Birchtree's Account Talk

[wv-girl]

Re: Birchtree's account talk

Birch,
In reference to the I fund and the currency factor, I heard on CNBC something about linking the Chinese currency with Japans currency since they were now even? I'm sorry I can't quote who it was. Have you heard this and if that ever were to happen, what kind of chaois would that cause?
Thanks

 

[mayday]

Re: Birchtree's account talk

Birch do'nt let it get you down some of the things you say just get under peoples skin touch a nerve set em off. You hav'nt got on my nerves yet so watch it mister I'm sensitive. Oh about chasing the market and falling through trap doors. You got my number. Hey if I bother you just ignore me.

 

[Birchtree]

Re: Birchtree's account talk

There are only a few things in this world that bother me at my age - and members of this message board don't qualify. However, I will say that if you address me you may run the risk of being stigmatized by the clique that bows to fatuity. Otherwise I'm busy trying to make a few dollars. Yes, I am bullish and have been that way since the triple bottom back in '02 - and I have no good reason to change for the moment. That time will eventually come but for now is off in the distant future.

In relation to the Chinese currency I do know that it has appreciated about 7% in the last year against the dollar. Some Chinese companies are starting to feel some profit margin pressure. There are many in the euro zone that are unhappy with the strength of the euro and with the possibility of increased interest rates. Some of the big money boys are repatriating their dollars back to this country - not seeing as much opportunity overseas. I think the I fund will not be an outlier like it was last year and that the C fund will outperform all funds. Now some individual is going to come along and remind everyone that they have heard this song already - who cares what they think. I'm tendentious and doing my DCA into the C fund and I'm happy as a frog on the lilly pad. We all put our money where our mouths are and time will tell who is most correct. Snort.

 

[wv-girl]

Re: Birchtree's account talk

In relation to the Chinese currency I do know that it has appreciated about 7% in the last year against the dollar. Some Chinese companies are starting to feel some profit margin pressure. There are many in the euro zone that are unhappy with the strength of the euro and with the possibility of increased interest rates. Some of the big money boys are repatriating their dollars back to this country - not seeing as much opportunity overseas. I think the I fund will not be an outlier like it was last year and that the C fund will outperform all funds. Now some fatuous individual is going to come along and remind everyone that they have heard this song already - who cares what they think. I'm tendentious and doing my DCA into the C fund and I'm happy as a frog on the lilly pad. We all put our money where our mouths are and time will tell who is most correct. Snort.

I certaintly hope no one chastises you for answering a question when asked. I am all for making money and however one choses to do so it up to them. You (among others) have provided much more information than just being bull or bear or timer. And I appreciate the time it takes to do this.

Thanks

 

[Birchtree]

Re: Birchtree's account talk

I'm getting the emotional feeling to cut and run - take the profits. But my good sense reminds me to let the profits run - be right and sit tight. I simply know there is much more to go on the upside. The epicenter 3 of 3 could arrive at any moment. Most MCOs are heading back or are above their zero lines and the MCSUMs are still high indicating further price momentum in the near future. Waiting either on 1995 or 1959 - either way it's golden.

 

[nnuut]

Re: Birchtree's account talk

I'm getting the emotional feeling to cut and run - take the profits. But my good sense reminds me to let the profits run - be right and sit tight. I simply know there is much more to go on the upside. The epicenter 3 of 3 could arrive at any moment. Most MCOs are heading back or are above their zero lines and the MCSUMs are still high indicating further price momentum in the near future. Waiting either on 1995 or 1959 - either way it's golden.

Looks that way Birchtree, we deserve a break, but remember we only need a fart out of Iran to mess it up! Watching the PPI next week, have to do my homework it might turn out GOOD, but I hope not too good, you know how the FED is!!

 

[Birchtree]

Re: Birchtree's account talk

There is a group of fighters in Iraq that voluntarily disarmed, perhaps numbering 4,000. They are called MEK (Mujahedin-e Khalq) dissident Iranian group. We listed them initially as a terrorist organization, but that is about to change. Our troops have been fighting Tehran's Iranian Revolutionary Guard Corp on Iraq soil. We are about to return the favors and let the MEK return to fight in Iran. The guard corp is believed to have developed close ties to both the Mahdi Army, a shiite militia and the Badr Brigade, the militant arm of Iraq's largest Shiite political party, the Supreme Council for Islamic Revolution in Iraq. I think the market is giving our counterinsurgency plan a green light. Care to weigh in on this Dell?

 

[Birchtree]

Re: Birchtree's account talk

The question is: will Q4 be number 19 in a row for double digit earnings? The consensus seems to indicate an earnings average return of 9.7% - but I think we will continue to surprise on the upside. There's an old adage on Wall Street that says as goes Alcoa, so goes the market. The world's biggest aluminum maker, which reported its results this week said profits soared 60% from a year earlier, and it had a 20% jump in revenue that beat many analysts' expectation. I think a lot of their revenue came from exports. The quarter might turn out to be better than expected and the market should respond in a positive manner.

As of Thursday, 31 S&P 500 components reported earnings. There were 17 companies that beat expectations, six met them and eight that reported results below projections. That happens to match the historical averages. Of the 31 companies, those that have beaten expectations have done so by an average of 8 percent. This is still well above the norm of a 3 percent rise. Measuring the pace of profit warnings has also been a good way to judge how the quarter will turn out. The drop in energy prices along with other commodities prices has to be beneficial going forward. If I remember the prices paid in the ISM were also lower. Inflation has remained benign and the Fed will drop rates in May'07. If not, the bull will just hoof on to more highs.

 

[Show-me]

Re: Birchtree's account talk

The question is: will Q4 be number 19 in a row for double digit earnings? The consensus seems to indicate an earnings average return of 9.7% - but I think we will continue to surprise on the upside. There's an old adage on Wall Street that says as goes Alcoa, so goes the market. The world's biggest aluminum maker, which reported its results this week said profits soared 60% from a year earlier, and it had a 20% jump in revenue that beat many analysts' expectation. I think a lot of their revenue came from exports. The quarter might turn out to be better than expected and the market should respond in a positive manner.

As of Thursday, 31 S&P 500 components reported earnings. There were 17 companies that beat expectations, six met them and eight that reported results below projections. That happens to match the historical averages. Of the 31 companies, those that have beaten expectations have done so by an average of 8 percent. This is still well above the norm of a 3 percent rise. Measuring the pace of profit warnings has also been a good way to judge how the quarter will turn out. The drop in energy prices along with other commodities prices has to be beneficial going forward. If I remember the prices paid in the ISM were also lower. Inflation has remained benign and the Fed will drop rates in May'07. If not, the bull will just hoof on to more highs.

Birch,

Would you be referring to this article.

Updated:2007-01-12 16:12:18
Companies Might Eke Out Big 4Q Profits
By JOE BEL BRUNO
AP
NEW YORK (Jan. 12) - Advanced Micro Devices Inc. and several other major companies issued warnings this past week that fourth-quarter results will miss expectations. Wall Street barely noticed.

For weeks, analysts have said the long period of stellar earnings growth might be over for U.S. companies, that the 18 straight quarters of double-digit profit growth for Standard & Poor's 500 companies will be replaced by more modest results.


Two demerits. Please post links to material you are quoting. Legal issues among other.

 

[Birchtree]

Re: Birchtree's account talk

Your link had a lot more information - glad I read it. I was only relaying facts with no opinion - but I'll be more cognizant. Most of my information came from CNBC. Thanks for the demerits - I'll try to do better.

 

[Birchtree]

Re: Birchtree's account talk

There's another old adage on Wall Street from years ago that said as goes General Motors, so goes the country. That is no longer the case - but I'm sure if you google it you can find some one else who said it.

 

[Birchtree]

Re: Birchtree's account talk

As an investor it's always good to know the odds and consequences attached to infractions. This one really seems mild in comparison to that whole article - but nonetheless. Currently I have 220 reputation points and 1 infractions point. Can someone tell me how many infractions I'm allowed before I'm relegated as a footnote to history - just curious.

 

[Birchtree]

Re: Birchtree's account talk

From TWSJ titled: The Boom Generation by Michael Milken dated 9/19/06

Baby boomer asset liquidation isn't really a financial market issiue because (1) there's plenty of liquidity in the global economy; (2) as the rest of the world becomes wealthier, people outside the U.S. will own a greater percentage of global assets and they'll want to keep a share of their net worth in America; (3) liquidity will grow in both developed and developing nations as they adopt recent American financial innovations and market structures; (4) as baby boomers live longer and healthier, their new mantra will become "Who wants to retire?" and (5) most assets won't need to be sold. I will examine each of these points. But Birchtree will only do 3 points.

1. Large parts of the developed world are awash in liquidity - Japan has more than $10 trillion - and we're also seeing a buildup in several countries with small populations. Norway, the UAE, Taiwan, Singapore and others each have hundreds of billions of dollars available for investment beyond the immediate needs of their citizens - in some cases, as much as $50,000 per person. To put that in perspective, Hewitt Associates reports that the median amount in a U.S. 401(K) plan is just $27,100.

3. In the U.S., the value of home mortgages equals 95% of the nation's gross domestic product. The ratio is considerably lower in other countries: mortgages in Germany total about 69% of GDP; in Japan, it's 36%; and in Russia, less than 1%. A worldwide securitized mortgage market alone could free up some $20 trillion for productive investment by unlocking the unused capital in residential real estate.

4. More baby boomers are asking themselves, Why retire? Ti's a cliche to say that 60 is the new 40, but it has some biological and psychological validity. Advanced biomedical research is leading to continued progress against cancer, heart disease, arthritis, dementia and other conditions that forced people out of the workforce before they wanted to quit. In the future, aging workers will be healthier and will use broadband technology to live and work from anywhere at the increasing proportion of jobs that involve knowledge rather than physical labor. They'll spend more years earning income, often in multiple careers, instead of selling assets.

Fewer people will retire in their 60s simply because they know that average life expectancy at birth is increasing at an astounding rate. Americans, who could expect to live an average of 47 years in 1900, now enjoy life spans approaching 80 years. (It already exceeds 80 for women.) An American who makes it to age 65 can look forrward to living almost two decades more. Worldwide, the increase has been even more dramatic. In a single century - despite wars, AIDS and other scourges - the global average more than doubled to 66 years. Nobel laureate Robert Fogel believes it will exceed 100 yeras within this century. More than just the length of life, the number of healthy years will also increase. When people are vibrant into their 80s and 90s, 65 will evolve from the traditional retirement age to a mid-career milestone for those who choose to keep working. Who wants to retire when you have fulfilling work, when you earn a good income, and when you feel great? According to a Yahoo poll, 70% of people over 55 say it's never too late to start a new business.

 

[Birchtree]

Re: Birchtree's account talk

5. Many baby-boomers assets won't be liquidated. The Federal Reserve reports that the wealthiest 5% of American households own about 60% of the nation's assets. Ninety percent of all stock is owned by 10% of investors. Debate continues about how this concentration of wealth affects our society, but what seems irrefutable is that the owners of most wealth will have no urgent need to raise cash. A retiree with a $10 million net worth doesn't sell stocks to buy groceries or pay the mortgage. He can easily live on dividends and interest while preserving assets for his grandchildren or favorite charity. And if wealthy retirees don't sell their assets, they won't put pressure on valuations.

If the top 5% of wealth holders won't be liquidating their 60% of U.S. assets, what about the remaining 40% of assets owned by 95% of the population? For most baby boomers, the biggest chunk of their net worth is the equity in their house. Many of these houses will be transferred to the next generation through inheritance. For those properties that will be sold, their future prices will be greatly influenced by policy decisions affecting social capital - things like good schools, clean air, cultural attractions, reasonable regulations and safe streets. A community that ignores the quality of its schools will eventually see that neglect reflected in its real estate market.

When I went to Wall Street in 1969, the major providers of investment capital had adopted regression analysis and concluded that the future would be much like the past. So they financed yesterday's industries. Today's predictions of a coming asset liquidation problem seem to make the same mistake of projecting the past into the future. There's one thing I can predict about the future with complete confidence: it won't be anything like the past. It ne ver is. But as long as we maintain asset values by enhancing human and social capital, I believe the future of the baby boomers - and their nest eggs - is secure.

 

[Birchtree]

Re: Birchtree's account talk

From TWSJ titled: Shares Bought in the Dark by Aaron Lucchetti dated 1/9/07

In the past few years, large brokerage firms, trading boutiques and even stock exchanges have launched or announced plans to start almost 40 trading networks known as "dark pools," named because they attempt to put buyers and sellers together anonymously without exposing their clients' orders first to the public, as happens on traditional stock markets like the New York Stock E#xchange and Nasdaq Stoick Market.

The pools have proliferated as big institutional investors respond to the boom in electronic trading and seek out alternatives to middlemen like floor traders. Critics of dark pools say the rapid growth could lead to less competitive trading prices for small investors who buy and sell the old-fashioned way - on open markets such as the Big Board and Nasdaq. Brokers are generally required to offer their clients the best available published price, something that will become harder to define if dark pools grow further, because shares are bought and sold in the dark, and the price is only posted after the trade has been completed.

Investors with big positions tend to favor dark pools because they don't have to expose their trading intentions to all market participants. Floor trading is more transparent, but players can still mask their strategies. For instance, a floor broker may break up an order and sell it in pieces, keeping the magnitude of the trade hidden from the markey.

In most darl-pool trades, the prices are usually slightly better than what is available in the general market. Dark pools typically charge higher fees than exchanges, but the customer often ends up saving money when the better price is factored in.

 

[Birchtree]

Re: Birchtree's account talk

The NYSE daily ratio adjusted (RA) cumulative A/D line is nearing its all-time high resistance posted in March 1959. One of the important long term ramifications of the NYSE RA-AD line potentially exceeding its all-time high, and that is the RA-AD line's utility when conducting Elliott Wave counts. A break of the all-time high in the RA-AD line will be an Elliott Wave Primary degree and the center point of Primary wave 3 of Cycle wave 3. In 3/13/1959 the RA-AD line record was 166,190. The NYSE daily cumulative ratio adjusted AD line is now within 1400 net raw advances of setting a new all-time high, breaking the 1959 record. Significant price tops (followed by declines exceeding 10%) do not coincide with NYSE AD line new highs. On 1/12/07 the NYSE cumulative AD line at 172608.00 achieved another multi-decade high. Also last week the DJTA was up 3.2%, NDX was up 3.3% and brokers were up 5.9%, truly a bull with strength.

On Wed we have the PPI and on Thur the CPI released. The risk is a that a big inflation number will force the market to correct down - I'm on the other side of that argument - looking for a continued surprise in an easing of inflation.

Two very important factors that make up a 3 of 3 structure - the first is that you will see the greatest plurality of volume and breadth A/D line data leading up to the center point. Currently both the NYSE volume and breath are moving in tandem with each other - this is a very positive situation for those of us that are bullish - the bulls are in control. The second thing is 3rd waves are 3rd waves because the majority recognizes the prevailing trend of the price pattern. We've been impulsing higher which are vigorous moves in the direction of the trend with brief pauses of the pattern for consolidation. Those that are maintaining a surreptitious vendetta against the trend will be left behind so says Ferdinand. We will know when we enter the center point of this 3rd wave when the volatility indexes start to wake up. The bull is getting ready to double snort.

I'll discuss the Zweig volume thrusts we had back in June - July'06 in a few days.

 

[Birchtree]

Re: Birchtree's account talk

As a bullish reminder there has never been a major price top without the NYAD first providing divergence of some kind first. So as long as the NYAD continues to move higher and higher so will price and the longer it does the longer the advance will run. And also remember there is always a Primary wave 4. When will it arrive is the trickey dick question - some time in the decade of 2010-2020, then Primary wave 5 up after that. Wave 5 will have its own definition.

 

[Birchtree]

Re: Birchtree's account talk

From TWSJ titled: Surging Exports Brighten Trade Picture by Greg Hitt, 1/11/07

Trade has for years been a drag on U.S. growth, as weak economic growth abroad, strong consumption at home and a strong dollar held back the nation's exports and boosted imports. That trend has begun to shift in the past year, as world growth has stayed strong, U.S. consumers and businesses have pulled back a bit, and the dollar's weakness begins to alter the flow of trade by making U.S. exports cheaper abroad and imported goods more expensive for Americans. The U.S. deficit in trade in goods and services fell 1% in November to $58.23 billion, the third monthly decline and the lowest in more than a year.

David Greenlaw, an economist at Morgan Stanley, estimated the economy expanded at a 2.8% annual rate in the fourth quarter and that a narrower trade deficit contributed 1.5 percentage points of that. He expects trade to contribute to growth in 2007, which would be the first year that has happened since 1995. With each month of data, it's more and more suggestive that the tide has turned. Falling oil prices will lend a complimentary hand also. Energy shares are now trading a 9.8 times estimated 2006 earnings per share. Three years ago, the price to earnings ratio was 13.7.

I noticed where COP - ConocoPhillips is going to spend $1 billion buying back it's stock. Snort.

 

[Birchtree]

Re: Birchtree's account talk

Some folks have heard me mention on accasion that one of the important traits to owning stocks is the "step up" in basis that relates to heirs - well here is another example. Enjoy.

From The Gainesville Sun titled: Heir Forced to Deal with Portfolio by Malcolm Berko dated 1/15/07.

Q: My mom passed away and left my wife and me a portfolio of 19 stocks, three bonds, three mutual funds and six preferred stocks, all worth $305,000. She used the dividends from this portfolio, which last year were $11,800, to pay her real estate taxes, insurance and a few other things. She got all these stocks and bonds from her brother when he died in 1991, who got these stocks from his wife who predeceased him a couple years before.

Neither my wife nor I know anything about stocks. We're both teachers, and our experience with investing from our 403(b) plan does not give us confidence in stocks and bonds. So since we don't know anything about the stock market, we have decided to sell everything and put the money in safe certificates of deposit so we can't lose money.

Now my problem is that I cannot find any record of what these investments cost her. I know that every once in awhile she would get a call from her broker who would recommend something to her. So I called the brokerage firm, but they are no longer in business. The broker was my uncle's broker, too.....what do I do.

A: Do not despair. I'm sorry that performance of your 403(b) plan does not please you. Most 403(b)s have underperformed the market because the participants (you and your wife) select the wrong mutual funds and quite often the funds available in the plan pay morons and cretins to manage the portfolios. The performance of most 403(b)s is disappointing because so many of these plans use variable annuities with obscenely high annual fees charges that would make the Mafia green with envy.

Now, please spend a few bucks and counsel with a certified public accountant. While I'm 99.8 percent certain of the following answer, tax law is not my area of expertise. The current tax law tells us that your basis for the portfolio is either the price of all securities on the date of your mother's passing or the value of all the securities six months after her death. In almost all circumstances, it doesn't make a dash of difference what your mother originally paid for those shares. This is what your accountant will probably tell you.

Your accountant may also tell you that his system is called the "step up" basis. It's called "step up" basis simply because your basis on these securities is stepped up to its value on the date of your mother's death. Now you can do what you wish with that portfolio but I would suggest that you consider counseling with an investment adviser before liquidating those investments.

Your mother owned them for a long time and they seemed to have served her well over the years. It's quite possible that those investments might serve you as well, too. And I will tell you that a long term investment in dividend paying stocks, especially those that have a 15 to 20 year record of annually increasing dividends, will easily outperform a CD.

 

[Birchtree]

Re: Birchtree's account talk

The recent price action has found little in the way of sellers over the last couple of months. During this time frame the market internals have been able to purge the the overbought extremes and because of this cleansing action the next move up could be astounding to surprising. This action would fit the 3 of 3 structure, and then comes the new RA NYAD line new all-time high past 1959. So if we get an aggressive price advance from the current level this will have meaning for longer term price patterns. Dow now at 12,600 - I was off by a few weeks. An Elliott wave Primary degree is on the horizon.