We have been honestly and fairly critical of CNBC’s Fast Money Show and some of the traders on this show. Our readers seem to approve. They have made our article, “CNBC’s Fast Money – Practice What Your Anchor Dylan Ratigan” the second most popular article on our blog (see http://www.cinemarasik.com/2009/02/21/cnbcs-fast-money–practice-what-your-anchor-dylan-ratigan-preaches.aspx ).
We have been diligent in catching mistakes made by Fast Money Traders as well as what we consider to be lack of journalistic integrity on Fast Money (see our article “CNBC’s Fast Money – Playing Fast & Loose With Facts About FED & US Treasuries?” – March 28, 2009 – http://www.cinemarasik.com/2009/03/28/cnbcs-fast-money–playing-fast–loose-about-facts-about-fed–us-treasuries.aspx ).
We like this show because it is fun to watch. So we feel happy that we can finally write a positive article about Fast Money today.
This week, CNBC introduced a mid-day 15 minute segment of Fast Money that airs daily at 12:45pm. Unlike the evening one-hour show, this short segment does not allow Fast Money traders to talk aimlessly but forces them to recommend trading actions briefly and succinctly.
This new segment had a great debut this week and the credit goes to Jon Najarian, a frequent guest trader on the show and the brother of the regular trader, Pete Najarian.
Goldman Sachs was scheduled to release its first quarter earnings on the morning of Tuesday, April 14. During the 12:45 segment on Monday, April 13, Jon Najarian said “..I would be a big buyer of Goldman and I have been all the way up into this, but I am very cautious into the actual event tonight and I will be somebody who will be protecting at the bell tonight and not holding on after the bell..”.
This was a clear and unequivocal recommendation to sell Goldman stock at the close on Monday, April 13. Good call. On Tuesday, April 14, the stock traded down almost 15 points from about Monday’s closing price of about 130 to about 115.
Jon Najarian had recommended buying Goldman stock on the evening show on Thursday, April 9. So, you could have bought Goldman Sachs on Monday morning at about 123 and sold it at day’s end at 130, before the earnings release. A great two-sided call by Jon Najarian. (You can watch his call at www.cnbc.com/id/15840232?video=1091538307&play=1 ).
Jon Najarian was not done with making one great call. He made another spectacular call about Google on Thursday April 16. During the mid-afternoon segment that day, Jon Najarian said about Google stock “Stock is up $20 from yesterday when I was talking about it. I still like it to trade with a 4-handle (above $400)….it is still gonna move through 4 (trade above $400)“. Google stock did trade above $400 up to $410 for a few minutes after the earnings announcement before it sold off to $380. (watch his call at www.cnbc.com/id/15840232?video=1095038974&play=1 ).
So if you followed Jon Najarian’s call both ways, you bought Google around $370 on Wednesday afternoon and sold it in the after-market on Thursday at $400. Nice trade indeed. This is what we call Fast Money and Jon Najarian made it for his viewers.
For these two great calls, we say, thank you Jon Najarian.
We hope that the short and sweet mid-day edition of Fast Money keeps up its debut performance and keeps making money for its viewers every week.
On a different note, it is a tenet of investing that the Business press usually provides a contrarian market signal. CNBC Fast Money is an aggressive trading show that does best when the markets are going up. The past six weeks have provided a great 25% plus rally in stocks. After such a great move in the stock market, CNBC decided to add a new mid-day segment of Fast Money this week. So we wonder whether this media decision by CNBC will prove to be a contrarian market signal.
Recall that in July 2008, after a ferocious decline in the stock market, CNBC canceled the 8 pm repeat edition of Fast Money and replaced it with a more conservative show that promoted capital preservation. On July 19, 2008 we asked on our blog “Will CNBC’s decision to promote lower risk on its network prove to be a contrarian signal for investors to add more risk to their investing approach?”
Amazingly, that action by CNBC did prove to be a short-term a contrarian buying signal. One month later, on August 18, 2008, Dow Jones, S&P 500, Nasdaq and the Russell 2000 were up 1.4%, 3%, 7.4% and 8.7% respectively.
So we have to wonder today whether this week’s bullish step by CNBC to add a new mid-day Fast Money Segment might prove to be a contrarian bearish signal for stocks. In other words, will this bullish action by CNBC end up marking a short-term top in markets and lead to a near-term decline in stock prices. Only Time will tell!
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