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« May 2006 | Main | July 2006 » June 30, 2006Instant FOMC Statement Paul Kedrosky has built a Fed press release generator. Every time you click the photo Bernanke, you get new words of wisdom from the FOMC. Here's a sample: The Federal Open Market Committee decided to increase its target for the federal funds rate by 50 basis points to 5 3/4 percent. The Committee used to think that a more restrictive than ever stance of monetary policy, coupled with baffling underlying growth in high-beta stocks, is providing cautionary support to economic activity. However, the whizzy change of geopolitical tensions has increased softwood prices, moderated Mad Money ratings, and damaged debt markets. These developments, along with the neutral stance of monetary policy and ongoing whizzy change in high-beta stocks, should foster decreased economic stability over time. Hey, why not? Posted by edelfenbein at 1:22 PM June 29, 2006Wow! We didn't have a 2% up day in over 2-1/2 years. Today we had our second 2%+ day of the last two weeks! How's that for volatility? Expeditors (EXPD) jumped nearly $4 a share, or 7.7% to another all-time high. SEI Investments (SEIC) was up 4.1%, also a new all-time high. Posted by edelfenbein at 4:06 PM The Fed Raises Rates And the market loves it. Here's the Fed's statement: The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 5-1/4 percent. Posted by edelfenbein at 3:03 PM Waiting for the Fed We’re all standing by waiting for the Fed announcement. I think another 25 basis points is a foregone conclusion. There’s some talk of 50 basis points, which I doubt, but that could come at a future meeting. The long-end of the bond market has not been in a good mood for the past two weeks, and that’s the ultimate driver of Fed policy. I’ve been surprised by the resurgence of the energy sector lately. Every time I think the group is flat on its back, it comes to life again. The Dow Jones Oil and Gas Index (^DJUSEN) tried to break 500 three different times. I’m not a chart guy, but that may have been a warning sign. The index quickly fell to 420 around mid-June. Today, it’s back up to 470. I still like defensive stocks, like consumer staples and health care. Although I noticed that General Mills (GIS) lowered its forecast today. The company reported earnings that were in line with expectations. It looks to be another nice day on Wall Street. Almost all of our stocks are up. On our Buy List, Medtronic made some minor adjustments to its earnings report for last year. The adjustment reduced revenues by $11 million, and earnings by $6.6 million. This won’t have any impact on its future business. I’m starting to get annoyed with Home Depot (HD). The company made a big mistake with its recent shareholder conference, plus it stopped providing sales reports. Since its March high, the stock is down nearly 18%. Lowe’s (LOW), by comparison, is down about 8%. I still like HD a lot, and it had a very good earnings report last quarter. The stock is going for less than 12 times this year’s earnings, which is very cheap. But I’d like to see management be a bit more shareholder friendly. The mega-cap stocks are trailing the market again today. I noticed that of all the stocks will market values of $100 billion or more, Cisco (CSCO) had the highest P/E ratio, but it’s followed by General Electric (GE), Amgen (AMGN), Procter & Gamble (PG) and Coca-Cola (KO). That’s an odd mix. I wouldn’t have expected to see so many consumer names. This is a very weird market. Posted by edelfenbein at 11:00 AM GDP Grew By 5.6% The first-quarter saw the fastest growth in 2-1/2 years. In real terms, the economy has grown by 23.1% over the last 13 quarters. Posted by edelfenbein at 9:09 AM June 28, 2006Courier Corp. Here's a cool little company that's not widely known, Courier Corp. (CRRC) of North Chelmsford, MA. It has a market cap of just $450 million. It's not even in the Russell 3000. Only one analyst covers it. The company is a speciality book publisher. They mostly publish niche market books like education and religion. Check out these financials: Date..........Sales............EPS That's not particularly fast, but it's consistent. Here's the stock chart:
Posted by edelfenbein at 2:46 PM J. Crew Goes Public Shares of J. Crew (JCG) had a fashionably understated but tasteful IPO. In 2004, the company lost over $100 milllion, but it eeked out a tiny gain last year. J. Crew netted $3.8 million on sales of $953 million. Posted by edelfenbein at 1:19 PM Biomet's Earnings Biomet (BMET) reported earnings of 41 cents a share for their fourth quarter. Excluding a few charges, the company earned 46 cents a share which match Wall Street’s estimates. Sales rose 7.3% to $539.9 million, which was slightly above the Street’s forecast. Looking ahead, Biomet said it remains "comfortable" with analysts' sales and earnings estimates of $513 million to $530 million and 43 cents to 45 cents per share for the first quarter of fiscal 2007, and $2.15 billion to $2.22 billion and $1.85 to $1.95 per share for fiscal 2007. Biomet’s shares have been hit for the past two days but the stock is doing well this morning. Seeking Alpha has the conference call. Posted by edelfenbein at 9:33 AM June 27, 2006The Chief Investment Strategist Derby Who's the best chief investment strategist on Wall Street? I decided to compare, but instead of the normal criteria, I looked at what they're really supposed to do--get their name in the paper. Number of mentions this year in the Wall Street Journal: Richard Bernstein, Merrill Lynch: 12 Jeffrey Saut, Raymond James: 11 Henry McVey, Morgan Stanley: 9 Joe Battipaglia, Ryan Beck: 4 Sam Stovall, Standard & Poor: 3 Abby Joseph Cohen, Goldman Sachs: 3 Liz Ann Sonders, Charles Schwab: 3 Francois Trahan, Bear Stearns: 2 Art Hogan, Jefferies: 2 Al Goldman, AG Edwards: 0 Michael Metz, Oppenheimer: 0 Posted by edelfenbein at 2:13 PM The Dumbest Reason for a Stock to Fall FactSet's (FDS) stock is down because the co-founder, Charles Snyder, sold 1 million shares. Note tense. He already sold the shares. If anyone is keeping track, the company has about 49 million shares outstanding. Synder's sale represents a tiny portion of the company. It was only a week ago that the stock jumped on its earnings news. There's nothing wrong with Mr. Snyder cashing in. Afterall, there are a zillion reasons to sell a stock. Myabe he wants to diversify. It's not necesarily because management thinks that the shares going to tank. Snyder still owns over 4 million shares. It's very easy to draw the wrong conclusions from insider selling. Posted by edelfenbein at 1:53 PM Take-Two Taken Down 20% These are hard times for the video game stocks. Electronic Arts(ERTS) is down about 30% in the past few weeks. The company had a rotten earnings report in May. Today we learn that Take-Two Interactive (TTWO) has been subpeonad. According to the New York Times, the grand jury is "seeking information about a range of its business practices dating back to 2001 and the inclusion of sexually explicit material in one of its games." The shares are down about 20%. Posted by edelfenbein at 12:02 PM Top 20 S&P 500 Stocks This Year
Posted by edelfenbein at 11:50 AM Rosneft Goes Public...Sort Of From the WaPo: On sale now, for a limited time only: shares of a company whose secretive chairman is a former KGB member who steers clear of foreigners; whose crown jewel was, in effect, expropriated from another company; and whose future hinges on the power of Russian politicians scheduled to leave office in two years. Posted by edelfenbein at 11:42 AM Twinkie Lasagna!
I'm not sure about this: Twinkies -- they're not just for dessert anymore. The new "Twinkies Cookbook" has recipes for everything from a Twinkie Burrito to Twinkie Lasagna. Twinkies are owned by Interstate Bakeries (IBCIQ.PK), which isn't looking too hot lately. Posted by edelfenbein at 11:32 AM June 26, 2006EU Upholds Anheuser's Right to "Bud" From AP: The Board of Appeal for the European Union's Office for Harmonization in the Internal Market (the what??) ruled that Anheuser-Busch can register it's trademark "Bud" beer throughout Europe, the company announced in a news release. The ruling is just one piece of a massive legal fight in several European courts between Anheuser-Busch and the Czech brewer Budejovicky Budvar. At issue is the famous Budweiser brand, which both companies claim an historical right to use. Do they really think Europeans will buy Budweiser? Dear lord! They're in worse shape than I thought. Posted by edelfenbein at 1:59 PM J&J Buys Pfizer's Consumer Health Unit Losing Guidant to Boston Scientific was one of the best things that could have happened to Johnson & Johnson (JNJ). That merger had troubled written all over it. It's usually a bad sign when the company you're thinking of buying sues you. Yep, you want to avoid that. The wait was worth it. Today we learn that JNJ is buying Pfizer's consumer health division (Listerine, Sudafed, Nicorette). This is a much better move for JNJ. The company has been sitting on a mountain of cash (nearly $6 a share). At the end of last year, I wondered if a good paired trade would be to go long Merck (MRK) and short Pfizer (PFE). It was (at least so far). The troubles for Pfizer are still pretty bad. They needed this deal. Posted by edelfenbein at 1:39 PM Expeditors Splits 2-for-1 Shares of Expeditors (EXPD) split 2-for-1 this morning. For Buy List track record purposes, I've adjusted the cost basis to $33.755. Posted by edelfenbein at 10:36 AM Biomet Subpoenad by DOJ From MarketWatch: Biomet Inc. said Monday it's received a federal grand jury subpoena from the anti-trust division of the Department of Justice. The company said the subpoena is related to possible violations of anti-trust laws involving the manufacturing and sale of orthopedic implant devices. Biomet, based in Warsaw, Ind., said the subpoena requests documents from Jan. 1, 2001 through the present, and it believes similar inquiries have been directed at other companies in the industry . The company plans to fully cooperate with the probe. The stock closed Friday at $34.98, down 21 cents. The stock is down about 10% in the pre-market. Earnings are due on Wednesday. Posted by edelfenbein at 8:51 AM June 25, 2006Buffett to Give Away Fortune
From Fortune:" Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world's largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett's (a connection that began in 1991, when a mutual friend introduced Buffett and Bill Gates). Posted by edelfenbein at 8:52 PM June 24, 2006Crossing Smith Island
I spent last weekend on Smith Island which is a tiny island in the middle of the Chesapeake Bay. There are two ways to get to Smith Island, get born there or take the ferry. I chose the latter. Smith Island is truly a place out of time. The island is absolutely beautiful (I took the picture above at dusk). It’s one of the few inhabited islands in the Chesapeake Bay that’s not connected to the mainland by a bridge. Its isolation has served it well. The island was settled by English speakers over 300 years ago. I should use the phrase “English-speaking” rather delicately. Smith Islanders do indeed speak English, but their accent is...well, I’m not sure how to describe it. They beat their A’s and O’s into submission. I’m sure Professor Higgins would be appalled. And when the islanders talk to each other, they speak backward. No, seriously. Smith Island, and it neighbor to south, Tangier Island, are often studied by linguists. Some believe that the resident’s speech is the closest to Elizabethan English. The island is very small but very charming. Think of it as Gilligan’s Island meets Jamestown. Most men there are crabbers, like their fathers and grandfathers before them. There are about 380 inhabitants in three “cities.” I rented a small cottage in Ewell, which is, for lack of a better word, the capital. Smith Island is a libertarian’s dream. There’s no government. No mayor or town council. No police. The people simply govern themselves. Many of the cars don’t bother with license plates. There are only two roads, and not much to crash into, perhaps a wayward crab. The highest point on the island is five feet. Strangely, the Maryland-Virginia border runs across the southern tip of the island (I’m told this is a sore subject). You can easily see across the entire island. There are no banks or ATM’s. No McDonald’s. No hedge funds. No SEC. The entire island is cash-only. There are, however, three Methodist churches. There’s one elementary school. The high school kids take a boat to the mainland each day. The island cemetery has many of the same names: Evans, Tyler, Bradshaw, Marsh. (No Elfenbeins, I checked.) Smith Islanders are unfailingly polite. I’m not exaggerating when I say that every single person I passed either waved or said hello. No exceptions. The sad part is that Smith Island is slowing fading away. Crabbing is hard work, and there are more job opportunities on the mainland. One hundred years ago, Smith Island was home to nearly a thousand people. Steamers went straight from Ewell to Baltimore. Not anymore. Most of the young folks are moving away. For such a teeny place, I saw a surprising number of “for sale” signs. If you’re ever in the mid-Atlantic and want to forget about your e-mail for a weekend, I highly recommend a visit to little Smith Island. Posted by edelfenbein at 7:40 PM June 23, 2006The Buy List So Far The Buy List is down -0.20% for the year, and the S&P 500 is down -0.30% (not including dividends). The daily volatility of the Buy List is 7.15% greater than the S&P 500. Here's the graph based on a $1 million equally weighted in the 20 stocks at the beginning of the year.
By avoiding the heavy cyclicals, we avoided much of the pain of the correction. Posted by edelfenbein at 9:06 PM From Oracle's Conference Call Courtesy of Seeking Alpha: Kash Rangan – Merrill Lynch Posted by edelfenbein at 8:50 PM Lunch With Warren Get your bids in now. On eBay, a charity is auctioning off a lunch with Warren Buffett. The current bid is $455,100. Posted by edelfenbein at 10:04 AM Anadarko Buys Kerr-McGee and Western Gas This is a huge deal: Anadarko Petroleum Corp., the second- biggest independent U.S. oil and gas producer, agreed to pay $21 billion in cash for Kerr-McGee Corp. and Western Gas Resources, an acquisition that would more than double its sales. Posted by edelfenbein at 9:41 AM June 22, 2006Google Sells Its Baidu Stake From TheStreet.com: Shares of Baidu slumped after Google sold its 2.6% stake in the Chinese search engine. Posted by edelfenbein at 5:06 PM Medtronic Raises Dividend From 11 cents a share to 14.3 cents a share. Medtronic (MDT) has raised its dividend for 28 straight years. Posted by edelfenbein at 3:39 PM Diworsify Me running in slow motion. Waving my arms.... "Noooo...." "oooooooooo...." Why oh why do companies do this? Someone please tell me. Has this strategy ever worked? If people aren’t buying your crappy beer, what makes you think they’ll buy your crappy vodka? I really want to know who exactly is the target market for Budweiser Scotch? I don’t care if it’s just one guy, he needs to be severely beaten. Let’s look at Anheuser-Busch’s (BUD) situation. Earnings are down and the stock hasn’t budged in a bull market. Even for a defensive stock, shares of BUD have been slackers. The fact is that beer sales are flat. They’ve been flat for years. Brewers don’t sell more beer, they only steal market share. That’s why the advertising and branding is so intense (and moronic). In fact, a better way to think of Anheuser-Busch is not as a brew stock, but as a marketing and distributing company. That’s what they really do. (On a side note, every year in Silicon Valley, some really smart engineers get together with some really smart ideas. They meet some other really smart people who give them really smart start-up capital. But being a really smart engineer doesn’t make you a really smart businessperson. The start-ups bomb and the troubles are often due to marketing and distribution. Engineers don’t think that way. It’s amazing how dumb really smart people can be.) Selling the hard stuff won’t help any of Anheuser-Busch’s problems. It’ll probably make them worse. About 20 years ago, all the American car companies bought European luxury car companies. There was absolutely no reason for this. Within a few years, all three dumped them. Chrysler was eventually bought by a European car company. I’ll give you a great example of a company knowing how to use its brand—Harley-Davidson (HDI). Harley only makes the big bikes. They have nothing to do with the rest of the motorcycle market. Every few years someone suggests that Harley should “LEVERAGE” its “BRAND NAME,” and move into the smaller-weight market. There are lots of smart folks at Harley, and this idea has crossed their mind, but still, they never do it. Why? Because it’s not their market. They could do it They’d probably even make some money at it. But Harley’s attitude is that they aren’t like everybody else. They don’t make bikes--they make Harley’s. Bear in mind that a surprisingly large percentage of their revenue comes from clothing. Harley isn't about to start diluting that brand. Harley knows exactly what business it’s in, and so do its customers. I have nothing against diversifying into good businesses. I’ll even look at other way at a brewer owning theme parks (that’s just marketing). But don’t fool anyone by thinking that you can brand your way out of troubles. Especially, don’t fool yourself. Posted by edelfenbein at 12:48 PM Dell Focuses on Customer Service Business Week talks with Richard Hunter, the new head of Dell's customer service: How and why did Dell's service deteriorate?
Posted by edelfenbein at 11:19 AM Writing Annual Reports A University of Michigan study looks at why annual reports are hard to read (via Tyler Cowen): Apparently there's a simple reason why annual reports are hard to read: managers, in many cases, are trying to hide something. Of course, there's always this:
Posted by edelfenbein at 10:59 AM Bed Bath & Beyond Taking a Bath Shares of Bed Bath and Beyond (BBBY) are getting hammered this morning (down about -5.5%). The stock has been cut by Bear Stearns. The company’s earnings report was inline with expectations, and the guidance for this quarter was also inline. Still, the stock made fresh 52-week lows this morning. Here’s a sample negative view from an analyst: In a note to clients entitled "Q1 Could Have Been Better," UBS analyst Brian Nagel said costs weighed on the retailer. Seeking Alpha has a transcript of the conference call. The good news for us this morning is that Varian Medical (VAR) is up strongly on an analyst upgrade from Oppenheimer. Posted by edelfenbein at 10:45 AM June 21, 2006Bed Bath & Beyond Earned 35 Cents a Sahre The company matched Wall Street's expectations. Sales came in at $1.396 billion, which was also in line with forecasts. The stock is down 19 cents a share in after-hours trading. Posted by edelfenbein at 4:21 PM The First Day of Summer Rally We’re having a very good day today so far, although I could do without the leadership coming from the “hard asset” sectors like energy and basic materials. The S&P 500 is now above last Thursday’s high point. The Dow was just at 11,111, which must be some sort of sign. The Buy List is being led today by Harley-Davidson (HDI), Expeditors (EXPD) and Fiserv (FISV). FactSet (FDS) is holding on to its big gain from yesterday. I’m waiting on Bed Bath & Beyond’s (BBBY) earnings after the close. Of Wall Street’s 25 estimates, the high is 36 cents per share, the low is 35 cents per share. Just to be different, I predict—no, guarantee—37 cents per share. When earnings came out three months ago, the stock was over $40 a share. Today, it’s down to $37. Morgan Stanley (MS) is up after a strong earnings report. The brokerage has been the sick man of Wall Street. It’s trailed the rest of the industry in a furious rally for the major Wall Street brokers. David Weidner at MarketWatch notes that some smaller houses are moving in to take business from some of the big boys. Volatility continues to rise. Today looks to be the S&P 500's 12th swing of 1% or more in the past seven weeks. In the six months prior to that, there were just eight such days. Posted by edelfenbein at 2:47 PM We've Pulled Even With the Market Great news! Thanks to FactSet’s (FDS) big day yesterday, our Buy List has pulled even with the S&P 500 for the year. Woo! It took the market and me nearly six months to lose a little less than 1%. OK, I can see that you’re not terribly impressed. But let’s take a step back and look at what we can expect of the stock market (and by extension, me). Although the market likes to jump around a lot, if you look at it from a long-term perspective, the market is far more consistent than many people realize. Over the last 80 years, stocks have averaged 10.36% a year. Oh sure, stocks will plunge 50% or more even few decades, but that just comes with the territory. But if you plan to stick it out, the market is the place to be. On average, it doubles your money every seven years. That’s better than every other asset class. All of them. But I have to caution you: Over the last 25 years, us stock investors have been spoiled. The reason has to do with bonds. Think of it this way. The stock and bond markets are in a never-ending battle for your money. Whatever bonds do, stocks are very likely to mimic. Stocks and bonds don’t have a perfect relationship but they will tell you a lot. One of the things you may have noticed from my site is that I don’t worry too much about the “background noise” of Wall Street. This includes most economic reports, the national debt or almost anything about the Federal Reserve. My feeling is that as long as the bond market isn’t worried, then there’s no reason to be worried. The bond market is one of the few sources that isn’t afraid to tell you the truth. Since 1981, we’ve had a massive rally for bonds. Interest rates for long-term bonds have fallen to levels we haven’t seen in decades. And like clockwork, stocks soared. The period from 1982 to 2000 was one of the greatest bull markets in history. What’s interesting is that during that time, stocks and bonds still closely tracked each other. In fact, since 1969, stocks have beaten long-term government bonds by just 1.69% a year. That’s a pretty measly bonus you get for taking on the risk of owning stocks. Moreover, that 1.69% has been fairly consistent. If we assume that 1.69% premium will continue, with today’s 30-year bond yield of nearly 5.2%, that translates to a long-term stock market return of (let’s call it) 7% a year. So a return for six months should only average about 3.5%. I’m afraid that too many investors think that the 20%+ years of the 1990’s are the norm. They’re not. Posted by edelfenbein at 10:00 AM How Low Can It Go? I often hear people say that a particular stock is so cheap, "how much lower can it really go?" The answer is, it can go a lot lower. A stock can drop 99% and it's still not at zero. It can drop another 99%, and it's still worth something. In fact, a stock can drop 99% many, many times, and still not reach zero. Delistings don't make a lot of news, but they happen every week. Here's a graph of issuers on the NASDAQ since 2003:
Posted by edelfenbein at 6:28 AM A Stock Market in Rwanda? Not yet says a study. But wouldn't be nice to see a market there soon? Posted by edelfenbein at 6:02 AM June 20, 2006Otis Spunkmeyer Files for IPO
One of my favorites is going public. The San Leandro, California-based company said in a registration statement with the Securities and Exchange Commission that it planned to use the IPO proceeds to repay debt, to redeem Class A preferred stock and for general corporate purposes. Posted by edelfenbein at 11:01 AM Looking At Bed Bath & Beyond If you’re new to investing, Bed Bath & Beyond (BBBY) is a good stock to look at. The financials are about as straightforward as they come. No pro forma nonsense or huge “one time” charges that seem to happen every single quarter (Cendant, I’m looking at you). Here are BBBY’s financial results for the past few years:
As always, I pass the graphics savings on to you. A few things to point out. You’ll notice that there’s a bulge in the February quarters (the company’s fourth, which technically end in early March but it’s my damn table). That’s because of the holidays so it’s important to compare similar quarters. Another thing you’ll notice—and something that I place a lot of emphasis on—is the company’s consistency. Here’s a chart of BBBY’s trailing four-quarter sales.
That’s what I like to see, a nice smooth line. The red is Wall Street's estimate. Yes, someone is paid a great deal of money to draw that line out a few more points. Like a nine-year-old couldn't find a trend here. Now let’s look at the operating margins. This is important.
This impresses me a lot. Operating margin is one of the purest measures of how efficiently a company is managing its business. BBBY has been doing very well lately. That last little downtick concerns me a little. But as long as the margins don't show a severe downtrend, I'm not too worried. Few things are more painful to a company than eroding margins. Now here's the company's earnings-per-share:
Once again, we see a nice smooth line. But what isn't a smooth line is the stock chart. Shares of BBBY haven't budged in over four years. This chart pretty much sums it up:
Rising earnings and a flat stock means a plunging earnings multiple. This issue is really about risk. The stock could certainly stay flat, or even fall. Who knows...we can’t predict the future. But we can see that the company has performed very consistently, and its relative valuation is very low. That’s one of the best ways to control for risk. Earnings are due tomorrow after the market closes. Posted by edelfenbein at 10:34 AM FactSet's Earnings FactSet Research Systems (FDS) reported fiscal third-quarter earnings of 41 cents a share (including a penny a share from a tax benefit). This is good news. Wall Street was looking for 39 cents a share. The company also sees revenue for this quarter coming in between $102 million and $105 million. Wall Street was expecting $98.7 million. The stock is up in pre-market trading. Posted by edelfenbein at 9:26 AM P/E Ratio of the Hombuilders Despite making huge profits, homebuilding stocks have been pummeled lately. Check out how low some of these P/E ratios are:
This is, of course, trailing earnings. The profits are going to be a little harder to come by next year, and the year after. Homebuilding is the ultimate boom-and-bust industry--it's all about timing. Don't even think about buying a homebuilder until the last person has given up on the industry. Here's how the sector has performed over the last three years:
Posted by edelfenbein at 6:28 AM MarketWatch Goes Blogging Welcome to blogging, Herb Greenberg, Bambi Franciso and Frank Barnako. Posted by edelfenbein at 6:08 AM Hurricane Season Congratulations to the Carolina Hurricanes, the 2006 Stanley Cup Champions. Here's how the Carolina-to-win contract traded at TradeSports during Game 7. I think you can tell when the goals were scored.
Posted by edelfenbein at 6:05 AM June 19, 2006Make a Killing in the Market Today’s market-induced suicidal tendencies story brought to you courtesy of India: The sudden stock market crash has triggered severe depression among a number of investors and some have even developed suicidal tendencies, according to a noted psyschiatrist in Ahmedabad. That's strange. I get all those symptoms from listening to Garrison Keillor. Posted by edelfenbein at 3:45 PM Earnings Preview: Bed Bath & Beyond From AP: OVERVIEW: Home furnishings retailer Bed Bath & Beyond operated 742 namesake superstores as of the end of February, in addition to Christmas Tree Shops Inc., a discount home merchandise chain, and Harmon Stores Inc., a discount health and beauty retail chain. Posted by edelfenbein at 3:15 PM The Noonday Market I was all set to give this market a yellow card, but things are looking somewhat better today, at least our stocks are. My advice is, don’t be overly impressive with Thursday’s rally. It was quite nice, yes. But we gained back what we had just lost. The key is watching the behavior of long-term interest rates. Whenever long-term bonds and the stock market part company, the odds greatly increase that something big is about to happen. The best news is the energy stocks keep falling. The Dow Oil and Gas Index (^DJUSEN) is down again today. When I set the Buy List for this year, I avoided all energy stocks. I thought that the sector was overpriced. Naturally, it went even higher. If you want to beat the S&P 500, I think all an investor needs to do is stay away from basic materials and energy. I just don’t see how those prices can hold up. The Buy List is beating the broader market again today. Our biggest gainer is Fair Isaac (FIC), which is up nearly 4%. We have three earnings reports coming. FactSet (FDS) reports tomorrow. Bed Bath & Beyond (BBBY) reports on Wednesday, and Biomet (BMET) comes the Wednesday after. And don’t forget that Expeditors (EXPD) will be splitting 2-for-1 soon. I think Bed Bath & Beyond is very a good buy right (full disclosure, I do own it). The Street’s current earnings estimate is for 35 cents a share, which the company will almost certainly beat. One small side note, since BBBY does a large percentage of its business during the holidays, the company ends its fiscal year in February (hence the unusual reporting date). This earnings report will be for its first quarter, so the totals will be a lot less than it had for the fourth quarter. Nothing is wrong, that's perfectly normal for them. The stock is trading at less than 17 times this year’s earnings. Plus, I wouldn’t be surprised to see the company guide higher after the earnings report. Posted by edelfenbein at 11:32 AM Nestle to Buy Jenny Craig Despite the conflict of interest, Nestle SA is buying Jenny Craig for about $600 million. One company wants to make you fat, the other tries to make you thin. Interesting synergy there. Based in Switzerland, Nestle is the largest food company in the world. This is an interesting move for Nestle. The weight-loss market is huge. Stocks like NutriSystem (NTRI) and Medifast (MED) have been some of the best-performing stocks of the past few years. NutriSystem's stock was up over 1,160% last year. Also, the owners of Jenny Craig will make a killing. The company was bought by private equity firms in 2002 for $115 million. That's a profit of over 400% in four years. Posted by edelfenbein at 9:19 AM June 16, 2006Profiting From Deflation For all the talk we hear about inflation, Charles Schwab (SCHW) has seen its profits explode even as it has cut its prices. Actually, the company hasn't merely cut its prices, it has repeatedly hacked them. Still, Schwab will make more money this year than it did at the height of the tech bubble. Now Schwab has announced yet another round of price cuts: The company's comeback coincided with a decision two years ago to dismantle a maze of higher prices and new fees imposed to recoup some of the revenue that evaporated as investors made fewer stock trades.
Posted by edelfenbein at 3:58 PM Happy Birthday Smoot-Hawley! Tomorrow is the 76th birthday of the Smoot-Hawley Tariff. President Hoover signed the bill into law on June 17, 1930. The president ignored the pleas of over 1,000 economists urging him not to sign the tariff. By the way, today is the 76th anniversary of the stock market crashing 8%--one of the worst days in history. I wonder if there’s some sort of connection. Incidentally, also on this day in 1930, the Braves traded veteran spitballer Burleigh Grimes to the St. Louis Cardinals. At the time, the Cards were in fourth place, but Grimes’ pitching helped them rally to win the pennant. His name lives on in the form of a widely panned musical comedy about the stock market. Posted by edelfenbein at 10:45 AM Fair Isaac Cutting 200 Jobs I'm usually wary of a press release which announces a new cost-cutting initiative. A well-run company should always be looking to cut costs. There's nothing new about it, it just is. But the truth is, these announcements work, meaning it moves the stocks. This morning, it's Fair Isaac's (FIC) turn: Fair Isaac Corp., which develops credit scoring systems, said Thursday it will cut 200 jobs as part of its restructuring plan, reducing annual costs by $24 million. The stock is up about 3% this morning. Posted by edelfenbein at 10:00 AM June 15, 2006The Best Day Since 2003 The market broke its streak of 987 straight days without a daily swing of 2% or more. Today, the S&P 500 (^GSPC) gained 26.12 points, or 2.12%. The last 2%-er came on October 1, 2003 when the S&P 500 gained 2.23%. By the way, 987 is a Fibonacci number. (Spooky!) Posted by edelfenbein at 4:42 PM The Noonday Market The market is building on yesterday’s late-day surge. So far, it’s the cyclicals leading the charge. The Morgan Stanley Cyclical Index (^CYC) is up 1.87%. Dow Jones tracks 100 industry groups, right now, 94 are higher. The energy and materials sectors are doing the best. Gold is higher today. The metal fell late yesterday even after Tuesday’s big plunge. This morning, the Labor Department said that unemployment claims dropped to 295,000 last week. That’s the lowest level in four months. Speaking of employment, McKinsey says that the jobless rate in Sweden is 15%, nearly three times the government’s estimate. Wow. In the debt market, once again we have a split day. Yields at the long end of the yield curve are higher, while short-term rates are slightly lower. Once you get past maturities of five years, the yield curve is pretty darn flat. I’ll have to give Bear Stearns (BSC) the award for best broker earnings of the week. The company earned $3.72 a share, 60 cents more than estimates. Both Goldman (GS) and Lehman (LEH) reported good earnings earlier this week, but it didn’t help their stocks. There was some good news yesterday for Harley-Davidson (HDI), one of our Buy List stocks. Anthony Gikas, the analyst at Piper Jaffray, polled 30 Harley dealers and 28 said that business is meeting or exceeding expectations. The stock is trading at less than 13 times next year’s earnings. Also, the New York Times talked with Kevin Rollins at Dell (DELL). Oh, and thanks to everyone who wrote in to complain about my World Cup bashing. Interestingly, approximately 98.4% of you mentioned baseball. So I have to admit, yesterday’s Saudi-Tunisia game was very good. The Germany-Poland game was also good except for the German's late goal. I was really hoping to see the Poles walk away with a tie. Two quick headlines to note. First, this one made me giggle. The other is from the New York Post on Dick Grasso taking the fifth 168 times, "Grasso Pass-o." You gotta love the NYP for its headlines. Posted by edelfenbein at 11:53 AM Google To Buy Googleplex
Google (GOOG) is forking over $319 million to buy the Googleplex. The previous owner was Silicon Graphics (remember them?). Here's what the Googleplex looks like from 1,600 feet (via Google Earth). The New York Times reports that Google is building a massive double top-secret facility in The Dalles, Oregon. The fact that Google is behind the data center, referred to locally as Project 02, has been reported in the local press. But many officials in The Dalles, including the city attorney and the city manager, said they could not comment on the project because they signed confidentiality agreements with Google last year. I won't say that I'm worried, but it does remind me of this. Posted by edelfenbein at 7:36 AM A Funny Story Out of Japan Wanna hear a funny story? There’s this guy in Japan named Yoshiaki Murakami. (Wait, it gets better.) He’s a legend in the Japanese mutual fund industry. To some people, he’s like a folk hero. The reason for his popularity is that he stands up for shareholders, and let’s just say that that’s not too "groovy" among the Japanese financial elite (it’s too...American). But now Murakami is in serious hot water. Apparently, he heard from some guys at an Internet company called Livedoor that they wanted to buy a company called Nippon Broadcasting. Actually, Murakami didn’t think they were serious, but he already owned lots of Nippon, and he bought even more. Well, the Livedoor guys were serious, and they went after Nippon. The fight turned ugly and Livedoor lost. But the stock soared and Murakami sold his stake to Livedoor making a huge profit. That’s pretty smart business, except for a minor problem—it’s against the law. Now Murakami has been arrested for insider trading. This is a HUGE deal in Japan. It would be like the Feds busting Jim Cramer on live TV. But now, it’s gotten even weirder. It turns out that a guy named Toshihiko Fukui invested 10 million yen with Murakami. Oh, did I mention that he’s the head of the Bank of Japan? So not only has Cramer been arrested on live TV, but he’s managing Bernanke’s money! That’s what we’re talking about. Some people are now demanding Fukui’s resignation. The Japanese market just had its biggest one-day plunge since 9/11. Come to think of it, the story really isn’t that funny. The side story is that the Japanese economy is actually doing well for the first time in years. Fukui has hinted that he might lift interest rates from their current level of 0%. He just balked at an increase, but it's coming soon. This scandal might actually have an impact on what the BOJ does. Posted by edelfenbein at 7:12 AM The Argument Sketch
The "Argument Sketch" from Monty Python This is from CNBC yesterday. The video is about nine minutes long (after a brief Ford commercial). I don't even know how to describe it. Joe Kernan is moderating an inflation "debate" between Diane Swonk of Mesirow Financial and Peter Schiff of Euro Pacific Capital. Posted by edelfenbein at 6:53 AM The Mark of the Bust Martin Mayer on the fate of the dollar: What we have to watch out for is a sudden and drastic increase in foreign official holdings. Rapid growth in this number in the late 1960's and 1970's forecast the recessions of the early 1970's and 1980's, and it could happen again. Posted by edelfenbein at 6:48 AM June 14, 2006The Flat Yield Curve
For all the talk about commodities, bear in mind that the most important commodity that's traded in the markets is risk. The thing about risk is that it mysteriously floats around in different market, but it's always there. Risk isn't so easy to see in the equity market, but it's very obvious in the yield curve. The chart above is a a good example of the effect that the stock market has on the bond market, and vice versa. In March and April, the long-end of the yield curve was flat. But as the risky stock sectors rallied, the yield started to curve again. Now that money is leaving risky areas of the equity markets, the yield curve is flattening again. The same thing is going on, just expressed in different languages. Posted by edelfenbein at 2:47 PM Today's CPI Report The government reported that consumer inflation rose by 0.4% last monht, and the "core rate" rose 0.3%. This pretty much gurantees that the Fed will raise rates in two weeks. Over the last twelve months, the CPI has risen by 4.2% and the core rate is up 2.4%. Here's what inflation has looked like since 1983:
Posted by edelfenbein at 12:21 PM Gold's Worst Day in 15 Years To quote Bud Fox quoting Sun-tzu: If your enemy is superior, evade him. If angry, irritate him. If equally matched, fight, and if not split and reevaluate. This here's the splittin' and now we're reevaluatin':
Sorry to run this hideous chart again, but it's the best way to show yesterday's breakdown in gold. The metal hasn't dropped like this since the air war began in the First Gulf War. That time, however, the stock market soared. This time, it sank. Here's a thought: Maybe Sptizer went after the wrong guys. If only he had looked in the commodity pits. Which is crazier, the Nasdaq at 5000 or gold at $730? Of course, you can't frogmarch a rock, Buddy boy. Posted by edelfenbein at 7:04 AM June 13, 2006World Wrestling Profit Falls 35% From AP: For the quarter ended April 30, the company reported net income of $10.6 million, or 15 cents per share, compared with profits of $16.1 million, or 23 cents per share, a year ago. Revenue declined to $114.3 million from $118.3 million in the year earlier period. I blame Mark Henry Posted by edelfenbein at 4:13 PM More Goals Please I'm watching the World Cup game between France and Switzerland. It looks like it's headed to a 0-0 tie. This will be the second 0-0 tie in this year's tournament. I'm sorry, but there needs to be more scoring. I'm an America. We need action. Someone needs to be scoring, or at least inflicting pain, to keep our attention. That's just how we are. In the 13 games so far, there have been just 30 goals. That's a little over two a game, or one every 45 minutes. Teams that have scored one goal are 3-4. There's only been one come-from-behind victory (the South Koreans 2-1 over Togo). The only game that came close to an offensive explosion was Germany's 4-2 win over Costa Rica. I suggest a few rule changes (downs, set plays, use of hands, cheerleaders). Every sport in the world could benefit from more end zone celebrations. OK, now the Brazilians are set to play. I'm expecting them to pound Croatia. They need this win. EWZ is down 34% in a month. Posted by edelfenbein at 1:36 PM The Last Seven Months
The index bounced off 1230 this morning. Posted by edelfenbein at 11:27 AM Goldman's Earnings Goldman Sachs (GS) had even more impressive earnings than Lehman Brothers (LEH), but like Lehman, the stock is down. Don't miss John Carney at DealBreaker blogging the GS conference call. Also, we know that Blankfein will replace Paulson, Charlie Gasparino looks at who will take Blankfein's place. Posted by edelfenbein at 11:13 AM Dissecting the Bear
Since May 5, the S&P 500's market value has fallen by $807 billion. That's a nice chunk of change. Percentage-wise, it comes to -6.74%. What's interesting to note is that since the stock market peaked, long-term interest rates have actually declined. Gold is down by $100 an ounce. This is not a market worried about inflation. If we use some reasonable assumptions, in just five weeks, the market has become convinced that around $50 billion of next year's corporate profits will not materialize. The Big Bad Bear, however, hasn’t treated everyone equally. Here’s the performance of the 10 industry sectors since May 5: Utilities....................+0.78% Two observations. First, it's almost the mirror image of the market before May 5. The other is that it’s a pretty wide gap. The bottom three groups, combined, make up just 27% of the S&P 500’s value, but have contributed more than half the losses. The rest of the market has suffered nary a scratch. So is this a major turning point? A new period of leadership for defensive stocks? It's hard to say. These turning points don't make their appearances widely known. Afterall, the energy stocks have been outperforming the S&P 500 for over seven years, and materials stocks have been ahead of the index for nearly six years. The trends last a long time. The two major defensive sectors, staples and health care, have been almost completely ignored by the bull market. Since mid-October 2002, the health care sector is up 7.2% and staples are up 10.9%, while the S&P 500 has grown by 38%. A month ago, the market was beginning to think that the Fed would hold off raising rates at the end of June. But now, it's convinced that another rate hike is coming. Interestingly, the yield on the 30-year T-bond now closely follows the price of oil. The correlation is up to 80%, which is a 15-year high. Today, the PPI report showed that wholesale prices rose 0.2% in May. The core rate was up 0.3%, slightly above expectations of a 0.2% increase. Gold is below $600 an ounce, and copper has lost 13% in the last four days. While the market is somewhat concerned about inflation, the main reason for the correction is a growing concern about the health of the economy. Posted by edelfenbein at 7:28 AM Crossing Broadway
Burleigh Grimes, a musical comedy about Wall Street, opens today off Broadway. The show features music from (the very brillant) David Yazbek and stars Wendie Malick (Nina from Just Shoot Me), Mark Moses (Paul Young from Desperate Housewives) and James Badge Dale (Chase Edmunds from 24) Set in a world where no bad deed goes unrewarded, BURLEIGH GRIME$ follows George Radbourn (James Badge Dale), a Wall Street newbie who doesn't recognize that his mentor, Burleigh Grimes (Mark Moses), may not be entirely sincere in appearance or agenda. A hard-driving stock market force, Grimes is a relentless man of infinite calculation, further assisted in his financial schemes by media powerhouse Elizabeth Bigley (Wendie Malick). That's not all. Guess who else shows up? The production also features a series of specially scripted guest video cameos by Jim Cramer, host of CNBC's "Mad Money." And here I was worried that Cramer was going to go Hollywood! Burleigh Grimes is playing at New World Stages/Stage 3, 340 West 50th Street, between 8th and 9th Avenues. Posted by edelfenbein at 7:18 AM Penny Stock Buyer Winds up CEO A penny-stock investor's unusual path to the CEO's office. Posted by edelfenbein at 6:26 AM June 12, 2006The NYT vs. Math A recent New York Times article makes a big deal about the one-week falloff of the Dow. Robert Ferguson, a newbie blogger, shows that it's really no big deal (warning: math ahead): Roughly, the DJI has a mean weekly return of about zero. Its annual standard deviation of return is about 15%, more or less. Assuming weekly returns are independent as an approximation, a 15% annual volatility corresponds to a 2.08% weekly volatility. A weekly return of -3.2% is only 1.54 standard deviations from the mean. Posted by edelfenbein at 9:48 PM Dead Cat Splat
We've given it all back. The Nasdaq is now below its low from last week, and is at its lowest point since October. This is the seventh straight down day for the index. Lehman Brothers (LEH) is down 6% today. Posted by edelfenbein at 3:47 PM S&P Share Buybacks Surge in 1Q From AP: NEW YORK — Share buybacks among companies in the Standard & Poor's 500 climbed over 22 percent in the first three months of this year versus the prior-year period, a trend that boosted their first-quarter earnings per share by roughly 4 percent, Standard & Poor's said Monday. Posted by edelfenbein at 1:43 PM The Best-Selling Business Books The top 20 according to Amazon: Freakonomics : A Rogue Economist Explores the Hidden Side of The Tipping Point: How Little Things Can Make a Big Difference Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! Blink : The Power of Thinking Without Thinking Good to Great: Why Some Companies Make the Leap... and Others Don't Jim Cramer's Real Money: Sane Investing in an Insane World Never Cold Call Again : Achieve Sales Greatness Without Cold Calling How to Win Friends & Influence People The Official Guide for GMAT Review, 11th Edition The Official SAT Study Guide Now, Discover Your Strengths Rich Dad's Advisors: The ABC's of Real Estate Investing : The Secrets of Finding Hidden Profits Most Investors Miss Getting Things Done : The Art of Stress-Free Productivity Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth Cashflow Quadrant: Rich Dad's Guide to Financial Freedom Revolutionary Wealth Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not! The Five Dysfunctions of a Team: A Leadership Fable Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and in Your Life The Little Book That Beats the Market Posted by edelfenbein at 12:17 PM The North Korean Fund Thanks, I'll pass. London-based Chosun Development & Investment Fund LP is trying to raise US$50 million (euro40 million) to exploit, as it says on its Web site, "opportunities in the Democratic People's Republic of Korea...one of the last frontiers of global investing." It claims to be the first such fund dedicated to investing in North Korea. A few years ago, the North Koreans had a bond offering which offered zero interest and--I'm not making this up--an "expression of affection" from the government. I proposed a counter offer of an "expression of affection," and I raised them "a laurel and hearty handshake." I never heard back. When the bonds come due in ten years, there will be a lottery and the winner will get some interest. By the way, Kim Il-sung is the official President of North Korea despite dying 12 years ago. Posted by edelfenbein at 11:52 AM Moral Hazard Interruptus Pimco's Paul McCulley on moral hazards and central banking. The great Hyman Minsky famously declared that stability is de-stabilizing. The experience of recent years reinforces the truth of that proposition, particularly when stability is bought with moral hazard. A little moral hazard is, to be sure, a necessary lubricant for global capitalism. And a little more than a little is the only path to cutting off fat-tailed deflationary risks. But way too much is not, in the words of Mae West, just about right. As they say, read the whole thing. Posted by edelfenbein at 11:48 AM Lehman's Profits Up 48% The company earned $1.69 a share, nine cents more than estimates. Posted by edelfenbein at 9:19 AM Carrie Rings the Opening Bell
Posted by edelfenbein at 7:10 AM The Golden Bear In less than one month, gold has dropped over $110 an ounce. Here's the contract for June delivery:
The XAU (^XAU), which is an index of 15 miners, is off nearly 24%. Posted by edelfenbein at 6:38 AM Lehman's Earnings Tired of being one-upped by Goldman (GS), Lehman Brothers (LEH) is reporting its earnings Monday before the bell. Here's a preview: OVERVIEW: The New York-based securities firm has spent the past few years expanding its reach globally, and has since captured a larger share of merger and acquisitions advisory deals. Like others in the industry, Lehman has also seen record profits during the past 12 months _ leaning on a stronger performance of its equity capital markets business in both the U.S. and abroad, and has made inroads in the prime brokerage business. Here's how the Big 5 have done since October 2002:
Not bad. One of the reasons why brokerage firms have been so profitable: Outsourcing. By looking at the chart, you can see why there was a shareholder revolt at Morgan (MS), aka the blue line. Lehman has definitely been the top-performer, even though its stock is off about 16%. Posted by edelfenbein at 6:22 AM June 11, 2006Fun with the SEC Search Function I noticed this too but wasn't going to post it. Since Paul Kedrosky did, I guess that makes it okay (his has a Ph.D, people). It also shows you where our minds are. In any event, Alex Kintner's mother makes a rather unexpected appearance in an SEC filing: RESOLVED, a description of such 6% Non-cumulative Perpetual Preferred Stock, Series E, including the preferences and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions for redemption, all as set by the Board of Direc you fucking new when i asked you liartors of the Corporation, is set forth in the attached Certificate of Designation Establishing the 6% Non-cumulative Perpetual Preferred Stock, Series E and Fixing the Powers, Designations, Preferences and Relative, Participating, Optional and Other Special Rights, and the Qualifications, Limitations and Restrictions, of the 6% Non-cumulative Perpetual Preferred Stock, Series E. That's exactly how the text appears. I blame the cut-and-paste fuction. This is why I write all my letters to the editor in longhand. I have to admit that I'm dying to know the back story here. Posted by edelfenbein at 10:08 PM Best Credit Card Ever At least, according to this guy. Posted by edelfenbein at 9:42 PM Submerging Markets Since the second week of May, emerging markets are down 16%. The Economist takes a closer look: Emerging economies have been strikingly successful in raising equity finance in the form of foreign direct investment, which accounted for almost half of the private capital they imported in 2005. They have also attracted the attentions of private-equity firms in recent years. But their record in wooing portfolio investors, who want to buy shares not companies, has been patchy. Foreign punters flirted with local stockmarkets in the year before the Asian financial crisis, for example, but were then embarrassed by the losses they incurred. As one money manager put it, "We did not go very deep, and we did not stay very long." Posted by edelfenbein at 7:23 AM June 10, 2006A Look at the Long-Term In this week's Barron's, Mike Santoli looks at the long-term cycles of the Dow. The really long-term. Here's the chart from Rydex:
You can see that there are several long cycles to the Dow (flat, up, flat, up, flat, up). This chart is a favorite of Barry Ritholtz's, and he even has his own, and I think, better version. There's an important lesson here: Investors need to have long time horizons. There have been long periods where the markets have been flat. I'm glad I wasn't a professional investor in the 1930s or 1970s. However, I don't think all hope is lost. Here's a chart of the total return of the market since 1925 (data is from Ibbotson). The blue line is the market. The two black lines are upper and lower trend lines, and the red line is a "best fits" trend line.
Unlike the Rydex chart, this includes dividends. That makes a big difference. It's also much broader than the Dow 30. Keep in mind that if the editors at Dow Jones hadn't have taken IBM out the index in 1939, the Dow would have broken 1,000 in 1961 instead of 1972. The Dow underperformed the rest of the market for decades. Even after all the pain of the last six years, the Wilshire 5000 Total Return Index (^DWCT) came within inches of a new all-time high just a few weeks ago. Bottom line: I think we're sitting in the dead center of the long-term trend. Update: Sam Stovall at S&P lists what he calls "bull market corrections" since 1970. Posted by edelfenbein at 6:21 PM Shariah-Grade Investing Ganesh Sahathevan looks at the growth--and abuse--of Islamic financing in Malaysia. Posted by edelfenbein at 3:47 PM There Will Always Be an England The New Yorker used to say, "There will always be an England." I thought of that as I read the opening paragraph of the Times' coverage of England's 1-0 World Cup win over Paraguay: Seventy sunny, soporific minutes had elapsed when Frankfurt resonated to the sound of 40,000 anglo-saxon voices chanting Wayne Rooney’s name, and how England need their convalascent talisman. With Michael Owen out of sorts and substituted, it took an own-goal by Paraguay’s captain, Carlos Gamarra, to prevent the opening match in the World Cup from becoming yet another false start. Beautiful. Posted by edelfenbein at 3:29 PM That's So Gross Daniel Gross makes good on his promise to eat Dow 36,000. Good for him for being a good sport (and taking a lot of ribbing from me). Posted by edelfenbein at 3:20 PM June 9, 2006I've Got World Cup-Mania! I’m going to get an early start to the weekend, so I won’t be posting much today. But don’t feel lonely, the folks on my blogroll will keep you company. Here are a few quick items to note. Only three stocks from the Buy List will be reporting earnings in June. These are the weird stocks that end the quarter in May. The three stocks are FactSet Research Systems (FDS), Bed Bath & Beyond (BBBY) and Biomet (BMET). FactSet will report on June 20, BBBY on June 21 and Biomet on June 28. Also, Expeditors (EXPD) will split 2-for-1 later this month, so don’t freak when you see the lower share price. The big economic news next week will be the CPI and PPI. Steve Leisman is already working on his flip charts. I can feel the excitement. Also, much of Wall Street itself reports earnings; Lehman (LEH) on Monday, Goldman (GS) on Tuesday and Bear Stearns (BSC) on Thursday. Speaking of Goldman, you can see their rating on any stock here. Assuming they cover it. The New York Times covers Hedge Stock (don't ask). Carl Bialik, the Numbers Guy, looks at the Ethanol debate. The long-end of the yield curve has become almost completely flat. The yield on the 30-year is close to falling below 5% for the first time in two months. The hard assets stocks have been getting creamed lately. Alcoa (AA), a Dow component (why), is down 17% in the last month. The World Cup gets started today. Germany plays Costa Rica and Ecuador takes on Poland. America’s first game is on Monday against the Czech Republic, which is probably somewhere in Europe. Have a fabo weekend, everyone! L8RZ! Posted by edelfenbein at 9:09 AM June 8, 2006Intel to sell Dialogic Unit I'm amazed at the decline of Intel (INTC). The stock hit yet another 52-week low today--$17.05. Imagine if someone told you ten years ago that Intel's stock would slightly underperform the market over the coming decade. (It's true). EE Times reports that the company is looking to sell its Dialogic unit (via F**ked Company). Posted by edelfenbein at 3:05 PM Stalk Your Broker At the NASD's Web site, you can check the background of your stock broker. To look up a particular broker, you have to click "Agree" to a lot of legal mumbo jumbo, which includes not making the info public. So if you want to look up, say, Yevgeny Mihailovich Plotkin of Goldman Sachs, you'll have to do it yourself. Posted by edelfenbein at 11:56 AM Look Out Below! The market is plunging this morning. The S&P 500 just lost all of its gains for the year. The index fell below 1240 to reach its lowest point in six months. Posted by edelfenbein at 11:39 AM Abu Musab al-Zarqawi Is No More This probably won't be enough to lift the stock market. Ticker Sense notes that the blip the market got from Saddam's capture was very short-lived. Here's something interesting I noticed. Look at how strongly the Oil Services HOLDRs ETF (OIH) is correlated with the iShares Brazil ETF (EWZ):
Posted by edelfenbein at 9:37 AM From 1999 Smart Money's Ten Stocks for the Next Decade: Inktomi (INKT) Posted by edelfenbein at 8:29 AM Soccer and the Stock Market The key to being a graduate student in finance is to compare any variable you can think of to the stock market. Since the World Cup starts tomorrow, I thought I'd show you results of a Dartmouth study comparing soccer matches to a nation's stock market: Stock markets move with soccer scores because they have a "decisive impact" on the mood of a nation, according to a study by Dartmouth College. Here's the entire paper. Posted by edelfenbein at 7:16 AM June 7, 2006Survey: iPods More Popular Than Beer Damn. SAN JOSE, Calif. - Move over Bud. College life isn't just about drinking beer. Posted by edelfenbein at 8:47 PM Harley-Davidson Shares Rise on Note From AP: NEW YORK (AP) - Shares of Harley-Davidson Inc. rose Wednesday after an analyst issued a report saying the motorcycle manufacturer's spring sales may be up more than expected. Posted by edelfenbein at 4:12 PM Free Money!
One of the cases often made by market bears is that the economic recovery, such as it is, is largely illusionary, thanks to lots of cheap money and inflated real estate prices. There's certainly a lot of truth to that, although I think too many bears overstate the case. But they're exactly rights about loose money. The chart above shows a good historical perspective. It charts the growth of an investment in Treasury Bills, adjusted for inflation, since 1953. In other words, real short-term interest rates. Over the long-term, real rates are rather puny--about 1.2% to 1.4% a year. The problem with inflation is "some" begets "more," and it can easily spiral out of control. If the cost of borrowing falls below inflation, then borrowers are being paid to borrow money. That's what happened in the 70's and you can see that the blue line headed down. In other words, real rates were less than 0%. What's interesting about this chart is that in the 80's, the line appeared to revert to its long-term trend. But the trend was snapped again four years ago. I was shocked to see how much of a departure from history the last four years have been. Real short rates have been running about -1% a year since 2002. The chart (based on Ibbotson numbers) runs through December 2005, although it looks like rates have stayed negative this year as well. For the first four months of 2006, the CPI (which may be understated) is up about 2.4%, or 7.3% annualized. Since January, the three-month Treasury yield has climbed from 4% to 4.7%. Posted by edelfenbein at 11:36 AM A Response to StockLemon.com It certainly took them long enough. Here's American Renaissance Homes' response to yesterday's allegations. Home Solutions of America (HOM) is rallying today. Posted by edelfenbein at 10:21 AM Save the Penny Greg Mankiw and Tyler Cowen think we ought to get rid of the penny. I'm not so sure. Despite any economic rationalizations, people are weirdly loyal to their currencies. Proper British gentlemen would never dream of conducting their racehorse business in anything but guineas. (I mean...really.) Did I mention that the last guinea was minted 193 years ago? See here for an example. Posted by edelfenbein at 10:02 AM Jim Stack: Recession Dead Ahead I don't always agree with Jim Stack, but he's certainly someone worth listening to. Here's his bearish outlook in the latest Forbes: Slowly and methodically, the forces have been moving us toward an imminent recession. These cyclical forces include commodity inflation, which on a long-term basis is at the highest level since the 1970s. But they also extend deeper-- into the monetary forces and even consumer psychology behind the economic expansion. Posted by edelfenbein at 8:32 AM Tap Your Inner Blankfein Are you interested in working for the Goldman Sachs? Well, of course you are! But you're not sure where you fit in? No problemo...just take Goldman's handy "Where do I fit in?" quiz. (Um...did anyone else get "shiftless blogger"?) :o( Posted by edelfenbein at 8:20 AM Google and Its Principles January 5, 2006: Crossing Wall Street One of the wonders of Google is the way they’ve been able to have Wall Street eat out of their hand at the same time the company slams the financial establishment. I’ve always felt that Google’s unconventionality was a bit affected. They seem to relish the role of outsider too much. June 6, 2006: Brin Says Google Compromised Principles Google Inc. co-founder Sergey Brin acknowledged Tuesday the dominant Internet company has compromised its principles by accommodating Chinese censorship demands. He said Google is wrestling to make the deal work before deciding whether to reverse course. Posted by edelfenbein at 7:32 AM Student Will 'Fess to $cam From (where else?) the NY Post: An NYU student who masqueraded as royalty to orchestrate multimillion-dollar check-kiting and hedge-fund scams in Connecticut is expected to cop to his crimes today, sources said. New York has the whole story in "Mommy's Little Con Man." Posted by edelfenbein at 7:04 AM June 6, 2006The Bull Market By Sectors Here's a colorful chart. This is the relative strength of the 10 major industry sectors since the bull market began in March 2003:
The defensive groups (staples and health care) have lagged. Also, tech hasn't done that well in the last two-and-a-half years. Except for energy, I think it's interesting how close together all the other sectors are. Posted by edelfenbein at 2:06 PM Women lowering voices to raise salary From UPI: British researchers say career-driven women are lowering the pitch of their voices to get ahead in the workplace. Posted by edelfenbein at 1:51 PM A 17th Rate Increase This is what yesterday was all about:
After being on the fence, the July futures contract now believes that a 17th straight rate increase is very likely at the Fed meeting later this month. Posted by edelfenbein at 1:26 PM Fibonacci on the Stock Market Over the weekend, I saw the Da Vinci Code. Since I’m the only person in the world left who hasn’t read the book, I felt a certain duty to see the film. The movie is OK, but a bit long. The plot revolves around several hidden messages buried in the works of Leonardo Da Vinci. Think “Paul is Dead” goes Gnostic. I noticed that Fibonacci numbers make a brief appearance in the film. If you’re not familiar with Fibonacci numbers, there are many people in modern finance who take them very seriously. There’s even an entire school of thought that believes that the stock market is a giant code and Fibonacci numbers are the decoding mechanism. I wish I were making this up. Fibonacci numbers are named for Leonardo of Pisa (aka Fibonacci), a 13th century mathematician. The idea behind the sequence is actually quite simple: Start with 0 and 1, then add the two preceding numbers and keep going. So the sequence goes as follows: 0,1,1,2,3,5,8,13,21,34,55,89,144…. The sequence shows up in nature, and it has some interesting characteristics. For example, if you divide two consecutive Fibonacci (the larger by the smaller), the result converges in on the Golden Ratio (roughly 1.618). The ancient Greeks were way into this ratio. They believed that ratios and proportions were keys to understanding the natural world. The golden ratio shows up in the Parthenon and even one of the Socratic dialogues. Skip ahead a few thousands years to the 1930’s. An accountant named Ralph Nelson Elliott developed a theory of technical analysis based on the Fibonacci sequence. I won’t go into the details of the Elliott Wave Theory. There’s already plenty of material out there. Plus, there are many competing schools of thought, and I’d hate to get in the middle of a doctrinal war. But I’ll give you an example of how the Fibonacci sequence (supposedly) shows up in the stock market. The Elliott Wavers note that it’s 55 years from 1932 (the ultimate low point) to 1987, which is also 13 years after the 1974 low, 21 years after the 1966 high and five years after the 1982 low. Fibonacci numbers all. Did that just blow your fucking mind? The stock market most recently topped in 2000, 13 years after 1987 and 34 years after 1966. Once again, the Fibonacci numbers are there. I think this means that 2008 will be trouble, but I’m not sure. Sometimes this stuff gets to be like Nostradamus. I can’t make heads of tails of it. Obviously, this is quackery, but like I said, some people take it very seriously. Of course, if some people believe it and act on it, could we then say that it has some merit? Nah. Posted by edelfenbein at 1:11 PM Home Solutions of America Down 34% Home Solutions of America (HOM) is crashing today. The cause is an alert from Stocklemon.com (I LOVE that name). Apparently, Home Solutions has been doing some naughty things: Just two short weeks ago, Home Solutions of America (AMEX:HOM) was hitting new highs. On the cusp of the new hurricane season, the market was searching for the next great “hurricane story” stock. That was the precise moment when insiders of HOM were selling their positions in large quantities. On May 23, the company put out a press release with the headline:
I copied and pasted the whole thing, but you really have to visit the Web site to see all the colors and bolding. Nothing says moral outrage like 22 point red font. So far the mainstream media hasn't said anything (pussies). During yesterday's Lightening Round, Cramer finally hung up on a guy who was taking forever to ask a question about Home Solutions. Here's StockLemon's take on HOM from Friday. ***Update: HOM responds: DALLAS--(BUSINESS WIRE)--June 6, 2006--Home Solutions, a provider of recovery, restoration and rebuilding/remodeling services, commented today on its relationship with American Renaissance Homes (ARH), a provider of affordable housing. On May 23rd, the Company announced through a press release that it had been awarded a contract by ARH. The Company has assumed, for purposes of its 2006 business outlook, that this relationship will generate $5 million in revenue, largely in the fourth quarter, representing a small portion of its 2006 financial guidance of revenue of $160 million to $165 million as ARH is a start-up company. In addition, Home Solutions has entered into an agreement with ARH, under which it would loan up to $800,000, upon ARH meeting certain performance criteria, to support ARH's working capital requirements, secured by ARH's ownership in modular homes and land. The parties have been in discussions regarding Home Solutions taking an ownership position in the Company, but no agreement has been consummated and Home Solutions does not, at the present time, have an ownership stake in ARH. A year ago, the stock was going for just over $1 a share. Two weeks ago, it broke $14. Posted by edelfenbein at 11:56 AM June 5, 2006More Volatility I keep having to update this statistic: Since May 11, the S&P 500 has had five daily falls of greater than 1.1%. In the six months before that, it had one. Today, the Dow Jones Oil & Gas Index (^DJUSEN) was down over 3%. Posted by edelfenbein at 5:56 PM Homebuilders This Decade Here's how the Dow Jones Home Construction Index (^DJUSHB) has done since the beginning of the decade:
The sector is down about 25% since April 5. Posted by edelfenbein at 3:14 PM Easily Pronounced Stocks An academic study finds that easily pronounced stocks do better (via the Kirk Report.) One explanation might be that bigger companies simply have more marketing people to dream up a catchy title, or certain business sectors may naturally tend towards simpler, more pronounceable names. But after a thorough statistical analysis, the psychologists concluded that there was no link between a company's type or size and its stock performance. Posted by edelfenbein at 3:04 PM Severance Furniture? From Michelle Leder at Footnoted.org: Here at footnoted.org, we’ve seen all sorts of strange severance agreements from a plane to a Porsche. But the severance package outlined in this agreement filed by Manntech (MTEX) late Friday is definitely one of the stranger ones. Posted by edelfenbein at 12:37 PM The Refinery Oligopoly Here’s James Surowiecki on oil refineries in the latest New Yorker: In a normal marketplace, of course, high prices and profits would drive companies to expand, in an attempt to capture more of the market, or else new players would emerge, hoping to outmaneuver a risk-averse establishment. But the refining industry isn’t a normal marketplace. For one thing, refineries are huge investments—a new one costs at least two billion dollars—and they take a long time to open. This means that although refiners might make more money by opening new facilities and thus serving more customers, they’d rather take the sure money than gamble. It also means it’s hard for new competitors to raise enough capital to enter the market at all. Posted by edelfenbein at 12:13 PM The Fall of the Dollar This chart says it all:
Posted by edelfenbein at 11:57 AM Introducing Condé Nast Portfolio We knew that Conde Nast was coming out with a new business magazine. We knew that Joanne Lipman was going to be the editor in chief. What we didn’t know was the magazine’s name. It was a battle between Quote and Portfolio. Portfolio won. Joanne Lipman, the magazine's editor in chief, said she liked the name because it conveyed several meanings: a corporate portfolio of brands, a personal financial portfolio and a collection of one's best artwork. The first issue is due out next year. Their Web site is www.cnportfolio.com. Gawker, naturally, has more. Posted by edelfenbein at 11:30 AM Danaher CEO raises low end of Q2 profit outlook Diversified manufacturer Danaher Corp. expects to report second-quarter earnings of 75 cents a share to 78 cents a share excluding items, President and Chief Executive Officer Lawrence Culp said in a statement on Monday. Posted by edelfenbein at 9:53 AM Meriwether to Get Lifetime Achievement Award This has got to be a joke. John Meriwether, the former head of Long Term Capital Management, is getting the Alternative Investment News' 2006 Lifetime Achievement Award. Let's skip over the fact that someone is giving out lifetime achievement awards for hedge fund managers, but John Meriwether??? This clown not only saw his fund blow up, but nearly took down the global financial system while doing it. That's an achievement alright. Posted by edelfenbein at 7:20 AM More on the P/E Ratio Barry Ritholtz was kind enough to link to my post about the P/E ratio of the S&P 500 hitting a 10-year low. I have to confess that I wasn’t trying to make a bullish call for stocks. I was simply pointing out that P/E ratios are at a 10-year low. I think it’s fascinating is that the bull market has seen its P/E ratio shrink over time. I believe that’s unprecedented. (Barry included a counter post from Scott Frew.) But I want to use this opportunity to make a few important points. The first is that ALL financial measurements are flawed. Some are worse than others. This doesn’t mean we ignore them, but we do have to recognize each one’s limitations. Of course, I was the one who raised P/E ratios in the first place so let’s zero is on that one. (Don’t get me wrong: I love the P/E ratio. I love despite the flaws). The first problem is that the P/E ratio mixes two types of data. One number—the price—is a fixed point number, it lives in a specific point in time. Earnings, however, is a rate. It tells how much money was made between two specific points. It’s as if we’re comparing dollars to miles-per-hour. This isn’t wholly unkosher, but we do have to look out for pitfalls. For example, P/E ratios often rise at the beginning of a bull market because prices tend to anticipate earnings. (Not only that, prices can even influence earnings.) The P/E ratio is also highly dependent on pay out ratios, meaning how much of its profits a company pays to its shareholders (the owners) in the form of dividends. When companies pay out a larger share of their profits as dividends, earnings multiples should be lower. According to Professor Robert Shiller’s latest data, only about one-third of corporate profits are paid out as dividends. That’s very near the lowest percentage in all his data, which stretches back more than 130 years. It’s far lower than 1929 or 1987. P/E ratios also influenced by long-term interest rates. This is for two reasons. The first is that borrowing costs are a major business expense, so if the cost of renting money falls, companies will be more profitable. The second, and more important reason, is that bonds compete against stocks for investors’ dollars. So higher bond yields means that stocks have to adjust and offer investors more “bang for the buck,” hence lower earnings multiples. The reverse is true for lower rates. It’s a never-ending battle between bonds and stocks. Periodically, gold likes to jump in the battle, too. Twenty-five years ago, long-term Treasury yields climbed over 15%, and it was common to see P/E ratios in the high-single-digits. While bond yields have crept up recently, we’re still in a period of low long-term yield relative to the last thirty years. And finally, the P/E ratio is a fine general gauge of market sentiment, but it’s still far from perfect. As Barry said, “cheap stocks can get cheaper.” That’s very true. Also, expensive stocks can get even more expensive. Much more. I’ll give you a good example. According to Dr. Shiller’s data (his P/E ratio data uses trailing earnings for the last 10 years), the P/E ratio reached 26 in February 1996. That was highest reading since October 1929. But if you sold out, you would have been kicking yourself. Four years after October 1929, the S&P 500 was down by two-thirds. But four years after February 1996, the S&P had doubled. Thanks for nothing Mr. P/E Ratio! As long-time readers know, I’m a perma-bull. This doesn’t mean I’m always bullish. It just means that I avoid timing the market. When you realize how many different variables affect the market stock, it’s simply overwhelming. The moral of the story is to look at all financial data, but don’t be a slave to any. Posted by edelfenbein at 6:11 AM June 4, 2006Bon Voyonage The WSJ looks at why the Vonage IPO sucked. In other news, Vonage sucks. In response to some written questions yesterday, the company said the IPO wasn't mishandled and that it will not be deterred "from executing on our business plan and serving our customers." The company also noted that it remains under a legally mandated quiet period. (Wince.) Update: Here come the lawsuits. Posted by edelfenbein at 12:04 AM June 2, 2006A Primer on the Option-Grant Scandal Business Week offers a handy guide to the backdating scandal. Posted by edelfenbein at 10:19 AM 75,000 New Jobs
The economy created just 75,000 new jobs last month which is much less than Wall Street was expecting. Economists expected an increase of 170,000. Posted by edelfenbein at 10:12 AM The Objection of Gross’ Affection I agree with John Carney at DealBreaker, it’s time we lay off Daniel Gross. Almost. Gross, as you may know, promised to eat the first chapter of Dow 36,000 if Bush nominated an A-list Wall Streeter as the next Treasury Secretary. Well, you don’t get much more A-list than Hank Paulson, so we all had a good laugh at Gross’ expense. But here’s a question: Of all the books to eat, why did Gross choose Dow 36,000? I mean, why not go for, say...Finnegan’s Wake? It still gets the point across, plus you get points for pretension. Or he didn’t even have to eat a book at all. I think a hat is more traditional. Or he could have gone with "I’ll eat Cleveland." You really have lots of options to work with. But there’s something about Gross and Dow 36,000. He has a rather bizarre history with this book. I’m not sure what to call it. An obsession? Gross simply MUST reference it, no matter how tangential it is to his topic. He can't not do it. As "wine-dark" is to sea," so Dow 36,000 is to...well, everything! Especially everything Republican. Consider this from his Web site last year: Of course, very few of the proponents of HSAs actually have them. How many people at the American Enterprise have them? Probably the same number who think the Dow should be fairly valued at 36,000--which is to say, two. See! The book must be mentioned, even when it doesn’t help his argument. Perhaps the idea of Republican journalists entering financial economic theory is just too much. (Hassett, of course, is a professional economist.) How come Gross doesn't refer to Paul Krugman's "stock bubble" call of three years ago? I'd eat that column (someone's got to). But no, it's always Dow 36,000. There was this from a Slate article last December: There was a nice jobs report on Friday. The folks at CNBC are busting out the "Dow 11,000" hats again (though the "Dow 36,000" Windbreakers remain in deep storage). Why? What does that even mean? We can even go back in time. Here he is January 2003, attacking the Bush tax cut: Council of Economic Advisers Chairman Glenn Hubbard, the Bush administration's one-man-economic-policy-band, apparently believes that this move will boost the market by 20 percent. "This will provide a lot of juice to the market," said Kevin Hassett, a co-author of Dow 36,000, told the New York Times. But if they believe that this proposal will achieve such results, then I've got some calls on Dow 36,000 to sell them. Well, that’s no so bad. At least Hassett is mentioned so it’s not coming out of left field. Incidentally, was that another prediction? Here he is in the New York Times last December: In 2001, the stock market meltdown and a brief recession threw cold water on the widely held belief that the U.S. economy, juiced by a technological revolution, had entered a new era of limitless, inflation-free growth. But today, as bubble-era books like "Dow 36,000" collect dust on library shelves, evidence is mounting that there may be a New Economy after all. Yuck. I certainly hope he doesn’t eat a dusty copy. DealBreaker has been kind enough to offer to buy a new copy for him. Gross noted that at Amazon, the book is going for four cents. But look! He’s checked the price before: Why is Bush's strategy stalled? I'd propose a few reasons: Gross just can't let it go. There were two other books written at the same time as Dow 36,000. One was Dow 40,000, the other was Dow 100,000. Neither had the benefit of being written by James Glassman. And as we know from bitter experience (Dow 36,000, anyone?), optimism is always highest just when stocks are about to tank. From his Web site, more parentheses: Now, as deputy chief of staff at the White House and director at OMB, Bolten has been present in the room when every decision on fiscal policy was made--the reckless tactics, the reckless spending, the creation of the Medicare drug program, the absurd Social Security reform proposals, and so on. Brad DeLong has rightly dubbed the Bush administration fiscal policy as a "clown show." I think it's clear who the Bozo of the bunch. But Bolten has been putting on the red noses, frizzy wigs, and oversized shoes with the rest of them. Kevin Hassett may earnestly believe in what he says. (He also may earnestly believe that the Dow would be fairly valued at 36,000 today). But it doesn't mean a reporter should (a) credit it; and (b) end the piece with it. I could go on. There are more D36K mentions here and here. Gross is one of my favorite business writers (look, he’s on my blogroll). But he clearly has an obsession. It’s madness! It’s hysteria! Wait...what was Dow 36,000 about again? Posted by edelfenbein at 6:05 AM June 1, 2006The Return of Volatility, Part III One of the interesting aspects of market volatility is that it's not linear. By that, I mean that when the market becomes more volatile, the volatile stocks get REALLY volatile. When volatility fades, volatile stocks then only become slightly more volatile than the market. Here's a chart of the trailing 50-day average swing (standard deviation) of the S&P 500 (yellow line) and the Nasdaq (black line):
Notice how the Nasdaq used to be two and three times more volatile than the S&P 500. But today, the two are practically identical. Posted by edelfenbein at 3:26 PM UnitedHealth expects 2006 revenue of $72 billion From Reuters: UnitedHealth Group Inc. on Thursday reiterated its expected 2006 per share earnings of $2.88 to $2.92 a share with total revenue near $72 billion and operating earnings between $6.8 billion and $6.9 billion, according to a regulatory filing. Posted by edelfenbein at 3:22 PM Crocs Shoe Company Co-Founder Arrested From the AP: A Crocs shoe company co-founder who resigned as a director last week was arrested on misdemeanor charges of threatening to slit his former brother-in-law's throat, police said. That's only a misdemeanor? George Brian Boedecker Jr., 44, was arrested May 27, a day after the confrontation in the law office of his sister's ex-husband, David Moorhead, the Daily Camera reported in Thursday editions. Posted by edelfenbein at 2:43 PM Reader Q&A Dear Sir:
I would never, EVER say a stock could double by the end of the year. It’s ahistorical, and I would be highly suspicious of anyone who made that claim. To quote Gordon Gekko (pbuh): You're walking around blind without a cane, pal. A fool and his money are lucky enough to get together in the first place. Don’t be that fool! Best regards, Posted by edelfenbein at 2:34 PM Balchem Here's another unknown stock that's made tons of money for investors, Balchem (BCP). This is from the company's Web site: Balchem provides state-of-the-art solutions and the finest quality products for a range of industries worldwide. The company consists primarily of three business segments: Encapsulated/Nutritional (Balchem Encapsulates) Products, ARC Specialty Products and BCP Ingredients, Inc. Balchem employs over 200 people in the United States who are engaged in many diverse activities, developing our company into chosen market leadership positions. Balchem isn't even a member of the S&P 600 Small-Cap Index. The stock is currently followed by one analyst. Here's a 20-year stock chart against the S&P 500:
Posted by edelfenbein at 1:36 PM Joseph Weisenthal on Anya Kamenetz Bravo to Joseph Weisenthal, who skewers professional whiner and "Generation Debt" columnist Anya Kamenetz: At the risk of of sounding like Holden Caulfield, Kamenetz is the worst kind of phony. It's common that in wealthy societies privileged persons seek to identify with and give voice to an oppressed class. This can be a good thing when such a class actually exists. But Kamenetz goes a step further. She brilliantly created a new oppressed class and made a lucrative career out of being its spokesperson. Surely it will be a new model for similarly ambitious people for years to come. Nah, she'll just grow up to be Gretchen Morgenson (oooh burn). Posted by edelfenbein at 1:26 PM The Bambi Blog For no reason in particular, I give you the Bambi Blog! Watch as Bambi Francisco talks with assorted tech nerds about their nerdy start-up nerd farms. Enjoy! Posted by edelfenbein at 1:20 PM |
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