No yield, no dice. I am marveling at Cummins (CMI) today, a company that is doing better and better as the truck business gets stronger and stronger. We know that because of yesterday's data points from Navistar (NAV), an inferior company that is still doing very well.
It went up a couple points yesterday, but has now given up more and then some. The reason? The CurrencyShares Euro Trust (FXE) is down, so the "Hope-on Hope-off" trade has switched to hope off. Why do I call it "Hope off" and not "Risk off," other than the fact that "Risk off" is the most stupid, meaningless, hedge fund speak to come out of 2011?
Because all stocks are risky. But what makes some stocks less risky than others? Dividends, and Cummins yields 1.85%, which is why it is much closer to its low than its high. People want one thing out of this market: they want to not be jerked around by the swings of the market. They don't want to be held hostage to the FXE and to the different plans being put in to save Europe, including ones that seem to backtrack the day after the ink's dry.
That means Pfizer (PFE), which is coping with life after Lipitor. It means Merck (MRK), which had a better-than-expected quarter. It means ConEd (ED) and Duke Energy (DUK) and it means Verizon (VZ) and Energy Transfer Partners (ETP). It means REITs with good yields.
It means anything but Cummins, and Cummins is a terrific company with a great outlook.
This market doesn't care. It may bore you to death to wait until the market gets pulled down to buy these. You may dream of the old saying when Apple (AAPL) and Google (GOOG) used to fly high, or Salesforce.com (CRM) and Citrix (CTXS) and the rest of the cloud plays. But you have to accept that the market has spoken. They hate this stuff.
You can't invest in the high fliers, the "pretty girls" as John Roque from WJB calls them. You just can't.
The low fliers?
They are loved.