Friday, July 25, 2008

What a (Crazy!) Week!

Don't know if idea of rotation to financials is correct. Two weeks is not enough to see a trend. We'll see.

Cramer pimped Panera Bread and General Electric on Wednesday show. I did invest in Panera. And maybe I sold too fast last year. But I'm not going back. Restaurant business is no good right now, with exceptions of McDonalds and YUM. Those are places where people who are short on money are going, and that's why they are performing right now. General Electric... Last conglomerate standing. I will invest in it when it breaks up. Only Jack Welsh could handle that monster, and he's long retired. Conglomerates are so 20th century. Of course, more than 550 billion dollars in outstanding debt doesn't improve my opinion.

Great article by Daniel Gross on today (here). This is an answer to a question in my yesterday's blog. Yes, obviously AT&T and Verizon are losing landline subscribers, and they are losing them in the business world as well, maybe even faster (do you know that you can run a PBX on an obsolete Linux box with open source software? Just install Asterisk). But all that still doesn't explain precipitous drop this year. I think that Cramer is right, on valuation and dividend both AT&T and Verizon are good investment opportunities. And they have a lot of business apart from landlines. But the problem with market is that often perception trumps reality. And, obviously, current perception is that both companies are going to lose business. I don't know if it's a good long term opportunity either, it's impossible to make long term forecasts for telcos. Field is changing too fast. I think I'll stay away for now. I still don't know what to make of Comcast, it doesn't even have landlines.

Looking ahead. Let's have a great weekend and make some money next week!

Full disclosure: at the time of publication author had no positions in any stocks mentioned. Positions can change any time.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

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