Love Letters, Hate Mail

First off, thanks to all my readers who deluged my mailbox with feedback
this week and last. I know many of you have portfolios bruised worse than a
bowl full of rotten fruit, and it seems as if investors are headed for the
hills.

For those of you who feel like lifers parked in front of the boob tube
anxiously awaiting Maria Bartiromo signal whether today’s opening bell
marks a recovery, I’d like to share some reader comments to calm your
nerves. It’s a segment I affectionately call finger on the pulse.

Hi Kelly,

When do you think the Nasdaq will [return] to its highs of 5100+?

Thanks,
Nishith

Dear Nishith,

The short answer to your question is within the year. In the interim, you
should expect to hear lots of outlandish opinions from analysts in the
media circus itching to make a name for themselves. Typically, one can use
bonafide “gurus” as terrific contrarian indicators.

My personal favorite has got to be Ralph Acampora. I’ve met him and he’s a
sweetie, but this is one guy who needs a new dartboard. Ralph is so good at
lagging two steps behind the herd that one’s got to wonder how long it’ll
be before Prudential puts him out to pasture.

Cheers,


Kelly

Kelly

Nice article!

Day traders on margin needing to ‘collect rent money’ should have had the
sense to buy property first before investing too heavily!

I want to buy yet am wary of committing new money, as I’ve been trading
within the value of my portfolio for some time without adding fresh funds.

Keep up the good work

Richard In LA

Dear Richard,

Thanks for the kind words. Y’know, new investors tend to forget two key
market rules:

Someone has to lose money in order for you to make money. And fear and
greed drive this train. It’s a painful hockey stick learning curve for the
uninitiated, but it’s one that functions in much the same way as natural
selection.

Once investors remove emotions from their portfolios, making money is a
breeze. The simplest ways to do that are to invest for the long haul and to
only invest money you can afford to lose. Of course, in a perfect world, we
wouldn’t have people who flush entire paychecks away on lottery tickets
either. C’est la vie.

Best of luck with your investments and have a great day!

Kelly

Before I stray too far, let’s check out some M&A action.

In a seemingly benign event as far as investments go, Safeway (SWY)
quietly announced plans to acquire a 50% stake in GroceryWorks.com for $50
million. Stop the music folks. We all knew it was coming, but we didn’t
know when. On the heels of Peapod’s (PPOD)
bailout by Royal Ahold (AHO),
this news is a wake-up call to last milers. Consolidate or asphyxiate.

Bricks and clicks make the most sense in this space, and offline grocers
are taxiing down the information superhighway. Safeway already boasts 1,663
stores. That’s the hard part. Blending its offline brand and infrastructure
with an established Internet venture will be like rolling downhill.

Consider that Webvan (WBVN)
rang up a measly $3 million in sales last year while hemorrhaging a
ridiculous $144 million. You can bet that Webvan is already warming to the
idea of a secondary offering, but that’ll be some trick in this nutty
market environment. Try it at four bucks a pop, and investors will kick ’em
to the curb faster than a wretched case of Salmonella poisoning.

Safeway’s stock is decidedly offline and arguably blue chip. A cold, hard
market winter will hardly a

ffect the old pro. The crackerjack collected a
whopping $29 billion in sales with nearly a billion net last year. Ever get
on one of those airport conveyor belts and start walking fast? It sure
feels like people around you are standing still. So will rivals once
Safeway pulls the trigger on its online initiative.

Stay tuned. This one’s just getting interesting.

Any questions or comments, love letters or hate mail? As always, feel free
to forward them to kblack@internet.com.