Falling Energy Stocks
Posted by Eddy Elfenbein on May 15th, 2006 at 2:04 pm

I had this brillant plan for the Buy List this year. We were simply going to side-step energy stocks and everything would be fine. At least, that was the plan.
So on the first trading day of the year, energy stocks soared. They kept climbing for the rest of January. No problem. We stayed patient. Soon, energy stocks plunged in February and early March, and the Buy List looked much better compared with the S&P 500.
Then energy stocks started rallying again. Every day it seems that energy are either the best- or worst-performing group. Eventually,the sector surpassed its January peak. Now energy are falling again, and very sharply.
Here’s the Dow Jones Oil and Gas Index (^DJUSEN) since the beginning of the year.

Here’s the past five days.

Earnings Preview: Home Depot
Posted by Eddy Elfenbein on May 15th, 2006 at 11:31 am

Home Depot (HD) reports earnings tomorrow. Wall Street is looking for 67 cents a share, but I think HD has a good shot of beating that. The company has been doing well lately, and the economy is stronger than many poeple realize.
The AP takes a look at the stock.

OVERVIEW: Home Depot, the world’s biggest home improvement chain, has been on an acquisition spree this year. The company on Tuesday said it would pay an undisclosed sum for home improvement loan provider EnerBank USA from CMS Energy Corp., a Michigan-based energy holding company.
In January, Home Depot announced it would pay $3.2 billion to acquire Hughes Supply Inc., a distributor of construction, repair and maintenance products, a deal that closed in March. The Hughes acquisition, the biggest in Home Depot’s history, doubles the size of its segment serving business customers like homebuilders, contractors, municipalities and maintenance professionals.
Recently there were reports that Home Depot was interested in acquiring a stake in Orient Home, a home improvement chain in China, though the company has not commented on any talks.
BY THE NUMBERS: Wall Street expects Home Depot to post earnings of 67 cents per share, the mean estimate of 21 analysts surveyed by Thomson Financial, on $21.52 billion in projected sales. In the first quarter of 2005, the company reported profit of 57 cents a share on sales of $18.97 billion.
ANALYST TAKE: “We expect Lowe’s and Home Depot to stand out on the upside due to easy comparisons, favorable weather, and the lagged impact of supportive economic data points,” Merrill Lynch wrote in a May 2 client note. “We forecast 16 percent earnings per share growth to 67 cents per share on 3 percent (same-store sales). Although higher gas prices create uncertainty, we believe that demand for home improvement remains solid and that Home Depot will continue to show productivity improvements.”
WHAT’S AHEAD: Home Depot has benefited from the strong homebuilding market, which has been on a tear for the past five years, fueled by historically low interest rates that have encouraged people to spend more on home renovations. However, many analysts think demand for home improvement products could start to wane, as the housing market cools and the Federal Reserve continues raising interest rates.
STOCK PERFORMANCE: Home Depot shares recently traded around $40 a share on the New York Stock Exchange. The 52-week high was $43.98, hit in July. The stock is more or less flat so far this year.

Random Market Fact
Posted by Eddy Elfenbein on May 15th, 2006 at 7:05 am

It’s been nearly four years since the Dow fell for seven straight sessions. The modern record is 12 straight losing days which happened twice. The first time was from July 29 to August 13, 1941. The second time was from January 9 to 24, 1968.
The longest winning streak came in 1987, which was for unlucky 13. In fact, it was the first 13 sessions of the year. The Dow also rose 12 straight times in 1929 and 1970. The streak in 1929 came on the heels of a six-session winning streak, leading to unmatched 18-of-19 record.

Boomhauer’s Wikipedia Page
Posted by Eddy Elfenbein on May 14th, 2006 at 8:45 pm

For your Sunday reading pleasure. From the Internet:

Read more…

Google Trends: Real Estate Bubble
Posted by Eddy Elfenbein on May 14th, 2006 at 2:08 pm

I haven’t heard much about the real estate bubble lately. Google Trends shows that it was last year’s Big Worry.

The Pirahã Tribe of Brazil
Posted by Eddy Elfenbein on May 13th, 2006 at 11:45 am

Here’s a fascinating article on the language of the Pirahã Tribe of Brazil. Their language has no numbers or subordinate clauses. In fact, the concept of “numbers” totally baffles them.
This is a language like no other. The Pirahã seem only to understand the here and now. Their language apparently contradicts what were beleived to be universal laws of language.

My 5 Step Plan to Spend Less Money on Gasoline
Posted by Eddy Elfenbein on May 13th, 2006 at 7:24 am

1. Spend.
2. Less.
3. Money.
4. On.
5. Gasoline.
It’s still the cheapest energy around:

Unfortunately, there is nothing on the horizon that comes close to gasoline as far as cost and performance is concerned. Consider the fact that taxes in Europe put gasoline prices at $5 to $8 per gallon. If alternatives to gasoline had economic merit, they would surely have arisen in Europe.
Ethanol made out of corn is probably the closest thing we have to a domestic alternative to gasoline. But no matter how nice “growing our own fuel” might be in theory, it’s uneconomically expensive in fact. Even after 30 years of lavish federal subsidy, ethanol (defined as fuel that is nine parts gasoline and one part ethanol) has only managed to capture a bit more than 3 percent of the automotive fuels market, and even industry participants concede if the subsidies and consumption mandates were removed today, the entire industry would collapse.

All-Time Home Run List
Posted by Eddy Elfenbein on May 13th, 2006 at 5:52 am

Yesterday, Alex Rodriguez hit his eighth home run of the year, giving him a career total of 437. Despite all the attention on Barry Bonds, A-Rod is piling up the homers at a much faster rate.
Hank Aaron didn’t hit his 437th home run until September 1966. He was nearly two years older than Rodriguez is now. If A-Rod hits 13 more home runs before the end of the year, he’ll break Ken Griffey Jr.’s record as the youngest player to 450.
Of course, he’s still a long way away from Hank Aaron’s 755. A-Rod will need to average 36 home runs a year for nine more years. In fact, he’s still not even 60% of the way to 755.
Here’s the top 35 (active players in italics):
Aaron………………755
Ruth………………..714
Bonds………………713
Mays……………….660
Sosa……………….588
Robinson………….586
McGwire…………..583
Killebrew………….573
Palmeiro……………569
Jackson…………….563
Schmidt…………….548
Griffey………………539
Mantle……………..536
Foxx…………………534
McCovey…………..521
Williams…………….521
Banks……………….512
Mathews…………..512
Ott…………………..511
Murray………………504
Gehrig……………….493
McGriff………………493
Musial………………..475
Stargell……………..475
Winfield……………..465
Canseco……………..462
Thomas………………455
Sheffield…………….453
Yastrzemski…………452
Bagwell………………449
Thome………………..444
Kingman……………..442
Ramirez……………..441
Dawson………………438
Rodriguez……………437

Another Decline
Posted by Eddy Elfenbein on May 12th, 2006 at 3:51 pm

The market is ready to do something it hasn’t done in over a year — decline over 1% on two straight days (the record is four). The cyclical and small-caps are getting pounded, and the 30-year Treasury broke through 5.3% today.
Energy stocks opened strong yesterday, but have nose-dived ever since. The Dow Oil & Gas Index (^DJUSEN) is currently down about 3%.

Rockin Wall Street
Posted by Eddy Elfenbein on May 12th, 2006 at 12:03 pm

Mark Gilbert compares investment banks to bands:

Investment banks have personalities that are reflected in how they go about their business and how their peers view them. Bands express their character traits through the music they make and the company they keep.

Here’s his rundown:
1) Goldman Sachs = The Rolling Stones
2) Citigroup = Ozzy Osbourne
3) Deutsche Bank = Fleetwood Mac
4) JPMorgan = Radiohead
5) Barclays Capital = Oasis
6) Morgan Stanley = Coldplay
7) Merrill Lynch = Madonna
8) HSBC = any boyband
9) UBS = Phil Collins
10) Commerzbank = David Hasselhoff
Under Deutsche Bank, he write: “A lazy comparison would equate Deutsche Bank AG, Germany’s only global bank, with Kraftwerk, Germany’s only global band.” Kraftwek? Please. Has he never heard of the Scorpions, the Ambassadors of Rock?
Plus, there are some glaring oversights. I’ll try fill in some blanks.
Lehman Brothers = The Clash, the only bank that matters.
Bear Stearns = OutKast, often copied never topped.
Credit Suisse = The Village People, see Quattrone’s mustache for details.