Big Picture
July of 2006 is almost gone (it went fast -didn't it?).
Now I have seen enough of earnings reports (2nd quarter) from various companies and I have also witnessed how stocks reacted to those earnings to form an opinion.
You are not going to like my assesment of the market (I personally think it is great). The market will go down again.
Let me give you the big picture:
2006, the U.S. stock market started with a bang. We had a beautiful gain in the first week. Thereafter, the market basically went up slowly (and stright up) until the first week of May. That was the high point in 2006. From second week of May until last week stocks went down fast (and stright down). You probably don't remember this but the market went down so fast that in two (2) weeks (by the third week of May) stocks lost all of its gains for the year. Now the major indexes are negative for the year. This week, stocks tried to come off the market low and so far it looks great. But I feel that we have not seen the real low of 2006 yet. Which means we will go down again. Now, do you get the feel for this year thus far?
Regular readers know that I have always said that the 3rd quarter of this year will be the low. I have also said that the 4th quarter will be the best quarter of this year (see my past notes). If my assesment is right, you should be happy knowing that you will get a chance to buy stocks at a discount soon. Of course the safest thing is to get out of the market now.
But here's the problem with that: When will you get back in? How will you know that that's the best time to jump back in?
Over time, earnings drive the prices of securities (stocks).
As long as our stocks are making money, I am not too worried.
I understand that even profitable, good stocks go down in a bear market, but they jump right back up when the market turns. And usually, investors miss the ride - up.
Bottom line: Get your ammos ready now!
As per my notes yeaterday, XMSR reported 2nd quarter numbers this morning. Basically, revenue went up more than expected ($228 million) but earnings were lower than expected (-$0.87 per share). XM added close to 400,000 new subscribers in the quarter and now expects about 8,000,000 (that's 8 million) subscribers by the end of 2006. Wow. I personally think that's not bad - not bad at all. And the stock is off 66% this year! Talk about discount!
Bottom line: Acetrader likes it. We will buy it soon.
This one is also a potential double within 12-18 months -Not bad either.
My order for Midastrade.com (MIDS) did not excute yet. I think we need to be calm and cool with this one. Do not chase it. My gut feeling tells me that within a few months, something big will happen with this. I am going to slowly accumulate this one. You should too.
Now I have seen enough of earnings reports (2nd quarter) from various companies and I have also witnessed how stocks reacted to those earnings to form an opinion.
You are not going to like my assesment of the market (I personally think it is great). The market will go down again.
Let me give you the big picture:
2006, the U.S. stock market started with a bang. We had a beautiful gain in the first week. Thereafter, the market basically went up slowly (and stright up) until the first week of May. That was the high point in 2006. From second week of May until last week stocks went down fast (and stright down). You probably don't remember this but the market went down so fast that in two (2) weeks (by the third week of May) stocks lost all of its gains for the year. Now the major indexes are negative for the year. This week, stocks tried to come off the market low and so far it looks great. But I feel that we have not seen the real low of 2006 yet. Which means we will go down again. Now, do you get the feel for this year thus far?
Regular readers know that I have always said that the 3rd quarter of this year will be the low. I have also said that the 4th quarter will be the best quarter of this year (see my past notes). If my assesment is right, you should be happy knowing that you will get a chance to buy stocks at a discount soon. Of course the safest thing is to get out of the market now.
But here's the problem with that: When will you get back in? How will you know that that's the best time to jump back in?
Over time, earnings drive the prices of securities (stocks).
As long as our stocks are making money, I am not too worried.
I understand that even profitable, good stocks go down in a bear market, but they jump right back up when the market turns. And usually, investors miss the ride - up.
Bottom line: Get your ammos ready now!
As per my notes yeaterday, XMSR reported 2nd quarter numbers this morning. Basically, revenue went up more than expected ($228 million) but earnings were lower than expected (-$0.87 per share). XM added close to 400,000 new subscribers in the quarter and now expects about 8,000,000 (that's 8 million) subscribers by the end of 2006. Wow. I personally think that's not bad - not bad at all. And the stock is off 66% this year! Talk about discount!
Bottom line: Acetrader likes it. We will buy it soon.
This one is also a potential double within 12-18 months -Not bad either.
My order for Midastrade.com (MIDS) did not excute yet. I think we need to be calm and cool with this one. Do not chase it. My gut feeling tells me that within a few months, something big will happen with this. I am going to slowly accumulate this one. You should too.
posted by Jaewoo | 11:10 PM
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