Archive for July, 2008

  • Moog’s Earnings
    , July 25th, 2008 at 10:42 am

    Moog (MOG-A) is one of the quieter stocks on our Buy List. They make flight control systems for commercial and military aircraft. Interestingly, employees own about 60% of the stock. The company just released a solid earnings report for their fiscal third quarter. Moog earned 72 cents a share, which is a healthy increase over the 59 cents from last year. The Street was looking for 69 cents a share. Moog also increased its guidance for this year by four cents a share to $2.75 a share. For 2009, they’re expecting EPS to range from $3.08 to $3.20 a share. It’s a good stock going for a good price.
    Here are Moog’s sales and earnings results for the past few years:

  • Words of Wisdom
    , July 25th, 2008 at 10:29 am


    Americans should be outraged at the latest sweetheart deal in Washington. Congress will put U.S. taxpayers on the hook for potentially hundreds of billions of dollars to bail out Fannie Mae and Freddie Mac. It’s a tribute to what these two institutions — which most Americans have never heard of — have bought with more than $170-million worth of lobbyists in the past decade.
    With combined obligations of roughly $5-trillion, the rapid failure of Fannie and Freddie would be a threat to mortgage markets and financial markets as a whole. Because of that threat, I support taking the unfortunate but necessary steps needed to keep the financial troubles at these two companies from further squeezing American families. But let us not forget that the threat that Fannie Mae and Freddie Mac pose to financial markets is a tribute to crony capitalism that reflects the power of the Washington establishment.
    Fannie and Freddie buy home loans from lending institutions and reissue them as marketable securities — creating a liquid market for mortgage debt that lowers borrowing costs for prospective homeowners. The two institutions have easy access to borrow at low interest rates because they were originally government agencies and continue to be viewed as being backed by the government. The irony is that by bailing them out, Congress is about to make that perception a reality, even though government backing is no longer needed for their original mission. There are lots of banks, savings and loans, and other financial institutions that can do this job.

  • Ave Maria
    , July 23rd, 2008 at 8:37 pm

    From two years ago, here’s Maria Bartiromo bombing on Celebrity Jeopardy:

    What’s more embarrassing than losing on Jeopardy? Losing to Gloria Vanderbilt’s son.
    (Via a new CWS favorite: CNBC Sucks)

  • The Stock Market and Whole Numbers
    , July 23rd, 2008 at 3:43 pm

    Yesterday, the S&P 500 closed at 1277.00, and at 1262.00 on the day before. The market hasn’t had back-to-back whole number closing since August 7&10, 1987, just before the market crash.

  • Harley Adds a Third Wheel
    , July 23rd, 2008 at 1:01 pm

    Meet the Tri-Glide Ultra from Harley-Davidson’s 2009 collection.

  • The Yahoo Mess
    , July 23rd, 2008 at 12:58 pm

    I have to confess that I can’t make any sense of Yahoo (YHOO) and its share price. I’ve said for some time that the stock should be around $15. Frankly, I consider that to be an optimistic price. Still, Microsoft thought it was wise to offer $33 for the company, and Yahoo thought it was wiser still, to reject that offer. And then later accept it after it had been withdrawn.
    Yesterday, Yahoo reported that its quarterly earnings-per-share fell from 11 cents last year to nine cents this year, two cents below the Street. This was the ninth time in the past ten quarters that YHOO’s earnings have decline. Sales rose just 5.9% to $1.8 billion. I just don’t get it. How can a company with such mediocre performance command such a high share price?
    This company has gone from earnings 58 cents a share in 2005, to 52 cents, to 47 cents, and probably another 47 cents this year. Yet, YHOO is over $21 a share. Nicholas Financial (NICK), on the other hand, went from $1.13 to 94 cents, and it’s under $5 a share.

  • Bush: “Wall Street Got Drunk”
    , July 23rd, 2008 at 8:51 am

    President Bush was recorded as saying, “There’s no question about it. Wall Street got drunk, that’s one of the reasons I asked you to turn off the TV cameras. It got drunk and now it’s got a hangover. The question is how long will it sober up and not try to do all these fancy financial instruments.”
    Presumably, this is an area that Bush is familiar with. Let’s continue the metaphor and say that the Federal Reserve “was doing lines of blow off the hooker’s ass.”

  • Flip a Coin, Get a Job
    , July 22nd, 2008 at 10:27 pm

    Guest blogging at Paul Kedrosky’s crib, Joseph Weisenthal spots this ad from a hedgie joint on San Francisco’s Craig’s List. The final requirements are:

    1) Prepare a cover letter.
    2) Flip a coin 50 times. Record the results on your resume as a sequence of heads (H) or tails (T) symbols.
    3) Email your cover letter and resume to us.

    So what’s the deal with the 50 coin tosses? Joe thinks it could be a way to spot phonies, since the data set is hard than it looks to fake. If you were to fake it, would you have the courage to list head or tails on a row? I wouldn’t, but the odds of that aren’t unreasonably small.
    Then again, 50 tosses ain’t that much. Plus, it could be done easily with the random number generator on Excel.
    Some commentors think it’s a sardonic comment on the nature of investing. Could be. Although that probably doesn’t explain why they’re hiring.
    My guess is that it’s a trick question. Once in the interview, they’ll ask you what kind of coin you used. Any who still deals in U.S. currency will automatically be eliminated from consideration.

  • The S&P Financial Index Divided by the S&P 500
    , July 22nd, 2008 at 9:43 pm

    Here’s an interesting chart. This shows the S&P Financial Index (^SPSY) divided by the S&P 500:
    There are three major low points. The first is from October 29, 1990 (0.1533). The next came nearly ten years later on March 9, 2000 (0.1927). This was not simply a reflection of financials going down, but of tech going way, way up. The most recent low came last Tuesday, July 15, 2008 (0.1910).
    What’s fascinating is that the last two lows hit almost exactly the same. Does this mean that financials are ready to turn around? It’s too early to say, but the sector has just had one of its best weeks in years.

  • Headline of the Day
    , July 22nd, 2008 at 2:06 pm

    UnitedHealth earnings fall 73%, but shares jump

    It’s true. UnitedHealth (UNH) reported earnings of $337 million, down from $1.22 billion for last year’s Q2. On an earnings-per-share basis, UNH earned 27 cents compared with 89 cents last year.
    Now if we exclude some big charges, UNH made 67 cents for the quarter, which is just ahead of the 64 cents Wall Street was expecting. The stock is up today, but that’s probably because investors were expecting more bad news. Earlier, the company said to expect 64 to 66 cents. If you can rally this well by beating the top end by a penny, I think it means that investors have lost confidence in management.
    I can’t say I blame them. UNH said not one, but twice, that it was expecting FY08 earnings-per-share of $3.95 to $4. After its competitors lowered forecasts, UNH lowered its forecasts, not once but twice. First to a range of $3.55 to $3.60 a share, then down to $2.95 to $3.05 a share. That’s where we are today.