THE SANTA CLAUS RALLY Daily Reckoning
Weekend Edition
December 23-24, 2000
Waterloo, New Hampshire
(Home for the Holidays)
By Addison Wiggin MARKET REVIEW: Who Is This Santa Claus
And What's He Doing In My Market? The "Santa Claus" rally arrived early on Wall Street.
Traditionally, the boost markets enjoy from holiday cheer is
felt just after the Christmas break, but on Friday, the
"beleaguered Nasdaq" (Reuter's) got an early x-mas gift. Up 176... or 7.5%... the Nasdaq closed with its strongest
performance in more than a week and its fifth-largest
percentage gain - ever. Still the rally couldn't compensate
for early-week woes: the tech-laden index fell 136 for the
week - down 5.1%. The Dow, on the other hand, ended the week 200 points higher
at 10,635, following a 148 point gain Friday. The S&P 500
climbed 31 to 1,305, but was off for the week, by numbers so
small they'd be difficult to pick up with a micro-video
instrument. Concerns about corporate earnings, which have been shadowing
the market since Labor Day, were intensified this week...
it's looks as the 'soft landing' purportedly orchestrated by
the Fed may be a little harder than analysts expected. The
Federal intoned they would not cut rates for the holidays. Markets Around The World... Japan's Nikkei rose a mite...
0.03%. The German DAX index closed 0.8% higher, London's
'footsie' fell 0.3%. The CAC-40 in Paris inched higher: +
0.4%. The Russell 2000 index rose 15 on Friday to end the week at
462. The Wilshire 5000 closed out the week 11,981. PRICES FOR THE WEEK: Gold: $273
Crude Oil: $26.25
Natural Gas: $9.57 (We hit this one on the head!)
CRB Index: 225
Dollar Index: 110
Esperanto zeuro: .92
British Pound: 1.47
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gets wind of the deal. The pattern is repeated. Again and
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THIS WEEK in THE DAILY RECKONING
By Bill Bonner 12/22/00 THE GHOST OF CHRISTMAS PRESENT
"...Ebenezer could barely suppress a "humbug." For he knew
there were advances coming in the biotech and microtechnical
sectors that would cure cripples and blind people. He had
seen the IPOs go up by 10 times. It was just a matter of
time until all of life's inconveniences were done away with.
And anyone who cared to could be rich too - they just had to
stop being so stupid and stubborn, like Bob. Get with the
program, for Pete's sake..."
(http://www.dailyreckoning.com/body_index3.cfm?id=417) 12/21/00 THE GHOST OF CHRISTMAS PAST
"... "What are these chains you wear?" "They are the chains
you forge for yourself. But instead of gold and silver,
yours are laden with computer terminals, stock certificates,
portfolio statements, the New Era... Amazon.com. You will be
fettered not just for your life, but for eternity. And they
grow heavier with each passing month. Unless, that is, you
heed the ringing of these chains..." "I am here tonight to
warn you," the ghost went on, "that you may have a chance of
escaping your fate. Rise and walk with me." ..."
(http://www.dailyreckoning.com/body_index3.cfm?id=416) 12/20/00 IN IT TOGETHER "...we have seen is that increases in the division of labor
and knowledge seem to lead to collectivized stupidity.
Unable to form an opinion on the quality of the meat they
eat...nor on the quality of mortgage debt bought by Fannie
Mae... they turn to the mass-marketed and most widely
distributed ideas available. Uniformity, however, comes at a
price. Vulnerability. When everyone is in the same boat, a
single leak can sink them all..."
(http://www.dailyreckoning.com/body_index3.cfm?id=415) 12/19/00 HEART OF TRUTH
"...People speak casually about the truth -- as if it were
something that they could look up in an encyclopedia and zap
around the Internet. The "digital men" seemed to think that
truth was the same as information...and that the key to
success in life was having more of it than the next guy. And
yet, even in the sciences, truth is unreliable..."
(http://www.dailyreckoning.com/body_index3.cfm?id=414) 12/18/00 "GOT IT" - GOOD AND HARD
"...Wolff describes what is like when the absurd pretensions
of the New Era techies met feeble, empty-headed corporate
America: "I wish I could communicate, however guilty I feel
about it now, the sheer joy of sitting in meetings with
well- established businessmen representing billions of
dollars of assets and multimillion-dollar profit streams and
being able not only to high hand them because I got it and
they didn't, but also to be able to actually humble them, to
flagrantly condescend to them, to treat them like children.
On the basis of this knowingness, hundreds of billions of
dollars have traded hands." Why didn't the big money guys
'get it'? Because there was nothing to get..."
(http://www.dailyreckoning.com/body_index3.cfm?id=413) * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
HEADLINES, NEWS and INSIGHT: The Dangers of an Asymmetrical "Wealth Effect"
by Raymond F. Devoe, Jr.
Very little in nature, or economics is completely
symmetrical. Recent events made me wonder whether "the
wealth effect" would be symmetrical on a market downturn, if
people started actually losing money in stocks. What will
happen to the economy as a whole?
(http://www.dailyreckoning.com/body_headline.cfm?id=835)
The Stock Market: Look Out Below
by Doug Casey
People rarely invest based on an ability to tear apart
income statements and balance sheets, not to mention
understand the business firsthand by not only interviewing
management and employees, but suppliers and customers. They
invest based on what are tantamount to tips and gut feeling.
That's why nobody was in the market in 1982 and why
everybody has been in it for the last five years.
(http://www.dailyreckoning.com/body_headline.cfm?id=831)
Lies, Damn Lies, Wall Street
by Dr. Kurt Richebacher
If the old sages of capitalism used to say that there are no
gains without pains, such as saving, investing and laboring,
the message of this new Wall Street model makes, of course,
much more cheerful reading: Consume and borrow as much as
you can, and just buy stocks to get rich. This is an insult
to economics.
(http://www.dailyreckoning.com/body_headline.cfm?id=827) The Dynamics Of Investment Booms
by Dr. Marc Faber
Minor manias or bubbles don't lead to any significant
economic disruptions when they burst, because they are only
based on a relatively small sector of the economy and are
usually local in nature. Major manias, by contrast, are
significant in the context of the whole economy and are very
often of international dimensions and attract a large flow
of foreign money.
(http://www.dailyreckoning.com/body_headline.cfm?id=826) Check Free (And Profitless)
by Andrew Kashdan
Checkfree offers the truly future-looking concept of
electronic billing and payment. But the company is
struggling with some old fashioned concerns, such as net
earnings and cash flow.
(http://www.dailyreckoning.com/body_headline.cfm?id=823) * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
FLOTSAM AND JETSAM: Casual Observations From Thom 'Bomb'
Hickling, Part-time Writer, Full-time Friend and Blueshound
"It's possible that in 10 or 20 years, we'll look back on
this period in the way that we now look at the Industrial
Revolution."
Henry Blodgett Henry Blodgett has been downgraded. The Cyber-stock
cheerleader from Merrill Lynch achieved guru status touting
overvalued Internet stocks is finding it a hard sell now.
And when he recently downgraded -- no let me use his
euphemism -- "resetting the investment ratings" -- on 11 of
his Internet picks, no one was very happy. Perhaps it was
because since recommendations on those tech stocks - they
had fallen an average of 62.5%. But even as he was "resetting the investment ratings" he was
softening the blow by adding "we believe that that the
stronger stocks may be near seasonal bottoms" and drew the
conclusion that the turkeys we becoming "increasingly
attractive." Since 10 of the 11 were well below the price he originally
recommended them at... duped investors had little celebrate
in the announcement. Pets.com, a company taken public with
the help of Merrill Lynch and now 82% below it's IPO price
was just one of his dogs. The failed on-line toy seller e-
toys fell 89% since Blodgett first recommended it. But it didn't start out so ugly. When Blodgett was at CIBC
Oppenheimer and Amazon was selling for $200, he predicted
that within 12 months it would double to $400. The next day,
Amazon shot past the $300 mark and settled at $289. That
very afternoon, Blodgett, clarified his forecast. He said it
would hit 400 in 12 months, not one day. As his star rose, Merrill Lynch picked him up as a senior
Internet analyst. When Blodgett talked people listened. But his magic touch
has worn off. Although he's sold a lot of stock for Merrill
Lynch and is certainly cashing in personally, those
newcomers who followed his advice have taken a beating. He still believes in the Internet, but says that the field
is overcrowded and that 75% of all dot.coms will fail in the
coming years. Right now, about 5 are profitable, but he
expects that number to double or triple in the next 3 - 5
years. But so far his recent recommendations are not doing
any better for his clients. On May 4 he reiterated buys on the following stocks: Ariba ARBA - down from 76 to 47, Vertical Net; down from 50
to 4, Internet Capital Group ICGE down from 39 - 3; AOL down
from 57 to 36; Amazon down from 55 to 15; Yahoo, down from
124 to 25 (Stats from May 4, to Dec 22, 2000.) Wishing your family a Merry Christmas, Addison Wiggin
Daily Reckoning P.S. Here's a little Holiday diddy for you (also from Thom): You're A Mean One, Mister Bear (Sung, as you might expect, to the tune of You're A Mean One
Mister Grinch) You're a mean one Mr. Bear
You really are a heel
You're as evil as a margin call
And as slippery as an eel But, according to First Gartner Group
You're a trillion-dollar steal You're a monster, Mr. Bear
Your hearts an exploding Cole
Your brain is full of Spiders (XLB)
You've got Barron's in your soul,
Mr. Bear I wouldn't touch you, with a
2,820 point post-election poll You're a vile one, Mr. Bear
You have Crisco (PG:NYSE) in your smile
You have all of the tender sweetness
Of a Amazon (AMZN:Nasdaq) crocodile,
Mr. Bear Given a choice of rivers
I'd have to pick da Nile You're a foul one, Mr. Bear
You're a ponzi, margined punk
Your heart is full of cold-call brokers
Your soul is full of chumps,
Mr. Bear The three words that describe you,
Are, and I quote: "Shrink, Shrank, Junk." You're a teaser, Mr. Bear
You're the death of bouncing cats
Your breath's a sad New Market burp
of dot.com-tasting brats
Mr. Bear Your soul is a black pile of greed
Overflowing with festering tulip bulbs,
South sea bubbles and money dreams gone splat You nauseate me, Mr. Bear
With a nauseous CNBC television
Pengiun dance of market outperform super-buy
Crooked broker bonus Ethernet widget
and porn You're a Wired Red Herring sandwich with DSL loops
And cobalt rambus juice,
Mr. Bear For more Contrarian Humor, by all means click here: Contrarian Humor:
(http://www.dailyreckoning.com/jokes.cfm) | 
