FedEx (FDX), like so many stocks, bottomed around March 9th of 2008 ($34) after an 86% decline from its 2007 highs ($121). It is currently trading around $87 or about 150% off its lows. News coverage today claims its earnings beat is proof of global economic recovery and merits an even higher stock price. Maybe, but even considering this Blog pointed out in Feb of 2008 the lunacy of the declines of the overall market, prices represent a move in position from opportunity to liability. Fixed point values which analysts are famous for are useless. Agreeing that price is where it is trading and value is where it should be, only gets into endless discussions as to value methodology. FDX's earnings numbers may have something to do with global and domestic economic recovery, but probably more to do with a business plan adjusting to promote the bottom line and a natural technical recovery of the stock which has already been captured by those willing to risk ownership at low prices.
Like so many stocks currently, the strong hands have made their money and now want the others to take it higher. They always have, but will they this time? Years of trading have taught me never try to underestimate the stupidity of upside traders, and certainly the greatest upsiders, fund managers. Long term investors do not have much to show for the last ten years and to think Fed and Treasury intervention has realigned the stars to make everything good again is an unreasonable assumption.
