Wall Street Make Up Your Mind Already!

Wall Street Make Up Your Mind Already! This is what I have been saying to myself for quite sometime. Wall Street needs a sense of direction. The one thing that is nagging this market is jobs! Jobs! Jobs! Jobs! It was only months ago that the stock market was trucking along and then the jobless claims started to rise.  The perception is jobs will not improve anytime soon. Today's report was more fuel to add to the fire. Another disappointing number!

Jobs continue to disappointment! The numbers were worst then expected, with a weekly initial jobless claims of 500,000. That’s 25,000 claims more than the 475,000 expected by the analysts. This is truly the only thing that is stopping this market from going higher. Every time claims come out we sell off! It’s obviously a negative to the market and the economy, but jobs have been terrible for quite sometime.

Everyone (I mean traders) are too quick to judge and any piece of bad news is an immediate sell. That to me isn’t logical. Why would you want to waste your time and energy selling a stock that you liked just a few days ago? This is what the stock market does. I’m here to tell you not to worry. The short term gyrations are meant to make people panic and sell their stock. There are many fund managers out there that still have plenty of money to put into the market. Lower prices are great for people that still need to get into the market. Negative news allows people to accumulate. To me that’s a good thing. A market that continues to move higher without stopping to take a break is a recipe for disaster.

As of today I’m not worried. I get excited at the potential of buying stock at lower prices. If you put in the time to do your research and build a great case for owning a company the short term sell-offs will be a blessing and not a curse. Buy more! It’s that simple. Investing is all about the future. If you can picture a better future for stock prices you will come to peace with the market. 6 months from now everyone will be laughing at how ridiculous it was to fret over the short term volatility.

If stocks were perfectly priced and in line with all the data there would be no reason to invest. No one would be able to make money. That’s why these sell-offs create opportunities in some stocks because the underlying value doesn't reflect the current price. It’s just like buying a house for less than market value, or a used car for a bargain. The potential to make a profit is there! I continue to stay optimistic as I see great potential for stocks.

Look at the market this way. Yes jobs are weak, but look at how well the earnings have been for the majority of companies over earnings season. Earnings have been great! If companies are improving their balance sheets and earnings are on the rise, the potential is huge! What will happen to stock prices when the economy turns and revenue increases? Earnings will explode! That’s why you invest now. Then you won’t miss the gobs of money on the way up as stock prices soar! It’s all about the Future! Future! Future!

On a positive note on a down day Intel (INTC) decided to buy software/security maker MCAFFE (MFE) for $7.7 Billion or $48.00 a share. Just yesterday MCAFFE closed at $29.93. Today MFE closed at $47.01. That’s a +57.07% return in one day! If that doesn’t get you excited that I don’t know what will. Companies wouldn’t be acquiring other companies if things weren’t getting better. I truly believe this is a sign of better things to come. So should you!

All research derived from http://finance.yahoo.com/

Have a great night! I’ll be back on Sunday.

Clay-

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