• A Little Perspective
    Posted by on July 18th, 2008 at 3:21 am

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  • Best Day Ever
    Posted by on July 17th, 2008 at 5:22 pm

    I’ll have more on this later, but today was the best day ever for our Buy List relative to the market. The Buy List gained 2.95% which is 175 basis points better than the S&P 500. The big gainer today was Amphenol (APH) which added 14.6%.
    For the year, we’re down -11.23% compared with -14.17% for the rest of the market.

  • Department of Not Getting Markets
    Posted by on July 17th, 2008 at 3:10 pm

    From a Bloomberg article titled: Pakistani Investors Stone Exchange as Stocks Plunge.

    “We demand that all stock prices be frozen at current levels.”

    Now why didn’t I think of that?
    (Via: Felix).

  • Markets in Everything
    Posted by on July 17th, 2008 at 2:05 pm

    At Intrade, Senator Obama’s contract to win the presidency is up to 66.1 and McCain’s is at 29.8.
    But here’s the noteworthy part. Hillary’s contract is still around and it’s at 4.6; Gore’s is at 2.0. Yesterday, a trade for Hillary went off at 6.9.
    Obviously, a tragic event isn’t the only scenario in mind. But still, is the unthinkable really that probable?

  • Danaher and Math
    Posted by on July 17th, 2008 at 1:03 pm

    Maybe I’m missing something, but I’m going through Danaher’s (DHR) earnings report and the numbers don’t add up. For the second quarter, the company earned $363.448 million and the number of diluted shares is 336.551. That comes to $1.08 a share while the company lists it as $1.09. I know it’s just a penny, but there shouldn’t be any mistakes here. That really undermines my faith in a company.
    Am I missing something?

  • Banking Index +22%
    Posted by on July 16th, 2008 at 5:41 pm

    The S&P Banking Index (^BIX) jumped 22% today. That’s not one stock; that’s the entire index!
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  • Is it Time to Raise Rates?
    Posted by on July 16th, 2008 at 1:19 pm

    Megan McArdle says yes. Today’s inflation report shows that consumer prices rose by 1.1% last month which is the largest jump in 26 years. For the last 12 months, the headline rate has been 5.02% while the core rate is 2.41%. With the Fed at 2%, this means that real interest rates are still negative.
    The market isn’t expecting the Fed to raise rates anytime soon. According to the Cleveland Fed, the futures market is pretty much convinced (over 80%) that the Fed will hold steady at its August meeting.
    Going by Professor Mankiw’s Fed Funds Rate equation, the Fed is way too loose. His equations is:

    Federal funds rate = 8.5 + 1.4 (Core inflation – Unemployment)

    Let’s plug in the numbers the numbers from June:

    Federal funds rate = 8.5 + 1.4 (2.41 – 5.50)

    That comes to a rate of 4.174% which is more than double where the Fed is.

  • Buy List Earnings
    Posted by on July 16th, 2008 at 10:13 am

    The next few days will be busy for a few stocks on our Buy List. Here are some upcoming earnings dates and Wall Street’s current estimate.
    Amphenol (APH)……………..….….July 17…………..$0.58
    Danaher (DHR)………………..…….July 17…………..$1.06
    Harley-Davidson (HOG).….…….July 17…………..$0.76
    Stryker (SYK)…………………….….July 17…………..$0.73
    Lincare (LNCR)………………..…….July 21…………..$0.71
    Unitedhealth Group (UNH)….….July 22…………..$0.65
    AFLAC (AFL)………………………….July 23…………..$1.01
    SEI Investments (SEIC)………….July 23…………..$0.33
    WR Berkley (WRB)…………..…….July 23…………..$0.85
    Fiserv (FISV)………………………….July 29…………..$0.80

  • Poll: How Would You Rate the Economy?
    Posted by on July 15th, 2008 at 11:04 pm

    Look at the enormous recent change in perceptions of the economy.
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    Nearly 40% of the public has shifted its opinion of the economy in the last 12 months.

  • Citigroup Shares Fall to Lowest Since Company Formed in 1998
    Posted by on July 15th, 2008 at 11:15 am

    From Bloomberg:

    Citigroup Inc., the biggest U.S. bank, fell to the lowest level in New York trading since former Chairman and Chief Executive Officer Sanford Weill created the company through a merger in October 1998.
    Citigroup, which has lost almost half its value on the New York Stock Exchange this year, dropped 43 cents to $14.79 at 9:31 a.m., the lowest since Oct. 8, 1998, the day the New York-based bank was formed through the $36 billion combination of Travelers Group Inc. and Citicorp.

    It’s rail on Citigroup Day at Crossing Wall Street. It turns out the bank also likes to keep a couple of assets “off the balance sheet.” By couple, I mean $1.1 trillion.
    When talking about Citigroup, it’s hard to explain how large this company—and I think its size is part of the problem. Citi has 374,000 employees which isn’t much less than the size of Washington. Citi’s payroll, however, will be declining over the next few months.
    According to Citi’s most recent balance sheet, the company has assets of $2.187 trillion, and liabilities of $2.087 trillion. That’s amazingly large, and that’s just the stuff on the books.
    The company is due to report earnings on Friday and it won’t be pretty. The analysts are all over the map on this one, but the consensus is listed as -61 cents a share. I think taking the under is a pretty safe bet.
    Six months ago, the company reported a loss of nearly $10 billion. Three months ago, Citi reported a loss of $5 billion.