Continue reading Sunday Funnies: Market Reruns Not Returns

Sunday Funnies: Market Reruns Not Returns originally appeared on BloggingStocks on Sun, 13 Jun 2010 19:00:00 EST. Please see our terms for use of feeds.

Continue reading Sunday Funnies: Gov't Can't Clean Up Its Own Act

Sunday Funnies: Gov't Can't Clean Up Its Own Act originally appeared on BloggingStocks on Sun, 06 Jun 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Sunday Funnies: Crazy Market, Places to Hide

Sunday Funnies: Crazy Market, Places to Hide originally appeared on BloggingStocks on Sun, 23 May 2010 18:30:00 EST. Please see our terms for use of feeds.

Most of this past week the stock market was erratic. News from Asian and American Markets was generally positive, sending the indexes higher, until unsettling news from the European Union let the air out of the tires, resulting in 100 point swings of the Dow Jones Industrial Average, which ended Friday up about 50 points for the week at 10,850.36.

Each day started upbeat and then we would hear about Greek debt, bonds coming due, Germany pushing for IMF participation in any plan to help Greece. Finally when this looked to be settled, we then got news of economic turmoil in Portugal. This activity stimulated me to write the following recent commentary:

Continue reading Sunday Funnies: Retail Sales and Investors

Sunday Funnies: Retail Sales and Investors originally appeared on BloggingStocks on Sun, 28 Mar 2010 15:20:00 EST. Please see our terms for use of feeds.

A new year is upon us and like the beginnings of any year, and even more so, a decade, the predictions are flying fast and furious.

The start of 2010 is bringing out every analyst, talking head, business journalist, periodical and newsletter propagator, sportscaster, palm reader, taro card interpreter, astrologist, medium and madam making predictions to garner attention, entertain and even profit. Apologies to anyone I left out.

Continue reading Sunday Funnies: Predicting Nothing

Sunday Funnies: Predicting Nothing originally appeared on BloggingStocks on Sun, 03 Jan 2010 17:40:00 EST. Please see our terms for use of feeds.

In this week's (November 9) Preview Section of Barron's (subscription required) I was surprised to find that on Wednesday (11/9) it is noted that Computer Sciences (CSC), Applied Materials (AMAT), and Macy's (M) reported "profits." How do they know this?

On other days they refer to the "earnings" of various companies reporting. Perhaps I am splitting hairs, perhaps it is editorial haste (like you might find on our site), or perhaps there is no difference in some people's minds? From my perspective there is a difference between earnings and profits. Every quarter, public companies report their earnings. They do not always report a profit.

Continue reading Sunday Funnies: Barron's predicting profits?

Sunday Funnies: Barron's predicting profits? originally appeared on BloggingStocks on Sun, 08 Nov 2009 18:40:00 EST. Please see our terms for use of feeds.

How desperate can they get? First I received a very long-winded, 10+ page e-mail from Motley Fool with the following sales pitch :That's why I'm offering you the chance to join Motley Fool Stock Advisor for just $79 -- that's 60% OFF our regular membership rate. But a word of warning: This special discount will be available for a limited time only!

Two days later, I received another 10+ page, jargon-filled e-mail blabbering on about the virtues of the newsletter while trying to create a sense of urgency because the clock was ticking and I was going to miss out.

Continue reading Sunday Funnies: Motley Fools seem desperate

Sunday Funnies: Motley Fools seem desperate originally appeared on BloggingStocks on Sun, 01 Nov 2009 11:20:00 EST. Please see our terms for use of feeds.

Since the stock market bottomed in March of this year, it has been firing on all cylinders -- except for those in the auto industry who manufacture the most cylinders of course. This year has not been kind to them.

For months, many have been surprised at the rapid rise, given the level of unemployment. During this same period, Wall Streeters have been dancing up and down, looking forward to more bonuses.

As the number of unemployed has climbed and the period of same has lengthened, many have wondered how business could be improving during a time when the consumer (those still left) has transformed from spender to saver.

Continue reading Sunday Funnies: Market rising in spite of high unemployment

Sunday Funnies: Market rising in spite of high unemployment originally appeared on BloggingStocks on Sun, 18 Oct 2009 14:40:00 EST. Please see our terms for use of feeds.

Continue reading Sunday Funnies: Pervasive bad advice

Sunday Funnies: Pervasive bad advice originally appeared on BloggingStocks on Sun, 27 Sep 2009 14:30:00 EST. Please see our terms for use of feeds.

It's been a while since I posted something in the "Funnies" category but today I just had to share something with our readers. I just got off the phone with an elderly friend that had received an e-mail from a notorious scam artist that promised daily income with little or no risk.

Her family had told her that it was a scam, and my wife had told her the same, but she still wanted to know what I thought. She had forwarded the e-mail to me. It took me about 5 seconds to see the offer as a scam.

Continue reading Sunday Funnies: Huge profits with no risk!

Sunday Funnies: Huge profits with no risk! originally appeared on BloggingStocks on Sun, 23 Aug 2009 17:10:00 EST. Please see our terms for use of feeds.

In running a very tight stock screen recently for value plays Burlington Northern Santa Fe (NYSE: BNI) showed up on a list of 14 stocks. Interestingly all the large railroad stocks did. This reminded me of several stories I have done on the subject, the most recent being Chasing Value: Watch BNI -- the heck with Citigroup.

To summarize, about six weeks ago a Citigroup (NYSE: C) analyst declared it was time to sell the stock when BNI was trading in the mid $60s -- I said investors should do the opposite, it was a great value. Friday the stock closed at $76.98. Even at this price it is a value and ever more so with oil prices steadly creeping up.

Continue reading Sunday Funnies: Economics -- art or science

Sunday Funnies: Economics -- art or science originally appeared on BloggingStocks on Sun, 07 Jun 2009 18:10:00 EST. Please see our terms for use of feeds.

It is not possible to know what level is the right level to enter the stock market and various analysts, gurus, journalists and economists have been weighing in this week as the market closed at a one month high, with some folks even becoming downright optimistic.

I might add that the true level we have reached is one of amusement to me because we all are trying to call the market bottom. I myself have entered the fray trashing Nostradamus along the way. This is as much hope, as fact, and folks are looking for clues everywhere.

Some are looking at historical precedent for clues. Technical analysts are combing their charts for patterns of market behavior. The uptrend has to be sponsored to some degree by short covering and momentum traders too.

Positive news was reported by Wells Fargo (NYSE: WFC) which said on Thursday, April 9 that it expects to post a record first-quarter profit of $3 billion, up about 50 percent from a year earlier, due to better-than-expected performance from Wachovia (acquired in December) and a strong performance in mortgage lending. This was all it took to send the market higher even before anyone has actually sifted through the quarterly report for themselves -- not due out until April 22.

I am not surprised that the market is up and I have been putting cash to work for the past six months; but not all at once; not without recognizing that I might be early; and not without a plan. This has included buying WFC most recently at $12.00 and selling naked puts at strike prices of $7.50, $9.00 and $12.00. My most recent post on the subject from last month was Chasing Value: The safest bank in the U.S. -- Wells Fargo.

If you have missed the recent market pop do not fret and do not chase it because it could change direction as many have called this a bear market rally.

What might be most prudent at this point, if you believe that the volatility will continue and the stock market will not see true lasting improvement for a while, is to segment the money you want to put back to work into four or five tranches and invest on a regular basis dollar cost averaging back in over time.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of WFC and I have open options.

Sunday Funnies: The bottom guessing game originally appeared on BloggingStocks on Sun, 12 Apr 2009 18:40:00 EST. Please see our terms for use of feeds.

Almost without fail if I write something about General Electric Company (NYSE: GE), or even mention the company in passing, someone will add a comment that its CEO, Jeffrey Immelt, has overstayed his welcome at the company and he has to go.

Here are a few samples:

• "Why is Jeff Immelt still employed by GE? he has ruined the company and cares nothing about his shareholders. He and his board need to go empty handed."

Continue reading Sunday Funnies: What is Jeffrey Immelt doing wrong?

Sunday Funnies: What is Jeffrey Immelt doing wrong? originally appeared on BloggingStocks on Sun, 15 Mar 2009 14:40:00 EST. Please see our terms for use of feeds.

It occurred to me while responding to a comment in my Chasing Value column that there are some basic necessities in life that we do not normally think of as such. The discussion had to do with finding those intrinsic or basic things a company (stock) produces that might reduce investor risk or help establish basic value.

Food and water clearly matter to everyone, and you could add energy, but until the economy freezes up like it has the past year, you might not appreciate the importance of credit.

The single biggest reason that car dealers say they cannot move anything off the lot is a lack of consumer credit. People have tapped out their credit cards and home equity lines, and probably their friends and family by now -- so it is all pay as you go. The going is rough and the going is slow.

The Federal Reserve has now reduced the overnight rate to nothing in an effort to get financial institutions to free up some of their capital and to lend to each other. They have also been trying to push mortgage rates down. They were successful in doing so because many lenders have offered me rates under 5% for 30-year fixed mortgages just this past week.

Continue reading Sunday Funnies: Life essentials -- food, water and credit

Sunday Funnies: Life essentials -- food, water and credit originally appeared on BloggingStocks on Sun, 21 Dec 2008 17:10:00 EST. Please see our terms for use of feeds.

• Suburban slums -- city centers being revitalized
• Fund roads & bridges NOT mad money stimulus
• Serious Money: Stimulate productivity not consumption
• Should Feds stimulate or stabilize; is there a difference?
• Re-think new stimulus package? Push infrastructure!

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

Sunday Funnies: All infrastructure for Dan originally appeared on BloggingStocks on Sun, 23 Nov 2008 15:10:00 EST. Please see our terms for use of feeds.

A former senior manager at CB Richard Ellis Group (NYSE: CBG) in Southern California, now a partner at a private real estate company where I am an investor said to me this week that the stock market was just "white collar gambling".

This is a relatively common thought from Main Street and when my colleague Ron, made the comment it was hard to argue that it is not.

It certainly looks like gambling when you consider how momentum day traders place their bets, or options traders, or commodities traders -- and the past few years -- CEO's of major corporations.

I certainly was playing this theme up when I posted The great leadership disconnect: I bet the farm and you lose in September.

Earlier in the week Ron had brought up the fact that CBG stock had dropped from over $40 per share to under $4 and it seemed like it was bound to get back sometime in the foreseeable future for a huge gain. The following is the three year chart.

Ron is a smart real estate guy but he is not a stock market aficionado. He believed the risk / reward opportunity seemed like a no brain-er (not that he was going to invest). The first problem is that idea of the foreseeable future. I think the market is not foreseeing much lately. Most things seem quite cloudy indeed.

Actually I could not help but ponder the matter because, coincidentally, I was at a business breakfast the following morning where the speaker was a manager with responsibility for CBG's Asian portfolio investments. When Ron brought up the subject originally I responded that I did not follow the stock, but that it did not have to return to it's previous glory to achieve a great return on investment. Suppose it took two years to go from $4 per share to $6 or $7. Most anyone would be delighted with a 25%+ annualized return.

As it turned out, I saw my associate later that day and he pointed out that CBG had jumped 40% from the day before. WOW, some of the day gamblers, I mean traders, must have made a killing. Of course that is only if they were on the right side of the deal, and sold in time.

CBG closed Friday at $4.84, down 10% and has been volatile lately as the chart and the stocks recent moves indicate. It has a beta of just under 2 which means that it moves at twice the rate of the broader market.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own any shares of CBG. I do not do any day trading.

Sunday Funnies: White collar gambling originally appeared on BloggingStocks on Sun, 16 Nov 2008 19:30:00 EST. Please see our terms for use of feeds.

Giving some thought to what in the world Mr. Gramm was thinking about (or not), it seems to me that his angst last week about Americans being a bunch of whiners was quite self referential. He obviously has lost his sense of balance and is spending too much time with the country club crowd to realize that some folks are feeling true pain.

Unless he is getting free gas or his limousine driver is not speaking with him then how could he have missed the fact that everyone in our country has seen a rapid and significant rise in prices. Ask anyone driving a truck for a living, just as a sampling. I would not consider their plight frivolous.

For some reason he has also missed the fact that all three of our major automobile manufacturers Ford Motor (NYSE: F), General Motors (NYSE: GM), and Chrysler (now privately held) are teetering on bankruptcy.

I have been fortunate enough to have traveled to the four corners of the United States, Alaska and Hawaii and I would actually say we tend to be overly optimistic at times in the US. By comparison many of the 25 countries I have had the chance to visit can be some what negative. I would place us somewhere in the middle.

Continue reading Sunday Funnies: Phil Gramm loses his balance

Sunday Funnies: Phil Gramm loses his balance originally appeared on BloggingStocks on Sun, 20 Jul 2008 18:30:00 EST. Please see our terms for use of feeds.

Most people in the United States and for sure shareholders of losing companies have been railing against executive pay for many years. It is generally agreed the salaries, bonuses, stock options, deferred compensation, and retirement packages have become ridiculous and do not reflect anything other then the "good ol' boy network" operating at its worst.

Compensation committees substantiate their decisions in a fashion that outlines plausible deniability not merit, value or truth. They do not reflect shareholders, employees, or customers best interest. They reflect a tight knit group that has to pay and pay big so that they can get theirs in the next round.

This brings me to the National Basketball Association and its use of the salary cap. We just witnessed an NBA finals where the better team won (Boston Celtics in six games) and that is the nature of the game. It's five on five, the best player does not take every shot and the best player cannot defend the other team by himself.

Continue reading Sunday Funnies: Business should have NBA type salary cap

Sunday Funnies: Business should have NBA type salary cap originally appeared on BloggingStocks on Sun, 06 Jul 2008 17:10:00 EST. Please see our terms for use of feeds.

A few days ago I posted Chasing Value: Valero -- when is a downgrade an upgrade? and since then I have become even more disturbed with our government and the stock analysts, as well as the companies they represent. Eitan Bernstein, an analyst with Friedman, Billings, Ramsey & Co downgraded his expectations for the major oil refiners Wednesday and lowered his price target for Valero Energy (NYSE: VLO) from $77 to $65.

How can this be? The stock was trading around $40 per share and closed Friday at $39.96. As a shareholder who has watched this stock go down, any signs of optimism have to be welcome I suppose, but what in the world is this guy saying. He is saying he has concerns about the sector, but believes VLO will be 61.5% higher this time next year any way!

This makes no sense. He can't be too concerned, can he? If you believed him you would buy all the VLO shares you could get hold of -- and so would he! Maybe he did? Or maybe he is trying to pump up the stock to help a big client? Or maybe he is clueless and does not know what he is talking about? What might his e-mails reveal?

Anyone can predict anything, and they have a right to be an idiot, but what responsibility does he have to eat his own cooking? VLO started the year near a high that is between Bernstein's old and new projections, and I for one have hopes of it rebounding, but I do not have the level of certainty to broadcast such an exact figure. What is the purpose?

The change in his projections of 15.5% is indicative of the silliness of this analysis. We have seen this before and will see it again ... so buyer beware.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of VLO.

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Sunday Funnies: Analyst -- VLO up 61.5% in next 12 months originally appeared on BloggingStocks on Sun, 29 Jun 2008 13:40:00 EST. Please see our terms for use of feeds.

Regular readers know that I enjoy Barron's Weekly (subscription required) one of the best business journals around and that it has provoked some of my better investment ideas. However, even Barron's can fall prey to bad or incomplete reporting, (as if there were a difference), as they benefit from market activity and can stretch an idea too far, becoming all too common.

Barron's incomplete and common story was in the June 9, 2008 issue titled "Timing is Everything". What I find common, and thus objectionable, is the fact that they choose to tout Appel Asset Management's like so many brokerage houses do numerous funds (for the fees), ignoring basic tidbits like said fees, and taxes. The Appels seem to do an admirable job for their investors but they do not beat the indices, so who cares?

Their simple strategy is to invest in the two broadly based hot ETF's, counting on momentum lasting more than one quarter, and switch them out each quarter. This they claim takes only an hour of work every three months, how lovely. In the story they state "From 1979 through 2007, Marvin Appel would have (emphasis mine) returned 16% a year, before fees, better than the 15% a year performance of the Russell 2000 Value Index". They also leave out how long the approach has actually been in place.

Continue reading Sunday Funnies: Barron's forgets fees and taxes

Sunday Funnies: Barron's forgets fees and taxes originally appeared on BloggingStocks on Sun, 22 Jun 2008 16:10:00 EST. Please see our terms for use of feeds.