Osama Bin Laden is dead, the precious-metals market is as volatile as ever, and hundreds of companies are reporting earnings -- you know, just another ho-hum week in this two-year-plus-long rally. For bulls, these rallies may seem like a dream come true. For skeptics like me, they're opportunities to see whether companies trading near their 52-week highs really deserve their current valuations.
Keep in mind that some companies deserve their lofty prices. Credit giant MasterCard
I'm not quite done picking on Eli Lilly
As I highlighted last month, Eli Lilly faces the most immediate patent troubles of any large pharmaceutical company, with its best-selling drug Zyprexa, along with popular names Cymbalta and Humalog, all coming off patent before 2013 is over. With more than half of Eli Lilly's revenue stream at risk of a serious crunch from generic vultures such as Teva Pharmaceutical, I'd consider putting these shares back in the bottle.
I love a cup of joe just as much as, if not more than, most people out there. I couldn't function in the morning without my coffee. And a few among us have shown that they'll pay almost any price to get their hands on some. Since a year ago, coffee futures prices have more than doubled as stockpiles have dropped modestly and the U.S. dollar has weakened. This price spike has brought with it an almost speculative feel that might make selling iPath DJ AIG Coffee
Historically, coffee has been a boom-or-bust commodity, so trading out when it hits extreme highs often makes sense. It’s possible that a simple rally in the U.S. dollar or milder weather patterns in coffee-growing regions could easily pop this speculative bubble. The long side of this trade has indigestion written all over it.
Do you Yahoo!?
Current shareholders of Yahoo!
The company reported a year-over-year revenue decline of 6%, blaming its poor results in part on its search agreement with Microsoft
What's your opinion on these companies? Are they sells or belles? State your case in the comments section below and consider adding Eli Lilly, iPath DJ AIG Coffee, and Yahoo! , as well as your own personalized list of companies, to My Watchlist.
Google and Microsoft are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers selection. Teva Pharmaceutical and Yahoo! are Motley Fool Global Gains picks. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Teva Pharmaceuticals, Google, and Microsoft. Alpha Newsletter Account, LLC, owns shares of Microsoft.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He would like to remind you not to forget about our friends in Japan, who could still use a helping hand. You can follow him on CAPS under the screen name TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that never needs to be sold short.