• Why Poor Countries Are Poor
    Posted by on March 25th, 2006 at 3:34 pm

    Tim Harford on the corruption-based economy of Cameroon.
    He finds a new school library that will never house any books because the roof wasn’t built to withstand the country’s rainy season.

    Consider the situation: money that was provided because of social networks rather than need; a project designed for prestige rather than use; a lack of monitoring and accountability; and an architect appointed for show by somebody with little interest in the quality of the work. The outcome is hardly surprising: A project that should never have been built was built, and built badly. The lesson of the story might appear to be that self-interested and ambitious people in power are often the cause of wastefulness in developing countries. But self-interested and ambitious people are in positions of power, great and small, all over the world. In many places, they are restrained by the law, the press, and democratic opposition. Cameroon’s tragedy is that there is nothing to hold self-interest in check.

  • The Market Today
    Posted by on March 24th, 2006 at 4:59 pm

    Thanks to a nice gain from Harley-Davidson (HDI), our Buy List beat the market for the fifth straight day.
    FactSet Research Systems (FDS) came within three pennies of a new high. Bed Bath & Beyond (BBBY) broke $39 a share, before slipping back some.
    For the year, we’re up 3.29% versus 4.38% for the S&P 500 (not including dividends).
    Here’s how our Buy List has done (based on a starting value of $1 million). The red line is Crossing Wall Street. The black line is the S&P 500.
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  • An Avian Flu Index
    Posted by on March 24th, 2006 at 3:44 pm

    You know you’re a professional investor when you look for a profit opportunity from anything.
    Here’s an Avian Flu Index from TrendMacro (via Luskin).

    These companies make vaccines, anti-virals and other products likely to be in big demand if the avian flu turns deadly, investment research firm TrendMacro says.

    Stock…………………………..Weds. Close……….YTD
    Alnylam………………………….$17.23……………29.0%
    Avant Immunotherapy……..$2.31……………..22.9%
    Avi…………………………………$6.98…………….102.3%
    BioCryst………………………..$19.16…………….14.4%
    Carrington Labs……………..$6.85………………44.8%
    Chiron…………………………..$45.70……………..2.8%
    Crucell………………………….$24.96…………….-2.5%
    Embrex…………………………$10.00…………….-27.8%
    Gilead Sciences……………..$62.70……………..19.3%
    Generex…………………………$3.22……………..288.0%
    Hemispherx……………………$3.74………………72.4%
    MedImmune…………………..$36.28………………3.6%
    Nastech………………………..$16.87……………..14.6%
    Novavax……………………….$7.51……………….95.1%
    Quidel…………………………..$11.87……………..10.3%
    Sinovac…………………………$5.11……………….27.4%
    Vical……………………………..$5.30……………….26.2%

  • Oshkosh Hits Another New High
    Posted by on March 24th, 2006 at 1:57 pm

    Does this stock ever go down? Man, I wish I had bought shares.
    Check this out. And it’s still going!
    The company makes all sorts of truck and military vehicles. Here’s more from their Web site. Hey, someone has to make all those garbage trucks.

  • Pit Bull Market
    Posted by on March 24th, 2006 at 11:05 am

    Yesterday, the Feds nabbed a bunch of mobsters in a stock scam operation. How’d you like to do business with these folks?

    The defendants, including accused Colombo family captain Joseph Baudanza, 61, and his brother Carmine Baudanza, 63, also extorted stock brokers, traders, cold callers and brokerage firm owners through threats and violence, authorities said.
    One stock promoter was kidnapped and chained to a pit bull dog, one broker was beaten with a bat, and another was stabbed when he tried to leave one of the firms, authorities said.

    In other news, a broker was fired after bringing a prostitute back to the office after hours. Now he’s suing the company. He said he felt unappreciated. (I’m not making this up.)

  • Google Added to S&P 500
    Posted by on March 24th, 2006 at 10:13 am

    Today is the sixth anniversary of the market’s top. On March 24, 20000 (also a Friday), the S&P 500 closed at 1527.46. Six years on, we’re still down about 15%.
    The folks at S&P are celebrating the bursting of the tech bubble by adding Google (GOOG) to the S&P 500. Burlington Resources (BR) has been voted off the island.
    Since Google is about three times larger than BR, index funds need to sell all 499 stocks to make room for Google.
    Also, Alcatel (ALA) and Lucent (LU) are in merger talks. The two sucky companies hope to form one large sucky company.
    Six years ago, Lucent closed at $48 a share. Today, it’s at $3.
    Bed Bath & Beyond (BBBY) is finally starting to move. This stock is a bargain under $40.

  • Top 10 Industry Groups Year-to-Date
    Posted by on March 23rd, 2006 at 6:46 pm

    Steel……………………………………………….38.95%
    Precious Metals……………………………….30.77%
    Commercial Vehicles………………………..24.28%
    Telecommunications…………………………17.12%
    Heavy Construction…………………………..16.44%
    Fixed-Line Telecommunications…………15.92%
    Building Materials…………………………….15.28%
    Industrial Supplies…………………………..14.78%
    Gambling…………………………………………14.76%
    Defense…………………………………………..14.56%

  • GM Sweetens Buyout Deal with New Toyotas
    Posted by on March 23rd, 2006 at 6:28 pm

    I love it.

    General Motors today sweetened its $35,000 buyout deal for 113,000 hourly workers at GM and Delphi, saying that each employee who leaves the companies by the end of March will also get the keys to a brand new 2007 Toyota Sayonara SUV.
    The number one American automaker lost $10.6 billion last year, which according to an unnamed United Auto Workers (UAW) spokesman, is only about $100,000 for each union worker on the payroll.
    The UAW hailed the agreement as “the ultimate tribute to the organized labor movement.”
    “For years, GM has been offering incentives to get consumers to drive their cars out of the showrooms,” said the UAW source, “It’s only fair that they would give us incentives to drive their employees out of the factories.”

    Yes, it’s a parody. But GM is hard to parody these days.

  • The Numbers Guy
    Posted by on March 23rd, 2006 at 3:19 pm

    Carl Bialik writes the “Numbers Guy” column for the Wall Street Journal. Today he has a fun article looking at the chances of picking perfect brackets for the NCAA Tournament.
    Put it this way, it ain’t gonna happen. There’s even a company that provides insurance to companies that sponsor events for picking all 63 games correctly. Talk about a safe business! Fifty contests and zero winners. Papa John’s contest had 90,000 entrants and no one got past the first round.

    To measure the probability for this year’s tournament, Jay Emerson, assistant professor of statistics at Yale, suggests using power ratings developed by Ken Pomeroy, a 32-year-old meteorologist from Cheyenne, Wyo. These ratings are based on team’s records, margin of victory, strength of schedule and other factors, and are expressed in units of points. For example, through last weekend’s games Villanova has a rating of 65.64 and Boston College has a rating of 61.99, so Villanova is expected to beat Boston by about four points — the difference in their ratings — when they play Friday.
    A forecaster could use the ratings from before the tournament (which Mr. Pomeroy sent to me) to predict who would win each matchup. Mr. Pomeroy says the ratings chose a winner in about 71.3% of games this year before the tournament. “There’s so much variation in performance from game to game, that even if you had a perfect system of ranking teams by how good they are, you’d still have significant errors,” he told me.
    Based on Mr. Pomeroy’s stats, I computed the probability that teams would win in all 63 matchups — I don’t recommend you try this at home — and found that if I had relied on power ratings, I would have had a one in 722 billion chance of a perfect bracket. (I’d also have chosen Kansas, a first-round loser, to make the Final Four.)
    Of course, none of these models account for forecaster psychology. The great satisfaction of picking an upset, and the lure of picking one’s own favorite team to win, combine to make picking all favorites more unpalatable than pizza is palatable. These forces conspired to make me, a writer of both a sports column and numbers column, pick first-round loser Syracuse to win the championship in our office pool. I’m tied for last place.

  • Medtronic Wins Patent Ruling
    Posted by on March 23rd, 2006 at 2:16 pm

    From the AP:

    An arbitrator has ruled in favor of Medtronic Inc. in a patent dispute with Johnson & Johnson over the design of its stents, the tiny wire metal mesh used to prop open arteries.
    Johnson & Johnson had alleged that Medtronic’s “Driver” stent and several other Medtronic stents infringed on patents owned by J&J’s stent unit, Cordis Corp. The arbitrator ruled that the stents were licensed under a 1997 agreement between the companies, Medtronic said on Thursday.