Archive for August, 2008

  • The Plunge of Gold Continues
    , August 18th, 2008 at 11:20 am

    A few weeks ago, I wrote about the recent peak in gold prices and said that we’re never quite sure if we’re in a bubble until it’s over. Perhaps one of the best signs that we’re in a bubble is that people will refuse to acknowledge that we’re in a bubble. If that’s any indication, the commentors on my post at Seeking Alpha definitely should have clued us in that gold was headed for a big fall.
    Bloomberg reports this morning:

    Gold may fall for a sixth straight week, the longest slide in four years, as a strengthening dollar erodes the precious metal’s appeal as an alternative investment.
    Twelve of 21 traders, investors and analysts surveyed from Mumbai to Chicago on Aug. 14 and Aug. 15 advised selling gold, which last week fell to $792.10 an ounce in New York, capping an 8.4 percent drop for the week that was the biggest in 25 years. Eight respondents said to buy, and one was neutral.
    Gold, priced in dollars, generally moves in the opposite direction of the U.S. currency. Gold is down as much as 25 percent from a record $1,033.90 reached on March 17. The last time the metal fell for six straight weeks was in May 2004.

    If you have some time for a little cheap entertainment, this link will take you to the Yahoo Message board posts for Cisco’s stock on March 27, 2000. That was the highest day for the hottest stock of the era. These posters are so madly in love with their stock it’s almost funny. Absolutely no criticism is allowed. Just look at the posts. They have a religious intensity to them.
    To scroll through the posts, just click on the > symbol right by the time stamp.

  • A 400,000% Return
    , August 18th, 2008 at 11:06 am

    Floyd Norris asks, “Has a Penny Stock Become a Big Company?”
    In my opinion, the short answer is no. If any company is serious about its business and its future, it has no business being listed on the pink sheets. Any real company has nothing to fear from full disclosure. Multimedia Kingpin Tim Sykes makes his living doing nothing but spotting phony pink sheet stocks that have no reason business outside of issuing daily press releases.
    The longer answer, however, is that yes, a very smaller number of stocks that have fallen to less than $1 per share have gone on to become real companies.
    In early 1985, Apco Argentina (APAGF) traded for as little as 12.5 cents (or an 1/8 back then). The stock has since split 4-for-1 (last November) so it was even less than that. It’s now worth about $27 a share,
    A better example is Mylan Labs (MYL). That stock was going for 75 cents a share in 1976. Since then it’s split 11 times (one 5-for-4, four 2-for-1 and six 3-for-2) for a total of 227.8125 for 1. Which means that adjusted for splits, the stock was going for less than one-third of a penny per share. Mylan is now going for $13.72 which is about half what it was five years ago. Still, that’s a nice 400,000% return from its low.
    (H/T: Paul K.)

  • Inflation at 17-Year High
    , August 14th, 2008 at 4:09 pm

    Ugh.

    Inflation reached a 17-year high last month, fueled by high gasoline and food prices, all but assuring that the Federal Reserve will keep interest rates at their current level for the time being.
    Consumer prices were 5.6 percent higher last month than they were in July 2007, a brisker pace than economists had expected, the Labor Department said on Thursday.
    That was the sharpest annual increase since January 1991, as Americans paid more for clothing, food, transportation and recreational products.
    The news was distressing for investors and the stock markets initially fell on the report. The major exchanges recovered, however, and the Dow Jones industrials up more than 80 points in early afternoon trading. Investors returned to buying financial stocks, taking advantage of a sector that has fared poorly in recent sessions. The broader S.&P. 500-stock index was up 0.46 percent. Wal-Mart also reported a better-than-expected rise in quarterly profits, but the discount retail giant also issued a gloomy sales forecast for the rest of the year. In addition, crude oil prices continued to fall, dropping below $113 a barrel.
    The overall Consumer Price Index, considered the benchmark gauge of domestic inflation, rose 0.8 percent in July. Economists had forecast a rise of half that rate. In June, prices rose 1.1 percent, the second highest monthly pace in 26 years.

    image705.png

  • Stat of the Day
    , August 13th, 2008 at 6:42 pm

    From its peak in 1980, if the price of gold had kept pace with total return of the Wilshire 5000, today gold would be worth over $21,000 an ounce.

  • When All the Small Things Includes Your Portfolio
    , August 12th, 2008 at 4:25 pm

    He lost
    It all
    So screwed
    he is
    Oh no!
    Must tour
    A-gain
    Ha Ha
    Dumb Ass
    Say it ain’t so
    Where did it go
    One Point Five Mil
    See you in Court
    Na, na, na, na…..

  • A Very Short Post
    , August 12th, 2008 at 12:06 pm

    I’d really like to buy T. Rowe Price (TROW) but I think it’s about $10 too expensive here.
    image704.png
    Pretty sweet chart tho.

  • Sysco’s Earnings
    , August 12th, 2008 at 11:17 am

    In terms of relative performance, these have been great times for the Buy List. Yesterday, Sysco (SYY) added 4% on good earnings news. Typically, this is one of the most stable large-cap stocks on Wall Street. For Q2, Sysco earned 55 cents a share, three cents more than estimates. Last year, Sysco netted 49 cents a share so the company is growing well.

  • Thank You NICK
    , August 12th, 2008 at 10:43 am

    I’m up 27% in three weeks since my last purchase of Nicholas Financial (NICK). It takes patience but the market is not efficient. The stock is still going for less than 80% of book.

  • From the NYT Corrections
    , August 11th, 2008 at 10:54 am

    August 11, 2008

    The Arts
    A listing of credits on April 28, 1960, with a theater review of “West Side Story” on its return to the Winter Garden theater, misstated the surname of the actor who played Action. He is George Liker, not Johnson. (Mr. Liker, who hopes to audition for a role in a Broadway revival of the show planned for February, brought the error to The Times’s attention last month. )

  • Gas Prices fall for 24 Straight Days
    , August 11th, 2008 at 10:45 am

    Supply and Demand continues to work its magic:

    Retail gasoline prices have fallen for the 24th straight day, a AAA survey of gas station sales showed.
    The national average price for a gallon of regular gas are down more than 7 percent from the record high of $4.114 on July 16, CNNMoney.com reported Sunday.
    Even with gas prices falling, Friday’s national average price is more than $1 higher than it was a year ago.
    In Alaska, the state with the highest prices, drivers pay an average of $4.63 a gallon, the AAA study found. Oklahoma and Missouri have the lowest gas prices, at $3.58 a gallon.
    Diesel, meanwhile, is up nearly 55 percent from last year’s levels. The national average price for diesel fuel fell Sunday to $4.557 a gallon.
    The AAA study is based on data from credit card swipes at 85,000 U.S. fuel stations.