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Intuit Inc. Message Board

  • j_smales j_smales Jan 31, 2001 2:31 PM Flag


    wrong this time on your 75bps call, but after yesterday's consumer confidence numbers, I thought you would have had two calls in a row - approaching guru status. anyway, for Greenspan to come through with 100bps in rate cuts in less than one month is pretty rare.

    Its frightening at how fast the US economy deteriorated. I am looking to get a consumer retail type stock with lots of exposure to Europe. I am already seeing articles on how the euro-zone will pick up the slack for the global economy.

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    • <<Paulohl can you please put the word MAY into your charting posts as often they sound so final and that there is no way the stock will move in any other direction other than down.>>

      My posts invariably use the word "indicate", not guarantee. As you must have learned as soon as you started investing, not all indications are true indications. The "may" is understood.

      j_smales asked me my opinion about the uptrend, which I gave.

    • Hi

      Paulohl can you please put the word MAY into your charting posts as often they sound so final and that there is no way the stock will move in anyother direction other than down. The resistance in the stock comes from the 50 day moving average which was touched breifly on friday right before the sell off at the end of the day. The next week will show whether the stock will drop down to retest the lows or break througn the 50 day, but the Doji gravestone on its own means very little other than we should play close attention over the comming few days. A close below 38 will be significant, as will a close above there 50 day.

    • The only way to trade them is to be on the floor and backed by unlimited capital. The major players are HUGE. Do you think for a moment you have a chance trading against SLK (now owned by GS), Susquehanna, UBS, and any number of players spread not just acroos the floors but around the world? The moment you enter your order you have lost--they pay pennies to trade,you pay dollars (probably lots of them).They hedge immediately. You can NEVER match their speed.
      If you feel you need to buy puts to be comfortable with a long,don't get long.
      If you feel you need to write calls for a sense of "protection" or to get "income" switch investments. If you want to sell puts or call naked,kiss your money goodbye. If you want to speculate and buy calls or puts,have fun as long as you can lose graciously. If you want to trade straddles or spreads do so knowing that the other side is ALWAYS going to make more money than you.
      As for other products,who knows. The industry is always trying to repackage itself so it can separate you from your hard earned money. Good luck.

    • felonsdie - Perplexing handle. I've heard reasons for and against options depending on your time horizon, expected return, etc. I agree that the limitating aspects are frustrating. To me, they are better suited for big time money managers who need to, with the assistance of a broker, make a large bet in a certain direction, either to increase or decrease their leverage on existing equity holdings.

      The brokerage industries' ability to invent supposedly new and better investment vehicles for the reason of taking more of our money is one thing I totally agree on. Every time I see these new index trusts come onto the market, like QQQ, or these "i-shares" I cringe. Do these people really think we do not have enough investment options with what is currently out there. These things are useless to someone like me and half the time they don't even trade like the index they are sipposed to be following.

    • Steer clear of the options market unless you have money to waste. No matter what the marketing departments of the various options exchanges tell you, you limit your upside,get very little downside protection and basically line the pockets of the exchanges and market makers. You can't win,even when you win. They ALWAYS will have the edge. Once in awhile a person hits a home run but someone always hits the lotto too. Stay the course and AVOID.I knwo the industry well,having worked for over twenty years in it. Rememeber. LIke the mutual fund industry they spend tens of millions telling you that it is fun,easy and rewarding. Read the fine print and take this free advice. Buy,hold,daytrade stocks. Avoid options (unless you have funny money) like the plague.
      All that said,look up the OCC or Options Industry Council for free software and advice. Trust me on this one--stay away.

    • paulal - thanks for the helpful info. I've only got like 5 stocks in my portfolio and 4 of them are long term blue chip type holdings. INTU is the most interesting stock I own, which is why I hang out here. Just don't have the cash yet to build a real portfolio. When I am ready, options will be there, but I want to learn as much as I can before I start with them.

      Given the past couple of days, what does your TE say about where ITNU is going? To me it looks like the trend is now up.

    • J_Smales,

      I still think that 75bp would have been the proper call. The Fed is just too cautious. I hope that he doesn't have to embarrass himself again and reduce interest rates by 25 bp before the March 20th FMOC meeting. My guess is that he may very well have to bite the bullet and do it in February. Lot's of investors will be selling stock to pay for Capital Gains that were accumulated last year. They will have to pay for those gains this year by selling stock that is worth less. Just doesn't make sense, does it?

      Look for another 25bp cut in February by the Fed. I wish they had just admitted failure and given 75bp this time around.

      Judging from the way the market is reacting, I guess that I'm not alone.

      May the sun keep shining in your neighborhood J_Smales.

      • 2 Replies to mauricethepantsman
      • I think I disagree with you pantsman. First off, whether it is 50bps, or 75bps, does not really matter in the long run. What matters is that rates are headed in the right direction and whether its 200bps in increments of 25 or 50, it is still 200bps and the effect will be the same.

        I think the Fed held back on cutting by 75bps, because they WANTED to have the option of a surprise cut between meetings. The psycholigical effect of a mid-meeting cut is more than that of a cut during a FOMC meeting. The reason they wanted to keep this option on the table, it that they are trying to influence the American consumer. The surprise cut will simply have a larger impact psychologically. Consumer confidence is falling fast and we need it to turn around. Interest rates and tax cuts are the tools that will help that. Interest ratest rates are under way, and the tax cuts, although we've heard a lot about them, are still a ways off. The Fed needs to play this close to perfect to avoid a recession. I hope thay know what they are doing.

      • I think you are right and would expect a somewhat stealthy rally during the next couple of weeks in anticipation of the additional 25bp.
        What's your view on INTU? Is the trend still down?

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