- how the advantage in market battles has shifted to the longs;
- how so many onetime bears have suddenly switched sides; and
- how the market got Norfolk Southern very wrong.
Growth Stocks Stirring Up Market Battles Posted at 3:28 p.m. EDT on Friday, Oct. 28. Battlegrounds now. Small-unit action. Like Salesforce.com ( CRM). We have about 20 days before we find out what Salesforce.com earned. In the interim, we have a market that fell out of love with high multiples and then has fallen back in love with them. We have a market that had no faith in the future, and then we have a market where the future looks bright. We had a market where the shorts were dominant. And now we have a market where the longs are going to hoard their stocks and make the shorts pay. > > Bull or Bear? Vote in Our Poll Into that arena stepped high-quality hedge-fund managers like Whitney Tilson, who shorted Salesforce.com before, right before and after appearing on CNBC's "Fast Money" and told a very compelling story about all sorts of issues, including accounting ones, that made you feel that he had uncovered the next Green Mountain Coffee Roasters ( GMCR), if not the next Netflix ( NFLX). Here's the problem. Tilson could very well be right someday. But you aren't going to get a lot of news flow in the name in the interim, and what you are going to get is chatter about how Salesforce.com has been winning accounts, gaining steam and pulling away from Oracle ( ORCL), which just did a catch-up acquisition, and IBM ( IBM), which is doing its best but has a lot of fingers in different pies. So, what happens? People gun for Tilson. They decide to rip off his and, well, the collective face, of all of the people shorting CRM. Soon, two things happen: The chart goes from bad to good, which is something that the rigorous shorts and longs care about, and long-only hedge funds decide to put more money to work in the name because they see that Chipotle Mexican Grill ( CMG) and Deckers Outdoor ( DECK) and Panera Bread ( PNRA) and Google ( GOOG) are working again.
Enough With the Johnny Come Latelys Posted at 4:02 p.m. EDT on Thursday, Oct. 27. Embarrassing. I am talking about how, all day, I heard people be bullish who had been bearish. Nope. Not right. The time to be bullish was when everyone was saying it was the end of the world. The time to be bullish was when people felt that we were going to be run over a cliff from Europe. That doesn't mean you had to be bullish at the beginning of the month, although that would have been amazing. That was when you heard lots of talk about crashes and head-and-shoulder patterns and how it was all over for Europe. You had a second chance when we had a breakdown in talks on Oct. 17. You could have bought the heck out of the market believing that the breakdown was just temporary. And then there was two Mondays ago. We came in. There was no deal over the weekend. People got hugely short. Of course, we never looked back again. I can forgive those who were bearish coming into the month. September was terrible. We were still dealing with the overhang of the government shutdown here and the downgrade of our bond rating. Over there it was pure chaos. At the beginning of the month we heard obituary after obituary for the euro and the FXE traded at 131. It brought out a huge number of bears.
The Market Hears What It Wants to Hear Posted at 6:27 p.m. EDT on Wednesday, Oct. 26. Sometimes the market is so infuriating. When the market makes its mind up that something's wrong or is about to go wrong, when it thinks that a company is dissembling or clueless, it just doesn't matter what is said.