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Wall Street to Social Network !

Two Sundays, two movies: Wall Street: Money Never Sleeps and The Social Network. Both had my interesting topics. But the movies turned out to be quite different. Wall Street was boring movie with very loose script and no-where near original Wall Street which came out in 1987. The Social Network which originally I was planning to see only on DVD but went due to one of friends insistence turned out be an excellent and very well made movie. Script by Aaron Sorkin was the key to very good movie.

I am no movie critic but I would recommend watching The Social Network and passing Wall Street !

We are in final quarter of 2010. The earnings season should start earnestly this week. What's in store for Q3 earnings and Q4 forecasts and how would markets react to those ?

Here are some of my predictions for Q4 and year end !

  • Corporate earnings would be good even though forecasts would continue to be cautious. In general more companies would have upside in earnings than downside
  • Q3 GDP would come around 1.5 to 2%
  • DOW would most likely touch 11000 by year-end. I won't be surprised if it touches that mark before October month-end
  • Un-employment should finally start coming down with holiday shopping season on its way and retailers hiring temporary workers. It should start inching towards 9.2% by end of year
  • Emerging markets should continue to keep inching upwards. BSE sensex may touch 21000 (all time high) around Diwali time
Regarding this week's recommendations - I wish Facebook was public company. Even at $30 billion valuation, I would have recommended to buy it given it's user base of 500 Million users. 

RIMM finally introduced its playbook - supposedly iPAD for corporates. While tablet market is getting crowded, RIMM definitely can cut a place for itself due to its Blackberry franchise. I just wish they had it for holiday season. Anyway, at around $48-50, I would recommend it as this week's recommendation for upside potential of about 30% in 12-18 months. Another interesting stock in same price range is Monsanto - MON ($47). Given need for food for growing world population, this could be an interesting long-term play.

/Shyam

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