05/23/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/052318.mp3

JUST LETTING YOU KNOW

Greed

Facebook was up a dollar today at 32 bucks. The IPO was 38. Some people owned the stock at 45 and I’m hearing that some people don’t even have their confirmations.

There was another shareholder lawsuit against Facebook and lead underwriter Morgan Stanley. There will be a lot more. A lot of people are P.O.’d. And I keep hearing blame this, blame that. But if the stock was up nobody would be whining right now.

Facebook said the lawsuit is without merit and they didn’t do anything wrong. The lawsuit is about…supposedly analysts had a weakened growth forecast and they concealed it.

I got news for you. I could be a witness in this case. They didn’t conceal it. It was out in the public. On my radio show, I told you that an analyst came out and lowered their growth forecast before Facebook came public. It was out in the public domain. These are ambulance chasing lawyers trying to make some bucks.

Now, the question is: Did they give the info to people first or second or third, things like that. To me this is just a case of greed, of the CFO as well as the underwriters, getting together and raising the offering, I think by 25% both in shares and price – and they screwed up.

Greed.

Let me tell you who I feel bad for. I feel terrible for brokers on Wall Street who were selling this to their clients, because I’m sure they were told this was going to be strong deal. And a defended deal. And a hot deal. I’m sure they told clients.

I’m finding out that a broker or somebody put in for 10,000 shares and they expected to only get 3,000. So they were told to order as many shares as they could. Well, they got as much as they could. That’s not good news.

Within initial public offerings, you can never get enough of the great ones, and you can always get too much of the crappy ones. Everybody got more than they expected.

Good Day Today, No Complaints

I received a lot of emails today.

Q: Gary, you said $15 on Facebook. And it’s up today in a down market. You’re going to be wrong.

A: I emailed him back and I said, “Dude, it’s just one day. Number 2, I never said Facebook’s going to 15. I said if I had put a value on Facebook, I’d say 15. I have no idea where the stocks going to go. I told you I had no idea how the IPO would open.

Q: Man, the market was down big today and finished up. And there was strength in growth. Is that the bottom?

A: I don’t know. The market was definitively defended today, that’s it. And defended pretty well. In order for the market to go higher, we need to see a Follow-Through Day (FTD) starting tomorrow. And if we can get one, we can starting talking. If we don’t, there’s not much to do.

All this talk just on the basis of one day.

Careful kids.

Strict rules and discipline will win the day.

Otherwise you’re going to be in trouble.

Just take you time. Relax.

I’m worried already about the anxiousness. I don’t want to see people anxious. I don’t want to see the masses anxious. That is bearish.

But overall, let me say – good day today. No complaints. 

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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.

05/22/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/052218.mp3

JUST LETTING YOU KNOW

If I Had to Give an Answer…I’d Say $15 Bucks

I want to discuss Facebook again today.

Facebook (FB) finished down another $3 dollars to 31.

As I’m doing my radio show today, it’s down in the aftermarket as…

 …the State of Massachusetts regulators are investigating Morgan Stanley and the Facebook deal.

….a class action lawsuit unfolds against the Nasdaq for mishandling the IPO, or at least they’re  looking for class action status.

…And there will be more.

Expect every state regulator to get involved and look into whatever’s going on.

Ladies and gentleman, I don’t anybody committed any criminal acts. I think greed was the culprit here. I don’t know if you can indict greed, but greed was the culprit.

The investment bankers decided to put their fees in front of the investing public and in turn…oh they’ll be getting their fees. You know how they’ll be getting their fees?  Oh…I’m sorry, the attorneys will be getting their fees.  

I think everything in this story encapsulates and encompasses everything that I have tried to teach you…about you and your money…during my tenure on my radio show.

  • Do your homework.
  • Because when noise is loudest, the risk is highest.

I have to tell you, leading up this IPO, I watched what was happening on television. It was nauseating to watch. You would have thought that this deal was opening at 60…70…80…or…90.  You would have though this is the “2nd Coming” and all it is — is a website where people get together and say “hi” and all that stuff. And yes, they have $3 and change billion in revenue and they make a billion dollars.

But there’s a price for that…and it’s not $100 billion. Who came up with that $100 billion number? Morgan Stanley. And the other bankers? They’re at fault in a big way. But this is not the first time. They were doing it through the late 1990s like crazy. They would bring companies public that had no sales with billion dollar market caps and you people bought them. And they open up at $2 billion market caps and they went to $3 and $4 and $5 billion market caps before they went to zero.

Price and valuation matters.

Not to Morgan Stanley, though. They jumped over dollars to get dimes and that’s what they’re going to end up with.

I had no idea what the stock would open up at. Because that’s a random number. I knew what they were bringing it at. But I knew when they could only open it up in the low 40s that there was trouble.

And they bit of more than they could chew by a large margin.

And who’s paying?

You guys.

I can’t absolve those of you who bought.

You didn’t do your homework. Because with the loud noise, you had to be in. Couldn’t miss it. This was it.

Well it WAS it.

It was a gimme, because as I told you on my show, the valuation was outrageous. Over the top. Insane. Stupid. Silly. Moronic. And it showed the greed of some on Wall Street.

But I don’t care about them.

I care about you.

You have to learn these lessons.

They won’t. You can.

You’re hard earned capital is very important. Don’t make it easy for them to take it away.

My expectations? Lower. Lawsuits. A lot of problems going forward.

The politicians are going to get involved and that’s not good news.

I was asked many times today, what I do I think a good valuation is? I don’t know. But if somebody put my back to the wall and I had to give one answer, I’d say $15 bucks. I’m not saying it’s going there. But that would be my guess. And maybe even through, it’s got a high valuation.

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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.

05/21/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/052118.mp3

JUST LETTING YOU KNOW

FADEbook

The stock closed down today 4.20 to 34.03. This was a 38 dollar IPO. Now, as you know before this very noisy and overhyped IPO came out, I simply said  the opposite of what everybody else was telling you. And believe me, I know what the brokers were saying. I knew what I a lot of people were saying.

I simply told you: “Pick your poison. Know what you’re getting into. Understand that valuation ultimately counts and that I had no idea what they would open this up at. But you know what I thought of valuations. And that fact of the matter is, if I was bringing this company public, I would have brought it out at 25% to 50% lower than the price they brought it out at, as well as shares put out there to the public.

It has turned into a fiasco. Not really in price. From IPO 38 to 34, it’s down about 12%.

But it’s the people who, at the open paid 42 to 45. For me it’s the same issue continued.

Take a moment to read this article on Facebook that I put out today.

Sometimes I say things that some people get offended by. But the fact of the matter is that there is a certain area of Wall Street that just plain old sucks. They put fees ahead of the investing public and in this case, that’s exactly what they did. There’s no doubt in my mind that they were trying to create another bubble in which they hoped this one was going to pop so that they could bring other things public that don’t even have the fundamentals that Facebook has.

And we saw it in the late 90s.

Do you realize that in the late 90s, because you enabled them, they brought out companies public like Webvan? They delivered food locally. And they called it an Internet company because you ordered you food over the Internet.

You may remember they brought a company public called Buy.com. You know what they did? You buy stuff from them on web, like Amazon. But their motto was to lose money on purpose and then make it on advertising. Now that’s one heck of a business model.

I could continue. But you pretty much get my point. And I believe my job, first and foremost, is to protect you from the ills of what goes on around you.

Day 1 of an Attempted Rally

It was a strong up day pricewise in the market and it was long overdue. I have been telling you it was overdue. It could have happened anytime recently. It just decided to happen today.

Coming into this week, the markets have been stretched and extended and it was oversold to the downside. I told you that last week. I told you last week that, any day we could get a bounce and it could be a big bounce. The fact is you don’t know where you’re going to get one. You just know that eventually you will.

What does this mean? Simple. It’s Day 1 of an attempted rally and now we’re looking for a Follow-Through Day (FTD) starting with Thursday. That would be the fourth day off of today. We’ll look for a high volume day and a big day off the Nasdaq or S&P that potentially turns the market. Just because you get a FTD does not mean it’s doing to work. Every bull phase the market has had started with one. Not every FTD led to a bull phase.

Do I have any type of educated guess? Not really. But, if I had the market to do my bidding, I’d like to see some backing and filling here and then a FTD.

We’ll see.

There really is a clear loss of Leadership. So many stocks and sectors have broken down. I think we’re going to need some repairing, which is usually comes in the form of time and price, before we can potentially move up in earnest.

Just remember, we’re heading into a holiday weekend and into the end of the month on massive oversold conditions both on price and in sentiment.

And while sentiment is a secondary indicator, some of the things I follow have gone down to massive extremes on a sentiment basis.

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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.

 

05/18/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/051818.mp3

JUST LETTING YOU KNOW

After the First 5 Minutes of the Facebook Open, I Started Tweeting the “Uh Oh” Moment

Just remember and don’t forget that somebody warned you about how Wall Street works and how you need to be careful.

For the past several weeks I have told you that I had absolutely no clue about what happens when Facebook opens. There was only one thing that I did know: That the valuation they were bringing out at was an absolutely joke. It is based on greed and fees and the complete ignoring of the investment community.

Facebook came public today. It was a 38 dollar deal. They opened it at 42.5. It went down to 38. Rallied back up to 40.5. With about 5 or 6 minutes to go, it was at 38. And they were selling the 38 dollar stock off. And then somehow somebody bought 10 million shares at one time to get it at the close to 38.28.

Now, I must tell you that this is not surprising. Wall Street is a hype machine. And the hype machine went into overdrive recently. They overpromised and underdelivered again.

And why? Greed.

The more shares sold at IPO and the higher the price, the bigger the fees the investment banks get. Screw the investing public and the price that they have to pay. As I’ve told you on this show, I think the stock is probably worth 15 to 20 dollars on amount of shares they just brought public. Not 38.

A company should not be brought public with $100 billion market cap that does only does $3.5 billion in revenues…and doesn’t make a product. But yet, that’s what they did. And everybody that bought stock today lost money and the people who were told by the brokers to buy were also told they were going to make some big cheese today. If you didn’t sell early, you haven’t made a dime.

But you know who has made money? All the insiders. All the investment bankers. All the private equity companies that funded them. And I’m sure a lot of them were selling today, because here’s what happens now:

All the people that expected a monstrous pop are now realizing “uggggh” and if that 38 dollar price is taken out on the downside, you going to see some serious selling and you’re going to see it in the low 30s…from the beginning. And then we’ll see what happens afterwards.

You know who owns the IPOs? A lot of retail investors that were sold but also a lot big people like the hedge funds and the like. And they’re not going to sit on this.

So the bottom line is: I’m not surprised. As you know I don’t watch financial TV but I turned it on today. Their face was going ashen as it was hitting back at 38 bucks. And all the people came on to talk about how surprised they were this.

Price counts. Valuation counts. And the market spoke today. But it spoke in other ways too.

You see, there have been companies that trade on the market that were able buy stock in the initial market before Facebook went public. I was look at this FirstHand Tech Value Fund (SVVC) because the psychos ran it up from 14 to 46 based on Facebook. The stock was now 7.5 to 19.24. It hit 46 just about 5 or 6 weeks ago.

I often talk about “picking your poison.” Pick your poison carefully. The investment bankers did you wrong again. They’ve done it so many times. In 1999, they brought companies public that didn’t have a dime in sales. And they brought them public because YOU THE PUBLIC bought it at any price…because you thought it would never end. Well life doesn’t work out that way because if you don’t have a business model and you have not sales and you have a $3 billion market cap, there’s a lot of money to be lost. And all those stocks went to zero.

So some of these things like SVVC are heading back into the real world.

Also, what we’re seeing now, because the “end all be all” Facebook didn’t do what everybody thought it would…is that stocks like Yelp (YELP), which also was brought out at a ridiculous valuation, with $90 in revenues and loses good money and (even at the close today it had a $1.1 billion market cap) was down 2.63 to 18.64.

Zynga…I warned you. The stock was down 1.11 to 7.16 today and is down 29% from its IPO. And it still has a $5.2 billion market cap as of today.

And I mention a few others, but it doesn’t really matter. I think you get the hint.

You can’t fit a10 pound salami in a 5 pound bag ladies and gentlemen and that’s what they tried to do. And I’m not surprised. I had no idea how it would open, but I saw the first 5 minutes and started Tweeting the “uh oh” moment. 

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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.

 

 

 

05/17/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/051718.mp3

JUST LETTING YOU KNOW

Bloodbathian

Today was a big market day.

While was somewhat “bloodbathian,” it did not start today.

For weeks and weeks and weeks, we have been telling you about a worsening internal condition of the market. We walked you through the commodities and told you to stay as far away as possible from them. Then, we saw the Semiconductors and we told you to walk away from them. And then we brought in the financials and told you get away from them. And then we told you the tactics that should be used…that any stock breaking the 50-day/10-week moving average – bye bye!

We told you about the European markets, acting like the South end of a North bound mule.

We told you about the Asian markets. We also told you that we have no idea how long a bearish phase lasts or how far it goes, just that we know we’re in a bearish phase. And we’ll let it play itself out.

Well, all the evidence is in. The market is getting worse and worse. Fewer and fewer stocks are working. More and more stocks are breaking down.

This leads us to today, which, as I stated was “bloodbathian.” I know that’s not a real word. But I figured, what the heck.

And we told you the reasons. But we also have told you the reasons have been out there for months and months and months. That it’s how the market reacts to these reasons that matters most and for a while, the market couldn’t care less.

Well, the market cares now.

So first off, here are the reasons:

  • We have $16 trillion in debt and a president that does not give a crap about it. And he is not even pretending to care about his $1.3 trillion a year in deficits as far as the eyes can see. He’s not talking about. He does not care about it.
  • On top of that, all he talks about is how he’s got to tax more people. We need more money in government, even though the government is the most inefficient corrupt blob we have ever seen in our history.
  • Europe…socialist countries that have run out of workers to pay for the people that are no longer producing…and the promises to those people that are no longer producing till death. And the fact that all these countries bought the debt of those other countries making them intertwined with those countries and having to take care of those countries. And this is after when they decided to adopt the Euro, they had promised they would not prop up a country.
  • Then we have our employment problem here in the U.S. 8.1% is a blatant lie. The crooks in Washington have taken millions and millions of Americans out of the workforce to make that number look better. The fact of the matter is you just had the same amount of people in the workforce as it was in 2009, we’d somewhere near 11%.

But there is nothing like the debt and the people in power who couldn’t care less. And media watchdogs are lying on their backs with their paws in the air saying “scratch me” and give me a dog bone. Lapdogs…while they are sitting there letting the deficit swell every day.

Now why does the deficit matter?

Who pays those deficits? The economy. Now if the economy only produces $2.5 billion in revenues to the government every year, at $16 trillion, you add it up. That’s six years of taxes already spent! And it’s been done on purpose by Republicans and Democrats.

So now the market is reacting to all this stuff and in case you don’t know, initial claims for unemployment were higher than expected today. In case you don’t know, they came up with the economic indicators which much worse than expected.

And the market reacted to that.

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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.

 

 

 

05/16/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/051618.mp3

JUST LETTING YOU KNOW

Take a Vacation

Nothing has changed in the markets today. It’s been another day where the market was up nicely and then sold off badly.

I can go into the “who,” “why,” “where,” “when,” and “how”…but we care about the reaction to all of that.

There was news from the Fed today that three Fed Heads came out and said that maybe we’re going to need QE 3. The market got bid up for 5 minutes and then went right back down.

There was news out Europe. First, Greece is okay, then it’s not. Then we’re gonna do this and then we’re gonna to that and then no we’re not.

And the list goes on and on in the news that came out today. But the only thing that matters to me is how the market reacts to all that stuff.

And to be clear, the market is not acting well.

Again, the market had a chance to be up and be up well. Again the market was sold off. And I gotta tell you…VISCIOUSLY.

Early in the morning, all the worst areas were up nicely. By the close, they were all smacked to smithereens.

Early on, the Financials had a little bid. By the end of the day, the Financials were once again got smoked and smoked badly.

And there’s not much more I need to add.

  • The market remains in a corrective mode.
  • All buying has been knocked out with a bigger bout of selling.
  • Price is not holding up.
  • First support levels have been taken out.
  • Now some secondary support levels have been taken out.
  • Fewer and fewer stocks are working, which means that more and more stocks are breaking support and/or moving averages.
  • Which means…take a vacation.

We have no idea how long this lasts or how far it goes.

I just know that again, today, they were distributing stock in a very big way. And if there’s anything you have learned from this show, never argue with action in the market. Because you will get run over.

Never argue with the market. The market is a great forecaster of things to come.

Remember just recently, I think Apple was around 640 at the high. And a couple guys came out and slapped 1000 price targets on it. Yippee yay yay. It’s 545 at the close today.

Don’t ever dictate to the markets.

That’s all. 

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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.

 

 

 

05/15/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/051518.mp3

JUST LETTING YOU KNOW

A Very Crappy Day in the Market Today

As I have taught you, it is never good when the market is up nicely and then finishes down. We’re getting loads of that right now.

We believe in characteristics of bull and bear phases and the understanding of them. We look at them on a long-term basis, an intermediate-term basis, and a short-term basis.

We look at the daily action because we know that in bull phases, the market will tend to open down and finish up. In bear phases, they tend to open up and finish down.

How do we know this? The study of bull and bear phases. You just have to do a little bit of studying.

And the bottom line out of today is really nothing good came out of today.

I can tell you the news.

  • Greece? Ain’t nothing good going on there. There’s now rumblings that they will leave the European Union.
  • Spain? Their 10-year bond is now 6.25.
  • Italy? Their ratings have now been taken down another notch.
  • Why? Not because of the great people of these great nations. It’s because the people running government decided to spend them into oblivion and forgot that they only way they get an money is to get it from those same taxpayers. And when you let too many taxpayers retire at the age of 50 and get salary equal to 75% for the rest of their lives, you’re eventually in trouble.

And mind you, this has been done on purpose That’s what socialism is all about. Clear no accountability of the tax dollar. So that’s a bit of the story over there.

But over here, in the U.S…

  • Massive deficit and a president that couldn’t care less about them and a president that lied that they cared about them.
  • A major tax increase coming in January if nobody does anything about it. Go read about it.
  • A fake employment number at 8.1%. You know I think it’s really around 10%. Because they’re trying to tell you that things are improving, but all these people are leaving the workforce. You know that’s not how it works. In a better environment for jobs, more people enter the workforce. And the unemployment rate first goes up! So who are they trying to kid.

So that’s all the news.

But we’ve seen markets that accept “not so go news” and they go up…and that’s a bull phase. And we’ve also seen markets where the just keep going down and that would be a bear phase. That’s what we are in right now.

And the genesis of this bear phase is about:

  • More about more stocks breaking support
  • Fewer and fewer stocks working.
  • The Semiconductor Index rolling over badly
  • The Financials breaking down
  • The New High List contracting and the New Low List expanding.
  • All major indices breaking the all-important 50-day moving average on volume, which happened on May 4
  • The NYSE, believe it or not is sitting on its 200-day moving average which is quite amazing.

And that’s how you get into this position.

But that doesn’t change the story of today which mind you was God awful ugly.

Now here’s a few notes today on something I haven’t mentioned in a while…the Dollar and Euro.

The Dollar was soaring because the Euro was crashing. Go look at FXE which is ETF of the Euro. It almost closed at new yearly lows. Why? Nobody trusts the Euro. And keep in mind how this worked. 17 countries got together and agreed to have a common currency. The problem is that you have 17 countries thinking differently and acting differently. The had a treaty that said, “If you want to screw up and spend your way into oblivion and run massive deficits, nobody’s going to help you.”

Well they changed all that realizing that “we own their bonds” and we better do something about it. They talked austerity and they’d do something about spending government-wise. But they really have not…just like here.

So the markets in a little bit of a soup. If and when things change, I will gladly let you know. 

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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.

 

05/14/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/051418.mp3

JUST LETTING YOU KNOW

Heading into this week, we’re into a “no earnings” period. No one’s really reporting, except for a few retail names this week. But the big story right now is a softening the economy here and a softening economy in Europe and Asia.

And the question is: “What happened to the save of Europe?”

Well isn’t any save of Europe and now there’s talk of Greece getting out of the European Union. So, I don’t what to tell you except, “DEBT KILLS.”

And we have monstrous debt here and nobody’s doing anything about it and…this president doesn’t even pretend anymore. And that’s where we stand.

Markets remain in corrective mode. All I can you right now is that they’re coming to get’em all…or just about them all.

When you get into bearish phases they eventually get most names – not every name, but most names. And more and more names went into the negative side of the coin, on another very rough day in the markets.

Basically, Europe was weak and we were weak. We started off weak, rallied back a decent amount and sold back off. When oversold conditions get relieved in the middle of the day and then sell off again, usually it’s not good news for the market.

The good is (and this is about the only good news)…oil prices are plunging.

Hmm….I’m waiting to hear Obama blame the speculators for the oil prices now plunging.

Because he was blaming them for them going up.

Now, of course, Obama is going to take credit for oil prices going down.

Now let me be clear. There is a direct correlation between the market and oil prices. So when the market is going down, oil prices are going down and vice versa. The good news is that oil is down 10% for past several days, so we’re going to get knocked down at the pump. That is quasi tax cut for every American. And the airline stocks are now acting better because a huge portion of their expense is oil.

As you know, little by little, piece by piece, more and more names have been breaking support and/or moving averages, which means:

  • Fewer and fewer stocks are working
  • The ice is getting thinner
  • The market tends to come down when that happens

…and that’s exactly what we’re getting.

If you look at the major indices:

  • The Dow is sitting a little under support which is about 12,710 with a close at 12,695.
  • The S&P 500 which has support at 1340, closed at 1338.
  • The Russell 2000 which has support at 780, closed at 778.
  • The Nasdaq which closed at 2902, has support at 2900.
  • The Nasdaq-100 has support at around 2975, closed at 2590.

So…we’re on the cusp. You don’t want to see any further deterioration from here.

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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.

 

05/11/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/051118.mp3

JUST LETTING YOU KNOW

Let’s Hope We Don’t Have a Repeat of 2008

Thursday, after the close J.P. Morgan announced a $2 billion loss on “stuff.” I looked at what they were doing and how they were doing it – and let me be clear and concise. I don’t know what the heck they did. I don’t think Einstein knows what they did. But what do know is that the stock took a big hit. It was down almost 4 bucks to 37 dollars on 216 million shares today. Average daily volume is 30 million.

What does this mean? As you know, I was one of the ones that were out in front of the 2007-2008 debacle. Let me tell you my biggest issues. First and foremost – and I wish I was making this up – there’s anywhere from $500 to $750 trillion of what they call derivatives. Instead of going on a long dissertation on what derivatives are, let’s just say…it’s “stuff.” And a lot of it is leveraged and it’s backed by “that, that and the other thing.”

It’s just one big, gigantic merry go round.

Now what happened in 2008 is that a lot of these derivatives were based on one entity and that was housing. And, of course, housing prices crashed. And all those derivatives basically crashed.

Here’s what I think is the outcome of this:

  1. I think it’s good that it happened. You think I’m crazy right? No, it’s actually because it’s a wakeup call. Hopefully all these banking goliaths are in their boardrooms this week asking each other the question: “Do WE have any issues?”
  2. Hopefully, the people that are supposed to have oversight on this stuff say to themselves or to each other, “Let’s go over the offices of these goliath banks and let’s make sure.”

And that’s that. It was a bad bet. A lot of people are going nuts over it. J.P. Morgan has had a good reputation. It’s just tells you how much stuff is out there and that anything can happen.

Now the last part of this equation:

I better not hear that government gives another freaking dime to another one of these banking institutions if they lose money.

I am sick and tired of privatized gains and socialized losses.

You do realize that’s what happened, right?

These morons got a gigantic put with our dollars in 2008. It should have never happened. Government should have told them to take a flying leap, put a bunch of them in jail, and took away the key. But no. Some of the same people ran the show back then are still running the show right now.

It makes me ill.

Now I am a big fan of Jamie Dimon. I have no idea what happened here, who’s at fault – whatever. But we’ll find out more. I’m glad that something like this gets out the open…that risk is still out there. And it can hit at any time.

And let’s just hope that this nightmare of derivatives that the regulators have still not lassoed…let’s just hope that we don’t have a repeat of 2008.

So that’s the story.

As far as the financials are concerned, of course J.P. Morgan had some influence on them. Goldman Sachs got hit a lot – Citigroup also — but I really didn’t see a lot of damage out there. 

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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.

 

05/09/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/050918.mp3

JUST LETTING YOU KNOW

“…I will not treat your tax dollars like Monopoly Money…”

Everybody who has been in Washington for the past 12 years – Republican or Democrat is an unmitigated failure, as a steward of our taxpayer dollars.

I know that France is going the other way. I’m going to do my darndest to make sure that we don’t go that way. Everybody keeps wondering how come the economy isn’t better. I gotta tell you, politicians are taking victory laps because we’re at 8.1% fraudulent unemployment. What? We were in the 5% range for years and years!

There is a direct correction between $16 trillion in debt – most of it accumulated since George Bush…and went into hyperdrive under THIS president – and this economy.

The people in Washington D.C. are castrating the future dollars of taxpayers and business and they all know it. Business people are smart. The only way government gets dollars is from them and individuals. And they know when the crooks in Washington spend $16 trillion that they don’t have, they know it’s coming out of who? Businesses and individuals. And if you haven’t noticed yet, there is a tax hike coming next year – the biggest one in history for $4 trillion coming out of the economy into Washington D.C. And they say they’ll cover the deficit, but they won’t. They’ll just keep spending it on stuff that is inefficient and makes no sense whatsoever.

I think we’re great. I think the American people are great. American people are smart. They work hard. They want to do the best that they can for themselves and their families.

The problem is THEM. Simple as that. They have shown a complete uncaring for you and me and our dollars. They have set rules for themselves that are different from ours. They live in a different land. Before recently, they were able to legally do illegal insider trading. And I could go on and on.

And unfortunately, we have a liar in the White House of the highest order and the lies are all there on video.

“I will not treat your taxpayer dollars like Monopoly Money. I will go line by line through the budget.”

They haven’t even put out a budget in three years!

He lied. He’s a charlatan. He represented himself as one thing and is another. He is a major league, over the top “tax and spend” socialist. A redistributor of wealth. And he has the wonderful people in the media enabling him. The media is supposed to be a watchdog. But no. And there’s just no talk about deficits by the media now.

This whole week has been on gay marriage. And, of course, Mr. Politician changed his stance today. Or “evolved.” Terrific. I’ll throw a party.

But I got news for you, in the pecking order – $16 trillion in debt and counting is Number One. But they don’t think it’s Number One because they’re economic advisors are a bunch of mutt hounds. They think it’s okay. Gimme more. And the reason they think it’s okay is because the markets haven’t collapsed. But even if that happens, they’ll just blame the other guy because that’s all they do. Naw, it wasn’t me. Just because I was in the White House for 3 plus years…no it’s Bush’s fault.

So get my point.  I want them all gone.

Find me 100 senators that care about balancing the budget.

Find me governors that care about balancing the budget of their states.

Find me 435 people in the House around the country representing their districts that “get it.”

Or I’m going to keep talking.

LISTEN TO GARY LIVE ON WEEKDAYS

6-7 pm EST

Best of Investor’s Edge
Saturdays 1-2 am EST

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.