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Nov 27, 2006 - Issue #034
Kerkorian Bails Out of GM!
Dow score card for the week ending 11/24/06.
DJ-30: 12280.17 -25.65 -0.21%. In the Real World: 51.10 -0.30 -0.58%.
UP: 8 (-17), Down: 22 (+17).
Trends (weekly): This is the subjective part.
Rising 19 (n/c):
+*AA, AXP, BA, DD, DIS, HD, HON, HPQ, IBM, INTC, JNJ, JPM, KO, MMM, MO, MSFT, T, VZ,
Consolidating 10 (n/c):
-*AIG, C, GE, GM, MCD, MRK, PFE, PG, UTX, WMT.
Declining 1 (n/c):
* denotes change of category.
+/- denotes change of direction.
The stand-out event of the week, in my opinion, was Mr. Kirk Kerkorian bailing
out of GM.
On the daily and weekly charts, GM busted through the upward sloping significant support
trendlines big time. Although it held well above the most recent significant low point,
the penetration of the trend lines, with such force, is the most compelling argument in
favor of liquidation that I can think of.
Back in July, in the 1st issue of this letter, actually, I identified what I suspected
was "Big Money" accumulation of GM shares in the face of bad news. Little did I know the
buyer was Kirk Kerkorian!
"Big Money" tends to be "Smart Money". Buy when they buy; sell when they sell. Simple.
In under $20, out over $30, in less than 6 months. Not bad. How many years worth of
dividends do you suppose that represents? What would one trade like this a year do for
So what's next? Does the market seem vulnerable to you? It does to me. I'm always
What's the "secret" to picking winners in the stock market? Not trying to pick winners.
Avoid picking losers.
The best candidates for new purchase are, in my opinion, to be found among the worst
performing stocks relative to the S&P 500 over the past year just as they are showing
signs of turning around.
That's why stocks such as INTC, HD, and AA currently attract my interest.
Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!