TFN eNews 07/20/2009: “The most contrarian investment in the market?”
Published via e-mail broadcast on July 21, 2009
In today’s TFN eNews:
* 37 double-digit gainers down… plenty more to go!
* Playing with numbers
* The most contrarian investment in the market?
Dear TFN Reader,
Sonic Automotive Inc. (NYSE:SAH) had been teasing the TFN’s Hot Stock Confidential crew over the last few trading days: Whenever it hit $11, it dropped back down faster than we could issue a sell alert to lock in gains of over 20%.
(Call us greedy Capitalists… in general we like to see gains of over 20% when we recommend a stock to our HSC members…)
This afternoon, TFN’s Laura Cadden decided she’d had it: “Let’s not play around anymore… If you took my advice back on June 25, 2009 and purchased shares of Sonic under $9.10, you should have gains of over 20%. Let’s lock in those gains by setting a stop-loss at $10.92.”
And we did. Bringing 21% gains to the table in just 18 trading days, Laura just booked double-digit gainer #37 for our Hot Stock Confidential closed positions in 2009!
Now, let me challenge you a bit here: Let me know if there’s another stock advisory service that has actually taken profits on 37 recommendations (and booked loses on only 10) this year… and I’ll personally give you a one-year free subscription to HSC free of charge!
(If you can’t find one, take heart: HSC is not only freely available to anyone who still dares to practice Capitalism, but it’s an exceptionally good deal. Just click here!)
*** Those still buying into the upbeat economic outlook percolating from the General Secretary’s office received another boost this weekend. White House top economic adviser Larry Summers trotted out the hard facts:
The number of people searching for the term “economic depression” on Google is down to “normal” levels.
I was almost giddy with optimism: Applying that logic, Michael Jackson will rise from the dead sometime this week… as Google searches for his name have surged over the past two weeks!
I still might be able to pick up ticket for his London show on the cheap!
Meanwhile, it’s the numbers that just don’t want to add up. The release of the Obama Administration’s midsummer budget update — sure to show higher deficits, ballooning unemployment, lower revenues and slower growth than projected in February — has been postponed until late August.
Apparently, the White House whould prefer Congress not to take a gander at the numbers before pusing through the unread $1 trillion-plus Obamacare bill before skipping town on August 7.
Which I guess would qualify the passing of this bill as a “double-blind” taste test.
*** Meanwhile, China is backing up the laughter that greeted Treasury chief Timmy Geither’s assurance that the dollar is “safe”.
It’s converting as many dollars as it can into hard assets.
TFN’ options guru Andrew Snyder has called this the “Commodity Carry Trade”. It’s the financial equivalent of playing “hot potato” with the dollar, hoping to stick someone else with devaluing “empathy” currency.
The results are showing in the commodities markets: Cash prices for iron ore delivered to China have climbed above $90 a ton for the first time this year.
Iron ore imports jumped 29% in the first half of 2009 as mills expanded output. China imported 55.3 million of iron tons in June alone.
The CCT is the cornerstone of one of Andrew’s option plays. He’s betting that China’s rush to buy assets for paper will push the price of one specific strategic metal. Can’t tell you what metal it is… only that he’s taken 90% off the table on that play already. And he’s ready for more...
*** TFN eNews reader Jon C. passed on the shortest Reader’s Grapevine pick we’ve ever received: “GFY”.
We pass it on without prejudice, just with the follwoing background information: Western Asset Variable Rate Strategic Fund Inc. (NYSE:GFY) is a non-diversified, closed-end management investment company. It’ primary investment objective is to maintain a high level of current income. It invests in high-yield and emerging market instruments. The Fund’s portfolio includes collateralized mortgage obligations, corporate bonds and notes, mortgage-backed securities, asset-backed securities, term loans, sovereign bonds and short-term investments. The Fund invests in stripped securities. Legg Mason Partners Fund Advisor, LLC ) is the Fund’s investment manager.
Sounds like the most contrarian investment in the market today!
Quote of the Day:
“No business is safe when you see the administration appoint czars, car czars, wage czars. There are over 20 czars who have been appointed and what do they do? Bypass that Congress.”
– Rep. Michele Bachmann, R-MN, YouTube.com
Recommended Reading
Slots and natural gas: Two small-cap movers
The TFN Complete Guide to Natural Gas Stocks
3 tiny “milestone” stocks you need to buy now
Today’s Top 3 Financial News Stories
MoneyNews.com – CBO: U.S. Debt At Danger Level “A new report from the Congressional Budget Office said the government simply can’t continue going on the way it has been — at least not under current law. Federal debt will continue to grow much faster than the economy over the long run, and rising costs for health care for an aging population only will make matters worse.”
Newsmax.com — Obama Health Plan to Cover 12 Million Illegals “Democrats moved one step closer to giving free health insurance to the nation’s estimated 12 million illegal aliens when they successfully defeated a Republican-backed amendment, offered by Rep. Dean Heller, R-Nev., that would have prevented illegal aliens from receiving government-subsidized health care under the proposed plan backed by House Democrats and President Barack Obama.”
Tradingmarkets.com — GM asks surviving dealers to oppose restoring franchise agreements “Economics professors and students at the University of North Alabama have investigated the 789 Chrysler dealerships the Obama administration decided to close to see whether there was any truth to widespread reports that political leanings played a role in the shutterings. (…) ‘In the back of it all,’ said economics professor Jim Couch, ‘there’s the variable that, as the vote in a particular county for Obama went up, those dealerships were more likely to remain open.’”
Cordially yours,
J. Christoph Amberger
Executive Publisher, TodaysFinancialNews.com
Next Article: Sizing up gold’s next move
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