FEBRUARY 18, 2009
TODAY’S LESSON FROM THE DON:
“Send those pricks at Chrysler to bankruptcy. Keep GM. They build cars with big trunks. Me and my crew need trunk space. Lots of trunk space.”
I guess we shouldn’t ask why they need all that trunk space.
Hey, hey, hey! It’s Fat Albert!
Gotta love Fat Albert so the line above is an ode to him. Why even mention Fat Albert in the first place, you ask? Good question with a good answer behind it. See, Fat Albert and the Cosby Kids were poor, broke and lived in the rough and tough ghettos of Philidelphia. But they were as happy as a bunch of kids could be. And, not only that, they were part of the Junkyard Gang, a rock band that used old garbage at the junkyard to play their music.
I mention this because today, in an unsurprising chain of events, the stock market tanked so bad it’s threatening to fall under or around the November 20th low (7450) that the Dow had reached. At the end of the day, the Dow lost 297 points and landed at 7552.6. That means since last Monday, the Dow has lost over 500 points. This has investors biting their nails, pulling out their hair and losing their minds.
This is also a tough, stressful week for the American economy across the board. Today GM and Chrysler went to the government in their newly appointed role of corporate beggar, kneeling down on their knees, hands out, heads down, asking for only $30 billion or so until 2011. They also reached an agreement with the United Auto Workers to reduce labor costs if that helps anything. Probably not but I really don’t know.
Also on deck, a bunch of big S&P companies are reporting earnings this week. Among them: Wal-Mart, Chesapeake Energy, Whole Foods and Hewlett-Packard to name a few. By the time Tuesday’s after-hours market closed, the only company with a leg up with none other than…Wal-Mart! I did mention I had my eye on Wal-Mart in last week’s edition and feel pretty good about the call considering the state of things and the fact I bought some shares.
On top of this economic news, today President Obama will be addressing the mortgage and foreclosure crisis in America and what the government is going to be doing about it. Hopefully he won’t Geithner it (I decided to turn Timothy Geithner’s last name into verb until he gains confidence from the people). I don’t think Obama will for the simple fact that his calm seems to keep people relatively relaxed but if the news really sucks, the shit just might hit the fan on Wall Street.
Yep, the market sucks and tomorrow it could go below that November 20th below and beyond. But in my gut feeling, I believe it’s only temporary. Investors so far haven’t liked the idea of the Dow below the 8000 mark so it’d be a good guess to believe we’ll see some money thrown back into the pot here in the next two weeks.
Remember, good stocks are still low. A lot of skeptics will tell you, “they’re priced low for a reason”. Maybe, but they all are. That’s the difference. Microsoft, Apple, Hewlett-Packard, Exxon Mobil, General Electric, Kraft, just to name a few out of hundreds, aren’t going anywhere. Neither is McDonald’s or Coca Cola.
So, I know I’m being an extreme optimist in this environment but then again, if we don’t take risks we feel in our guts we regret them at the end of the day. Even if this market hits 7000 or 6500 or whatever horribly low number, it’s going to go back up. And I also happen to feel it’s worth it for anybody who invests in the stock market now for the long run, years down the line.
STOCKS I GOT MY EYE ON
SBX – STARBUCKS CORPORATION
You all know Starbucks. Their hot, aromatic coffee and tasty lattes have their stores packed with devoted coffee lovers. At least, they used to be packed. Starbucks announced they would be closing 600 stores nationwide a few months ago amid the ongoing recession. But after revealing a $4 value meal and a $1 packs of instant coffee called Starbucks Via, I’m having other thoughts. Not a lot, but a little. A lot of analysts and experts are slamming Starbucks for both choices saying it reeks of desperation and blah, blah, blah. Look, if people like their Starbucks they like their Starbucks and this may get people back in there. It might not but I lean toward it be successful rather than not.
GE – GENERAL ELECTRIC
General Electric has fallen on hard times. But really only because of one thing: it’s credit part. If it wasn’t for that, it’d still be kicking butt. However, it’s had tons of issues and the shares have fallen to $10.81. But we’re talking about General Electric here. Do you really think they’re going to go bankrupt anytime soon? Doubt it. Besides, with all of this renewable energy stuff coming to the forefront with Obama at the helm, General Electric figures to be a huge beneficiary, especially if a smart grid is implemented. Watch for news on that.
In closing, this gets me back to Fat Albert and the Cosby Kids. They were poor, they knew they were poor, but they were the happiest kids on the planet. There was always a lesson to be learned and Fat Albert was filled with morals and integrity. No matter what though, they were happy, in good times and bad. And that’s what we have to try to be right now. Things shall get better. And until then, you just have to remember what Bobby McFerrin once sang in “Don’t Worry, Be Happy”:
“In every life we have some trouble
When you worry you make it double
Don’t worry, be happy”
