Underweight/Overweight?

[kittydashwood]

Where I Stand: Six Major Themes
Bernie Schaeffer
6/8/2006 2:43 PM ET
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In light of the market turmoil of late, set forth below are six major themes to help put my current views in perspective.

1. The small-caps will resume their leadership on rallies. Maintain your emphasis on the small and mid-caps and also maintain an aggressive cash reserve of 25-50 percent.
2. Don't fall into the large-cap trap looking for "safety." If this market is headed for bear territory, these names will take it on the chin as well, and they will continue to disappoint on the upside.
3. Large-cap technology remains the most dangerous sector. The Nasdaq could easily shed another 10 percent on further market weakness. Don't be fooled by possible dead-cat bounces in moribund names such as Microsoft ( MSFT: View sentiment for MSFTsentiment, chart, options) and Cisco (CSCO: View sentiment for CSCOsentiment, chart, options) .
4. Bearish sentiment on the financial sector is extreme, especially in the context of the relatively strong price action in such sub-sectors as the brokers and the exchanges.
5. As I stated in my June market commentary: "The award for 'most shell shocked' from this pullback has got to go to those who invested in the precious metals and the precious metals shares. They thought they were buying an "uncorrelated" asset class that could benefit from market turmoil, and instead they found themselves in a trade that moved in lock step with the India stock market. The potential for further disillusionment keeps me wary of gold for the shorter term, though I like the longer-term case."
6. I see the potential risks in the emerging markets as too high relative to the potential rewards.



Bernie Schaeffer

[kittydashwood]

The Saudi Arabian government has warned that world oil prices could triple if the standoff between the U.S. and Iran over its nuclear program escalates into a full-fledged war. "The idea of somebody firing a missile at an installation somewhere will shoot up the price of oil astronomically," Prince Turki told a conference hosted by the United States Energy Association, according to the BBC. At risk is the Strait of Hormuz, through which most of the oil in the Middle East is shipped. The International Energy Agency says as many as 17 million barrels of oil a day are transported through the strait.

* Iran is the Opec cartel's number two oil producer.

* Meanwhile, Iran says it will reply to the international package of proposals seeking a compromise on its program by August 22, could be a hairy old autumn.

I have been having lovely transmissions from my favourite of the nine brides of profit, the point & figure charting technique. She sure does strip away the market noise. Get to know her I'm not greedy.

http://www.minyanville.com/articles/index.php?a=2392

[kittydashwood]

(From Minyanville)Canary in the Coal Mine

Turkey's central bank raised key interest rates by 225 basis points on Sunday and said it would begin lira purchase auctions to try and halt the currency's slide. Why do we care?

* Turkey's Monetary Policy Council hiked the overnight borrowing rate to 17.25 percent and the lending rate to 20.25 percent overnight on Sunday.
* "In order to correct medium-term inflation expectations the monetary policy committee decided to evaluate its key interest rates and carry out another strong monetary tightening," the central bank said, according to Reuters.
* The Turkish lira has fallen 23% against the dollar since the end of April.
* Bond yields have risen by 300 basis points since the beginning of the year and equities have fallen.
* Turkey's CPI rose to nearly 10 percent in May.
* The bank began lira purchase auctions, called "depo" auctions, in order to drain liquidity from the market and reiterated it would engage in direct forex market intervention if deemed necessary.
* So, why do we care? It's the repricing of risk... worldwide. To give credit where credit is due (hahaha, an inside central banker joke!)
* "The macro-market trend has now reversed, towards risk being re-priced as opposed to the environment of DE-PRICING risk that has been so dominant in the era of monetary reflation," Professor Weldon noted.
* With the FOMC set to report their expected 25 basis point rate hike on June 29, most will direct their tunnel vision toward US markets. What we will be closely watching this week however, per Professor Weldon's advice, is the Brazilian Real, the MSCI Emerging Market Index and the CRB Commodity Index; our canary in the coal mine.
* The effects of global shrinking liquidity and subsequent risk aversion will manifest in the riskiest of markets first.

[kittydashwood]

On June 15, the S&P500 surged more than 2% (the biggest one day gain in nearly 3 years). Since then, the index has made highs below the high of that day (1258.64) and lows above the low of that day (1230.01). That’s 6 consecutive daily bars inside the large range day. This is the first time we’ve seen this type of consolidation in more than 10 years and just the 6th time in the last 30 years.

This is another one of those patterns that gives us no help directionally – but we should get some range expansion this week.

[kittydashwood]

From
http://www.gurufocus.com

As of July 04, 2006 GURU portfolio is 108.36 (+0%)
Performance Inception January 03, 2006

Portfolio 99.44 108.36 +8.97%
S&P500 1268.8 1280.19 +0.9%


This is the complete portfolio of the portfolio:
(Current Value: $108362. Invested: $100,000 on January 03, 2006)

Symbol Company # of Shares Bought on Share Cost Current Price Change Value ($)
CASH Cash 406.32 12/31/1969 1 1 0 406.32
AIG American International Group 57.65 01/03/2006 $69.39 59.57 -14.15% 3,434
AMT American Tower Corp. 142.15 01/03/2006 $28.14 32.31 +14.82% 4,593
AXP American Express Co. 77.18 01/03/2006 $51.83 53.66 +3.53% 4,141
BRK-A BerkshireHathaway Inc. CL A 0.04 01/03/2006 $89690 91600 +2.13% 3,664
BRK-B BerkshireHathaway Inc. CL B 1.35 01/03/2006 $2967 3050 +2.8% 4,118
BUD Anheuser-Busch Companies Inc. 92.23 01/03/2006 $43.37 45.56 +5.05% 4,202
CFC Countrywide Financial Corp. 113.35 01/03/2006 $35.29 38.58 +9.32% 4,373
CMCSK Comcast CL A SPCL 154.08 01/03/2006 $25.96 32.72 +26.04% 5,041
COP ConocoPhillips 67.47 01/03/2006 $59.29 66.82 +12.7% 4,508
DISH EchoStar Communications Corp. 139.76 01/03/2006 $28.62 31.06 +8.53% 4,341
EMN Eastman Chemical Co. 77.85 01/03/2006 $51.38 54.46 +5.99% 4,240
FCE-A Forest City Enterprises Inc. CL A 105.51 01/03/2006 $37.91 50.41 +32.97% 5,319
FRE Freddie Mac 62.25 01/03/2006 $64.26 57.5 -10.52% 3,579
KO Coca-Cola Co. 98.72 01/03/2006 $40.52 43.37 +7.03% 4,281
LH Laboratory Corp. of America Ho 73.07 01/03/2006 $54.74 62.19 +13.61% 4,544
NWS-A News Corp. CL A 258.9 01/03/2006 $15.45 19.25 +24.6% 4,984
PFE Pfizer Inc. 166.04 01/03/2006 $24.09 23.58 -2.12% 3,915
PGR Progressive Corp. 138.07 01/03/2006 $28.97 25.75 -11.11% 3,555
S Sprint Nextel Corp. 190.02 01/03/2006 $21.05 20.04 -4.8% 3,808
SHLD Sears 34.48 01/03/2006 $116.01 156.86 +35.21% 5,409
TYC Tyco International Ltd. 134.95 01/03/2006 $29.64 27.61 -6.85% 3,726
WFC Wells Fargo & Co. 64.45 01/03/2006 $62.06 67.44 +8.67% 4,347
WM Washington Mutual Inc. 91.18 01/03/2006 $43.87 46.29 +5.52% 4,221
WMT Wal-Mart Stores Inc. 86.98 01/03/2006 $45.99 47.57 +3.44% 4,138
WYNN Wynn Resorts Ltd. 74.28 01/03/2006 $53.85 73.7 +36.86% 5,474
Total Market Value: $108,362; Cost: $100,000; Change: 8.97%