Moneytalk Bob Brinker Summaries - Information ONLY
- JenL_2
- SteveT
- Kirk
- Rande
- Rob_Larsen
- JenL_2
- Karin_
- Kirk
- Marty_H
- Rande
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» JenL_2 - Sat, Sun 8/5-6 MoneyTalk
On both days during the MoneyTalk monologue BB referred to Alan Abelson's column in 8/7 Barron's. On Saturday he talked about the first part of the article about G.W. Bush. On Sunday he talked about the wireless sector and Abelson's interview with Bearish Hedge Fund Operator Doug Kass:By Alan Abelson
Disappointing.
That, sad to say, sums up our reaction to George W. Bush's acceptance speech Thursday night.
So, Demosthenes he isn't. But considering it may have been the first time he read the words, Mr. Bush's delivery was more than adequate.
And the substance can't really be faulted, either. We were certainly glad to hear him confirm that he loved his mom, was proud of his dad, thought America was a great country and, what's more, its greatness doesn't depend on a rising stock market. That last observation showed true courage, since its utterance, we can attest, shocked Wall Street and probably cost Mr. Bush untold millions in campaign contributions (the exact amount depends on where Nasdaq closes at the end of the quarter).
No, frankly, what dashed our expectations was not what he said or how he said it but rather that he had led us to believe that he'd be different, that he'd be breaking fresh ground, that the keys to the Bush approach were "new" and "inclusive." Don't believe it.
For Mr. Bush's oration failed the acid test of new and inclusive. Like all aspirants for the office, Mr. Bush tends to invoke the glory of the office and tries to snatch a little gilt by association by ritually reciting the names of past Presidents. In indulging this incantory exercise Thursday night, he included George Washington, Thomas Jefferson, Franklin and Teddy Roosevelt, Dwight Eisenhower, Abraham Lincoln, Ronald Reagan and Harry Truman. In other words, he dropped the same old handful of names.
Nothing new there. Nothing inclusive, either. Mr. Bush blew a terrific opportunity to break with tired tradition and do something different and, yes, inclusive. He might have cited the inimitable Millard Fillmore, or quoted Rutherford Hayes (we're sure Rutherford must have said something in his four years) or made reference to Warren Harding (if only to aver he liked the cut of his jib) or James Buchanan (somebody had to warm the seat for Lincoln).
Instead, Mr. Bush played it safe and stayed with Washington, the Roosevelts, et al. Boring -- tell us about it -- and restrictive. And since Al Gore is a cinch to talk about FDR and Truman and JFK along with Washington and Lincoln, Mr. Bush also lost a golden opportunity to differentiate himself from his opponent. One of these elections, we fervently believe, somebody will pick up the Hayes, Fillmore and Harding package, run with it and win in a landslide.
Mr. Bush didn't say much about the economy except that it was booming but it wasn't Clinton and Gore's fault. Obviously, he plans to ignore it during the campaign and hope it goes away until after the election. Smart.
He also showed a nice appreciation of New York City's political composition with his closing remarks on the superiority of East Side to West Side. The West Side, of course, is a hotbed of liberalism, while there's hope for the East Side, so it was very savvy of him to praise the latter and deprecate the former.
One disturbing note was that, a few scattered digs at Bill and Al aside, the speech didn't display much meanspiritedness. The received political wisdom is that American voters have a low tolerance for negative campaigning. And so they do -- but only between elections. We trust Mr. Bush is fully aware of that. Otherwise, he's likely to spend a lot more time in Austin than he's planning to.
Wireless, as in wireless telephones, a scant few months ago was the big buzz. Lately, alas, it has been providing more static than buzz. One leading maker of cell phones after another, including Qualcomm, Nokia, Motorola and Ericsson, has been the source of news that has roiled the individual stocks, the group and techs generally.
Nothing particularly exotic about the nature of that news: Demand is not living up to anticipation. The business is by no means falling apart; sales are still climbing briskly. But because expectations were so high and the wireless stocks were fully priced to meet those expectations, even a modest scaling back of projected growth has had a wicked investment impact.
Qualcomm, for example, which reached 200 early in the year, closed a touch over 64 on Friday. Motorola is down from nearly 62 in March to below 37. Nokia has fallen some 20 points from its 62 high. Yet most of the stocks still command a premium multiple -- even based on next year's likely earnings. That suggests there's still room on the downside for the stocks.
So insists Doug Kass of Seabreeze Partners. He has an extraordinary record: So far this year, net after his fees, he is up 41%. And that's atop a smashing performance in '99 when, again after subtracting the hefty fees a hedge fund charges its limited partners, he was up 72%. We've quoted Doug before and to good purpose: He was short a number of Internet stocks (remember them?), most of which have handsomely repaid his skepticism. Doug also has been short the wireless group for the past three months, and he's in no rush to cover.
The weakness in cellular, moreover, means bad things are in store for many of the semiconductor makers as well. And, putting his money where his mouth is, he has shorted the stocks of selected chip producers. His reasoning here is that cell-phone demand for chips has been mounting swiftly and, in terms of the growth of the semiconductor market, is currently a greater spur than computers (the latter still account for larger absolute volume).
Doug's negative view of the Street's high hopes for wireless springs from his study of the potential market for cell phones and contrasting what he found with spectacularly extravagant analysts' projections. Understand, Doug expects the market to grow quite rapidly -- but not at the exponential rate with which the Street justified (excused?) those absurd P/Es awarded the wireless wonders a few months ago.
By his reckoning, if cellular demand continued to soar at the rate it did last year -- a prospect underlying a number of brokerage-house projections -- by 2006, a grand total of six billion handsets would be sold: one for every man, woman and child on the face of the earth. As he wryly points out, not a few of those six billion folks lack the electricity to charge up a cell phone (a small detail that no doubt progress will attend to).
What encourages Doug in his conviction that the downturn in the wireless stocks has yet to run its course is that he hasn't found an analyst with a Sell on them. Almost universally, he says, they're in denial and steadfastly continue to put out buy recommendations (the odd Neutral is the exception). Comes the revelation, the resultant stampede to downgrade could trigger a final salvo of selling.
So, how far down is down?
Well, in the case of Qualcomm, Doug feels, the stock, which closed Friday at 64, might eventually work its way down to around 30. In like vein, Nokia could go from 40 or so to 25. Even Motorola appears vulnerable: He sees it dropping around 10 points from 36-and-change.
As we noted, he expects the slowing in the cell-phone market to affect-and not for the better-the semiconductor makers. And those stocks already have hit the skids. Here, too, he espies an ominous reluctance on the part of analysts to adjust their estimates to what's happening in the real world.
Doug is short Micron Technology, Advanced Micro Devices and Cypress Semiconductor, all of which are already down a bunch. His target for Micron, 73-plus, is 55. AMD he sees going from 62 to 35, and Cypress from 33 to 25.......
Subscribe to WSJ & Barron's Online @ http://www.wsj.com
......Jen
-- posted by JenL_2
» SteveT - August 20, 2000
I thought was rather interesting.The call in question started at 2:28 on the archives. The caller was a young man age 20 and wanted to know how to invest, he thought maybe in an aggressive fund. Bill said yes or a good growth fund with a good record. Then the caller asked about books Bill could recommend? Bill refereed him to the reading list at bb.com.
After he hung up Flannigan went into a rhetorical phase saying " There is a tremendous amount of wisdom in some of the books that have been printed about investing but there has been an awful lot of garbage too… The problem is with financial books there is more money to be made by saying something outrageous than there is by saying something not outrageous but which people should know. Predict the market is going to go down a thousand points or three thousand points, or ten thousand points or the reverse and you get instant notoriety and everybody hears about who you are and what they are saying is pure unadulterated hogwash. You go back and look at most of the best selling money books over the last decade and most of them are just hogwash. HOGWASH! Those gals with that investment club. That did so well that beat all the indices and professional money managers well they didn’t do the math right. Turns out they didn’t beat anybody. Did the publisher give people their money back?"
-- posted by SteveT
» Kirk - 8/26/00 First hour was total waste of time
He went on about a small fiber optics company called Emulex that has a market cap of ONLY $3.8Bhttp://finance.yahoo.com/q?s=emlx&d=b
This isn't much larger than a company I was asked to help start... My word, it had a grand total of $3.66 M in revenues the last 12 months!
Anyway, who cares if you are a long term investor? Only those that have stop losses lost money and you all know I think these are terrible for long term investors to use. IF you like a stock and it goes down 50%, then you should buy more, not stop out of it.
Only traders care about this whole thing.
Of course, if you are trying to scare people about the market and make them glad they are not in it even if it is up 3% YTD or 12% since this time last year, then you go with the story for an hour of your show...pathetic!
IF he was interested in providing a service, he would tell us that these micro caps are perfect targets for manipulation as they are thinly traded (if ONLY has 24M shares outstanding) so a few shares can move it a large amount. Did he mention the size of the company or just scare you?
-- posted by Kirk
» Rande - My guess is that far more people were bored than scared.
My guess is that far more people were bored than scared. The blue hair GNMA types couldn't care less and the faithful our out of the market already and don't matter anymore. Maybe it was meant to make his followers feel good about being out of the nasty, evil Nasdaq even though QQQ is up 23% since the January newsletter call.-- posted by Rande
» Rob_Larsen - I posted this on the BB Questions for MT
Bob Brinker, I have been a listener since the first show many years ago. I must say that today was the second worst show you have ever done! The worst show you've ever done was talking about Gail Dudak for 6 hours. Today's show ranked right up there with worthless information and 3 hours of the same thing. It is my opinion you are blowing this Emulex hoax way out of proportion. Every person that traded on Friday was over 18 years old since they had to sign the trading contracts with the broker who they were trading through. These traders are not kids we're talking about, but adults who made poor, quick and uninformed choices. That is no ones problem but their own. I did not own the stock, but if I did, I would not be talking sour grapes. Now, let's get on with some productive money talk and hear about this bear you're predicting since it hasn't shown up knocking on my portfolio yet. Sincerely, Rob Larsen-- posted by Rob_Larsen
» JenL_2 - Thanks Rob.....
.... for posting your Question for MoneyTalk. Here's the link:http://www.bobbrinker.com/message.asp?th...
Looks like you got a reply from Active Trader, who sounds suspiciously like you know who:
http://www.bobbrinker.com/message.asp?th...
To: Robert Larsen (156332)
Date: Aug 27 2000 12:35AM
From: Active Trader Msg #: 156353
Robert Larsen is all wet. I am a long time Moneytalk fan and today's show was one of your best ever. I loved that last caller who told his eye witness story of how he was the victim of the Emulex scam on Friday and sold out at 47 after the stock dropped 66 points and he learned of the news from cbsmarketwatch and bloomberg.
You are doing an incredible service pointing out the big risks in the Nasdaq stocks and hopefully you will continue your fine work. I noticed how many callers today told you they thought the show was fantastic. Add my name to your list of happy listeners. Those that don't like your show need not listen, they can find something else to do with their weekends.
So what BB was doing today was pointing out to us "the big risks in the nasdaq stocks". So why why did he encourage us to embark upon the counter-trend bear market rally trade in the risky QQQ? .....Jen
-- posted by JenL_2
» Kirk - 'mercial
Normally, the show is a 3 hour infomercial for his newsletter. Fine as the information is a good hook.Today, it was just a 'mercial or better yet, a bor-o-mercial filling dead air between commercials!
EMLX has a market cap of $3.8 Billion and gets 3 hrs when it dips on a hoax. Why not discuss it when it fell from over $200 to under $40 just a few months ago? Falling from $100 back to that $40 on a hoax then recovering was no big deal.
Now MSFT has a market cap of $371 Billion AFTER losing nearly half its value. All I remember him saying when this happened was how he blamed the Government for going after one of the stocks he didn't sell in January and it was the Government's fault! LOL.
http://finance.yahoo.com/q?s=emlx+msft&d...
Compare the two companies. To spend more than 5 minutes on the first is a waste of air time! I wonder why he didn't get all upset about the rumors that BOWG was going to be bought by AOL? This was a story that got published in the paper while it was just being discussed and it never came about. The stock is down 95% or so since then... many bought back then and lost money...
-- posted by Kirk
» Marty_H - EMLX and EMH
The EMLX ride yesterday was a vindication of the Efficient Market Hypothesis that Rande is always espousing.Any stock will get shot for bad news. Look at Agilent, Lilly, Lucent. When it is widely reported that the CEO is going to resign, earnings will be restated, etc., of course the stock will get thrashed quickly.
The fact that the stock rebounded so fast after it was determined that it was a hoax means that the markets work-new information was acted on as soon as it was available.
If the stock had stayed down after trading restarted, it would be a different story.
Marty
-- posted by Marty_H
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