What does the 0.8 percent decrease in stockpiles for December represent? It shows that manufacturers couldn’t keep pace with the level of demand which includes inventory rebuilding along with increased sales.

The rebuilding of depleted inventories contributed 3.4 percent points to gross domestic product in the fourth quarter, the most in 20 years.

With a large chunk of inventory depletion coming from inventories of durable goods (items meant to last three or more years), this gives lasting support for the continued expansion of the U.S. economy. According to a report from the Labor Department, job openings in December increased to 2.5 million from 2.43 million a month earlier with most opportunities in manufacturing and retail, further highlights the continued growth in the U.S. economy. [Bloomberg]

Since the dot-com bust, Sun has struggled to find its footing in the new paradigm of open-source software and low-cost servers. Over the last few months, Sun has approached several large technology companies in hopes of being acquired, quoting “people familiar with the matter” by the WSJ.

Although this transaction would bolster IBM against Hewlett-Packard (HP), it would severely hit IBM’s profit margin that currently makes over 50 percent of it earning from services. By acquiring Sun, one third of revenue would be from hardware which has a lower margin.

Is this a good buy for IBM? If IBM can reduce the redundancies and cut costs at Sun, this could be a good buy. What always worries me when melding two very distinct cultures is how they will work together. Time and time again two counter cultures have seen the downfall of good intentions.

What is causing this huge drop? Mostly momentum to the down side because people are running scared due to the slowing world economy and the continued destruction of assets prices.

*Note: (Update: After looking at more data and numbers, the DOW will be under 8, 000 and could get as low as 7,500.) This recession is going to be longer than anything in recent history. So grab a rope and hold on – it’s going to be a bumpy ride.

*Note: this post isn’t finished.

Is it time to invest? It depends. Let me explain what I mean by that statement. Historically, stocks will go up after the recent carnage that has wiped out over $8 trillion in stock market value. We might even see an up tick in the range of 18% – 22% but don’t be fooled.

The hurricane isn’t over; this is the calm before the storm. So, what should you do? Well that depends on where you are in your investment cycle. If you are close to retirement and you didn’t heed the age-old advice to move more money to cash the closer you get to retirement, then you might need to push retirement off a bit, but this also depends on how much you have lost and many other factors. If you fall into this category, then I suggest you talk to your financial advisor.

For those of you who are not close to retirement, then you have several options to explore. If you are investing for the long-term and want to reduce the variance in your portfolio, the easiest and simplest investment philosophy is called ‘Dollar Cost Averaging’ (DCA). Dollar Cost Averaging is investing regularly scheduled amounts into a fund(s) and/or stock(s). The idea is to spread the risk consistently over time, but most research into this form of investing has debunked this philosophy. The problem with DCA is that the market is on an upswing more often than on a downturn. So in actuality an investor will be paying more for a stock over time than someone who places a lump sum in the market during a downturn. If you have been using this method, I recommend that you stop and choose another method and/or contact a financial advisor.

Nokia is the latest to announce a potential iTunes killer concept. What Nokia is proposing is unlimited music downloads for a year with a purchase of one of their phones bungled with their “Comes With Music” service — an extra $20.  If the service takes off, this could potentially match or exceed the music industry’s business according to Tero Ojanpera, head of entertainment and communities business at Nokia. This is an interesting and potentially huge win for the music industry and Nokia.

This is one of the best swings at Apples venerable iTunes service and the consumer only wins. So sit back and enjoy the music.

By promising direct flights to China within two months,  Ma Ying-jeou has provided an immediate boost to the domestic airline industry. With this continued integration with China, Taiwan’s dollar will begin to appreciate against other world currencies and specifically against the U.S. dollar.

Opening up to China may not insulate Taiwan from the current global slow down in the short run, but this is a long term boom for Taiwan.

When you have too much money you make bad decisions. This is a bad idea. I’ll provide more details as to why in a later post.
MSFT

Qualcomm is one of those stocks that is ready to break out of its trading range — you can see and smell it. Though the markets haven’t quite caught on to the upside potential, there are several ways to play Qualcomm’s continued bounce: short, long, or trade often (buy when it’s low, sell when it’s high).

When should you invest in Qualcomm? For those who want to play Qualcomm long or ‘trade often,’ I suggest buying anytime the price hits $37 and under. If you want to short, first I suggest that you do your research into this art. Remember this, all things that go up eventually go down. So there is money to be made, but shorting isn’t for everyone.

When will Qualcomm break out of its trading range? As legal issues hold Qualcomm’s stock in this perpetual trading range, it will continue to be at play. But as world demand begins to realize the potential, possiblities, and functionality of smaller devices, there will be a need for higher bandwidth to play games, watch and download video. And Qualcomm’s patented 3G technologies will enable many of these devices. As this demand increases world wide, so should demand for Qualcomm stock. Happy Bouncing!
QCOM

Why, because the fundamentals are strong. Even as the competition is chasing after their jewels – namely the iPhone and the iPod, they still haven’t been able to capture the current magic of the Apple brand. The combination of great design, more than competent products, and the crown jewel (the Brand itself) leaves the company with a significant lead. Will the competitors one day catch up? Possibly, but it will take time and a combination of the cachet that Apple has been able to garner.

One brand that comes to mind is Sony’s Walkman. If Sony could start firing on all cylanders they could make a run at Apple, but that would take a gargantuan revamp of the company – possible an American style breakup.

*Note:  The  author does own  stock in Apple.