• Buy List Update
    Posted by on October 10th, 2006 at 8:11 pm

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    Through today, the Buy List is up 7.18% compared with 8.42% for the S&P 500. The good news is that we’ve closed the gap over the last two months. Since August 9, we’re up 11.30% compared with 6.91% for the S&P 500.

  • Two Stocks I’m Watching
    Posted by on October 10th, 2006 at 1:12 pm

    One of things I enjoy about this blog is that it let’s me think out loud. Given that, here are two stocks that I’m keeping a close eye on right now. It doesn’t mean I’ll add them to the Buy List, but they look somewhat interesting at the moment.
    The first is TrustCo Bank Corp. NY (TRST). This little bank is about as dull as they get. The share price has slooowwwlly drifted down from $13 to $11. This thing just doesn’t move much, and no one follows it. But TRST pays a nice dividend (hey, 16 cents a quarter is more than any T-bond will get you).
    The other is Lincare (LNCR). Frankly, I’m undecided on this one. It’s a health care company that makes home oxygen equipment. The stock got slammed after Medicare cut back on its reimbursements. The stock is down, and it may be a great value. I’ll have to look at this more closely.

  • Google Buys YouTube
    Posted by on October 10th, 2006 at 10:00 am

    So the rumors were true:

    The Google guys have swallowed YouTube for $1.65 billion. Marking its biggest deal ever, the Internet giant agreed to snap up the red hot site in a major push for video supremacy on the Internet.
    “Google has taken the first step toward being more of a media company than a technology company,” said Joe Laszlo, senior analyst at Jupiter Research. “They bought the idea that social networking is big business – and they bought the leader.”
    The Google-YouTube match-up marks another stunning story for an online start-up that didn’t even exist two years ago.
    YouTube’s twenty-something founders, Chad Hurley and Steven Chen, started the company just 19 months ago, with the idea of giving regular folks a shot at uploading their own short videos onto the Web. In short order, YouTube became the Internet’s No. 1 video-sharing site.
    The YouTube-ers and their 67-person staff – now overnight millionaires – will join Google but remain largely independent in Silicon Valley headquarters.

    Sigh. Will the 90s ever end?

  • Phelps Wins Nobel Prize
    Posted by on October 9th, 2006 at 11:09 am

    Congratulations to Edmund Phelps, the winner of this year’s Nobel Prize in Economics:

    The 73-year-old Columbia University professor’s work showed how low inflation today leads to expectations of low inflation in the future, thereby influencing future policy decision making by corporate and government leaders.
    Phelps is the sixth American to win a Nobel this year, meaning that every prize except for the literature and peace awards, which are yet to be announced, have gone to Americans.

    U.S.A! U.S.A!

  • Fifty Years Ago Today
    Posted by on October 8th, 2006 at 9:59 pm

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    Twenty-seven batters up. Twenty-seven down.
    Retrosheet has the details:

    Read more…

  • Today’s Jobs Report
    Posted by on October 6th, 2006 at 9:25 am

    This morning, the government reported that the unemployment rate fell to 4.6% (or 4.578% to be exact), which is the lowest rate since before 9/11. But the economy only created 51,000 new jobs last month which is less than half what economists were expecting.
    The economic environment continues to be defined as one with surging corporate profits and very meager job growth. Over the last three years, the economy has created an average of 160,000 new jobs a month, which is just barely above the rate of growth of the labor pool. Contrast this with the 1990s when the economy routinely created over 250,000 jobs a month.

  • Berkshire Hathaway Breaks $100,000
    Posted by on October 5th, 2006 at 4:04 pm

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    The stock reached $100 a share on the first day of trading in 1977.

  • The Correlation of Stocks and Bonds
    Posted by on October 5th, 2006 at 12:58 pm

    I wanted to follow-up on my previous post about how stocks and bonds have become correlated.
    This is a very important point, and I think it explains much of the recent rally. Here’s at look at how they’ve performed since April 25. For my bond proxy, I’m using the American Century Target Maturity 2025 Fund (BTTRX).
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    The two asset categories were negatively correlated until the middle of June. Since then, stocks and bonds have moved in tandem.
    A scatter plot will show it better. Here’s the S&P 500 and the BTTRX from April 25 to June 15:
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    A downward sloping lines mean a negative correlation. The worse bonds did, the better stocks did. This tells us that money went directly out of one asset and into the other. But then, the markets suddenly converged in mid-June. Here’s a scatterplot from June 16 to yesterday:
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    Except for a few strays, that’s a pretty strong positive correlation. This tells us that money was coming out of hard assets like gold and into paper assets.

  • Third-Quarter Earnings Season
    Posted by on October 5th, 2006 at 11:21 am

    Thirteen of our 20 Buy List stocks ended their quarter in September, so we have these earnings announcements to look forward to:
    Company…………………..Ticker…………………Date……………………EPS
    Wachovia…………………….WB……………………16-Oct…………………$1.19
    SEI Investments…………..SEIC …………………18-Oct…………………$0.57
    Danaher………………………DHR …………………19-Oct…………………$0.82
    UnitedHealth Group………UNH…………………..19-Oct………………..$0.76
    Brown & Brown…………….BRO…………………..23-Oct………………..$0.28
    AFLAC………………………….AFL……………………24-Oct………………..$0.72
    Fiserv…………………………..FISV………………….24-Oct………………..$0.62
    Varian Medical Systems….VAR……………………25-Oct………………..$0.53
    Expeditors International…EXPD…………………7-Nov…………………$0.30
    Fair Isaac……………………..FIC………………………TBA………………….$0.57
    Harley-Davidson…………….HOG…………………….TBA………………….$1.10
    Respironics……………………RESP……………………TBA………………….$0.30
    Sysco……………………………SYY……………………..TBA………………….$0.36

  • The Campari Family Feud
    Posted by on October 5th, 2006 at 6:43 am

    How’s this for a dysfunctional family:

    Luca Garavoglia, chairman of the Milan-based beverage company, has just been slapped with a court order to pay his sister and fellow shareholder 100 million euros ($127 million) in damages.
    Maddalena Garavoglia had complained in court in 2000 that the company, in which she held a 23% stake, had tried to push her out in the run up to its 2001 stock-market listing. Using a capital increase, she alleged, it tried to pressured her to sell her holdings to investment powerhouse UBS, misleading her about the value of her stake.

    That’s not all. Maddalena’s brother and mother also face criminal charges for allegedly giving her false information.