Archive for 2007

  • “One of the most interesting and unnoticed developments of recent decades has been the tendency of big enterprise to socialize itself”
    , June 3rd, 2007 at 1:27 am

    Nick Schulz writes on “The Greening of Capitalism.” He finds this quote from John Maynard Keynes:

    A point arrives in the growth of a big institution…at which the owners of the capital, i.e. the shareholders, are almost entirely dissociated from the management, with the result that the direct personal interest of the latter in the making of great profit becomes quite secondary. When this stage is reached, the general stability and reputation of the institution are more considered by the management than the maximum of profit for the shareholders. The shareholders must be satisfied by conventionally adequate dividends; but once this is secured, the direct interest of the management often consists in avoiding criticism from the public and from the customers of the concern….They are, as time goes on, socializing themselves.

  • The Earl of Baltimore
    , June 1st, 2007 at 5:30 pm

    Now that the week is over, I thought you might enjoy this — the great Earl Weaver in top form. I have to warn you, the language is…Earl Weaver-esque.

    Here’s the funny part. On the scoreboard, you can see that there’s one out in the top of the first. Yep, the game had just started.
    By the way, Weaver was right. He’s now in the Hall of Fame.

  • Today’s Jobs Report
    , June 1st, 2007 at 2:09 pm

    The government reported that 157,000 jobs were created last month. That’s good, not great, but good. The unemployment rate stayed at 4.5%.
    The problem I have is that many Americans have left the job market. The number of employed people as a percent of the civilian population is still not very high.
    Allow me to chartify:
    image475.png
    Warning: The line is bumpy because it’s not seasonally-adjusted. You can see that we’re better than where we were, but far from our best.
    If the same percent of the population were employed today as we had seven years ago, that would mean 3.2 million more jobs.

  • Bancrofts to Meet With Murdoch
    , June 1st, 2007 at 11:39 am

    Maybe they changed their minds, but the Bancrofts are going to meet with Rupert Murdoch and, we can assume, listen to his bid for Dow Jones (DJ). John Carney* at DealBreaker picked up this quote:

    “If they meet, they sell,” said a Dow Jones employee familiar with the thinking of the Bancrofts.

    They’re also considering other potential bids. I really hope Murdoch wins out if for no other reason to see extra-voting-power shares lose.
    *I also stole John’s HAL 9000 image below. It’s what bloggers do.

  • Where are the Algorithms’ Yachts?
    , June 1st, 2007 at 10:14 am

    hal.jpg
    Wall Street slowly goes bionic:

    Louis Morgan, managing director of hedge-fund firm HG Trading, has never talked to his best trader. That’s because his best trader is a machine.
    Morgan’s top earner is a computer whose software can monitor thousands of stocks simultaneously, and respond in less than a blink of an eye when opportunities arise.
    “Doing what we do by hand would be impossible,” said Morgan, who focuses on statistical arbitrage — taking advantage of sudden and potentially profitable price anomalies between securities that usually trade in correlation.
    Morgan uses a computer trading system based on algorithms, complex mathematical formulas that quickly weigh a huge number of possible trades and execute orders in milliseconds (a millisecond is one thousandth of a second).

    Best of all, you don’t have to pay an algorithm a bonus.
    If all goes well, I think Wall Street can entirely displace humans by 2011. Of course, stock blogging can never be replicated by a machine. (They wouldn’t dare.)

  • Macy’s Lands the “M” Ticker
    , June 1st, 2007 at 9:58 am

    On the NYSE, the most highly prized ticker symbols are the single-letter symbols. That’s only for the very elite.
    The NYSE has always kept M and I open, and everyone assumed that was for Intel and Microsoft. Well, they apparently think they’re not going to win Microsoft over.
    Today, Macy’s (M) starts trading under M.
    Two weeks ago, the company changed its name from Federated Department Stores and it used to trade under FD.

  • 207% Returns
    , June 1st, 2007 at 9:52 am

    Since 2001, this asset has increased from $195,000 to $600,000 today. What am I talking about?
    New York City cab medallions.
    (Hat Tip: Altucher & Stockerblog.)

  • Dell’s Earnings
    , May 31st, 2007 at 11:20 pm

    After the bell, Dell (DELL) reported earnings of 34 cents a share. Here’s a look at Dell’s quarterly results for the last 10 year. These stats, however, may change. The company hasn’t filed an earnings report in nearly a year.

    Quarter…..Sales….Oper. Income…..EPS
    1-97………$2,588………$198………..$0.0675
    2-97………$2,814………$296………..$0.0725
    3-97………$3,188………$346………..$0.085
    4-97………$3,737………$397………..$0.10
    1-98………$3,920………$429………..$0.11
    2-98………$4,331………$483………..$0.12
    3-98………$4,818………$539………..$0.14
    4-98………$5,173………$595………..$0.15
    1-99………$5,537………$600………..$0.16
    2-99………$6,142………$694………..$0.19
    3-99………$6,784………$650………..$0.18
    4-99………$6,801………$513………..$0.16
    1-00………$7,280………$625………..$0.19
    2-00………$7,670………$736………..$0.22
    3-00………$8,264………$818………..$0.25
    4-00………$8,674………$589………..$0.18
    1-01………$8,028………$588………..$0.17
    2-01………$7,611………$545………..$0.16
    3-01………$7,468………$544………..$0.16
    4-01………$8,061………$594………..$0.17
    1-02………$8,066………$590………..$0.17
    2-02………$8,459………$677………..$0.19
    3-02………$9,144………$758………..$0.21
    4-02………$9,735………$809………..$0.23
    1-03………$9,532………$811………..$0.23
    2-03………$9,778………$840………..$0.24
    3-03………$10,622…….$912………..$0.26
    4-03………$11,512…….$981………..$0.29
    1-04………$11,540…….$966………..$0.28
    2-04………$11,706…….$1,006……..$0.31
    3-04………$12,502…….$1,089……..$0.33
    4-04………$13,457…….$1,187……..$0.37
    1-05………$13,386…….$1,174……..$0.37
    2-05………$13,428…….$1,173……..$0.38
    3-05………$13,911…….$944………..$0.39
    4-05………$15,183…….$1,246……..$0.43
    1-06………$14,216…….$949………..$0.33
    2-06………$14,094…….$605………..$0.22
    3-06………$14,383…….$824………..$0.30
    4-06………$14,402…….$801………..$0.30
    1-07………$14,622…….$947………..$0.34

    With Dell, the important number to watch is operating margin. That came in at 6.48%, which is improvement. In the late 1990s, Dell’s operating margins were often over 10% or 11%. In other words, the same amount of sales does nearly half the work. Last quarter, sales increased by 2.86% which is roughly in line with inflation.

  • The Buy List So Far
    , May 31st, 2007 at 9:55 pm

    Now that the first five months of 2007 are down, let’s look at how our Buy List is doing:
    image474.png
    The red line is the Crossing Wall Street Buy List. The black line is the S&P 500.
    The 20 stocks on the Buy List are up an average of 4.43% so far. That’s behind the S&P 500 which is up 7.92%. Neither figure includes dividends. The daily volatility of the Buy List is a tiny bit more than the S&P 500 (just 0.48%).
    The Buy List was actually leading the S&P 500 up through early April. But the market’s big kick after that left the Buy List in the dust. The good news is that we’ve closed the gap a little in the past two weeks.

  • Wachovia to buy A.G. Edwards
    , May 31st, 2007 at 11:52 am

    Fresh from buying Golden West Financial, Wachovia (WB) is now buying A.G. Edwards (AGE) for $6.8 billion in cash and stock. This will create the second-largest U.S. retail brokerage.
    In September 1974, you could have picked up shares of AGE for less than nine cents a share–after factoring many, many stock splits. The stock is currently trading around $87. That’s a gain of nearly 100,000%. Not bad.
    AGE.gif