1. President-elect Obama has been busy working on choosing members of his cabinet in hopes of hitting the ground running on January 20th. As an early sign of "keeping my promise to the American people", I do see his choices running the gamut of liberal/conservative and both parties, many with experience in the Clinton administration. Now, what shape the economy will be in by then is still up in the air; hopefully there will be something left for this team to manage!
2. Financial crisis continues. The big three, GM, Ford and Chrysler, are still hoping for a $25 billion bailout (this on top of the $25 billion they want to upgrade the facilities to produce fuel efficient cars). Yesterday was not a good day for the CEOs of the big three, flying in on private jets, refusing to work for a $1 salary (except for Nardelli, apparently he is "still good" with the $300 million package he got from Home Depot!), nor do they have a concrete plan they can share about turning things around (saying they have made a lot of cuts already), as they hold out the proverbial "tincup" asking for a handout. Talk about not getting it! Look, I have no issue with the private jet for important CEOs who need to be able to get to important meetings/conferences where traveling coach would just not work. I do think this would have been one of those times to buy 3 first class tickets and fly commercial like the rest of the public as you try to show "you understand and care about the common man". Who is their PR people - please, give me a break!!! It is all about perception - and the perception of the big three CEOs are they are rich, arrogant, and don't get it! There are a number in Congress who feel these companies should just reorganize in bankruptcy. I am not in favor of the bailout without specifics and restriction (especially built around performance measures for pay for the executives), but I find it a little ironic that members of Congress (who don't have to pay social security taxes, have a pretty good "lifetime benefits package", etc.) are talking about cutting costs until it hurts and protecting the people's money.
3. The markets: the international markets are not that different from the U.S. markets, as governments are stepping in along with various money center banks and large world fund banks in an attempt to instill confidence in the system, but things still seen to rise and fall on the fortunes of the U.S. markets. Yesterday (November 19th) the S&P500 hit 819. This is significant for me, as in previous market highs which move to lows and then back to highs, etc., the difference between the market high and market low as measured by the S&P is 50% (this means a drop of 50% from the high before the bottom is found). In this last market cycle, 819 is that 50% down number. For me, if this number can hang in her for a while (say a week or so), I think we could have a temporary bottom call to look at. However, if it continues to fall, it is going to go way down (under 800 on the S&P and about 6500 on the Dow), in my opinion.
4. Ideas for investing (other than the mattress, that is) is very little is out there that I would venture into right now. If you play options, tomorrow is options expiration so you can look at puts of certain stocks as well as some index plays (as I don't think anything is going to happen on the upside for a while), out a ways (maybe January at the earliest). What to look at in individual stocks (this is only if you have a LONG TERM view) is very little as well. I do believe there are still good quality companies that have been beat down too far, but they will come back only when some level of confidence is restored. There are a bunch (latest count is over 100) "blue chip" stocks that are under $10. While you can bottom feed it is important to understand the risk and what the story is behind the company. I always say, if you can't talk about a company you are interested in, for two minutes, you don't know enough to own it!
Here are some stocks that are intriguing to me:
Citicorp (though I think this one is going to break up and pieces sold to other banks)
JP Morgan
Wells Fargo
Johnson & Johnson
Intel
Cisco
Wal-Mart (I think, if this market stays like this for a while, this could be the next Google, as far as price goes)
Merck
ExxonMobil
Blackboard
Apple
You need to have a strong stomach for this market and a long-term time horizon, or just find safe CDs, government money markets, and government paper.
