Saturday, September 27, 2008

Gadget Stocks

while the Dow Industrial Average closed over one percent higher today, the Nasdaq 100 actually declined by nearly one percent.

for over a month now Trend & Value has warned that the Stock Markt will be lead by companies dealing in electronic gadgets. (click here for the initial post on the subject.)

on September 10 I pointed out the deteriorating cartographic condition of the Nasdaq 100 tracking stock, QQQQ, and wrote: 'the collapse of the housing market, mortgages, &c, that kind of stuff has largely been digested. but the collapse of the Worthless Shit Market? by the looks of it, the Bear may just be catching the scent...'

since then the Nasdaq 100 has been the worst performer among the major indexes, down about 3% while the others have been largely flat. but the Gadget Stock components of the index interest us most.

QCOM has been flat since the 10th. though before that it had deflated quite a bit from its August highs. currently trying to hold the 200 day moving average:



AAPL has enjoyed a drop in excess of 15% since Terrors' Day Eve. well below the 200 dma now:



and the weekly:



if you look at the weekly chart you notice that the share price has approached the lows of the year, and so it wouldn't surprise to see a fair bit of 'value' buying at this level. but to me this looks like something that could just gap down 30 or 40 points one morning. surprise! but maybe the stock will go up. if they can figure out a way to hold up earnings, good for them. seems to me though that they will be having quite the image problem the next couple years. besides, they charge too much for their products. I'm not saying the crap's not worth the money, I'm just saying it's too expensive. period.

don't think a big gap down in Apple shares is possible? talk to RIMM investors:



Trend & Value continues to expect these companies to portend the trend in the broader Stock Markt. and from the looks of things recently that trend appears negative.

Candice's aunt just flew down here from Chicago for eye surgery. (medical tourism is not a myth. try it sometime.) she was nice enough to bring us a couple packets of index cards (non-existent in Ecuador, believe it or not), Tom's of Maine toothpaste, and a liter of Tanqueray that she got at the duty free shop. so it's gin and tonics tonight.

the company that produces and distributes our favorite gin (among several other well-Known brands) is Diageo (NYSE: DEO). if I invested in stocks (I don't, thank Gold) I might consider tucking a few shares of DEO into the portfolio. nice dividend above 4%, decent business as far as I can tell. big debt load though. I might look into that before making a buy.

in any case, DEO looks like an interesting case study for this period of the New Normalcy, as Gary at Biiwii has termed it. with any encouragement I might delve into it a little further.