- Sign of the times? Three hundred thirty-three new lows yesterday and one new high. The stock? Sturm, Ruger (RGR), the country’s largest manufacturer of hand guns. Shares were up 3.5% on double the average volume.
- Purusing the list of new lows on Friday I was struck by some the declines. For example: Bowne -13%; Esterline -15%; MGM -21%; Norstar 12%; Raytheon -5%; Torchmark -12%; Hurco -19%; Quest Energy -16%; West Coast Bank -21%. These were declines in one day. These kinds declines make it almost impossible to pick a handful of stocks which will outperform the market. Performance is 60% market driven.
- Nevertheless I am beginning to build my wish list for a rally. Some names that occur to me: GE, with yesterday’s 68% dividend cut the shares sill yield 4.6%. That they cannot seem to find buyers for light bulb and appliance divisions is troubling. And, of course, we really don’t know the exposure of their finance company. But we may soon as it becomes stressed tested by the Feds. Blackstone Group (BX), run by the overpaid and generally unlikeable but smart Steve Schwarzman the stock is down from $20 to $4.87. Under a barrage of news releases yesterday the stock was up 25%, perhaps based upon the company’s reiteration that the $1.20 annual dividend will be paid. Berkshire Hathaway; (BRKA/BRKB) The “A” shares are off $77,000 to $78,300/share. Perhaps more manageable are the “B” shares at $2564/share, down from $4700. The company reported a dismal quarter yesterday. One wonders how I can pick the right names if Warren, supposedly the best investor of our age, can’t do it. Hewlett Packard (HPQ); shares are cut by 50% to below $30. With IBM’s announcement that its services division is coining money am thinking that recently acquired EMC may do the same for HPQ. Of course, one could always just buy IBM.
- More later.
- From the Chicago Tribune about Detroit:
“It may be tough to get financing for a new car these days, but in Detroit you can buy a house with a credit card.The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service.
Not $75,000. Remove a zero—it’s seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market.
Among the many dispiriting numbers that bleakly depict the decrepitude of this onetime industrial behemoth, the steep slide of housing values helps define the daunting challenge to anyone who wants to lead this shrinking, poverty-pocked city of about 800,000 people . . .
On a positive note, Detroit’s homicide rate dropped 14 percent last year. That prompted mayoral candidate Stanley Christmas to tell the Detroit News recently, “I don’t mean to be sarcastic, but there just isn’t anyone left to kill” . . .
- Normisms. Click to watch.
