COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

George Chamberlin's Money in the Morning

Yesterday's activity on Wall Street proved something very important: Stock prices do not go up -- or down -- forever. Just as trees don't grow to the sky, stocks do not move in one direction or the other without interruption. Last Friday, the Dow Industrials and S&P 500 closed at the highest levels since October 2007, extending a powerful five-week rally. However, some necessary profit taking took the Dow down 130 points yesterday for no apparent reason. Well, the bulls are using the opportunity to do some buying this morning with the index up triple digits in early trading.

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By the way, individual investors are ignoring the whining of bearish analysts and pouring money into the stock market. A report from Trim Tabs Investment Research says more than $77 billion flowed into mutual funds in January, mostly stock funds. That blows away the old record of $53 billion set way back in February 2000. However, the Trim Tabs report suggests the stampede by individual investors is not always a good thing, saying, "These unprecedented inflows should concern contrarians because the stock market tends to perform poorly after such heavy buying."

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Shares of Yum! Brands -- parent company for KFC, Pizza Hut and Taco Bell -- are down sharply this morning after the company reported earnings were "significantly impacted by the intense media attention surrounding an investigation into poultry supply management at Yum! China. The report showed a few poultry farmers were ignoring laws and regulations by using excessive levels of antibiotics in chicken." The reports caused a significant decline in sales at KFC restaurants in China. This prompted CEO David Novak to say, "Although we cannot predict how long it will take to restore sales, we are steadfast in our belief that the power and popularity of the KFC brand in China will ultimately drive a full sales recovery."

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It's been in the works for some time now but Dell made it official this morning: it is going private. A team headed up by founder Michael Dell and technology investment firm Silver Lake will pay $24.4 billion to assume control of the company. Dell started the company in 1984 while a student at the University of Texas at Austin. He will remain CEO of the company after the buyout is completed and the company goes private.

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The beat goes on. CoreLogic is out with its latest real estate report this morning and it shows home prices rose by 8.3 percent in December compared to the same month a year ago. That represents the biggest increase since May 2008 and the 10th consecutive monthly increase in prices. "The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery," said CEO Anand Nallathambi. California fared better than the rest of the country with prices here rising 12.8 percent in the same period.

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It was nine years ago yesterday that Mark Zuckerberg and a bunch of other students at Harvard created a social media company that today is known, of course, as Facebook. Originally meant to be a service for students on the campus, Facebook has now grown to more than 1 billion users worldwide. Unfortunately, the company stock has dropped about 10 percent in the past two trading sessions as the shares remain volatile since the IPO last May.

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Lost in all the hoopla surrounding the Super Bowl Sunday was the amazing performance by Phil Mickelson in his wire-to-wire victory in the Waste Management golf tournament played in Scottsdale, Ariz. Lefty finished 28 under par and never trailed through all four rounds. It was once again obvious how much golf fans love Mickelson. I think the only thing that would have made the victory sweeter for the fans would have been if Tiger Woods had been playing. The tour swings this week to Pebble Beach where it will be much more difficult to put up the same kind of scores.

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