Thank You!
Posted by Eddy Elfenbein on May 12th, 2006 at 11:43 am

Thanks for the all the responses to my question, “where are you?”
I never realized Crossing Wall Street has so many readers. And I certainly never realized that I have readers all over the world. (Canada has the Internet??)
Thanks also for the many kind words. I greatly appreciate all the feedback I get.

Freakonomics on Soccer
Posted by Eddy Elfenbein on May 12th, 2006 at 10:33 am

Are you a good soccer player? It may depend on when you were born.

If you were to examine the birth certificates of every soccer player in next month’s World Cup tournament, you would most likely find a noteworthy quirk: elite soccer players are more likely to have been born in the earlier months of the year than in the later months. If you then examined the European national youth teams that feed the World Cup and professional ranks, you would find this quirk to be even more pronounced. On recent English teams, for instance, half of the elite teenage soccer players were born in January, February or March, with the other half spread out over the remaining 9 months. In Germany, 52 elite youth players were born in the first three months of the year, with just 4 players born in the last three.

Update: Um, it’s not true.

Dow vs. S&P 500
Posted by Eddy Elfenbein on May 11th, 2006 at 5:05 pm

Although the Dow is near an all-time high, it’s still trailing the S&P 500 in this bull market. Here’s a comparison of the two since July 2002.

If the Dow kept pace with the S&P 500, it would be over 1,200 points higher than it is today.

Dell? Or No Dell?
Posted by Eddy Elfenbein on May 11th, 2006 at 12:45 pm

The market is not in a happy place today. Tech stocks are getting hit especially hard. Dell (DELL) just hit a new three-year low.
Dell’s closing price on May 13, 1998: $24.56.
Dell’s price midday May 11, 2006: $24.50.
Dell’s profit for FY1998: $1.46 billion.
Dell’s estimated profit for FY2006: $3.4 billion.
Gold is soaring, and bonds are falling. Interestingly, the short-end of the yield curve is doing well (meaning, yields are lower).

Danaher Hits New High
Posted by Eddy Elfenbein on May 11th, 2006 at 10:17 am

Here’s how strange Wall Street can be. Three weeks ago, Danaher (DHR) reported good first-quarter earnings. The company made 67 cents a share, two cents more than Wall Street’s consensus. The company’s forecast for the second quarter and the rest of 2006 was a bit conservative, but the range still included Wall Street’s forecast.
The stock reacted by falling. Then, all of a sudden, somebody concluded that this might be a good stock after all. The stock rallied to a new all-time high yesterday. It was almost a delayed reaction to a good earnings report.

Let Us Hear From You
Posted by Eddy Elfenbein on May 11th, 2006 at 10:04 am

The marketing department high atop the Crossing Wall Street Tower has noticed a growing number of visitors to our Web site. We’re curious as to the geographic makeup of our readership. So…let us hear from you! Just send us an e-mail telling us what city or country you call home. Thanks!

UnitedHealth Confirms SEC Probe
Posted by Eddy Elfenbein on May 11th, 2006 at 9:53 am

From the Wall Street Journal:

UnitedHealth Group Inc., becoming the latest company to acknowledge problems with the way it administered its stock-option grants, warned that it might have to restate past results, lose some valuable tax deductions and take charges that could reduce the past three years’ net earnings by $286 million.
The giant health-care company also disclosed in its first-quarter filing with the Securities and Exchange Commission that is the subject of an “informal” SEC inquiry into its stock option granting practices.
UnitedHealth said option related matters could reduce operating earnings by up to $393 million in the past three years, and net income by up to $286 million. It didn’t detail the potential effect on earlier years’ results, though the review goes back to 1994. The biggest impact of the past three years, the company said, would be in 2005 when the company said it could take a 4.5% hit on net earnings, which would drop by $150 million, or 11 cents a share.
UnitedHealth, which previously maintained that its option grant practices were “appropriate”, stressed that the reviews were ongoing and that neither the special committee nor the company had reached final decisions.

After a strong day yesterday, the stock is lower at the open.

Richard Parsons’ Family Crest
Posted by Eddy Elfenbein on May 11th, 2006 at 9:42 am

A reader found Richard Parsons’ family crest. Yuck. It looks likes a renaissance festival collided with a Gay Pride march. Still, he’s probably one of the few graduates of the University of Hawaii to have his own crest. I’ll give him that.

Understanding Options
Posted by Eddy Elfenbein on May 11th, 2006 at 8:32 am

Are you confused about options? Sure, who isn’t. Heck, even AIG got slammed on its derivatives.
Fortunately, Alexander Chong at DailyIndia.com gives us an easy-to-read primer on options.

There are abundant of money in the stock market. However, not everybody can get the money out from there. Some people can gain a lot from the stock market but some has lost a lot of money there. It is very indecisive. Sometime at that moment, you loss money but after a few days, you may earn a profit and sometime is reverse. So, how should we do to get the money out from the stock market? Usually, there are two ways to get the money out from the stock market; that are investing and trading. The difference between trading and investing is trading involves buying and selling share, future or option within a short period of time; whereas investing is buying share, future or option and hold it for quite a long time, usually one year or more before selling it.

Dear lord, this more painful than reading Business Week.

Extensible Business Reporting Language
Posted by Eddy Elfenbein on May 11th, 2006 at 7:17 am

Here’s another chapter in the long-running series of Wall Street being completely taken over by machines. The Denver Post reports:

A relatively new software code known as XBRL will soon give investors, stock analysts and regulators a better way to evaluate and compare the financial statements of public companies, a finance expert said Tuesday during a luncheon in Denver.
The software, short for extensible business reporting language, is already being adopted by a handful of companies. Widespread use, however, is still at least a few years away, industry experts said.

I wouldn’t be surprised if the SEC soon mandates XBRL.

XBRL software is similar to a bar code that tracks any consumer product. It affixes specific “tags” to financial data. Each line item on a company’s balance sheet or earnings report – sales, liabilities and profits – would receive a tag that makes the information easy to access and read.

Update: Jack Ciesielski has more on XBRL.