Interview: TrimTabs.com---Biderman, Charles---Chief Executive Officer
>> the market is going to move about 12% higher by june. charles bitterman, the c.e.o. of trim tabs investment research. charles joins us from santa rosa, california. welcome.
>> good to be here.
>> let me ask you about today’s moves. anything more than this wait and see attitude ahead of chairman bernanke’s speech tonight at the new york economic club?
>> well, we did see a bit more exuberance by individual investors than we have in the past. five or six days in a row of up market . we had $2.2 billion money going into u.s. equity funds. on the one hand that’s good. on the other hand, it came in very quickly. so we might in b in for a day or two of profit taking or, you know, meandering. but companies keep buying and there’s a ton of money on the sidelines. and take home pay is surging. so things look good all across the board.
>> of course you hit on so many topic there is. the other story is the big decline in oil prices today. now, getting back to the speech tonight we’re expecting from bernanke. if we get a market -friendly speech, we could see a significant rally in stocks and bonds tomorrow.
>> bernanke looks at daily income tax collection and so do we. that’s very strong. he’s looking at real-time data. i think he looks at realtime daily income tax collections. this is indicating a strong economy. so those who think that the fed is going to overshoot and that the economy is currently on tender hooks, which it’s not, they might get a little nervous if he comes across saying things look good in the economy. on the other hand, from my point of view a good economy is a good economy. and i’m not worried about the fed.
>> ok. 10 then as in his previous two speeches, bernanke’s comments tonight are not likely to be market -moving in your view?
>> theeked be short term. they could be for, you know, half a day to a day. but not real lifment i think the most important thing is that companies continue to shrink the number of shares out there by very aggressive buying and increasing the amount of dividends they’re paying shareholders. and at the same time, keeping cash on the balance sheet at near-record highs.
>> all right. mr. biderman, let’s get to the bullish outlook you have for the marks. when you were here three months ago, you’re looking for 20% market gains. you’re sticking with your view here?
>> yeah. things are even more bullish now. we’ve seen more corporate buying. the first quarter of this year than we did in the fourth quarter of last year. and the fourth quarter waws record amount of companies buying back their shares. and we’re seeing that exceeded this quarter. and the amount of cash takeovers where shares are being retired, you know, everything else being equal, when the number of shares goes down, the market goes up.
>> now, in your most recent edition of liquidity review, you said corporate buying is tripling corporate selling so far this year. you’re talking a lot about cash on the sidelines. why is it such an important indicator for you.
>> well, cash on the sidelines means that increased cash on household balance sheets has been growing by 6% per year the last few years. take home pay is growing at 9% a year. so, you know, there’s a myth that the u.s. economy is not saving. well how come cash is going up so fast. mortgages are going up―the amount of mortgage is less than the value of homes. the consumer has a very strong balance sheet. consumer credit did not grow in the last four months. which means they don’t need to borrow because their take home pay is surging. so there’s a lot of cash being generated tpwhi economy. companies, individuals, and for the last year, most of the new money that individual investors had been put into the market , they’ve been sending offshore. and the u.s. economy is paster than europe, faster than japan, and at some point, that money is going to come back home in the next few month, i think, i think the market is going to sore. • soar.
>> you mentioned take-home tai surging a couple of time fsms you look at prior years, sit true it? ‘s barely keeping up with inflation. swhy that not a focus for you?
>> that’s not true. we saw 9% growth in take home pay last year. and the first 2 ½ months of this year, it’s delose 10% increase. year over year, and take home pay of people who pay taxes on their income. in other words, those who have jobs, or those who are self-employed and pay estimated payments, that stuff, the treasury reports daily. and the federal reserve looks at that congressional budget office looks at that. we look at that daily. and that says that this economy • i mean that compares to two years ago, it was 4%. three years ago it was 2% asmed the year before that, it was zero growth so. we see rapidly accelerating year over year growth in the economy.
>> ok. just pay devil’s advocate a little bit there. we’re running out of time. but i want to talk about your favorite sector, which is media. you talk about the buyback announcements in the group. why aren’t more feel people on your board?
>> that’s why company are buying because there aren’t more people in board. companies know what’s going on in their companies and industries a heck of a lot better than wall street analysts and investors do. where they lead, i like to follow.
>> got to live it there. charles, thanks so much.
>> thank you.
>> there is so much more ahead on tonight’s edition of “after the bell.”
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Listen Market briefing --- Rhonda (slow)
NYSE --- Deb (fast)
Nasdaq --- Robert (slow)
Chart of the day --- Tom (slow)
bell.” third quarter sales of new database missed analysts estimates at oracle. the world’s number three software maker said earnings rose 42% as revenues climbed 18%. net income rose to $765 million, or 14 cents a share. sales increased to $3.47 billion. excluding costs if for takeovers, profits came in at 19 cents a share. heather ballini estimated oracle would earn 16 cents per share. oracle reported $1, 827 million in this category. the average estimate of analysts surveyed by bloomberg, 2.3%. in the regular trading session, oracle gained 12 crepts to close at $13.72 a share. up almost 1%. and our other top story today. a federal appeals court overturn the 2004 obstruction of justice conviction of frank quatrone of credit suisse first boston. a three-judge panel in new york ruled jurors were instructed before deliberating charges quattrone urged fellow bankers to destroy records. quatrone will face a new trial before a judge if they decide to retry him. today’s reversal may lead the government and quattrone to reach a deal. the delaur had its biggest retreat in seven months of trading. around midway through the session, price broke through a key support level then slid -- picked up speed. let’s go ahead now and check those closing numbers for you on this day. looked like we lost some steam for sure as equity investors put in a wait and see attitude ahead of chairman bernanke’s speech. the dow closed at 11,274. but the nasdaq did gain today, up seven points, 2314. microsoft, google. oracle was up about 1% ahead of its earnings report today on the nasdaq. after a banner week last week, stocks low slowing down a bit today as we start out the week. here’s deborah kostroun with this report on why we are getting off to a bit of a slow start here.
>> not a whole lot of movement in the major averages. in fact, we’re just kind of creeping along today. below average volume, the dow and s&p 500 really hugging the flat line. investors focus on a couple of things. that being the fed and oil prices. the dow and s&p 500 little changed on the day, following their best week in two months. the s&p 500 breaking that winning streak. also crude oil, sitting at $60.42 a barrel. in addition to that, those interest rate sensitive stocks on the decline. a lot of the people on the market really kind of waiting on the fact that fed chairman bernanke giving a speech in new york. and many people kind of wondering what he might say about long-term interest rates. marks in a wait and see mode for most of the day. you saw real estate, energy and utility stocks. remember that real estate stocks were some of the best performers last when this mark was going higher. many of those stocks hitting 52-week highs. other interest rate sensitive stocks on decline, some of the utilities and banks were lower. in addition to that, with the crude oil coming down. $60.42 barrel a mark. natural gas, oil services, integrated oil stocks all on the decline. the biggest drag on the dow, we saw late-day weakness. g.m. and its former auto parts maker delphi may offer united auto maker members as much as $35,000 to retire. that enticement, one of the several plans that could be presented to tens of thousands of workers. that, of course, part of a labor atchoord g.m., delphi and the union are negotiating right now. and michael stores are considering a deal for the largest retail in year. biggest gain in more than two years. michael has had a market value.
>> nasdaq closed up six days in seven ahead of bernanke’s speech.
>> the nasdaq composite continued to build on its gains, rising for the six days in seven. though it was fairly little changed, just gaining a couple of points on the session, as we tell―saw investors and contraries, that of course came after the close of regular trading in new york. lord abbott and company saying we were in limbo most of the day, waiting for bernanke. stocks were taking a little bit of pause and consolidating. it’s a good sign, not giving back a lot of gains from last week. it’s the best week in seven for the nasdaq composite. as far as the industry groups good morning, america we did see the financial stocks, the natural index rising, before doing a reverse value midday. transports were moving higher. internet stocks moving higher. google shares were rising after a federal judge saying google did not have to turn over search queries to the government, though google will have to sur rerpped 50,000 web addresses. the government wanted these names and addresss in an effort to block children’s access to position fism and investors were concerned google users would shy away from the site and go to rivals. we did see piper jaffree saying ford was its stock of the week. it presented a very attractive entry point for investors. also satellite radio stocks on the rise. sirius satellite radio, one of the best percentage gainers on the nasdaq 100. passing the 4 million subscriber threshold. also x.m. satellite radio had 5.9 million customers at the end of 2005. at the nasdaq, i’m robert gray.
>> ben bernanke is in new york to address the corporate elite of the nation’s top financial capital. fears that an inverted curve may signal an economic slowdown. time for a look at our chart of the day with tom keene. welcome.
>> welcome. good to be here, lo ri. this is one of the most fun nights of the year for new york. 1,300 people, actually almost 1,400 people will crowd into a hotel, the grand empire ballroom. it used to be all tux seed dee does and black tie. 40 or 50 people on the stage and they’re all going to pay attention to ben bar nan key -- bernanke before they eat. so there’s going to be a lot of stirring around before chairman bernanke speaks. what we’re seeing here are reflecks on the yeeled curve. before we go to the chart, you see why chairman bernanke is talking about this. just in the last five or six year, we go from the inversion in the blue box in the lore left corner and then the recession beginning in 2001 is the red line and then up goes the spread and we come across and down we’ve come again. and you can see, lori, right over here, it’s zero. we’re right where the two-year yield―stadium scume, the three-month yield equals the 10-year yield. so the concern is will we dip below? will it signal recession? and chairman bernanke said before, no way and he’ll reiterate that tonight.
>> what can he say before the next fomc meetinging?
>> he can say next to nothing. you’ve heard and certainly all the economists i’ve talked to said the same thing. what they’re going to look for is tone. the overall tone of the speech. and i believe they’ll be listening very, very carefully.
>> his language or style of speaking?
>> no, not style he’s very familiar with speaking. a different way of chairman greenspan. it’s not about style. ice what is he going say. isle pay particular attention to the q&a period. but it will be interesting.
>> you got a toict go.
>> i’m going with the press.
>> i see.
>> i’m going along with richard miller of our washington office and drew ward of our economics team. we’ve got a big contingent going. nevertheless, it is an important speech, even though it’s right up against that march 28 meeting.
>> so that speech, are you it can expecting a hawkish or dovish tone.
>> real lit es pence of it, will there be a nuance with it, paragraphs emphasizing a dovish tone, which means lower interest rates. that will be good news for the market or more hawkish tone, worry about higher interest rates. that means bond prices lower, yields higher we’ll know a lot more starting at 7:00 p.m. tonight.
>> investors are in a wait and see mode ahead of this. could this be a market -moving event?
>> my guess is it was a skiddish market today. i’ll give you that for sure.
>> i hope you get a dinner seat.
>> we’ll try.
>> thanks a lot. there is so much more ahead tonight on bloomberg “after the bell.” all things that can sway the market on a daily basis. or do they?
