Reality Check, Anyone?

 | Jan 30, 2014 | 3:33 PM EST  | Comments
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Stock quotes in this article:

ua

,

cat

,

adt

I love companies that stick it to the bears. Under Armour (UA) CEO Kevin Plank came on Mad Money not long ago and made bold claims about what he could do with his superior products and how he could challenge Nike (NKE) because of his technological edge.

What did I hear from the bears? How about endless chatter about how he had too much inventory and declining gross margins. The bears swore that the multiple was way too high and was, therefore, ripe for a fall.

Then you look at today's action and you realize that the stock was cheap after all on next year's earnings and that the sucker play was to short it on valuation. I always urge you never to short on valuation.

Or how about Caterpillar (CAT)? The company confounded the bears with a terrific quarter and announced a beast of a buyback. But nobody upgraded it, and the bears went out of their way to say that it remains a big short. All I can say is, "WRONG!"

But you want to know who stuck it to the bulls? How about those clowns at ADT (ADT) who paid an activist board member $44 per share for his stake and now, after a totally blown quarter that the activist was no doubt privy to, the stock sits at $30?

If I were the SEC, I would be calling them up right now to have a little sit-down about the concept of insider information. We used to own this stock for Action Alerts PLUS and there but for the grace of God we avoid this monstrosity.

Fortunately, I can tell you that you should have too, as Herb Greenberg was writing about this travesty when you still had a chance to get out. Reality check, anyone?

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