Up is Good. Down is Bad.

Twitter is not a Media Company

2012-01-31T06:20:00.000-05:00

Twitter CEO Dick Costolo sounds like he went out of his way last night at All Things D to say that Twitter is not a Media company. Sure it is.

noun

a plural of medium.

( usually used with a plural verb ) the means ofcommunication, as radio and television,newspapers, and magazines, that reach orinfluence people widely: The media are covering thespeech tonight.

Groupon vs. WSJselect

2012-01-31T06:01:00.000-05:00

This just hit my inbox.

The Wall Street Journal is joining Google and everyone else invading Groupon's deal turf.

Groupon's market cap makes no sense to me.

Phone Stacking

2012-01-19T07:23:00.000-05:00

This fad has some redeeming qualities, not the least of which is keeping some attention whores from broadcasting what they're eating/drinking.

It's not going to last, though.

Quote

2011-06-18T07:19:00.000-04:00

Maybe when you die, you come before a big, bearded man on a big throne, and you say, “Is this heaven?” And he says, “Heaven? You just came from there.”

Kirk Douglas

TechCrunch Reviews new Apps/Services

2011-05-15T04:34:00.001-04:00

I stop by Techcrunch.com a few times a week. Often they review a promising new startup that sparks my interest. As follows is my typical experience in the minutes/months following:

Read about a brand new app or service that sounds interesting or useful
Click though some link to go to the web site of the company, typically a brand new start up
Find out that the service doesn't really work yet
Sign up to be a Beta User, or Super Beta User, which sounds terrific
Never hear from them again

From someone's point of view, I guess at least they got my email address.

iPad - like this and like that and not really like anything

2011-04-24T03:24:00.000-04:00

This captures what I think is going on with iPad vs. the competition, or as it increasingly looks, iPad vs. a lack of competition.

The folks over at AAPL Orchard on how difficult it will be for any company to close the gap that iPad has created.

This will change too, I'm just not sure how.

Nothing Better To Do? Get the Poker Thugs

2011-04-16T06:59:00.000-04:00

I can't tell you how proud I am that US federal prosecutors have succeeded in figuring out how online poker sites process deposits and withdrawals.

Bravo.

Listen up you ne'er do well home gamers. It is no longer legal to play poker for your money in your house. You have to go play somewhere else, where it is perfectly legal.

Maybe it is time to move back to Canada.

Paul Graham from YC

2011-03-26T07:28:00.000-04:00

There is a great temptation in life and at work to over think, over analyze and get totally wrapped around the axle. I am currently trying to make it simpler.

The brilliant Paul Graham at Y Combinator tweeted the following last night:

@paulgPaul Graham

It's remarkable what a large percentage of our advice at Y Combinator is either "Just tell them" or "Just ask them."

Rethinking Gov't Employee Unions

2011-03-26T06:41:00.000-04:00

Since the topic of state-employed, union-member compensation and benefits are front and center these days, here in NJ and elsewhere, I thought I'd link to this excellent excerpt from and email posted by Misch over here.

"It is the purest definition of a corrupt process to force membership in any group hired by government and then, in any way, manner, shape or form, use involuntarily collected funds of that group to influence a political process that literally picks the taxpayer's pocket.

I am not writing this as an indictment of the great majority of fine educators. I am, however, writing this as an absolute indictment of the political, self-aggrandizing corruption and whining of those who do, indeed, disgrace the profession. We need to drop most of the pretense of bigger paychecks and benefits "for the children"."

I have a ton of respect for teachers. I hate to see any contract, originally agreed to by both sides, overturmed. The other option is really bad at some junctures, this being one of them.

Groupthink - the new good thing?

2011-03-25T21:27:00.002-04:00

There is going to be, in my opinion, a lot of energy devoted to monetizing this concept.

So the idea is that if everybody piles into the same trade at the same time it is more likely to work? That is sure for sure. It is also not the point at a lot of times, though it mimics technical analysis as it honors the idea that the "collective crew might know more than me".

There is a fine line in here between missing what others know and being the last to do what others have done. Or are doing en masse.

I want to follow up on this tomorrow.

~~~~

Here's the follow up. Of course any trade is more likely to work if lots of people put it on at the same time. Any trade is almost guaranteed to work if 100 people put it on at the same time. In the short term. The trickier thing is what happens when the group thinkers want to go the other way. Everybody can't close positions at the same time. I would not IM you.

Dell Streak - this might work

2011-03-19T09:29:00.000-04:00

This is eerily similar to the AT&T iPhone, a smallish touch screen tablet that doesn't make phone calls.

~~Giving it away~~ selling it for $99 bundled with a PC or laptop might mean that sales will be only somewhat disappointing. I'm betting on Samsung being #2 in the tablet space over time.

Michael Dell apparently has some other ideas. He bought 10 million shares last week. Is he preparing a run at taking Dell private, or does he know something that I don't know?

The US Dollar Yesterday

2011-03-17T08:46:00.000-04:00

What the heck was that?

Looks to me like a big fund was liquidating. Not sure though.

HP - Better?

2011-03-15T04:53:00.000-04:00

"Our vision is to provide seamless, secure, context-aware experiences for a connected world."

Big HP strategy event yesterday. The above is what the new CEO came up with after a few months on the job. Some earnings growth might be a seamless place to start.

Memory Prices are Going Wild

2011-03-15T04:37:00.002-04:00

DXI DRAM price Index from DRAMexchange.

Asia spot prices for computer memory are going up in a hurry this morning, obviously over supply disruptions in Japan.

http://goo.gl/NtXBl DRAMexchange does a good job in times of market dislocation.

Another Big Down Day in Japan

2011-03-15T04:28:00.000-04:00

Japan

INDEX	VALUE	CHANGE	% CHANGE	TIME
TOPIX INDEX (TOKYO)	766.73	-80.23	-9.47%	02:00
TOPIX CORE 30 IDX (TSE)	430.96	-37.89	-8.08%	02:00
TOPIX LARGE 70 IDX (TSE)	752.80	-76.40	-9.21%	02:00
TOPIX 500 INDEX (TSE)	607.88	-61.73	-9.22%	02:00
TOPIX SMALL INDEX (TSE)	748.40	-105.46	-12.35%	02:00
TOPIX MID 400 INDX (TSE)	767.51	-91.18	-10.62%	02:00
TOPIX 100 INDEX (TSE)	540.44	-50.62	-8.56%	02:00
TSE2 TOPIX 2ND SECT INDX	1,914.80	-235.14	-10.94%	02:00
NIKKEI 225	8,605.15	-1,015.34	-10.55%	02:28
NIKKEI 300 INDEX	156.93	-16.17	-9.34%	02:28
NIKKEI 500	732.03	-77.20	-9.54%	02:28
JASDAQ: STOCK INDEX	45.46	-4.22	-8.49%	02:11
NIKKEI JASDAQ	1,055.49	-121.05	-10.29%	02:11
TSE REIT INDEX	926.83	-78.87	-7.84%	02:00
TSE MOTHERS INDEX	363.73	-46.16	-11.26%	02:00

I'm surprised they even opened the market this week.

What if you can't?

2011-03-14T17:57:00.001-04:00

That question in the title could be in response to a standard investment assertion, "You need to do your own work."

CCME looks like a fraud. (Roddy Boyd did some great work here.) It might not be a fraud, but I met with the company in late 2009 and it had a certain toogoodtobetrue feeling to it. There is more bad news out today.

On the face of it, this play on Chinese in-transit advertising could have been a great investment. The growth rates and returns were fabulous. The stock wasn't that expensive, there was a liquid ADR which made buying this no more difficult than buying shares in Microsoft. Now the stock, which has been halted since last week, looks like it may have made $400+ million in market cap vanish.

The guy getting credit for revealing the fraud actually did a lot of work that is not remotely possible for the average retail investor, or even the extraordinary retail investor, including going to China to meet the company. Fast-growing China plays are still very much a hot area. Investing in them as an individual requires an extra dose of caution, and a smaller position, if doing so when you're not in a position to ascertain whether there's any there there.

This is not about oil doubling

2011-03-13T06:31:00.001-04:00

(24-month percent change, $/barrel) ht Reformed Broker

In that chart right to the left, David Rosenberg of Gluskin Sheff points out that oil prices have gone up a lot, and that in some instances in the past when this happened, a recession ensued.

I was never a fan of Rosenberg but I'm not attacking his work or logic. I am also not a fan of the current macro/market debate. On the blog where I first saw this chart, the comments section was unreadable. Everybody has an opinion about why we are here, where we are going, and it feels like it's less fact-based than ever.

See how I didn't give you my opinion on oil prices?

~~~~

The Spring Ahead nonsense is nonsense.

This picture probably isn't copyrighted

2011-03-12T07:02:00.002-05:00

If I were a pro blogger

2011-03-12T07:00:00.000-05:00

I would pay someone to make this Blog look less crappy. Or if I were a pro, I would know how to change the layout without having it look like crap in the interim.

As is, making this look less crap-like is #6 on my to do list today.

~~~~~~

Good luck to all in Japan trying to sort things out.

Microsoft Internet Explorer is my new ex-friend

2011-03-12T06:37:00.002-05:00

Apple had a big iPad day yesterday. The iPad 2 launch was sold out all over the place.

I had to uninstall Microsoft Internet Explorer again.

Another natural disaster, this time in Japan.

While we have had a lot of disasters lately, I hope we don’t have another one any time soon.

On one and two, this is still not an Apple house other than a few iPods but that won’t last forever. I like the functionality of my Gmail account almost as much as that of Outlook, and it is way better in some ways. I can feel the end of the Microsoft stronghold on the operating system coming closer, but in terms of my browser, the virus/bug I got this week in IE was truly ridiculous.

While IE has been the default browser on this laptop since I got it, I have also downloaded Firefox and Chrome to play around with. The bottom line on the other two is that while they feel faster, I didn’t want to spend the time to learn the tricks and shortcuts until this week. I have now switched to Chrome permanently. The IE browser bug went as follows: about 50% of the time I opened a new tab in an existing window or clicked on a link, the new tab would open, crash, open again the go crazy and tell me that my IE has gone off to software heaven.

I ran virus scans with Norton and Malwarebytes, Googled a fix, asked on Twitter, searched on Twitter. Either I was the only person with that problem or nobody cares about the problem. I am joining that latter camp.

CEVA

2011-03-05T08:13:00.003-05:00

Is CEVA refueling its rockets for another big move? It is probably a good takeout candidate give what is going on in the smartphone space.

The stock is not cheap but its market cap is so small that INTC could swallow it in a heartbeat. Or ARMH.

Switching Gears Maybe

2011-03-05T07:01:00.006-05:00

I know that Shaniqua is not gonna like this but since everybody else quit blogging (go Twitter) I think I MIGHT start up again. Or maybe not.

~~~~

Don't read Barron's. It's bad for you.

BUY GOLD. And iPads.

Macau Casinos - Unsustainable?

2011-03-05T06:09:00.003-05:00

"On the mainland, wealthy punters deposit their money in what are called "junkets," organisations widely believed to be controlled by triad gangs.

Once in Macau, the junkets dispense the money back to individuals, and extend credit, often two to three times the amount originally deposited with them. They bring the VIPs to the casinos, and are paid huge commissions. Back on the mainland, punters who fail to pay up face menacing debt collectors."

Right over here.

This Winter Sucks

2011-02-05T10:54:00.000-05:00

Happy 4th of July

2010-07-04T06:46:00.001-04:00

Here we go

2010-05-30T10:05:00.000-04:00

Facebook Privacy Sucks

2010-05-23T07:06:00.006-04:00

I deleted my Facebook account yesterday.

I have a wife of almost twenty years and three wonderful kids. We have family all over North America and friends all over the world. Facebook was a great way to keep in touch.

Now I've accepted the fact that Facebook is the villain and can't be trusted with any personal info of mine.

Bye bye.

I was browsing the internet yesterday and was at a site that I hadn't logged into and wouldn't due to its sketchy nature - the kind that is happy to sell your contact info to advertisers, scammers and spammers. After scrolling down I saw a picture of my kids (my Facebook profile pic) with the message [*****] has logged into this site using his Facebook account.

That was enough for me.

Edit

2009-10-03T05:51:00.002-04:00

Nope. Done for good.

Have a nice day.

Hiatus

2009-09-30T06:04:00.000-04:00

Back next week.

Difficult

2009-09-29T05:17:00.004-04:00

"Sept. 29 (Bloomberg) -- Former Federal Reserve chairman Paul Volcker said the rise of China and other emerging economies has underscored a decline in the comparative economic and intellectual leadership of the U.S.

“I don’t know how we accommodate ourselves to it,” Volcker, an economic adviser to President Barack Obama, said in an interview with PBS’s Charlie Rose taped yesterday in New York. “You cannot be dependent upon these countries for three to four trillion dollars of your debt and think that they’re going to be passive observers of whatever you do.” "

From Bloomberg. This is a very difficult issue and one that I haven't touched on since it is obvious to me that I have no edge here. Give China a big hug if you get a chance.

Heading into NY soon. Later.

Mid Day Update

2009-09-28T12:32:00.002-04:00

At 12:30 the averages are up 1.5 - 2.5%. Quite a day for one that was supposed to be quiet.

There is some speculation that this is end of the quarter mark-up time, which is possible. More probable in my opinion is that there are people who still need to get long, and show that they are long at the end of the quarter. The S&P 500 is up over 15% quarter to date. If you are a client of a pro who missed that, you will be pretty unhappy when you get your quarterly letter next month.

My new investing rules for 2009:

anything can happen
nothing will surprise me
I will stay flexible
I will not get greedy

Like a Library

2009-09-28T06:53:00.005-04:00

Very quiet Monday today as some of us observe Yom Kippur.

Xerox announces that it is acquiring services and outsourcing player Affiliated Computer Systems. That's a pic of a Xerox buggy whip to the right.

Futures are up a little; oil is down a little. The tech data point of the week should be Micron's earnings reports tomorrow. Folks are uniformly positive on memory and Micron never reports exactly what is expected so there should be fireworks.

Good News. Bad News.

2009-09-27T06:52:00.007-04:00

Good news: I'm playing Liberty National today, the new track near the Statue of Liberty that just hosted the Barclays.

Bad news: It's raining.

Good news: The rain might stop by then.

Good news: Other than the really troubling stuff in Iran, no new bad news this weekend. So far.

Bad news: Tomorrow is a holiday for some so trading volume will be light and inconclusive.

****

I have mixed feelings abot HBO's Bill Maher but I like where he's going with this OpEd piece.

"why has America become a nation that can't make anything bad end, like wars, farm subsidies, our oil addiction, the drug war, useless weapons programs - oh, and there's still 60,000 troops in Germany - and can't make anything good start, like health care reform, immigration reform [or] rebuilding infrastructure."

Leaving each of the above examples aside, the truth of that idea is depressing. We need some radical change, not incremental populist politics.

No Way of Knowing

2009-09-26T06:11:00.004-04:00

Whether this is a clean data point or not. h/t to Carpe Diem.

"MP: The 16.2 point increase in Consumer Sentiment from 57.3 in March to 73.5 in September of this year is the largest six-month gain in consumer confidence in 15 years, going all the way back to January of 1994.."

This one is a head scratcher for me, since the economic data has been getting softer for the last couple of weeks. Best to keep on moving.

Branford Marsalis Has An Opinion

2009-09-26T04:24:00.001-04:00

Yowsa.

Oil - One Foot on a Banana Peel

2009-09-25T07:02:00.004-04:00

The technicians are having a field day with oil this week. That chart comes courtesy of Daily Oil Prices. I'm not a technician so I'm not sure whether that is important support but it looks scary. I'm glad that chart is not a stock I own.

There is no shortage of opinion on the causal relationship between and among commodities, currencies and stocks. Leaving the dollar aside, I am very interested to see whether stocks can hang in if oil craters.

****

Can I go to the G20 meeting and protest something? That Corzine is the Governor? My property taxes? The amount of rain we got this summer? That my car is dirty?

It's 6:00 am

2009-09-25T05:48:00.009-04:00

Do you know where your tech stocks are?

They're all over the place.

RIMM's number's were just plain not good enough. Time to regroup.

HP issued guidance that was lukewarm. They're too big ($27 billion/q in revenue) to grow much without the economy.

Chinese online gaming company Shanda Interactive priced its IPO last night at the high end of the range after having upsized the deal a couple of weeks ago. This makes it the biggest U.S. IPO this year.

Morgan Stanley cuts numbers on Microsoft ahead of the quarter for no particular reason
Citi and Stifel both raised numbers or price targets on Google yesterday.
VZ officially (I think), for now, rejects the PALM Pre. My buddy Ski desperately wants to love either MOT or PALM. I've seen plenty of people play the value tech game; not many of them well. Godspeed to him.

Another laptop problem today - grrr. I think this one is going to laptop heaven soon. It has been a trooper.

Twitter = $ 1 billion?

2009-09-24T17:25:00.002-04:00

If you don't think Twitter is worth $1 billion, you have company. I don't either.

The WSJ reports:

"Twitter, the messaging web site that has become an Internet sensation, is nearing a deal to close as much as $100 million of new funding from as many as seven investors, according to people familiar with the deal.

The investors are valuing Twitter, which has yet to generate revenue or finalize its plans for making money, at about $1 billion."

That being said, Twitter might be worth a billion. There are many market participants who can't afford to miss the next big thing, pre orpost IPO, whether it's Google or Salesforce.com or anything else.

The fact that that they haven't figured out a business or revenue model yet is daunting to a rational investor. The fact that they have zillions of users and still have a clean slate to decide on a monetization direction is exhilarating.

It feels like the late 90s again.

Research in Motion in Motion

2009-09-24T11:38:00.005-04:00

Blackberry maker Research in Motion (RIMM) reports tonight and it better be good. YTD chart on the left.

I'm not sure where real expectations are for the quarter but the stock has more than doubled since March and consensus estimates are slightly above the midpoint of guidance that RIMM gave when they last reported.

I have written in the past that while RIMM has done a good job closing the gap with iPhone, they haven't leapfrogged them so it's still a tough battle. In a tape that is sudden acting softer the risk is tilted to the downside.

edit @ 3:54 - the stock is down 3% into the number which is a better setup if you're long

edit @ 4:08 - look out below unless the guidance is great

G20

2009-09-24T06:55:00.007-04:00

At least we get to put the health care debate on hold for 48 hours while the big guys (not Bush) tackle the world's problems.

****

The accounting change (which determines when Apple can recognize revenue on iPhones and Apple TV) that I wrote about on Sept. 17 was approved last night.

According to Morgan Stanley, Apple's CY2010 revenue and earnings estimates go up by 11% and 21% respectively. As I wrote in the earlier post, in an efficient market this would not move the stock. I might be giving the market too much credit.

@

Yesterday

2009-09-24T06:28:00.008-04:00

That was ugly (S&P 1 day chart).

That wasn't a reaction to the Fed; it was a non-reaction that led to a pile-on. The sellers were ready to roll.

The way is now paved for a sharp move down from here. I wouldn't expect more than 5 - 10% though.

****

Microsoft officially denies that it is interested in buying EA. Methinks they doth protest too much. I wouldn't either if I were Microsoft but it feels like they are going to do something.

****

It looks like the Nintendo Wii price cuts (to $199) are official.

Lending - Is This Bullish?

2009-09-23T10:25:00.003-04:00

Thinking about the implications of this chart is giving me a headache. It was part of a chart book that someone sent me this morning. I'm not sure who the outfit Economic Data is but h/t to them.

It would be easy to jump on the negatives that the economy can't grow without credit, the government can't sustain these leverage levels, the dollar is going to continue to be weak...

Consider the positives:

Commercial bank and shadow banking leverage was way too high. That is being corrected.
Commercial bank lending will improve at some point
Said lending will lead to economic growth. It always does.

The downdraft in commercial lending as depicted and extrapolated through year end has been a long three years. Going in the opposite direction for the next three would be a nice tailwind.

Yahoo Quote of the Day

2009-09-23T09:49:00.002-04:00

Interesting article yesterday by Michael Arrington at TechCruch on how by Yahoo hiring veteran operator Carol Bartz to run the company rather than a visionary, they have basically given up despite vocal protestations to the contrary;

"Bartz says not to worry, that middle America still loves them: “When you get outside New York and Silicon Valley, everyone loves Yahoo.” You know who else used to say that as they began their long, slow decline? MySpace."

Fed Decision

2009-09-23T06:12:00.006-04:00

The Fed rate decision is expected at 2:15 today. Fed officials are in a 2-day meeting to discuss their outlook and plans.

I managed to sneak into the meeting yesterday and overheard the following:

Fed Guy 1: What are we going to do?

Fed Guy 2: (quietly) Nothing.

Fed Guy 1: What are we going to say?

Fed Guy 2 (a little louder) Nothing.

Fed Guy 1: Nothing? Why?

Fed Guy 2: It's working, stupid.

Hump

2009-09-23T05:21:00.005-04:00

I was in NY Penn Station yesterday, walking toward the men's room past a food court.

A (homeless?) man standing in front of the restaurants put out his hand and said very quietly, "Can you help me out with some food?"

I kept moving and just shook my head no. He immediately shouted out, "Yaaaaaaaaaaaaa. You're going to pay for that."

I'm not really sure what that meant but it can't be good.

****

Oil is down but U.S. equity futures are up. That hasn't been the case very often of late. Early though.

****

The WSJ is reporting that South Korea will begin allowing sales of the iPhone. We are going to see how well the device sells purely as a fashion item - it's definitely cool but is that enough?. Korea is way ahead of the U.S. in terms of personal technology deployment and adoption, so the iPhone probably doesn't have much of a functionality edge.

Hardware Primer - For Investors Only

2009-09-22T06:00:00.008-04:00

If you are an engineer or the least bit tech savvy, please disregard the following. If you want to invest in tech hardware stocks but don't know any of the terminology, this might be helpful.

A bit is a 1 or a 0. the numbers 1 and 0 compromise the entire alphabet in the digital world.

A byte is a group of 8 bits. They are always in groups of 8.

A megabyte is 1,000,000 bytes. 8,000,000 bits.

A hard disk drive (pictured) is the magnetic storage device in your computer that is capable of storing your programs and files in your computer, whether the power is on or off. I can remember when a 20 gigabyte drive was a very big one.

A terabyte is 1,000,000,000 bytes. A billion. That's a lot of bytes.

Drive maker Seagate today announced its fastest, biggest drive to date, spinning at 7200 rpm and storing 2 terabytes. $299.

Storage is almost free. You can store a lot of anything in there.

The lesson? You should probably only buy drive stocks when they are very very cheap.

edit Wednesday @ 6:22 am. STX preannouced positive last night and caught 2 upgrades today. My point was that the stock is no longer dirt cheap, not that it can't go higher. Business is good.

****

Boring news day today. Commodities up again. Futures too. Stocks? Probably.

Deep Thoughts

2009-09-21T13:01:00.006-04:00

That is Paul Graham - programmer, entrepreneur and essayist.

He does a wonderful job over here questioning a fundamental pillar of modern media - the idea of whether people actually pay for content.

"...consumers never really were paying for content, and publishers weren't really selling it either. If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn't better content cost more?

Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant. Book publishers, for example, set prices based on the cost of producing and distributing books. They treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics."

The logic isn't flawless. The Wall Street Journal is still charging for online news; most other outlets aren't.

Some content is worth next to nothing, some is very valuable. Smart media players are going to figure ths out. You could argue that the internet helped consumers get there ahead of them

Nintendo - Can You Hear Me Now?

2009-09-21T06:44:00.006-04:00

That is a 3-year chart for video game powerhouse Nintendo.

I'm not sure whether the stock is forming a magnificent base or is dead.

Morgan Stanley is commenting this morning that the company has confirmed that the Wii console price will be cut to $199 this month. This should help the market overall, but I know a lot of dads who were going to buy one this Christmas anyway. I might want to buy Nintendo on this news (edit: probably not).

Activision was talking late last week about possibly bypassing to consoles all together. I'm still negative on the high end of the market.

****

Dell buys IT Services company Perot Systems. Ironic that Dell wants to be IBM.

G20 etc.

2009-09-21T05:53:00.007-04:00

Futures were flat when I went to bed last night, but have since weakened significantly on no new news. Have you ever noticed that the financial media blames stretched valuation every time stocks inexplicably decline, but never mention it otherwise?

Blomberg is the worst at this.

****

There is lots of anticipation around the G20 Finance meeting this week. I'm not sure what silver bullets they have that they didn't use during last years's crisis.

Sven: "Hey Mario, did you hear that Lehman failed last night?"

Mario: "Yes. It's bad."

Sven: "Our banks have a lot of exposure."

Mario: "Ours too."

Sven: "I have a plan to save our banks and restart our economy while creating jobs at the same time."

Mario: "Shhhhh. Are you crazy? You should keep that under your hat until the G20 Meeting."

****

Alcatel Lucent (ALU) is in the WSJ denying that it is looking at bids from a Chinese suitor, likely ZTE or Huawei.

Oh really?

On the plus side, ALU has been losing money since 2005. I'm sure they'd like an out.

On the negative side, ALU owns a ton of technology and patents that are very important in defense applications, thanks to its legacy position in Bell Labs.

Health Care

2009-09-20T19:58:00.004-04:00

Words don't do justice when attempting to convey how much I dislike this health care reform debate.

I'm not sure if you noticed, but it's not really much of a debate.
This is exactly the wrong time to try to get this done (economically), especially since there are tax increases involved.
Every plan that I've seen has at least a wrinkle that will materially change the current coverage of Americans who like their health insurance the way it is.

All that being said, I believe that all citizens should have access to affordable coverage.

Bloomberg combed to globe this week for studies (none totally impartial I'm sure) attempting to measure whether the current U.S. systems is any good. Since I've been bitching about health care reform, I wanted to put it out there that there's a lot of bad in what we currently have. Of note:

"While delays do occur [in Canada] for non-emergency procedures, data indicate that Canada’s system of universal health coverage provides care as good as in the U.S., at a cost 47 percent less for each person...

Deaths considered preventable through health care are less frequent in Canada than in the U.S.,

Private-insurance administrative costs in the U.S. are 12.7 cents of a dollar, and as high as 18 cents for some companies, said Karen Davis, president of the Commonwealth Fund. Government plans, including Medicare and Medicaid, spend 5.8 cents excluding costs of private drug plans, she said. In Canada 4.2 cents is spent on administration."

I still think this argument should be shelved for a while and not rushed through, especially in the awful iterations currently out there.

Me vs. Microsoft

2009-09-20T10:24:00.004-04:00

This laptop is about 21 months old so my expectations are declining accordingly.

There is one annoying virus in here that cripples Internet Explorer 8 about once a day. It locks up Explorer entirely then after I reboot, has erased all my cookies and left a big red mark on my forehead. Well not really the last part.

My gripe is that when I restart IE, it takes forever to load because it is running an annoying utility called dumprep.exe. I disabled that utility today. Here is how:

Not Funny Ha Ha

2009-09-20T07:16:00.005-04:00

The NY Times is reporting this morning that the Obama administration and friends are suggesting that NY Governor Paterson insert himself directly under the bus.

"But Mr. Obama’s political team and other party leaders have grown increasingly worried that the governor’s unpopularity could drag down Democratic members of Congress in New York, as well as the Democratic-controlled Legislature, in next fall’s election."

Dear President Obama,

We have a huge problem here in New Jersey. Please see us next.

kthxbye

ps: I would have searched for another picture rather than using that ^ one again but does it really matter?

Evolution

2009-09-19T05:59:00.003-04:00

I Feel His Pain

2009-09-18T11:51:00.006-04:00

Flash memory maker Sandisk is a "hard" stock.

Very volatile stock, very cyclical business, tons of unit growth, massively deflationary pricing.

The BofA ML analyst on the stock today upgraded it two levels, from underperform to buy, and made a tiny bump in his price target - from $9 and change to $30. The stock is at $22.89 as I write this.

It's tough admitting that you are wrong and there's often no good way to get out of the way.

****

Another good day if you're long equities.

Hong Kong Real Estate

2009-09-18T06:55:00.005-04:00

According to this article in FT.com, Hong Kong residential real estate prices have recovered well ahead of those in the U.S.

The Chinese economic recovery is undeniably real and is rubbing off on those regions around it.

On a related note, I feel sorry for the editor who rubber stamped that very poorly-written article. It may be that HK real estate prices have risen 26% since the recent low, or it may be that prices are 26% higher than pre-Lehman. (I doubt that).

****

The futures are flattish. Nothing to see here. Feel free to take the day off.

****

I'm not sure whether Palm is the #3, 4, 5, 6 or 7 smart phone maker, but they reported earnings last night. It speaks to the strength of the smart phone market that a smaller player can put up better than expected numbers and have the temerity to announce a 16 million share secondary. That's a good sign for the equity markets as well, if they get it done cleanly.

New Jersey - You Can Do This

2009-09-17T17:45:00.003-04:00

I am not a fan of that gentleman - NJ Governor Jon Corzine.

NJ's major Talk Radio station, 101.5 FM, was informed by Corzine's staff this morning that he is refusing to participate in a debate ahead of the election in November. According to the station, he is the first pol running for Statewide office to refuse such an invitation in almost twenty years.

http://www.intrade.com/ has the chances of him or any other Democratic candidate of winning down to 35% bid. Bring it.

Apple - Not This Basket

2009-09-17T16:39:00.006-04:00

I wouldn't bet on that Apple right there -->.

I also wouldn't bet on Apple's stock getting a material boost from an accounting change in the works.

According to many, Apple's as-reported quarterly earnings per share will show a material pop if said accounting change is enacted. Apple currently books iPhone revenue over the life of the subscriber contract, not as a one-time sale. Since the phone buyer is a customer of the carrier and not Apple, that seems wrong from the get go. In any case, changing the accounting would pull forward earnings as reported, not change them over the life of the phone.

I'd like to think that the market has figured out what the real returns available to common shareholders are. Maybe not.

Apple's stock has gone up almost every day for the last seven months. Even though I still like it, don't put all your eggs in the wrong basket.

Pig Farmers Getting Involved

2009-09-17T06:06:00.008-04:00

Chinese demand for copper is through the roof.

Real industrial demand, government stockpiling and pig farmer speculation are all behind the surge. Yes. pig farmers. You read that correctly. From Bloomberg:

"Sept. 17 (Bloomberg) --

Private investors in China, the world’s largest metals user, have stockpiled “substantial” quantities of copper as the government ramps up stimulus spending to spur the economy, according to Sucden Financial Ltd.

Pig farmers and other speculators may have amassed more than 50,000 metric tons, Jeremy Goldwyn, who oversees business development in Asia for London-based Sucden, wrote in an e- mailed report after a visit to China. That’s about half the level of inventories tallied by the Shanghai Futures Exchange, which stood last week at a two-year high of 97,396 tons."

It's ironic that the media are willing to take a shot at estimating the extent of retail speculation in the copper market, but even a rough estimate of the effect of speculation on oil prices is hard to come by.

I wish the above farmers would devote time and money to creating and exporting more bacon. Lower prices would be good.

****

Futures up again ahead of the inconclusive economic data in a couple of hours. Having fun yet?

****

Oracle missed last night. I still like it. Cash flow machine.

Yankees Fans

2009-09-16T20:27:00.005-04:00

I think the following is great. You might not.

http://deadspin.com/5360509/expository-writing

And I am a Jeter fan.

Ha Ha 50 Cent

2009-09-16T09:53:00.002-04:00

I love being surprised by people. 50 Cent comes off as very knowledgeable and practical in this CNBC video. I wish that crew of jokers would have let him talk more.

Mr. Market - The Punisher

2009-09-16T07:31:00.006-04:00

Futures are up. Again.

If you thought the market had come too far, too fast and reduced equity exposure accordingly, you are losing.

If you have been getting more constructive and waiting for a pullback to get in, you are losing.

If you think this market is expensive, it looks very much like you are answering the wrong question.

If you are positioned for the economy to double dip, you won't know whether you're right until after it has happened.

****

BAS ML just upgraded Amazon. The name has been stalled out in the $80s so I haven't been wrong yet, but being negative on this one has been unpopular.

****

Return of the day traders?

Yo Mr. Market, I'm very happy for you and Imma let you finish, but 1999 was the best upside rip of our generation.

Help Me Out Here

2009-09-15T20:24:00.003-04:00

That's a not-so-good side by side pair of pictures of Kanye West and Serena Williams.

I want to know how Kanye's misdeed is more newsworthy and/or shocking than that of Serena Williams, aside from the fact that the President apparently called Kanye a jackass.

Kanye acted like a drunk fool. I'm not sure if he was drunk or if he is a fool but he certainly acted like one at that show.

Serena delivered a threat which, if delivered in front of most cops in America, would land her in a lot of trouble. And it was mean.

PC Sales

2009-09-15T09:36:00.003-04:00

That PC was once cool. It isn't any more.

According to Morgan Stanley, August PC sales data as reported by NPD were very cool.

U.S. PC units grew 22% y/y in August vs. a 15% rise in July. ASP declines moderated as expected.

Are replacement PC sales a leading indicator? I hope so.

Still Inconclusive

2009-09-15T05:02:00.005-04:00

That is a year-to-date chart for General Electric. Would the crafty bastard who bought shares in this powerhouse below $6 please raise your hand?

Despite that positive-looking chart, GE has underperformed this year. The stock is down 5% vs. the S&P 500's 16% gain. It probably has to do with the inscrutable financial exposure on their balance sheet, which is may not be fully resolved.

Lots of people - me included - are worried about a trade war with China. GE is a big exporter. GE's stock isn't acting like it's worried, it's up 10% over the last 5 trading days. The market continues to punish the bears and remind all players that the playbook doesn't always work.

****

Interesting Twitter development from yesterday:

ABC's Terry Moran set the Twitter-sphere all aflutter when he wrote:

“Pres. Obama just called Kanye West a ‘jackass’ for his outburst at VMAs when Taylor Swift won.”

According to a statement from ABC, the president’s remark was supposed to be off the record.

As reported, it wasn't even Moran's interview. There might be more than one jackass out there.

Too Late

2009-09-14T12:20:00.001-04:00

From Twitter @ 12:15 today:

serenajwilliams

I want to sincerely apologize FIRST to the lines woman, Kim Clijsterst, USTA & mostly tennis fans everywhere. Thank you all for your support

5 minutes ago from web

And her web site today:

http://www.serenawilliams.com/blog_message_detail.php?msg=125

Yawn.

Please Fasten Your Seat Belts

2009-09-13T18:33:00.003-04:00

This is going to get bumpy.

"Sept. 14 (Bloomberg) -- China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation."

If there's a worse way to go about this short of military action, I'm not sure what it is.

The U.S. and China can take swings at each other on the fair trade front for decades and the only thing that is going to be hurt is trade. I hope some cooler minds than the ones ginning up these decisions get involved soon.

Obama will be on 60 minutes tonight. I'm sure he's straighten it all out.

I actually hope he does.

Disappointing

2009-09-13T07:22:00.004-04:00

I was watching college football last night but switched to tennis when my wife and her friend got home from a movie because I'm a great guy like that.

What a crock.

I'm glad my kids weren't watching with me. Serena, between her frequent outbursts, breaking her racket at the end of a much-deserved first set loss and the ending threat/tirade, acted like a spoiled brat throughout.

For the most part she has been a good champion. I guess she can be added to the list of world class athletes whose behavior sinks to a woefully lower level when things aren't going as well as she "deserves".

What Has Changed?

2009-09-12T06:18:00.004-04:00

CNBC has been annoyingly touting their one year anniversary special on the collapse of Lehman et al for weeks and the end of Wall Street as we knew it.

The NY Times takes the other side this morning with their excellent article "A Year After a Cataclysm, Little Change on Wall St."

The question should be whether things are going to change. The article correctly points out that while many of the players have changed, the motivations are the same and the rules have not yet changed much. There is still money to be made.

Google Economist

2009-09-12T05:47:00.005-04:00

Google Chief Economist Hal Varian was in Washington this week telling the good folks there that the recession is over, according the the Post.

Actually, he was there telling them that they should use the internet more to predict economic activity.

"In March, the number of Google users searching for information about unemployment benefits or employment centers began to drop, Varian said. Overall unemployment has continued to climb, of course, but new jobless claims have declined since peaking earlier this year."

The possibilities are endless.

Yup. Still Broken

2009-09-11T06:18:00.009-04:00

NPD result for US video game sales came out yesterday. Not so hot.

Hardware sales were down 25% y/y. Software sales were down 15%, which was better than July if you're a second derivative geek but worse than expectations.

Microsoft should go ahead and buy Electronic Arts just to confuse/diffuse the dismal news flow.

edit: BofA Merrill just downgraded ERTS to sell.

****

We live in a short term world. That being said, the following is stupid:

Steve Pearlstein at the Washington Post writes today about the Aspen Institute's blue ribbon committee recommendations on combating short termism. Mouth full.

The gist is that the quest for short term profits hurts American business. Is it bad if some bank does something stupid at the end of the quarter in order to meet Wall Street expectations? Yes. The blue ribbon panel's solution? Raise taxes on short term traders. Not short term execs and managers. Short term traders and investors.

Come on.

Yoo Hoo

2009-09-11T05:49:00.005-04:00

I wasn't a fan of newish Yahoo CEO Carol Bartz when she was at Autodesk. Nothing specific, just not a fan.

She is growing on me after her comments on Squawk yesterday. From the San Jose Mercury News:

"Would Yahoo CEO Carol Bartz have accepted Microsoft's $40 billion-plus takeover offer last year if she had been in charge of the company then?

"Sure, do you think I'm stupid?" Bartz replied in an interview this morning on CNBC, the business-news cable channel."

Is she responsible for the huge change that just went down in the tech media? Two months ago, Yahoo was an also ran search player. Suddenly, they are on online media powerhouse with a quaint little search business and a partnership with Microsoft. Quite a move.

****

This market refuses to correct. I has got to be pissing a lot of pros off and restoring the confidence of a lot of amateurs.

Wounded Animal

2009-09-10T15:54:00.003-04:00

Motorola's stock has been acting better of late, and has more than doubled since the market low in March.

Much of the better action can be attributed to that <--- phone, which rolled out today. Motorola hasn't had a hit in a while. That particular model's claim to fame is that it is supposed to maximize the social networking experience via a software/service called MOTOBLUR.

There is a risk that Motorola screws up the whole smart phone market if this and their next couple of products are almost good enough. Like most markets in tech, most of the profits happen at the high end. If Moto comes in just below there and has to/chooses to price aggressively, look out.

Push That Rock, Microsoft

2009-09-10T07:09:00.003-04:00

I guess that Microsoft's new search engine, Bing, may have gained some share from Google and Yahoo.

I find it interesting that Microsoft is advertising within Google search results. Tough to win that one.

Some interesting details over here.

Progress

2009-09-10T06:34:00.004-04:00

There was an interesting article at TheHill.com about Obama's new FCC commissioner, Julius Genachowski .

"“We needed an upgrade,” said Genachowski, 47, who has been hailed as the agency’s most tech-savvy chairman in decades. But his interest in the high-tech arena goes well beyond gadgets and has some industry giants eying his moves nervously, wondering what’s next on his upgrading list."

It's nice to see that we have a good candidate in a very important position.

"Genachowski has made a point to emphasize the importance of being a “data-driven” agency that makes “fact-based” decisions."

That is a strange quote coming out of government.

Obama on Health Care

2009-09-09T20:59:00.000-04:00

What?

I give up.

One Bad Deed Deserves Another

2009-09-09T06:50:00.005-04:00

The aftermath of the Bank of America/Merrill Lynch deal has gotten very little press since Ken Lewis' Washington hearings. The travesty continues today, as chronicled in the Financial Times.

The short story goes like this: as the deal was about to close, not-so-careful inspection of the books by BofA execs revealed that Merrill's balance sheet was unraveling quickly. BofA considered backing out of the deal, may or may not have been coerced by Uncle Sam to go ahead with it, but in any case didn't tell shareholders what a mess they were overpaying for.

Very poor performance by BofA execs. The result? The SEC required BofA shareholders, not execs, to pay $33 million in damages. Now NY Attorney General Andrew Cuomo is considering taking more money from BofA shareholders in exchange for the misdeeds of Ken Lewis et al.

Bad stuff.

****

Underwriters Morgan and Goldman announced the IPO for A123 Systems, Inc. today. Does this mean we have officially run out of decent company names?

Back to School

2009-09-08T06:49:00.006-04:00

Back to normal for the markets. Kind of chaotic out there.

Gold is above $1,000
Futures are moving higher
Oil is participating to the upside
The dollar continues to be weak
Morgan Stanley either upgraded or downgraded everything in tech
It's the one day yearly on which my kids are excited about going to school

****

The average iPhone user has spent more than $80 on apps according to a recent survey by AppsFire. I guess that also means that the average iPhone user has spent more on apps than the average person spent on their non-iPhone phone.

This is What They Were Worried About

2009-09-07T17:06:00.005-04:00

If you've checked in here even semi-regularly, you probably know that I'm not a fan of the policies or strategies of the President, even though I understand that he might be a great guy. That being said, those that were worried about the implications of him addressing American students tomorrow were way off base. The White House released the text today:

"Your families, your teachers, and I are doing everything we can to make sure you have the education you need to answer [the diffficult] questions. I’m working hard to fix up your classrooms and get you the books, equipment and computers you need to learn. But you’ve got to do your part too. So I expect you to get serious this year. I expect you to put your best effort into everything you do. I expect great things from each of you. So don’t let us down – don’t let your family or your country or yourself down."

I read the whole thing, I didn't just cherry pick a quote. He will not talk about any issues whosoever that are worrying some of his right wing opponents, so unless you are against your kids getting an education or working hard, calm down.

I don't mind my kids listening at all. Quite the opposite.

Happy Labor Day

2009-09-07T07:13:00.003-04:00

Or Labour Day to you non-Americans.

The S&P 500 is up 12.5% year to date and I am confident that for a significant majority of investors out there, it hasn't felt like a better than average year. After getting pounded in 2008, the first 2 1/2 months of this year were relentlessly down. Unless you ignored the whole thing and hung in there, or made some good moves around the March bottom, you are probably up less than the 12% that the averages show.

Even though the summer is over, there is lots of time between now and Christmas for the market move a lot in either direction, or both. Stay flexible.

****

It is curious that Cadbury turned down big premium from Kraft to be taken out today. Cadbury's stock is acting like their board may be right that the price is too low. Kraft's offer was at a 31% premium to Friday's close. The stock is trading up 41% as I write this.

By the way, I thought the dollar was too weak for deals like this to happen.

Ha-Ha-Harwood

2009-09-06T10:48:00.003-04:00

From DailyKosTV.

NBC/CNBC/MSNBC White House correspondent John Harwood on how ridiculous not allowing Obama to speak to students would be:

"MONICA NOVOTNY: John, what about this controversy over opposition to Obama’s speech to school children?

JOHN HARWOOD: I gotta’ tell you Monica, I’ve been watching politics for a long time, and this one is really over-the-top. What is shows you is there are a lot of cynical people who try to fan controversy, and let’s face it, in a country of 300 million people, there are a lot of stupid people too, because if you believe that it’s somehow unhealthy for kids, for the president to say "work hard and stay in school," you’re stupid. In fact, I’m worried for some of those kids of those parents who are upset — I’m not sure they are smart enough to raise those kids."

Not OK

2009-09-05T08:06:00.003-04:00

Glenn Beck has been trashing this guy - Van Jones - for weeks. I'm not a Beck fan and I wish we could raise the public/media debate to a higher level.

The Washington Post today has some words on the topic:

"White House officials offered tepid support Friday for Van Jones, the administration's embattled energy efficiency guru, who has issued two public apologies this week, one for signing a petition that questioned whether Bush administration officials "may indeed have deliberately allowed 9/11 to happen, perhaps as a pretext for war."

Earlier, Jones said he was "clearly inappropriate" in using a crude term to describe Republicans in a speech he gave before joining the administration."

Ridiculous.

edit: He just resigned.

9.7%

2009-09-04T08:30:00.004-04:00

The jobs number just came out and it is worse than expected. The unemployment rate is now 9.7%.

Futures were up nicely and are struggling to stay positive.

Since it's the Friday before the last long weekend of the summer, I'm guessing that everyone is going to head to the beach early.

Jobs Thought of the Day

2009-09-03T09:38:00.004-04:00

"Due to the 20% adjusted (his estimate of the real unemployent rate) unemployment rate(vs the 9.5% stated) as well as the off the charts debt [to]disposable personal income levels, this economy cannot enjoy a self-sustaining recovery without significant jobs growth."

Robert Marcin writing at RealMoney.com

The jobless claims number this morning was a disappointment and the unemployment data tomorrow, expected at 9.5%, are what everybody is waiting for.

My view is that things getting better slowly on the job front is the best we can hope for.

Gold

2009-09-03T07:15:00.002-04:00

It's hard to find a good place to get charts of currency prices. That --> is the September gold futures price, spiking as you can see.

Someone is worried about something - probably inflation. Could also be out-of-control government spending.

On that note, Minnesota Governor Tim Pawlenty was just on CNBC sounding very much like the next republican candidate for President.

That Was Ugly

2009-09-01T19:40:00.004-04:00

Today's market I mean.

Since I have been thinking a correction is overdue, I'm not going to complain.

I have meetings in New York tomorrow so I'm going to try to ignore this market for the next 30 hours or so.

****

Not Much

2009-09-01T07:54:00.006-04:00

6-month chart of the S&P 500. That's a big move - 676 to 1,020 - 50%.

The futures are indicating that this correction will continue today.

Icahn is throwing in the towel on Yahoo. That whole effort couldn't have been fun or funny.

Ebay has a buyer for Skype? No IPO? Like I've said before, this is a different Ebay. Buy it.

Though I haven't seen the note, I see that Bernstein downgraded AIG today. Not sure why it wasn't already a "sell".

I have a busy day ahead. More later.

Amazon

2009-08-31T13:59:00.005-04:00

That ---> is a 2-year look at AMZN vs. the S&P 500. Winner.

The fact that Amazon's Kindle reader has been getting new competition is no secret and I've written about it before.

Merrill Lynch is making a midday call that Walmart Marketplace, their entry into the 3rd party online retail market, will likely have a negative impact on Amazon.

I think this one is going lower.

Gamestop Might Be Cheap

2009-08-31T10:52:00.003-04:00

The stock of video game retailer might be cheap. The stock is at $24 and next year's consensus earnings estimate is over $3.00

Goldman just upgraded it to conviction buy (I have not read the note or heard the rationale).

I doubt it (the part about it being cheap). I still think the shrink wrapped video game market is totally busted.

Anyone Listening?

2009-08-31T07:26:00.007-04:00

Many of the Fed's actions in bailing out the financial system and the players involved have proven to be good investments, according to data released today.

Nobody viewed this as an investment at the time so that is a silly way to look at it. Some of the recipients have not yet repaid so the math is incomplete. AIG, despite recent claims that it will be able to repay all the money, is still in up to its neck.

My point is that the results have not only been not bad so far, they have been good. The banking system was saved and taxpayers have seen a return on their money.

Here's an ironic twist on the subject from Tim Collins at RealMoney.com:

"What I find ironic here is that the strongest banks/holdings are being allowed to buy back the holdings from the U.S. taxpayers. In essense, the U.S. taxpayer is being forced to sell its winners and hold it losers, which at least from my experience, is not a long term winning strategy."

****

Last day of August. This year is flying by.

Solar Really?

2009-08-30T11:04:00.002-04:00

Is this real?

Wow if so.

Twitter Twitter Twitter

2009-08-30T10:21:00.004-04:00

"Anyway, this all leads me to understand that Twitter is way underhyped and is worth more in the marketplace than anyone has estimated yet. Now I totally understand why Ev Williams didn't take the Facebook deal of about a half billion dollars."

Robert Scoble on why Twitter isn't getting enough love and is worth $5 - 10 billion.

I'm still not close to seeing it. For consumer apps, I'm still thinking Facebook is better. For business apps, I can't think of a business I care enough about to want their Tweets.

Composure

2009-08-29T09:18:00.000-04:00

These guys. The owners I'm sure.

Ummm

2009-08-29T08:27:00.003-04:00

Nothing

2009-08-28T08:37:00.009-04:00

I woke up late and it's raining. This was supposed to be a great day.

My wife, kids and all the inlaws that were here left for the Outer Banks yesterday. When I got home from the office last evening my intention was to kick off a few blissful days of quiet quiet quiet nothing.

Then I locked myself out of the house.

I didn't exactly do anything to lock myself out. The door from my kitchen to my deck has a lock in the doorknob and a dead bolt. We always lock the deadbolt, never lock the knob lock. Never.

My mother in law had locked it. I went outside to move some stuff since rain was coming and re-entering the house entailed (a) me trying to crawl through a basement window that was way too small, (b) going to a neighbor's house to call a locksmith, (c) waiting like a loser for an hour for him to arrive, (c) paying him $160.12 for the 8 seconds it took him to pick the lock.

Not my finest hour.

****

Between the time Dell was tripped up in the 90s speculating on currency and the period a few years ago when PCs became a trueish commodity, Dell was revered as a great execution machine and Michael Dell was the man.

Along those lines, Dell's aggressive guidance post earnings last night is being treated as gospel by tech investors, at least in the pre market.

Oh, and Intel just took up 3Q numbers.

****

AIG is up another 10% pre market. Man oh man I would love to short this stock.

Under the Radar

2009-08-27T11:16:00.005-04:00

Drive maker Seagate (STX) is up 8%+ as it was reported that CEO Steve Luczo bought 100k shares on Tuesday. If my memory serves correct, Steve used to be an investment banker, so...

****

ML is insisting today (good call for a quiet day) that PALM can earn $1.00/share next year. CY 2010 consensus is around breakeven as far as I can tell. The stock at $13 is telling you that real consensus is higher than that.

Dog Days

2009-08-27T05:58:00.011-04:00

Global Positioning System (GPS) makers Tom Tom and Garmin are talking about how 2010 might be a growth year for GPS systems.

It's amazing how quickly that biz went from the hottest category around to something not that exciting that you can do on your phone if you need to.

****

Stocks are up so many want to find something to be positive about. The idea of a PC upgrade cycle beginning in 2h 09 is gaining steam.

Gizmodo adds fuel to the fire by getting excited about Intel's new laptop product cycle, which happens to be coordinated with Microsoft's Windows 7 release. It will be interesting to see whether there is a chance with really new product to halt the slide in average selling prices.

****

Microsoft is cutting price on the Xbox 360. I'm not buying it and I think a lot of other people won't as well. The console market is broken.

****

NJ stuff. Looks like Jon Corzine's Repulican opponent for the Governor's race in November, Chris Christie, shot himself in the foot. NJ101.5 broke the story over here yesterday.

Looks like Corzine will now be the favorite and not the underdog, which is a bummer. http://www.intrade.com/ now has it as pretty even money.

This is a drag since as I've written before, I find Corzine's performance in his 1st term to have been very disappointing.

****

I watched the Allen Stanford (Antigua ponzi schemer) special on CNBC last night. I can't imagine a more boring villain.

****

“There is a theory which states that if ever anyone discovers exactly what the universe is for and why it is here, it will instantly disappear and be replaced by something even more bizarre and inexplicable. There is another that states that this has already happened.”

Douglas Adams

French Nonconnection

2009-08-26T07:12:00.007-04:00

RIP Ted Kennedy.

****

If all goes according to plan, the French could help resolve the current impasse in the US regarding Wall Street compensation.

French President Sarkozy is about to take his Wall Street compensation message to the good folks at the G20 meeting next month in Pittsburgh.

Sarkozy, is his native fiefdom, is willing to among other things deny government underwriting business to firms who do not follow his guidelines, which include 3 year deferrals on 2/3 of bonus payments, limits on total bonus payments per firm and limits on individual bonuses.

Sarkozy wants to set an example and standard for the rest of the world. I hope the American public is paying attention because following French example is not something that Americans have been doing a lot of.

According to Bloomberg, France has done one debt offering this year and Barclays and HSBC were lead underwriters, not Paribas and SocGen. I wish we could fast forward the debate because I can't imagine a large US Government deal not having a US bank on the cover.

If a US institution owes US taxpayers money, the government should have some say on compensation. For all other players - bankers, athletes, musicians, artists, entrepreneurs - let the market decide.

Let the French bring the outrage. We're not going there.

****

Futures and oil are down a little. Not a ton going on.

USPS

2009-08-25T20:44:00.011-04:00

That's the USPS cycling team, former cohort of overachieving Lance Armstrong from 1998 to 2004. Whether an [independent?] government agency should be sponsoring a cycling team is not the point I'm trying to make.

The following story hit the wires today:

"U.S. Postal Offering to Pay Workers to Leave, Retire

Aug. 25 (Bloomberg) -- The U.S. Postal Service said it reached agreement with two unions to offer as many as 30,000 employees incentives to resign or retire by the end of next month in a plan that may save $500 million...

[USPS] said in July it may lose at least $7 billion in the fiscal year ending Sept. 30."

In 2004, their last respectable year by decent profitability standards, USPS made $3.1 billion net profit on revenues of $69 billion - and that's not exactly killing it. Their fiscal year ends September 30. In 2007, the numbers had tumbled to a $5.1 billion dollar loss on revenues of $78 billion. 2009 is looking like a greater than $7 billion loss on revenues of $76 billion.

I'm not exactly criticizing USPS, although if you can lose billions three years in a row without having to come to market to issue equity or bonds, explain yourself and have a much better story to tell, you have a better sponsor than I do, but we knew that already.

The Bloomberg story above reminded me of a very strange research meeting I was in at an asset management firm I worked at in San Francisco in 1997 or 1998. Our Director of Research (DOR) told us that USPS was coming in the following week to do a fake road show for a tentative IPO. That wasn't what USPS was saying, that was our DOR's interpretation.

It turns out that the monster UPS IPO was on the way and USPS folks (the US Govvies) were wondering if they should be capitalizing on the same mojo. The process didn't quite get there but as late as January 2000 I found the following article referencing the speculation:

"Article: The Postal Service: One Hot Property

I have a proposal that would allow both the government and the people to benefit greatly from the stock market's growth. United Parcel Service's record-breaking IPO demonstrated that the company's market value was more than $80 billion. The U.S. Postal Service should be sold as well."

We all know what happened. The internet. Just as online shopping and biz-to-biz easier-than-ever eCommerce was giving a turbo boost to shippers UPS and FedEx, it was doing the following to USPS:

Killing traditional mail. Email and electronic payments have had a predictable effect on mail volumes, not to mention the fact that USPS' core mail customer are now more than likely to have grey hair.
Putting serious pressure on USPS management. A government agency that had a recent whiff of the public market limelight was subsequently faced with declining volumes and the imperative to cut costs in a high fixed cost organization that was not traditionally technology friendly.

In the words of Jessica Rabbit, not bad, just drawn that way.

The irony is that had the USPS IPO gone through as contemplated, the US would probably be without a postal service as you read this, or shortly thereafter.

Not the end of the world, but a strange dozen years none the less.

The LA Times is Part of the Problem

2009-08-25T16:53:00.004-04:00

The LA Times has a story today about the death of buy and hold investing. The premise is a layup to resonate with many since the S&P 500 is down 23% over the last 10 years. That is a long time.

The problem I have with the article is encapsulated in the following example that they use in the story:

"Susan York was fed up with the dismal performance of her 401(k) retirement account. Then her husband saw a Sunday morning infomercial in January touting the benefits of trading options, which give an investor the right to buy or sell stocks and other securities at pre-determined prices.

The 50-year-old from Naples, Fla., had limited investment knowledge but attended several seminars before starting to trade in May. So far, York said, she's up an average of 40% a month and is trading full time.

"It's the best job I've ever had, not just for the enjoyment but from the compensation standpoint," said York, who previously sold telecom equipment. "I've replaced a significant six-figure income.""

Let's say she started with $100k, which is low if her actual intention was to replace a six figure income. Compounding at 40% per month over one year would result in a gain of over $5.4 million in the first year. Let it ride and her new bank roll will be over $310 million after year two.

Is that going to happen? Of course not. Might some readers try it for themselves? Of course.

I am not defending the professional investment industry here. Lots of pros got it wrong and the market has been dismal. I'm just pointing out that putting a 4 month fairy tale example into a financial article with a serious premise is irresponsible.

Richard Russell

2009-08-25T12:43:00.005-04:00

That young fellow is Richard Russell and he has been writing the highly respected newsletter Dow Theory Letters since 1958. I am not a subscriber currently but someone emailed me Russell's note from today, which raises the question of whether this is a bear market rally or a new bull market. While that question is much more interesting than whether Bernanke was going to get another term, the conclusion that Russell is leaning toward gives me pause.

"Here's my problem -- I believe all great bear markets end with stocks selling at great values and with investors "fearful and hating the market." I have yet to see either of those phenomena, which makes me think that the final bottom for the bear market that started in October 2008 lies somewhere ahead. It's a fascinating puzzle, and the very viability of the US may depend on its outcome."

I have written about this before but I do believe that just because something happened before does not mean that it will happen again. Particularly, just because past bear markets ended with stocks trading at trough multiples on trough earnings, doesn't mean it will happen this time or ever again. The market may be smarter. Furthermore, making major investment decisions based solely on historical patterns is unlikely to ever create a variant view that leads to outsized gains.

Yet another argument that won't be settled until well after it is proven by time and history.

I am reminded of the following quote:

“Consistency requires you to be as ignorant today as you were a year ago.”

Bernard Berenson

Up is Good. Down is Bad.

Twitter is not a Media Company

me·di·a

Groupon vs. WSJselect

Phone Stacking

Quote

TechCrunch Reviews new Apps/Services

iPad - like this and like that and not really like anything

Nothing Better To Do? Get the Poker Thugs

Paul Graham from YC

Rethinking Gov't Employee Unions

Groupthink - the new good thing?

Dell Streak - this might work

The US Dollar Yesterday

HP - Better?

Memory Prices are Going Wild

Another Big Down Day in Japan

Japan

What if you can't?

This is not about oil doubling

This picture probably isn't copyrighted

If I were a pro blogger

Microsoft Internet Explorer is my new ex-friend

CEVA

Switching Gears Maybe

Macau Casinos - Unsustainable?

This Winter Sucks

Happy 4th of July

Here we go

Facebook Privacy Sucks

Edit

Hiatus

Difficult

Mid Day Update

Like a Library

Good News. Bad News.

No Way of Knowing

Branford Marsalis Has An Opinion

Oil - One Foot on a Banana Peel

It's 6:00 am

Twitter = $ 1 billion?

Research in Motion in Motion

G20

Yesterday

Lending - Is This Bullish?

Yahoo Quote of the Day

Fed Decision

Hump

Hardware Primer - For Investors Only

Deep Thoughts

Nintendo - Can You Hear Me Now?

G20 etc.

Health Care

Me vs. Microsoft

Not Funny Ha Ha

Evolution

I Feel His Pain

Hong Kong Real Estate

New Jersey - You Can Do This

Apple - Not This Basket

Pig Farmers Getting Involved

Yankees Fans

Ha Ha 50 Cent

Mr. Market - The Punisher

Help Me Out Here

PC Sales

Still Inconclusive

Too Late

Please Fasten Your Seat Belts

Disappointing

What Has Changed?

Google Economist

Yup. Still Broken

Yoo Hoo

Wounded Animal

Push That Rock, Microsoft

Progress

Obama on Health Care

One Bad Deed Deserves Another

Back to School