Archive for August, 2009

  • Since 1970, All of the Market’s Gain Has Come When Gold is Below $455
    , August 20th, 2009 at 8:08 am

    I was playing around with some data and I came with an interesting stat: All of the stock market’s gain since 1970 has come when the price of gold is below $455.
    OK, now let me explain a little. I took two monthly files; one with the closing price of gold from 1970 though this past May. The other with the dividend reinvested index for the S&P 500 over the same time period.
    I then looked at how well the S&P did based on the closing price of gold for the previous month. The results show that the index was net flat whenever gold closed the previous month higher than $455.50.
    There were basically three times when gold gave its sell signal. The first was in late 1979 to mid-1981. The second came in mid-1987 to mid-1988 (very good timing there!). The third has been continuous since September 2005. For gold to give another buy signal, it would have to plunge by more than 50%.
    Let me add that I don’t see this as a market-timing tool. I just think it’s interesting how the market has behaved.

  • Google’s Stock Turns Five
    , August 19th, 2009 at 3:37 pm

    It was five years ago today that shares of Google (GOOG) went public. The stock ended its first day of trading at $100.34. It peaked at $747.24 in November 2007 and is currently at $442.16. Over the same time, the S&P 500 is down by about 9%.
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  • Comrade, Have I Got a Deal for You!
    , August 19th, 2009 at 1:38 pm

    Line of the day: “There are more brokerage account holders than Communist Party members in China.”
    Something tells me that they’re not mutually exclusive.
    (Via: Kedrosky)

  • Energy Leads Turnaround
    , August 19th, 2009 at 1:04 pm

    A fairly flat day has suddenly become a good day for stocks, and it’s mostly thanks to energy stocks.
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  • The Whole Foods Boycott
    , August 19th, 2009 at 12:48 pm

    Earlier this week, Whole Foods (WFMI) CEO John Mackey wrote an op-ed in the Wall Street Journal against President Obama’s health care reform ideas. Some Whole Foods customers are responding with a boycott.
    The opinion expressed was Mr. Mackey’s, not the policy of Whole Foods. I find it deeply unsettling that customers are willing to boycott a company due to the personal political opinions of its CEO.
    The irony lost on the boycotters is that Whole Foods’ customers operate in a market where they’re free to boycott Whole Foods and go to a different store. This is exactly the same principle that critics of health care reform are trying to make.

  • Ewwwwww
    , August 19th, 2009 at 12:18 pm

    Madoff’s lover goes overboard with TMI:

    He sometimes blinked his eyes uncontrollably, leading her to nickname him “Winky Dink” when she disclosed her affair to some close female friends.
    At the Willard, Weinstein wrote, she learned one of his many secrets that they discussed by telephone a few days later.
    “Bernie had a very small penis,” she wrote. “Not only was it on the short side, it was small in circumference. That he was now pointing it out to me was telling. It clearly caused him great angst. I wanted to be careful how I responded. Men and their penises have a strange and unique relationship.”
    Still, she said: “I liked this man and didn’t want to emasculate him. His tiny penis hadn’t prevented me from climaxing.”
    “On the bright side,” she concluded, because of its size, “oral sex would be a breeze.”

    Insert prison joke here.

  • The first thing we do, let’s kill all the bankers
    , August 19th, 2009 at 10:17 am

    Imagine a world without bankers.

    Enter Zopa, a website that describes itself as a place “where people meet to lend and borrow money … sidestepping the banks”. The idea is pretty simple. Someone who has money to spare goes online, says how much he’s ready to lend and at what rate of interest – and waits for would-be borrowers to take him up on his offer. If both sides are happy – and Zopa stands for the negotiating term “zone of possible agreement” – then the deal goes ahead. Quite a few of them, as it happens: Zopa has now facilitated £50m worth of loans, from one ordinary Briton to another.
    The theory is that everyone benefits, the lender enjoying a much higher rate of return than he would from a regular savings account, and the borrower paying off his debt at a much gentler rate of interest. That’s not difficult, says Zopa, when the high street banks are being so stingy towards savers and so demanding of borrowers. Current deals on Zopa are running somewhere between 8% and 10%, while savers would be lucky to earn more than a few points in interest and borrowers can be looking at charges in the teens or higher.

  • “It beats the heck out of any certificate of deposit”
    , August 19th, 2009 at 10:14 am

    Where are some investors placing their money?
    Tax liens.

    Private investors step in and buy tax liens, paying governments upfront all or part of the value of the taxes. The investors then get the right to foreclose on the properties, taking priority over mortgage lenders, and to charge interest rates as high as 18 percent on the unpaid taxes.
    “It beats the heck out of any certificate of deposit,” said Howard Liggett, executive director of the National Tax Lien Association.
    Because the sales occur in a patchwork of cities and counties across more than two dozen states, there are no figures tracking the number of tax-lien sales nationwide. The liens that are sold come from cases in which homeowners pay taxes to the local government, not through their lenders. But Mr. Liggett, whose group represents tax-lien investors, said they generated about $10 billion every year.
    In 2006, Lucas County began selling off its overdue tax certificates to a New Jersey company named Plymouth Park Tax Services, a subsidiary of JPMorgan Chase. It also operates under the name Xspand.
    The company, once run by the former governor of New Jersey, James J. Florio, was sold to Bear Stearns and then absorbed into JPMorgan after Bear’s collapse last year. Today, Plymouth Park is one of the largest players in the tax-lien business.
    Plymouth Park has filed more than 1,000 foreclosure actions against delinquent taxpayers, more than any single mortgage lender in the county. But it says that it has only foreclosed on 56 of those filings.

  • Eaton Vance’s Earnings Fall But Top Expectations
    , August 19th, 2009 at 9:57 am

    It’s still been a good year for the asset management stocks. Eaton Vance (EV) is up over 40% for us. Reuters reports:

    Asset manager Eaton Vance Corp said fiscal third-quarter net income fell 37 percent compared with a year ago as fees decreased.
    For the three months that ended July 31, Boston-based Eaton Vance reported net income of $31.2 million, or 26 cents per share, down from $49.6 million, or 40 cents a share in the same period a year ago. Revenue fell 19 percent to $228 million.
    Analysts surveyed by Thomson Reuters on average had expected the company to earn 28 cents per share, and revenue of $224.5 million for the quarter.
    Revenue and net income rose compared with the quarter that ended April 30, 2009, however, as did assets under management. Eaton Vance managed $143.7 billion in assets as of July 31, up from $127.2 billion in the previous quarter. The increases were similar to those at other asset managers that have benefited from rising stock markets.

  • Investor Quiz
    , August 18th, 2009 at 2:46 pm

    Guess what company went from concept to $1 billion in sales in three years?

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