The Real Lipstick on a Pig
Gary Kaltbaum is an investment advisor with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show “Investors Edge” on over 50 radio stations. Gary is also editor and publisher of “Gary Kaltbaum’s Trendwatch”… a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary’s Daily Market Alerts click here or call 888.484.8220 ext. 1.
I have been amazed at what I have been watching in recent days and weeks. How so many just don’t get it. Just so many trying to put the lipstick on a pig. Since this phrase has been widely used recently, I thought it appropriate as the financial world continues to just not get it. In the past couple of weeks, I have watched:
One famed banking analyst tell the world to buy Lehman Brothers
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|
Sovereign Wealth Fund Investment in Wall Street | ||||||
|
Price of Stock |
Price | |||||
|
Counrty |
Date of Deal |
Amount |
Company |
on Deal Date |
on 8/28/08 |
% Change |
|
Kuwait |
1/25/2008 |
3 billion |
Citigroup |
$26.00 |
$19.08 |
-26.60% |
|
Kuwait |
1/25/2008 |
2 billion |
Merrill Lynch |
$54.22 |
$27.52 |
-49.20% |
|
Singapore |
1/16/2008 |
6.88 billion |
Citigroup |
$29.52 |
$19.08 |
-35.40% |
|
Singapore |
12/24/2007 |
4.4 billion |
Merrill Lynch |
$53.90 |
$27.52 |
-48.90% |
|
China |
12/20/2007 |
5 billion |
Morgan Stanley |
$51.37 |
$40.60 |
-21.00% |
|
Singapore |
12/7/2007 |
9.75 billion |
UBS |
$50.48 |
$22.16 |
-56.10% |
|
United Arab Emirates |
11/26/2007 |
5 billion |
Citigroup |
$30.70 |
$19.08 |
-37.90% |
|
Singapore |
7/23/2007 |
2 billion |
Barclays |
$735.00 |
$326.75 |
-55.50% |
|
China |
7/23/2007 |
3 billion |
Barclays |
$735.00 |
$326.75 |
-55.50% |
|
Source: A. Gary Shilling & Co. and Yahoo Finance | ||||||
These numbers speak for themselves. Why would anyone in their right mind continue to invest in financials? Impotent because the stock price is now dictating just like the action in Bear Stearns did. And amazingly, analysts continued to stick their neck out. I have only one fill-in-the-blank question: Dick Fuld is still running the show at Lehman because _______ ?
But it is not just Lehman. Have you watched the stock of Washington Mutual
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The bottom line is that there remains a crisis of confidence in the financial world – and for darn good reason. So many of these companies shirked all fiduciary responsibility in the management of their companies… and it did not have to be. I believe there was this smart investor guy named Warren Buffett that scolded all these geniuses for years… telling them “derivatives were a ticking time bomb!” But no one listened. Now the comeuppance. Of course, the comeuppance comes with a $14 million and $9 million severence package of the Fannie Mae
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(
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I continue to see nothing that resembles A BOTTOM in this stock market. And if FINANCIALS come under pressure again, fuggetaboutit.
Disclaimer: The opinions expressed herein are those of the writer and may not reflect those of Wunderlich Securities, Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we can not assure its accuracy or completeness. Neither the information or any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.