The Kirk Report

More Than Just A Bounce?

The bulls are doing a good job today. A few more days like today and those sitting on the sidelines or short the market will be rethinking their positions, if they haven't begun to do that already. It appears the bulls are taking full advantage of this brief window of opportunity ahead of the Republican convention. One thing is true, the oversold state we were in a few days ago is quickly evaporating before our eyes, so it may be time to start getting a little more careful with our long positions. While not a lot of people are talking about it, that sentiment number we received this morning is part of the reason why the market is up today. Polls like that inspire even the value managers to start looking at dipping their toes back into the water again.

Tips for Managing Your Risk

Alan Farley provides some great tips on how to manage your trading risk better. There are some good nuggets of wisdom here. My favorites are 1) Enter positions at low risk and exit them at high risk, 2) Develop an original view of the markets, and then trade it ruthlessly, and 3) forgo mediocre positions and wait for the best opportunities. READ

Value Fund Managers are Sidelined

While the average stock fund has just 5% of its assets in cash, there are a number of solid value managers who remain sidelined. Value focused managers appear to be having a difficult time finding undervalued opportunities and the last time that many of these value managers had so much in cash in their portfolios was back in the late 1990's. While most claim they are not market timers but value focused investors, it is still noteworthy to see these cash positions as they relate to the argument on how overvalued or undervalued the market currently may be. READ

Cellular Evolution

Right after I graduated from college and got married, one of the first jobs I had to take was working as a cellular phone salesman. The year was 1993 and at the time the average "flip phone" I sold was about $1,000. Times have changed as well as the technology. I, for one, enjoyed reading Stephanie Mehta's look back at the cellular industry to see how far it has come in a relatively short period of time. READ

Where To Stash Your Cash

One of the questions I receive these days is where to safely stash your cash. Obviously, it depends on your financial situation, but as BusinessWeek points out, there are now some ok money market accounts available at places like ING Direct, VirtualBank, & UFB Direct. READ

Momentum is Fading

So far, today's trading tone is very interesting to me. It has been some time now since we've seen buyers come in after a negative open. The fact that stocks are holding in the green and Dow is above 10K, despite higher oil, is also having some positive effect. But, unlike the last couple of days, some momentum has faded. My trading radar only has a few names right now which include IMOS, ROST, NIKU, SWN, & CCBI.

Using Stats To Promote Your View

James Altucher, a fellow reader of this website and contributor to RealMoney.com, posted a very good rebuttal to an article I referenced here on Monday. As always, he makes the point that stats can always be used in ways that confirm your own views about the market. Great job Jim. READ

Investment Opportunities in Outsourcing

When I moved this summer, I had to undertake the dreaded task of calling every credit card, bank, broker, and utility company to update my address. The funny thing is that I don't think I ended up talking to someone in America in the dozen or so phone calls I had to make. That is, unless the Americans I spoke to had a strong accent from India.

Outsourcing is a trend here to stay, and the interesting thing about this is that the companies who benefit from that trend are not receiving a lot of attention by investors. For example, in this recent article in the New York Times about outsourcing by financial firms in the U.S., two companies receive attention - Satyam Computer Services (SAY) and Wipro (WIT). Here are their stock charts:

Both stocks have been flat for some time now, but the underlying growth must be quite impressive. Technically, both stocks are also holding up quite well in this market. A long flat trading base is exactly what you want to see after a strong upside move both stocks experienced some time ago. In my view, this trend is still in the early stages and it is something to put on your radar, especially those of you who are long-term investors. Like all new industries, a big winner or two is likely to emerge in the next year or so and it will be important to watch.

India is the New Growth Story

To be sure, the population of the world is going to look a lot different in 2050. According to the Population Reference Bureau (PRB), the number of people on Earth will reach 9.3 billion by 2050, compared to 6.3 billion today. In fact, it is predicted that India will take over China as the world's most populous nation sometime over the next few decades. READ

Watching the Insiders

Among the companies in the S&P 500, sales by corporate insiders outnumbered buys by 4 to 1 this month through Aug. 12, according to Thomson First Call data. Todd Mason takes a look at what the data may mean as well as some things to look for when viewing insider activity. READ