My portfolio ended the day on the saddest tune-up-the-cello note - much more out-of-tune than my French...
-1.10% on the standard brokerage account
-1.89% on the Roth IRA
Even AA retraced after hitting a daily high of $13.53.
I still believe that all the big fish in the sea are looking to gobble up little mermaids and my bimbo assessment is as follows. The BLS figures came in indicating that the 2009 labour picture was much worse than originally thought, which means to achieve this level of GDP and this level of retail sales at labour conditions that turned out to be much worse than economists were basing their estimates on throws everything off for the better. Supporting this theory is the minor run-up in prices of various retailers and FMCG companies, from JWN to TIF to HWD.
Based on this same theory, we should see a run-up in the financial sector as well. More so because consumer credit card delinquincies eased in December 2009 for CapitalOne, indicating that the tide is starting to turn. And to put the Greece sovereign debt issue into perspective, if all the PIIGS defaulted, which would be the worst case scenario, the impact would be about $4.2 trillion. If we only get a Greece default, the impact would be $401.98 billion - which is much less than Lehman. Not that I'm on the side of the PIIGS, but the US budget deficit is 86.1% of GDP and the Eurozone sovereign debt is 'just' 78.2% of GDP. Half my salary is in EUR so I have to defend the Euro here a little, but that's a personal bias based on logical truth (see table below lovingly calculated by ForexDiva in Microsoft Excel based on interesting article from The Economist).
Anyway, I totally digress. Getting back to stocks... the valuations in the financial sector appear much higher than the retail sector. Price/Sales ratios are well above 1.5 for most of the banks I'm looking at, whereas some stocks in the retail sector have Price/Sales ratios of below 1. Price/Book in the retails sector is much worse, whereas there are several big banks trading at well below book value with lots of cash holdings as well.
Moreover, the volume that I see on C and MS favours upwards price movement, so I'm going to try to hide behind a coral reef. I'm putting myself out on a limb with the Big Bank Theory of ForexDiva Portfolio Recovery, brought to you by the OTT ForexDiva Institute of Premeditated Profit Taking.
Interestingly, the E*Trade babies gave E*Trade a good lift after the Super Bowl commercials, increasing ETFC by +2.05% today.
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