the bailout and his $5B-$10B investment in Goldman Sachs that broke after market close, Tuesday.
POTC feels the S&P could witness a 4%+ advance with the combination of these psychologies: Buffet-Berkshire/Blankfein - Goldman hook-up buzz; an okay Durable Goods Orders report (8:30ET), and the scariest of all; an unemployment number that doesn't exceed 450K (8:30ET).
The market inversion we predicted in the last sentence of the "McCain vs Obama" piece is upon us, yet now in the late stages. We believe Buffet's actions will bring down the volatility index (VIX). And, IF you feel the bailout will pass before the weekend, we could see the S&P move past 1,280.
Many IFs, yet we feel the pressure has shifted squarely on the shorts to cover, especially after the 70 pt S&P inversion in the last two trading sessions. Simply a panicked herd, simply oversold.
Buffet's actions come at a very uncomfortable & questionable political time as Paulson and Bernanke are grilled on Capitol Hill. What will you say IF the bailout doesn't pass by Friday, yet financials and S&P stabilize due to Buffet's tune? Wouldn't that give the D.C. animals more leverage on adding their bells and whistles? You decide.
POTC will set-up trades with conviction the bailout passes by Friday. We feel the risk-reward is too great to be short or overweight in cash.
Lastly, Buffet's 'perpetual preferred' share investment is a long term deal as far as he's concerned. Warrants worth $5B are attached at $115/share, with an option to buy in at anytime. The psychology of the closing bell will be critical Wednesday, and we see bear blood. Equity markets are the best leading indicator of the economic cycle, so we feel it's critical the S&P closes up at least 35 points for the bulls to mount control. And that would be only half of what we lost in the last two days...
We recommend aggressive traders go long, and even conservative forward thinkers nibble at some "best in breed' positions for your IRAs. We are optimistic after this Buffet $Billion investment, since the majority of recent blood loss came from the financials, especially ex-Investment Banks GS & MS.
The Psychology of the Call team remains confident there will be a market, in some form this Friday, next week, and next year. Thanks to all for answering the POLL on the blog as well.
Good night.
Tuesday, September 23, 2008
"Lights, Camera, Action", Attention all POTC readers
Warren Buffet will be interviewed Wednesday on CNBC at 8 ET. He will address the bailout and his $5B-$10B investment in Goldman Sachs that broke after market close, Tuesday.
POTC feels the S&P could witness a 4%+ advance with the combination of these psychologies: Buffet-Berkshire/Blankfein - Goldman hook-up buzz; an okay Durable Goods Orders report (8:30ET), and the scariest of all; an unemployment number that doesn't exceed 450K (8:30ET).
The market inversion we predicted in the last sentence of the "McCain vs Obama" piece is upon us, yet now in the late stages. We believe Buffet's actions will bring down the volatility index (VIX). And, IF you feel the bailout will pass before the weekend, we could see the S&P move past 1,280.
Many IFs, yet we feel the pressure has shifted squarely on the shorts to cover, especially after the 70 pt S&P inversion in the last two trading sessions. Simply a panicked herd, simply oversold.
Buffet's actions come at a very uncomfortable & questionable political time as Paulson and Bernanke are grilled on Capitol Hill. What will you say IF the bailout doesn't pass by Friday, yet financials and S&P stabilize due to Buffet's tune? Wouldn't that give the D.C. animals more leverage on adding their bells and whistles? You decide.
POTC will set-up trades with conviction the bailout passes by Friday. We feel the risk-reward is too great to be short or overweight in cash.
Lastly, Buffet's 'perpetual preferred' share investment is a long term deal as far as he's concerned. Warrants worth $5B are attached at $115/share, with an option to buy in at anytime. The psychology of the closing bell will be critical Wednesday, and we see bear blood. Equity markets are the best leading indicator of the economic cycle, so we feel it's critical the S&P closes up at least 35 points for the bulls to mount control. And that would be only half of what we lost in the last two days...
We recommend aggressive traders go long, and even conservative forward thinkers nibble at some "best in breed' positions for your IRAs. We are optimistic after this Buffet $Billion investment, since the majority of recent blood loss came from the financials, especially ex-Investment Banks GS & MS.
The Psychology of the Call team remains confident there will be a market, in some form this Friday, next week, and next year. Thanks to all for answering the POLL on the blog as well.
Good night.
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9 comments:
Warren's yukalalee costs more than $5B, nothing will help.
WOW... at $117, I set a buy limit of 105 on AMN and Chuck Schwab pulled the trigger yesterday... OOPS!
This a distinct buying opportunity. AMN came out with high quality earnings/report and is way oversold in our opinion. We purchased shares @ $82, $75, and just now at $78.75
Any thoughts on CRAI? Did you sell at a loss or will hold hoping for a comeback?
AMN is overso0ld, CRAI is mismanaged. We continue to buy AMN this morning; good business model, good management, and quality earnings. AMN is trading for less than 10X forward earnings.
Adding and holding because it gapped down, business looks good, but management should be fired. Here's what they said:
CRA did say Thursday that the recent turmoil in the financial markets would benefit the firm "over the long-term through significant litigation assignments." Another idea is to swap into FNM on hopes the rescue plan passes by tomorrow or today.
i think all that money should be split up amongst all americans instead of going to the banks. just think, do the math. everyone would get at least 200,000. that is already with taxes taken out. that would get real estate, banks, stores, cars and wall street moving all in one move.
Brilliant idea with the $200,000 Where did you get the idea?
I love it,
Jack
That is some interesting division. Awaiting a $200K stimulus check in the mail would help the auto industry, retail and banks...
Decent idea, although before we all received the $200K check, there could be no banks left due to the locked credit markets. This is one bad market inversion that seems like its coming to an end. When every one of your neighbors and friends who don't follow the market are suddenly experts, it has to be in the late innings in our opinion. Still, the 11 Commandments are important, that 20% cash on any size account will come in handy tomorrow morning.
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