06/19/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST
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https://archives.warpradio.com/btr/InvestorsEdge/061918.mp3
JUST LETTING YOU KNOW
I received a lot of emails over the past day or so. Many people have been asking about Facebook, as it has been rallying up. Last Wednesday or Thursday, I told you it got defended in that 26 to 28 area. It’s back to 31.85.
For me, I think the market’s doing better, but nothing changes the valuation on Facebook stock. But also told you on my radio show that, regardless of what I think of the value on a company, the stock is going to go wherever it wants to go regardless.
There have been moments in time back in 1999 where companies that didn’t even have any revenues were brought public. And I would laugh at the valuation and they’d double on the IPO and go three more times. That was the “bubble of all bubbles.”
So you never know where things are going to get to in the short run. The market every now and then is full of froth. The market just puts it into the stratosphere. You just never know.
And underneath the surface of this market, you’ve had a couple like that in the past year. There was a company called Broadvision which went from 7 up to 56. At 56, it had a $250 million market cap with $10 million in revenues and the company loses a lot of money. Of course, the stock is back down to 12. So you just don’t know.
But you understand my point. Facebook is being accumulated right now again and I think that has to do with the market, more than anything. But it’s going to have deal with its first earnings report as a public company and whether or not they’re going to do well off of it. And we’ll leave it at that.
The Market
I believed the market was getting into a little bit of trouble last Thursday. I always tell you that the market is going to do what it wants to do regardless. Then, at 3:05p, it was announced that Ben Bernanke and Central Banks around the globe were ready and the bazookas were out. That turned the market. We got a Follow-Through Day (FTD) on Friday. Strong day yesterday. Another good today. And that’s that.
Now the Fed will make some sort of announcement tomorrow and I’m posing the question to myself, hating the fact that I even have to do that:
What if the Fed does not announce more “Quantitative Easing?” i.e. the printing of money.
The Fed has telegraphed that they will at some point, even though some would say they didn’t. So the market has this real expectation of it. If don’t get it, what happens with the market?
So that’s something we’ll watch closely. I hate…I abhor…that we have to, on a monthly basis, sit around waiting for the decisions of the few.
And may I say, the few are dummies. But they have control of markets and trillions of dollars of fake money.
We’ll see what happens. I don’t have a clue about what they do. I don’t know how the market will react. I will just tell you that it remains a very news driven environment based on the nonsense out of these people.
So we’ll just have to deal with it.
That does not change the leadership in the market.
Flip Flop
Today, the worst of the areas of the market were the strongest areas today. The Euro had a very strong day, which means that the dollar had a weak day. When the dollar goes down, commodity area and commodity countries go up. When you have chance go look at the UUP (PowerShares Dollar Index) vs the market. You will see that as soon as the UUP topped out, the market started rallying.
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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.