My Favorite Trade for a Bullish Market: RIMM

It is not uncommon for stock market gurus to forecast the year ahead each January. Some are more lucky than good, which, in my opinion, is always better. That's not to say that a good forecast is not important. In fact, I am going to show you my time-cycle chart for the upcoming year, but with the following caveat: It is virtually certain that this forecast will change dramatically as the weeks unfold in 2011.

This is why it is so important to see these charts on a daily basis. Exogenous events can and will occur with more frequency than we would like to admit. One-off events are virtually impossible to predict and one-off (exogenous) events are certain to occur.

You may believe it is impossible to predict the future. I have no argument with that position, but if you do not have a plan that is capable of handling virtually any possible outcome, then your investment strategy could have far too much risk exposure.

I have found that the best way to plan for any contingency is to have a clear set of rules to use for your trades. Always know what your plan will be for the downside and for the upside. As I have often said in this venue: "Buying is easy... Selling is hard!" The successful result of selling the right stock at the right time is what separates winning trades from losing trades. If you haven't developed a solid set of investment/trading rules, I recommend my book "10: The Essential Rules for Beating the Market." (more)

HUMOR: Pelosi Passes Gavel to Boehner

Lock In Rates Now

Reader Walter has asked an important question on the recent actions of Goldman Sachs and Warren Buffett. Link here.
These investing behemoths are locking in long term debt at low, low rates and retiring variable rate loans.
Goldman's strategic 50 year move in the bond market at a hair over 6% is fascinating.

Who can possibly predict yields 50 years on the future?

In my view, yields on the 10 year rate will soon skyrocket.

The timing will depend on several factors, including the rollover of debt in Europe (Spain, Ireland and Italy are on my radar), and the cooperation in Congress on controlling Federal spending.

In my estimate, we will see the 10 year rate at close to 5% or higher by year end with steady increases into 2012.

I suspect that GS and WB have analysts that have also reached this conclusion which explains their actions. (more)

Amid Facebook frenzy, fears of Bubble 2.0

Remember Webvan? The online grocer, whose initial public offering in March 2000 was among the most hotly anticipated during the dot-com boom, is now viewed as one of the greatest disasters of the era.

Fast forward 11 years and the feeding frenzy around Facebook and its exponentially expanding valuations are conjuring fears of a Bubble 2.0.

Goldman Sachs bankers have offered their private wealth clients less than a week to decide whether they want to hand over $2-million (U.S.) apiece for a sliver of the Web darling du jour: Facebook at a $50-billion valuation.

For one Goldman client, who was expecting a 100-page financial document on Facebook to be hand-delivered on Thursday, hours before the deadline to invest in the company - the whole thing “felt a bit like 1999.”

Thanks to Goldman Sachs’ latest cash infusion of about $450-million with a commitment to raise another $1.5-billion, Facebook has become the lightning rod for debate over whether these new Internet hotshots possess the profit-generating muscles to justify Wall Street’s unforgiving expectations. (more)

S&P Stocks With the Highest Short Interest: ADS, BYD, CIEN, GMCR, RAX

Here’s 5 S&P mid-cap stocks with extraordinarily high short interest:

Alliance Data Systems Corp (NYSE:ADS): The Plano, TX-based company provides data-driven and transaction-based marketing solutions and customer loyalty solutions. The company has 50.39 million shares float. 36.8% of the shares float are short, or 18.458 million are shares short. (more)

THE MOST AND LEAST RISKY SOVEREIGNS

“This quarter there were few surprises in the list of the top ten most risky sovereigns, with Greece at the top of the table, followed by Venezuela, Ireland and Portugal, and there were no changes to the top eight least risky, although The Netherlands dropped out of the top ten.

However, the top five worst performers for the quarter are from Western Europe, confirmation that 2010 was one of the most difficult years for the region since the introduction of the euro in 1999. The report found that UK CDS widened 13% in the quarter following the bail out of Ireland.”

The most risky

The least risky

US Economic Calendar for the Week

Date	Time (ET)	Statistic	For	Actual	Briefing Forecast	Market Expects	Prior	Revised From
Jan 11	10:00 AM	Wholesale Inventories	Nov	-	1.0%	1.3	1.9%	-
Jan 12	7:00 AM	MBA Mortgage Purchase Index	01/07	-	NA	NA	+2.3%	-
Jan 12	8:30 AM	Export Prices ex-ag.	Dec	-	NA	NA	0.8%	-
Jan 12	8:30 AM	Import Prices ex-oil	Dec	-	NA	NA	0.8%	-
Jan 12	10:30 AM	Crude Inventories	01/08	-	NA	NA	-4.16M	-
Jan 12	2:00 PM	Treasury Budget	Dec	-	NA	NA	-$91.4B	-
Jan 12	2:00 PM	Fed's Beige Book	Jan	-	-	-	-	-
Jan 13	8:30 AM	Initial Claims	01/08	-	415K	420K	409K	-
Jan 13	8:30 AM	Continuing Claims	01/01	-	4000K	4070K	4103K	-
Jan 13	8:30 AM	PPI	Dec	-	0.8%	0.7%	0.8%	-
Jan 13	8:30 AM	Core PPI	Dec	-	0.1%	0.2%	0.3%	-
Jan 13	8:30 AM	Trade Balance	Nov	-	-$39.5B	-$40.6B	-$38.7B	-
Jan 14	8:30 AM	CPI	Dec	-	0.3%	0.4%	0.1%	-
Jan 14	8:30 AM	Core CPI	Dec	-	0.1%	0.1%	0.1%	-
Jan 14	8:30 AM	Retail Sales	Dec	-	1.0%	0.7%	0.8%	-
Jan 14	8:30 AM	Retail Sales ex-auto	Dec	-	0.8%	0.6%	1.2%	-
Jan 14	9:15 AM	Industrial Production	Dec	-	0.4%	0.4%	0.4%	-
Jan 14	9:15 AM	Capacity Utilization	Dec	-	75.3%	75.5%	75.2%	-
Jan 14	9:55 AM	Mich Sentiment	Jan	-	75.5	75.0	74.5	-
Jan 14	10:00 AM	Business Inventories	Nov	-	0.9%	0.7%	0.7%	-