CME and GOOG

CME is now in talks to merge with NYMEX. They already have a clearing/operations deal with them for trading some energy contracts so the two companies are very familiar with eachother. I would expect some cost synergies but more importantly would be the ability to move the Nymex volume to Globex (CME's electronic trading platform), which would have a positive impact on volume and therefore earnings.

The stock was down to flat today despite the strong up move in the market. The stock is trading around 30x, which I think is not a bad price for the quality of the business and the growth potential of the company.

financials and consumer discretionary stocks definitely making a comeback over the last week or so. I remember making various comments about how financials had bottomed and would bounce but I admit my timing wasn't the greatest. Google is my current enigma -- I expect their earnings to be pretty good yet the stock has dropped like a stone. Granted, the stock's rise from $500 in the summer to $700 at the peak was a very steep rise and makes the decline seem bigger than it really is. What I mean is that Google is still up 10% or more from where it was in July -- it might be down 20% from September/October but its still up from July.

Should I have taken profits in Google while it was near $700 -- absolutely. Is the stock vulnerable to further declines from here? unlikely. Not unless fundamentals are weakening. VMWare's miss after the close could be a sign that tech demand is weaker than anticipated. Of course VMWare is up against MSFT so that might have more to do with it than a general slowdown in tech spending.

Google's main problem is the same as Apple's problem: Cramer. The mad man boosted their stocks for so long that now they are in a hangover -- the stocks became too over owned and too loved by too many funds and too many individual investors. Now those investors need to raise cash and that means selling Google and Apple regardless of what happens with the numbers. As this selling is completed the two stocks will be at very attractive levels but its hard to say how long that adjustment takes.