|Written by Rob Goldman|
The good news is that we now know that we are nearing bottom on oil prices which bodes well for price and market stabilization, once growth fears can be allayed. We may not be at the stock market bottom yet, but see why we are getting close. Moreover, we are amassing a list of small stocks that could buck the current trends.
THE SIGN OIL IS NEAR ITS BOTTOM
If it is any comfort, we have been given the gift of foresight with respect to the future of oil prices, courtesy of President Obama.
Our fearless leader is apparently going to propose a $10/barrel tax increase on imported oil. Typical. Just when you get complacent and think we are in good shape with low costs on a big part of our economy and a politician comes a long to ruin the party. Does he not realize that the damn thing will be back over $50 before you know it? Why? Such a poor decision.
(Hint:. I think we could see it approach $40 by Memorial Day.) The only thing worse than the proposal is if it passes and puts more pressure on the consumer. Gee whiz. I know it is supposed to be “phased in” but based on current prices it works out to a 30% increase on a barrel of oil based on current prices.
I know that Iran’s plans to flood the market with oil which will have a near term effect in keeping prices low. Still, with seasonal demand likely to rise this summer and the potential of spikes in prices due more to geopolitical issues and events, I don’t think that the big supply reports will last as long as some industry watchers forecast.
The sad truth is that until we have some clarity, oil prices will continue to weigh on stocks and ultimately impact direction.
Five Words to Describe This Market
Scary: The Russell 2000 Index dropped by more than 5% last week but all people seemed to concern themselves with was LinkedIn (NASDAQ—LNKD) and the jobs report. Do not small caps exist? Did no one notice the Russell dropped over 5% last week?
Knee-Jerk: Speaking of LinkedIn, that damn stock sold off like mad as it became the poster-child for a high growth tech stock that is now just a lower valued plain old growth tech stock. Investors are selling (and shorting) in waves at the slightest whiff of bad news.
Opportunistic: If you can be like Jack, and be nimble and quick with how you buy stocks and pull the trigger on the few names that are working, there is some money to be made. Other ways include buying puts on names mired in its own mess and the overall market until we see some daylight.
Conviction-less: No one seems to be willing to make even intermediate term bets!
Hopeful: We have not yet hit the capitulation stage and we are all waiting for some real semblance that the worst is behind us. While it appears to still be a ways off, it may be sooner than you think, and certain small stocks may start the turn.
Great info, insights, and hard-hitting stories make up this week’s Say What? feature...
Oy vey...capitulation coming soon, please?
The story just keeps getting worse, huh?
The New York Times
Words of comfort from a well-known bear?
I confess this is not good news from FactSet but this is now a lagging indicator.
The Stock Market Today
AAII Sentiment Survey (figures rounded)
Amazing that there is really no change in sentiment from week-to-week. Things are just terrible, I guess. Perhaps after we get through the earnings season and Iran dumping oil on the market to raise money things will stabilize. Still, no one can really point to a triggering event for the blood-letting to subside. However, you will know when it happens and don’t want to be on the sidelines when it does.
1498 Reisterstown Road, Suite 286 Baltimore Maryland 21208 Phone: 410.609.7100
Launched in May 2010, The Goldman Guide is a free weekly publication of Goldman Small Cap Research and is written by Founder Rob Goldman with contributions from the GSCR contributor team. This non-sponsored investment newsletter seeks to provide investors with market, economic, political and equity-specific insights via an action-oriented, straight to the point approach. No companies mentioned in this newsletter are current sponsored research clients of the Company or its parent, unless noted, With some exceptions, all companies or investment ideas mentioned in this publication are publicly traded stocks listed either on the NYSE or the NASDAQ. Goldman Small Cap Research members and contributors’ bios, certifications, and experience can be found on our website: www.goldmanresearch.com
This newsletter was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces non-sponsored and sponsored (paid) investment research. Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
The Firm’s non-sponsored research publications category, Select Research, reflects the Firm’s internally generated stock ideas, along with economic, industry and market outlooks. In virtually all cases, stocks mentioned in Select Research offerings are listed on the NYSE or the NASDAQ. Publications in this category include the weekly newsletter The Goldman Guide, Market Monitor blogs, Special Reports, and premium products such as The 30-30 Report. Goldman Small Cap Research analysts are neither long nor short stocks mentioned in this newsletter.
Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored microcap research ideas that typically carry greater risks than those stocks covered in Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in company-specific Opportunity Research reports, updates and articles.
Goldman Small Cap Research has not been compensated for any content in this issue.
All information contained in this newsletter and in our reports were provided by the companies mentioned via news releases, filings, and their websites or generated from our own due diligence. Economic, market data and charts are provided by a variety of sources and are cited upon publication. Stock performance data and information are derived from Yahoo! Finance and other websites or sources, as noted. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, other firms, or other financial news outlets. Goldman Small Cap Research relied solely upon information provided by companies through filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, blog, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. This newsletter does not take into account the investment objectives, financial situation, or particular needs of any particular person. This newsletter does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the FINRA or with any state securities regulatory authority. Statements herein may contain forward-looking statements and are subject to significant risks and uncertainties affecting results.
Separate from the factual content of our articles about the company featured in this newsletter, we may from time to time include our own opinions about the companies profiled herein, their businesses, markets and opportunities. Any opinions we may offer about the companies are solely our own, and are made in reliance upon our rights under the First Amendment to the U.S. Constitution, and are provided solely for the general opinionated discussion of our readers. Our opinions should not be considered to be complete, precise, accurate, or current investment advice. Such information and the opinions expressed are subject to change without notice.
ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com.