There's a common thread between
disappointing results and
profit warning, Cody Willard of CL Willard Capital tells Aaron Task on Thursday's
The Real Story podcast.
Both Micron and Rackable are "commodity businesses," Willard says. "Those business models are very difficult. You often end up being a price taker vs. a price maker."
Willard says the same is true of
, which he is long. The fund manager and
contributor is also long Micron calls. "Those are cyclical investments. Like trying to buy an oil company in 2002 when those things were crushed," he says. "That's what I'm hoping I'm doing" with Micron and Seagate.
While acknowledging there were positive elements of Micron's call -- namely that DRAM prices are firming -- "frankly the crux of the call wasn't very good," Willard says. "I would have liked to have heard a more positive tone." (Willard and Task also discuss
latest moves in digital music in a video interview, which can be found
Meanwhile, major averages posted modest gains, aided by more M&A activity, including news that Kirk Kerkorian's Tracinda Corp. has approached
about acquiring its Chrysler unit. Task discusses the implications for
, which revealed Thursday that CEO Alan Mulally received $28.2 million in compensation for his four months on the job with the automaker last year.
Task also discusses
CEO Mitch Gold's stock sale in the wake of the company's recent ascent, as reported by
Task's second guest,
floor trader Gordon Charlop of Walter J. Dowd Inc., says the market action this week was "certainly encouraging," although there was a "lightness of volume" because of the holiday-shortened week. (U.S. equity markets are closed Friday in observance of Good Friday, although the government is releasing the March payroll report.)
As for the idea that bulls are hoping for a weaker jobs report on Friday, Charlop agrees: "The big issue is inflation. The Fed chairman has made that abundantly clear. Unless he gets data showing that it's under control, it's a negative for the market, so weaker data is positive for the market."
Looking ahead, Charlop expressed optimism about the outlook for corporate earnings and says "we should see activity reminiscent of last year, when equity markets took off in the latter half of the year."
In the remainder of the podcast, Task addresses the day's other corporate news, including the bidding war over
, and warnings and/or disappointing results from
here to listen to the entire podcast.