ADP reported loss of -491k jobs which is a positive news. ADP numbers have tendency to be a little inaccurate, but taking into account that other positive signs in the economy one can speculate that the Friday unemployment number will be also positive news.
My portfolio is not diversified, and it makes me uneasy. I am overexposed to financial stocks, it was not a bad thing recently with +100% profits, but I want investing to be part of my everyday life for the long run, and I understand that lack of diversification will add a lot of volatility to my equity graph. In recent months I have learned to live with my portfolio but it might not be strength of character, but foolishness. That is why I am working on rotating some of my holdings to introduce exposure to other sectors like technology and basic materials.
Having majority of my portfolio in financial stocks I am very interested in the results of the bank stress test. I think that the results will be positive, because Obama administration would not go after high credit card rates if it was otherwise. Moreover, with the steep yield curve banks are making a lot of money that they can use to shore up their balance sheets. Let’s not forget low mortgage rates and the volume of home loans refinancing that also generate a lot of fees.
Apple reported Q2 2009 results and they are very interesting, beacuse the only line of business that shows any substential growth year over year is the iPhone. Apple sold 1.7M iPhones in Q2 2008 versus 3.8M in Q2 2009 a 123% change.
Apple needs new products. The question is if some kind of iPod variation will help. Everyone is talking about the net book market as the holy grail of growth. I am sure that Apple will delivery good net book solution based on the iPod platform, but will Apple be able to achieve high margins on the new products. Net books are cheap, some of the sell for less that Apple’s high end iPods.
Is today a correction of the uptrend or start of next down leg. I think everyone who is invested is struggling with that question. I have positions in financial companies (C, BAC, WFC) and they had very sharp move down (-30%) in last three days. However, the prices now are in the range of the consolidation range formed from March to April. I have to say if the support hold I will be happy, but if the support fails then retest of early March is very probable.
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