• Tepper’s Hedge Fund Scores $7 Billion Year
    Posted by on December 21st, 2009 at 10:53 am

    Ever heard of David Tepper? His hedge fund made $7 billion this year, of which Mr. Tepper will keep about $2.5 billion for himself. The funds secret was to beat against American falling into a second Great Depression.

    Through February and March, Mr. Tepper scooped up beaten-down bank shares as many investors were running for the exits. Day after day, Mr. Tepper bought Bank of America Corp. shares, then trading below $3, and Citigroup Inc. preferred shares, when that stock was under $1. One of his investors insisted more carnage loomed. Friends who shared his bullish beliefs were wary of aping his moves amid speculation that the government was about to nationalize the big banks.
    “I felt like I was alone,” Mr. Tepper recalls. On some days, he says, “no one was even bidding.”
    The bets paid off. A resurgent market has helped Mr. Tepper’s firm, Appaloosa Management, gain about 120% after the firm’s fees, through early December. Thanks to those gains, Mr. Tepper, who specializes in the stocks and bonds of troubled companies, manages about $12 billion, a sum that makes Appaloosa one of the largest hedge funds in the world.

  • The Short-Selling Conspiracy
    Posted by on December 21st, 2009 at 9:57 am

    I’m honored to be named a Sith Lord — a member of the short-selling conspiracy.
    If anyone needs me, I’ll be meeting with the Rothschilds by the grassy knoll.

  • Worst Decade Ever
    Posted by on December 21st, 2009 at 9:40 am

    The Wall Street Journal tallies up how bad this decade has been:

    With two weeks to go in 2009, the declines since the end of 1999 make the last 10 years the worst calendar decade for stocks going back to the 1820s, when reliable stock market records begin, according to data compiled by Yale University finance professor William Goetzmann. He estimates it would take a 3.6% rise between now and year end for the decade to come in better than the 0.2% decline suffered by stocks during the Depression years of the 1930s.
    The past decade also well underperformed other decades with major financial panics, such as in 1907 and 1893.
    “The last 10 years have been a nightmare, really poor,” for U.S. stocks, said Michele Gambera, chief economist at Ibbotson Associates.
    While the overall market trend has been a steady march upward, the last decade is a reminder that stocks can decline over long periods of time, he said.
    “It’s not frequent, but it can happen,” Mr. Gambera said.
    To some degree these statistics are a quirk of the calendar, based on when the 10-year period starts and finishes. The 10-year periods ending in 1937 and 1938 were worse than the most recent calendar decade because they capture the full effect of stocks hitting their peak in 1929 and the October crash of that year.
    From 2000 through November 2009, investors would have been far better off owning bonds, which posted gains ranging from 5.6% to more than 8% depending on the sector, according to Ibbotson. Gold was the best-performing asset, up 15% a year this decade after losing 3% each year during the 1990s.
    This past decade looks even worse when the impact of inflation is considered.
    Since the end of 1999, the Standard & Poor’s 500-stock index has lost an average of 3.3% a year on an inflation-adjusted basis, compared with a 1.8% average annual gain during the 1930s when deflation afflicted the economy, according to data compiled by Charles Jones, finance professor at North Carolina State University. His data use dividend estimates for 2009 and the consumer price index for the 12 months through November.
    Even the 1970s, when a bear market was coupled with inflation, wasn’t as bad as the most recent period. The S&P 500 lost 1.4% after inflation during that decade.
    That is especially disappointing news for investors, considering that a key goal of investing in stocks is to increase money faster than inflation.
    “This decade is the big loser,” said Mr. Jones.

    Here’s a cool graphic.

  • The 2010 Buy List
    Posted by on December 17th, 2009 at 7:41 pm

    Here’s the Crossing Wall Street Buy List for 2010:
    AFLAC (AFL)
    Baxter International (BAX)
    Becton, Dickinson (BDX)
    Bed Bath & Beyond (BBBY)
    Eaton Vance (EV)
    Eli Lilly (LLY)
    Fiserv (FISV)
    Gilead Sciences (GILD)
    Intel (INTC)
    Johnson & Johnson (JNJ)
    Jos. A Bank Clothiers (JOSB)
    Leucadia National (LUK)
    Medtronic (MDT)
    Moog (MOG-A)
    Nicholas Financial (NICK)
    Reynolds American (RAI)
    SEI Investments (SEIC)
    Stryker (SYK)
    Sysco (SYY)
    Wright Express (WXS)
    The list is now locked in and I can’t make any changes for the next 12 month. I’ll start tracking the new list on Monday, January 4, 2010. As in previous years, I assume the Buy List to be a $1 million portfolio that’s equally divided among the 20 stocks going by the closing price of December 31, 2009.
    Also as in previous years, I’ve only changed five stocks to the Buy List.
    The five stocks I’m taking out are Amphenol (APH), Cognizant Technology Solutions (CTSH), Donaldson (DCI), Danaher (DHR) and FactSet Research Systems (FDS).
    The five new stocks are Gilead Sciences (GILD), Intel (INTC), Johnson & Johnson (JNJ), Reynolds American (RAI) and Wright Express (WXS).

  • Bernanke Passes Senate Banking Committee
    Posted by on December 17th, 2009 at 11:23 am

    The vote was 16 to 7.

  • Danaher Guides Higher
    Posted by on December 16th, 2009 at 11:30 pm

    Some good news from Danaher (DHR). The company is raising its Q4 guidance to a range of 99 cents to $1.09 a share. The Street was at 97 cents a share (and had been rising). Still, Danaher has had a rough year. It looks like EPS will be down about 17% or so from last year.

  • The Best Time of Year for Stocks
    Posted by on December 16th, 2009 at 3:39 pm

    We’re soon coming up on the famous Santa Claus rally. I crunch all the numbers for the Dow from 1896 through 2007. Historically, the best stretch for the market has come between December 21 and January 7. Of the 15 best days of the year for the market, six are in this period.
    Over 111 years, the Dow has gained an average of 3.39% during that 17-day period. To put that in some perspective, the Dow’s annual gain is 8.32%. This means that more than 40% of the Dow’s yearly gain has come during this brief stretch which is less than 1/20 of the entire year.
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  • The Dump Bernanke Bandwagon
    Posted by on December 16th, 2009 at 3:25 pm

    There are now three senators who say they will vote “nay” on Time’s Person of the Year: Jeff Merkley, John McCain and Bernie Sanders. More may be coming.

  • Bernanke Named Time’s Person of the Year
    Posted by on December 16th, 2009 at 9:50 am

    Wake up, sheeple.
    tiopdmk.jpg
    This will drive the conspiracy folks nuts. Or rather, even nuttier.

  • FactSet Drops on Earnings
    Posted by on December 15th, 2009 at 10:51 am

    Shares of FactSet (FDS) are down sharply today after posting earnings that were in line with expectations, which makes you wonder what the expectations really were. For their fiscal first quarter, FactSet made 74 cents a share and revenues were down a trivial amount. For the second quarter, which ends in January, the company sees EPS ranging between 73 and 75 cents a share. That’s a narrow range. The Street was at 75 cents a share.
    The stock is currently down about 7.6% today. I can’t say I’m complaining since the stock has traveled almost consistently upward all year.