NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Among his posts this past week, Kass discussed how he was piggybacking on a well-known JPMorgan Chase investor and how he was adjusting his trading positions over the course of the week.
Please click here for information about subscribing to RealMoney Pro.
Piggybacking on Dimon's Insider Buy
Originally published on Friday, July 20 at 4:42 p.m. EDT.
A Bit of Housekeeping
Originally published on Friday, July 20 at 8:19 a.m. EDT.
Downgraded Market OutlookI modestly downgraded my "Fair Market Value" calculation on the S&P 500 index on Monday and Tuesday. I also reduced, to 50%, the recommended exposure in the "long-only" Kass Model Portfolio. Optimism has expanded, in line with rising prices, in part because second-quarter earnings results held up better than the pessimists expected. Nevertheless, this should be noted: Although about 65% of the earnings reports beat consensus, consensus was low, and had been lowered throughout the quarter. I never view consensus forecasts as meaningful -- they are crafted by investor relations departments, and beating them is much like Monty Python's Twit of the Year contest (easily jumped over). Moreover, despite the earnings "beats," 65% of the top-line sales forecasts missed.
Revenues Lead, Profits Lag!Earnings beats and sales misses are what one would expect in a balance-sheet recession. Companies are not hiring or spending, so costs are in control (for now) in a sluggish economic setting. There is no reason to expect things to get better in the third quarter, as you can't shrink your way to higher profits indefinitely. At some point, profits flatten out. We're seeing a deepening crisis in Europe, a continued slowdown in China and India, coupled with a near-15% rise in the Commodities Research Bureau Index (grains and oil ++) since early June. All of these likely signal worsening profits, threatened margins and moderating personal consumption expenditures in the second half.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV