Wednesday, January 21, 2009

The Kirk Report

The Kirk Report

Damage Control

Posted: 21 Jan 2009 11:05 AM CST

* Find more links at the members' only website!

Investment Themes & Trends

Posted: 21 Jan 2009 10:58 AM CST

I asked the following in the membership survey: "What investment themes/trends do you think will play a significant role in 2009?" Here's a another word cloud based on the responses received:

Investment Themes & Trends For 2009

Infrastructure seems to be the top theme for 2009 as everyone expects big government spending projects to rejuvenate the economy. A simple search at Google will reveal many links to articles from those who offer recommendations on how to play this well-known trend.

While I also see the potential here, I'd rather wait to see infrastructure plays find their way onto my screens once their fundamentals and technicals start to show meaningful improvement versus the other way around. Government spending is slow spending and it takes months, if not several quarters for companies that obtain profitable government contracts to show significant earnings and sales gains. While that's ok for long-term investors who can afford to be patient (we all have to be cognizant of our time horizons and objectives), I'd much rather build watchlists now with the focus on finding leaders who benefit most of the trend and then later look for signs of that within the screens I follow. Doing this in the past has prevented me from being too exposed to early trends that never really pan out the way most expect and avoid situations where bullish expectations don't translate into improved bottom line performance right away.

Looking & Hoping For Temporary Relief

Posted: 21 Jan 2009 08:30 AM CST

Good morning. With the S&P down 11% since the beginning of the year, investors are hoping for some relief this morning.

Premarket futures have a positive bias following a better than expected earnings report from IBM. In addition, Obama's economic team is pushing to complete a bank-rescue plan that can be twinned with the $825 billion dollar stimulus package.

Premarket gainers: AVII, BK, RVBD, ERIC, WGOV, BEE, C, NTRS, TOMO, DRYS, HCBK, CREE, PNC, CNB, WLL, ABT, MET, SAY, STT, IBM, BAC, GFI, MT, JASO, PALM, F, STC, HMN, MS, JPM, & GS.

Premarket losers: OMCL, BCS, AIB, AMSC, LYG, IRE, FRX, FOR, CSH, PLCM, KGC, BLK, RBS, TGT, PEG, HLS, BP, BK, GOLD, & GE. Retail chain store sales rose +1.1% from a week ago and at 1:PM we have the NAHB Housing Market Index. This morning Geithner faces Senate hearings and a confirmation vote is scheduled for tomorrow. Apple will report earnings after the closing bell.

With oversold conditions in place traders will be looking and hoping for at least some temporary relief over the next few days. As usual, many will take their primary cue from how financials trade and whether they find any support whatsoever after the pounding they've received especially over the past few days. Obviously, we need some good news to restore confidence and bring back buyers as oversold conditions aren't going to be enough for anyone other than those with very short-term time horizons.

Have a terrific Tuesday!

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