Weeding

A tougher market and economy tends to weed out the weak companies and stocks. Poor management and poor strategies can be hidden in strong markets in a strong economy, but when both struggle, the weak pay for their errors.

AA reported earnings yesterday, missing on EPS but beating on revenues. High prices for alumina and aluminum were offset by higher energy price, so management said. Anyone following that stock for a few years knows they serially miss earnings estimates. Management is just poor. Hence no surprise here that AA missed ... again.

AMD to cut 10% of its workforce. This weak and overleveraged company just can't compete with the much stronger INTC.

Greenspan [ aka "Elmer" ] says that house prices might stabilize this year. Gosh, does it take a genius to see that ? And he gets paid for that ? Anyone observing the speed with which buyers scooping up foreclosed properties in many areas can see that prices are clearing. Well, maybe Elmer reads this blog. That's ok, it's free to all. If he can scam that hedge fund to pay him for repeating what he reads here, fine. [joke]

My "opinion" is that the beefer shorts, who have taken short interest to new records again, will find some bad news in the early earnings reports to attack again. So wait for dips to buy good stocks for a long term hold. When the dust clears, they will find themselves greatly overextended and risking serial underperformance, hence beefer oblivion. So the ensuing rally will create a grinding move higher for many months.

This is just my outlook ... "real" facts can change it at anytime.

Words of the Day

"Parecious" - adjective [$100] Botanical
[this is an "aeiou" sequential vowel word - see yesterday's post]
Parecious is a variant of paroicous, meaning (of certain mosses) having the male and female reproductive organs beside or near each other.
Sentence: I really can't come up with a natural usage for "parecious", but in humor, I suppose that the Clintons haven't achieved a parecious joint physical state for decades, due to Bill's adultery or Hillary's ... uh ... that's enough fun.

"Parol" - adjective and noun [$10] a Law term pronounced pa rol' with a long "o" or par' el, first syllable as in the golf term - par.
Parol means (adjective) 1. given orally; 2. (of a document) not given under seal; (noun) an oral declaration.
Sentence: When questioned, Hillary prefers parol answers without oaths so she can lie without risk of perjury.

"Prevaricate" - verb, intransitive [$10] (I knew this one, but it fits for today)
Prevaricate means 1. to speak or act evasively or misleadingly; 2. quibble, equivocate.
Sentence: Both Clintons prevaricate with such skill that any parol response must be transcribed and then subject to exegesis to understand the meaning and possibilities of their statements.