Ignore the noise

The market has been very confused, one day they did not like what they hear when Obama says nothing how he is going to address the financial issues, they sold down financial sector - unbelievable crazy if you see how they sold down Wells Fargo. Dow shed 300+ points when he took over the President office on the first day.

The next day, IBM reported their Q4 '08 earning, beaten their expectations(without looking at the details, see below), they rocketed the market almost 300 points, back to where it was before Obama took over the office. I am not sure what GE is going to report on Friday -- substantial shorts have been built up already for the last two weeks, this is kind like playing in the casino - big small - you will have equal chance of making money and lose money. This kind of trading environment will prove to be disastrous. Don't be surprise when GE has 10% one-day rise when they meet or beat expectation.

Back to Bursa Malaysia, our moods will be affected as well. Looking at Public Bank latest results, earning seems like already peaking and due for some corrections. Traders relying on technical analysis saw KLCI retracing back to 50-d MAV must be standing on the sideline or taking profit. With the external moods see sawing, I will sit back and relax. Not to mentionthat high yield currencies are still unwinding. For example, British Pound/Japanese pair has broke 14-year low yesterday.

Let the bull and bear fight it out. I willl only deal with the winner after they settled their fight.

(WSJ)Those investors cheering IBM's higher-than-expected fourth quarter earnings may want to take a closer look at the numbers. It might give them pause.

IBM stock was up 11.5% Wednesday after its 17% jump in earnings per share. But the arguably more-important indicator of IBM's performance -- its top line -- fell 6.4%. Due mostly to currency changes, the drop was worse than even reduced Wall Street assumptions.

What's more, it'll be tough for IBM to maintain the earnings growth it reported. EPS of $3.28 was boosted by lower tax expense, share buybacks and lower pension expenses, which together accounted for a total of 56 cents a share, according to Barclays Capital.

Barclays noted that both the pension and tax benefits wouldn`t be available in full-year 2009 and the share buyback effect would be lower.

Indeed, pension costs are likely to turn into a drag on earnings. The peculiarities of pension accounting resulted in last year's drop and will likely keep costs from rising this year. But eventually the market losses -- IBM's global plan was down about 17% last year -- will show up in higher pension costs.

The impact of the crash on IBM's pension plan did surface in the company's balance sheet. A noncash adjustment "related to year-end pension remeasurements" for 2008 and 2007 cut shareholders equity by a whopping 52.7%, a reduction of about $15 billion from the end of 2007.

IBM won't be the last company to take such a hit on its pension plan.