News Posts

Fed Officials Told to Shut Up

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Fed Officials Told to Shut Up New US Fed rules clamp down on “Chatty” officials The US Federal Reserve, in a push to control the often wayward communications of its top officials, issued detailed rules Tuesday dictating what they can and cannot do. The US Fed has come under fire for speaking with a dissonant voice and sometimes allowing details of its highly market-sensitive policy meetings to leak to the media or former staffers. “To the fullest extent possible, Committee participants will refrain from describing their personal views about monetary policy in any meeting or conversation with any individual, firm, … Read more

Call us paranoid

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Call us paranoid but we still see some of that “deer in the headlights” look from Chairman Bernanke in recent public appearances.  After all why shouldn’t he be concerned? Unemployment appears to be intractable, the national deficit is in arithmetic realms never before seen and the remedy for its correction in the hands of Congress who seem more like a squabbling couple in divorce court than elected representatives.  Furthermore the housing bubble collapse appears to have been replaced by an even bigger bubble, sovereign nation debt defaults.  Buying more house than you can afford appears to be a relatively trivial … Read more

Jobs Data Have Rebound Rabbit Stuck in Hat – WSJ.com

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I agree with the message but not the conclusion.  Yes, the economy is in the doldrums.  It’s really quite pathetic.  That doesn’t mean though I am totally pessimistic on stocks.  At the moment we are less than half invested,, mostly in cash but that can and hopefully will change soon.  I do think stocks have little competition.  Real estate investing is scary, the bond market offers negative real rates, and money must go somewhere.  That in part explains why some companies that have decent growth are getting indecent P.E. multiples HEARD ON THE STREET: Jobs Data Have Rebound Rabbit Stuck … Read more

Another promiment bear joins Chanos in China bashing

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Shilling: China Heading for a Hard Landing, Pt. 4 China’s Future, Part 4 Illustration by Jonathan Zawada By A. Gary Shilling Jun 29, 2011 6:57 PM MT 4 Comments     Past performance, in China’s case, may be indicative of future results. In late 2007, the Chinese government was scrambling to control a capital-spending boom. The central bank was concerned about 11 percent growth in gross domestic product, far above its official target of 8 percent, and about money flooding in from exports and direct foreign investment. By Nov. 1, the People’s Bank of China had raised its one- year … Read more

One of my favorite tools- and its free!

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Announcing Valuing a Stock 2 – 10 Principles of Finance!! Buy ValuePro Stock Valuation Software!! ValuePro is our new easy-to-use stock valuation program that interacts with our online valuation service.  Now you can download data from our web site to your computer and use ValuePro to analyze your investments. The price is only $44.95.  Please see our Guide to the ValuePro Software for an in-depth description. Try our online stock valuation service.  Enter the stock symbol, click on the Get Baseline Valuation button, and we do the rest. The inputs used to value the stock are updated periodically.  You can … Read more

IMF warns US of global debt ‘shock’ – FT.com

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June 29, 2011 5:57 pm IMF warns US of global debt ‘shock’ By James Politi in Washington The International Monetary Fund has warned of a “severe shock” to global financial markets if the US does not move quickly to increase its borrowing authority, adding pressure on Congress and the White House to clinch a deal on fiscal policy. In its annual report on US economic policy, the IMF cited “unfavourable fiscal outcomes” as one of the main dangers to the country’s economic outlook. More On this story Obama warns debt ceiling vote critical Insight Default prospect not focusing minds In … Read more

‘s $14 Billion Mortgage Settlement Should Boost Stock – Barrons.com

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Barron’s Take | WEDNESDAY, JUNE 29, 2011 BofA Settlement a Bullish Turn By TERESA RIVAS | MORE ARTICLES BY AUTHOR Saying it has set aside $14 billion for mortgage-related claims, Bank of America has removed a major longstanding hurdle. Article Comments (5) + text size − print email Share more Twittertwitter DiggDigg Facebookfacebook LinkedinLinkedIn StumbleuponStumbleUpon YBuzzYahoo! Buzz MySpaceMySpace Deliciousdel.icio.us NewsVineNewsVine MixxMixx reprints get rss “The past is never dead. It’s not even past.” Faulkner’s words referred to a fallen Southern belle, but could just as easily apply to Bank of America, which continues to pay for its past sins during … Read more

Dollar seen losing global reserve status – FT.com

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Dollar seen losing global reserve status By Jack Farchy in London The US dollar will lose its status as the global reserve currency over the next 25 years, according to a survey of central bank reserve managers who collectively control more than $8,000bn. More than half the managers, who were polled by UBS, predicted that the dollar would be replaced by a portfolio of currencies within the next 25 years. via Dollar seen losing global reserve status – FT.com.

‘| The Economist

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America’s debt ceiling The mother of all tail risks A US technical default would convulse markets. Nothing else is certain Jun 23rd 2011 | WASHINGTON, DC | from the print edition AMERICA’S debt is supposedly the world’s safest, backed by trustworthy courts and an unrivalled capacity to raise taxes and print money. Yet thanks to a quirk of law, talk of default is not confined to the European side of the Atlantic. via America’s debt ceiling: The mother of all tail risks | The Economist.

Weekend Reading

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WSJ With Its Stock Price Buffeted, Berkshire May Be a Bargain Warren Buffett likes cheap stocks. Right now, he doesn’t need to look far to find one. His company, Berkshire Hathaway, has slid in the last three months, making it one of the more striking values in the stock market. Indeed, some think the Oracle’s stock hasn’t been this cheap since the height of the Internet stock boom—and investors who got in then have tripled their money, even after the recent decline.   Bloomberg Obama, Boehner Put Aside Budget to Tee Up President Barack Obama lines up his putt as … Read more

Insiders are Buying Overseas Shipholding Group Inc. NYSE:OSG

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Insiders are Buying Overseas Shipholding Group Inc. NYSE:OSG   Overseas Shipholding Group Inc. NYSE:OSG has seen a flurry of insider buying with 5 insiders making significant purchases since June 3. CEO Morten Arntzen bought about $105,000 worth of shares on June 15 after previously buying about $84,000 on June 8. Overseas Shipholding Group, Inc. (OSG) is a bulk shipping company engaged in the ocean transportation of crude oil and petroleum products. During the year ended December 31, 2009, the Company owned or operated a fleet of 106 vessels (aggregating 10.9 million deadweight tons and 864,800 cubic meters), of which 84 … Read more

Beware Contagion From Greeks Baring Rifts?

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Thursday, June 16, 2011 Beware Contagion From Greeks Baring Rifts? Richard Barley of the WSJ reports, Beware Contagion From Greeks Baring Rifts: Euro-zone politicians may be fiddling while Athens burns. Tuesday’s meeting of finance ministers brought no progress on how to address Greece’s funding problems and avoid setting off a financial crisis. But conditions in European markets are deteriorating. The main risk from Greece has always been contagion, and that process is already under way. Most directly, prices of Portuguese and Irish bonds have fallen sharply, with 10-year yields rising above 11% and the cost of insuring their debt at … Read more

”t afford.

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The headlines read that EU officials are scrambling over the weekend to avoid triggering a Greek default which could set in motion a daisy chain like detonation of those familiar weapons of mass destruction, credit default swaps.  The very same WMD that nearly took down the global financial system in 2008.    They’re back!!.  And just when you thought it was safe to go in the water.  Apparently there are astonishingly large bets between all kinds of counter-parties regarding sovereign European debt that threaten to take down the entire global financial system all over again.  Or at least a lot of … Read more

Is the US Jobs Crisis Here to Stay?

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Is the US Jobs Crisis Here to Stay?   John Talton of the Seatle Times reports, Why the US is in a jobs crisis:   The situation is nicely encapsulated by economist Nouriel Roubini’s tweet this morning: “US economy now close to stall speed. From anemic recovery to tipping point to stall speed and growth recession. Is a double dip next?” The economy only created 54,000 jobs last month. It takes between 125,000 to 150,000 net new jobs a month just to keep up with the organic numbers of people entering the labor force, much less make up for the … Read more

Singapore Leads the Rich List

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Singapore Leads the Rich List The Fullerton Bay Hotel Singapore LTN reports the Countries with the most Millionaires Y 2010 As financial markets improved last year, Global wealth grew in nearly every region in the World. The fastest, at 17.1%, came in the Asia Pacific region, excluding Japan, followed by North America at 10.2%. “Global wealth is at an all-time high,” says BCG Senior Partner Monish Kumar. According to BCG’s study, Global assets under management grew 8%, to US$121.8T about US$20T above the level during the depths of the Global financial crisis. The number of Millionaire households grew 12.2%, to … Read more

| Invest With An Edge

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ETF Stats for May 2011: 1,010 ETFs Fighting For Scraps June 2, 2011 by Ron Rowland Filed under Commentary, ETF Statistics A steady onslaught of new product introductions continued in May along with the first closure of the year. Sponsors rolled out 36 new ETFs and three ETNs while retiring one ETN. The net addition of 38 brings the quantity of listed ETPs to 1,254 consisting of 1,089 ETFs and 165 ETNs. Currently, ETNs account for 13.2% of ETP listings, but only 1.5% of assets and 1.4% of trading activity. The quantity of actively-managed ETFs remained unchanged at just 34. … Read more

Weekend Reading

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According to www.livetradingnews.com US’s actual employment numbers not that bad The market was disappointed with Friday’s US employment data, but on a close look the actual total employment, as opposed to the widely reported seasonally adjusted numbers, was no near the headline disaster that the market’s reaction took.       Welcome to austerity, America! CNN Money By Nin-Hai Tseng, writer-reporter June 3, 2011: 11:36 AM ET Those calling for smaller government should be pleased: State and local municipal employees are losing their jobs at a much faster pace than the private sector. FORTUNE – For all of Washington’s bickering … Read more

The Next Big Thing or NFC

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I don’t know how to play it yet but I have been looking for some time.  The problem is EVERYONE will be there.  This is a good article I found in my new favorite blog, Chipworks. NXP’s NFC technology in the PN544 controller by chipworks contributed by Sam Thumm First the smartphone came along and replaced our MP3 players, our paper maps, our portable gaming systems, and our in-car DVD players. Even before the smartphone, they held our kids photos and our contact lists so we no longer needed to carry these things in our wallets. However, they have not … Read more

‘s erratic market behavior?

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I believe this was part of the downdraft and erratic market behavior in May.  Combined with the cram down offering of AIG, let to a rough patch.  Oil  rising predictably shook some consumer confidence and crimped discretionary spending.  But all of this was known.  The unknown was the larger seller sitting on the market at the close of the day each week.  SAC investors begin to eye the door.  An article by Katie Benner from Fortune is the first thing I have seen written about what I have talked privately about. By Katie Benner May 31, 2011: 7:37 AM ET The government investigation of Steve Cohen’s firm … Read more

Why I believe so much in charts

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The 20 biggest and most active Apple-trading hedge funds By Philip Elmer-DeWitt May 27, 2011: 8:53 AM ET Who’s behind the weekly Max Pain phenomenon that has become the tail that wags the dog? In our ongoing quest to understand what part the trade in weekly Apple (AAPL) options plays in keeping the company’s stock price from reflecting its performance (see here, here and here), we had a chat the other day with Mark Sebastian, a former market maker at the Chicago Board Options Exchange who posts frequently on TheStreet.com. He’s been encouraging individual investors to piggyback on an options … Read more

‘s easy to figure out who is making money in this crappy economy

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  Just look at the SEC filings.  Insiders are unloading stocks at staggering quantities.  But selling is the nature of the casino market and insiders always sell stock, at least the smart ones.   But some selling is more portending than others.  Here’s my reading of the tea leaves and as usual any actionable trading ideas I can glean from it.   Southern Company SO Southern Company made a lifetime high on 5-19 at $40.87.  According to the Washington Service  “At Southern Co. (SO), the stock reached a 52-week high on 5/19/11, and  has slipped only slightly since that high. Ten … Read more

Weekend Reading Highlights

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As a rule, I don’t post weekend reading that I think is just interesting but only stuff that I think can make you money or save you money or stimulate you to do one or the other.  But the first article I posted was so well written, I had to share it. On the Floor Laughing: Traders Are Having a New Kind of Fun from Atlantic Monthly MAY 9 2011, 1:41 PM ET34 The modern trader is playing the most sophisticated, dynamic, immersive game in the world. Here’s how it works — and why your job might be the next … Read more

Chanos vs. China?

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Svea Herbst-Bayliss and Matthew Goldstein of Reuters report, Top hedge fund chiefs: short green tech, store gems:
Bet against solar energy, says famed short seller James Chanos. Squirrel away gems, advises bond guru Jeffrey Gundlach. Go long on discount retailer Family Dollar, counsels activist investor Bill Ackman.

These and other hot — or unusual — ideas emerged on Wednesday from an annual conference where top hedge fund managers pitch their best investment ideas.

Chanos threw cold water on alternative energy companies, saying that shares in wind turbine maker Vestas Wind Systems and solar panel maker First Solar Inc likely will fall.

Arguing that alternative energy may not create the jobs politicians predict, Chanos said he would likely offend the green movement with his bets.

“The cost of wind is 50 percent more expensive than natural gas,” Chanos said, adding that Denmark-based Vestas would be a good company to bet against or sell short.

The environmental benefits of solar power are also questionable, he said.

Chanos said he is certain that he is on the right path on First Solar because top managers are leaving the company. “We advise you to heed their warnings,” he said, drawing both applause and laughter.

Ackman, who has cemented his reputation as a polite activist, said his new idea is on the passive side — indeed it is not even his own, but investor Nelson Peltz’s idea. He likes retailer Family Dollar Stores Inc for being accessible to shoppers and selling unique and inexpensive products.

While lagging behind chief rival Dollar General, its managers are trying to close the gap, and the company may be a buyout candidate for private equity firms, he said.

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More Spying on Elite Funds – Part 2

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A follow-up to my last comment on spying on elite funds. We begin with an article by Naked Value on Seeking Alpha, Paulson & Co.’s Biggest Buy, Biggest Sell and Top Holdings. You’ll notice that unlike Dodge and Cox, Paulson & Co sold all their Pfizer shares, and initiated a new position in Hewlett-Packard Company (HPQ).

Unlike Soros, Paulson & Co is still betting big on gold, owning a significant stake in SPDR Gold Trust (GLD) and expects a continued recovery, and as such it thinks banks like Citigroup (C) will continue to benefit. The fund also owns Anadarko Petroleum Corp (APC) and Transocean Limited (RIG), which is the company Ontario Teachers’ bet on and made a bundle on.

Are you confused? Don’t be. You should be using the tools on the NASDAQ website to slice and dice the portfolios of these elite funds. For example, clicking on the % change in value header at the top of the fourth column will show you Paulson & Co’s new holdings (click on image to enlarge):

Note that apart from Hewlett-Packard mentioned above, Paulson & Co made a significant new investment in Weyerhaeuser (WY), buying up 31,700,200 shares during Q1 2011. Share prices for both companies are well off their highs, and if the fund did their homework, these could yield excellent returns going forward.

When analyzing 13F quarterly filings, it’s important to look at new holdings, not just top holdings. For example, looking at new holdings for Dodge and Cox which I neglected to do in my last comment, you’ll notice that they bought a significant stake in Motorola Mobility (MMI) and Microsoft (MSFT) during Q1 2011 (click on image to enlarge):

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Mark Haines – We Miss You Already.

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Turning on Squak around 5 this morning I never would have imagined I’d hear “we lost Mark last night” At the ripe age of 65, CNBC anchor Mark Haines, has passed.  He was the best in the business.  I didn’t know him personally but having watched him every morning for more than a decade, it feels awful to know he won’t be on tomorrow. These 2 clips give you some insight in to the type of person and type of host he was. His heated interview with Barney Frank  and his touching goodbye to his long-time morning co-host Erin Burnett earlier this month… [youtube=http://www.youtube.com/watch?v=LrAY3ZxVOH4&w=450&h=400]  We … Read more

Chart of the Day: Will the US Dollar Finally Break Its Long-Term Downtrend?

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May has been a great month for the US Dollar, rallying nicely off of its lows.  Lets take a look at the US Dollar Index over the past year….recently breaking the short-term downtrend channel, and days away from breaking its long-term downtrend channel…Will it rally and break through or find strong resistance and come back off? Will the US Dollar Index break through its downtrend channel? Yes No Free polls from Pollhost.com Source: Bespoke Investment Group

Market may have further to go on the downside

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Bearish chart  The S & P 500 closed down 1.19% Monday on any number of growing anxieties.  We are oversold on a short-term basis but the RSI line is picking up momentum on the way down.  Not good.  Besides the 50 day moving average has been convincingly broken.  Interesting enough Berkshire Hathaway stock is now down for the year. It kind of looks like my broken position in Wells Fargo which is also one of BRK.A’s largest positions. The last year Buffett’s Berkshire Hathaway was negative and the S&p 500 had positive returns was 1999.   There was also massive Internet … Read more

‘s Road to IPO

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Linkedin is a social network geared to the work world. The company has more than 1,000 employees and 100 million members in more than 200 countries. Now it will be one of the first major social media IPOs. Let’s take a look at the history behind Linkedin’s IPO… Source: The Credit Score Blog

Mid-Week Reads…

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Linked-In, The Most Expensive Stock in America and that was pre 90% jump (Smart Money) Rating Agencies Face Crackdown (Dealbook) Earthquake and Aftermath Push Japan Into a Recession (NYT) Collateral Damage: the True Cost of a U.S. Default (Barron’s) Ten High-Conviction Buys from Our Ultimate Stock-Pickers (Morningstar) Against the ‘strong dollar.’ And the ‘weak dollar.’ (Washington Post) Some Simple Deficit Reduction Arithmetic (The Street Light) Hedge Farm! The Doomsday Food Price Scenario Turning Hedgies into Survivalists (New York Observer) Foreign Buyers Getting Firesale Prices on U.S. Housing (Real Time Economics) Soda Maker Company Reaches An All-Time High The anatomy of a short … Read more

Second Automotive Fund Now Available

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First Trust Advisors last week (5/10/11) introduced the First Trust NASDAQ Global Auto Index Fund (CARZ).  CARZ becomes the second fund to focus on the global automotive industry and the first in an ETF format.  The underlying index is a modified market capitalization weighted index of companies classified as automobile manufacturers.  The index caps the five largest stocks at 8% and all others at 4% during each quarterly rebalancing.

CARZ presently has 32 holdings, and the annual index reconstitution is scheduled for next month.  The ten largest stocks are Daimler AG (DDAIF) 7.9%, Ford Motor Company (F) 7.8%, General Motors Company (GM) 7.2%, Toyota Motor Corporation (TM) 7.1%, Honda Motor Co., Ltd. (HMC) 7.0%, Hyundai Motor Co. 5.2%, Kia Motors Corporation 5.0%, Volkswagen AG (VLKAY) 4.3%, Bayerische Motoren Werke AG (BAMXY) 4.2%, and Nissan Motor Co., Ltd. (NSANY) 3.9%.

Nine countries are represented in the fund with Japan at 32.7%, Germany 20.2%, U.S. 17.7%, South Korea 9.9%, France 7.0%, China 5.2%, Italy 5.0%, Taiwan 1.4%, and Malaysia 1.0%.

Fidelity Select Automotive (FSAVX), the first automotive industry fund, was launched nearly 25 years ago in June 1986.  It limped along with assets under $40

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