Archive for 2007

  • The Hottest Billionaire Heiresses
    , May 21st, 2007 at 4:17 pm

    Forbes looks at the Hottest Billionaire Heiresses.
    (Wait a sec. Doesn’t Steve Forbes have five daughters?)

  • Close, but No
    , May 21st, 2007 at 4:03 pm

    The S&P 500 closed today at 1525.10, just shy of the record close of 1527.46.
    (Hey, we’ve been waiting seven years. What’s a few more days?)

  • The Nasdaq Goes Fibonacci
    , May 21st, 2007 at 1:22 pm

    Brace yourself: The Nasdaq Composite is currently stuck at 2,584.
    Why is that important? Because it’s a Fibonacci number!
    (Shaking You Furiously)
    OK, so why’s that important? Er, I have no clue. But other people seem to think it’s important so I’m running with it.
    Here’s a look at the Nasdaq with Fibonacci Numbers in blue.
    image470.png
    If the you divide a Fibonacci Number by the one directly below it, you get the Golden Ratio.
    (Seriously, did that just blow your fucking mind??)

  • Shanghai Update
    , May 21st, 2007 at 1:16 pm

    Speaking of the Chinese market. Remember how everyone panicked where the Shangai market plunged? Measuring from the 9% correction on February 27, the Shangai Composite is up 45%.
    I think we all know how this story ends.

  • The Stock and Bond Market Part Ways
    , May 21st, 2007 at 1:09 pm

    As the stock market keeps chugging higher, the bond market is starting to leave it behind. As a very general rule, the bond market leads the stock market by a few months. In the chart below, I’m using the BTTRX mutual fund as my bond proxy. Note how the bond market (the gold line) started fall behind the stock market before the Shanghai Surprise in February.
    big56993.gif

  • The Blackstone IPO
    , May 21st, 2007 at 9:54 am

    More details are out about the Blackstone IPO. We already know they snagged BX for a ticker symbol (Eddy’s coolness rating = 8). The company plans to offer the shares in the range of $29 to $31 (coolness rating = 6; $18 to $20 is tops). At $31, it would value the company at $33.6 billion, that’s about three times larger than Fortress (coolness rating = 4).
    Also, Blackstone is buddying up with the Commies:

    Blackstone announced the IPO terms one day after saying China would take a $3 billion stake at a 4.5 percent discount. Beijing would hold its stake at least four years.

    Yes, it’s always good to have the Communists on your side. Especially if you’re planning any more hostile takeovers. Taiwan, for example.

  • The New High Countdown
    , May 18th, 2007 at 2:59 pm

    The S&P 500 is now within spitting distance of its 2000 high. The index’s closing high was 1,527.46 on March 24, 2000, just 0.11 points higher than the day before. Around 2:20 this afternoon, the index got to 1,522.68. We’re getting very close.
    Don’t let anyone tell you that this rally isn’t for real. And especially, ignore all the phony comparisons (to gold, to euros, to inflation, to Swedish kronor). Who cares? I don’t use euros anyway. Why not compare it to bandwidth? I use lots of that. Anyone can use clever comparisons to show what they want.

  • Looking At the Chrysler Deal
    , May 18th, 2007 at 10:31 am

    Business Week looks at the math of the Cerberus/Chrysler deal:

    In fact, Cerberus could conceivably fetch a fat return on its money by doing very little. Consider Cerberus’ low purchase price of $7.4 billion. Lehman Brothers (LEH) analyst Brian Johnson said in a research note that at most $2.2 billion of the purchase price was for Chrysler’s carmaking operations. The other $5.2 billion or so bought Chrysler Financial Services, which made about $720 million last year and remains solidly in the black, according to Johnson.
    If the restructuring moves that parent Daimler announced in February work, and Chrysler makes $1.5 billion to $2 billion in 2009 like the company said, then Cerberus makes a 68% profit on its investment over about a two-and-a-half-year period. That’s at least 27% a year from the car business.

  • Illinois Tool Works
    , May 17th, 2007 at 11:00 am

    Here’s another boring stock with a great long-term track record. Even the name is dull, Illinois Tool Works. But in the last 30 year, Illinois Tool Works (ITW) is up about 60-fold, including 13% this year. The shares are going for less than 14 times next year’s earnings.
    ITW.gif

  • Sign of a Top?
    , May 16th, 2007 at 1:12 pm

    There’s an old saying, “they don’t ring a bell at the top.”
    But you do see this:

    A local man who lost his leg in a car accident has become so skilled as a stock market trader that he has managed to pay off almost all of his medical bills.
    Jiang Lai was on a business trip to Huzhou, Zhejiang Province in November when the car in which he was a passenger collided with another vehicle. Jiang’s injuries were so severe that he had to have his right leg amputated.
    However, neither of the two drivers accepted responsibility for the crash and hence refused to cover his medical bills, which eventually topped 100,000 yuan ($12,500).
    For Jiang to be fitted with an artificial leg would cost a further 40,000 yuan.
    Jiang’s parents are retired and were therefore unable to help with either the bills or to pay for a lawyer to take the case to court.
    In desperation Jiang posted a message on kds.pchome.net, asking for advice and help from his fellow netizens. To his delight, he received numerous replies.
    After verifying Jiang’s story, several people, mostly from the Shanghai area, started a campaign to help him. They gave advice on legal matters, recommended lawyers and even sent him books of consolation.
    One of the people who made contact was a retired university professor, surnamed Yang, whom Jiang had helped in the past with a computer problem. Yang encouraged Jiang to turn his attention to the stock markets.
    Over the next two months, Jiang studied all the information he could find on markets and stocks. By the end of it, he had memorised the basic information of almost all the 1,400 stocks listed on the Shanghai and Shenzhen markets.
    After practicing trading for two weeks using an online simulator, Jiang decided it was time to open a live account.
    On his first real trade, Jiang made just 27 yuan. It was no fortune, but it was a profit, so he withdrew the money and kept it as a souvenir.
    Two months later, Jiang’s profits were starting to soar, so he set himself the goal to make enough money to pay off his medical bills.
    “My earnings from the stock market have since covered the majority of my debts. I now have only 20,000 yuan left to pay,” Jiang said.
    Despite making large profits, Jiang is quick to issue a word of warning to those keen to follow him: “My success on the stock market is based on my knowledge, not luck. I want to remind all new investors that the stock trading is very risky.”
    He added that he regards stock trading only as a part-time job. He hopes one day to open his own teahouse.