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Goldata Financial
Investing with the accent on rísk
STOCK MARKET COMMENTARY
February 22,
2010
From Elliot
Goldberg, Registered Investment Advisor, Goldata
Financial
Last week, Mr. Market cheered the continued promise of a return to political
and fiscal sanity on display. President Obama continued his efforts at
self-preservation (See Bill Clinton, circa 1994) by moving toward the center
and vowing dollars for nukes (nuclear reactors, that is), a non-partisan
commission was appointed by him to suggest ways to cut the deficit and even
the Fed released notes that suggested they start shrinking their bloated
balance sheet and sell some assets (to whom?, they did go on to say that they
might not be done buying either.) Even Chris Christy, newly elected governor
of New Jersey, got into the act during a CNBC interview adamantly claiming
that salvation was not found by increasing spending but by controlling
spending. This was great stuff!!! In any event, the black clouds of debt and
deleveraging had no chance as buyers were found on each dip, including Friday
morning after the Fed raised its discount rate (the penalty rate for being
the lender of last resort) after the market closed the night before. It then took
great pains to squelch any notion that this action meant Fed tightening had
begun (rise in interest rates). These are great longer term trends but Greece
(PIIGS) and China have not disappeared (although their entries in the Winter
Olympics were sparse) and should continue to surprise from time to time. Jobless
claims reversed their downward trend and popped up and guidance from WalMart (WMT) and Hewlett-Packard (HPQ) were lukewarm at
best. Washington continued its “do as I say, not as I do” ways by
hiring Fritz Henderson, ex-CEO of GM (that’s right, the GM we paid for
and own), to be a consultant for 20 hours a month at a rate of $59,000 per
month (that’s over $2,800 per hour). It will be interesting to see if the
outrage over CEO pay extends to ex-CEOs. Conclusion: Short-term challenges
have not disappeared therefore I cannot sound the “all-clear.”
We’re still even-money for a 10+% correction and I’d like to
minimize the give back of our hard-earned profits should we head south. As a
result, strategy will remain the same --- sell the rips higher and keep
moving stops up. Longer-term, brighter days are ahead and we’ll have
plenty of time to ride the market higher as political and fiscal sanity
continue their march back from the abyss.
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