Sears Profits Dropped 28%

[Mark Heide]

It appears Sears profits dropped due to bad credit-card and financial-product debt. A large portion of there sales is due to credit sales. Does anyone think this will cause a problem with other retailers, and what effect will it have on the economy?

Here's a link to the story:
http://www.quicken.com/investments/news/story/?story=NewsStory/dowJones/20021017/ON200210170922000495.var&p=S

The stock dropped a whopping 31.81%!!!!!!!!!

Good Luck

Mark

[PokerBabe(aka)]

Hi Mark- I think the problem at S is company specific and would look to buy the broadline retailers like Target on weakness. LGPG and Buy Low. Babe

[Mark Heide]

Pokerbabe,

I think you should change your name to BullMarketBabe? Anyway, I think Target issues their own credit cards too, and they are in the same market segment as Sears. Even though, TGT is undervalued currently, I'd stay away.

Don't forget...Sell high when everyone loves the stock.

Good Luck

Mark

[PokerBabe(aka)]

Hi Mark- Yes, I am bullish here. Why shouldn't I be? We have had the worst bear market in our lifetime and I really believe that one should buy low on weakness like we are seeing. Target is a great franchise and much different than Sears. BABE LOVES TARGET ! If I am bullish Babe, you are Bearish Mark. My God man, how can you be so negative? /forums/images/icons/mad.gif Must I remind you of my bullish pick on IBM? /forums/images/icons/cool.gif Buy Low and LGPG, Babe. /forums/images/icons/smirk.gif

[Mark Heide]

BullMarketBabe,

I was even told I look like a bear. /forums/images/icons/grin.gif Be careful, the bear might jump out and scare the bulls into a stampeed on the street. I don't see this situation lasting long just because of the mixed fundementals of the economy and politics. But, I do believe what you say, buy low, but sell high, especially when they love the market.

Right now, I'm working on my list of stocks for next year and doing evaluations. I left the market when the DOW was 9500 in May, and am up over 14% this year. I still think based on the fundamentals of the economy and the valuations of stocks compared to growth that this is a bull run. It might last until the end of next week when all the earning reports are out. In November, the market will start noticing the political situation more. I've heard mixed reports from technical and fundamental analysts.

Watch out for the bear!

Mark "The Bear"

[PokerBabe(aka)]

Hi Mark- you certainly did well if you are up 14% this year!! /forums/images/icons/laugh.gif I think we will have another pullback here if we don't break out of the current channel soon. To me, it looks like S&P 850 is first support and then 750. I think 750 is unlikely over the next few months, however. On the upside, we must break through S& P 990- 1000 before making new highs. I am doing some "trading" here, and also hedging positions that I want to keep with options. I am not sure if we will have one more retest of the July lows, but if we do that would be super bullish (triple bottom) and I would buy my cute butt off! /forums/images/icons/wink.gif. LGPG and Buy Low, BullBabe /forums/images/icons/grin.gif

[Mark Heide]

BullBabe,

The bull/bear index this past week is heavily weighted on the bull side. With that being said I'm not surprized that the market had a decent gain. There will be more bulls in the market this week, and those are the ones that will follow because they are afraid they will miss out.

If you agree that the market is responding basically to earnings reports, then that will continue. So far, the ratio of good reports to bad is 70% good and 30% bad. That justifies the bull market. Some technical analysts expect that to continue this week. But, don't forget that alot of companies made preannouncements in September that their future earnings and outlook was not going to be what the street expected, so the street lowered their expectations. That should explain losses in September and gains in October to some extent. Furthermore, don't forget that the 911 incident ruined profit expectations last year for the financial industries. Even if the profits of the banks that you like are reporting better earnings than last year, it's due to loss of revenue from 911 that makes the balance sheets look good this quarter.

After the elections in November, I expect the excitement to die down as investors will be hearing more from the politicians about war and terrorism. Then at the beginning of December there should be a report out concerning the Christmas season.

Back in September the Conference board indicated that consumer debt was at a level they were not confortable with. That's why I brought up the story on S. Will this effect other retailers liket TGT that issue their own credit cards?

Employment situation is still with mixed results. We will find out more towards the end of this week and on the 31st.

Good Luck

Mark "The Bear"