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« April 2006 | Main | June 2006 » May 31, 2006Zimbabwe Government Raids Stock Exchange HARARE - A desperate Zimbabwe government, hard-pressed for cash, has raided the Zimbabwe Stock Exchange (ZSE) demanding Value Added Tax (VAT) on all brokerage incomes received on the bourse since 2004, a move that analysts say gives a graphic illustration of the Mugabe administration’s "policy deficiencies." The intelligence-led swoop on the ZSE, accused by government of failing to remit VAT for two years, was expected to raise a Z$15 trillion windfall for government. I'm selling my Zimbabwean stocks immediately. Posted by edelfenbein at 11:35 PM The Cara 100 Blogger Bill Cara has unveiled his Cara 100. I'm happy to see that it features several stocks from our Buy List. Posted by edelfenbein at 11:20 PM A Few Brief Comments Dear Visitor: Did anyone see the word "sorry"? Me neither. Posted by edelfenbein at 4:38 PM The Fed's Minutes This is what everyone was waiting for, the minutes from the Fed meeting three weeks ago: Although the Committee discussed policy approaches ranging from leaving the stance of policy unchanged at this meeting to increasing the federal funds rate 50 basis points, all members believed that an additional 25 basis point firming of policy was appropriate today to keep inflation from rising and promote sustainable economic expansion. Recent price developments argued for another firming step at today's meeting. Core inflation recently had been a bit higher than had been expected, and several members remarked that core inflation was now around the upper end of what they viewed as an acceptable range. Moreover, a number of factors were augmenting the upside risks to inflation: the surge in energy and commodity prices, some recent weakness in the foreign exchange value of the dollar, and the possibility that the apparent increase in inflation expectations could, if it persisted, impart momentum to inflation. In addition, the economy appeared to be operating at a relatively high level of resource utilization and had been growing quite strongly, and whether economic growth would moderate to a sustainable pace was not yet clear. At the same time, members also saw downside risks to economic activity. For example, the cumulative effect of past monetary policy actions and the recent rise in longer-term interest rates on housing activity and prices could turn out to be larger than expected. Still, it seemed most likely that, with modest further policy action, including a 25 basis point firming today, growth in activity would moderate gradually over coming quarters, pressures on resources would remain limited, and core inflation would stay close to levels experienced over the past year. Posted by edelfenbein at 2:55 PM Tiffany's Earnings
From TheStreet.com: Overseas Demand Adds Luster to Tiffany It's always worth tracking the earnings of a company like Tiffany's. The reason is that the company's business moves in two gears--very fast or nothing at all. That's the life of being a high-end retailer. Even though the company had a good earnings report, the share are down over 20% since last November. Posted by edelfenbein at 12:59 PM Overpriced Curio to go Public
At least at some point: Gauging Segway's prospects in an IPO is difficult, since the company will not reveal its yearly revenue or whether it is profitable. Norrod will only say that "tens of thousands" of Segways have been sold around the world, and that the company's revenue has been growing by at least 50% over each of the last few years. Just to be safe, I'm going to give it a price target of $200 a share. I think it's a tipping point. The company's critics believe Segway's continued silence regarding its finances is an indication it is still not profitable, especially given the reported $100 million spent developing it. Sources close to "walking" indicate that it will continue to be private. Posted by edelfenbein at 7:53 AM The Buy List Year-to-Date Here's how the Buy List has done year-to-date versus the S&P 500:
Through Tuesday, we're down -0.99% and the S&P 500 is up 0.93% (not including dividends). The Buy List's daily volatility is 6.1% greater than the S&P 500. Posted by edelfenbein at 6:01 AM May 30, 2006More on the Return of Volatility The S&P 500 was down over 1.5% today. In the past 12 months, the S&P 500 has dropped by more than -1.1% eight times. The last four have happened since May 11. Posted by edelfenbein at 4:13 PM David Phillips on Bed Bath & Beyond David Phillips, the 10-Q Detective, takes a look at Bed Beth & Beyond (BBBY) and likes what he sees: On its 4Q:05 Earnings Conference Call, management was comfortable—based on its most recent real-estate analysis—in updating the store openings [square footage] that will fuel this growth: “We now anticipate that we can grow to approximately 1,300 Bed Bath & Beyond stores in the United States [ed. note. before saturation becomes a concern], in addition to continuing the expansion and integration of our Christmas Tree and Harmon store concepts…. expanded information technology capabilities, new merchandising initiatives and developing concepts significantly adds to our potential to create a much larger, more successful retailing business.”
Posted by edelfenbein at 2:18 PM The Midday Market Thanks to Kinder Morgan, the energy sector got off to a strong start this morning, but now it’s been dragged lower with the rest of the market. Of the 100 Dow industry groups, 93 are currently down for the day. The S&P 500 just dipped below the -1% mark for the day. For a fleeting moment last week, the 10-year Treasury yield fell below 5%, which is the Fed’s target rate for overnight lending. The inversion didn’t last long. Yields are up all across the yield curve. The 10-year came close to breaking 5.1% today. On the Buy List, Home Depot (HD) and Danaher (DHR) are both down over 2%. Dell (DELL) is back up to $25 a share. Medtronic (MDT) is taking a rest after its recent run. I wouldn’t be surprised to see Medtronic make a run at $55 a share. Posted by edelfenbein at 1:41 PM Eat Up From Daniel Gross' Slate column "Snow's Job: John Snow will have a replacement, and he may very well come from the corporate world. But if it's an A-list Wall Street CEO, I'll buy a copy of Dow 36,000 and eat the first chapter. This is why journalists shouldn't make predictions. Come to think of it, so is Dow 36,000. Posted by edelfenbein at 11:36 AM Private Equity Strikes Again Kinder Morgan (KMI) is buying bought out by...Kinder Morgan. Who needs a stock market anyway? If this goes off, the buyers will assume about $14.5 billion in debt. This is a huge deal. In 17 years, no one has ever topped KKR's buyout of RJR Nabisco. Doesn't stuff like this usually happen at market peaks? Posted by edelfenbein at 11:19 AM Bill Gross: Admitted Philatelist Not only is Bill Gross, the "Buffett of Bonds," but he's also an admitted philetelist. Gross' stamp collection is worth tens of millions of dollars. He owns every stamp made by the U.S. from 1847 to 1869. Ever wonder what it's like to be a Master of the Universe? Here's how Gross describes a typical day (scroll down a bit): Posted by edelfenbein at 10:49 AM Michael Dell Buys $70 Million in Stock Last week, Michael Dell bought nearly three million shares of Dell (DELL) at 23.99 a piece. He's already made a nice profit. The stock is over $25 this morning. Posted by edelfenbein at 9:41 AM Bush Taps Paulson to be Treasury Secretary From the Washington Post: The White House named Henry Paulson, Chief Executive Officer of Goldman Sachs, as the new Treasury Secretary this morning to replace John W. Snow. It looks like Lloyd Blankfein will take over as Goldman's new CEO. Here's a Business Week profile of Blankfein. Wall Street Folly finds Blankfein's 1983 wedding announcement. Posted by edelfenbein at 9:28 AM May 27, 2006Thanks Vets
Posted by edelfenbein at 6:08 AM May 26, 2006Are We There Yet? Yawn! Trading is very quiet today ahead of the three-day weekend. Here are a few random thoughts in no particular order. TickerSense points out that the time around Memorial Day has historically been quite good for the market. Since 1960, the market is up an average of 0.11% on the Friday before Memorial Day, and 0.60% for the week after. So far, we're keeping we tradition. Many defensive stocks have been surprisingly strong lately. This includes stocks like Anheuser-Busch (BUD), Colgate (CL), Coke (KO) and Pepsi (PEP), Disney (DIS), General Mills (GIS) and Kellogg (K). FactSet (FDS) has also been doing well for the past few days. David Jackson, the Grand Poobah at Seeking Alpha, pointed me to this bearish research report on FDS done by some graduate students at Yale. Francois Trahan, the chief investment strategist at Bear Stearns, found that the number of analysts covering tech stocks has increased since the top of the tech bubble. The average number of analysts per tech stock in the S&P 500 nearly doubled to 23.53 by the end of April from 12.36 in January 1996 and was still 22% higher than the 2000-2001 average of 19.25 analysts per tech stock, according to Mr. Trahan's report. By the first quarter of 2000 -- near the height of the Internet bubble -- the total stock market value of S&P 500 tech stocks peaked at well over $4 trillion. Today it is about $2 trillion. Jay Walker comments on a recent study showing similar irrational decision-making between humans and capuchin monkeys. Those silly monkeys. Barry Ritholtz defends his remark that Ben Bernanke is the Neville Chamberlain of central bankers. So I guess we know who inflation is. Keeping the metaphor alive, today we learned what Poland is. Chico's FAS (CHS) is rallying today on a good earnings report. The stock has beaten the S&P 500 for the last eight straight years. But the streak is in serious danger. The shares are down 30% YTD. That's it for me. Have a great weekend, everybody! Posted by edelfenbein at 2:33 PM The S&P 500's P/E Ratio is at a 10-Year Low Despite all the 1987 Redux talk on Wall Street, the market's P/E dipped to a 10-year low this week. The S&P 500 is now trading at just under 16 times trailing operating earnings. The P/E ratio hasn't been this low since October 1995. Here's a chart of the S&P 500 (black line, left scale) with its earnings (blue line, right scale). Whenever the two lines cross, the P/E ratio is at 20.
The market often anticipates the flow of earnings (meaning, the black line moves before the blue). You can see that's what happened in 2000. As a result, the P/E ratio often decreases in the initial stage of a bear market, and increases at the beginning of bull run. What was unusual about the rally that began in March 2003 is that it came well after the bottom in earnings. I think that indicates how much investor confidence had been rattled by Enron and 9/11, and the coming showdown with Saddam. Here's the market's P/E ratio:
Posted by edelfenbein at 10:29 AM Status of High-Profile Corporate Scandals The AP has a rundown of prominent corporate scandals. Posted by edelfenbein at 8:22 AM Happy 110th Birthday to the Dow The Dow Jones Industrial Average (^DJI) debuted on May 26, 1896. The first close was at 40.94. Over the last 110 years, the Dow is up 39,017.41%, or 5.58% a year. Here's an odd fact: In 1939, the keepers of the index decided to kick out IBM. The company didn't return for 40 years, and it's still there today. But those were 40 amazing years for the company. If the stock had been left in the index, the Dow would be thousands of points higher today. In fact, the index would have broken 1,000 in 1961 instead of 1972. Here's every single weekly close. Posted by edelfenbein at 6:20 AM May 25, 2006Today's Rally Don't be fooled by today's rally. It's good, but it's not that good. Here are today's top 15 performers in the S&P 100: EL PASO CORPORATION.................6.41% It's heavily tilted to energy and materials, the two areas that have been feeling the most pain. Posted by edelfenbein at 3:02 PM The Real Meaning of the Enron Verdict I wanted to get a head start on the discussion of the "real meaning" of the Enron verdict. Some may say that it's a classic tale of human arrogance and greed. To me, I see it as easy way to publicly moralize. Plus, I have an excuse to post a photo of Bethany McLean, former Goldman analyst and co-author of Enron: The Smartest Guys in the Room.
It's a win-win for everybody. (Except Skilling and Lay of course.) Posted by edelfenbein at 2:35 PM It's Al Goldman TV! The Chief Market Strategist at A.G. Edwards gets all metaphorical: We believe the animal that best describes the current stock market is a turtle. Think about it. A turtle plods along making slow progress and often stops to rest as it carries a heavy load on its back. A turtle's shell is like a wall of worry, and it grows heavier as the turtle ages. Investors may try to speed up the turtle but to no avail. What we all must do is adjust to the turtle's physical limitations and abilities. Yes, a turtle is slow-moving, but it can chug along for an extended period--remember the old parable about the turtle and the hare. He later says that the turtle might be driven off a cliff. I'm not kidding. Posted by edelfenbein at 2:03 PM Guilty From CNN: Skilling was found guilty on 19 counts of conspiracy, fraud, false statements and insider trading. He was found not guilty on eight counts of insider trading. Posted by edelfenbein at 1:30 PM Fire Ballmer Paul Kedrosky says it's time to fire Steve Ballmer: With today's news that Microsoft's Vista could indeed slip further into next year, as I had promised would happen, there is only one rational response from Microsoft's board: Fire Steve Ballmer. He has long been an erratic force inside the company -- someone with real strengths, but also horrible deficiencies (among which is being utterly tonedeaf) -- and it is finally clear that the latter permanently outweigh the former. Hmmm...decency from Ballmer? Let's look at the evidence: F**king Eric Schmidt [Google's chief executive] is a f***ing p****. I'm going to f***ing bury that guy. I have done it before, I will do it again. I'm going to f****ing kill Google. Yep, it's a long shot. Posted by edelfenbein at 11:08 AM GDP Growth Revised to 5.3% First-quarter GDP growth was revised higher to 5.3%. Even though that's an impressive number--the best in 2-1/2 years--it still came in below Wall Street's forecast of 5.7%. Here's how the economy has done for the last 10 years:
GDP growth is highly "trend-like." The magic point is 3%. When GDP growth is over 3%, there's a 70% chance that the following quarter will also be over 3%. If GDP growth is below 3%, then there's only a 39% chance that the next quarter will be over 3%. The key is spotting those points when the economy breaks out of its trend. In the fourth quarter of 2005, the economic fell to 1.7% leading to fears of a recession. But we defied the odds and are growing strongly again. For now. Posted by edelfenbein at 10:27 AM Correction Prevents Mistakes The Saudi market crash is causing thousands of marriages to be called off: The stock market crash, which affected more than 3.5 million middle income investors, has delayed the marriages of many people this summer, Asharq Al-Awsat newspaper reported. Posted by edelfenbein at 7:23 AM May 24, 2006Donaldson's Earnings Donaldson (DCI) just reported earnings of 43 cents a share, two cents better than Street estimates. The company also narrowed its full-year guidance to a range of $1.49 a share to $1.54 a share. The previous range was $1.47 to $1.57. Since the company has already made $1.12 a share through the first three quarters of this fiscal year, it means that it's forecasting earnings of 37 cents to 42 cents a share for this quarter. It also virtually guarantees a 17th straight year of rising earnings. Here are some historical financials on Donaldson: Year.............Sales.................EPS Revenues for the quarter came in on the low side. Here's a chart of Donaldson's EPS. I used a logarithmic scale so you can see how steady the increases have been. The red is the forecasted range. Also, there were some minor charges last year, which explains the slight dip.
Companies don't get much more dependable than that. Owning DCI is as close as you'll get these days to owning a bond with a 13% coupon. Posted by edelfenbein at 4:19 PM Eaton Vance Here's a cool stock: Eaton Vance (EV) just reported another solid quarter. The company earned 29 cents a share compared with 23 cents last year, although the Street was looking for 32 cents. No worries, the shares are higher today. Over the last 31 years, the stock is up about 230,000%--and that doesn't include dividends. And it's still not in the S&P 500!
Posted by edelfenbein at 3:47 PM 1987 Redux? Lately, we've been hearing a lot of silly talk about how now is "just like 1987." Please. I need more than "a new Fed chairman and rising interest rates" to see the similarities. Unless Cutting Crew is getting popular again, then no--this is not like 1987. There is, however, one big change going on in the market, and it's actually more important that the level of stocks. I think the leadership of cyclicals stocks has run its course. Here's a chart of the Morgan Stanley Cyclical Index (^CYC) divided by the S&P 500:
There are three other times that cyclicals have burned out at this level. On May 10, the ratio peaked at 0.672. It's fallen back since, and it's down again today. Posted by edelfenbein at 3:13 PM Gold Down $20 an Ounce The market is up modestly today. From the Buy List, Medtronic (MDT) is about 4% higher. Expeditors (EXPD) is up about 3% on an upgrade from Robert W. Baird. Donaldson (DCI) reports after the close. Also, Home Depot’s Bob Nardelli’s pay (and performance) is targeted in today’s NYT. There’s not much of a theme so far. This is one of those rare days when the energy sector isn’t leading or lagging the broader market. The only sector that’s feeling the pain is in the gold pits. The yellow metal is off $20. Gold peaked at $728 on May 11 and 12. It’s down about 10% since then. A few other items: Vonage (VG) is down about 15% on its first day of trading. Are you looking for a medical marijuana stock? Well, here's Cannasat Therapeutics (CTH.V). Check out CNBC's Morning Blog. Liz Claman updates it maybe twice a month. (She calls her readers "bloggers," as in "hey bloggers!" That's so cute!) Have you seen those Washington Mutual (WM) ads with the "stodgy bankers"? It's a penned-off group of middle-aged, white men who harrumph at all the consumer-friendly things WaMu does. (Given the traditional stereotypes of money lenders, I guess this is an improvement.) In any event, as part of their cost-reduction strategy, the company is laying off 1,400 workers in two of their call centers. I wonder if the stodgy white guys would approve. Lastly, enjoy the fine prose of "The Relation between Time-Series and Cross-Sectional Effects of Idiosyncratic Variance on Stock Returns in G7 Countries." There will be a quiz tomorrow. Posted by edelfenbein at 11:02 AM Medtronic Raises Forecasts Before yesterday, Wall Street had been terrified that the mess over at Guidant was crimping Medtronic’s ICD business. While sales growth was down, it wasn’t nearly as bad as the Street was expecting. Actually, Medtronic wound up having a pretty decent quarter. What’s more, the company raised estimates again. For next year, the company expects earnings of $2.52 to $2.60. For 2008, Medtronic sees earnings of $2.78 to $2.88. Posted by edelfenbein at 9:38 AM May 23, 2006The Bitchiest 8-K Report I bet you didn't know SEC filings could have such a nasty attitude. Check out this Q&A from Expeditors' (EXPD) 8-K report: 20. You are generating a lot of cash and you are increasing the dividend. Your working capital is strong, etc. The balance sheet is probably the best in the transportation industry, so what else do you with the cash? You have always reinvested in the business, but you must be getting to the point where there is little else to invest in. Are there locations where you can open other offices? What’s next for your company? Where do you go from here? Is it more of the same in terms of growth? How should we think about the company going forward in terms of next steps? I know it’s an open-ended, broad question, but you have been one of the few companies that have consistently delivered on growth, on promises, etc., and the company has obviously shifted to a level of growth that your peer group has never been able to match. Thanks for indulging the question. It seemed like a reasonable question to me. (Sheesh, they should see some of my e-mail.) It's a good thing they're making money. Otherwise, they might come across as jerks. Posted by edelfenbein at 5:35 PM S&P Is Bullish on FactSet They give FactSet (FDS) a 12-month price target of $55 a share: Standard & Poor's favorable opinion of FactSet Research Systems (FDS) reflects our belief that, at current levels, the shares do not fully reflect the company's positive business momentum. We see solid fundamentals for its target market, the global financial investment community, and we expect that international markets will offer strong revenue-growth opportunities. We continue to think the company has an important, entrenched position in a niche market with significant barriers to entry. Posted by edelfenbein at 5:16 PM Medtronic Earned 62 Cents a Share Medtronic Inc. on Tuesday said quarterly earnings rose on higher sales of its implantable devices to manage irregular heart rhythms. The stock hit an 18-month low today. Posted by edelfenbein at 4:17 PM Dell to Open Retail Stores The first one is scheduled for Dallas. The store, at NorthPark Center, will not carry inventory, Dell spokesman Venancio Figueroa said. Rather, it will allow customers to try out Dell's products and order them for delivery, Figueroa said. Posted by edelfenbein at 2:49 PM The Fall of Fannie The accounting scandal at Fannie Mae (FNM) is certainly one of the saddest. Few companies had the corporate image of FNM. People don't expect much from companies like Enron, but Fannie was supposed to be different. Now we learn that it was all a charade. Fannie Mae's regular quarterly reports of smooth profit growth in recent years were "illusions deliberately and systematically created" by senior executives through improper accounting and manipulation of earnings, the company's regulator said in a report issued Tuesday. The report showed that Raines systematically misled the public: In the summer of 2002, interest rates fell 100 basis points in 60 days to a 40 year low, and mortgage prepayments accelerated dramatically. That acceleration caused Fannie Mae's duration gap, the only published measure of the Enterprise's interest rate risk exposure, to move well outside of Board-approved limits. In Fannie Mae's 2002 Annual Report, Mr. Raines described the Enterprise's response: Raines served as Director of OMB from 1996 to 1998. Posted by edelfenbein at 2:01 PM The Vonage IPO I know the big worry now is supposed to be inflation. I’m sorry, but I can get into it. It’s like sake. I know I’m supposed to like it, but I just...can’t. I’ve looked at the inflation numbers and it doesn’t seem like that big a deal. Sure, it’s probably true that the government understates inflation, but that’s the kind of thing governments do. Jeff Matthews had a great post mocking the idea of the core rate of inflation. As usual, he’s right. But I’d like to add that I don’t often use gold or silver or platinum in my day-to-day dealings. If I did, then the prices probably wouldn’t bother me anyway. Let’s remember that there are areas where prices are falling. At the same time, we’re told that Dell is a complete mess because its competitors are underpricing it, and inflation is roaring back. If you want to watch for falling prices, just look at the Vonage (VG) IPO. Well, the offering price is certainly inflating. The offering is oversubscribed. But the price of voice-over-Internet protocol (VoIP) is plunging. And so will Vonage’s share price. Check out this gem from a Reuters article on Vonage: Vonage has acknowledged that it may never be profitable and is viewed with skepticism by many analysts, who cite the growing competition it faces in providing voice-over-Internet protocol (VoIP) services. For the love of carbs! May never be profitable?? In 11 years, the company has never made a profit. All told, Vonage has lost over $460 million, which is roughly the amount it will raise from its IPO. (Irony, no?) In the first quarter, the company had sales of $119 million, and it spent $88 million on marketing. Posted by edelfenbein at 1:25 PM David Phillips on Arden Group David Phillips, the 10-Q Detective, looks at Arden Group (ARDNA) and likes what he sees: Perhaps the Company should rename itself, "The Cheap Gourmet." In 2005, despite generating operating cash flow of more than $33.0 million, capital expenditures totaled $6,390,000, which included costs of approximately $2,400,000 related to the remodeling and expansion of the Century City store. The balance sheet is in great shape, with Total Debt-to-Equity of approximately 2.0 percent. Posted by edelfenbein at 9:44 AM Medtronic's Financials Here are Medtronic's numbers for the past several quarters: Quarter...........EPS.............Sales If the earnings report is inline with expectations, then Medtronic's trailing P/E ratio will drop to 22, its lowest level in a decade. In October, the company boosted earnings guidance for FY06, FY07 and FY08. Remarkably, the stock is down 11% since then. Posted by edelfenbein at 7:44 AM May 22, 2006Medtronic's Earnings Preview Medtronic reports earnings tomorrow. The AP has a preview: OVERVIEW: The acquisition of Boston Scientific Corp. and Guidant Corp. during the period changed Medtronic's competition landscape slightly. Guidant had always been second to Medtronic in the market for implantable defibrillators _ devices implanted in the body to regulate heart rhythm _ while Medtronic seeks to grab share in the drug-coated stent market currently dominated by Boston Scientific and Johnson & Johnson Inc. Posted by edelfenbein at 11:44 AM The Late Cyclicals Are Being Left Behind I just ran this chart a few days, but it's worth updating for today. The black line is Morgan Stanley's index of consumer stocks. The gold is the early cyclicals, and the blue is the late cyclicals. My point is that this is not a broad downturn. The market is being very selective. Outside of energy and metals, things aren't so bad. Yet.
The 10-year yield just dipped below 5%. Posted by edelfenbein at 11:30 AM More of the Same The market is moving lower, and once again, the cyclical stocks are getting hit the hardest. In fact, the divergence between cyclicals and the rest of the market appears to be accelerating. The Dow Oil & Gas Index (^DJUSEN) is down another 10 points today to 444. Remember, this index just recently tried to break 500 on three occasions. Materials stocks are also being punished. The rest of the market is only down slightly. The Brazilian iShares (EWZ) are down over 8% today. The Buy List is again ahead of the broader market (meaning, not down as much). Lowe’s (LOW) had a good earnings report today. The company earned $1.06 a share, which was 12 cents higher than estimates. Shares of LOW are higher, and HD is lower. The VIX (^VIX), the market’s volatility index, is much higher today. Believe it or not, they are people who "trade" volatility, and volatility bulls are very happy today. The VIX is up to 19. It was at 13 before last week’s CPI report. Finally, I noticed these two articles in the British press: 'Is this a crash like 1987? No chance!' Posted by edelfenbein at 11:11 AM May 21, 2006Weekend Reading
For a quiet Sunday: Currency Markets Mistook Indonesia for Turkey Posted by edelfenbein at 4:10 PM May 20, 2006Happy 200th Birthday John Stuart Mill
Richard Reeves on John Stuart Mill: He wrote one of the definitive 19th-century works on political economy—and also worked tirelessly for Irish land reform. He produced a landmark argument for equal rights for women, and throughout his life pushed for legal and political reform on their behalf—Millicent Fawcett described him as the "principal originator" of the women's movement. Mill made, in his famous On Liberty, a timeless case for freedom of speech and action that has inspired generation after generation around the world. But as an elderly MP he also led the successful campaign against Disraeli's attempt to ban demonstrations in public parks, especially Hyde park—a corner of which remains a symbol of free speech to this day. Posted by edelfenbein at 2:28 AM May 19, 2006The Nasdaq Breaks Its Losing Streak Not a bad day today. The 10-year bond nearly fell below 5%, and the Nasdaq broke its eight-session losing streak. Helping matters was Dell (DELL), which added 62 cents a share, or about 2.6%. AMD (AMD) was up over 11%, and Intel (INTC) fell 1.5%. On our Buy List, we had a good day from Fiserv (FISV), which was up 2.6%. Also, Sysco (SYY) announced a record sales week. While most of the Buy List was up today, we were hurt by two big losers. Expeditors (EXPD) dropped 4%, and UnitedHealth (UNH) lost 1.9%. Next week, Donaldson (DCI) reports on Wednesday. The current estimate is for 41 cents a share. Bloomberg reported that commodities had their worst week in 25 years. This week, copper plunged 10 percent, the most since October 1994, and gold tumbled 7.6 percent, the biggest drop in more than 15 years. The CRB Index dropped 19.46 this week to 342.29. It reached a record 365.45 six sessions ago. Posted by edelfenbein at 4:26 PM Dell By The Numbers Here are Dell's quarterly sales, operating earnings and earnings-per-share for the last nine years: Quarter.....Sales....Oper. Income.....EPS The numbers are in millions except for EPS. Also, since Dell ends its fiscal year at the end of January, this past quarter is technically the first quarter of FY2007. I changed it because it just seems...weird. Don't ask me why they do it that way, I just own the shares. Now let's deconstruct this stock. To the spreadsheets! Let's start with operating profit margins:
Yup, this here's the squeaky wheel. The tech blowout obviously took a big toll on margins (11% is crazy good for a commodity maker). From 2001-2004, Dell was steadily recovering. It was the last three quarters that have been totally off-the-mark. Now let's look at sales growth. Here's the trailing four-quarter sales:
I used a logarithmic scale so the "arcing" pattern is due to the slowing rate of sales growth. Now let's look at the sales growth rate:
Wow! You can really see how much Dell's topline growth rate has "decelerated" (i.e., lower rate of growth) since the glory days. Sales grew just 6.2% last quarter. Nominal economic growth was 6.7%. If you're new to investing, here's an important point. Sales growth and profit margins are closely related. When Dell's sales growth plunged in 2001--even turning negative for a bit--operating margins got squeezed. Imagine if you ran a business and suddenly everyone stopped buying your product. You'd cut prices which would lower your operating magin. Notice how, from 2001 to 2004, Dell's operating margins gradually increased even though its rate of sales growth was slowing down. Assuming you keep your variable costs under control, all a company needs to do to grow its margins is grow its sales faster than its fixed costs. Simple, right? But a commodity business is all about the margins, and Dell's margins were too fat for its competitors to ignore. Here's a scatterplot of Dell's quarterly sales growth (horizontal) and operating profit growth (vertical):
I didn't include a trendline, but the slope is clearly greater than 1.0 (meaning the trend rises at greater than a 45° angle). Around 20% is the magic point. Above that, each 1% increase in sales brings in more than a 1% increase in profit. Here's Dell's trailing four-quarter EPS:
That last little down mark is what all the fuss is about. Wall Street thinks it will continue. The Street now projects earnings for this year of $1.44 per share, and $1.70 per share for next. Posted by edelfenbein at 8:20 AM CNBC's "Guidelines for Appearances by Financial Professionals" So it does exist! Here's CNBC's official "Guidelines for Appearances by Financial Professionals." Thank you for agreeing to appear on CNBC. We appreciate the opportunity of giving our viewers access to your knowledge, insight and experience. You provide a special point of view and we encourage you to express your opinions clearly and candidly. CNBC is a valuable, independent platform for such expression. Maintaining that value requires us to be diligent in providing our viewers with a clear context for the information they receive from CNBC including the financial interests of our guests and the companies they represent with respect to the securities they are discussing. In that respect, CNBC has long had disclosure policies for on-air appearances by financial professionals. Posted by edelfenbein at 7:15 AM Gene Marcial on Medtronic From Business Week: Medical device giant Medtronic, the leader in defibrillators and pacemakers, has been a market laggard. The stock slumped from 60 in January to 49.19 on May 17. But some investors say it may beat analysts' consensus forecast of 62 cents a share when it reports earnings for its fiscal fourth quarter on May 23. Among the few bulls: Investment firm Harris Nesbitt's Joanne Wuensch, who continues to rate it "outperform," with a 12-month target of 62. Still, some worry Medtronic may deliver bad news. Not only has growth slowed in the cardiology market, but rival St. Jude Medical (SJM )also missed its quarterly sales forecast. Wuensch counters that Medtronic is "more insulated from the implantable-device market sways than its brethren." It generates 27% of revenues from them, vs. St. Jude's 36%. Wuensch sees Medtronic earning $2.09 a share on sales of $11.3 billion this year, and $2.38 on $12.6 billion in 2007. David Sowerby, portfolio manager at investment firm Loomis Sayles, which owns shares, says the stock is "compelling" near its 10-year low, especially as he expects Medtronic to gain market share and show double-digit earnings growth in 2007. Posted by edelfenbein at 6:53 AM May 18, 2006Dell's Conference Call Seeking Alpha has the transcript. After the Q&A, Michael Dell has this to say: So I want to thank you all for joining us and reiterate the points that Kevin made about our competitive environment and what we are doing to enhance the value we bring to our customers. The competitive environment has changed. Some competitors have gotten stronger. There has been price compression in the high-volume consumer transactional segment, and that has eroded industry profitability. More than ever, customers are using service as a point of differentiation. Posted by edelfenbein at 9:04 PM Dell Earned 33 Cents a Share $14.2 billion in revenue. The company said it won't provide any quarterly guidance. Here's the press release: ROUND ROCK, Texas--(BUSINESS WIRE)--May 18, 2006--Dell's expansion of business outside the United States and its sales of servers, storage and enhanced services drove revenue of $14.2 billion and earnings of 33 cents per share in the fiscal first-quarter 2007. Also in the press release is this: Dell will also introduce new AMD Opteron processors in our multi-processor servers by the end of the year offering a great new technology to our customers at the high-end of our server line. The stock is up about 4% after-hours. AMD is up 12%, here's their response. Posted by edelfenbein at 4:03 PM The Afternoon Market The market is just a tad higher today. The good news is that bonds are much higher. The yield on the five-year Treasury is back below 5%. Interestingly, Wall Street is undecided on what will happen at the next Fed meeting. The futures indicate that there’s a roughly 50/50 shot of another rate hike in June. If the Fed holds off, it will break its streak of 16 straight 0.25% rate increases. The Buy List is holding its own today. Dell (DELL) is showing some strength ahead of its earnings announcement, which will come after the bell. Sysco (SYY) is having another good day. Home Depot (HD) is also rallying. If you’re looking for a good stock, you may want to consider Bed Bath & Beyond (BBBY). I’m a bit perplexed by this stock. The shares have been falling since a strong earnings report in early April. Burger King (BKC) is doing well on its first day of trading. The stock is currently over $18 a share. Speaking of IPOs, we have Mastercard coming next week. We also have Vonage which is turning into a train wreck of an IPO. I’ll have more on that later. Finally, if you’re concerned that your portfolio is trailing the rest of the market, don’t worry too much. Warren Buffett has trailed the market for over two years. Posted by edelfenbein at 2:42 PM The Return of Volatility The stock market's volatility may be returning with a vengeance. A few years ago, the market's daily swings calmed down dramatically. Here's a chart of the S&P 500's daily changes since the beginning of 2002:
By historic standards, that's a huge change. The "feel" of the market altered entirely in just a few months. There hasn't been a 2% or greater daily move in over 2-1/2 years (although we've come close). To give you an idea of how big a change that is, there were 43 such days in the second half of 2002. Posted by edelfenbein at 12:34 PM The Indian Market Cracks As bad as yesterday was here, the market in India is doing much worse. The two rival national indexes, the Sensex and the S&P Nifty, both fell -6.8%, which would be like 700 points on our Dow. That was the worst drop ever. Posted by edelfenbein at 11:06 AM Orphan Stocks I love finding great stocks that are under-followed by Wall Street. Now we have evidence that the ignored stocks do better than their well-watched peers: Data compiled by Bloomberg showed 49 companies with market values of $1 billion or more that are covered by no more than one analyst. The median gain for the group over the past year was 17 percent, compared with an 11 percent rise in the S&P 500. Google (GOOG) is followed by over 30 analysts, yet many great companies are completely ignored. Ever heard of Northern Empire Bancshares (NREB)? Neither has Wall Street. There's not a single analyst who follows it, but check out these earnings: 1999 $0.55 Not too shabby. For the first quarter of 2006, the company earned 39 cents a share versus 37 cents last year. The stock is actually down since last summer. Some other unfollowed gems are Arden Group (ARDNA), Coastal Financial (CFCP) and NewMil Bancorp (NMIL). Posted by edelfenbein at 9:40 AM The Day After The market looks to rebound this morning. Home Depot (HD) announced that it’s expanding its share repurchase program by $2 billion to a total of $14 billion. The stock retreated after reporting strong earnings but weaker-than-expected sales. UnitedHealth (UNH) should open lower after announcing that it’s been subpoenaed by the U.S. attorney’s office for the Southern District of New York. Today is also D-Day. Dell (DELL) will report its earnings for its third quarter. The company recently lowered guidance to 33 cents a share. I’ll be curious if the company offers a forecast for the fourth quarter (ending in July). Wall Street’s current outlook is for 34 cents a share. The Burger King "King" (BKC) rang the opening bell at the NYSE. The fast food chain went public today. The offering was price at $17, the high end of the range. Interestingly, Chipotle (CMG) is having a secondary offering. The company had one of the best IPOs of the year. Posted by edelfenbein at 9:36 AM May 17, 2006UNH Subpoenaed The press release: MINNEAPOLIS--(BUSINESS WIRE)--May 17, 2006--UnitedHealth Group announced that it received on Wednesday afternoon a subpoena from the office of the United States Attorney for the Southern District of New York requesting documents from 1999 to present relating to the granting of stock options. The Company also announced that on Wednesday it received a request from the Internal Revenue Service for documents from 2003 to present relating to stock options and other compensation for the named executive officers in the Company's annual proxy statements. Posted by edelfenbein at 8:32 PM -214.28 Points Yuck! What a rotten birthday. Let's look at the damage. The Dow dropped a total of 214.28 points, the biggest loss in three years. Twenty-nine of the thirty Dow stocks fell. Only Hewlett-Packard (HPQ) gained ground. The S&P 500 lost 21.77 points, or 1.68%. In percentage terms, this was the second-worst day for the S&P 500 since September 2003 (Janaury 20 of this year was the worst). The Dow Oil and Gas Index (^DJUSEN) lost 12.23 points (or 2.60%) to close at 458.01. Our Buy List lost -1.42%. The 20 stocks are now up 0.05% for the year. Here's how our stocks did:
There are 100 Dow Jones industry groups. Today, 98 were down. The only two industries that were up were Health Care Providers (^DJUSHP), which includes UnitedHealth; and Computer Hardware (^DJUSCR), which includes Hewlett-Packard. The culprit for today's sell-off was the higher-than-expected inflation report. The CPI rose 0.6% in April, and core prices rose 0.3%. Here's a look at the CPI and the core CPI for the past few years.
Perhaps it's me, but I don't see what's so scary. Posted by edelfenbein at 4:02 PM The Last Five Days Here's the story:
Consumer stocks are the black line. Early cyclicals are gold, and late cyclicals are blue. This is not a value-versus-growth issue (growth is actually holding up a bit better). It's a rethinking of the economy's prospects. The Dow is headed for its biggest point loss since March 24, 2003 when it dropped 307 points. But the Dow was only at 8,200 then. Update: Dow 11,200 has just fallen to the enemy!! Posted by edelfenbein at 2:11 PM Hold On! This is turning into a rout! I guess yesterday was just a brief rest. The Dow (^DJI) is down over 200 points today. H-P is the only Dow component that's up. The S&P 500 (^SPX) is down 20 points (more than 1.5%). The Dow Oil & Gas Index (^DJUSEN) is down over 3%. (Again.) I'll give one to the technical analysts crowd. That index did not like the number 500. The index closed at 500.50 on April 21. Then it finished at 499.27 on May 2, and 499.21 on May 10. Now, it's at 455. The cyclicals are getting creamed (largely materials and energy), but the techs are holding up surprisingly well (meaning, they’re not down as much). The Nasdaq Composite (^IXIC) is off by 1.3% The Buy List is taking the damage well. In fact, stocks like FactSet (FDS), Sysco (SYY) and Medtronic (MDT) are trading higher. We could wind up outperfoming the market by 40 basis points today. Posted by edelfenbein at 1:34 PM Foreign iShares Since 2003 Foreign markets have been the place to be. Here's how several foreign iShares have performed since the beginning of 2003: Brazil (EWZ)....................433.95% By comparison, the S&P 500 Spyders ETF (SPY) is up just 52.81%. Posted by edelfenbein at 12:02 PM Gold at 26-Year High From The Onion:
Posted by edelfenbein at 11:49 AM Three Stocks I'm Watching Here are three stocks I've been watching. optionsXpress Holdings (OXPS) is an online broker. As the name suggests, the company specializes in options, an area not well-served by the larger online brokers. The company has experienced very fast growth. For the last quarter, sales were up 73% and profits jumped 84%. Still, it reported 29 cents per share which was merely inline with forecasts so the stock has pulled back some. The company now has about 180,000 customers. I've never used the service so I can't say how good it is, but others seem to like. My fear is that the big online guys will move to squish OXPS. Cintas (CTAS) is one of the largest companies that no one knows. The company makes business uniforms and other pieces of flair. The stock did very well through the 1990's, but this decade has been rough. The business is still doing very well, but its valuation has crumbled. The P/E ratio has plunged from about 60 at the beginning of 1999 to just 22 today. This isn't a fast-growing business, but it's a solid, well-run company that has consistently delivered earnings. For this year, Cintas said its expects earnings of $1.92 to $1.96 a share compared with $1.74 last year. Investors Financial Services (IFIN) is similar to SEI Investments (SEIC). The company provides asset-administration services for the financial services industry. IFIN had a bad first quarter but the company still sees profits for the year of $2.32 a share. Posted by edelfenbein at 9:39 AM Consumer Inflation +0.6% This morning, the CPI for April came in at +0.6%, which topped forecasts by 0.1%. The core rate was 0.3%, which was also 0.1% higher-than-expectations. The market is not taking this well. Gold is up strongly in what looks to be its largest jump since 9/11. Gold reached $730 an ounce last week, but had fallen back. Hewlett-Packard (HPQ) had a great earnings report yesterday. Profits for its second quarter jumped 51%, and earnings from the PC division rose 69%. Even AMD (AMD) got a little rise out of the report. H-P also said that it will consolidate 85 data centers into six large centers. The move should help the company save $1 billion. Dell (DELL) reports tomorrow after the close. Posted by edelfenbein at 9:01 AM Happy Birthday Wall Street On May 17, 1792, 24 brokers signed the Buttonwood Agreement: We the subscribers, brokers for the purchase and sale of public stock do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day on for any persons whatsoever any kind of public stock at a less rate than one-quarter percent commission on the specie value of, and that we will give preference to each other in our negotiations. The first shares traded were for the Royal Googloe Parchment Seeke Co. at a price of three crowns and four shillings. Ok, not really, but the other stuff is true. Posted by edelfenbein at 7:08 AM May 16, 2006President Bush's Financial Disclosure Form Just as I suspected: He's rich. So is the Veep. Posted by edelfenbein at 11:24 PM Dell Below $24 Shares of Dell (DELL) are now below $24. Including cash, Dell is going for less than $20 a share. Earnings are due out on Thursday. Posted by edelfenbein at 12:57 PM James Surowiecki on Hedge Funds In the current New Yorker (hat tip: Abnormal Returns): In the past five years, hedge funds have become a new power on Wall Street; the number of funds has doubled, to more than eight thousand, and the assets they control have tripled, to more than a trillion dollars. In the process, they’ve also become a favorite scapegoat for bad financial news, blamed for everything from inflating the housing bubble and demolishing stock prices to jacking up the price of oil. A German politician has called hedge funds "locusts" of the global economy, while William Donaldson, the former head of the S.E.C., has warned that "disaster" looms if hedge funds aren’t regulated. The title of a recent column made the point nicely: "Instruments of Satan." Ouch. Posted by edelfenbein at 12:47 PM A Warning Sign? One of the general rules of the thumb on Wall Street is that the stock market tends to follow the long-term bond market. I should stress that this is a very general rule. I've never been a market timer, and I'm not going to start now. But I want to show you how the market often reacts. Here's a chart of the S&P 500 (black line) versus the American Century Target Maturities Trust—2025 Portfolio (the gold line, symbol: BTTRX) from May 1996 to December 1999. I'm using BTTRX as a proxy for long-term bonds (it's a mutual fund that holds the Treasuries coming due in 2025).
Notice how closely the two lines followed each other, right until 1999. That's when long-term bonds started to head down while equites continued to float upward. It was a foreshadowing of what was to come. Now here are the same two since the summer of 2003.
It's not exactly the same, but you can see some similarities. The BTTRX is parting ways with stocks. Here's the chart one more time, since last August:
Now you can really see it. The two were like waltzing partners right up to the beginning of March. Like I said, I'm not predicting a fall in equities, but the bond market could be.
Posted by edelfenbein at 12:16 PM FactSet Soars on Upgrade Home Depot (HD) opened lower despite its good earnings. The big surprise today is FactSet Research Systems (FDS) which is up over 9% on an analyst upgrade. Shares in FactSet Research, which provides financial information to investment professionals, rose sharply Tuesday, touching a fresh 52-week high, after Piper Jaffray upgraded the stock citing expected strong demand from investment banks. Analyst Brett Manderfeld raised his rating to "Outperform" from "Market Perform" and boosted the target stock price to $50 from $44. Posted by edelfenbein at 11:58 AM Home Depot's Earnings The company's profits rose 19% to 70 cents a share, three cents more than estimates. Sales were up 13% to $21.5 billion. The average customer transaction increased to $60.75. Home Depot said its appliance market share grew 1.4 percentage points to 9.9 percent in the first quarter. The retailer is the third- largest seller of appliances behind Lowe's and Sears Holdings Corp. Posted by edelfenbein at 9:37 AM Watching the Yuan One of my many, many complaints about the financial media is its alarmism. (This also applies to some prominent financial academics as well.) Everyday, it seems, we’re told about a new Major Concern, that Must Concern Us All. If not addressed, the Major Concern will become a Serious Problem with Serious Repercussions. The longer we ignored the Major Concern, the worse it will get. And usually, the Major Concern goes away. Sometimes it’s replaced by a younger and thinner Major Concern. Remember the Housing Bubble? It turns out, that was sooo last year. Nowadays, we have to be worried about oil prices. And gold prices! Don’t forget copper! Of course, no one ever calls it a gas bubble (okay, all bubbles are gases, smartie). In the media’s eyes, when the bad things go up, we’re selfish users. When good things go up, we’re selfish speculators. If you pay attention, you might be able to spot some similarities. Anywho, there really are things to worry about. But usually, they’re not what everyone else is worried about. And that’s what makes them so troubling. The real mischief is hidden in broad daylight. Yesterday, China allowed its currency, the yuan, to rise above eight to the dollar (meaning lower than eight, confusing I know). In foreign currency terms, this was a tiny move, about 0.1%. But on the symbolism front, it’s equivalent to one enormous spring roll. The Chinese government is slowly falling to pressure from the United States to adopt a "more flexible" currency policy. More flexible is diplospeak for "higher dammit." The U.S. has been seriously pissed that China has pegged its currency too low. Last year, China finally allowed its currency to float. Well...not float float. I guess you could call it "semi-submerged." So now everyone is happy that the yuan is going up. Almost everyone. Enter Robert Mundell. He thinks a stronger yuan is a big, massive dumb ass mistake. Although he’s an economist, he might know what he’s talking about. Mundell is one the world’s leading currency experts. He’s a Nobel laureate and considered to be the Father of the Euro (I’d still call for DNA testing, but that’s me). Mundell says such admonitions are not in China's interest and would bring about huge problems such as threatening its already wobbly banking system beset by bad loans, cause deflation, increase unemployment, reduce net foreign investment and cut economic growth. The problem that our policy makers don’t see (and this is very far from a partisan issue) is that we may be forcing China to follow the same path as Japan. A higher yuan could cause a deflationary slump. Once started, those aren’t easy to stop. Or there’s another question. How do we know that the yuan is too low? What if it’s not? Perhaps the reason why we have a massive trade deficit is—how can I put this—because we need to have a massive trade deficit. If not China, there’s always India. Also, it was because the yuan was tied to the dollar that helped stem the Asian financial crisis of the late-1990s. Senator Chuck Schumer of New York said, "given the importance of this issue, we should approach it with a calm understanding of the facts and not resort to shameless grandstanding." No, I’m kidding. He’s being a screaming moron. Schumer and Lindsey Graham have sponsored a bill that would impose a 27.5% on all Chinese goods. Why 27.5%? That’s what they claim the yuan is undervalued by. As for me, I can’t say exactly why the yuan is where it is. But...there it is. And now we’re screwing around with its value for political reasons. There’s your Major Concern right there. Posted by edelfenbein at 7:05 AM May 15, 2006Falling Energy Stocks I had this brillant plan for the Buy List this year. We were simply going to side-step energy stocks and everything would be fine. At least, that was the plan. So on the first trading day of the year, energy stocks soared. They kept climbing for the rest of January. No problem. We stayed patient. Soon, energy stocks plunged in February and early March, and the Buy List looked much better compared with the S&P 500. Then energy stocks started rallying again. Every day it seems that energy are either the best- or worst-performing group. Eventually,the sector surpassed its January peak. Now energy are falling again, and very sharply. Here's the Dow Jones Oil and Gas Index (^DJUSEN) since the beginning of the year.
Here's the past five days. Posted by edelfenbein at 2:04 PM Earnings Preview: Home Depot Home Depot (HD) reports earnings tomorrow. Wall Street is looking for 67 cents a share, but I think HD has a good shot of beating that. The company has been doing well lately, and the economy is stronger than many poeple realize. The AP takes a look at the stock. OVERVIEW: Home Depot, the world's biggest home improvement chain, has been on an acquisition spree this year. The company on Tuesday said it would pay an undisclosed sum for home improvement loan provider EnerBank USA from CMS Energy Corp., a Michigan-based energy holding company. Posted by edelfenbein at 11:31 AM Random Market Fact It's been nearly four years since the Dow fell for seven straight sessions. The modern record is 12 straight losing days which happened twice. The first time was from July 29 to August 13, 1941. The second time was from January 9 to 24, 1968. The longest winning streak came in 1987, which was for unlucky 13. In fact, it was the first 13 sessions of the year. The Dow also rose 12 straight times in 1929 and 1970. The streak in 1929 came on the heels of a six-session winning streak, leading to unmatched 18-of-19 record. Posted by edelfenbein at 7:05 AM May 14, 2006Boomhauer's Wikipedia Page For your Sunday reading pleasure. From the Internet:
Boomhauer (voiced by Mike Judge) is a character in the animated series King of the Hill. Hank Hill, Dale Gribble and Bill Dauterive are his neighbors, and the four have been close friends since childhood. Boomhauer spends most of his spare time drinking beer with Hank, Dale and Bill in the alley behind Hank’s house. During the course of the series Boomhauer’s first name has never been revealed, nor is it told exactly what he does for a living (one episode mentions that Boomhauer is on worker's compensation; another reveals that his parents are rich after having won the lottery; and a third implies that Boomhauer receives favors from the various women with whom he sleeps). On the FX website that shows King of The Hill, it says that "Boomhauer likes Seinfeld... 'dat' show about nothin' and he works in a deafening loud factory that makes barbed wire." His primary pursuits in life are fast cars and loose women. Boomhauer tends to mumble his speech very rapidly with a heavy Appalachian accent to the point that he has been mistaken for mentally disabled, and was once admitted to a mental hospital. Despite the apparent incomprehensibility of his speech, all of the characters on the show understand what he is saying to some extent. Often, the closed caption text of Boomhauer's mumblings is much more clear that his spoken words. Boomhauer's speech patterns serve as a recurring theme. An example of a typical line of dialogue: Yeah man, I tell ya what, man, that dang ol' internet, man, you just go in on there and point and click, talk about w-w-dot-w-com, mean you got nekkid chicks on there, man, just go click, click, click, click, click, it's real easy, man. Though his speech is difficult to follow, Boomhauer sings clearly, as evidenced by his rendition of "Blue Moon of Kentucky" in Episode 6.9 ("The Bluegrass Is Always Greener"). The sung vocals were actually voiced by country singer Vince Gill. Boomhauer has had four relatives that have appeared on the show. His mother, and his "Meemaw" (Appalachian slang for grandmother) who both have the same accent as Boomhauer's. Boomhauer's father is drawn in one episode, though he does not speak. He is referred to simply as Dr. Boomhauer. The fourth family member is Boomhauer's brother, Patch Boomhauer, who was voiced by Brad Pitt in his only appearance, when he was preparing to marry Boomhauer's ex-girlfriend. The wedding did not take place. Boomhauer is portrayed as highly intelligent, and often gives advice to his friends. Once after giving advice to Bobby Hill, Bobby replied by saying "Wow Mr. Boomhauer, Dad was right. You ARE smart." Boomhauer favors animal-print bikini briefs, which has been observed a few times in the show when he's appeared without his blue jeans. Trivia It is revealed in the episode "A-Firefighting We Will Go" that in Boomhauer's point of view, he is the only clear speaker, while everyone else mumbles incoherently. A King of the Hill Season 1 DVD special feature titled "Making of King of the Hill" explains that Boomhauer's voice was inspired by an angry (yet funny) voicemail Mike Judge received while he was producing Beavis and Butt-head. External links Posted by edelfenbein at 8:45 PM Google Trends: Real Estate Bubble I haven't heard much about the real estate bubble lately. Google Trends shows that it was last year's Big Worry.
Posted by edelfenbein at 2:08 PM May 13, 2006The Pirahã Tribe of Brazil Here's a fascinating article on the language of the Pirahã Tribe of Brazil. Their language has no numbers or subordinate clauses. In fact, the concept of "numbers" totally baffles them. This is a language like no other. The Pirahã seem only to understand the here and now. Their language apparently contradicts what were beleived to be universal laws of language. Posted by edelfenbein at 11:45 AM My 5 Step Plan to Spend Less Money on Gasoline 1. Spend. It's still the cheapest energy around: Unfortunately, there is nothing on the horizon that comes close to gasoline as far as cost and performance is concerned. Consider the fact that taxes in Europe put gasoline prices at $5 to $8 per gallon. If alternatives to gasoline had economic merit, they would surely have arisen in Europe. |
