Volume was low today and the market was flat on a mundane “quadruple witching” Friday (and it is called that because all kinds of futures contracts and stock options expired today and not because Alan Greenspan’s guest appearance on Charmed was being rerun).  The big macro news of the day was that consumer confidence fell from luke warm to colder than Bernie Madoff’s heart while analysts had guessed it would rise in their continued attempt to miss the forest through the trees or the adam’s apple on the reality TV show.

Consumer confidence registered a devilish 66.6, a drop from last month’s 68.9 (which was so close to 69 that it could taste the cunt hair), and below analyst guesses of 70 which brought the index to its lowest level in over a year.  Interesting tidbits from the survey include consumer expectations falling to 59 (lower than the 63 from last month) and the biggest decline in confidence coming from families with >$75k in income as they begin to realize that the glass ceiling is made out of cement and falling faster than Ines Sainz‘s popularity in the Jets lockerroom.  The real fear here is that a less confident consumer will spend fewer of their borrowed dollars and thus turn any potential recovery in to the longest bottomed U-shaped recovery in history or what might also be known as an “L.”

In other macro news, consumer prices were held in check rising only .3% though as always, excluding the things people actually need to buy (like food, gas, and Shake Weights), prices were flat.  One question that keeps springing up is “are those real?” while another one is “is the US Economy going to see deflation?” and unfortunately the CPI results don’t give enough information to answer either of those questions definitively (though off the record, the CPI says yes and yes).  With debt burdens higher and more dangerous than Manuel Uribe‘s cholesterol, a deflationary environment that lowers wages could crush the working class and send the recession in to a double dip (or a continued dip if you take out the stimulus effects) so it is critical to watch this measure (though more critical to watch this measure).

Internationally there were rumors of Irish bank Anglo Irish going in to default or needing to have to renegotiate their bonds and that sent spreads on Irish government debt to the highest they have been since the Norman Invasion in 1169 (which Money McBags hears was simply the result of Dermont MacMurrough overhearing a conversation in the kitchen and misinterpreting it).  While European markets have had a sharp rebound over the past couple of months, their banking system still remains more fragile than Sarah Palin‘s ego or Betty White’s hip so pay very close attention to the fundamentals of anything European before getting too long that continent.

The big news of the day though was the technology sector where Oracle proved to be wiser than the market by putting up a huge quarter and RIMM defied all forecasts and proved once you go blackberry, you almost never go back(berry).  Oracle’s profit was up 20% thanks to the addition of Sun Microsystem’s hardware sales, the demand for business software, and increased offerings made to Pythia.  CEO Larry Ellison talked up the success of bundling Oracle’s software with Sun’s hardware and compared it to other great pairings like peanut butter and chocolate, Astaire and Rogers, and Faye Reagan and anything.  With their software license revenue up 25% and ahead of targets, ORCL stock was up ~8% on the day and the company appears to be in nice shape with the addition of Mark Hurd, who coincidentally, has quite an eye for nice (though MILF-y) shapes.

But it wasn’t just ORCL who outperformed as RIMM put up a huge quarter, growing EPS from $1.03 in last year’s Q to $1.46 in this Q which easily beat analyst guesses of $1.35 and they also guided well above the Street.  The company shipped 12.1MM devices which was well above guesses (though more curious to Money McBags than IHOP suing IHOP) but they had only 4.5MM net new subscribers which was below their target.   Look, on any type of valuation RIMM looks hella fucking cheap (like Lindsay Lohan after a night of blow) but Money McBags just sees serious threats to their business model as the blackberry is quickly becoming more outdated than dial-up internet service or Cloris Leachman‘s vulva.  While RIMM is still the market share leader in the business handset market, they are forecast to lose share for the first time this year as Apple, Google, and MSFT continue to win customers so sure they are cheap, but Money McBags prefers to own industry leaders over industry laggards and with continued international issues surrounding RIMM’s data and privacy, Money McBags would rather be short RIMM than long RIMM.  If the company can’t rally after a quarter like that (and it finished down for the day), their future seems bleaker than Jordan van der Sloot’s (though with potentially less assraping).

In small cap news today, Money McBags favorite TMRK continues their month long rally that has seen them run up ~40%.  Money McBags has written about TMRK exhaustively here on the award winning When Genius Prevailed (just throw it in to the search box up top) and it remains one of this favorite long-term names even with the run up as cloud computing is a trend Money McBags believes in more than he believes in sex before marriage and sex after marriage.  The stock is no longer ridonkulously cheap and trading near where other companies have been taken out so you might actually want to trim a bit here since the whole market feels like it is ready to go down as if it were auditioning for the lead role in Saturday Night Beaver, but the catalysts remain the same:

1.  Increased outsourcing of IT departments/servers/software/anything unrelated to normal business operations.  Companies just don’t need to be in the IT business anymore and one of the easiest ways to cut costs in this slumping economy is simply to outsource all of the non-core business functions like maintaining servers, updating software, and designing TPS cover report sheets.

2.  They already have built out data centers and have a good deal of capacity which makes them attractive to a buyer who might not want to build all of the shit out themselves.  The colocation market is one area where buying is definitely better than building.

3.  They have a strong relationship with the government and that revenue is not only stickier than Ashley Dupre‘s hands after a day of work, but should also continue to grow as the government cuts costs.

This is basically a 5 to 10 year play so you can be cute (perhaps you were expecting this?) and trim a bit here after the run up or just hold on and check back in 5 years when TMRK is appreciably more than it is today and has outperformed the market (that is if it doesn’t get taken out first and if there still is a market).


Have a good weekend.

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