Continue reading Closing Bell: Technical Relief On Groundhog Day (GE, JPM, F, AMTD, RPRX, LXK)

Closing Bell: Technical Relief On Groundhog Day (GE, JPM, F, AMTD, RPRX, LXK) originally appeared on BloggingStocks on Tue, 02 Feb 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Fidelity International's Bolton sees multi-year bull market, led by developing world

Fidelity International's Bolton sees multi-year bull market, led by developing world originally appeared on BloggingStocks on Tue, 06 Oct 2009 15:30:00 EST. Please see our terms for use of feeds.

Continue reading Fidelity to close private equity division

Fidelity to close private equity division originally appeared on BloggingStocks on Mon, 22 Jun 2009 08:40:00 EST. Please see our terms for use of feeds.

At the height of the buyout boom in 2007, private equity firms amassed expansive portfolios. Some of the drivers of the trend included: a growing economy and easy debt markets.

Of course, dealmaking has ground to a halt over the past couple years. However, private equity firms still need to find ways to get liquidity from their portfolios, so as to produce returns for limited partners.

How? Well, the IPO market will be crucial.

So, to this end, Fidelity Investments and Kohlberg Kravis Roberts & Co. (KKR) have agreed to form a venture to distribute IPOs to retail investors. Keep in mind that such offerings typically go to institutions and wealthy individuals. But private equity firms will need to expand their reach.

Continue reading Fidelity and KKR eye IPOs

Fidelity and KKR eye IPOs originally appeared on BloggingStocks on Mon, 08 Jun 2009 08:30:00 EST. Please see our terms for use of feeds.

Now it looks like the media has a new Madoff angle to chew on. He made up the account statements that he sent to his victims. And investigators can find no evidence that he conducted any trades. For example, one Madoff victim's November 2008 account statement showed all sorts of trades -- including the buying and selling of shares in Fidelity's Spartan US Treasury Money Market Fund. But Fidelity has no record that Madoff's firm dealt with the Fidelity unit the works with investment advisers like Madoff.

If Madoff was not making up account statements he could not have pulled off his fraud. Of course the same thing can be said for Satyam Computer Services (NYSE: SAY) and Enron. As I have posted, when you allow a company or an investment manager to write their own report card, you are just asking for trouble. Simply banning that practice and replacing it with a 100% independent group of financial statement preparers would save society uncounted misery.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and is the author of You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He owns Fidelity's Spartan US Treasury Money Market Fund shares and has no financial interest in the other securities mentioned.

Madoff made up trades originally appeared on BloggingStocks on Thu, 15 Jan 2009 10:38:00 EST. Please see our terms for use of feeds.

After the stock market meltdown of 2008, Wall Street brokerages aren't anyone's favorites in 2009.

But some customers said they're still happy with their online broker.

A December ChangeWave survey of 3,051 consumers found that despite the extremely difficult financial market, two online brokerages still capture high customer satisfaction ratings -- Charles Schwab (NASDAQ: SCHW) and archrival, Scottrade.

Continue reading Somebody actually likes their broker!?!

Somebody actually likes their broker!?! originally appeared on BloggingStocks on Mon, 05 Jan 2009 19:00:00 EST. Please see our terms for use of feeds.

Continue reading No. 11: Rich people know it's not what you make, it's what you keep that matters

No. 11: Rich people know it's not what you make, it's what you keep that matters originally appeared on BloggingStocks on Sat, 06 Dec 2008 18:15:00 EST. Please see our terms for use of feeds.

During these times of crushing financial news, collapsing stock markets combined with tremendous volatility, government ineptitude (what else is new), doubt, pessimism, and yes -- fear --- we all need to hear the reassuring words of one of our most successful investment sages.

'My pal Warren' has been filling the media with market supporting bits of wisdom and backing it up by making strategic investments through Berkshire Hathaway (NYSE: BRK.A) and more investments utilizing his personal fortune.

Yesterday I received the following in an email quoting Peter Lynch, who managed to gain an average of 29.7% per year for 13 straight years while he was running Fidelity Magellan fund. Once someone asked him how he knows what stage the market is at, he replied:

• "If I go to a party, and introduce myself as a mutual fund manager to strangers, and they walk away from me and talk to other people instead, I know the market is near the bottom. If they sit down and ask me what stocks they should buy, the market is at normal levels. If they sit down and TELL ME what stocks to buy, the market is near the top."

Continue reading Serious Money: Peter Lynch, a simple view

Serious Money: Peter Lynch, a simple view originally appeared on BloggingStocks on Fri, 24 Oct 2008 15:47:00 EST. Please see our terms for use of feeds.

DealBook reports that Fidelity Investments has agreed to buy back $300 million worth of auction-rate securities (ARS). This settlement is a first in the sense that the previous redeemers were ARS issuers. Fidelity is considered to be "downstream" from the issuers. And its decision to settle puts pressure on other downstream participants such as Oppenheimer and Raymond James.

Exactly what has Fidelity agreed to do? "According to the terms of the deal, the first struck with a 'downstream' seller of these securities, Fidelity will not pay a fine. The firm will buy back auction-rate securities from individuals, charities and institutional investors alike, making no distinction among investor classes, as previous settlements with other firms have," DealBook writes.

Of the $330 billion in ARS that were issued, only 10% have been redeemed so far -- "the big banks have repurchased more than $35 billion of the securities and paid more than $360 million in fines," according to DealBook. I am impressed that regulators are continuing to push hard to get ARS issuers to take care of these investors given all the distraction from the weekly collapse of one major financial institution after another.

Continue reading Fidelity is latest to join Auction Rate Securities redemption bandwagon

Fidelity is latest to join Auction Rate Securities redemption bandwagon originally appeared on BloggingStocks on Fri, 12 Sep 2008 17:36:00 EST. Please see our terms for use of feeds.

This is the part of a new series of columns called "The Naked Truth," by retirement expert Dan Solin. Please bring him your questions, in the comments box, and he will answer as many as he can.

Ralph Cioffi and Matthew Tannin were indicted on June 18, 2008. They are accused of a litany of fraudulent activities in connection with the demise of two hedge funds they managed for Bear Stearns.

Cioffi and Tannin are entitled to the presumption of innocence. The obligatory "perp walk," staged for the benefit of the press, is offensive to traditional notions of justice. Not only does it demean and humiliate them, it taints the jury pool and intrudes upon their right to a fair trial.

Nevertheless, the indictment offers an insight into conduct that would otherwise be inexplicable.

Here are two highly educated, sophisticated, fund managers who achieved the American dream -- and then some. Why would they risk it all by, as alleged, misrepresenting the risk of these funds, and their personal stake in them?

Continue reading Naked Truth Investing: The secret hidden deep inside the indictment of the Bear Stearns hedge fund managers

Naked Truth Investing: The secret hidden deep inside the indictment of the Bear Stearns hedge fund managers originally appeared on BloggingStocks on Sun, 22 Jun 2008 10:40:00 EST. Please see our terms for use of feeds.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

To some degree, a face-off between Vanguard and Fidelity is really a face-off between John Bogle, Vanguard's founder, and Peter Lynch, Fidelity's star fund manager. While Bogle was a pioneer in no-load and low-cost investing in index funds, Lynch was a proponent of investing in "what you know," or getting investing ideas from your day-to-day life. BloggingStocks covered this Bogle vs. Lynch match up back in September, and readers gave the financial edge to Lynch.

Privately held Fidelity Investments is made up by two independent but closely cooperating companies: Boston-based Fidelity Management and Research LLC serves the North American market, and Fidelity International Limited (FIL), spun off in 1969, provides investment products and services to clients in the rest of the world. Fidelity reported revenue of $12.87 billion in 2006, by offering a large family of mutual funds, as well as providing discount brokerage services, retirement services, estate planning, wealth management, securities execution and clearance, life insurance, and a number of other financial services. The founding Johnson family still controls Fidelity, but Peter Lynch and some other fund managers also hold stakes in the company.

Continue reading Battle of the Brands: Vanguard vs. Fidelity

Battle of the Brands: Vanguard vs. Fidelity originally appeared on BloggingStocks on Wed, 30 Apr 2008 14:00:00 EST. Please see our terms for use of feeds.

This post is one of several on business heirs apparent. Let us know in the comments whether you think Abigail Johnson should take up the reigns of Fidelity, and be sure to check out the other heir apparent posts.

I covered the mutual fund business for about six years in the 1990s, when Fidelity Investments was all the rage. It had the most star managers, the best performing funds and by far the most assets. It had the awe-inspiring Fidelity Magellan! And that was nothing to sneer at back then.

So it was with great interest when I learned that Abigail Johnson, the daughter of CEO 'Ned' Johnson (himself an heir to Fidelity), and a woman near my age (she's 46), was being primed to take over the company. I have been cheering for her ever since. (Even as I wonder if the only way a woman can get to the top of a major financial services firm is by having her father run the place).

Continue reading Heir apparent: Abby Johnson could take reins at Fidelity from dad one day

Heir apparent: Abby Johnson could take reins at Fidelity from dad one day originally appeared on BloggingStocks on Sun, 23 Mar 2008 14:40:00 EST. Please see our terms for use of feeds.

Google
Weiner likes Google Inc. (NASDAQ: GOOG). Weiner says of the search giant, "I don't think there's [strong] threats to their paid search advertising model." Interestingly, Weiner says that Google's biggest threat is not being a one-product pony, as many analysts and pundits criticize the company. Rather, Weiner is nervous about the expansionist drives of Google management into businesses that may not be nearly as attractive as paid search.

Continue reading Fidelity fund manager likes Google, RIMM, and Cisco here

Fidelity fund manager likes Google, RIMM, and Cisco here originally appeared on BloggingStocks on Wed, 05 Dec 2007 11:57:00 EST. Please see our terms for use of feeds.

How vulnerable is your mutual fund to the ongoing mortgage meltdown? In this series, BloggingStocks contributor Lita Epstein, author of more than 20 books including Trading for Dummies and The Complete Idiot's Guide to Improving Your Credit Score, digs into mutual funds' holdings looking for securities with exposure to the currently shaky credit markets.

The first inkling I got that Fidelity might be tied to the SIV bailout was a story last week in The Wall Street Journal that indicated Fidelity's Prime Money Market Portfolio owned $402 million medium-term notes in Gordian's Sigma Finance Inc. as of the end of August [subscription required]. Taking a closer look at Fidelity Funds, I found two broad market bond funds with significant exposure to the mortgage-backed and asset-backed credit categories now showing signs of trouble.

As of 9/30/2007 Fidelity Ultra Short Bond Fund holds 42.4% of its assets in asset-backed securities, 17.5% in collateralized mortgage obligations and 15.2% in commercial mortgage-backed securities. That's 75.1% of its assets in securities tied to the credit markets that are now showing signs of trouble. While I'm not saying that 75% of this fund's assets are in trouble, what I am asking is, do you really want that much exposure to these markets in this volatile time?

As of 9/30/2007 Fidelity Short-Term Bond Fund holds 23.1% of its assets in asset-backed securities, 13.5% in collateralized mortgage obligations, and 11.6% in commercial mortgage-backed securities. That's almost half of its assets in the most volatile parts of the credit markets. If you do hold these funds, you need to decide if you want this level of exposure to these risky credit markets right now.

In reviewing bond funds this morning, these two Fidelity bond funds were less-diversified than many of its peers. While their yields may be high, you must decide whether the risk is worth it.

Lita Epstein is the author of more than 20 books including the "Pocket Idiot's Guide to Investing in Mutual Funds."

Mutual funds and the mortgage mess: Fidelity Funds originally appeared on BloggingStocks on Mon, 22 Oct 2007 16:03:00 EST. Please see our terms for use of feeds.

Nearing retirement and wondering how you can possibly manage your retirement portfolio yourself? I'm talking about the funds you'll be rolling out of your 401K, 403B or other employer-based retirement savings program. Many people are asking that question as they look at those large chunks of money and want to be sure they don't outlive their money during retirement.

Fidelity and Vanguard want to make that easier and cheaper with an alternative to annuities. Fidelity calls them Income Replacement Funds and Vanguard calls them Managed Payout Funds. Eleven Fidelity funds were launched last week and Vanguard plans to make its version of three funds available by early 2008.

How do these differ from annuities? Annuities are a type of insurance with a guaranteed payout based on a contract. They can be structured with a guaranteed payment for the rest of your life (no matter how long that is) or can be structured with a set payout over a set number of years. The big disadvantages of annuities is that you lose all control of the money inside the annuity and you have to pay significant fees to the insurance company managing it.

Continue reading New mutual fund concept - they'll manage your payout

New mutual fund concept - they'll manage your payout originally appeared on BloggingStocks on Wed, 10 Oct 2007 18:45:00 EST. Please see our terms for use of feeds.

You probably think mutual funds are the least likely activist investors. While that was true in the past, the tides appear to be changing. T. Rowe Price just did something it's only done once before in its 70-year history - filed as an activist investor in order to fight the management buyout of Laureate Education, according to the Wall Street Journal.

T. Rowe Price mutual fund manager, Brian Berghuis, ran the numbers and determined that the private deal valued at $3.8 billion for this operator of universities could be valued about 80% higher. Why did he care? T. Rowe Price mutual funds shareholders could be losing as much as $210 million according the the Journal.

Management buyouts tend to work differently than the more traditional outsider takeovers. Managers want to keep the price as low as possible in these deals, while they look for the highest price possible for an outsider takeover.

Fidelity Investments took a similar stance against a deal for a private-equity buyout of OSI Restaurant Partners earlier this year. OSI manages the Outback Steakhouse chain. Fidelity's stance worked and the offer had to be increased before shareholders would approve it.

It's about time that mutual funds take activist stands to protect their shareholders. Mutual fund assets totaled $11.496 trillion in August, according to the Investment Company Institute. As managers of their investors' money, mutual funds have an obligation to make sure people who hold mutual funds get the best bang for their buck. There's power in numbers and if the mutual fund companies became more active in protecting the rights of their shareholders, both stocks and mutual funds shareholders would benefit.

Lita Epstein is the author of more than 20 books including the "Pocket idiot's Guide to Investing in Mutual Funds."

Newest defenders of shareholders' rights -- mutual funds originally appeared on BloggingStocks on Thu, 04 Oct 2007 13:05:00 EST. Please see our terms for use of feeds.

Few professional money managers have had the success Peter Lynch has had. The former Fidelity manager of the widely-held Magellan mutual fund racked up great returns year after year in his tenure at Fidelity. After he retired in the 1990s, Lynch wrote a few books (which are worthy reads, I might add), and aimed them at the "everyman" of investing: the normal American consumer (hopefully, investor).

Along with Vanguard founder John Bogle, Lynch is someone I've followed for some time, and following much of what he said has, well, done right by me. But, after having talked with many a business associate and family member in the past year -- as the market has swayed to and fro -- few of them follow Lynch's investing strategy. That is, if they have an investing strategy at all beyond pumping 0.5% into that 401k and putting 50% of their portfolios into their employer's stock. Yikes!

The average mutual fund is a dog and laggard, yet salespeople rope everyday people into these expensive funds by the boatload. Bogle would have said, "just buy index funds and be done with it." Lynch would have said, "check the price-to-earnings ratio, make an informed choice, and be done with it." Both are exemplary ways to examine and adjust your portfolio.

Does it take some self-education? Sure it does -- but hey, it's only your money, right? Why would anyone pay an underperforming fund manager when buying a no-cost index fund produces better returns? Yes, in many cases the situation is a bit more complex than that, and tax rules and holding periods (among other things) come into play. Still, do you invest like Peter Lynch did? If not, why?

Do you invest like Peter Lynch did? Maybe you should! originally appeared on BloggingStocks on Sat, 22 Sep 2007 08:40:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• William Ackman's Pershing Square Capital Management, whose firms holds about 15% of Ceridian Corporation (NYSE: CEN), doesn't like the proposed $5.3B sale of the company to Thomas H. Lee Partners and Fidelity National Financial Inc (NYSE: FNF), and says he's going to find higher bidders, according to the Wall Street Journal.
• The Financial Times reported that British bank Barclays PLC (NYSE: BCS) has drawn up plans to sweeten its $86B all-share offer for Dutch bank ABN Amro Holdings (NYSE: ABN), by substituting cash for some of the shares it is currently offering for ABN.
• Beginning today, Apple Inc (NASDAQ: AAPL) is embedding its iTunes internet music download service in the British and Irish social networking site Bebo, reported the Financial Times.

• The New York Post has learned that a private-equity firm owned by the Dubai government is close to buying Barneys New York from the Jones Apparel Group (NYSE: JNY).
• The New York Times reported that the Wall Street Journal is set to "shake up its newsroom" by reassigning and replacing several top editors.
• Golf equipment maker Callaway Golf Company (NYSE: ELY) is suing Fortune Brands Inc.'s (NYSE: FO) Acushnet Co, for allegedly violating five Callaway patents for golf clubs, reported the Los Angeles Times.

Newspaper wrap-up 6-13-07: Apple embeds iTunes in Bebo originally appeared on BloggingStocks on Wed, 13 Jun 2007 09:15:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Barron's Online's (subscription required) "Inside Scoop" column reported that Goldman Sachs Group (NYSE: GS) has raised its stake in RadioShack Corporation (NYSE: RSH), and now owns 12.6% of the company.
• The Wall Street Journal (subscription required) reported that Time Warner Inc's (NYSE: TWX) Warner Bros. is planning to release movies to video-on-demand services at the same time as the DVD launch to see if they can expand one distribution pipeline without harming another.
• The Financial Times (subscription required) reported that General Electric Company (NYSE: GE) is not seeking to acquire Dow Jones and Company Inc (NYSE: DJ), after the collapse of talks between GE's NBC television network and Microsoft Corporation (NASDAQ: MSFT) regarding the possibility of a joint bid for Dow Jones.

• Fidelity Investments, which was the third-largest shareholder in Dow Jones, has sold almost all its shares in the company, which is the target of a $5B takeover by News Corporation (NYSE: NWS), reported the New York Post.

• CNet.com reported that Sony Corporation (NYSE: SNE) will begin selling a line of televisions specifically for Wal-Mart Stores Inc (NYSE: WMT), Target Corporation (NYSE: TGT) and other discount retail chains.

Newspaper wrap-up 6-12-07: GE will not look to acquire DJ originally appeared on BloggingStocks on Tue, 12 Jun 2007 09:15:00 EST. Please see our terms for use of feeds.

I'm just about as big of a Warren Buffett fan as you'll find, but I found myself somewhat disillusioned when he declined to divest Berkshire Hathaway's (NYSE: BRK.A) stake in PetroChina (NYSE: PTR), after critics proposed such a move because of the company's ties to Darfur. Fidelity Investments recently sold its share of PetroChina for just that reason.

Buffett defended the investment by saying that it was Chinese state oil company CNPC, the parent of PetroChina that was involved with Darfur. But in a piece on TheStreet.com, Brett Arends points out just how closely the companies are linked. He discusses the numerous insiders at PetroChina who also work for or did work for CNPC; PetroChina's Chairman, Chen Geng, was General Manager at CNPC until last November.

Over at the Motley Fool, Emil Lee opined that Buffett should go ahead and sell the shares: "Both sides of the divestment argument are entitled to their own opinions, but I think that Berkshire should divest, not because it will help save Darfur victims -- the problems go much, much deeper than who owns PetroChina's shares -- but more because Berkshire has always been a beacon of light for investors everywhere, and it would be a tragedy for that light to be clouded, regardless of whether the reasoning was even slightly correct."

Lee summed it up perfectly. Berkshire's investment in PetroChina just smells bad, even if the company really isn't to blame. The arguments for divestiture were powerful enough to sway Fidelity, and I just really wish Berkshire would go ahead and sell the shares, if only to preserve its squeaky clean image.

Should Warren Buffett dump Darfur-involved PetroChina? originally appeared on BloggingStocks on Sun, 03 Jun 2007 13:10:00 EST. Please see our terms for use of feeds.