WSW: Louis Rukeyser's Wall Street Summary &amp; Discussion $treet

Top 759. Mar 21, 2004 9:02 AM

» Kirk - Re: 3-19-04

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In response to message posted by SteveT:

Tom Gallagher noted the market rallied late Thursday when it was announced al-Qaida # 2 man Ayman al Zawahri may be cornered in Pakistan but the rally faded late Friday since it was not clear it was true and people didn’t want to go into the weekend not knowing. Tom said for the most part politics doesn’t affect the stock markets until after Labor Day.

Don't forget two weeks ago we had the terrorist attack in Spain. We saw similar market conditions right after the 9/11/01 attack on the US.

I track the weekly close of put/call ratio. Last week it closed at 1.05 and this week it closed at 1.03. It has only closed above 1.0 twice in the past four years:


        DATE        P/C ratio  P/C 10DMA    S&P500
------------------  ---------  --------- -------------
Sept 10/21st, 2001  1.01/1.27  0.81/0.94  1093/966
June 14/21st, 2002  1.15/1.27  0.93/0.98  1007/989
Mar  12/19th, 2004  1.05/1.03  0.97/0.86  1121/1110

What I find interesting from the above table and chart is major bottoms were set weeks after the put/call ratios closed above 1.0 two weeks in a row.

I’m not a market timer, but as a TA person who is sometimes right on this, I might guess a major bottom at 1,000 (perhaps spiking down to match the 944.8 low set in 2001) would provide the needed “symmetry” that I like to see in a recovering market.

Of course, the bottom could already be in or we might be seeing a 50% retrace of the fall from the peak and the market is just having a bear market rally before it rolls over to set new lows as the bears predict.

-- posted by Kirk

Top 760. Mar 21, 2004 10:00 AM

» SteveT - Re: Re: 3-19-04

In response to message posted by TipsTraders:

Martin, thanks for stopping by. I am not much into “tips” when I first started doing summaries I didn’t list the stocks mentioned because I thought the tipsters were in some cases pumping a stock and looking to sell it. Now with somewhat better disclosure I am more comfortable reporting the stock picks. It also is nice to have a record of how those picks perform.

I personally find what I consider to be the best tips on Lou’s show the few words of sage advice. For example last week Christopher Davis mentioned he likes to be to be an owner for five years or more so lots of research is required in advance of purchase. He also said “A great business can be a lousy investment if you over pay”. This week Nick Sargen reminded us the market is not without risk. And Richard Aster talked about how stock selection has no magic formula, it is an on going process and lots of work. He monitors up to 200 companies that have growth prospects for 5 years or more. He finds by being patient you often get opportunities to buy them at reasonable valuations. To me these tips are much more useful than a hot stock tip. Anyway glad to be of service, stop by often.

-- posted by SteveT

Top 761. Mar 21, 2004 10:58 AM

» Normxxx - Re: Re: 3-19-04

In response to message posted by Kirk:

What I find interesting from the above table and chart is major bottoms were set weeks after the put/call ratios closed above 1.0 two weeks in a row.

I dunno. I don't think we've had a chance to scare many weak players. So far, this has only been about half of a "whoosh." I agree that this is only a correction that is likely to end soon, but that's the opinion of perhaps 75% of the gurus! Such unanimity has got to have an upset. I agree we still have another sharp downleg in our future (probably to around 900 - 950) before the turnaround. I also think we are going to have a late summer/early autumn "whoosh," about the time everyone has discounted it.

-- posted by Normxxx

Top 762. Mar 21, 2004 7:05 PM

» Marteau89 - Uncle Lou's Status?

Anyone know when Lou will return to his show?

Has there been any public disclosure of what his surgery entailed?

Surprised to see him gone so long. Wonder if he will make it to his Vegas conference early next month.

-- posted by Marteau89

Top 763. Mar 21, 2004 7:38 PM

» Normxxx - Re: Uncle Lou's Status?

In response to message posted by Marteau89:

I am no medic, but as far as I know, in back surgery, if the results are positive, recovery is a lot quicker than this.

-- posted by Normxxx

Top 764. Mar 22, 2004 5:07 AM

» TipsTraders - Re: Re: Re: 3-19-04

In response to message posted by SteveT:

Steve, I agree that in some (maybe many) instances the tippers do have ulterior motives. That is why I started tracking their advice, so that the record might show and possibly disqualify some names.
On the other hand the shows are an invaluable marketing opportunity for many of these analysts, so they might be eager to present their very best bets when they have the chance. I cannot believe I am the only one to 'take notes' on their recommendations, which will come back and haunt them if not given cautiously. I know Tobin Smith really hates my website.

Rukeyser's is certainly very different from the business blocks on FOX. I for one can do without the yelling and screaming and settle for the 'food for thought'. I just find it far too difficult to try to look 5 years ahead. For me trading stocks works much better than investing in them.

-- posted by TipsTraders

Top 765. Mar 22, 2004 12:24 PM

» SteveT - Re: Re: Re: Re: 3-19-04

In response to message posted by TipsTraders:

"I know Tobin Smith really hates my website."

If you got one of them dudes hating you, you must be doin' somethin' right. smile

-- posted by SteveT

Top 766. Mar 22, 2004 3:27 PM

» Normxxx - Re: Re: Re: Re: 3-19-04

In response to message posted by TipsTraders:

Since about 95% of investors do not actually use paid advice, I would expect it to be much worse for the free advice. And, unless you actually buy one of these stocks, it's out of sight (or hearing?), out of mind. Besides, you normally get at least one new recommendation per week. Over the course of a year, you are bound to have some great winners. Then you just tout those for the usual selective track record.

But, I agree, they probably do their best on the shows, it's just that their 'best' is rarely much better than chance. If you figure that they probably put out recommendations on several hundred stocks in the course of a year, and there are probably no more than a few thousand 'live' stocks on the exhanges (omitting the BB), then they are bound to catch some really good ones overall, on a regular basis. Have you found any to be consistently above average, say, on a 5 year basis? Hulbert finds that regression towards the mean is a powerful force among the advisers who don't drop out.

-- posted by Normxxx

Top 767. Mar 23, 2004 5:40 AM

» TipsTraders - Re: Re: Re: Re: Re: 3-19-04

In response to message posted by Normxxx:

"Then you just tout those for the usual selective track record."

That is exactly why I started tracking on my own.

No, I don't have 5 years of records, I started 1 year ago. But yes, the pattern is very clear, f.ex. Gregory Spear has consistently and significantly outperformed most others throughout this period. So has John Bollinger.

-- posted by TipsTraders