Monday, October 11, 2004

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MARKET PERFORMANCE

Year to Date 2004




12/31/03 09/30/04 YTD 2004
Close Close Performance


DJIA 10,453.90 10,080.27 Down 3.57%

S&P 500 1,111.92 1,114.58 Up .24%

NASDAQ 2,003.37 1,896.84 Down 5.32%

Russell 2000 556.91 572.94 Up 2.88%


October 10th 2004

Hello,
Recently one of Wall Streets biggest technical analysts called for a prolonged bear market, kind of like jumping out of plane that already hit the ground. My view is still that short term impediments of global insecurity will eventually be over whelmed by good fundamentals and a growing economy. Years of technology investment are paying off with bigger and bigger increases productivity growth, enabling even the most technologically inept, to easily access quality of life enhancing technologies.

Does anyone think the coverage of the Mt St Helens volcano is a bit silly, are those camera men really going to sit there until it erupts? Unless it erupts soon I don’t think that is going to be a good career move. This market is like watching Mt St Helens .We all know something is going to happen it is simply a matter of when. Another words what will be the catalytic event that will get the market going in a positive direction in a big way?

We are entering the seasonally favorable time of the year, the middle of October till the ides of April. Usually the market makes some kind of a low by the 3rd week of October then on que uncertainty begins to lift and we are off to the races. The last several years the October to April sweet spot has been noticeable absent. The recent strength in the market coupled with an explosion to the upside of the transportation sector implies that the seasonally favorable time of the year may have resumed. The markets have continued to rally recently in the face of higher oil prices, terrorism, nuclear proliferation, beheadings, prison atrocities, debates, hurricanes, volcanoes and earthquakes. What has become noticeable is that counter cyclical stocks such as energy issues have often rallied along side of traditional growth stocks.

The “NET” is back. In the last couple of months many on the larger high quality internet stocks have not only show good profit growth but also some nice moves in their stocks prices. It seems the advertisers are back and much of the sticky pay for content is sticking and getting paid for. Personnel ads, traditional classified, travel, special news services, online shopping and job ads have begun to go mainstream. Advertisers are beginning to dig the “pay for click “format.

James

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