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The Best of Kass

And if the Street waxes optimistically this morning -- I have yet seen the reviews -- I will sell the balance of my AIG (no rush!) and wait (depending on price) for the secondary to reenter the name.

I continue to expect that the AIG secondary will come in November/early December, but previously I thought it would come between $34-$35 and then the shares would not look back. Now I think it might come $32-$33 and the sale and near-term outlook will be more of a struggle.

The conference call is currently under way.

At the time of publication, Kass was long AIG.

Taking a Bite Out of Apple
Originally published on Wednesday, Oct. 31 at 10:41 a.m. EDT.

  • As I often like to write, in this market backdrop it is important to stay flexible and opportunistic!
  • To that end, I have taken a small trading long rental in Apple (AAPL - Get Report) at under $590.

    My trading rationale is as follows.

    • Many of my recent concerns have been discounted in the $110-per-share schmeissing in Apple shares.
    • Month-end is probably exaggerating the price fall, as some investors/traders want the stock off of their books.
    • Controversy surrounding the recently announced management changes have likely hastened and accelerated the share price decline. These concerns are probably overblown.
    • Product concerns are also likely overblown -- though the competitive landscape is changing.
    • The technicals! As I have previously written, I believe in charts, especially at important support and resistance lines. Apple's 200-day moving average is $588.70, and I suspect it will hold for now.

    In other words, traders and investors are shooting first and asking questions later.

    I am putting my pen to my opportunistic writings -- and staying flexible in my trading.

    At the time of publication, Kass was long AAPL.

    Parsing the Data
    Originally published on Friday, Nov. 2 at 12:12 p.m. EDT.

  • Let's review this morning's economic data.
  • The jobs report was good, though it had some blemishes -- workweek and average hourly earnings were weaker than expected, which could serve to moderate the recent strength in retail activity. Nonfarm payrolls rose by 171,000 (consensus was 125,000). Importantly, September and October jobs were revised upwardly by nearly 85,000. Private sector was quite strong (184,000 vs. estimates of 123,000 and 128,000 in September, the best reading in nine months).

    The underlying trend in jobs growth is running 155,000 a month -- sufficient to underpin real GDP growth of 2%. Given the labor participation rate, this is still not enough to reduce the unemployment rate -- we need 175,000 or more. The particular strength in retail (month-over-month gain of 36,000) implies good growth in retail sales last month. Temporary employment rose smartly in October, possibly a sign of stabilization in manufacturing.

    Factory orders were up 4.8% -- no surprise since most of this report was included in last week's durable goods release. Core durable good orders and shipments (excluding defense and aircraft) were revised to +0.2% and +0.1%, respectively. It also means that the recently reported third-quarter 2012 real GDP might be raised from +2% to +2.2%.

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