Mr. President.. Irrational Exuberance... Living and Learning...

Mr. President...
Most Americans are excited to get this Presidential Election over with. Both candidates pose as change agents. Barack symbolizes a combination of angst and pragmatism. Voters with a high degree of angst see Obama as a genuine break from the Bush administration. But beyond the "NO more Bush attitude", American voters see Obama as someone who actually seems to care for the underdog. The people like an upbeat attitude and a sense of self-confidence that seems to permeate Obama. At the bare minimum, he appears to fit the "image" of a President.

John McCain does have the battle scars to prove that he is a change agent as well. I do believe that he could have... and should have been the President of the United States instead of George W. Bush. But soft money donations took care of that... And big money ruled the day, McCain was left out in the cold. McCain a bit older, and now a bit wiser. He lacks the Presidential image or grace of Barack. Yet, more Americans will agree with McCain's platform as opposed to Obama's. A survey was conducted on Friday, where a test group of 150 individuals voted for the President. On appearance Obama won hands down. However, the same 150 individuals completed a survey based on political platforms, and most found that they agreed with McCain. Truly interesting!!!

Both candidates bring innovative ideas to the voter. While a number of polls suggest the election is already over, I am anticipating a dog-fight on Election Day. Regardless of the out-come, I believe that both of these candidates can move this country forward. Barack could well find himself in the same position that Bush had in his first term. Ownership of the House and Senate. This could well move his agenda along. By the same token, McCain who has a track-record of working across the aisle could position himself as a champion of bi-partisan change. Whoever it is, they will have their work cut out for them. On a side note, Representative Steve LaTourette is visiting schools in Solon and Twinsburg, Ohio. The fact that he is taking time out of his busy schedule to deliver speeches on Democracy and the Importance of Voting to kids who can't vote yet tells you what kind of a guy he is! I only wish I knew where to get his sign for my front yard!!!

Irrational Exuberance...
Former Fed Chairman Alan Greenspan coined the phrase "Irrational Exuberance" during the 1990's Bull Market, explaining why companies who had negative earnings but, had a .com attached to them, doubled and tripled in value. I wanted to remind readers that companies like Bamboo.com, Sunrise Technologies, Microvision, and Iomega are a few companies where the following epitaph might read: "Easy Come, Easy Go... Where the earnings came from, We did not know... They gave us money, for our stock. And we watched it drop, just like a rock." Yet, investors and speculators piled into stocks with no real reason, with the exception that stocks kept going up. The last time investors had piled into useless stocks was during the wireless radio revolution of the 1920's-30's!

Earnings drive companies, and companies that cannot demonstrate clear revenue now, or in the near to medium future should be punished. For instance, LVS is the ticker symbol of Las Vegas Sands Casinos. As we speak, they have no earnings... none! The EPS of LVS stands at a negative .08 cents per share. While the market cap reflects $5.04 Billion, companies are only worth what people are willing to pay for them. This week, analysts rewarded companies that require discretionary spending from a beleaguered consumer. The general belief on Wall Street must be that people will attempt to gamble themselves out of debt... or at least, win back their depleted retirement savings!

Cinnemark (CNK)is another loser. Not that I don't mind catching a movie. But when it comes to buying stock on this dead horse.. forget-about-it! While we are sure to see a new salvo a Christmas time movies (or if you prefer the term Holiday movies), expect box office numbers that are well-below expectations. With earnings of -.53 cents a share, and a high likeliness of global recession, this one should be avoided like the Bubonic Plague!!! Companies like WMT and D make much more sense!

On a positive note, reduced gas prices could well keep consumers in their houses... and hopefully service a portion of debt... but in terms of additional spending, it is just not going to happen. Moreover, I do not think that GM will actively pursue the next generation of Hummers until new gas mileage standards are developed. San Francisco Fed Chief Robert Parry suggested additional "downside risks" even after the .50 rate cut announced earlier this week. The bottom line is that a triple whammy of rising unemployment, tightening credit, and shrinking wealth are at work as major de-levereging forces. From the peak of housing boom, national housing prices have dropped -17%.

Living and Learning...
The realm of trading options is new to me. While I have had stunning success (profits of over 40%), I am living and learning. As a rule of thumb, when stocks hit a 100-200% profit, I believe a prudent strategy might be to purchase a covering position to lock in a higher degree of profits. Technical rallies have cut deep into profit margins that would be otherwise OUT OF THIS WORLD!!! The covering could well be a contract that is only a month out... and cheap. While I was a big winner of COF, XLI, and XLY, I have learned that covering positions could well be a reasonable strategy. A reminder should always be that profit is never a dirty word. I am currently holding calls on BAC, GE, and AU. Put positions include WYNN, FXI, VNO, SPG, BBW, and CNK.

Sources...Varied