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November 21, 2006

Differences of opinion are one thing, but;, Tues., Nov. 21, 2006, 4:43 PM

I for one never want Humungous Bank & Broker to zip the lips of their best people. I want to know their most extreme opinions, from house to house and within the house.

I see that Goldman Sachs has a SELL on Micron Tech (NYSE: MU $14.60), with a near-term price target of $12, while Standard & Poor's has a STRONG BUY with a 12-month PT of $26.

Here's the S&P report on this Cara 100 company.

One short-term trader I know says he'll accumulate MU under 14 and distribute it over 16 if these prices are achieved before year-end. That scenario could possibly provide a +14.3 pct return in a very short time-frame. And if MU were to tank from $14.60 to $12, the short trader would gain +17.8 pct.

In any event, I wanted to show you the divergence of opinion on the Street.

Within a single firm, there are also widely diverging views at times. Take, for example, the UBS research reports I provide. The disclaimer is clear:


"Regarding two sources of research: Two sources of UBS research are available to our clients. One is written by UBS Wealth Management Research which is part of UBS Global Wealth Management & Business Banking (the UBS business group that includes, among others, UBS Financial Services Inc. and UBS International Inc.), whose primary business focus is individual investors. The other is written by UBS Investment Research, which is part of UBS Investment Bank, whose primary business focus is institutional investors. Because both sources of information are independent of one another and reflect the different assumptions, views and analytical methods of the analysts who prepared them, there may exist a difference of opinion between the two sources."

Markets depend on opinions, and on differing opinions. But something I heard, before leaving for meetings this morning, stuck in my craw.

CNBC anchor Mark Haines stated on air today at 11:00 am: "The two people I don't trust are realtors and car salesmen. Not that they are dishonest. They just have a vested interest in keeping spirits up."

Doesn't that take the cake?

With respect to Mr. Haines and the subject of "keeping spirits up", readers know my views. I'm on the record.

CNN calls themselves "The most trusted name in news" and CNBC is all about "The greatest story never told". It's all a crock that nobody believes, so why they play this mindless game is beyond me.

But -- and this is important -- it's only been in recent years that Wall Street has permitted their best people to speak their minds -- as long as they cover themselves with disclaimers. We need to encourage that.

Wall Street is full of brilliant minds, and these professional players don't all agree with their colleagues, or with Talking Heads. We need to hear their differences of opinion, directly.

From the media, many of whom are on the sidelines cheerleading advertisers and promoters and their friends, we need to tune out. If they were simply journalists, we should listen.

Posted by Posted by Bill Cara on November 21, 2006 04:43:09 PM | Category: Cara Today in the Market

Discourse

"Another Reason to Not Buy Dell"
Why are value investors still buying when a restatement seems likely?

These headlines are from MSNBC site with The Motley Fool providing the opinion from Oct. 17.

http://www.msnbc.msn.com/id/15767700/

MSNBC and The Fool seem very pessimistic in hindsight...especially since the shares popped over 9% tuesday evening on better then expected earnings. Was this really news or simply opionated spin. A 9% pop in one day would be a sickening gain to have missed, especially on a blue chip.

Posted by: quail [TypeKey Profile Page] at November 21, 2006 8:19 PM [link]

Bill and readers, I cringe at thinking that I fall under the umbrella of Ma&Pa investor. That moniker seems fit for people oh-so-older than I! Anyway...The difficulty in any of this ("this" being investing) is finding one's own way particularly among the brilliant-but-divergent opining from the luminaries in the field (to include Bill and other competent bloggers here). Fundamentalists have it wrong. (The market has been a sassy teenager in this regard). Technicians have it wrong. (The market has been a technical anarchist!) The market just "is". (Tao anyone?) To have the greatest success, I'm surmising, is to be be in some enlightened Zen/Buddhist-like state: non duality--neither bull nor bear. Market=reality---enlightenment is when we become the market (no matter how screwy). Perhaps I'll reach some Zen-like state in the future, but I must say that the bullish case feels so contrived, to this amateur. Perhaps its because I've never been predisposed to being a cheerleader (stated with no regret though my daughter was a cheerleader for 4 years!-how weird is that?). The market feels to me like a a game of Twister (though I'm much too young and serious to have ever played THAT game), but the position is so contorted that collapse is all but certain. I remain firmly in the smelly, contrarian, ursine camp, arrogant in my conviction that eventually I'll be right (like that dependable stopped clock). My Armenian grandmother had this wonderful saying...."You cannot cover $hit with snow". It's a wonderful saying, is it not?

Posted by: Leisa [TypeKey Profile Page] at November 21, 2006 9:28 PM [link]

Good post, Leisa, as always. Best of luck on your road to enlightenment, twixt ursa and taurus. But wouldn't enlightenment maybe just be signing up for a good mix of index funds at Vanguard and going out to smell the roses?

Posted by: jcf [TypeKey Profile Page] at November 21, 2006 9:49 PM [link]

JCF, thanks for your post. Point well taken. But, even those good index mutual funds take tumbles. I owned only mutual funds in 2000 when I was out smelling the roses they tumbled along with everything else!

Posted by: Leisa [TypeKey Profile Page] at November 22, 2006 6:52 AM [link]

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