• Looking at High-Yield Bonds
    Posted by on April 28th, 2008 at 3:30 pm

    Thanks to the credit crunch, the market for high-yield bonds is in the toilet. For example, I called Vanguard to see what the yield is on its Vanguard High-Yield Corporate (VWEHX) fund is. The fund is currently yielding 8.3%, and it has rallied a good ways off its mid-March low.
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    Please note that I’m not recommending this fund, I’m just using it to show you the state of the high-yield market.

  • Golman Sachs’ Top 10 Stocks to Benefit from Rebate Checks
    Posted by on April 28th, 2008 at 12:50 pm

    Drum roll please:

    Cheesecake Factory
    Best Buy
    Darden Restaurants
    Home Depot
    JC Penney
    Kroger
    Kohls
    Royal Caribbean
    Safeway
    Wal-Mart

    Eh, call me unconvinced. I think it’s a mistake to over conceptualize investing ideas. (By the way, investing in something due to demographics is another good example.) There really aren’t many better ideas than to find great companies going for decent prices.

  • The Crash Of Zoe Cruz
    Posted by on April 28th, 2008 at 12:06 pm

    NY Mag has a long article on the career of Morgan Stanley’s Zoe Cruz. At one point, it looked as if she would be Wall Street’s first female CEO. But she was fired in November. Here’s a sample:

    If that meeting in Mack’s office had been the meeting she was hoping for, Cruz would have made history: No woman has ever been CEO of a Wall Street firm. Now it looks like that won’t change for a very long time—there are no other high-ranking women in serious contention for a top job. If women across Wall Street viewed Cruz’s firing as a blow, there were men at Morgan Stanley who seemed almost gleeful about it. The woman they had nicknamed the “Czarina,” the “Wicked Witch,” and, most famously, “Cruz Missile” was out of the picture. They joked that it was worth the $9 billion loss to have her gone. In her rise through the company, Cruz had become not just one of the most powerful women on Wall Street but also the most loathed. It’s a matter of opinion whether those two things are inextricably linked, but for Cruz the same qualities that propelled her almost to the top also prevented her from reaching it.

  • Introduction to Mamajuana Energy
    Posted by on April 28th, 2008 at 11:24 am

    I really don’t know what to say about this, but here’s Mr. Meredith Whitney’s herbal supplement.

    (Via: Timothy Sykes)

  • Yahoo Finance Malfunction
    Posted by on April 28th, 2008 at 11:03 am

    If you use Yahoo Finance to track your portfolio, except for a small number of tickers, it doesn’t seem to be listing current articles this morning.
    Update: It looks like it’s back up.

  • Sysco’s Earnings Report
    Posted by on April 28th, 2008 at 10:58 am

    Speaking of Wrigley (WWY), a similar stock on our Buy List is Sysco (SYY), which is up nicely today on a strong earnings report. The WSJ reports:

    Food-distribution giant Sysco Corp. posted a 9% rise in fiscal third-quarter net income as strong sales growth more than offset increasing food-cost inflation.
    The supplier of food service and equipment to businesses, schools and health-care institutions reported net income of $240.9 million, or 40 cents a share, for the quarter ended March 29, up from $221 million, or 35 cents a share, a year earlier.
    Sales rose 6.7% to $9.15 billion. A year ago, an accounting-rule reduced sales by 0.9%.
    Analysts polled by Thomson Reuters had expected earnings of 39 cents a share on revenue of $9.21 billion.
    The economic downturn amid rising food costs has spelled trouble for restaurant sales. Sysco said Monday it saw food costs jump 6.2% in the quarter.

    Here’s a look at SYY’s sales and earnings of the past few years.
    Year…………..Sales……………EPS
    1998……..$15,327.54……..$0.47
    1999……..$17,422.82……..$0.54
    2000……..$19,303.27……..$0.68
    2001……..$21,784.50……..$0.88
    2002……..$23,350.50……..$1.01
    2003……..$26,140.34……..$1.18
    2004……..$29,335.40……..$1.37
    2005……..$30,281.91……..$1.47
    2006……..$32,628.44……..$1.35
    2007……..$35,042.08……..$1.60
    If you’re new to investing, those numbers above are very good.
    The fiscal year ends in June, so SYY has already made $1.26 for the first nine months of 2008. The company is on track to make about $1.80 this year, and $2 next year.

  • Mars to Buy Wrigley
    Posted by on April 28th, 2008 at 10:32 am

    This is a blockbuster deal in the candy world. Mars, the private candy company, is buying Wrigley (WWY) for $23 billion. Shareholders of WWY will get $80 a share in cash. That’s a nice 28% premium over Friday’s close. Mars is perhaps one of the last, very large privately held companies.
    I’ve been a long-time fan of Wrigley and it’s one of the classic stocks on the market. It has a simple, easy-to-understand business. The company is well run, and the stock has a great long-term track record.
    As I’ve said many times, investors often make a mistake with investing by looking for a stock that’s trying to invent the seventh dimension. You really don’t need to do that. One of the best ways to invest is to find a solid, stable stock that has churned out earnings year after year.
    Twenty-five years ago, shares of WWY were going for about $1 (adjusted for splits). That’s a nice 80-fold return in 25 years, and that doesn’t include a consistently rising dividend. Given Wrigley’s business, it’s probably no surprise that Berkshire Hathaway will be in the deal, providing financing for the purchase.
    Andrew Ross Sorkin writes:

    Mr. Buffett has a history with iconic food and beverage businesses. He was an early investor in Coca-Cola and is already a candy owner in Sees Candies.

    Actually, Buffett didn’t buy Coke (KO) until 1988. I’m not sure if that qualifies as early; it was after the stock had risen a great deal.
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  • Researchers Discover Massive Asshole In Blogosphere
    Posted by on April 28th, 2008 at 8:55 am

    The Onion Radio News is on the scene.

  • How Rare Is a 56-Game Hitting Streak?
    Posted by on April 27th, 2008 at 2:50 pm

    Here’s a fascinating article from the NYT looking at the probability of Joe DiMaggio’s 56-game hitting streak. It turns out, a 56-game streak isn’t that improbable. But from Joe D it is.
    (Via: Joe Weisenthal)

  • Sequoia Fund to Reopen to New Money
    Posted by on April 26th, 2008 at 7:20 pm

    After 26 year, the legendary Sequoia Fund will reopen.

    Since its inception in 1970, Sequoia has returned more than three times that of the S&P 500. An investor who put $1,000 into the fund at inception would today have a little more than $200,000, compared to about $63,000 in an S&P 500 fund, according to Morningstar Inc.
    Sequoia’s reopening comes amid a similar move by several other funds, most noticeably the Longleaf Partners Fund, which reopened this year.
    Sequoia is managed by New York-based Ruane, Cunniff & Goldfarb Inc., which was co-founded by Mr. Ruane, a friend of Mr. Buffet. In 1970, when Mr. Buffett was liquidating his investment partnership, he advised clients to sign with Sequoia. Mr. Ruane died two years ago, and Mr. Goldfarb became chairmman in 2005.
    The fund’s managers hope reopening will infuse fresh blood into its client universe.
    They said their shareholders have aged since the fund was closed in 1982, “to the point that attrition has become an issue.” Its assets are down 2.4% at the end of last year, even though the fund had a positive 8.4% return. The S&P 500 was up 5.5% in 2007.