3SOF

Quote from: Quasi on March 09, 2007, 12:29:23 PM

Quote from: tokyopua on March 09, 2007, 10:55:03 AM
Anyone here good at interpreting the jobs numbers this morning?  It seems to me not so positive that Construction and Mfg jobs were down while the major up numbers were Service related?

Also, isn't it the case that unemployment fell in part because the labor force itself dropped by 190,000 as they reported on CNBC just now?

Hi Tokyopua

Yes re the jobs numbers, I don't follow them or chart them or try to analyze them, I just go with my gut feeling and what I see in the world around me.  The following may not be politically correct and many will disagree with me, but its just how I see the NA jobs situation and for me its very much a large part of the overall problem.

I've worked in the engineering field for 28 years, last 18 yrs at Nortel doing research and development,  (downsized, no pension not enough yrs of service, now self employed).

I've been very concerned for many years that we in NA have a standard of living way beyond our means on a global basis.  Yes we were the worlds major supplier of manufactured items and we were very good at it, but that is changing radically as this historic engine of growth moves elsewhere.

In the manufacturing sector I've seen wages rise way beyond fair market value, ie when it takes 1 day to learn how to load and unload and push the start button on a machine, it is NOT a skilled labor job reflective of $35/hr with very lucrative benefits.  This is a minimum wage range job we're talking about, but nobody wants to listen and in the NA manufacturing boom times companies just gave the unions whatever they wanted because they couldn't afford a strike, and I've personally seen a lot of unbelievable deals over the years.  They were also justified by the fact that they guy across the street gets that much so I deserve it too.   Now in other areas say machinists or industrial electricians, with 2-3 years of study and then several years of apprenticeship and ongoing training, they are in the same $35/hr range but I feel, as a true skilled job they are much closer to fair market value.

So where are we now, well I just look around and see high paying factories everywhere shutting down, a devastating blow to many communities.  Now many of those employees get early retirement (now out of the market), the ones that don't move into the lower paying service industry.  So jobs are still being created, jobs numbers are OK right ?   So now we get to the point that everyone works in the service industry at low paying jobs, well who are they servicing ?  My take is the current baby boomer's who are spending their retirement money, traveling and buying that last new BMW.  So what happens as they start to decline, less demand for service, as the current service people are not going to expensive restaurants, theaters or buying new Beamers.  Sort of a spiral, less disposable income, less spent in the community, less demand for service jobs, less disposable income, etc etc.

Now we still have a lot of R&D going on in NA, but here again there is erosion, as many of the mid & lower range jobs are being farmed out over the internet to places like India.  Big Engineering and Accounting firms have most of the drafting or booking entry stuff done overseas.  I see it happening everywhere and its accelerating, it's the only way companies here can remain profitable at the present time.

In many cases I see the Gov stepping in with subsidies to keep the factories running, I personally see this as a band aid on the symptom rather than a long term solution addressing the actual problem.  When the subsidies are now longer available the factory closes and relocates elsewhere to receive more subsidies.  I'm a business type guy so I feel if you want to start a banana plantation in Alaska, you should be on your own, no Gov help should be available !.  But the Gov continues to support many of these areas which just don't make proper business sense, I call them Gov paid make work projects with no long term fundamentals for success.

In Canada we are not so bad off as we still have O&G and mining, where the jobs just can't be farmed out offshore.

Sorry for this bit of a rant, just got on a roll.

Re Markets, guess we call this a gap to crap on pretty good volume, now slightly rising on low volume, not what the Bulls want to see.  Looks like its gonna be more sideways slop for a while longer.

JMHO

Quasi

Hi Quasi, I see the same thing. I am in NY State and watched as my local region lost 39,000 jobs in the steel industry. Workers were getting 13 weeks a year and making a professional salary. The Chemical industry lost 19,000 jobs, similar labor story but they also had huge accumulated environmental problems. Their solution has been to keep a skeleton crew operating the plants to avoid the huge costs of a cleanup required on closing, leaving a blighted area and no jobs.The region still has a fair amount of auto related business left. ll left. At one of the local plants, the average worker was still able to pull down 60,000 a year with really nice benefits. An acquaintance who works at the plant says that the average absentism is about 25% on any given day. The company entered bankruptcy a few years back. An axle plant just announced it is closing, 750 jobs gone overnight. The one bright spot  in manufacturing is a GM plant that builds engines. 15 years ago the union and management agreed on a policy of cooperation that has worked very well and is one of the most efficient operations in the GM family.  All in all, a wealthy (by world standards) middle class based on manufacturing is a thing of the past. A service economy which exists only to serve a service economy is not sustainable in the long run. Mid to Long term the US standard of living is going to decline until it is on par with the rising chinda economies. Gambling has moved into the area big time, touted as wonderful growth by the politicians, but in reality providing service jobs and sucking money from the local economy.
One advantage of the region is its housing prices. I can buy a very nice suburban home for less than 140,000, a beautiful modern log home w/swimming pool on 4 landscaped acres for 125,000, but people have a hard time affording them evan at those prices. When you look at realestate across the country, are retiring baby boomer's going to stay in a 600,000 ranch house that is no longer appreciating, or move to an area with a lower cost of living? Imagine what that could do to some over heated markets over the next 15 years.
Sorry for continuing your rant, but I think it is always good to be looking into the future.          

Hey guys,

Looks to me like the market is just starting to break down here.  The QQQQs, COMPEX, DOW are all showing signs of a channel breakdown.  The Dow just broke 12250, and I think that we may see an afternoon selloff into more selling next week. 

Quote from: ScottishTrader on March 09, 2007, 02:00:22 PM
Hey guys,

Looks to me like the market is just starting to break down here.  The QQQQs, COMPEX, DOW are all showing signs of a channel breakdown.  The Dow just broke 12250, and I think that we may see an afternoon selloff into more selling next week. 

I also see a possible cup and handle pattern forming on the intraday $VIX.  This was a learning experience because when I then checked the dow and s&P charts its an inverse cup and handle type pattern, which is interesting to see, I never looked for such a thing nor would have recognized it... only problem is I cant tell volume on the VIX so its hard to discern cup and handle pattern volume patterns.

Actually if I look at the SPY though, the volume pattern is perfect for an inverse cup and handle, you have high volume in the run down, diminished volume now on the pull back to form a handle...  then if it breaks down again I expect higher volume.

I have been invested in JADE for a few weeks now; but I am considering selling soon and moving my investment to CECE; there seems to be a lot of focus on improving the pollution issues in China lately (bookings in February already total 22 million; http://biz.yahoo.com/prnews/070226/clm051.html?.v=76).

As for Brazil, I have been following NETC for a few weeks, I am not invested yet, but am looking for a good entry point; the company provides entertainment and communications services; its a booming market.

After reading some posts here on NVTL, it reminds me of ATHR which I've been following for a few weeks.  Both have great potential.

I'm also interested in a recent post regarding  HQSB (I will start to follow this next week and do some research over the weekend).

David, can you share your thoughts on CECE and NETC?

Cheers,

Handle just broke to the downside, S&P at -3.0% but I think its going lower on this pattern...

Hey tokyo, not quite sure if I see what you're saying... could you post a chart???

Quote from: ScottishTrader on March 09, 2007, 02:30:01 PM
Hey tokyo, not quite sure if I see what you're saying... could you post a chart???

Guess I was wrong about the breakout or the handle needs more time to form, but here is the picture, let me know what you think:

Volume is supposed to be higher at the sides of the cup and on the handle breakout, but low in the base of the cup, and we see that here.  Except for the now messy handle, pretty classic pattern, but inverted.  A break below the 140.2 that lasts on this 3 minute chart should eventually lead to a swift downtrend if I am right about the pattern.

BigSully1 requested an analysis on AMK, let me see what I have here. Well, this is a very low volume stock, just 26,100 shares traded today, so definitely not a short term trader's dream (but perhaps a great investment, share volume traded has nothing to do with the value of the company). One has to be prepared to wait months, maybe years, for the stock to wake up to live again.

The trend is now bearish as the stock came off 40% over the last month or so, from $20 to a low of $11.53.

Fundamentally:

- Market cap is $124 M. American Technical Ceramics Corp. engages in the design, development, manufacture, and sale of radio frequency/microwave/millimeter-wave ceramic capacitors, thin film products, and other passive components worldwide. (complete profile here)

I don't understand the business of the company completely. It was founded in 1966, so hardly a new growth story.

- No significant dilution over the years
- Balance sheet looks ok in terms of working capital, but I see inventory levels rising every quarter. This might be a signal that demand for the company's products is slowing down.
- Revenues and profits grew nicely in 2004, 2005 and 2006. Fiscal 2006 revenues were $84.13 M, so the price to sales ratio is 1.48. The Diversified Electronics industry average is 1.43.
- EPS in fiscal 2006 was $0.67, so the trailing earnings multiple is 20.7. The industry average is 19.4.

Revenues went down a bit this latest quarter and the stock tank. Yet, EPS rose some more as net profit margin rose and the company bought back some shares. EPS in fiscal 1Q 2007 (calendar 4th quarter 2006) was $0.35. If we annualize that we get $1.4 EPS for a full year, and that means a forward earnings multiple of about 10, which looks cheap, indeed, from this perspective, the stock might double.

But under the carpet I see problems arising, because that inventory buildup and decline in revenues tells me demand is slowing. The company can't get much more net profit margin expansion, in fact, the one that occurred this latest quarter might have happen because of the previous inventory buildup.

All in all I don't find the stock interesting, but, as I wrote, I don't understand its business well. Good luck

Maybe you can review JSDA.  Great earnings report yesterday.  I think they have a bright future

Quote from: rudynostalgia on March 09, 2007, 10:11:35 AM
David, a suggestion for the portfoliio: MAMA   It's the Canadian Google ( fun to be around, diffident and all the queries have to end in eh?)  I bought in at around 5.40 this a.m.

Hi Rudy

Canadian Google, MAMA wished. I believe I know MAMA fairly well, even managed to lose some money in it ... let's start by the chart. If you're playing the short term, you can see yesterday's candlestick was black, that means the stock closed below the open, so supply was higher than demand throughout the day. That is a bearish short term development.   

The news yesterday was:

• Mamma.com Releases Q4 and Year-End 2006 Results
Market Wire (Wed, Mar 7)

First thing I want to look for is the number of shares outstanding and how it changed from previous quarters. They say:

«The Company's Q4 2006 net earnings were $420,175 ($0.03 per share)»

So, the number of shares outstanding is $420,175/$0.03 = 14 million. It was about that number for the previous 3 quarters, that surprises me, I was expecting dilution, but no.

The second thing I want to know about is the market cap and its relation with revenues and profits. Current market cap is $5.16*14,000,000 = $72.24 M.

Sales for the entire 2006 were $9.6 M, so the price to sales ratio is 7.52. Google's price to sales ratio is 13.3, so MAMA doesn't look expensive from that perspective.

I believe we shouldn't care too much about the $0.30 loss per share in the full year of 2006, but the $0.03 profit per share over the 4th quarter. If the company maintains that profit for a year (the natural assumption), it would earn $0.12 and have an earnings multiple of 43. GOOG's earnings multiple is about 32.

So, MAMA needs to get more profitable, to expand its revenues and bottom line (as any company).

Let me make just one more test, the balance sheet test: I'm amazed to see the balance sheet isn't weak.

Given the area the company is in, Rudy, I risk saying you have a nice investment here. Your short term timing wasn't the best, though, but I'll study MAMA some more. If they could enter a Adwords/Adsense type of business the stock would certainly explode.

Interesting situation, thanks

QuoteI guess I kind of think a little like cramer... I go with trends I see around me and have a good sense of how things will play out by looking at the real world.

I just wish your long term performance will be better than Cramer's nullzero

QuoteDavid, can you share your thoughts on CECE and NETC?

For CECE you just need to look under "C" on the Stocks Covered List, I'm a long term bull on the stock. Please request NETC on another day, no more time today.

Thanks

Lol I wish, im to negative or neutral most of the time. Im more of a pesimist which causes me to miss out on trades and oppertunities.

David what do you think of CMGI for a long?

Quote from: tokyopua on March 09, 2007, 02:12:05 PM...charts its an inverse cup and handle type pattern, which is interesting to see, I never looked for such a thing nor would have recognized it...

I hear ya Tokyopua

Its a whole different mind set in a bear market, the normal chart patterns that you look at are all upside down, the mind just doesn't like that.

Here's my trick, I run two monitors, so what I do is text on the main and put all the charts on my secondary monitor, then I turn that monitor upside down.  Now the mind works as normal.

Just kidding

Quasi