E-mail from a reader:”Thoughts on the stock markets last week of July? Thanks, Kim, you are doing God’s work.”
My answer is I hope I am at least doing my own work and God approves and I need to remind you that I am not a professional financial analyst though I am very good and very honest about my views and experiences on making money. My analysis and gut feeling – the one two punch that really means absolutely nothing in the grand scheme of things despite what other pundits will tell you-tell me that we will see a brief pullback in the market in the coming week.
All the business earnings reports where companies have made or lost money that have been posted last week – well most of them, there are more coming down the pike – have had their brief blip reactions. The stock market overall for the short term of the next few months barring any economic bad news of catastrophic proportions should be going up. By catastrophic proportions I would state something like all the world’s oil is gone, or that all our money turns into air. We’ve managed to wade through the loss of billions without blinking in terms of the stock markets going up and down and that is in relation to investor’s perceptions that the stocks and bonds will make movement in the future.
Let me see what is left to report with. There are 184 of the S&P 500 companies having reported earnings through Friday, a total of 77 percent — or 142 companies — exceeded earnings forecasts, Thomson Reuters data showed.
In the coming week, our month end week, 146 companies in the S&P 500 are expected to report earnings, according to Thomson Reuters data. About 12 of the 30 Dow components are set to report.
In addition to earnings due on Thursday from Exxon Mobil and Disney, other major companies set to report results include Valero Energy Tuesday, ConocoPhillips on Wednesday and Chevron on Friday. So, we need to ask ourselves based on market psychology, how likely is it that people will or even could be so happy when they have heard nothing but “good” news for the last few weeks.
The last week of most months is generally a consolidation of resources for investment houses and people jockey their money around in funds to try make their portfolios look like the owned their star performers and sold their dog stocks. I haven’t tracked charts to see over the last few years how the markets fare but I seem to recall with some of the larger Dow companies that there is some dipping and generally after the first of the month there is a rise in value for a few days. Of course, do your own due diligence to see if I am full of baloney or not.
Especially on specific stocks that you are interested in. The historical informaiton is freely available on search engine sites throughout the Internet and you need to remember that past performance doesn’t predict nor guarantee future earnings or performance. That is the way the cookie crumbles.
For those of us out there who are on fixed incomes or out of work, be very cautious and stay away from anything that will negatively affect your principal. You want to make sure that you have funds to weather the storm of being unemployed. It may be some time until companies are hiring again.
If you are capable to research companies and they are local. Go over in person and check out their business. If they have a manufacturing plant or facility go inside and if you can, take some time and talk to the employees, the owners, managers or anybody who will listen to your questions. If you can make arrangements with their public relations person (if they still have a p.r.dept after any downsizing) see if you can get the company tour that way.
Remember also that in summer time some industries do better than others. This is the big time of the year for ice cream sales. Chains like Baskins and Robbins, Coldstone and the like benefit from longer days with extended sunlight and that also means more heat and people wanting to cool off. Frozen yogurt stores do well in the dog days of summer especially in places like California where we have temperatures over 100 degrees on more and more days.
So the take away from all of this is that yeah, the markets may dip for a bit this coming week, please do your own research and try to do it face-to-face if you have the time and resources for it. There has been anecdotal evidence for example that KFC has had increased cars through their drive up windoes because of their new grilled chicken offerings. I don’t have the statistics for that either and it might be fun to watch the restaurants at lunch or dinner each day for an hour and count cars. Bear in mind that for some franchises, that one or two hours a day would have to have large enough orders to cover for the countless hours where there isn’t any traffic. If you can find out what the rent is for the location you can have a decent idea if that particular unit is making revenue or not.
Stay cool and careful over the next few days folks. Don’t play with any money either that you cannot afford to lose.
July 27 2009
Also, please don’t quite go anywhere yet. Having some tax issues or tax questions? Any problems with trying to make it through the financial Depression we are in that is making you depressed? Please read on.
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Kim Isaac Greenblatt
Markets Going Up But Taking a Breather
