Bull Market
Gee, a little market turmoil and suddenly everyone is a comedian . . .
Wednesday, February 06, 2008 | 07:15 PM | Permalink
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The bull is always the last to know.
Posted by: Marcus Aurelius | Feb 6, 2008 8:16:30 PM
Why did they only highlight the cheap stew meat...lol
Posted by: mino2126 | Feb 6, 2008 8:40:09 PM
I don't know if anyone else listened to CSCO call. Listening to Chambers speak gave me deja vu.
It's almost like he is reading a transcript from a CSCO conference call in early 2001.
Well we all know how it ended last time.
My favorite comment was John Hooper's after call interview where he said that the financial vertical was surprisingly strong and that "market volatility is driving demand for investment in infrastructure" at large financial institutions.
Sweet, then CSCO should do great this year.
They also spent 4 billion buying back shares at a an average price of 28.67.
Posted by: Vermont Trader.. | Feb 6, 2008 8:49:08 PM
Hey, no fair. This was funny the first time you put it up and then broke our hearts taking it down. The theory being that it'd come 'round again ?
So what'll you put up next if/as we keep on doing a deep dive ?
p.s. - Bull market bounce ?
Posted by: dblwyo | Feb 6, 2008 8:50:34 PM
Why can't we just embrace the business cycle? It's like everyone is so shocked that the economy could actually contract...everybody panic.
Posted by: Meds | Feb 6, 2008 8:54:13 PM
Vermont trader,
CSCO's underwater repurchase is peanuts. My employer, a publicly traded company, bought back 14mil shares in their 2007 repurchase program at an average price in the $74.76. Stock closed today ~$43. Efficient use of capital, dudes.
Posted by: bonghiteric | Feb 6, 2008 9:20:24 PM
could actually contract...everybody panic
no - do it in marked time for the short sellers
spread it around - goes farther that way
Posted by: Greg0658 | Feb 6, 2008 9:30:28 PM
bong..
i am always surprised when people make fun of companies buying shares back.
isnt it a good thing for the share holder?
if you cannot find a way to use the capital to grow business, why not give dividend or buyback shares?
instead of wasting it on some stupid acquisition where the acquired company shareholders laugh all the way to the bank...and your shareholders, well they are left holding the bag.
Posted by: techy | Feb 6, 2008 9:36:50 PM
bong..
i am always surprised when people make fun of companies buying shares back.
isnt it a good thing for the share holder?
if you cannot find a way to use the capital to grow business, why not give dividend or buyback shares?
instead of wasting it on some stupid acquisition where the acquired company shareholders laugh all the way to the bank...and your shareholders, well they are left holding the bag.
Posted by: techy | Feb 6, 2008 9:36:50 PM
""""
maybe these companies should pay a dividend instead. Its a lost art
Posted by: rickrude | Feb 6, 2008 9:45:12 PM
Techy,
On the surface I agree with your point, though I don't believe that all buybacks are created equal. That's a whole other topic though.
The point I was making was specific to my employer. It happens to be in the financial services sector. It also has some damaging exposure to ABS's & CDO's. Additionally it has a minority stake in a monoline. The bulk of the repurchase occured in Q1-Q3 of 2007 so management bought at the top, hence my sarcasm directed at their use of funds. They could've decreased the public float more effectively by purchasing more shares later in 2007 when they were cheaper.
Posted by: bonghiteric | Feb 6, 2008 10:00:43 PM
rickrude, CSCO buys back the shares to keep the eps growth that the street expects from them. If they paid a dividend instead of share buybacks, you might be looking at a 10x multiple, although the way things are going CSCO might get there on their own.
Seriously, this market looks either insanely cheap on a absolute and relative (treasuries) basis, or it is discounting the mother of all global recessions.
Posted by: kk | Feb 6, 2008 10:08:12 PM
Just heard the stimulus package failed in the Senate. Not that it means much, but how do you think the hold up will effect purchasing managers (holding back puchases) re accelerated depreciation?
Posted by: bidask | Feb 6, 2008 11:14:25 PM
Is CSCO buying back shares
or buying back shares they gave away (options).
You have to ask THAT question to any all corps. in the US.
End of story.
Posted by: MarkTX | Feb 7, 2008 12:27:39 AM
That's a steer not a bull. Maybe that's what's wrong with it.
Posted by: k2613 | Feb 7, 2008 1:12:26 AM
Interesting this is in the Psychology section of the website. In the minds of many Bulls the recession has come and gone, and now financials and retails and transports are leading the stock market into a recovery of the economy. Yes, the stock market can be a leading indicator, but this is ridiculous.
The recession has yet to be fully felt by the U.S. economy. Who knows whether it will be mild or serious, bordering on depression. Yet in the minds of many Bulls the market has already discounted whatever the future holds: a slowdown or a recession or a depression. Interesting Psychology.
Posted by: tom a taxpayer | Feb 7, 2008 3:10:09 AM
tom a taxpayer,
The Bulls psychology is such, because they have been spoon feed the Greenspan/Bernanke Put for so long. The problem is this time around, because of the nominal interest level being so low, a monetary easing cycle is not going to work!
We are in deep do-do here. It is going to be long and protracted. My only hope is that it comes sooner rather than later.
Posted by: Justin | Feb 7, 2008 6:15:12 AM
Barry, why do we have to listen to "Cramer down your thoat," on CNBC all the time lately, what's going on at CNBC? He is creating such a negative tone around the FED that they are going to lose their credibility amongst the layman sooner rather than later. Very scarry stuff. All he does is pump, pump, and pump, until he realizes he's way on the wrong side, and then he screams, screams, screams! Get the idiot off of there!
Posted by: Justin | Feb 7, 2008 7:43:29 AM
Oh, and how can he get away with plugging, after Walmart's numbers come out and they at the round table there on set saying how bad things are, but he throws in a comment about how tourism is looking good at Disney...my guess is that his charitable trust owns some shares in Disney.
Posted by: Justin | Feb 7, 2008 7:49:07 AM
MarkTX-
Totally and unconditionally the truth.
It's all about the ATM for execs.
Ciao
MS
Posted by: michael schumacher | Feb 7, 2008 10:45:05 AM
"Why did they only highlight the cheap stew meat...lol
Posted by: mino2126 | Feb 6, 2008 8:40:09 PM"
Because they have eaten the best bits already and now need to eat humble pie for a bit :)
Posted by: derek | Feb 7, 2008 3:53:53 PM
Ain't it the sad truth.
Posted by: stockboy1337 | Feb 8, 2008 4:21:41 PM
