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Monday morning
By Rob | April 21, 2008
For the week, the Dow rallied +4.25%, the S&P 500 +4.31%, Nasdaq +4.92%, and the Russell 2000 +4.78%. 95% of the stocks closed the week with a gain. The top performing sectors were oil & gas, mining, brokers, shipping, farm products, agricultural chemicals, internet, railroads, tech, heavy construction, banking, trucks, healthcare, and semiconductors. The laggards were airlines, resorts & casinos, diagnostic services, and medical equipment. We also saw a major flight away from safety as investors dumped Treasuries.
SOLARS: Goldman this morning gave their solar top pick in China: STP. The firm also released its Pair trade idea: long STP, short TSL: STP is our top pick in the sector given its enhanced scale, solid order pipeline, and strong financial position. Among our Neutral-rated stocks, we are most cautious on TSL due to concerns on overexpansion, downside risk to margins and potential disappointment in 2H08 earnings.
However, Goldman Sachs America likes SunPower (SPWR):
“We continue to see firm industry pricing for 2008 and therefore believe that industry fundamentals will be strong as solar companies sell more megawatts and drive costs lower. While SunPower’s financial model is a bit of a black box given the limited disclosure on megawatts sold, ASPs or cost per watt, we continue to like the shares as we anticipate them driving strong results in a robust solar market.”
This below is from Warren Buffet’s interview for Fortune Magazine:
What should we say to investors now?
The answer is you don’t want investors to think that what they read today is important in terms of their investment strategy. Their investment strategy should factor in that (a) if you knew what was going to happen in the economy, you still wouldn’t necessarily know what was going to happen in the stock market. And (b) they can’t pick stocks that are better than average. Stocks are a good thing to own over time. There’s only two things you can do wrong: You can buy the wrong ones, and you can buy or sell them at the wrong time. And the truth is you never need to sell them, basically. But they could buy a cross section of American industry, and if a cross section of American industry doesn’t work, certainly trying to pick the little beauties here and there isn’t going to work either. Then they just have to worry about getting greedy. You know, I always say you should get greedy when others are fearful and fearful when others are greedy. But that’s too much to expect. Of course, you shouldn’t get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that.
By your rule, now seems like a good time to be greedy. People are pretty fearful.
You’re right. They are going in that direction. That’s why stocks are cheaper. Stocks are a better buy today than they were a year ago. Or three years ago.
But you’re still bullish about the U.S. for the long term?
The American economy is going to do fine. But it won’t do fine every year and every week and every month. I mean, if you don’t believe that, forget about buying stocks anyway. But it stands to reason. I mean, we get more productive every year, you know. It’s a positive-sum game, long term. And the only way an investor can get killed is by high fees or by trying to outsmart the market.
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