This is another special appearance: For two segments, I will be debating Microsoft, discussing Telecom mergers, and a giving a general over view of the Markets with Cody Willard and John Rutledge.
I’m scheduled to be on from 5:20 to 5:40 pm.
UPDATE: June 22, 2006 10:15
Video of the appearance is here in two parts:
ask cody if this is really his cousin….
Great show and what a plug for your Blog. The SexGod Cody seemed very flustered. The Sex Qween blogger must be on him.
Did I hear right? Cody is in mostly cash and only a little MSFT?
I’m sorry but this is worse than armchair investing. Time for a showdown. I wanna see his $10k against your $10k and no backdating like he’s obviously been doing with his claims. Just when did Cody first say he was moving mostly to cash?
Barry: Looking sharp nice shirt, tie was good, keep smiling. Kudlow’s tie was outstanding. (RATS)
Did I hear you recommend the banks on the program?
We are at the end of a bull run within a secular bear mkt, and the credit cycle is turning.
Rest assure that when the liquidity cycle is turning (as it is now), the credit cycle will turn. this will be a multi year event, and will NOT help the financials.The treasury mkt is alread telling us (imho), they are afraid of over tightening by the fed.
It is not much I disagree with you….but this one I do.
maybe i’m wrong but think he was looking at relative performance of banks vs broker/dealers???….. regardless, relative performance does not pay the bills and 95% of cnbc’s target audience would not spread trade like that.
cody loves everything but sits in cash…. LOL
One more thing………..the brokers (and the banks) are exposed big time to the credit cycle though credit derivatives direct( In their porfolios) as well as through their exposure to hedge funds……we are only one major credit event away from a downgrade of the financials….remember these thing do not show up in good times but with dow at 8000( your prediction) they will!
My nagging concern about “banks” are their practices of recording mortgage transactions. Negative amortization loans book increases in principal balances as current income. Teaser/introductory rates on mortgages are booked as income as if being paid back at the full rate. Do I remember sometime around early 2000 when we “discovered” tech companies booking future earnings in current quarters? Nah, we learned that lesson. We’d never let that happen a third time.
Another great appearance. I hope some day they put you in the same segment as the Dynamic Duo (Riech and Moore).
Well, not really but kinda.
I wasn’t planning on recommending the banks — I was discussing the Long Brokers/Short Banks paired trade that has been all the hedge fund rage (not me) — and is now reversing, wiht BBH rec’ibng to go long Banks/Short Brokers.
I think I also said you “can hide in cheap banks” — but its not my first choice where I would put money — if you must be (by charter) between 90-100% long, you go to food, beverage, tobacco, utility, and bonds.
But yeah, it sure looks like I said that
it was an arbitrage.. he spoke of shorting the broker dealers and buying the banks. it’s not a bad risk/reward. you get to collect a 4% yield and the brokers have been leading this decline. say long c/short gs. goldman has been increasing their VaR to generate extra returns and that could catch up with them as markets unwind. citi pretty diversified. sounds good to me. let’s revisit it in a couple of months
the problem with short brokers and long banks is that banks are probably more exposed to the credit cycle via both corporate banking, mortgage products and retails banking, than the brokers with their prop trading (pure alpha — although i am sceptical) and their fee based investment banking (m&a/ restructuring and bond/equity issuiance). on the other hand their private equity is vulnerable. in the end I wouldnt’ be long any of them. The only positive i can say about them is that the short trade is already crowded (see bernie shaeffer) and it might be too early for a good short position?
Regarding “Did I hear right? Cody is in mostly cash and only a little MSFT? ”
Actually Cody has been mostly in cash for a while now. For an alleged “perma bull” he did very well from my viewpoint on getting what he could from the bull market and then bailing.
On 6/1 he said: “The best trade I can come up with in this environment is still to “trade in trading for patience.” I am indeed anxious to get active trading stocks, but sometimes capital preservation is the most important focus of one’s trading. And that — for me, for this day — still dictates being mostly in cash and mostly patient. ”
The week before on 5/24:
“First, let’s keep it real, folks. You know as well as I do that part of that call to go to cash right before this crash was Lady Luck’s grace. Further, just as I’m looking for a potential tech bubble in 2007 and 2008, but am not positioned for it (yet?), I’d only thought there was potential for the ugliness that ensued after my cash call. Had I actually expected such, I sure would have gone short.
I’m growing increasingly bullish and excited about starting to get long as prices continue to come down. But I still think the best approach for me right now is stick with being mostly in cash and Microsoft. I know it’s boring.”
“Everyone keeps asking me when I’ll start buying stocks again. Put simply: I don’t know…. What I know is that I’m going to sit on a bunch of cash for now. Let you know when that changes.”
He talks bullish but watch his feet.
Barry mentioned that the so-called positive housing data was a blip and noted how rates are still historically low. Kudlow used it as a typical talking point indicating strength. Did anyone look at the number and as I did and say “wow, this is just going to continue add to the tremendous glut of inventory and just make things worse on the backend”…I would have thought Barry would have been all over that angle.
Did Cody really say Crash? I think Codys alright, but Market Crash!, really? I’d call it more of a moderate decline in the US markets.
Housing “starts” are a useless indicator in a wildly wobbling bubble. The massive speculatory bubble and its ugly offshoot Real Estate bubble most likely are near collapse, globally. This September-December period will go down as one of the worst economic periods in recent history and will be the beginning of a new economic era.
Cody Willard would never have made it on Lou Rukeyser’s Wall Street Week– ’nuff said