Weekly Wrap

Today is my husband Phil's birthday. He turns thirty-seven. If only I were able to go back to his thirty-sixth birthday and know what I know now. Ugh. what has happened this past year?

One year ago the Nasdaq hit its all time high of 5,048, and today it closed at 2,052. a loss of 3,000 points. Let me put that into a percentage for you. it's a loss of 59%. That means if Phil made like the Nasdaq over the past year, he would be fifteen years old. (How fun would that be, going back to 1979, only knowing what we know now about the market? We'd all be gazillionaires. Where's Michael J. Fox when you need him?)

This past week was especially tough as rumors were flying everywhere. First, about the birthday boy. Every Canadian newspaper you opened had him being traded to another NHL team somewhere. (The Flames will not be making the playoffs, therefore vultures fly in looking to pick up some meat for their own teams entering the playoffs. The trade deadline is next Tuesday.) The papers said that the General Manager here was shopping Phil around. Excuse me? I know this is not true because Phil has a no-trade clause, therefore, he cannot go anywhere unless he lifts that clause. The next day, the newspapers said, "Housley lifts his no-trade clause and wants to go to Pittsburgh." Ummm. are we talking about the same Housley? The birthday boy? If this is true, he failed to mention it to his wife. Where does all of this stuff come from?

Similar rumors surrounded Yahoo (YHOO) this week. One of the rumors was that they were supposedly being bought by German media company Bertlesman, another rumor had them merging with eBay, another rumor was that Viacom was taking them over, and yet another had them closing their doors. The seed that started the rumors was that Yahoo suddenly (and without explanation) pulled out of a Merrill Lynch Internet conference. Henry Blodget, a Merrill Lynch analyst went on camera to cite what he thought could possibly be the reason. "The explanation will likely be: 1) impending earnings pre-announcement/restructuring, 2) major acquisition, 3) take-out or strategic investment, and/or 4) major management change." Then our dear friend Blodget ended his pot-stirring with, "Let your imagination roam." There were so many roaming rumors that the Nasdaq halted YHOO trading on Wednesday because of the tittle-tattle.

Much controversy ensued as to whether the Nasdaq should have halted trading on what one analyst spewed when they had yet to hear an explanation from Yahoo executives. One television anchor asked the President of the Nasdaq, "What if Yahoo missed the meeting because their representative was out with the flu?" J. Patrick Campbell responded by saying, "We'll continue to do what we think is in the public good." It turns out, in my opinion it was the right move. as the news was bad. Really bad. Yahoo's earnings this next quarter are going to be even lower than the already reduced earnings, (and at this point, who cares how low, why kick them when they're down) and they announced that Yahoo's CEO, Tim Koogle will be stepping aside. There was such hub-bub happening around Yahoo, it was hard to focus on anything else in the market. I, for one, am not a big fan of any analyst who says, "Let your imagination roam." I wish I could have reminded him that it was his firm who one year ago told us that Pets.com was a buy. (Pets.com has since gone out of business.) Yahoo is now in the process of searching for a new CEO as Koogle will remain on the board, but not in the lead chair. For a great article on why investors are holding onto Yahoo, check this out at Fool.com.

This wasn't the only bad news in the market..

Intel warned that their first quarter earnings would be 25% less than expected... not good. Then they also announced that they would be laying off 5,000 employees. Chick-held Cisco also announced on Friday that they would be reducing their work force by some three to five thousand people. That's 5% of their employees. Hmmmm, what other bad news should I share? New lows were hit this week by tons of tech companies. those being Cisco (CSCO), Broadcom (BRCM), SunMicrosystems (SUNW), Siebel (SEBL), and Charles Schwab (SCH). I own three of those stocks. Did I mention that I own a chunk of Yahoo too?

Let the depression set in.

Okay, onto the good stuff of the week. which if you can believe, there was! Quite a few companies hit their new 52-week highs! And, looking at the companies, they're all quite Chicky! Bed, Bath and Beyond (BBBY), Tupperware (TUP), Liz Claiborne (LIZ) and Philip "get me a beer" Morris (MO). Not one of them is tech, and not one of them is not in my house. I need to re-evaluate where I put my investment dollars.

My favorite analyst Chick, Abby Joseph Cohen of Golman Sachs spoke to the public this week and actually said that she feels the S & P 500 stocks are undervalued! I love Abby. She's always pulling me out of the gutter when I can't see the light. She took her cash balance and put it into stocks this past week. I'm going to spread this rumor. "Abby says that the S&P stocks are undervalued. And that's the truth. Plblblblblblblbl." (That was my Ruth Buzzy imitation. )

Other good news had Krispy Kreme (KREM) announcing a two-for-one stock split and that in May they will be moving over to the New York Stock Exchange (NYSE). Their ticker symbol will be (KK). I'm guessing that they fear that "Nasdaq Plague" may be contagious so they're hitting the stock exchange highway. They actually announced some great earnings. more than tripling their same quarter sales from a year ago. This is not a rumor.

Another truth be told, Michaels Stores (MIKE) announced their fourth quarter earnings which were also higher than expected. They beat analysts' expectations by ten cents per share! They also announced that February sales were up by 9%. That's a lot of crafts, Martha! Chick Susie, were you doing most of your Memory Book making in February. or were people just trying to keep their hands busy during the February market blues?

That was the week in the market. I must go and call my husband to wish him a Happy Birthday. He's in Pittsburgh, only he's still playing for the Calgary Flames.

Chick Karin

Closing Market Numbers