A Blast from the Past

 | Nov 22, 2013 | 6:45 PM EST  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

twc

,

chtr

,

cmcsa

Watching that tape fly by today, the tape showing the stocks of Time Warner Cable (TWC), Charter (CHTR) and Comcast (CMCSA), one of my employers, flying high, reminded me of what this business used to be like. We used to have stocks go up day after day after day and just when you think they are done going up you get talk of takeovers and then you get another leg up and then you actually get takeovers and they go up AGAIN!

I know it seems ridiculous that we could be in one of those moments after all that we have rallied, but think of the logic of it as my friend David Faber traced things out.

  1. If any of the cable companies bought Time Warner Cable they could improve service and get more users.
  2. It would be immediately additive to the acquirer.
  3. It would not be blocked by the government because the federal courts have already ruled that it's fine if cable companies buy each other pretty much without limitation.

Now think of it like this. The once-bankrupt Charter was up about 70% going into the session and  Time Warner Cable  and Comcast were both up more than 30%. You would think that there's no combination that could still be had after that run. You would think that an acquirer's stock would be hammered paying up here.

You would be wrong. Why is this all so important? Because it has to do with the mindset. We are still in a recession mindset in this market. We believe that things only happen because the Fed let them happen.

That's what's kept so many investors from making money. This cable company dynamic is a living, breathing instance that shows you that the stocks are too cheap to each other, even if they seemed expensive to the marketplace.

It is why, even after all of these moves, it is still too early to ring the cash register on many stocks, even as we know that no one ever got hurt taking a profit and I always countenance taking a little something off the table.

Columnist Conversations

Well this is confusing...our models were calling for a run to 2072 before a bearish reversal would be possible...
Revenue Trend Apple is one of the most remarkable companies in the world, not just because it has the largest...
HOG has topped out. The stock's twelve day winning streak is ending today with and ugly reversal. HOG o...
Seems like there was a bid underneath at the crucial 2:45 p.m. hour.. day saver? still not sure..

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.