Wow, has it really been nearly 8 years since my last post here?  And I'm sure you've all been waiting with bated breath for my next insightful stock market idea.  The best investments I've had over the past few years have been Berkshire Hathaway, Google, and a Proshares Ultra Utilities ETF (UPW).  I also still own EBAY, which has been a real laggard for years, but lately it has been doing rather well, and it looks as though there may be good reason to hang on for the ride.  I saw one analyst on TV several weeks ago pose the question: When is EBAY just going to change its name to PayPal already?  An obvious allusion to the enormous earning power of the online payment system.

I'll try not to let 8 years go by until my next post.

—Rob

Mixed Signals

The market is sending mixed signals this morning.  I've been reading and hearing where a good number of technicians are seeing at least another 5-to-10% downside in a continuing broad-based market correction.  Some I've read are even saying that the rally of 2003 was nothing more than longer-than-average bear market rally, and that we are in fact still in an overarching bear market.

On the other hand, the fundamentals of the economy look to be exceptionally strong.  There are plenty of market analysts and economists who say quite unreservedly that we are in the midst of a booming economic recovery, and the picture they paint is rather like that of a land flowing with milk and honey.

The emerging markets as well as the European and Asian markets overnight have all experienced pretty strong sell-offs, with Japan being hit especially hard.  The Tokyo Index, or TOPIX, suffered its biggest drop since Sept. 11, 2001, falling 5-2/3%, and the Nikkei broke the 11,000 support level, dropping 554 points (nearly 5%) ending the day at 10,884.70.  The Nikkei has given up over 1,200 points in the past six weeks.

So far this morning the futures on the U.S. major indicies have been weak but improving.

I have to seriously consider going to all cash here until the market gets a more solid footing.  I've even thought about taking a few short positions.  It's a tough call.  The market just might turn on a dime this morning and break to the upside.  It's going to be one very difficult day to play, that's for sure.

OVTI S.A.R. Parabolic Triggered

On Friday, May 7th, the Wilder Parabolic point to go long OVTI was triggered.  It will be interesting to see how this plays out.

Elaine Garzarelli

Here are some tidbits from Elaine Garzarelli's last newsletter of April 15, as reported by Smartmoney.com:

Predictions
· Although the stock market may not rise as fast as it did before the bear market began, Garzarelli expects gains in certain sectors to outpace the increases in the S&P 500 index. Her largest overweight positions are in financials, basic materials and consumer cyclicals. (Garzarelli Capital, April 15)

· Garzarelli believes there's "a good possibility" that economic growth will slow in the second quarter relative to the first. Potential drags include higher mortgage rates, a decline in refinancing activity, rising oil prices and slowing money-supply growth. (Garzarelli Capital, April 15)

· The strategist downgraded two industries this month. Due to recent price appreciation, she reduced newspapers to Neutral from Attractive and electric utilities to Unattractive from Neutral. (Garzarelli Capital, April 15)

OVTI at JP Morgan Technology & Telecom Conference

It was a good and an encouraging presentation; very positive.  If you're contemplating buying this stock or if you already own it and wonder if you should hold (or add), you really need to listen to this presentation which includes an informative series of slides.  It's supposed to be archived at the JPM site, but so far the link doesn't appear.  It should be there shortly I imagine.

Meanwhile, a guy over on the Yahoo message board took some good notes you may want to read.  And by the way, Mr. Rossi did in fact state that they would hold their next conference call on Wednesday, June 9.  I'm taking this to mean that they will release their earnings report after the market closes on Tuesday, June 8.  This is very good, because I'm holding some June call options that expire on the 18th.  I like it.

It's Been A Bloodbath Lately

Let's not kid ourselves.  Last week was brutal for anyone like myself who tends to be long in technology stocks, and in the semiconductor industry in particular.  All my stocks got hammered hard last week, including my newest holding, Imclone, which I bought on the news of its super-spectacular earnings report.  It truly was a bloodbath of epic proportions.

I'll admit it.  I'm scared.  But I bought the stocks I own for fundamental reasons, and I think fundamentally all the stocks I own are still sound.  I'm not selling.

I'm breathing a measured sigh of relief today as it appears the worst may be over.  (Although it would be nice to see a little better volume on today's "rally".)  I listened to the NTE conference call this morning, and I got the feeling that the company is still on track for good growth, despite its recent major sell-off in the market.  There may be a little downside left, but I stress, a little.

Here's something that might help move OVTI tomorrow:  I see that Business Wire is reporting that CFO John T. Rossi will speak at JPMorgan's 32nd Annual Technology & Telecom Investor Conference at 3:30 p.m. PDT (6:30 in the east) today at the Westin St. Francis Hotel in San Francisco.  You can listen to the live webcast by going to http://equityconferences.jpmorgan.com/.  If you miss it, you will still be able to hear it, as it will be archived.

Pixelworks Doing Quite Well

On April 16 I posted here a note on Pixelworks (PXLW) and the fact that Next Generation Equity Research had on Mar. 18 initiated coverage with a 12-month price target of $20.00, 36.2% higher than the $14.68 closing price that day.

Well, as of Friday the 23rd of April that price target had already been met and surpassed. Rather than waiting 52 weeks for the 36.2% return, those who owned PXLW on Mar. 18 enjoyed a 37.4% return in 4 weeks and 1 day.  The stock is up 21.5% from the $16.60 close on April 16, the date I noted it here.

Here are some highlights from their press release accompanying their Q1 earnings report on Apr. 19:

1.  Record revenue of $45.3 million in the first quarter increased 41% from $32.0 million in the first quarter of 2003, and increased 11% over $40.8 million in the previous quarter

2.  Record GAAP net income in the first quarter of $6.6 million, or $0.14 per diluted share, improved from $0.2 million, or $0.01 per diluted share, in the first quarter of 2003

3.  Record pro forma(A) net income of $7.0 million, or $0.14 per diluted share, increased 195% from $2.4 million, or $0.05 per diluted share, in the first quarter of 2003

4.  (A) Pro forma gross profit, income before income taxes, and net income, which differs from gross profit, income before income taxes, and net income in accordance with accounting principles generally accepted in the United States of America (GAAP), excludes merger-related and restructuring expenses, and non-cash expenses for amortization of purchased developed technology, and stock-based compensation and amortization of assembled workforce. A schedule reconciling these amounts for the three months ended March 31, 2004 and 2003 is included in this news release. Pixelworks' management believes the presentation of these non-GAAP financial measures provides useful information to investors regarding Pixelworks' results of operations as these non-GAAP financial measures allow investors to better evaluate ongoing business performance. Pixelworks' management also uses these non-GAAP financial measures internally to monitor performance of the business. Pixelworks, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

Incidentally, I noticed that Pixelworks shows up as #97 on IBD's top 100 this week.