Click here to Bookmark this
site!
Monday, May 8th 2006
Apples & Oranges (Secular
vs Cyclical)
"You want to understand why the Dow's around all-time highs?
If you want to know why this market is so incredibly strong, then you
need to forget everything you've ever thought about the drug co.s, the
food co.s, the consumer non-durables and the durables, minerals, oils,
heavy machinery and metals.
I've been watching this market
- studying. And underneath the noise from individual stocks,
I found something totally unprecedented, that needs to be acknowledged
and responded to.
The secular growth stocks have
all gone cyclical; and the cyclical stocks have all gone
secular! Man, that's some authentic, serious Wall St.
jibberish, but I think it's the reason for the strength behind the
market.
If you don't know a secular
stock from a cyclical, or you need a refresher... I can't think of a
better way to celebrate Lou's [Rukeyser's] legacy, than to use his
definitions.
He could joke that cyclicals
sounded like washing machines, and they actually were. And
secular sounded like a 'religious' thing, and that actually is too a
good place to start.
On Wall St., we are addicted
to growth. And we will pay a big premium for steady growth,
and an even bigger one for unstimulated, organic growth!
That's the secular growth I'm
talking about; secular stocks are the ones that should give you the
same high levels of growth through thick and thin.
Historically, that has meant healthcare, food & beverage, light
consumer goods, like PG
(PROCTER GAMBLE CO)
These all do well in a healthy
economy, but they're supposed to do very poorly when things slow
down. That means they don't deserve a premium multiple,
because you know that great earnings are unsustainable."...
cont'd
MONDAY
(5/8/2006):
Lightning Round!!!
Apples & Oranges
Radio Recap
Good Calls
