Year: 2009

Crysler, Fiat, contract law, civilisation etc. etc.

Hamilton

Seeking alpha is the mission of all portfolio managers. They haven’t found much of it lately but that is about to change. A prominent brand of FIAT (no, not fiat money ,there is enough of that, but as in Factory , Italian, of Automobiles from Turin) Here is an example.

Alpha Romeo GT

It is the Alpha Romeo GT, arguable the best built sports car in its price class.  Better styling, better mechanics than even the Germans make; you can go through a hairpin at 100km/hr with this thing. It is very civilized as it even requires “warming up” before you take it for a spin. Unfortunately this kind of car is wasted on North Americans and certainly does not do as well in Canadian climes. FIAT itself is not that hot lately either; here is a chart.

FIAT

Going from 32 to 4 is not exactly confidence inspiring, but then going from 4 to 10 clearly is. So why the turn-around today. In my view it is fairly simple having recently had some experience with this myself. Money is not the life-blood of capitalism, contract law is. Without the ability to agree on certain things in the knowledge that the agreement will be honored  we would be left with pure chaos. We already have some of that as the Unions become shareholders and the Government steps in as operators, but today Obama revealed an unbelievably anti-capitalist attitude in publicly vilifying the bondholders as recalcitrant speculators etc. and in the process denying them the usual remedies under law. This is completely and totally unheard of and will, no doubt, have many unintended repercussions. Where is $1 Lee Iacocca?

IBM April 30 (update)

Hamilton

IBM April 30

We have been in and out of this stock. Last, on April 12 I suggested the stock would trade to $106. Wrong again as it went to $106.05 and then turned down below the starting point. The technical jargon for this is an outside reversal day, a very bad omen. Hope you have your puts on!

TA Transalta, April 30 (for CB)

Hamilton

Back on the 30th of March I suggested the stock had completed a 5th of a 5th or, even if it had not, was about to do so. The chart then is under the archives but here it is again.

TA March30

At the time I suggested a possible target of $27 or so, 4th wave , B wave, percentage retracement, 200-day moving average etc. etc. I had completely forgotten about this one but fortunately it did do close to 30% (18+ to 21). Next question is where is it really going. Here is today’s chart.

TA april 30 

Nothing has changed  $21 is the first point. $27 is the next wave 4 of prev. degree. $25 is where the 200-day moving average resides. $28 is where the B wave top resides; it also happens to be a pretty exact 50% retracement. So all told there is a whole cluster of reasonable targets between $21 and $28, most at or above $24. The sharp action of the last day or so suggests we are in some third wave, implying that we still need a 4th (when you start worrying if you should not have exited the trade) and then a 5th to finish (perhaps only) the 3d wave up.  So, all ge-OH aside, go for $24. What are the fundamentals on this ? I am not even sure what they actually do. (oil is maybe going to $65 before it goes to a new low).