Christmas Eve Thoughts and Randomosity

Santa Claus puts massive bid under market to help the market close at the highs in today's shortened session. (I just wanted to write the headlines, instead of reading about consumer optimism, short-covering, technical buying, etc.
For those of you who don't believe in Santa Claus, maybe it was some of those other things.  But as for me, Virginia, I believe.
Merry Christmas to you and yours.  Enjoy the season and the company of friends and family.
Some Christmas Eve randomosity....

• SP500 bottoms vs. recessions.  Typically, the markets bottom 3, 4 or 5 months in advance of the recession’s end. However, it has been as much as 7 months (1954) and in 2001, the market did not bottom until 12 months after the recession’s end.
• But wait, Paul Krugman says we're not out of this by a long shot.  So what about our current situation? It’s just like the two previous “postmodern” recessions, only more so, since the bubble before the slump was in housing itself. This suggests a long period of jobless growth; so does the international evidence on the aftermath of financial crises.
• Some TV channels having Christmas marathons!  You know, A Christmas Story, Christmas Vacation, etc. 
• Christmas Eve, and the Senate is loading up the health care sleigh with goodies!  Senate OKs health care bill.
• Fasten your seatbelts, because it's going to be a bumpy tax ride.  I think we all realize that the government only spends more money, and with national health care coming, the government will need more money.  Yes, your taxes will go up.  It may come directly, it may come indirectly as companies pass on their tax hikes to you.  But, you will pay more.
• The Meaning of Blogging from DJ at Wizbang.  For me, it's a diversion from the day to day, and a way to meet other folks around the globe.  I do enjoy the emails and comments.  I also spend time on Twitter. 

Wednesday Randomosity

• I'm 100% long the stock market and see no reason to do anything different through year-end. We're seeing nice ramp-ups into the end of the year in the sectors that have done well in 2009. Sweet.  Of course, January 4th could see some shifting, but that's not today's business.
• Wow, California lost almost 100,000 residents in 2009.  But they call that an improvement, as over 300,000 left in 2006.  They say folks are staying because they can't unload their homes.  Heck, with the no foreclosure rule, some have figured out that they can stay in their homes without making any payments!  But, net-net,  folks are still leaving.  Just look at this Google search.
• I mentioned in November that I was re-watching Lost.  I'm a few episodes in to season 5 and they're all back on the island!  It's been really fun to go through the series again.  Thank goodness for online streaming to the family room TV via the Netflix Roku box.
• I roll my eyes about activists concerned about global warming.  Today we learn that it's not CO2 causing global warming, but CFCs and cosmic rays.  Hey, and it's peer-reviewed!  In my eyes, the gist of it all is that science marches on outside of politics.  When Al Gore said that the science was settled, every alarm bell in an open mind should've gone off. 
• Not Penny's Boat.
• Does Amazon buying Netflix make sense?  Maybe.  Can Netflix survive all by itself as other content providers (cable companies, sat dishes, Apple, etc) make it easy to get online video to TV?  Maybe it is in Netflix's best interest to align or be bought by Amazon.  Or Apple.  Or Microsoft.  Or somebody.
• On the Roku box I mentioned above, Roku has expanded their online offerings for streaming Amazon movies, MLB.com, and other web videos.  I still just stream Netflix content at this time.  Maybe that's where all my free time is going these days.  LOL.
• So, how you doing?

The US Dollar and Foreign Stocks

Just thinking out loud, but if we (the US) are heading into a stronger economy an rising interest rates, the US dollar will rise. My thought here is that mutual funds and ETFs that invest in foreign companies and have assets denominated in foreign currencies have seen share price appreciation due to the declining dollar. What happens if that trend reverses?

Chasing High Dividend Stocks

Interesting perspective from the WSJ on chasing dividend paying stocks in this low inflation environment.

With the income from bonds withering away, investors are piling into dividend-paying stocks. Investors should be cautious.

...

Don't forget that even today's 2% to 4% bond yields aren't as paltry as they look, because inflation remains close to zero. The 6% interest income you remember earning a decade ago came at a time when inflation ran about 3%. You might protest that inflation, as officially measured, is understated today—but it is probably no more inaccurate now than it used to be. In real terms, you are only slightly worse off now than you were then.

Link

What is a Santa Claus Rally?

A good column on what exactly is the Santa Claus rally. Many definitions, but the historically most accurate is that the week between Christmas and New Years tends to be bullish. From Mark Hulbert.

I remain long the market and short on time. Work is crazy but I see some less stress after next week.

Microsoft 7 Bugsapalooza

Nobody should ne surprised that Microsoft $MSFT is dealing with software bugs and issues.

Microsoft launched Windows 7 in late October to much fanfare. But, just like with previous Windows upgrades, complaints about bugs have already started rolling in.

Link

As a software developer, this is the nature of the beast.

More important to the industry and us as investors is that Windows 7 is a strong product and will lead to PC purchases. For example, I'm about to order a new Dell. Same with many friends and coworkers. I don't think we are alone.

Yes, there are bugs and there will be bug fixes. What's new?

The Economic Recovery

About 9 months after the atock market bottomed and put on a tremendous rally, we are now seeing employment numbers improve. I believe the numbers will continue to improve into 2010.

I think the remaining stimulus money should not be squandered. With our growing deficit and the economic recovery gaining traction, any excess money should be used to reduce the deficit.

I remain 100% invested.

Taxing Stock Trades

The latest brain freeze out of our government is a tax on stock trades.

A growing chorus of Democratic lawmakers and liberal economists are pushing hard for a tax on stock trades to pay for job creation.

By levying a small fee when stocks, futures, swaps, options and other securities are bought and sold, supporters of the tax believe the government can take in between $120 billion and $240 billion annually. That money could be used to fund additional government stimulus to help put the nearly 16 million unemployed Americans to work.

Link

The big issue I see with this is a decline trading volume. That is up to $240 billion out of people's pockets. It could reduce liquidity in the markets It's a very bad idea.

Innate Male Behavior

Agree with Tobin Smith.

Rationalization? Sure. It does happen a lot.

Sunday Randomosity

• Well, it will be interesting to see if the market bounces back tomorrow. We are hitting the end of the month and beginning of December, which could see the monthly dollar-cost averaged cash enter the market. Or not. I hope we bounce back from friday.
• I ordered vegetable udon at a Japanese restaurant tonight. It was a bowl of noodles with just a few sprigs of brocoli and a few carrots, very finely shredded. $9. The broth was okay, but come on $9? The free bowl of miso soup with a few tofu cubes was more hearty.
• As I lamented on Twitter, I am playing the last-placed team in 2 fantasy football leagues. They have the highest scores in their respective leagues this week. Me? Second highest score. In both leagues. Good grief.
• Almost done with re-watching season two of Lost. Michael jsu came back and shot Anna Lucia and Libby, while Eko and John found the monitoring hatch under the drug running plane.
• RSS Player is back in the iPhone app store. Improved version. Crashes here and there but pretty good. During the time it was unavailable I used Drivecast. Will continue to use both. Drivecasts fast forward is broken in current version but dude says next version submitted to apple.