This weekend brings with it a huge sigh of relief, along with a new installment of Cocktail Chatter. August is supposed to be the time when fund managers can relax at the beach, secure in the knowledge that nothing really important will be happening on Wall Street. Instead, we've been greeted with what may be the first stirrings of a serious re-evaluation of this late bull market (though the "bards" of that market have been out in force the past two days, doing their best to prevent any such re-evaluation, insisting that everything really is more hunky-dory than ever). It was a chaotic week on the Street, the kind of week that makes "I need a drink" a reasonable motto.
So this weekend, as you're lifting those glasses in toast to the retirement money that hasn't been vaporized, here are seven conversation starters from this week in business (though I suspect that this weekend everyone will be happy to talk about the market without any encouragement at all).
1. "Poor Ralph Acampora. He's now been read out of the bulls' club, relegated to the status of 'insignificant events and comments' by a fellow market strategist. Of course, Road-to-Damascus conversions always get you booted out of the sect." [Acampora, technical analyst for Prudential Securities and a raging bull, made what he termed a "bear call" on Tuesday. On Wednesday, every bullish strategist in New York publicly repudiated his change of heart. Not in so many words, but we know what they meant.]
2. "One stock that held up mighty well during the recent correction was Anheuser-Busch. No surprise, really. Just remember: 'I need a drink.'"
3. "More than half of all the IPOs of the last three months are now trading below their offering price. (Of course, none of these losers are Internet companies.) With so much capital sloshing around in the stock market, you'd expect more and more companies to be going public to take advantage of it. But if it doesn't have .com at the end of its name, it's hard to get anyone excited."
4. "Flying in the face of this trend is GeoCities, the Web community that will be going public next week. GeoCities generated $4.6 million in advertising revenue in the last quarter. So what do you think we'll be talking about, then? A market cap of $2.5 billion? That seems about right."
5. "The vultures began circling this week. Allied Signal announced a hostile takeover attempt of AMP, an electronics firm whose stock had been crushed in recent weeks. Of course, AMP is based in Pennsylvania, which has the toughest anti-takeover laws in America. Allied Signal would have had a better chance of succeeding if it had offered AMP shareholders less of a premium and saved the rest to bribe a Pennsylvania judge." [That doesn't mean they should bribe the judge, of course, just that they'd have a better chance of succeeding if they did.]
6. "The CEO of Internet portal site Lycos said yesterday that soon we'll be talking about which giant media conglomerate Lycos is thinking about buying, instead of the other way around. And someday soon we'll be talking about which American soccer player was responsible for our World Cup victory, too."
7. "Liquidity is driving this market. The technical indicators look better. Corporate earnings are just fine. The stock market is actually undervalued. The problems in Asia have been solved. Interest rates are low. There's nowhere to go but up." [Say 10 of these before you go to bed at night, and everything will turn out okay.]