Archive for August, 2007

  • Wallstrip Does Checkpoint Systems
    , August 29th, 2007 at 9:08 am

  • Dow Drops 280 Points
    , August 28th, 2007 at 4:48 pm

    The Dow lost 280 points today. There’s something odd about the 280-point level. This is the sixth time in the past seven weeks that the Dow has moved by 280 or more. That includes gains of 283 and 286 and a loss of 281 and today’s loss of 280.28. Before February’s drop of 416 points, the previous +/-280 day came in March 2003.
    Although T-Bills are kinda back to normal, the yield on the 10-year T-Bond got down to a five-month low today.

  • Yahoo Update
    , August 28th, 2007 at 4:23 pm

    Five months ago, when Yahoo (YHOO) was at $31 a share, I wrote that I wouldn’t touch it for half that price.
    The market is starting to agree.
    That big spike in early May was due to that crazy story that Microsoft was looking to buy Yahoo for $50 billion.
    Here’s what I had to say:

    No. No way. Never.
    By my math, that’s $36 a share, eight bucks above yesterday’s close. It’s eight times next year’s sales and 52 times earnings.
    If Google went for that much, it would be a $1,000 stock.

    Yahoo’s market cap is now down to $30 billion.

  • Knight Capital May Return Hedge Fund Fees
    , August 28th, 2007 at 4:04 pm

    Here’s a new one. Knight Capital (NITE) may return $68 million in fees of its hedge funds due to lousy returns.

    The Jersey City, N.J.-based said in a regulatory filing that it would return all or a portion of the fees related to managing its Deephaven Funds. All three major funds in the Deephaven group, which have $4.2 billion under management, have suffered losses during the first six months of the year, according to a report by Sandler O’Neill & Partners. The Deephaven Event fund is down 12.6%, while the Market Neutral fund is down 5.6%. The small Credit Opportunities fund is down 0.7%.
    If these funds continue to loss as much during the rest of the year, Knight could suffer a hit of 16-cents per share. Based on “clawback” clause, Knight could return at least a portion of the incentive fees if the Deephaven Funds suffer a loss in the second half of the year.

    The stock is down about 10% today.

  • Market Talk from 1996
    , August 28th, 2007 at 2:18 pm

    Here’s a video of Jim Cramer (with hair!), Gail Dudack and the Motley Fool brothers on the Charlie Rose show from October 1996. The market segment is for the first 17 minutes. Cramer was correctly bullish.

  • Cox for AG?
    , August 28th, 2007 at 10:02 am

    Gonzales is out, the NYT lists some possible successors:

    Among the candidates, they said, were Michael Chertoff, the secretary of homeland security and a former federal appeals court judge and top Justice Department official; Christopher Cox, the chairman of the Securities and Exchange Commission; George J. Terwilliger III, a deputy attorney general under the first President Bush; Laurence H. Silberman, a court of appeals judge in Washington; and Larry D. Thompson, a former deputy attorney general who is now senior vice president and general counsel of PepsiCo.

  • The Day The Loan Died
    , August 28th, 2007 at 9:45 am

    From Jane Wells’ blog, sung to the tune of American Pie:
    Long, long time ago… I can still remember
    How that yield spread made me smile.
    And I knew if I had my chance
    Those mofos I could finance
    And I could pay my bills for a while.
    But February made me shiver
    With every good faith I’d deliver.
    Bad news on my e-mail;
    I just lost one more deal.
    I can’t remember if I cried
    When I saw the Fremont slide
    But something touched me deep inside
    The day the Subprime died.
    So bye-bye, BC money supply.
    Sent my package to four lenders
    But they all asked me why.
    And good old boys were on a crack induced high Singin’, “This’ll be the
    day the loans die, This’ll be the day the loans die.”

  • Is It Over Already?
    , August 28th, 2007 at 9:26 am

    For the last three weeks, the most interesting investment to watch was the rate on the 90-day T-Bill. I’ve never seen it so erratic. But now, it looks like short-term Treasuries are almost back to normal.

  • Market Mania Grips Kenya
    , August 28th, 2007 at 9:11 am

    The stock market is all the rage in Kenya:

    One ordinary afternoon in a bright, marble-floored lobby downtown here, the following conversation took place between two women, a government worker and a self-employed soapmaker.
    “I bought KenGen at 9.90 shillings,” said the government worker, Josephine Nduta, referring to her stake in the initial public offering of Kenya’s power company last year. “I sold them at 28 — I made a lot of money!”
    “I also made money on that,” said Mary Kariuki, the soapmaker, recalling how she used the $1,000 to pay her children’s school fees. “I bought 3,300 shares.”
    The two women carried on about liquidity and profit margins, and recalled with pride attending the first shareholder meeting of KenGen this year, an event so huge that it had to be held in the city’s largest soccer stadium. About 200,000 people from all corners of the country came like so many newly minted executives.
    “I felt so good,” Kariuki recalled. “It was just normal, common people. People dressed well. What impressed me was the number of old women — they were coming in their traditional clothes. They were telling me, ‘Yes, we bought!’ “

    Hmm, I wonder how this story will end. Wait, don’t tell me! I want to see.

  • Renaissance to Pursue Private Offering
    , August 28th, 2007 at 9:00 am

    From the FT:

    Renaissance Technologies, one of the world’s biggest hedge fund groups, has shrugged off concerns about volatile global markets and is considering a partial float.
    The $30bn (£15bn) group run by billionaire mathematician James Simons had held discussions about selling shares to sophisticated investors through a private trading network set up recently by a group of investment banks.
    The move suggests that Renaissance believes that the recent crisis in the US credit markets and the global flight to safety among investors will be short-lived and that there will be ample opportunity for the hedge fund to continue to earn its historically high returns.
    Renaissance believes that there will be strong demand for its shares from big US institutions and foreign investors such as governments in Asia and the Middle East.
    The bullishness shown by Renaissance comes as hedge fund groups such as AQR and private equity firms including KKR are proceeding cautiously with planned initial public offerings.
    However, those groups are contemplating full listings available to all investors that must be registered with the Securities and Exchange Commission. Renaissance is considering a so-called 144A listing that would not be registered and would be available only to institutional and other sophisticated investors.
    The highly secretive Long Island-based group is considering this route because it would not be forced to publicly reveal significant information about its trading strategies and it believes it would be more likely to attract more long-term investors.
    The shares would trade on a system called Opus 5, launched this month by Morgan Stanley, Lehman Brothers, Citigroup, Merrill Lynch and the Bank of New York Mellon.
    The consortium platform is intended to compete with existing markets for private placements set up by Bear Stearns, Goldman Sachs and JPMorgan. Friedman, Billings, Ramsey has also been a big user of the 144A market. A Renaissance official could not be reached for comment. Talks about a sale are at a sensitive stage and could still stall, however the shares could be sold as early as next month.
    It is not yet clear what size of stake Renaissance would sell in the offering but it is assumed that current management will retain control of the group.
    Fortress Investment Group, the hedge fund and private equity firm that went public this year, manages about $43bn and has a market value of about $7.3bn.