Half-Mile of Rock Between Chilean Miners, Surface

barrons did a facebook cover story. i participated in an inverview with the writer and we discussed the topic. from my prior postings, u know i am less generous with valuation as i am in print with a $10 price target. however, i agree with many of the fundamentals issues in the story.

jay, if FB revenue growth accelerates on its new marketing program i would raise my targets. beat and raise is built in at 10x's sales. if the double the biz in 3-4 years, stock could double less some valuation contraction. i just dont see the growth though. always free.

Jay, sorry to always be askin' for interpretation, but, once again, could you explain what Bob means when he says"u know i am less generous with valuation as i am in print with a $10 price target."? and, again, " beat and raise is built in at 10x's sales." and, threpeat: "valuation contraction." Thx much!

excellent explanation jay

i am flat FB

market starting to feel heavier. little follow thru to the hedge funds much chase beta theory. little follow thru so far on the QEternity gig at the fed. it seems challenging to expect another big run with shares at 15x's record profit margin eps with no revenue growth in aggregate. but its also hard to see huge downside with so much cash and unattractive interest rates and bond yields. so mabe we just frustrate everyone at 1500, the bulls and the bears.

there u go jeff, big pop in confidence. looks like it was in market though. no?

well, i think its a "sell the rallies" market now. big catalyst is history. macro fundies deteriorating, micro fundies deteriorating. investors a little complacent. worst quarter for negative estimate revisions in 11 years according to reuters. you tell me whats gonna stop from going down when they simplyh stop going up? last weeks initial shorts timed well, but need rallies to get bigger.

jay thats another way of saying liquidity. i have seen liquidity disappear in a flash wven in october with the market up H

HUGE! witness 1987 crash my friend. also, market was up a lot last 2 years and each year we got correction. i agree with your point, there will be some buying pressure from underexposed hedgies. the question is can that small slice of pms drive the entire $20 Trillion equity market higher. i dont think so.

jay, i could see the powers that be try to keep markets up thru elections. i dont think it will be a feel good campaign. but, i can then see a swift plunge if obama wins and goes hostile on the providers of capital and tries to redistribute resources to providers of labor. he will not need big money after this election. i think stocks could react to that poorly.

also, cyclicality suggests a poor market in post election years. and with all of the b.s. re debt/delevering/fiscal cliffs, i cant see how next year would be offer good returns. so i guess i am saying the long side is only for trading til 2014.

anybody out there worried?? selling??

sitting tight here

Doing staged buys in new accounts and those that have added recently. Also setting new dividend stock/short call positions to replace those called away on Friday.

Bob those are some ugly candles on the builders and 2nd derivative plays in housing the last 3 days...LEN MAS LPX.

ROST looks scary

PETM building a top?

@Bob: it looks like we are in "sell the rally" mode now. After 5 down days, stocks can't even bounce for end-of-quarter window dressing.

sonny, i dont know about that. after seeing the II sentiment survey deteriorate from one good week, i am still open to the idea of another leg up into early oct for a modest nominal new high or failed rally. but i can also see last week as a high. it still feels as if ther are more stocks breaking down than recovering to new bullish charts. that is , momentum leaders are keeping the indices up, but more stocks are not participating. for my long book, its much harder to make money than in the june-august rally.

Re Faqcebook from BI:

At our Social Media ROI conference this morning, Facebook has been a big topic of conversation. And the comments from marketers have not been encouraging for Facebook's bottom (or top) line. The message we've heard over and over again this morning is that the social platforms are excellent (critical) tools with which advertisers can interact with customers and potential customers, but that this is not the result of the advertisers spending money advertising on the platforms. Pinterest, for example, doesn't even accept advertising yet. And much of the value that advertisers can get out of Facebook comes from the advertisers' own efforts and investments and people, not Facebook advertising. Kmiec of Campbell Soup put it this way: "The answer isn't Facebook. The answer is your social strategy." "The mad rush to Facebook [is over]," he said.

i have seen the case for retargeting ads that give FB much higher revenues and profits, and now this. how FB will turn out depends on the revenue and profit growth which remains highly uncertin imho.

agree with bob on fb

jay, often wrong never in doubt is the saying?

interesting day. mostly stinky macro, cept claims, and no real catalyst for big rally, but thats what we get anyway. month end markup? i guess the bulls have this thing figured out. we get a 2% dip and everyone slams the offer.

@robert: I've been busy elsewhere for a couple of days, I see you talked about an Obama victory taking the market down yesterday. Shouldn't most of an Obama victory be priced in by this point? He's up 8% - 10% in Ohio, Silver has the chances of Obama win at 81.5% http://fivethirtyeight.blogs.nytimes.com/2012/09/27/sept-26-could-2012-be-like-2008/#more-35103 (the table is messed up, the article shows 81.9%).

if obama sticks with the plan to raise investment income, its bad for financial assets. i suspect he will also start to jawbone corporations about excessive profitability and cost cutting. these things are not good for valuations.

@robert - what if polls are wrong and Romney wins in a landslide, like Reagan?

ugly chicago pmi. lots of bad macro lately. markets ignoring it and bulls complacent. if it translates into meaningful est cuts, stocks will get spanked. esp if there is heightened sensitivity to sovereign debt/deficits problems.

agree on wall street but huge difference beyond the markets, one's for individual freedom the other is a socialist, not good for USA

@cody: The big difference is Federal District and Supreme Court appointments. That makes a huge difference for decades. Obama appointments have been horrible.

@cody: Is that a bullish comment? Either candidate good for those owning stocks? I agree that the immediate impact on poicies of greatest market significance will probably not be that great.

To draw a more specific conclusion, defense stocks might be attractive. I don't have positions right now (except for a covered write in LMT), but I am watching. There might be a better chance in the next few weeks.

Andy Borowitz reports on Tim Cook's advice to iPhone 5 users: http://www.newyorker.com/online/blogs/borowitzreport/2012/09/apple-advises-maps-users-not-to-go-anywhere.html

Jeff, What do you make of the Schiller paper: http://www.businessweek.com/news/2012-09-27/shiller-data-questions-housing-revival-power-cutting-research