Today’s Jobs Report
Posted by Eddy Elfenbein on June 1st, 2007 at 2:09 pm

The government reported that 157,000 jobs were created last month. That’s good, not great, but good. The unemployment rate stayed at 4.5%.
The problem I have is that many Americans have left the job market. The number of employed people as a percent of the civilian population is still not very high.
Allow me to chartify:

Warning: The line is bumpy because it’s not seasonally-adjusted. You can see that we’re better than where we were, but far from our best.
If the same percent of the population were employed today as we had seven years ago, that would mean 3.2 million more jobs.

Bancrofts to Meet With Murdoch
Posted by Eddy Elfenbein on June 1st, 2007 at 11:39 am

Maybe they changed their minds, but the Bancrofts are going to meet with Rupert Murdoch and, we can assume, listen to his bid for Dow Jones (DJ). John Carney* at DealBreaker picked up this quote:

“If they meet, they sell,” said a Dow Jones employee familiar with the thinking of the Bancrofts.

They’re also considering other potential bids. I really hope Murdoch wins out if for no other reason to see extra-voting-power shares lose.
*I also stole John’s HAL 9000 image below. It’s what bloggers do.

Where are the Algorithms’ Yachts?
Posted by Eddy Elfenbein on June 1st, 2007 at 10:14 am

Wall Street slowly goes bionic:

Louis Morgan, managing director of hedge-fund firm HG Trading, has never talked to his best trader. That’s because his best trader is a machine.
Morgan’s top earner is a computer whose software can monitor thousands of stocks simultaneously, and respond in less than a blink of an eye when opportunities arise.
“Doing what we do by hand would be impossible,” said Morgan, who focuses on statistical arbitrage — taking advantage of sudden and potentially profitable price anomalies between securities that usually trade in correlation.
Morgan uses a computer trading system based on algorithms, complex mathematical formulas that quickly weigh a huge number of possible trades and execute orders in milliseconds (a millisecond is one thousandth of a second).

Best of all, you don’t have to pay an algorithm a bonus.
If all goes well, I think Wall Street can entirely displace humans by 2011. Of course, stock blogging can never be replicated by a machine. (They wouldn’t dare.)

Macy’s Lands the “M” Ticker
Posted by Eddy Elfenbein on June 1st, 2007 at 9:58 am

On the NYSE, the most highly prized ticker symbols are the single-letter symbols. That’s only for the very elite.
The NYSE has always kept M and I open, and everyone assumed that was for Intel and Microsoft. Well, they apparently think they’re not going to win Microsoft over.
Today, Macy’s (M) starts trading under M.
Two weeks ago, the company changed its name from Federated Department Stores and it used to trade under FD.

207% Returns
Posted by Eddy Elfenbein on June 1st, 2007 at 9:52 am

Since 2001, this asset has increased from $195,000 to $600,000 today. What am I talking about?
New York City cab medallions.
(Hat Tip: Altucher & Stockerblog.)

Dell’s Earnings
Posted by Eddy Elfenbein on May 31st, 2007 at 11:20 pm

After the bell, Dell (DELL) reported earnings of 34 cents a share. Here’s a look at Dell’s quarterly results for the last 10 year. These stats, however, may change. The company hasn’t filed an earnings report in nearly a year.

Quarter…..Sales….Oper. Income…..EPS
1-97………$2,588………$198………..$0.0675
2-97………$2,814………$296………..$0.0725
3-97………$3,188………$346………..$0.085
4-97………$3,737………$397………..$0.10
1-98………$3,920………$429………..$0.11
2-98………$4,331………$483………..$0.12
3-98………$4,818………$539………..$0.14
4-98………$5,173………$595………..$0.15
1-99………$5,537………$600………..$0.16
2-99………$6,142………$694………..$0.19
3-99………$6,784………$650………..$0.18
4-99………$6,801………$513………..$0.16
1-00………$7,280………$625………..$0.19
2-00………$7,670………$736………..$0.22
3-00………$8,264………$818………..$0.25
4-00………$8,674………$589………..$0.18
1-01………$8,028………$588………..$0.17
2-01………$7,611………$545………..$0.16
3-01………$7,468………$544………..$0.16
4-01………$8,061………$594………..$0.17
1-02………$8,066………$590………..$0.17
2-02………$8,459………$677………..$0.19
3-02………$9,144………$758………..$0.21
4-02………$9,735………$809………..$0.23
1-03………$9,532………$811………..$0.23
2-03………$9,778………$840………..$0.24
3-03………$10,622…….$912………..$0.26
4-03………$11,512…….$981………..$0.29
1-04………$11,540…….$966………..$0.28
2-04………$11,706…….$1,006……..$0.31
3-04………$12,502…….$1,089……..$0.33
4-04………$13,457…….$1,187……..$0.37
1-05………$13,386…….$1,174……..$0.37
2-05………$13,428…….$1,173……..$0.38
3-05………$13,911…….$944………..$0.39
4-05………$15,183…….$1,246……..$0.43
1-06………$14,216…….$949………..$0.33
2-06………$14,094…….$605………..$0.22
3-06………$14,383…….$824………..$0.30
4-06………$14,402…….$801………..$0.30
1-07………$14,622…….$947………..$0.34

With Dell, the important number to watch is operating margin. That came in at 6.48%, which is improvement. In the late 1990s, Dell’s operating margins were often over 10% or 11%. In other words, the same amount of sales does nearly half the work. Last quarter, sales increased by 2.86% which is roughly in line with inflation.

The Buy List So Far
Posted by Eddy Elfenbein on May 31st, 2007 at 9:55 pm

Now that the first five months of 2007 are down, let’s look at how our Buy List is doing:

The red line is the Crossing Wall Street Buy List. The black line is the S&P 500.
The 20 stocks on the Buy List are up an average of 4.43% so far. That’s behind the S&P 500 which is up 7.92%. Neither figure includes dividends. The daily volatility of the Buy List is a tiny bit more than the S&P 500 (just 0.48%).
The Buy List was actually leading the S&P 500 up through early April. But the market’s big kick after that left the Buy List in the dust. The good news is that we’ve closed the gap a little in the past two weeks.

Wachovia to buy A.G. Edwards
Posted by Eddy Elfenbein on May 31st, 2007 at 11:52 am

Fresh from buying Golden West Financial, Wachovia (WB) is now buying A.G. Edwards (AGE) for $6.8 billion in cash and stock. This will create the second-largest U.S. retail brokerage.
In September 1974, you could have picked up shares of AGE for less than nine cents a share–after factoring many, many stock splits. The stock is currently trading around $87. That’s a gain of nearly 100,000%. Not bad.

Gates and Jobs Joint Appearance
Posted by Eddy Elfenbein on May 31st, 2007 at 10:41 am

I noticed this sentence in the San Jose Mercury‘s story on yesterday’s joint appearance by Bill Gates and Steve Jobs:

On a personal level, Jobs and Gates were good enough friends in the 1980s to double date occasionally and for Gates to leave friendly prank calls on Jobs’ answering machine.

Am I the only one who wants to hear the girls’ account of the evening?

Surowiecki on Chrysler
Posted by Eddy Elfenbein on May 31st, 2007 at 10:34 am

In the latest New Yorker, James Surowiecki looks at Cerebus’ purchase of Chrysler. He says that “legacy costs” are a problem, but not the only problem.

A 2006 report by the Harbour-Felax Group, a well-respected automotive-industry analyst, concluded that in 2005 Chrysler’s health-care costs were about eleven hundred dollars more per vehicle than Toyota’s. But even if that gap were closed Chrysler and other U.S. automakers would be far less profitable and would be growing more slowly than their foreign competitors. Ultimately, American manufacturers sell too few cars for too little money, and have to offer too many incentives—thousands in cash back or low-interest financing—on the vehicles they do manage to sell. That same Harbour-Felax report found that, on average, Japanese automakers’ profits for 2005 were twenty-nine hundred dollars more per vehicle sold in the U.S. than those of American automakers. And most of that profit comes not from lower production costs but from the Japanese automakers’ being able to charge more, because their cars are better designed and more reliable, and because their mix of products is smarter. Honda’s revenue per vehicle, for instance, was twenty-six hundred dollars more than Chrysler’s.