Archive for March, 2010

  • The Bull Market Turns One
    , March 8th, 2010 at 10:22 am

    This is going to be a big week for market anniversaries.
    Tomorrow is the first anniversary of the bull market. The S&P 500 closed March 9, 2009 at 676.53. That was a Monday. During the day on the previous Friday, March 6, the index got to its spooky intra-day low of 666.79.
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    The day after tomorrow is the seventh anniversary of the 2003 market low. On March 11, 2003, the S&P 500 closed at 800.73. The intra-day low came the follow day at 788.90.
    This month will also market the tenth anniversary of the bull market high of 2000. The S&P 500 reached its closing peak of 1527.46 on March 24. However, the index that everyone was watching back then was the Nasdaq which marked its closing high of 5,048.62 ten years ago this Wednesday.
    We’re still than half of where we were.

  • SEI Investments Rallies on Upgrade
    , March 8th, 2010 at 10:00 am

    So far, it’s a good morning for our stocks on the Buy List. SEI Investments (SEIC) is up over 4% thanks to an upgrade from Janney Montgomery Scott. It’s about time someone noticed them. Also, Jos. A Banks (JOSB) just announced it’s “risk-free” promotion:

    JoS. A. Bank Clothiers, Inc. announces it is bringing back its popular “Risk Free” promotion. As part of the promotion, the Company will refund the price of a suit or sportcoat if the purchaser loses his job, and also allow him to keep the garment.
    “We believe that our customers will appreciate another opportunity to look great at work and at the same time be assured that their purchase will be free if they lose their job,” stated R. Neal Black, President and CEO of JoS. A. Bank. “We think our 5.2 million customers and potential new customers deserve our support in these uncertain times,” continued Mr. Black.

  • The Power of Long-Term Investing
    , March 8th, 2010 at 9:35 am

    In 1935, Grace Goner invested $180 in Abbott Labs (ABT). She died earlier this year at the age of 100.
    Oh..and those ABT shares: $7 million.

    Like many people who lived through the Great Depression, Grace Groner was exceptionally restrained with her money.
    She got her clothes from rummage sales. She walked everywhere rather than buy a car. And her one-bedroom house in Lake Forest held little more than a few plain pieces of furniture, some mismatched dishes and a hulking TV set that appeared left over from the Johnson administration.
    Her one splurge was a small scholarship program she had created for Lake Forest College, her alma mater. She planned to contribute more upon her death, and when she passed away in January, at the age of 100, her attorney informed the college president what that gift added up to.
    “Oh, my God,” the president said.

  • Today’s Jobs Report
    , March 5th, 2010 at 2:39 pm

    Here’s a strange statistical angle to today’s jobs report. Officially, the unemployment rate was unchanged, 9.7%. But you break down the numbers, the rate was eerily the same.
    For January, the unemployment rate was 9.68662%. For February, it was 9.68719%.
    That’s an increase of 57/100,000 of one percent. Think of it this way: If the workforce had remained at 175,000 for January and February, then only person lost his job.
    I’m not trying make any economic point, I just think it’s an unusual statistical occurrence.

  • The Buy List YTD
    , March 4th, 2010 at 4:37 pm

    It’s early but the Buy List has gained 4.06% so far this year. The S&P 500 is up just 0.71%.
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  • The Day Trader With 40 Computer Screens
    , March 4th, 2010 at 2:05 pm

    This is nuts.

  • Dean Foods
    , March 4th, 2010 at 1:57 pm

    I’ve been looking at Dean Foods (DF) as an attractive value play. Like a lot of value stocks, this company is not without its bruises. The company’s recent earnings history has not been very terribly strong. Still, they are making money and the stock is so beaten down that it could rally 10%-20% from here and still be seen as a bargain.
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    Dean is a large and well diversified food company. They own about a zillion brands. Despite that lackluster earnings, they are profitable which says a lot in a rough economy. Dean has bought up a ton of businesses over the past several years and they now find themselves fighting not one, not two, but three anti-trust battles. On top of that margins are under attack thanks to retailers using milk as a loss-leader to get folks in the door.
    Last month, the company said it earned $1.59 for all 2009. For 2010, Dean said they expect EPS to range between $1.54 and $1.64. The mid-point, of course, is exactly what they made last year. So that means they don’t expect any growth. Still, the stock is going for less than 10 times next year’s earnings. Considering what you can get in the bond market right now, that’s not so bad. For Q1, Dean expects EPS between 25 cents and 30 cents.
    The bottom line is that Dean is in rough shape right now, but it things start to turnaround by the middle of 2011, the stock could rally quite handsomely.

  • Should Greece Sell Some Islands to Pay Its Debt?
    , March 4th, 2010 at 12:05 pm

    Some politicians are floating the idea of Greece selling some of its islands to pay down its debt. The only problem is that the aforementioned politicians aren’t Greek but German.

    “The bankrupt one has to do everything he can to make money for the sake of his creditors,” said Josef Schlarmann, a member of Angela Merkel’s Christian Democrat party who heads a lobby of small and midsize businesses that back the CDU. “Greece possesses buildings, businesses and uninhabited islands, which can be used to pay down debt.”
    The sentiment was echoed by Frank Schaeffler, a financial expert with the CDU’s coalition partner the FDP. “The chancellor can’t break the law, and may not promise Greece aid. The Greek state needs to get rid of stakes in businesses and sell real estate — e.g. uninhabited islands.”

    To be fair to the Germans, they’ve always had some difficulties with the concept of sovereignty.

  • Buffett Has Made Nearly $10 Billion Since the Stock Split
    , March 3rd, 2010 at 2:46 pm

    Earlier this year, the B shares of Berkshire Hathaway were added to the S&P 500. The B shares also split 50-f0r-1 on January 21. Measuring from two days before the stock split to the price right now, the B shares have gained 27%. After the split, Buffett owns 75 million B shares, so that’s a gain of roughly $1.4 billion.
    The big money, however, is in the A shares. Buffett owns about 350,000 of them (going by the last numbers I could find). Those are up 23% since January 19 netting Buffet a gain of $8.2 billion.
    Added it all together, Buffett has seen his net worth jump from about $40 billion in mid-January to about $50 billion today. Thank you stock split and S&P!
    (If you haven’t seen it, here’s the latest Chairman’s Letter).

  • Dallas Fed President Richard Fisher
    , March 3rd, 2010 at 10:24 am