Brave New World of Tech Stocks, etc.!

The market is going UP and there is no such thing as down...

So we need to ride the UP.

Once the retailers get scared later, then we will short.

For now, buy buy buy!

See what the jobs report says prior to the open Friday. Retailers react quickly to news...  :)  :)

Don't get left in a pool of retailers taking diabetes medication... !!  :)

Semi winners and losers for Dec.

We have been buying Nvidia aggressively for now.

We will sell by sometime in January and then we will short prior to the Q1 announcement and Q2 debacle again.

Even TV cannot change the future for this one with the design wins in the loser phones and the design misses in the internet future. But the lookout is good at the present time in our opinion!

Cisco is under-valued for now... we intend to buy it.

Tech Stocks for 2010 - Buy or Sell?

What are you buying for Christmas? Here’s what I’m buying and why.
Why? Because the family pretty much asked and even specified what to buy. J
What? for 6 people:
For two hard core gamers, we need to purchase two XBOX systems, either new or upgraded, with that “hands-free” deal.
For two social networking experts, two new I-phone 4’s. Doesn’t matter if they already have an I-phone 3 or 4, they just want a new one.
For two mostly ordinary folks, we don’t care but one IPAD is a good idea for keeping out of trouble. J
PCs? No.
New chips for PCs? No.
New processors for PCs? No.
Game cards for PCs? No.
Probably this family is not too different from the rest of the world. J
For me? I don’t want anything. I just pay for things!
What CNBC says about make believe chips for phones and things that will never be made or sold?
Very funny.
Good luck with your holiday buying and with your stock purchases for this year! J

The perfect Yen/US-SPI may have broken down, and so did US/Euro

The reason is the expectation that no matter how high the US$ might become, the Fed will be able to whack it back down below the other currencies. We don't believe the Fed can in fact do that without dire consequence to the world economy and without even a worse impact on the US economy.

But the algorithms are starting to differ - shake up - this is a great opportunity during Wall Street confusion. Take advantage of in-between-algorithm confusion... during that time, the supercoms are 'off.'

Semi Trash

Our favorite TV show trashed one of our favorite semis last Friday.  :(

Oh oh, better sell that one. Probably the word is out at this point...

Of course, we understood way ahead of last Friday. :)

The currency market is interesting so far today in Asia, that Yen/US algorithm is still on? Appears that way. We are still waiting for another challenge instead of the same old, same old.

Fooling the Super Coms

Pears are not on the menu here, but we understand pair trades. The algorithms do not because they are written by simple folks. But the super coms execute the algorithms quickly.  :)

Sony Corp. to Buy Nvidia?

What better type of strategy for counter attack in the present currency war?

At this rate, a Yen will soon have a 50% advantage over the US dollar. And even if the Japanese corps. don't want to spend the cash, BOJ will lend it to them at 0%.

What is the next move for Japan?

Outcome of G20

Probably the US will not make any new friends. The next moves are obvious... everyone will attempt to damage everyone else's currency even further. Not a good sign for global economics. Either the ROW will raise the US dollar or the Fed will raise it after the midterm elections when the Fed will be a little more afraid of the Republicans. Either way, be careful with your portfolio when it happens.

Too early to talk about the End-Game for this currency war...

But the middle game for most currency wars looks like world-wide depression. In the past, the end game has been world-wide war, e.g. WWI and WWII, let's hope it doesn't become that serious!

But sometimes protectionism does become serious, especially when you threaten to pay back the folks who lent you money with a fraction of what they lent you in the first place. Those folks tend to get a little P.O.'d when that happens...

Most reasonable policy would be to avoid those middle and end games.

Reasonable policy will most likely happen very soon, for example next week when no one on the planet is willing to lend the US Fed a single dollar without an exorbitant interest rate. Then, the US can face the consequences of huge national debt without relief.

Or - the following week, when there is no longer any motivation for anyone in the US to be concerned about midterm elections... because the elections will have concluded.

You have one-to-two weeks to sell. Try not to leave any $ on the table. :)

Your trade for Friday?

Could anything catastrophic happen with the dollar valuation over the weekend?

Yes it could so make sure you are hedged.

US and California

From now on, we are distinguishing California from the rest of the US. The three largest economies of the world are: China, Japan, and California.

California, for now, uses the US $ as a currency. That is unfortunate for California.

The US $ is weak because the US has a weak economy. That fact may not change any time soon. The US $ can be made even more weak, but it will not help the ROA = Rest of America.

And, of course, the term weak means weak as in unable to succeed in competition. You can trade on Forex or SP, it's all the same thing for now.

Currency War - Round 6

China has increased interest rates seemingly to appease the US Fed who has been ragging on the Chinese for months now. The move has fooled the Forex traders for the past two days.  Unfortunately for the Fed, who would love to see massive inflation in China, China is smart enough to control inflation without losing the trade battle.

Watch out for US labor interests holding down the $ vs. Yen and Euro. Those forces will be over-run. 

Who bought the NVDA Quants today?

Precisely starting at 2:15pm. Wasn't us. But we know who it was. We're not certain why though. In case you know the reason, please send us a note.  :)

How's Benny Doing?

His preferred clients are doing well. His standard clients are doing less than well. Benny's standard clients are set up to take a big loss soon, but the preferred clients are getting out. It's a matter of which funds you have bought into. I know you can figure it out...

Selling at the Top

Not yet, but soon. At this point, you should select your Silicon Valley stocks as if they were all part of a big tech/nasdaq ETF. The big boys have to play it that way since it's all a currency trade. Also, with this kind of risk, don't buy stocks - quantify your risk using options instead. Especially for the Bio and Pharma stocks.

We cannot answer some of you in PRC - we apologize

There is an internet connection problem, we are told, mostly in the North. We are working to fix this as quickly as possible. We will get back to you personally soon. :)

And Pharma?

There is an acquisition move that's real. Know what it is? The news was just acquired this afternoon in Mountain View. We will make our moves in the morning.

Friday for NASDAQ

If the market goes up... sell. If it doesn't move, sell. If it goes down, check to see how much. Maybe you should ask us what to do in that case... :) We already know.

You need the exact algorithm between US Dollar and SP, DOW, NASDAQ; otherwise, you are at sincere risk.

Get Serious about AMD and other PC Stocks

AMD produced effectively zero revenue enhancement for Q3 and whatever the earnings enhancement, it may help the AMD Estaff and BOD but it won't help you as an investor. It just means they are firing people - great, BUY BUY BUY...?

Ha Ha - SELL IT SHORT! The Q4 guidance is "flat" from an already crappy Q3? Uggg. Ick.

Find a buyer for the co. before the debt over-runs the management.

Your only hope for a play here is the currency exchange... but this CUSIP is a risky choice. Even if you consider debt as an advantage today, you may be wise to think again.

Semiconductor Stocks

Semi's were up today ahead of the Intel announcement... which was a little lackluster; nevertheless, the market wants to go up on the currency moves (i.e. QEx) Oh yea, Intel will be in all tablets and all phones soon... in a few decades or so.

Don't bother with your stock pick; instead, watch out for the big currency deal - who can be the lowest? Or... nobody can in fact be the lowest... oh oh!

Want to make money for now? Do it on the currency exchange, it's more direct and more profitable. Just don't make a mistake.

And NVDA?

Hmmm... while the market goes up, it goes down?

It doesn't even follow the semi 's.

Do you have any idea why?

We do. Be careful how you invest in Silicon Valley.

Benny's respective funds

Benny's top fund clients are a special group. They pay a little extra, but not much. They are simply Benny's friends.

Benny's other clients are relatively naive. They are simply honest folks.

More next about the fund structure! You don't want to miss the structure part, that's a great part. :)

NVIDIA and TV

Did you see the TV ad for NVDA proclaiming it would go from 10 to 12-13?

It did! for about one day.

Then it went back to 10 and it belongs lower.

Watch the next blog about Benny...

Benny's Clients

In the other scenario, when the overall market moves down instead of up, then the math looks this way for Benny:

Fund A made no progress and reports a zero gain. Fund B reports a 10% loss. Of course, the market went down an average of 5% or so, and everything averages out. For example, just like June and August of 2010.

And in July and Sept., when the market is driven up, then our previous scenario applies.

It's weird how these movements coincide with monthly and quarterly reporting dates! :)

Now who exactly gets to be in Fund A vs. Fund B??? Fascinating for next time...

The Next Move?

US, BOJ, or China? Or will it be the Euro based on the China influence? Who makes the next offensive? We're not certain ourselves, but we have a pretty good educated guess and it won't take long. No matter what, we know how to profit from it. Do you?

Recent record high for Dow

Because the market is now run by bulls? Of course not, the market is still run by Benny.

Let's see... the US$ is at a local low and stocks are at a local high... what a coincidence!

Don't lose out on the next currency move. :)

BRIC

Anyone, especially anyone still on TV, that uses the term BRIC is living in the past.

Brazil, Russia, India and China... excuse me?

China is the no. 2 economy in the world. Hello??

Next time you need help, don't watch TV.

Emerging is emerging and dominant is dominant. We understand and so do you. Don't settle for anyone who does not understand.

Someone bought Actel?

I forget who it was. Our first guess is to short them. But wait for the currency wars to establish themselves first.

Friday for NASDAQ

Jobs Report?

If the report is good, prices will knee jerk up? But then later knee-jerk down because there will be no money-printing?

Hmmm.

Unfortunately, the jobs report is/will be overshadowed by the threat of the outcome of the world-wide currency wars.

In case you don't know how to act... we do. And don't think you can just buy gold as a safety net... uh uh.

Who are Benny's Clients?

So one fund effectively loses while another fund effectively wins. That does not mean that both funds can't make money at the same time. For example, if the average market rise in a given period, maybe 2009 or whenever, is say 10%, then Fund A could make 15% and Fund B could make 5%, typically, and everything would just average out. :)

Of course, you can do the math yourself. Fund A would make an extra 5% and Fund B, in return, would lose an extra 5%. That is how the world goes around for Benny.

Tomorrow, we will check on the other end of the scenario, i.e. what happens if the overall market goes down in a given time period as opposed to up. That's a great story!

PC Stocks like INTC, AMD, NVDA

Dinosaurs for now. Do you plan to buy the family a brand new large desktop PC for the holidays? Even a laptop? Probably not. That doesn't mean the stocks cannot go up, they will just fall relative to the dollar's valuation relative to other more successful companies.

That rascal Benny

Once the momentum shifts in the way Benny wants, then the rest is simple. He just waits a little while for the move to slow down - until it's about to come to a stop and later change directions. Then he just "buys" or "sells" in order to make money on whichever way he sent the price. :)

The only problem is that one fund makes money while the other fund effectively loses money. But it doesn't matter for Benny because he makes money both ways.

The fund "owners"/"clients"? Even better. Check in on Benny's story tomorrow!

Algorithm

xP=xCexp( - the rest is obvious after today) divided by the usual.

Worldwide Currency War - Round 5

After disengaging for a short time, BOJ has today re-engaged with a massive frontal attack on all currencies. Huge move by Japan, the world's number three economy.

ROW says: "We have just begun to fight!"

This could "inflate" things for a while. But only until ROW puts everything back to even, which is exactly what happens in a currency war. Don't get left out of this one, this one could make you a fortune. Have you figured out the algorithm between the US dollar valuation and the US dollar-based equities? We have.

No reason to go up... except for that BOJ surprise move :)

Spot currency trade today. As you already know, there has been an algorithm for relating the Euro/US to the SP. Now there's a new algorithm for relating currency to the SP, etc. We already have it correlated and into our trading machines. This one is even simpler than the last one. You need to know the algorithm for the Wall Street super-com 's. They are already fast enough to beat anyone, but if you don't even know the algorithm they are running then you should not be trading for now.

Tues. for NASDAQ?

We suppose Benny could do anything he wants for a little while, but there is no reason for U.S. stocks to go up and especially not tech. We do not see Tues. as a jump day and especially not a high volume day. Of course, we haven't checked Europe overnight, but we will soon.

Semiconductors and tech in general - Silicon Valley

As we recently reminded, the lead time for semi products is long, even if they are simple analog products these days - because simple analog products, these days, have to be smart analog products.

If the tech volume ramps up, the semi's (run mostly by not the brightest business folks in the world) are then forced to ramp. If the economy changes within the 6 months of their big ramp, then it's kind of an "oops!" More so than in any other industry.

So if outlooks go up and down relatively fast, and if the chip fellows knee-jerk react to it, and also the products can be obsolete in 6-mo., then what is the inventory situation? Pretty ugly? Probably you should call us before you invest.

Benny's volume trade

Benny went to a good school and he took at least one physics class.

Benny knows that once a big heavy truck starts speeding up, then it's really hard to slow the truck down. Of course, once a big heavy truck starts to stop/slow down, then it's really hard to get it going forward again!

So once the sell volume brings the xyz price down, it takes a little while for xyz to start moving up again.

In case Benny wanted for xyz to go up, then he would just need to have the buy volume exceed the sell volume by just enough. Then, with his large volume, he would create a big heavy truck speeding up. It would take a little while for the truck to slow down in that opposite case.

The absolute best part for Benny is in tomorrows blog. :)

Exactly as we said

We hate it when the semi's go down. Why would they go up? Because the worldwide economy is so obviously strong? It takes about 3 to 6 months to produce a semiconductor product. Are you aware of what that means? We are.

Monday NASDAQ open

We don't care about the open and neither should you. Just wait for the volatility once earnings start getting announced. Then make sure you know what to do. We hate it when the semi's go down.

Best thing about Benny

You already know Benny's background and line of work.

Here's the best part so far:

In his position, Benny can provide instructions to the loosely coupled funds. For example, on a given day, Benny could instruct the well endowed hedge fund Benny A to "sell" security xyz and at the same time he could instruct the well endowed hedge fund Benny B to "buy" the security xyz.

Of course, Benny is a smart fellow. The relative buy and sell volumes between A and B are different. :)

Wait until tomorrow when you hear what happens next(!)

Taking advantage of currency wars...

In the market for a luxury car in Silicon Valley?

The dealers bought/buy cars in the factory currency when the dealers think the dollar is strong against the factory currency.

Do you know how to take advantage of the dealers in US dollars in that case?

We do. Don't get left out.

The Price of Gold Today

The price of gold is almost an oxymoron. When people in the U.S. say "price of gold" they mean the price of gold in U.S. dollars. Everything is relative to something else, just as the U.S. dollar has a value relative to the Euro or the RMB and so on. There is unfortunately no such thing as an "absolute." The price of gold is high when the dollar is or is expected to be relatively worthless, like now. Don't get left out of currency moves.

More about Benny

Benny is a low profile guy but he is wealthy beyond belief. He controls a series of hedge funds. You could call them syndicated, or a better term would be "loosely coupled." He is in fact able to give instructions to the various funds. More soon about how Benny makes a living.

Earnings Season for US

3rd Q will be relatively disappointing if you are able to read between the thinly spaced lines. 4th Q will then be super? Probably not. Don't get left out before 2011 is a huge disappointment.

Semi's

Our favorite ETF has gone from $40 to $45. We intend to do better.

China PMI

China's economy is the most important economy in the world.

The government has a great deal of power and is often correct. Sometimes, the government does not help the citizens to the maximum extent.

Economic data always flows through Beijing. We hope it is correct in its review, as the great citizens of the PRC deserve.

Emergency Markets

Silicon Valley is the most productive region in the world. At the present time, the Valley's growth and dominance, while in tact, is subdued with the diminished global economic condition. Do not be fooled into thinking that Brazil, for example, is going to save the planet. You need to think again. Don't get left out.

Benny the Jest

This is the start of a continuing story about Benny, a Wall Street executive. Benny's been in the business a long time. In fact, his father got him into the business. Wait 'till you see the next post about Benny tomorrow! He is a fascinating guy. :)

Currency Wars and World-wide Deflation

After all of our comments about world-wide deflation and currency wars, and after a huge volume of hits on our web site, TV has finally made its first comments today using our exact words.

“Currency wars” is now a popular term, and people are now in fact using the words “world-wide deflation.”

Do not be fooled by an inflationary threat from printing money as you may be led to believe. That is a head fake.

We have already made our most important opening moves, have you?

Wall Street has made its opening moves and is advertising the opposite. Don’t get fooled.

Watch Out!! :)

Did you see the move this week?? It's public information now. Did you get left out?

What TV wants you to believe...

TV is paid for by the Street. Unless you believe diabetes medication can spend $5B per year in ads.

We do not believe, don't get duped.

Don't be the ground zero target for a rip off(!)

Don't get left out.

Wow, here comes the middle and end game...

Oracle for now has dropped any storage attempts as we said and is now stepping up to the semiconductor-buyout podium, that's OK - it could still be TI and Google to want to spend cash - do you know who the potential targets are? We do.

Watch Out! Inside Deal is Hitting. Obvious This Week or Next.

We heard there was some inside information passed on that led to a Wall Street character video today.

We don't like inside trading, but we understand it.  Do you?

Don't get left out of moves this week.

Currency wars escalated by FOMC 9/21...

What would you do if your homeland currency was suddenly overvalued or undervalued with respect to another major currency?

We know exactly what to do. Don't get left out.

If you send us $1 US, we can most likely send you $2 US sooner than one year.

What is your historical rate of return on your assets? Don't get left out.

Worldwide Deflation

The three largest economies of the world are the U.S., China, and Japan.

The U.S. is effectively printing dollars to combat deflation.  No one calls it printing money.  It's called maintaining the Fed balance sheet.  It's the same thing, i.e. insert cash into the economy that would not otherwise be there.

BOJ and the Japanese government went a little farther this week and it's pretty much printing yen as a counter to worldwide deflation.  This is basically called protectionism.

China needs to do nothing unusal since they already have a continuous currency protection program.

The Euro valuation has already caused huge U.S. equities market loses in 2010 and will continue to do so.

Nations have begun currency wars.  There are plenty of ways to lose money at the present time but also some intelligent ways to make money.  Don't get left out.

Beginning of September Trading

We are happy the market has up-ticked in early September.  We are using this as an opportunity to effectively short sell at the present time.  Don't get left out of ways to profit from the deflationary cycle.  The cycle cannot end quickly.

Jobs

Jobs have been shipped overseas because it is cheaper for US and especially Silicon Valley corporations to employ folks there. If there is hiring to be done, it will be done overseas.  Do not expect the US jobs picture to improve.

Best sign of deflation? Silicon Valley corporations laid off the excess in 2008 and also reduced wages/salaries because they could do it at the time. Nothing has changed. Those employees remain with lower pay and new hires are overseas.

You need to get on board the deflationary ship. The enlightened profit ships are leaving the harbor. Don’t get left standing on the dock with some kind of concerned inflation view.

Cloud Computing?

It really means back to the basics of computing.  Everything cannot be housed on your own hard drive in the closet anymore.  Everyone in Silicon Valley knew that two years ago.

Since your PC has been nothing more than an internet tool, it makes sense that your data no longer needs to be stored on your little hard drive at home; instead, it needs to be housed (by rent) in larger coffers, e.g. the same thing losers like AOL and winners like Google and others have done for many years.

Other Takeovers

M&A is not healthy for the economy at this point and will only serve to continue the deflationary cycle, nevertheless; there could be some synergy for certain acquisitions. We are looking for very large cash balance companies in this case to pursue some medium caps. TI and Google would be logical buyers along with the higher cash foreign holding companies.

3PAR Tug of War Between HP and Dell

Excellent for 3PAR, this is exactly why we invest in equities. Not so good for Dell or HP, especially after a bidding war. Data storage and tech small caps in general can be takeover targets in this environment. We saw the 3PAR deal as an options trade but did not buy the 3PAR stock outright. We may have missed some of this one, but we also do not expect storage additions to help technically savvy companies. We also do not consider Dell as a technically savvy company.


We in fact heard on TV that Oracle had a lot of cash and could be a potential bidder for 3PAR. Hello? Oracle IS a data storage company with already great IP. Don’t plan on that scenario.

Our Opinion is the Deflationary Opinion

Consider an airfare from San Jose, CA to Austin, TX. The fare is huge, 20-50%+ higher than a year ago. Higher price = sign of inflation or at least non-deflation? NO it’s definitely a sign of deflation. About 50% of the US airline fleets are parked in the Nevada deserts because they cannot operate at a profit. The available planes have been cut in half. A mere 40% loss of air travel demand creates a supply surplus and higher prices. The net performance/loss of air travel demand is in fact 30% to the red side. Assets are being taken out of service, not the other way around.


We can’t believe a lot of the news we might hear. We are in a deflationary mode in the US. We need to adjust our plans accordingly. Don’t get left out.