"IT'S JUST MY OPINION" - VOL. - 16
This past week I have heard so many fund managers on the business networks warning investors that a big stock market correction is coming soon. I actually heard one of them refer to the 1929 crash. Really! That idiot forgot something about that event! In 1929 people were buying stocks with 10% down!!!! Where was Congress then? Why did they not stop that insane practice? Well, because just like today's politicians, they had know understanding of finance! They we're clueless that it was a recipe for disaster!
Does this sound familiar? Remember the TV adds starting around 2005 - buy a house - no money down - we will give you 125% of the value of the house you want to purchase! Again, where were our politicians? Didn't they see the obvious handwriting on the wall? History has a funny way of repeating itself!
Enough of my rant! Let's concentrate on the future. American companies are sitting on hordes of cash never seen before in our country! That is why in the future you will see more mergers and acquisitions to boost shareholder value. Example - Time-Warner with Comcast. Also you will see more spin-offs, which also are shareholder friendly.
FED chairman, Ben Bernanke announced this week that short term interest rates will remain low for a very long period of time! This is the green light for the stock market to continue to rally! Another thing I want to mention, you will hear a lot about FED tapering from now to the end of the year. The FED has stated emphatically that FED tapering is in no way any indication of FED tightening! That is missed by all that claim that a FED tapering will cause a big correction in the stock market - those waiting for a correction or even worse selling their stocks anticipating a correction, will miss out on the big surge from now till the end of the year!
"THAT'S JUST MY OPINION"
By the way in my earlier blog, I recommended that for every 100 shares of AAPL you owned to sell 1 January 2014 $550 call @ $15 and collect $1,500 which gets credited to your account - That
is called a covered call. Remember every call option represents 100 shares of the underlying stock. So the $15 you collected = $1,500. Then I recommended that you buy that option back @ $7 or $700 - creating a $800 profit for each cover call you sold @ $15 and you still own the stock. Well on 11-20-2013 you would have bought back that option @ $7.
There are 3 stocks I want you to look at - remember what Jim Cramer of CNBC says "Do Your Homework" before buying any stock!
MU - David Einhorn's, Greenlight Capital Fund, bought this stock recently even thought its near its 52 week high. Now, just because David bought this stock, it does not mean you should. However, if you want to see why he bought this stock - go to Yahoo finance.com - punch in MU and go to news. I believe his analysis is correct.
"THAT'S JUST MY OPINION"
Yahoo - Yahoo? you say - well its a great way and a cheaper way to own Alibaba, which is the biggest and most popular e-commerce site in China. Yahoo owns 24% stake in Alibaba. That should be floor on any break in Yahoo stock!
Citigroup - symbol C. C is the only major US bank that is trading below it's tangible book value - $53.75. When C trades over it's double top of $54, this stock could really take off to the upside.
"THAT'S JUST MY OPINION"
By the way, do not buy Twitter yet - Never buy a stock that does not make a profit! Wait - I'll let you know what price and when to buy - when I see it!
On Friday, GOOG closed down - $2.18
APPL closed down - $1.34
I find that curious with the markets closing at all time highs. Don't get me wrong - I like both of these stocks for the long haul but they are acting as if we can buy them cheaper at some point.
"THAT'S JUST MY OPINION"
Thank You,
Len Dwelle
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