Thoughts After the Close on November 15

Thanks to the two readers that posted comments - my response to your comments is/will be posted after your words in the same post you commented on.

Another up day today led by those stocks that got this rally started - anything with exposure to the consumer. Thursday will be a very busy day with a lot of data for the market to digest, and will shed some further light on both inflation and housing. As I mentioned yesterday, the data do seem to point towards tame inflation figures, and I would expect CPI to mirror this trend. The housing data that comes out at 1:00PM EST is the one I am most focused on, as it will measure the depth of the housing slowdown along with Friday's housing starts data. If there are any negative surprises in any of these numbers, look for a sharp sell-off. If there is good news here, I think the market may have it priced in already - no sharp run-up to follow. In fact, I would even suggest that if both numbers come in "at expectations" we move lower.

Airlines made significant noise today with potentially the start of the wave of consolidation. My advice on airlines as an investor is very simple. Never, under any circumstances, buy shares of companies that operate in this god-awful industry. The airline industry makes the automotive industry look good, but serves little other purpose from an equity investment perspective. The economics are terrible, with unions involved, substantial exposure to oil prices, massive operating leverage (and in most cases, financial leverage layered on while funding operating losses), and generally overcapacity since Uncle Sam refuses to let the weak players die when there is the routine bankruptcy filing. As Sir Richard Branson has been quoted as saying, millionaires have been made when billionaires buy airlines. Don't put good money to work in this industry hoping to find the next takeover target - you might actually get stuck holding a dog.