Skip to main content

Yahoo/MSFT and Dow at 13000

Another week is over - quite exciting week and I was glad that quite a few of my predictions were correct.

  • Dow is over 13000 (would cross 13500 by Summer 08)
  • Yahoo/Microsoft deal is getting finalized close to 35 ( would most probably get done over weekend) - I was surprised to find out that May 30 calls were selling for 60-70 cents on Friday session. Upside-to-downside reward/risk was nearly 4:1 (potential reward of 400% vs risk of losing all money) - we know that markets are not efficient in short term
  • Financials had one of their best week in last few months (8% weekly return in UYG)
  • Emerging markets came in very strongly especially India, China and Latin America (7% weekly return on UUPIX)
  • GDP came in at 0.6%
  • Fed rate was cut by 25 basis points
Next week's predictions:
  • Yahoo agrees to friendly merger with Microsoft between $35 to $36. Since it may happen over weekend, there would not be any opportunity to play call option strategy on Monday.
  • Dow, Nasdaq goes sideways and remain range bound with exception of one or two days of good returns
  • Oil stays around $110-115 range and Gold around $850-900 range
  • Financials retain the gains made over last few weeks
Now that Dow is above 13000, I would recommend start taking profits on your stock investment and mutual funds and keep some cash on hand - we may see a bump (and buying opportunity) in late May/June 08

Have a good weekend !

/Shyam

Comments

Post a Comment

Popular posts from this blog

2026: The Year of Convergence – Melt-up, Moonshots, or Mid-cycle Correction?

Happy New Year! After another period of self-imposed hibernation from the blog—partly due to the festivals, travel, intertia and partly to watch the dust settle on a chaotic 2025—I decided to use the quiet of this New Year’s morning to finally reboot.  Looking back at my October post,  “Clicks to Tokens,”  the hunch about the AI theme held firm. We spent much of 2025 debating whether we were in 1998 or 2000. As we enter 2026, the answer seems to be "neither and both." We have the roaring optimism of the 1920s fueled by "Silicon Spirits," but with the high-speed volatility of the 2020s. So, as the calendar flips, what is in store for 2026? Markets may experience melt-up (S&P touching 8000),  with some moonshots (like SpaceX and OpenAI) IPOs or even see mid-cycle correction bringing down S&P to 6000. That's a wide range and will be decided by Four R's... Here are my thoughts on the " Four R’s ":  Rates, Robots, Rotations, and Real Assets. 1. ...
Post a Comment
Read more

Rockets, Relics & Roaring Markets: The $4 Trillion Crossroads of 1927 and 1999

Happy (almost) Summer! After watching Kevin Warsh get sworn in at a White House ceremony two days ago, tracking three S-1 filings that could collectively hoover up more capital than every U.S. IPO since 2022 combined, and watching 26-year-old stock charts finally break to new highs — it felt like the right moment to ask the uncomfortable question out loud. Are we at a party that ends gracefully, or one that ends with the furniture on fire? The market is simultaneously flashing the neon signs of 1999  and  the orchestral excess of 1927. Most commentators reach for the dot-com playbook. I think the original Roaring Twenties is the better map. Here's why... Assembly Lines to AI Clusters Ford's River Rouge complex was the largest industrial facility on earth in the 1920s — raw iron in one end, a Model T out the other. Steel, rubber, and oil became the picks-and-shovels of the age. GE and Westinghouse were electrifying factories and homes. The infrastructure buildout  was ...
Post a Comment
Read more

Stree-Dhan vs. Oracle of Omaha!

Happy February! After another brief hibernation from the blog—partly to digest the early year volatility and partly to observe the shifting sands of global liquidity—it’s time to look at some fascinating disconnects in the market. Lately, I’ve been thinking about the "Unbeatable Asset Class." No, I’m not talking about the S&P 500 or Nvidia. I’m talking about a collective force that has quietly outperformed the "Oracle of Omaha" for over two decades. 1. The Golden Saree: Indian Women vs. Warren Buffett If you look at the performance of Berkshire Hathaway (BRK-B) since the launch of the GLD ETF (the first gold ETF) in late 2004, you’ll find a startling reality. While Buffett is the gold standard of value investing, the "Gold Standard" itself—specifically in the hands of Indian households—has been a formidable rival. Data shows that since the inception of the GLD ETF in November 2004, the total return on Gold has actually surpassed Berkshire Hathaway. I...
Post a Comment
Read more