08/23/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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https://archives.warpradio.com/btr/InvestorsEdge/082318.mp3

JUST LETTING YOU KNOW

I’m not making this up.

Yesterday I was upset because based on Fed statements, supposedly everybody was in agreement that the Fed was going to print money again to hopefully lower interest rates in order to better the economy. The other thing that it has done is lift the markets. That’s all its done. Now you can say that’s good. But I worry about the longer term of the markets. How are they could roll all of this money back?

We woke up today and you have another Fed head and rolls back yesterday. A guy named Bullard says the opposite – that the minutes were stale and the economy has gotten better and we’re not sure we need to do anything.

So in just two days, we had people that are creating trillions of dollars out of thin air saying the opposite things and we’re supposed invest our dollars?

Bullard said the Fed has seen more encouraging data since the Fed meeting. He said the Fed is being intentionally vague on timing on possible stimulus. He said that if 2% growth resumes wit lower unemployment, likely the Fed will stay on hold. Not clear of the action is needed right now. The latest FOMC minutes are a bit stale.  And he’s the late-2013 camp for raising rates.

Now, what do you think the market’s going to do when you have these people that control the levers, even though, frankly, I wouldn’t let them drive my car or run my kids lemonade stand. But what do you think happens with all this uncertainty?

Oh yeah. The market dumps today. There was no big reason except – it’s called vertigo. Market vertigo.

And we get to deal with it.

Backing away from that…just a crummy day today.

Hewlett Packard (HPQ)

We saw Dell (DELL) get absolutely imploded. And today, Hewlett Packard did the same on their woeful numbers. Again, as investors, it is vital that we stay in tune with things right in front of us that we can see…and that is the PC business. No longer is it “a high priced, make money off of business type of thing.” It is a commodity, where prices keep coming every lower and, to boot, sales of them, are doing ever lower– as other instruments have come out to usurp the industry. Now mind you, there’s still a ton of them sold. But in the world of the stock market which pays up for growth, it pays down for decelerating growth. And that’s what you’re getting in these companies.

So I would continue to stay away from them. HPQ was whacked today 1.56 to 17.60 on $72 million shares…almost 4x average volume. And that ain’t Aunt Mary and Uncle Bob selling.

Sometimes you can see it. You know when I go to a Best Buy (BBY) and you see that the parking lot is 50% of what it was a year ago, it tells you something. Peter Lynch was right aboit some things. He once said, “See it, hear it, feet it, touch it, taste it…it works in the market. Not 100% of the time. But a good amount. 

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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.