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The Money Map Advantage
Thursday, October 13, 2005
By Horacio Marquez
#13
** Looking Through The Valley
Very little has changed in the advice I gave you last week. Keeping the powder dry to use it at the appropriate moment proved to be the right move.
This is the short-term money “show-and-tell” season: Show me your realized profits so that we can calculate your year-end compensation. So, naturally, whatever these smart traders were long the most is suffering the most. The main culprits this time are energy, including our beloved Tenaris (NYSE: TS), and some tech stocks, like Apple and AMD.
The short-term choice for those looking for fast money will be to see the glass half-empty. The excuse this time is the Fed’s hawkish inflation outlook and rate-hiking to accommodate the immediate slowdown of the economy due to hurricanes Katrina and Rita. The street and the fast money are anticipating a really bad CPI tomorrow (1.1% headline number and 0.5% CPI).
At first glance, annualize this and sob. Adding to the weakness in equities are slow car sales and general consumer weakness, the dollar’s short-term strength due to the profit repatriation window, and the so-called “demand destruction” in distillates. But just as they prefer to look straight down the valley right now, the sun will rise again, and they will once more come back, looking for cheap buys that will outperform.
And they will see across the valley into the economy six months ahead… The Fed will stop hiking rates, since inflation will have been contained and housing prices will have corrected in bubbly areas, the economy will reaccelerate, along with the New Orleans rebuilding efforts, lower gasoline prices and the U.S. dollar’s renewed weakness in the new year. Also, Delphi, GM, Ford and the rest of the unionized car manufacturers – and their suppliers – will be well on their way toward restructuring inflexible, old-era wages and benefits and, globally competitive once more.
So, as we see stock prices “on sale” we can cautiously start edging in. By March 2006, we should see our difficult trade rewarded handsomely. Tenaris is one of those cases where we can add in steps, over the next couple of weeks. I have identified many stocks to which the Money Map indicators point for a handsome return, and I expect to be unleashing them to you very, very soon.
In the meantime, we thank Jim Cramer, who focused on our Mitsubishi UFJ Financial pick last night as his preferred pick with mammoth potential. He compared it to Citibank in 1991 (thank you Jimbo). He also mentioned another Japanese stock, Kirin Brewery (Nasdaq: KNBWY) and Cameco (NYSE: CCJ), both of which have been in my radar screen for almost a year. I have highlighted both of them to the attendees at many of our Oxford Club seminars.
Finally, Cerner (Nasdaq: CERN) is going through the turmoil without much ado, and our Austria ETF (AMEX: EWO) is pausing temporarily, not helped much by the poor agreement between Schroeder and Merkel in Germany.
Yes, market-friendly Merkel leading the country is good news at face value, but Schroeder is still a major obstacle to reform. Therefore, we are still tuned to Germany’s developments before we jump in. We want to see if they finally see the light of inevitable reform, or are forced into it, like Delphi was.
Enjoy and profit,
Horacio Marquez
If you have any questions, feel free to call one of our VIP Trading Services representatives at 888.570.9830 (toll-free) or e-mail: viptrader@oxfordclub.com , or contact Pillar One Advisor Greg Galloway at 800.438.3040 or 407.667.4729.
Stock
Current Price
Comments
Mitsubishi UFJ Finan. (NYSE: MTU)
$12.92
Buy. Sell stop is $10.20.
iShares Japan Fund (AMEX: EWJ)
$11.95
Buy. Sell stop is $10.
Cerner Corp. (Nasdaq: CERN)
$84.30
Buy. Sell stop is $62.25.
Tenaris (NYSE: TS)
$111.71
Buy. Sell stop is $95.
MSCI Austria Fund (AMEX: EWO)
$25.57
Buy. Sell stop is $20.90.
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