The market will continue to move sideways based on the numbers and guidance given this week BECAUSE:
By Daniel at 13 July, 2009, 8:48 am
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
1) FIRMS will say nothing or say that the outlook looks better than the recent past. It would be a SELF-FULFILLING PROPHESY if companies with weak Q2 results give negative guidance for Q3. A literal death wish for any firm saying that they won’t improve their numbers even though the economy is beginning to level out and the stimulus is still gaining momentum.
2) The banks will report good numbers because they talk to Geithner EVERY DAY about how they are doing. He is protecting the $1 trillion we have given to banks and financial institutions and for his own sake, must know how the banks are faring. If they were in trouble, we would know about it already because nobody likes surprises.
3) Q2 earnings will be presented as improving month-to-month versus the less favorable Y-O-Y. You will be sold on how things are improving and to forget about t he Y-O-Y because it is not valid in this recession.
The market will meander until Q3 reports. In the mean time, get dividends while you wait for the market to move. Take advantage of this by getting into a strong position in some of the things that we CANNOT DO WITHOUT like:
OIL – BP (Yield = 7.43%), RDSB (Yield = 7.11%), etc.
UTILITIES - ATT (Yield = 7 %), VZ (Yield = 6.4%), VOD (Yield = 6.2%), NGG (Yield = 5.9%), CHL, etc.
FOOD - ADM (Yield = 2.1%), MOO (Total Return = 23.7%)
BANKS - NYB (Yield = 9.3%)
e.g. “Philips profit drops 94%”.
That is ok. Just tell me if it is ‘BETTER THAN EXPECTED’ or not!
Tom
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
No comments yet.