I bought Sun at $3.60 a couple of weeks ago and it immediately dropped to $3.50 and then hit a monthly low of $3.29 on August 12th. Now it's back up at $3.70 and I sold my position last Friday for a quick 2.8% gain.
As long-time readers know, I'm not in this for the quick buck, usually. However, what I thought to be support at $3.75 has proven to be too high and I want to get in at a lower average price for the long haul back to $6, which I expect to see at the end of this year or beginning of next.
Therefore, I sold my position at $3.70, and have already placed a new limit order to buy again at $3.45. If it drops below that, I'll buy more to get my average buy price as low as possible.
I bought about half of my target position in Sun Microsystems last Friday at a price of $3.60. It closed at $3.51. I believe we'll see even cheaper prices during August. If so, I'll buy more.
In down times like these, it's easy to get scared away from stocks. The jobs report was awful, oil is expensive, terrorists are plotting a pre-election attack, and we don't know who the next president will be. These jitters happen periodically in the stock market and are the very reason we get good opportunities to buy at low prices. However, most people don't take advantage of the buying opportunity because of the attendant bad news.
In case that's you, I've collected a few items to give you hope that the market will rise again in the future. As an aside, on any given day in any given market environment, I can find articles for you saying that the market will rise and I can find articles saying that the market will fall. I can point to an expert saying that you should buy; I can point to one saying you should sell. You need to educate yourself to ignore the so-called experts and arrive at your own conclusions about what is a true risk to your money and what is a sensational headline. You need to know what price is cheap for a stock based on its trading history, its business performance, and recent developments. You need to know what matters to you.
Nonetheless, in case you're new to this or just overly focused on the storm clouds, below are some articles that see blue skies ahead and may give you the confidence you need to place your money on the line now, when prices are cheap. Don't wait until December to look back at summer and wish you'd done something.
Profits Are Strong
The Standard & Poor's 500-stock index is on track to post an earnings increase in excess of 27%, with 8 of the 10 sectors posting actual quarterly results that top earlier estimates. In addition, full-year 2004 estimated results have improved as well, with a 21% advance projected for the "500," a 24% gain for the S&P MidCap 400, and a 37% jump for the S&P SmallCap 600.
What's more, these stellar second-quarter performances weren't just the result of belt-tightening efforts. S&P estimates that sales for the period increased 11% for companies in the S&P 500.
But in the long run, maybe the best catalyst for an upward move in the market will simply be the passing of time, allowing many of the things investors are worried about -- terrorism concerns surrounding the Republican convention and the Olympics, combined with the results of the upcoming U.S. Presidential election -- to have come and gone. Maybe, just maybe, investors will be able to focus purely on fundamentals once again. Read the whole article...
Bull Speed Ahead
I don't see the economy going into a hole, and equity valuations are very cheap. After Thursday's slide back to the bottom of the range, the S&P 500 is about 27% undervalued, according to my model.
If you don't believe me, just think about a couple of facts. As of Thursday's close, the S&P 500 was 1% lower than where it was on Sept. 10, 2001 — the last night the World Trade Center towers still stood. Yet today, actual trailing 12-month earnings for the S&P 500 are 27% higher.
There's no two ways about it: Stocks are cheap. Could they get cheaper? Sure. But when values look like this, the smart bet is in the other direction. Read the whole article...
Expect A Rise In The Fall
We're still looking for a good year. We think that when we close the year, GDP growth is going to be near 6%. Part of that is because productivity is so good. The other part is that we think the job growth will be there to improve the hours worked, which will translate to about 2 1/2% GDP growth, and the other half, we think, will come from productivity.
I wouldn't say the market is going to come back strongly, but I do think we'll end the year where stocks will have generated positive returns, high single-digits, maybe 10%, and bonds will probably have generated flat to negative returns, because the Fed has just begun to raise interest rates, and that's going to continue. Read the whole article...
Folks, I told you way back in February that I was selling my stocks and waiting until summer lows to buy back again. Now that Jim Cramer says this is a time to be careful with your money (he's usually wrong), the employment data is much weaker than expected (people usually overreact), and stocks are already down (saw that coming six months ago), we're probably right at the lows.
The true lows often come in just a few moments on a down day. So get your limit orders in. As for me, I'm interested in Sun Microsystems at or below $3.60 and Maxtor at or below $4. We might just hit those prices soon.
If the gloom has you down, keep in mind that this site has a history of selling when people are cheerful and prices are high -- think last February -- and buying when people are depressed and prices are low -- think now.
I was a fan of Bush's, but the rush to war was when I stopped supporting him. Do you know that for about 8 months before the war started Bush NEVER MENTIONED the name Osama Bin Laden? There was a guy who actually did a study on it. Now, most people might not think this is that big of a deal, but my attitude was simply this:
If you've got the goods to go to war, then you would not need to resort to "semantics" in order to make your case. Here you have the leader behind the biggest terrorist attack in U.S. history, and you no longer mention his name...when virtually every speech is dedicated to promoting the war on terror!
Back in January, I watched a hero and a true patriot on CNN. His name is Greg Thielmann, former director of the Strategic, Proliferation and Military Affairs Office at the State Department's Intelligence Bureau. The truth just exudes from this man, and he communicates in a demeanor that I have never seen before. I can tell that he's just as outraged as I am, but he delivers it in such a flowing but understated fashion...never missing a beat, and never raising his voice or getting frustrated.
Thielmann, who left his job in September 2002, contends that much of the intelligence about Iraqi weapons of mass destruction was entirely politicized. "Senior officials made statements which I can only describe as dishonest," he says. "They were distorting some of the information that we provided to make it seem more alarmist and more dangerous." This interview was conducted on August 12, 2003. "There's plenty of blame to go around. The main problem was that the senior administration officials have what I call faith-based intelligence. They knew what they wanted the intelligence to show," says Thielmann.
"They were really blind and deaf to any kind of countervailing information the intelligence community would produce. I would assign some blame to the intelligence community, and most of the blame to the senior administration officials."
At the time of Powell's speech, Thielmann says that Iraq didn't pose an imminent threat to anyone: "I think it didn't even constitute an imminent threat to its neighbors at the time we went to war."
But Thielmann also says that he believes the decision to go to war was made first, and then the intelligence was interpreted to fit that conclusion. For example, he points to the evidence behind Powell's charge that Iraq was importing aluminum tubes to use in a program to build nuclear weapons.
Powell said: "Saddam Hussein is determined to get his hands on a nuclear bomb. He is so determined that he has made repeated covert attempts to acquire high-specification aluminum tubes from 11 different countries even after inspections resumed."
"This is one of the most disturbing parts of Secretary Powell's speech for us," says Thielmann.
Intelligence agents intercepted the tubes in 2001, and the CIA said they were parts for a centrifuge to enrich uranium -- fuel for an atom bomb. But Thielmann wasn't so sure. Experts at the Oak Ridge National Laboratory, the scientists who enriched uranium for American bombs, advised that the tubes were all wrong for a bomb program. At about the same time, Thielmann's office was working on another explanation. It turned out the tubes' dimensions perfectly matched an Iraqi conventional rocket.
"The aluminum was exactly, I think, what the Iraqis wanted for artillery," recalls Thielmann, who says he sent that word up to the Secretary of State months before.
Houston Wood was a consultant who worked on the Oak Ridge analysis of the tubes. He watched Powell's speech, too.
"I guess I was angry, that's the best way to describe my emotions. I was angry at that," says Wood, who is among the world's authorities on uranium enrichment by centrifuge. He found the tubes couldn't be what the CIA thought they were. They were too heavy, three times too thick and certain to leak.
Months later, Thielmann reported to Secretary Powell's office that they were confident the tubes were not for a nuclear program. Then, about a year later, when the administration was building a case for war, the tubes were resurrected on the front page of The New York Times.
"I thought when I read that there must be some other tubes that people were talking about. I just was flabbergasted that people were still pushing that those might be centrifuges," says Wood, who reached his conclusion back in 2001. "It didn't make any sense to me."
The New York Times reported that senior administration officials insisted the tubes were for an atom-bomb program.
"Science was not pushing this forward. Scientists had made their determination their evaluation and now we didn't know what was happening," says Wood.
In his U.N. speech, Secretary Powell acknowledged there was disagreement about the tubes, but he said most experts agreed with the nuclear theory.
"There is controversy about what these tubes are for. Most U.S. experts think they are intended to serve as rotors in centrifuges used to enrich uranium," said Powell.
"Most experts are located at Oak Ridge and that was not the position there," says Wood, who claims he doesn't know anyone in academia or foreign government who would disagree with his appraisal. "I don't know a single one anywhere."
As for Greg Thielmann, he told 60 Minutes II that he's a reluctant witness. His decision to speak developed over time, and he says the president's address worried him because he knew the African uranium story was false. He said he watched Secretary Powell's speech with disappointment because, up until then, he had seen Powell bringing what he called "reason" to the administration's inner circle.
Today, Thielmann believes the decision to go to war was made -- and the intelligence was interpreted to fit that conclusion.
"There's plenty of blame to go around. The main problem was that the senior administration officials have what I call faith-based intelligence. They knew what they wanted the intelligence to show," says Thielmann.
"They were really blind and deaf to any kind of countervailing information the intelligence community would produce. I would assign some blame to the intelligence community, and most of the blame to the senior administration officials."
The administration wants to spend several hundred million dollars more to continue the search for evidence.
After turning down repeated requests for an interview by 60 Minutes II, Colin Powell spoke to the BBC Wednesday afternoon about Thielmann's claim that he misinformed the nation during his February U.N. speech.
"That's nonsense. I don't think I used the word 'imminent' in my presentation on the 5th of February. I presented on the 5th of February not something I pulled out of the air. I presented the considered judgment of the intelligence community of the United States of America -- the coordinated judgment of the intelligence community of the United States of America," said Powell, according to a transcript of the interview released by the State Department.
"The investigation continues. There is an individual, I guess, who is going on a television show to say I misled the American people. I don't mislead the American people and I never would. I presented the best information that our intelligence community had to offer."
When the BBC interviewer pointed out that Thielmann was considered the leading expert for Iraqi weapons of mass destruction in his department, Powell replied: "I have many experts in my department, and there are many differences of opinion, among any group of experts. And it's quite easy for a television program to get this individual and then they complain. But to try to turn it around and say that 'Secretary Powell made this all up and presented it, knowing it was false,' is simply inaccurate."
Powell again refuted the charges in an Oct. 16 interview with National Public Radio.
"It wasn't hyped. It wasn't overblown," said Powell, in a transcript released by the State Department. "I would not do that to the American people, nor would I do that before the Security Council, as a representative of the American people and of the President of the United States."
I agree with you on the difficulty of establishing Democracy in Iraq. But does that mean we shouldn't even try? I must totally dismiss your argument about already having a democracy in the region with Israel. There is one slight difference...Israel is not a Muslim nation that supports terrorism. How can you say that Iraq was not a terrorist state? Saddam openly offered rewards for homicide bombers to terrorize Israel. Do you really believe that Saddam didn't have WMD or that he wouldn't hesitate for a second to get them into the hands of terrorists to use against America? But we had no reason to attack his non-terrorist state. It didn't matter that Saddam was violating how many UN resolutions for over 12 years, that he attacked our aircraft daily in the no-fly zones, that he invaded Kuwait, that he tortured and murdered thousands of Iraqis, that he tried to assassinate Bush Sr. Still, Iraq did nothing to deserve the war.
Sour grapes over not capturing bin Laden? I think the big difference between our convictions is that you view the whole war as payback or revenge against bin Laden for 9/11 and I view it as a broader war on terrorism in general. Bin laden is not the only terrorist out there, and I'm convinced that we will still get him eventually, but the war shouldn't stop there. This has been and will continue to be an attack on our society by a multitude of radical Islamic fascists and we need to kill them before they kill us...it's that simple.
The question always comes back to the best way to keep them from killing us. Yes, Saddam was a bad guy. It's increasingly clear, however, that he was not the bad guy behind the most dangerous threats to us. He was not even an imminent threat in the context of our current war on terror and, in fact, served as an impediment to the mullahs of Iran, a country that appears to be more of a threat to U.S. security than Iraq was.
What's more, our focus on Iraq has left Bin Laden at large. He may be just one among many of the "multitude of radical Islamic fascists" that we need to kill, but he has proven himself to be an especially effective organizer of said multitude. We need to get him and we need to get him soon. Even if we do get him soon, it will not remove the fact that we're three years into this war on terror with little understanding of our enemy because we were off attacking a country that was not the most pressing threat.
From the July 26, 2004 edition of Newsweek:
Grimly, what the new 9-11 report makes clear is that nearly three years into the war on terror, America is still not close to understanding the enemy. And Washington seems less able to force Tehran to change its ways, especially since Bush has removed one of the chief threats to the mullah regime, Saddam Hussein, and is now bogged down in Iraq. As one intel official said before the Iraq war: "The Iranians are tickled by our focus on Iraq."
All these issues have gained new urgency as Bush officials warn of further attacks. Despite recent portrayals of bin Laden as a man hunted and on the run, U.S. counterterrorism officials now say the threat today from Al Qaeda may be just as serious as in the summer of 2001. The warnings are based on unusually high-quality intelligence emanating from the Afghanistan-Pakistan border near Waziristan, where top Qaeda leaders are said to be hiding. "This is absolutely real," said one senior U.S. counterterrorism official. "We feel very confident that they are trying hard to attack us inside the United States before the election and that some of the operatives are already here." But just as with the 9/11 attacks, officials are at a loss to say what the actual plot is, who the plotters are, how they got here -- and who helped them get here.
Columnist and bloggerHugh Hewitt falls squarely in Glen's Camp. He had this to say in a National Review Online interview when asked "Why does my life depend on W. winning?":
Because hundreds of thousands of Islamists are trying to kill you. George W. Bush isn't going to try and stop them on the cheap or pray that we get lucky. He's committed to preemption when he believes it is necessary.
John Kerry is not so committed. In his acceptance speech he said "[a]ny attack will be met with a swift and certain response." This is not the question, and by refusing explicitly to answer the question of when if ever he would act preemptively, we can only conclude that Kerry will not move preemptively against gathering threats. Like Clinton, he will judge the intelligence too vague, the country insufficiently prepared for battle, or the undeniable costs in the lives of Americans and American dollars too great.
George Bush is trying to kill the terrorists before they kill more Americans. He will not always succeed. But I think fewer Americans will die from such attacks if Bush wins reelection, far fewer in fact.
However, John Kerry feels that the president's policies have further endangered us, as he told reporters:
The policies of this administration, I believe and others believe very deeply, have resulted in an increase of animosity and anger focused on the United States of America. The people who are training terror are using our actions as a means of recruitment.
In our country there is a concerted effort to remove God (I refer to the Jewish/Christian God) from public places. All the other gods are OK because they really don't cause problems with conscience. This was not the original intent of the founding fathers. Separation of church and state was to keep government out of the church not the church out of the government.
If anyone checks the history of our country, they will find that our country was built on Christian principles -- primarily the Bible. Our laws come from the Mosaic law given to Moses by God (i.e. the Ten Commandments). Many of our earlier presidents gave thanks to God and encouraged our people to not forget God's blessings, especially during very difficult times (i.e. war). On the other hand, I believe that any religion should not be persecuted and that they have a right to worship the way they desire unless their religion causes harm to the public or they desire to kill others because they don't adhere to their belief system. There are those Christians who are dogmatic about what they believe, but for the most part, Christians are law abiding and they don't go out of their way to kill people or harass them because they reject Jesus Christ. If anything, they pray for people and feed them, and help provide for them as Jesus commanded.
Because President Bush is a Christian, I believe that he is the best candidate because he understands our enemy and he understands the [religious perspective on the] internal issues here in our country such as abortion, attacks on the traditional family, limiting free speech (i.e. hate crime law). For example, that hate crime law is a big one because the Bible teaches that homosexuality is a sin. If Christians read or preach on this, there is the possibility that they can be persecuted just because they agree with God and preach that this lifestyle is contrary to the norm (which even the birds know it is).
So, there is no doubt in my mind that we have another terrible war going on inside our country. Those who want morality in this country and those who want to do whatever feels good whether it hurts others or not. I feel that Senator Kerry has no true understanding or wisdom concerning these issues. He only wants to make people happy and get their votes, not do what is best for our way of life -- the normal and good, prosperous way of life. President Bush will do what he believes is right regardless of the polls, therefore I know he is the man that will lead this country through difficult times and not be blown around by the winds of change. Our country does not need to go further down the wrong road as the Greeks and the Romans did.
From The Rebirth of America, published by the Arthur S. DeMoss Foundation:
"A nation which does not remember what it was yesterday, does not know what it is today, nor what it is trying to do. We are trying to do a futile thing if we do not know where we came from or what we have been about." -- Woodrow Wilson
Andrew Tobias, author of The Only Investment Guide You'll Ever Need and Treasurer of the Democratic National Committee, wrote on his website:
It's terrific that Bush names Jesus as his favorite philosopher. Jesus was an amazing teacher. But what exactly did President Bush learn from Jesus? Would Jesus have shifted trillions of dollars of resources from the meek to the most powerful? Would he have abrogated so many of our treaties? Gone about Iraq in the same way?
