• S&P 1450
    Posted by on February 7th, 2007 at 11:34 am

    The S&P 500 just got up to 1452. It was briefly — very, very briefly — above 1450 yesterday.
    The first time the index closed above 1450 was December 23, 1999. The last time was September 28, 2000. Once we hit 1469.25, then we can say we’re flat for the millennium. The Dow is also in record territory and briefly touched 12,700.
    On our Buy List, both FactSet Research Systems (FDS) and Fiserv (FISV) are at new all-time highs.

  • The Biggest Secret on Wall Street
    Posted by on February 7th, 2007 at 10:52 am

    Well, I already used that title before, but here’s another very big secret on Wall Street — mutual savings banks.
    Don’t laugh, whenever you hear that a mutual savings bank is about to go public, pay attention. A mutual savings bank is a bank that’s “owned” by its depositors. Most of these institutions are a zillion years old. They’re well run, and they basically have zero overhead.
    Most are still based in the Northeast. Every year, a few more decide to go public, and that can be very good news. When the bank’s IPO, the depositors usually get first crack at buying the shares. Also, the IPOs tend to do very well. This is from the Wealth Effect Web site:

    Historically, these IPOs have been very profitable. The biggest reason for this is the unusual advantage a mutual bank has going into the public offering: the book value (assets minus liabilities) of a bank is essentially cash, and this cash remains the property of the bank after the offering; add to this the cash the bank receives from the IPO, and you will always be buying shares for less than the book value of the newly public bank.
    Another reason why mutual bank IPOs have done well, some suggest, is that the bank managements — which receive shares at the offering price — want that price set low enough to leave plenty of room for future gains. A third reason for the success of bank IPOs is that many of these banks were eventually purchased (at a premium) by larger banks looking to consolidate a banking industry strewn far and wide by the legislation of the Great Depression.

    A few days ago, a reader asked me about Hampden Bancorp (HBNK), which is a MSB that just went public. The bank was founded in 1852, and it has seven branches in and around Springfield, MA.
    Last month, the bank sold 7.6 million shares to its depositors at $10 a pop, and the stock is already around $12.50. I found the prospectus at the bank’s Web site. The prospectus also lists the seven MSB IPOs since the beginning of 2005, and the performance of their shares.
    Stock……………………………….IPO……After 1 Day….Through 9/1/06
    Chicopee Bancorp (CBNK)…..7/20/06……..44.6%…….46.1%
    Newport Bancorp (NFSB)…….7/7/06……….28%……….36.2%
    Legacy Bancorp (LEGC)………10/26/05……30.3%…….50.4%
    BankFinancial (BFIN) ………….6/24/05…….36%……….74.7%
    Benjamin Franklin (BFBC)…….4/5/05……….0.6%……..40.7%
    OC Financial (OCFL)……………4/1/05………20%……….10%
    Royal Financial (RYFL)………..1/21/05……..16%………..51%

  • Put this Guy at the Fed
    Posted by on February 6th, 2007 at 9:23 pm

    Calgary man fined for charging 207,981% interest:

    Actually, I do not feel bad for what happened. I was doing like everybody else does. A bunch of other pawn shops in Calgary are doing the same.

  • Bernanke Warns
    Posted by on February 6th, 2007 at 5:07 pm

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    Bernanke Warns of Possible ‘Crisis’ From Budget Gap
    Bernanke warns of falling economy
    Bernanke warns of growing rich-poor gap
    Bernanke warns action needed soon on budget
    Bernanke warns US about burden of ageing population
    Bernanke warns against protectionism
    Bernanke warns of deficit balloon
    Bernanke warns of threat to US prosperity
    Greenspan: I’m Totally Broke

  • Cisco Beats the Street
    Posted by on February 6th, 2007 at 4:59 pm

    Cisco (CSCO) just reported earnings of 33 cents a share, two cents more than Wall Street was expecting. The company had gross margins of (GASP) 64.8%. I think only the mafia does better.
    For the decade (and century and millennium), shares of Cisco are down -49.07%. Over that time, the Nasdaq 100 (^NDX) is down -51.64%.

  • Harley sees layoffs, output cuts; blames strike
    Posted by on February 6th, 2007 at 4:13 pm

    Reuters reports:

    Harley-Davidson Inc. plans to lay off up to 740 workers and cut production at two sites because of a strike at its largest motorcycle plant, the company said.
    Negotiators for the company and the strikers planned to meet with a federal mediator today, Harley said. No details on the meeting were made public.
    Nearly 2,800 workers at Harley’s York, Pennsylvania, plant, which makes some of the company’s most profitable motorcycles, walked off the job on February 2 after their contract expired. Harley is seeking a variety of concessions from the workers.
    In a statement posted on its Web site, dated February 5, Harley said it would reduce production of engines, transmissions and components at two plants that supply parts to the York facility. That will mean the temporary layoff of about 740 workers at the plants in Menomonee Falls and Tomahawk, Wisconsin, it said.

    The article notes that analysts believe the strike will cost Harley a penny per share a day in profits. Here’s Harley’s statement. The stock closed higher today.

  • Share Crazy
    Posted by on February 6th, 2007 at 1:48 pm

    Guess what country’s stock market is up 787% since 2002?
    I’ll give you a hint: Kenya.
    Give up?
    From the Guardian:

    Kenya has gone share crazy. The incredible performance of the Nairobi Stock Exchange (NSE) – which is next to the public auditorium and provides the live share-price feed – is the talk of the country. From 2002 to 2007, the main NSE index rose 787% in dollar terms, according to Standard & Poor’s, the investment research firm, making it one of the world’s best-performing markets.
    Jimnah Mbaru, the NSE chairman, said: “We have several stock market billionaires [1bn shillings equals £7.2m]. We’ve stopped counting the multimillionaires.”

  • Nicholas Financial Hits New 52-Week Low
    Posted by on February 6th, 2007 at 12:19 pm

    Shares of Nicholas Financial (NICK) got down to $10.96 a share this morning, a level it hasn’t seen since January of 2006. The P/E ratio is now in the single digits.
    For the first nine months of NICK’s fiscal year, net earnings were up 12.4%

  • Jim Cramer – Sex Machine
    Posted by on February 6th, 2007 at 11:34 am

  • Apocalypse Dow
    Posted by on February 6th, 2007 at 11:07 am

    Bloomberg looks at the market for catastrophe bonds–debt linked to “insurance claims from calamities such as hurricanes, earthquakes or disease.”

    Swiss Reinsurance Co., the world’s largest reinsurer, estimates the market for insurance-linked securities, which includes everything from Triple-X and bird flu bonds to so-called sidecars, will grow to $350 billion in a decade after more than quadrupling to $27 billion in the past five years. With as much as $2 billion in underwriting fees up for grabs, almost every investment bank, from Lehman Brothers Holdings Inc. to Deutsche Bank AG, is building teams to sell and trade insurance.
    “You can’t match these yields,” said Brynjolfsson, who holds $1 billion of catastrophe bonds at Newport Beach, California-based Pimco. “They fully compensate the investor for the risks that are being underwritten and provide an additional premium. I’m making a real strong push with issuers and Wall Street to bring out more of these securities for my investors.”