Filed under: Earnings reports, Rants and raves, Market matters, Wells Fargo (WFC), Sunday Funnies, Comic Relief
It is not possible to know what level is the right level to enter the stock market and various analysts, gurus, journalists and economists have been weighing in this week as the market closed at a one month high, with some folks even becoming downright optimistic.
I might add that the true level we have reached is one of amusement to me because we all are trying to call the market bottom. I myself have entered the fray trashing Nostradamus along the way. This is as much hope, as fact, and folks are looking for clues everywhere.
Some are looking at historical precedent for clues. Technical analysts are combing their charts for patterns of market behavior. The uptrend has to be sponsored to some degree by short covering and momentum traders too.
Positive news was reported by Wells Fargo (NYSE: WFC) which said on Thursday, April 9 that it expects to post a record first-quarter profit of $3 billion, up about 50 percent from a year earlier, due to better-than-expected performance from Wachovia (acquired in December) and a strong performance in mortgage lending. This was all it took to send the market higher even before anyone has actually sifted through the quarterly report for themselves — not due out until April 22.
I am not surprised that the market is up and I have been putting cash to work for the past six months; but not all at once; not without recognizing that I might be early; and not without a plan. This has included buying WFC most recently at $12.00 and selling naked puts at strike prices of $7.50, $9.00 and $12.00. My most recent post on the subject from last month was Chasing Value: The safest bank in the U.S. — Wells Fargo.
If you have missed the recent market pop do not fret and do not chase it because it could change direction as many have called this a bear market rally.
What might be most prudent at this point, if you believe that the volatility will continue and the stock market will not see true lasting improvement for a while, is to segment the money you want to put back to work into four or five tranches and invest on a regular basis dollar cost averaging back in over time.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of WFC and I have open options.
Sunday Funnies: The bottom guessing game originally appeared on BloggingStocks on Sun, 12 Apr 2009 18:40:00 EST. Please see our terms for use of feeds.
Bain & Co., a leading consulting firm, estimates that luxury goods sales will fall 20% in the first half of 2009 before stabilizing in the second half. In all, Bain expects luxury goods sales will fall 10% for the year. In October, Bain was forecasting a drop of just 7%, but conditions have deteriorated quite a bit since then.
It’s universally believed that 
I was looking at The Hollywood Reporter the other day and came across an item about 
Fannie and Freddie have already gotten their bailouts, and now the third leg of the federal government’s affordable home ownership fetish might need more money too: the Federal Housing Administration.
Retail is abysmal right now, and apparel is getting totally hammered.