Market Keeps Moving Higher as Investors Now Buy the Rip
Oh shit did the market get it's buying on today as investors once
again shunned the reality of Europe's tenuous hold on the Euro (and
Ireland, as the Fianna Fail party finally fucking failed this weekend.
And note to political leaders, if you're going to start a party, here
are some words you might want to leave out of the name of it: "fail,"
"dictatorship," and "cumshot"), ignored rising input costs (though Money
McBags would pay any cost for this input), and failed to blink at the banning of porn at Marriott Hotels (and Romney, dude, seriously? Perhaps you needed some looser special underwear).
In fact all the market focused on was mixed earnings and
potentially overflowing cash on company balance sheets for executives to
either spend on M&A (which there was a shitload of yesterday) or T&A
(which is likely why Money McBags' recent purchase of RICK was up
~5%). The reality is, nothing can stop the market's melt up as we now
live in an economy where unemployment, actual production,
and common sense don't matter as apparently the wealthiest 5% of the
people can spend enough of their easy earned manipulated portfolios to
give the illusion of a functioning economy. Keynes and Ponzi would be
Anyway, there was virtually no macro news yesterday as the market braces
for the State of the Union address to learn how awesome the
recovery is and to see who won the fight to sit next to the delightful Mary Bono Mack
(and there isn't an aisle Money McBags wouldn't cross to show Ms. Mack
his "bono"). That said, the theme of the day was cash; cash for buy
backs, cash for buy outs, and cash for buying one too many boob jobs (though Money McBags can think of no nobler way of dying). INTC announced they will be buying $10B of stock, and if their shareholders are lucky, it will be stock in AAPL, NFLX, or Flavor Flav's new fried chicken restaurant that they will be buying. There is also a rumor that BRK may start paying a dividend as they could end the year with $50B in cash and no large acquisitions to spend it on now that asset prices have risen and Kristin Davis has closed for business.
In M&A news, Rock-Tenn announced they will acquire Smurfit
for $3.5B after barely outbidding Gargamel. The combination of the two
will form North America's second largest container board company which
should benefit from the global trend of cardboard packaging being up 6%
this year as both shipping is coming back and more people are losing
their homes and having to look for alternative forms of shelter. Also, Novartis is set to buy Genoptix
for $470MM which represents a 27% premium above the closing price after
Novarits found Genoptix' balance sheet not to be cancerous (and
seriously, you try writing a joke for a cancer diagnostic company
acquisition and then let Money McBags know if you have anything
better). Genoptix basically has diagnostic tests to help understand who
would benefit from certain medications, and all joking aside, this is a
trend Money McBags has talked about before as medicine is becoming more
personalized and we already saw CLRT being taken out, so keep your eye
on these companies or others such as BRLI (and as always, keep your eye
on these too).
In company news, RSH dove 11% as their CEO resigned claiming something about "you can just buy all of this shit on the internet" while JC Penney shot up 7% on news that noted hedge fund self-fellaters Bill Ackman and Steven Roth will be joining the board. Ackman's fund now owns 16.5% of the retailer and when asked what he would to to help Penney recognize value, he said "I'm going to take Eddie Lampert's plan at Sears, and just do the exact fucking opposite of it."
In earnings news, MCD announced their Q
and investors weren't loving that MCD came up a penny short of analyst
guesses of $1.16 per share thanks to snowstorms, rising commodity costs,
and apparently taste buds. MCD had 5% global comp store growth for Q4
but US comp store growth in December slowed to 2.6% as a result of the
aforementioned snow as poor people had to spend their lunch hours
digging out fucking driveways to earn extra money and thus didn't have
time to get their Big Macs on. Guidance for January is 4% to 5% comp
store growth, new items such as frappes and oatmeal continue to drive
traffic, and the Hamburglar is still in jail for grabbing Grimace's
greasy fry (and thus causing him to literally grimace), so MCD remains a
long-term, though expensive holding of Money McBags. The one thing of
which to be aware is that if you go to Argentina they are getting serious about collecting taxes,
but the other thing of which to be aware is that MCD is going to be
raising prices as the cost of meat is expected to rise as much as 3.5%
per year according to the USDA and Peter North's manager. But remember,
the Fed said inflation is minimal because according to core inflation,
you can still buy shit you don't need for the same price as last year.
The point is, rising costs are a huge theme for 2011, more so than Hayley Atwell's upcoming break out in that Captain America movie or the burgeoning Femen movement.
If you're still bored and want to avoid work (which should be all of you), Money McBags gets his fundamental analysis on at the award winning When Genius Prevailed today on some do shit little company, and he does it in ways that would make the sell side blush. the buy side money, and Mary Meeker wet. So take a look and don't miss his daily twitter updates where he gives real time news and real time Kayla Collins.