For those suckers in stocks, today was a good day. all of the major indices posted gains, with the Dow jones Industrials close to 52-week highs.

Gold and silver were also higher, but, if you had money in your pocket, your investment was safe and not exposed to any risk except that of somebody robbing you.

You must learn to love cash. It has no equal as far as liquidity is concerned, it takes up very little space, and can buy more things, especially things by which you can make more cash. It's tax-free once in your possession and nobody has to know how much or how little you have of it. With a little, you can buy a decent meal. With a lot, the world's your oyster.

Every minute of every waking day should be an effort to raise more cash. Even as I write this, tiny increments of cash are headed my way, in a never-ending flow (well, as long as the advertising market remains intact). I have various web sites and blogs which generate cash all day and all night. Over the past 5 years, it's been the most remarkable, reliable source of cash I have found. The best part of it is that I incrementally improve my earnings with more traffic. More eyeballs = more page views = more $$ for me and my partners.

If you don't have a stream of income like mine, you're going to be left to find other ways to make money, probably a job, the most degrading, insecure, life-cheating device ever invented. The job has enslaved millions and millions of people who could be otherwise leading normal, productive lives. If you have a job, I'm sorry. I your boss is an absolute ass, too bad. I've been there, many years ago. Didn't like it. Moved on.

Having a regular job is about the absolute worst way I can imagine going through life. The alarm clock, the traffic, the meetings, the BS, the commute home, are all so conducive to wasting one's life that I chose to avoid that path completely. Now, there are the benefits of a regular check, until you get laid off, that is, or fired, but how many of us use that money wisely to free ourselves from the mordant, the mundane, the mortal blows of employment?

You need to find a way out of the rat race. Here's my simple tip for the day: Sell something on ebay. Anything, one item a week at least. You can find something around the house that you don't use, want or need. Somebody will buy it. Put the money you make into a tin or bank or bottle, and leave it there. Keep adding every week. Just keep adding to it. You'll find the habit addictive and maybe, in 2 years or 10 years, you'll have enough to do whatever you want with your life. You'll have enough to quit your job and become a surfer, or a guitarist or something that doesn't involve checking in on a daily basis with a boss, who, by the way, could give a sh-t about you or your life.

Dow 10,680.77, +53.51 (0.50%)
NASDAQ 2,307.90, +25.59 (1.12%)
S&P 500 1,145.68, +9.46 (0.83%)
NYSE Composite 7,430.14, +59.69 (0.81%)

Advancers beat decliners, 4581-1924. New Highs: 405; New Lows: 55.

NYSE Volume 4,821,581,000
NASDAQ Volume 2,348,554,000

Oil, -$1.14, $79.65. Gold, +$8.60, $1,138.00. Silver, +$0.15, $18.40.

See ya.

Markets Pare Gains on Profit Weakness

Earnings continued to roll out on Wednesday, with the following highlighting a heavy day of releases:

• CIT Group (CIT): Second-quarter loss after paying preferred dividends of $134.5 million, of 70 cents per share was reported, compared with a profit of $236 million, or $1.16 per share, in the year-ago period. The results include a charge of $495.3 million, or $2.58 per share, from the planned exit of its home lending business, making CIT yet another casualty of the subprime mortgage industry implosion. Analysts expected 1.35. The stock dropped 6.26 (11.29%) on the news.


• eBay (EBAY): Reported earnings of $375.8 million, or 27 cents per share, compared with earnings of $250 million, or 17 cents a share, for the same period last year. Analysts expected 0.32


• Gannett (GCI): Excluding a $73.8 million gain from the sale of several newspapers and earnings from discontinued operations in both periods, Gannett earned $289.9 million from continuing operations in the quarter, down 4.8 percent from $304.5 million in the same period a year earlier. Per-share earnings on the same basis came in at $1.24 versus $1.28 in the same period a year ago. Analysts expected 1.21


• Pfizer (PFE): Excluding items, adjusted profit fell 20 percent to $2.94 billion, or 42 cents per share, from $3.66 billion, or 50 cents per share, a year ago. Analysts expected 0.50


• Piper Jaffray (PJC): Second-quarter net income was $9.3 million, or 52 cents per share, compared with earnings of $4.1 million, or 21 cents per share, in the second quarter of 2006. Analysts expected 0.74. Shares were off 3.69 (6.72%).


• Southwest Airlines (LUV): Earned $278 million, or 36 cents per share in the April-June quarter, compared with $333 million, or 40 cents per share, a year earlier. After adjusting for fuel-hedging transactions, Southwest said it would have earned 25 cents per share. Analysts expected 0.22


• United Technologies (UTX): Earnings per share for the quarter that ended June 30 were $1.16. Analysts expected 1.15

Most of the big names offered disappointing results, and it took a toll on the overall market.

Dow 13,918.22 -53.33; NASDAQ 2,699.49 -12.80; S&P 500 1,546.17 -3.20; NYSE Composite 10,148.28 -22.08

The results thus far for companies reporting 2nd-quarter earnings have been mixed with some major misses, not a positive trend for a market that's just made new highs. Add to the sour mood of today, Fed Chairman Ben Bernanke's remarks that the sub-prime lending ordeal is likely to worsen, though the US economy is in good overall shape. He has his doubters, however, and signs of a significant slowdown are everywhere.

Today's trade was also somewhat deceptive. All of the indices were down more than twice their closing losses. Some serious tape-painting occurred in the last hour of trading.

Declining issues once again overwhelmed advancers, by nearly a 2-1 margin. New lows surpassed new highs for the first time in weeks, 375-229. This is a definite sell signal that's been building for weeks.

Oil continued to weigh on the market as well, with the price of crude for August delivery gaining another $1.03 on the NY Merc, to close at $75.03.

Gold moved up to $673.70, a gain of $7.80, while silver added 27 cents to close out at 13.29. There's a growing number of commodity specialists who believe the precious metals are due for another run-up on inflation concerns, though both are near historic highs and have been stuck in trenches for more than 18 months.

There may have been consolidation in these commodities as positions have been unraveled, though most of the speculators are calling for doubling or even tripling in price over the next 2-3 years. Those predictions have been around for years, and, following the movements of the metals, they are highly cyclical and they seem to be on the downside of their most recent bullish cycle.

On the other hand, the gold cycle is very long, and neither gold nor silver has yet to show signs of breaking the long term uptrend. With inflation running rampant, they are not the worst investments, but stocks have performed much better over the last year and a half. These should be only held in large quantity if the potential for a complete market crash is high, and that's certainly not the case at present.

Watch out for the remainder of this week. Any more profit disappointments may just cause outright flight from equities for the summer.

Bailing Out: eBay and Yahoo

From time to time, I like to mention stocks I like or don't like. In all cases I will tell you whether I own the stocks (full disclosure). The stocks I am highlighting today - eBay and Yahoo - I do not own. Nor would I. These are two of the oldest internet properties and both have had their ups and downs, but lately, I see little to no upside, in terms of share price appreciation, for either of them.

Let's look at Yahoo first. Six years ago, they were the leaders in just about every measurable internet category. They had traffic, were the leader in search, news aggregation, games, etc. Then along came Google and stole their search crown. Other competitors sliced away at other categories. And while Yahoo still has impressive traffic numbers, they lack what every great internet company needs - innovation - and that's why their profits and share price are down.

Yahoo is exploring partnerships and integrations with local newspapers to improve the ad spending and reach in major local markets. This is a strategy that has great potential to backfire. Local ad spending on the 'net is the last great frontier, as yet unexploited by the giants. But large, clunky local newspapers, which have been slow to adopt best practices regarding their web offerings, while established entities, may not be the best prospects for innovative ad deals.

There's that word again. Innovation. Many of the largest chains of newspapers have been slow on the uptake and are still, like it or not, tied to the big bucks in print ad sales. The old tree-killing, mash-to-pulp-to-print mantra still resonates in newsrooms and ad departments across America. Teaching the old dogs of newspaper ad sales new tricks is going to be challenging, and likely unprofitable for some time to come, if ever. Ad reps at large newspapers have entrenched customer bases, many of them are in their 50s or 60s and make six-figures, so they're a tough bunch to crack. Why should they offer internet ads to their big-time clients? If it ain't broke don't fix it.

Yahoo would do better to seek out new internet-only local entities, like bloggers, wikis and ultra-local small websites. But they're stuck in that "bigger-is-better" corporate mindset, and that's yet another reason they're in failure mode.

Local ad markets represent some of the most fiercely-fought-over turfs in any selling regimen. Yahoo is in for a long, tough fight in which the landscape shifts from market to market and sometimes day to day. Good luck. It's a losing battle for both the newspapers and Yahoo. In the innovation war, they've come to a gunfight with a switchblade.

Just as i was finishing up this entry, Yahoo announced that CEO Terry Semel is stepping down and will be replaced by co-founder Jerry Yang. Leave it to Yahoo. News about their own company, and they get scooped by CNN Money. I'll stand by my prediction for short term gloom, however. This company needs more than a face-change at the top.

As for eBay, I'll just keep it simple. If it wasn't for their purchase of payment processor PayPal back around 2002, they'd be sunk lower than they already are. The company has made various large acquisitions that don't seem to offer much synergy. Take Skype, for instance. What good does a free long-distance telephone service offer a company that depends on online retail sales for 60% or more of its revenue?

If you're scratching your head on that one, you're not alone. Analysts, merchants and users of the big, fat internet auction shopping site are still trying to figure that one out.

eBay had made other questionable calls on acquisitions and they seem to have lost their focus, if they ever had one in the first place. It's almost as though they feel that the online auction format is not sustainable long term, and maybe they're right. They haven't made the one fundamental change to the auction format that could change the paradigm - taking the time element out of the auction. Most offerings on eBay languish for days before getting bids in the final minutes or seconds, if at all.

The chiefs at eBay haven't noticed that they could make more money with a better, more exciting user experience in the company's 10 year history. Already this summer, listings are down on the flagship US site. It bodes evil for the future of the auction king.

Once again, failure to innovate plagues this company as it does Yahoo. The only advancements eBay has made over the years to their core product are bloated extras that have the potential to boost their bottom line. eBay is missing the web's new wave in very noticeable ways.

Currently trading around 31, eBay should languish in the 20s for some time to come and underperform the S&P 500 through 2008, or until there's a management shake-up.

Yahoo, already trading slightly below 30, may make it's way down to the teens by the end of 2007. They've offered nothing new for so long, major shareholders may begin to bail soon.

Now, today's markets: Dull. With a capital D. Get used to it. It's summer and these kinds of days are the norm. Volume was very light and the indices didn't budge far from the flat line, though they all closed on the downside.

Dow 13,612.98 -26.50; NASDAQ 2,626.60 -0.11; S&P 500 1,531.05 -1.86; NYSE Composite 10,005.47 -8.46

Declining issues lead advancers marginally, by roughly a 10-9 margin, but new highs still superseded new lows, 427-92.

Oil was up over $68... and $69, ending $1.09 higher at $69.09. They're out of their minds, these oil people, and they deserve to see everyone in America walk to work or take alternative transportation for two months. It won't happen, but they, the sheiks and the Big Oil execs deserve a fate much, much worse than death. They're raping the US economy, the world economy, and trying to rape Iraq and next, Iran. Brutal.

Gold and silver went in opposite directions, but not far. The metals are so dull, they are barely worth reporting. A timely strategy might be to sell all your precious metal holdings now and buy back in a year from now. These particular commodities have had their days in the sun and have been treading water for months. A major fall is coming soon.

Dow Powers to New Record, eBay Piles On

Thanks to oodles of cash and some better-than-expected earnings reports from a handful of companies, the Dow Jones Industrial Average cruised to a new closing high today of 12,621.77, putting the fears that January would be a downer of a month pretty much to rest.

By adding nearly 88 points today on top of Tuesday's 56-point gain, the Dow is a cool 148 points on the plus side for 2007. While that's only a 1.2% bump, it's likely to be enough to keep January positive, which is a huge emotional buffer for the markets. So long as companies keep reporting earnings close to in line or better than expectations, the month will end on a high note, portending good things for the rest of the year.

The so-called January barometer actually tracks the S&P 500, and, according to the highly-regarded Stock Trader's Almanac the adage, "As goes January, so goes the year," is usually on-the-money. According to a February 1, 2006 report by U.S. News and World Report's Paul J. Lim,

85 percent of the cases since 1970, a positive gain in the S&P 500 in January has led to a positive year for stocks

With the S&P up 22 points or roughly 1.5%, we seem to be in safe territory, bearing in mind that there are only 5 trading days left in the month.

If one was to take out the days of the January Effect - the last trading day of the year and the first week of trading in the new year - a period notorious for dumping stocks - we're in very, very good territory. That's because the S&P bottomed at 1409.71, roughly 8 1/2 points below last year's close. But, that's enough of beating a worn and nearly dead horse. Suffice it to say we're setting up for another solid year of gains on the markets.

After the close, auction behemoth eBay released 1st quarter results and stunned investors with a dazzling report. Profits were 24% higher than last year's same period. Net income rose to $346.5 million, a healthy gain from the $279.2 million in Q4 2006. The 25 cents per share was well above analyst estimates of 19 cents.

Shares were bid up 1.38 prior to the release and added another 3.93 in after-hours trading. That's almost an 18% gain in one day. Not bad. The beat goes on...

Suddenly, January's No Sure Thing

There was not much in the way of jubilation on Wall today. Rather, like the weather, investors have tuned cold on stocks they seemingly could not get enough of just a few sessions ago. The buoyant feelings that usually complement a new year have given way to doubt and indecision. Stocks soured. The Dow lost 88 points, closing a scant 14 points above the 2006 finale.

The tech side didn't fare any better, dropping 20 points on the day. The hangover from last week's deflating comments from analysts covering the likes of Apple, Intel, Cisco, Motorola and others had a continuing effect on the day's trade.

But the real news was in the Dow components. Pfizer, while beating earnings expectations, announced a restructuring, calling for a 10% workforce reduction and the closing of some plants. Boeing was downgraded and both stocks took a hit. Pfizer lost only about 1%, but investors bailed on Boeing, dropping the aircraft manufacturer by 3 points (3.42%). With the Dow leading the way, the rest of the market marched to the sour notes. Declining stocks led advancers by a nearly 2-1 margin on both the NYSE and NASDAQ.

One could say that this kind of dip was overdue, but whether its a one-off or indicative of a longer term trend is not readily apparent. The markets - despite fairly benign economic data - are in a trendless phase, though if a consensus were to be had, it would likely point lower. Right now, earnings are the horse pulling the cart, or rather, the cart pushing the horses... and they're currently heading for a nearby ditch.

Some optimism may come from Yahoo, which reports on Tuesday, and eBay, on Wednesday, though savvy investors aren't likely to pin much hope on either. Yahoo has been a consistent underperformer and eBay is besieged by doubt over the wisdom of upcoming fee increases, their shuttering of operations in China and the effectiveness of new initiatives such as eBay Express.

Shares of eBay have been under some pressure of late, down more than 10% since mid-November. Analysts are seeking an attainable .28 per share for the just-completed 4th quarter, though the future for the company seems very much up in the air. If the company doesn't begin producing better margins and profits, management may take aim on some top executives, notably Bill Cobb, President of eBay North America and quite possibly CEO Meg Whitman, one of tech's most vilified personalities.

Markets End Week Meekly

As the short week drew to a close, the markets exhibited signs of life, but barely. Mixed signals from corporate earnings, economic reports and political tensions kept movement to a minimum. The Dow dropped a scant 2.40 points, while the Nasdaq ended its recent losing streak by adding 8.10.

The upside in tech was despite Motorola's (MOT) dismal earnings - 25 cents per share vs. 47 cents a year ago - as deals on popular cell phones continued to whittle away at margins. Gross income was 17% above last year's figures.

The company announced shortly after its earnings release that it would cut 5% of its workforce - about 3500 jobs - and investors cheered, boosting the stock by half a point.

General Electric (GE), a Dow component, also reported 4th quarter results prior to the market open, and delivered a healthy 64 cents per share, more than double last year's 30 cents. The bad news, which sent GE's shares down nearly a point, was that it was restating earnings from 2001 though the 3rd quarter of 2006, due to interest rate swaps in its commercial paper operations.

With just 8 trading days remaining in January, the Dow is 102 points to the positive for 2007, keeping alive hopes for a winning January and setting the tone for the year. It's amazing how many analysts and brokers are guided by the January effect and will follow their nose dependent solely on how the markets perform in just the first month of the year.

The Nasdaq may be a closer call, though today's close puts it 36 points over last year's finish. Further weakness from the likes of Yahoo or eBay, both of which announce results next week, could spawn more selling in tech.

Google announces on January 31, after the close. Amazon reports on February 1.

Should you be a fool?

The Motley Fool, in an article entitled Companies you should buy right now is recommending the following stocks as buy and hold candidates. I have some difference of opinion, but here's a key quote from the article:

What makes a great company? That's the rub. There can be a lot of ways to measure greatness. eBay (Nasdaq: EBAY) and Southwest Airlines (NYSE: LUV), for example, have high net promoter scores. Coca-Cola and Nike (NYSE: NKE) have nearly unmatched brand and marketing savvy. Boeing (NYSE: BA) and 3M have long histories of innovation. Starbucks (Nasdaq: SBUX) and Genentech (NYSE: DNA) have strong corporate cultures and are among Fortune's 100 Best Companies to Work For.

The article was originally published Dec. 8, 2006 and has been updated for publication on Jan. 9, 2007. (Makes one wonder which ones were switched out)

Right off the bat, I have some concerns over anyone calling eBay a great company. As I explained in my stock of the day feature, the company has been mismanaged and made poor business decisions for years.

Southwest Airlines? The stock has ranged between 12 and 22 for 5 years and is currently in a holding pattern over 15. Perhaps the "Fools" expect us to hold stocks that fly under the radar of the S&P 500. Maybe we'll just walk away.

Besides being suspected of operating in many countries as a CIA front, Coca-Cola still has that brand appeal, but the world of soft drinks is evolving quickly, toward more eco-friendly and trendy offerings. Coke has hung in gallantly and is a leader, but where is the growth and price appreciation going to come from? I don't see it.

Nike? See above, though the stock has been a stellar performer. Since late 2002, share price has appreciated from 40 to 100. Even I can't knock a 150% return over 4 years.

Another star performer is Boeing, which has run from the high 20s in early 2003 to near 90. Those monster returns are not likely to recur. recommending stocks near their highs may be foolhardy, but hardly prudent.

What can I say about 3M besides that it's so old school. The stock hasn't budged since late 2003, so maybe it's time for a move. Like others here, it does pay a dividend. Are the Motley Fools suggesting that 2-3% returns are de rigeur?

I like Starbucks coffee and the company has a great culture, but American's appetite for $4 lattes may wane and competition is sure to take a bite. Starbucks also sports a p/e over 40, so it's no bargain. Shares have ridden up from 10 to 40 over the past 5 years, and that kind of performance (400%) is going to be hard to top. If there's a winner on this list, this may be it.

Probably the most recognizable name in biotech, Genentech is a leader in profit as well. The company is expected to return 2.68 per share in 2007. However, the price of the stock doubled in mid-2003, split in 2004, ran up to nearly 100 in 2005 and was flat in 2006. This is a well-entrenched company, but maybe a touch pricey with a p/e close to 50. Value may still matter to some.

Overall, what impressed me about these picks was how many were close to their highs after impressive runs over a long bull markets. The Fools might have better served their readers - in an article professing that investors trade too often - by advising to time their buys on these stocks or wait for a general market correction before taking a plunge. They didn't.

I'll keep an eye on these stocks and check back in 6 months, a year, and beyond. Obviously, I don't care much for these picks and will stake my reputation against the Motley Fools, a bunch with whom I've frequently found fault.

Here are the closing prices from January 9 on the Fool's picks:
eBay: EBAY 29.75
Southwest Airlines: LUV 15.81
Coca-Cola: KO 48.61
Nike: NKE 99.76
Boeing: BA 88.00
3M: MMM 77.68
Starbucks: SBUX 34.86
Genentech: DNA 84.69