Thursday, July 9, 2009
"That's the story, and we're sticking to it"
Every couple of months, I have lunch with a highly decorated, ex-NY City police officer. He was an expert at testimony. I asked him, what was the secret of his success on the stand. He said, "Remember, your opponent is a bad guy. And sometimes, we always don't have what we need. But we always have the story. And we stick to it."
Today we heard about China's auto sales. They were up 34% last month, and up 36.5% in June. That's the story, and we're sticking to it. After all, China gave us the figures.
Enter Exhibit A in today's trading. Alcoa. The proxy for the materials and the metals. Less bad, means better. China is turning, auto demand is up, and so is beverages. And aluminum is leveraged to the economy. The ATOI (after -tax operating income) is better than expected, so buy. My words? No Goldman's. That's the story, and we're sticking to it.
Enter Exhibit B in today's trading. Amazon. The proxy for the NAZ. Late yesterday, they cut the Kindle price. But don't worry, the $60 they were making per unit in May, when it was $359, is still there because of cost efficiencies. And the average reader, will buy 3 e-books a month. An extra $360 a year, accruing to AMZN. That means, we need a $103 six month target on the stock price, on a DCF (discounted cash flow basis). My words? No Goldman's. That's the story, and we're sticking to it.
So check out Goldman's morning research, and know the story that Wall Street is spinning.
Two stories, with the same spin. The bullet stocks, for today's action.
That's the story, and we're sticking to it.
After all, isn't Goldman, Wall Street's cop?
gs main 070909
Posted by Palmoni at 10:54 AM