Microsoft criticizing Google is reminiscent of Andrew Carnegie badmouthing JP Morgan. There is such a thin line between shrewd and shady that often the line is blurry: less about right and wrong and more about fair competition. The only problem with that is there is an equilibrium that much be reached, at what point can a company be punished for being better run and more efficient than another company. That is the nature of competitive advantage.
All the Titan fighting aside, the DoubleClick deal is bad for Google, and the Facebook deal is a "make up" deal for Microsoft. You can expect to see a quick spike in MS stock price, but it remains a very solid long term investment.
Next week will be big, the start of the Q4 will bring out a a slew of earning reports from the previous report. The fear is that corporate earnings power was lessened in the third quarter. This is the last trading day of one of the most volatile periods in years -- one that pulled stocks sharply lower after the Dow Jones industrial average closed at a record 14,000.41 in mid-July. We also had an emergency Fed infusion of capital. Along with many big banks visiting the Discount Window. Not to mention that the loonie matched the dollar, and oil climbed to over $80 per barrel.
As the tumultuous third quarter draws to a close, investors appear a bit less concerned about the tightening in the credit markets that sent stocks plummeting in late July and August. On Thursday, the Fed said banks slowed their borrowing from central bank this week to the smallest amount in six weeks, after a huge spike last week.
But while most market watchers agree that conditions have improved, the credit markets still don't appear they are back to operating normally. Levels of outstanding asset-backed commercial paper fell about 17 percent in the week ending Wednesday -- not as steep a decline as seen a few weeks ago, but still suggesting that demand isn't meeting supply.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 285.9 million shares.
Friday, September 28, 2007
Wednesday, September 26, 2007
Bad Bank
Now that the strike is over, look for GM's stock price to dip back down. GM still remains at a competitive disadvantage over international companies, which do not There was big news today from Goldman, and it pertained to Merrill Lynch. Now is a good time to sell Merryl. And Bear Sterns may sell off a portion of its bank to either Wachovia, Bank of America, or Chase; that is unless Warren Buffet doesn't buy them first.
BS
All of that said, now is a good time to buy Bear Sterns. The price is still at the $115 point, but it will bounce back. This is "buy low" time. If BS does sell off a portion of its banking functions, that will only drive the price higher. I would not be surprised to see Bear's stock jump as high as $135 in the next two weeks.
Target
Target released bad news, they number of customers going into its stores, the problem is that now that WalMart is going green the outlook for Target is not looking good. They need to improve their logistical supply chain. I would not suggest buying Target in the short-term; the market that they compete is in way too tight and profit markets are very slim.
Strong Buy
Advanced CustomVue the company that owns the Lasik laser is a good choice to buy. They have bounced back from a recent recall and will be getting a shot in the arm from outerspace. NASA will give its stamp of approval, allowing Astronauts to have Lasik surgery. This after the Air Force will being allowing fighter pilots to have the procedure as well. Also, they have 5 new products that will be rolling out over teh next few months.
BS
All of that said, now is a good time to buy Bear Sterns. The price is still at the $115 point, but it will bounce back. This is "buy low" time. If BS does sell off a portion of its banking functions, that will only drive the price higher. I would not be surprised to see Bear's stock jump as high as $135 in the next two weeks.
Target
Target released bad news, they number of customers going into its stores, the problem is that now that WalMart is going green the outlook for Target is not looking good. They need to improve their logistical supply chain. I would not suggest buying Target in the short-term; the market that they compete is in way too tight and profit markets are very slim.
Strong Buy
Advanced CustomVue the company that owns the Lasik laser is a good choice to buy. They have bounced back from a recent recall and will be getting a shot in the arm from outerspace. NASA will give its stamp of approval, allowing Astronauts to have Lasik surgery. This after the Air Force will being allowing fighter pilots to have the procedure as well. Also, they have 5 new products that will be rolling out over teh next few months.
Sunday, September 23, 2007
The Loonie Bin
Last week the US Dollar hit a record low against the single currency of the European Union known as the Euro. Not only that, but for the first time in more than thirty (30) years the United States dollar reached parity with Canadian loonies.
Unlike in 1976, when Canadian politics sent the loonies reeling, this time it’s a weak US dollar and possible recession that are to blame. However, it would be unfair to blame the US economy without realizing the strength of the Canadian economy and the relatively high commodities prices. For Canadians this means cheaper imports from the States as well as making this a good time for taking a vacation south of the Border. "It's a hallmark of successful economies that they also have strong currencies," Ross Healey, CEO of Strategic Analysis Corp., told CBC News. "Manufacturers may not like it very much, but unfortunately, that's the price we pay for running a tight ship."
Commodity strength powers rise
But it has been the soaring price of oil that has provided much of the fuel for the loonies long flight higher.
In global commodity trading, the price of a barrel of oil was at a record $83.32 USD Thursday afternoon, up $1.39 USD from Wednesday.
Gold prices surged to a 27-year high above $740 US an ounce, further bolstering the Canadian currency. Copper and wheat are at or near all-time highs. Canada produces and exports all of those commodities in abundance and the world has noticed.
Record levels of takeovers of Canadian companies have also lent power to the loonies, as have Canada's big budget and trade surpluses, and healthier housing market.
If it were to one day pass $1 USD. While this is rare for the US currency, let’s see how this will affect the currency markets this week. I assume that the Dollar will bounce back, but how long will it take?
For more information on investing in Canada and Canadian markets please visit http://www.investcanada.blogspot.com.
Unlike in 1976, when Canadian politics sent the loonies reeling, this time it’s a weak US dollar and possible recession that are to blame. However, it would be unfair to blame the US economy without realizing the strength of the Canadian economy and the relatively high commodities prices. For Canadians this means cheaper imports from the States as well as making this a good time for taking a vacation south of the Border. "It's a hallmark of successful economies that they also have strong currencies," Ross Healey, CEO of Strategic Analysis Corp., told CBC News. "Manufacturers may not like it very much, but unfortunately, that's the price we pay for running a tight ship."
Commodity strength powers rise
But it has been the soaring price of oil that has provided much of the fuel for the loonies long flight higher.
In global commodity trading, the price of a barrel of oil was at a record $83.32 USD Thursday afternoon, up $1.39 USD from Wednesday.
Gold prices surged to a 27-year high above $740 US an ounce, further bolstering the Canadian currency. Copper and wheat are at or near all-time highs. Canada produces and exports all of those commodities in abundance and the world has noticed.
Record levels of takeovers of Canadian companies have also lent power to the loonies, as have Canada's big budget and trade surpluses, and healthier housing market.
If it were to one day pass $1 USD. While this is rare for the US currency, let’s see how this will affect the currency markets this week. I assume that the Dollar will bounce back, but how long will it take?
For more information on investing in Canada and Canadian markets please visit http://www.investcanada.blogspot.com.
Wednesday, September 19, 2007
Rates Fall, Stocks Rise
Stocks will likely end up for the week amid the recent rate cut, so now is a good time to let the markets balance themselves out. There are still some good picks out there, like INTEL, LEHMAN BROTHERS, and APPLE, but there is no need to make any big moves. Apple cut the price of its iPod Nano to its lowest price ever.
High Energy
Look towards energy companies; its almost that time of year again and the Energy Sector will be creeping up over the next few months. Do your best to be ahead of the curve, this is a cyclical market and now is the time to buy. Look to re-evaluate your energy holdings around March.
The Energy Information Administration said crude stockpiles fell by 3.8 million barrels in the week ended Sept. 14, while U.S. gasoline supplies increased by 400,000 barrels. Analysts polled by Dow Jones Newswires expected a smaller drop of 1.5 million barrels of crude oil. Gasoline inventories were forecast to decline by 1.3 million barrels.
High Energy
Look towards energy companies; its almost that time of year again and the Energy Sector will be creeping up over the next few months. Do your best to be ahead of the curve, this is a cyclical market and now is the time to buy. Look to re-evaluate your energy holdings around March.
The Energy Information Administration said crude stockpiles fell by 3.8 million barrels in the week ended Sept. 14, while U.S. gasoline supplies increased by 400,000 barrels. Analysts polled by Dow Jones Newswires expected a smaller drop of 1.5 million barrels of crude oil. Gasoline inventories were forecast to decline by 1.3 million barrels.
Tuesday, September 18, 2007
Fed Funds Rate
After todays rapid rise in Stock prices it is important to look at that this really means. The Federal Funds Rate is the interest rate that depository institutions lends immediately available funds (balances on deposit with the Federal Reserve Bank)to another depository institution overnight.
The Discount Window
In many respects the Discount window is an outdated function of the Fed, having long been replaced by the Open MarketThe Discount window functions as a safety valve in relieving pressures in reserve markets; in circumstances where extensions of credit can help relieve liquidity strains in the banking system, the window also helps to assure the basic stability of financial markets more generally.
Recently a number of large financial institutions, including, CitiGroup (the largest institution in terms of assets in the United States), BoA and Wachovia have all paid visits to the Discount Window. This represents a shift in the way Banks think and operate, for years most banks avoided the Discount Window, there was a stigma that this form of borrowing was reserved for distressed banks only, but that feeling is slowly beginning to change.
Little Bank takes Big Bank
Reverse Re-construction or vendor financing
What happens when a nation's trade deficit runs at levels upward of 6% of GDP: investor confidence ebbs, capital investments are scarce, credit markets plummet, and the central bank is forced to counterbalance deflation by raising interest rates, all this while the currency is weaker then a sand castle - deep recession.
When that nation is the USA, these things don't happen, or at least they haven't yet; but how much longer will Asia keep up this predatory lending practice? As of June 30, 2007 the Japanese government owned just over $800b, and China owned around 680b worth of US government backed securities or Treasury bonds. Basically the US Treasury sends over IOUs and they send us money.
This affects us all: since mid 2004 the Federal Reserve has raised the federal funds rate from 1% to 5.25% and, in-theory, this should have caused a sell-off of long dated Treasury’s. However thanks to central banks around the world this didn't happen.
In short, why would a poorer nation lend to richer one? Simple: send cheap money to the richer nation and they will send it right back in the form of Lexus’, Samsung flat screen TVs, LG washing machines, and any number of [defective?] Chinese products
Tomorrow we will discuss how US borrowing affect mortgage prices. For now buy Doral Financial
Monday, September 17, 2007
Same Old Song
Stocks fall, while oil rises. It seems like the stock is beginning to mirror the housing market: buy NOW, prices are low. This is a buyers’ market. From the opening bell stock prices headed down, not far into the red, but just outside of the black. Most of this can be blamed on Fed anxiety; every market expert is speculating on what the Federal Reserve will do in their Board Meeting tomorrow. For the casual investor - WHO CARES - the only thing that matters now is looking at P/E ratios and trying to find some last minute bargains.
The market is betting on a rate cut from the Fed when the central bank meets Tuesday; but investors are not completely sure what it will do and what it will say in its accompanying economic statement. Furthermore, with the major brokerages' third-quarter results yet to be released, investors are uncertain about how badly the summer's stock downturn, souring home loans, and credit squeeze will hit the banking industry.
Making matters worse, the mortgage crisis seem to be spreading across the Pond. Northern Rock PLC, Britain's fifth-largest mortgage lender, saw its stock plunge and customers withdrew billions of dollars after it issued a profit warning after hours on Friday and drew from emergency funds held in reserve by the Bank of England. That gave U.S. investors an added impetus to pare their stock holdings, particularly in the financial sector. The good news for us is that financials almost always bounce back; like car manufacturers and airlines.
60 Minutes
The former Federal Reserve Boss Alan Greenspan did his first interview, since leaving as the Chairman of the Fed, on 60 Minutes and he warned of a possible recession. The couples with job cuts from First Franklin and Merrill have investors jumpy.
The good news is that while looking at the bigger picture one will discover that the job rate is steady, and this may help contain the credit crisis to the "sub prime" market. However, be careful when asking your credit card company for a limit increase, and check for new terms as well. The lenders of last resort will begin to tighten their belts' as well.
The market is betting on a rate cut from the Fed when the central bank meets Tuesday; but investors are not completely sure what it will do and what it will say in its accompanying economic statement. Furthermore, with the major brokerages' third-quarter results yet to be released, investors are uncertain about how badly the summer's stock downturn, souring home loans, and credit squeeze will hit the banking industry.
Making matters worse, the mortgage crisis seem to be spreading across the Pond. Northern Rock PLC, Britain's fifth-largest mortgage lender, saw its stock plunge and customers withdrew billions of dollars after it issued a profit warning after hours on Friday and drew from emergency funds held in reserve by the Bank of England. That gave U.S. investors an added impetus to pare their stock holdings, particularly in the financial sector. The good news for us is that financials almost always bounce back; like car manufacturers and airlines.
60 Minutes
The former Federal Reserve Boss Alan Greenspan did his first interview, since leaving as the Chairman of the Fed, on 60 Minutes and he warned of a possible recession. The couples with job cuts from First Franklin and Merrill have investors jumpy.
The good news is that while looking at the bigger picture one will discover that the job rate is steady, and this may help contain the credit crisis to the "sub prime" market. However, be careful when asking your credit card company for a limit increase, and check for new terms as well. The lenders of last resort will begin to tighten their belts' as well.
Friday, September 14, 2007
Fed up with the Bull-ish
Its now the end of our week, and a lot has happened, but it seems like everyone is already looking forward to next week’s Fed Board Meeting. Today, the Fed is not our concern; some people spend so much trying to predict what Mr. Ben S. Bernanke and his cohorts on that sit on the [Federal Reserve] Board of Governors will do, that they forget about the here and now. At Landes, we are doing the exact opposite: we have examined a few sectors have are providing you with some sound advice, for both the domestic and international markets.
First, while there has been a slight recovery in the financial sector, look for value buys on the engineering side. Companies that make “stuff”. The engineering sector is very diverse and is made up of companies that are frequently household names such as, Rolls Royce, ABB, Siemens, and L&T. One of the big reasons that these companies will continue to do well is the fact that in America and globally is because governments are constantly investing in infrastructural upgrades; in the USA it there is an attempt to make everything more green, while in nations with experiencing rapid GDP growth nations such as India and China, they are simply trying to lay the foundations of the World’s next Industrial Revolution. On the small-cap side: Kirloskar Brothers, Honda Siel Power, and Aban Loyd Chiles have all seen sharp gains over the past few months. While on the Big Board: Cummins India, Bharat Electronics, Alfa Laval, Bharat Forge, Thermax, Crompton Greaves, BHEL, Siemens, ABB, Kirloskar Oil Engines and Alstom Projects, have all doubled within one year’s time.
Countrywide
Buy Countrywide (CFC), the Nation’s largest independent mortgage firm. There was never a question of when CW would get bailed out, but merely who would provide the financing to bail them out. Over the past few weeks Countrywide has trimmed its workforce, sold off a 2 billion dollar stake to Bank of America, which (by the way plans to raise ATM fees to the absurd amount of $3) and borrowed over $11,000,000,000. Additionally, in the month of August, less than 4% of new loans originated by Countrywide fell into the Sub Prime category. These efforts combined with low rates still make this a buyer’s market and CW should be able to bounce back, but remember this is a long-term pick. For bond investors, it is important to realize that Countrywide debt carries a Bb2 rating, making it a “junk bond”. With high risk comes higher reward.
Strong Buys
On the other side of the real estate market take a look at Tarragon Corp. (TARR), which has been up since it announced plans to sell a Florida rental property to General Electric Capital. The buzz is that there are more sales to follow. Get in now, the stock in only about $3 and will rise to over $6 by the end of the year. Also a good strong buy is Euro Tech Holdings; everyone likes having fresh water. Last for the week is the big G again, Google. The reason is Google is boost ad revenue and the P/E margins are off the chart. If you can afford it, buy it.
Happy Investing, and have a good weekend.
First, while there has been a slight recovery in the financial sector, look for value buys on the engineering side. Companies that make “stuff”. The engineering sector is very diverse and is made up of companies that are frequently household names such as, Rolls Royce, ABB, Siemens, and L&T. One of the big reasons that these companies will continue to do well is the fact that in America and globally is because governments are constantly investing in infrastructural upgrades; in the USA it there is an attempt to make everything more green, while in nations with experiencing rapid GDP growth nations such as India and China, they are simply trying to lay the foundations of the World’s next Industrial Revolution. On the small-cap side: Kirloskar Brothers, Honda Siel Power, and Aban Loyd Chiles have all seen sharp gains over the past few months. While on the Big Board: Cummins India, Bharat Electronics, Alfa Laval, Bharat Forge, Thermax, Crompton Greaves, BHEL, Siemens, ABB, Kirloskar Oil Engines and Alstom Projects, have all doubled within one year’s time.
Countrywide
Buy Countrywide (CFC), the Nation’s largest independent mortgage firm. There was never a question of when CW would get bailed out, but merely who would provide the financing to bail them out. Over the past few weeks Countrywide has trimmed its workforce, sold off a 2 billion dollar stake to Bank of America, which (by the way plans to raise ATM fees to the absurd amount of $3) and borrowed over $11,000,000,000. Additionally, in the month of August, less than 4% of new loans originated by Countrywide fell into the Sub Prime category. These efforts combined with low rates still make this a buyer’s market and CW should be able to bounce back, but remember this is a long-term pick. For bond investors, it is important to realize that Countrywide debt carries a Bb2 rating, making it a “junk bond”. With high risk comes higher reward.
Strong Buys
On the other side of the real estate market take a look at Tarragon Corp. (TARR), which has been up since it announced plans to sell a Florida rental property to General Electric Capital. The buzz is that there are more sales to follow. Get in now, the stock in only about $3 and will rise to over $6 by the end of the year. Also a good strong buy is Euro Tech Holdings; everyone likes having fresh water. Last for the week is the big G again, Google. The reason is Google is boost ad revenue and the P/E margins are off the chart. If you can afford it, buy it.
Happy Investing, and have a good weekend.
Thursday, September 13, 2007
Don't Quant On It
Goldman Sachs Group Inc.'s Global Alpha Hedge Fund took an unheard of hit in the month of August - 22.5 percent! The Fund made numerous poor decisions, with stocks, bonds, and currency investments; many rooted in shaky economic theory… at best. Alpha Fund has lost more than one-third of its market capitalization value this year alone. After word of this drop in value, investors informed the Fund that they wanted to pull out 1.6b in cash, totaling 20% of the Fund’s current liquid assets. This is what should have been expected, if any public company lost 1/3 of its value in 9 months, there would be a massive sell-off.
Alpha uses numerous mathematical models to evaluate potential trades, this strategy is known as Quantitative Investing. "We still hold our fundamental investment beliefs that sound economic investment principles couples with a disciplined quantitative approach can provide strong uncorrelated returns over time," Goldman Sachs Inc. said in an unsigned report that discussed on the funds drop.
While Quantitative Investing does take into consideration market trends, and prevents active managers from entering into a trendy market too late, it also attempts to find patterns and predict the Market’s next move; essentially stripping away the human bias. When you remove an active manager from the fast paced, hands on, boot in the trenches, 20 hour work day side of his job, its like removing his soul, emasculating him of his very essence. Just ask Martha Stewart.
In the world of Private Placement and Alternative Investments, accredited (especially high net worth) inventors are looking for long term wealth management and sustained growth. So when you have a math wizard who is able to apply a theoretical formula ONLY, you loose something. At what point did their formula fail to realize that they were hemorrhaging capital? Why were there no "stop limits" in place? These answers are simple: when a manager relies heavily on formulae he becomes much less nimble and tends to trade within a predefined set of parameters. For traders who are more hands on, it is the opposite; we are often examining sectors, and working 20 hour days. I feel sorry for the investors here, but not the managers. Financial markets are dynamic, never static and a hedge fund manager must be the same. Many have tried, most have failed: you simply can not stop the Market from moving, and when it moves you have to move with it. Quant Managers are not “active manager” they are more like conveyor belt puppets.
At Landes we have a philosophy: be like water; no matter the obstruction, remain fluid enough so that we may just flow around it, and not miss a beat. The current will trade up to the Ocean.
Happy Investing,
Fund Manager, Landes Capital Management
Alpha uses numerous mathematical models to evaluate potential trades, this strategy is known as Quantitative Investing. "We still hold our fundamental investment beliefs that sound economic investment principles couples with a disciplined quantitative approach can provide strong uncorrelated returns over time," Goldman Sachs Inc. said in an unsigned report that discussed on the funds drop.
While Quantitative Investing does take into consideration market trends, and prevents active managers from entering into a trendy market too late, it also attempts to find patterns and predict the Market’s next move; essentially stripping away the human bias. When you remove an active manager from the fast paced, hands on, boot in the trenches, 20 hour work day side of his job, its like removing his soul, emasculating him of his very essence. Just ask Martha Stewart.
In the world of Private Placement and Alternative Investments, accredited (especially high net worth) inventors are looking for long term wealth management and sustained growth. So when you have a math wizard who is able to apply a theoretical formula ONLY, you loose something. At what point did their formula fail to realize that they were hemorrhaging capital? Why were there no "stop limits" in place? These answers are simple: when a manager relies heavily on formulae he becomes much less nimble and tends to trade within a predefined set of parameters. For traders who are more hands on, it is the opposite; we are often examining sectors, and working 20 hour days. I feel sorry for the investors here, but not the managers. Financial markets are dynamic, never static and a hedge fund manager must be the same. Many have tried, most have failed: you simply can not stop the Market from moving, and when it moves you have to move with it. Quant Managers are not “active manager” they are more like conveyor belt puppets.
At Landes we have a philosophy: be like water; no matter the obstruction, remain fluid enough so that we may just flow around it, and not miss a beat. The current will trade up to the Ocean.
Happy Investing,
Fund Manager, Landes Capital Management
Wednesday, September 12, 2007
Crude and Unusual Punishment
Oil Futures Spike Again
The price of a barrel of oil rose today to just above $80 per barrel, for the first time in history. Crude oil for October delivery rose $1.68, or 2.2 percent, to settle at $79.91 a barrel at 2:54 p.m. on the New York Mercantile Exchange, a record close. Futures also touched the highest intraday price since trading began in 1983. The previous record of $78.77 was reached on Aug. 1.
This after the ever cleaver, OPEC announced yesterday that they planned to open up the wells and pump out an additional 500,000 barrels per day. While this 500,000 barrel per day increase sounds nice, the US Dept of Energy expects this number to fall well short of the increased seasonal demand. So while OPEC made a friendly gesture in reality all they did was shift the supply curve a few places to the left. U.S. oil inventories fell a greater-than-expected 7.01 million barrels to 322.6 million last week, the Energy Department said today.
Still Depressed: OPEC is not to blame [completely] for the jump is oil futures; point the finger at Mother Nature. There are two tropical depressions in the Gulf and inventories took a big hit.
Other prices of interest:
1. Light, sweet crude for October delivery rose $1.68 to settle at a record $79.91 on the New York Mercantile Exchange after rising as high as $80.18 earlier. October gasoline rose 3.49 cents to settle at $2.016 a gallon.
2. Nymex heating oil futures rose 3.64 cents to settle at $2.2191 a gallon, while natural gas futures jumped 50.4 cents to settle at $6.438 per 1,000 cubic feet. Natural gas prices typically react strongly to news of tropical weather due to the concentration of gas infrastructure in the Gulf.
3. Natural gas for October delivery rose 50.4 cents, or 8.5 percent, to $6.438 per million British thermal units in New York, the highest close since Aug. 17.
4. Heating oil for October delivery rose 3.64 cents, or 1.7 percent, to close at a record $2.2191 a gallon in New York. Futures touched $2.2224 a gallon, the highest intraday price since trading began in 1978.
5. In London, October Brent crude gained $1.30 to settle at $77.68 a barrel on the ICE Futures Exchange.
All in all, today was a good day for oil companies, so if you are heavily weighted in energy and oil companies you will see short term gains. I would look at companies in the Northeast, because of the discounts they receive on heating oil. Additionally, companies in states like WY and MA have been doing very well with Nature Gas exploration.
Tips: Ultra Petroleum Inc. (UPL); Avalon Oil and Gas; and SAP. Don't forget, everyone needs software.
The price of a barrel of oil rose today to just above $80 per barrel, for the first time in history. Crude oil for October delivery rose $1.68, or 2.2 percent, to settle at $79.91 a barrel at 2:54 p.m. on the New York Mercantile Exchange, a record close. Futures also touched the highest intraday price since trading began in 1983. The previous record of $78.77 was reached on Aug. 1.
This after the ever cleaver, OPEC announced yesterday that they planned to open up the wells and pump out an additional 500,000 barrels per day. While this 500,000 barrel per day increase sounds nice, the US Dept of Energy expects this number to fall well short of the increased seasonal demand. So while OPEC made a friendly gesture in reality all they did was shift the supply curve a few places to the left. U.S. oil inventories fell a greater-than-expected 7.01 million barrels to 322.6 million last week, the Energy Department said today.
Still Depressed: OPEC is not to blame [completely] for the jump is oil futures; point the finger at Mother Nature. There are two tropical depressions in the Gulf and inventories took a big hit.
Other prices of interest:
1. Light, sweet crude for October delivery rose $1.68 to settle at a record $79.91 on the New York Mercantile Exchange after rising as high as $80.18 earlier. October gasoline rose 3.49 cents to settle at $2.016 a gallon.
2. Nymex heating oil futures rose 3.64 cents to settle at $2.2191 a gallon, while natural gas futures jumped 50.4 cents to settle at $6.438 per 1,000 cubic feet. Natural gas prices typically react strongly to news of tropical weather due to the concentration of gas infrastructure in the Gulf.
3. Natural gas for October delivery rose 50.4 cents, or 8.5 percent, to $6.438 per million British thermal units in New York, the highest close since Aug. 17.
4. Heating oil for October delivery rose 3.64 cents, or 1.7 percent, to close at a record $2.2191 a gallon in New York. Futures touched $2.2224 a gallon, the highest intraday price since trading began in 1978.
5. In London, October Brent crude gained $1.30 to settle at $77.68 a barrel on the ICE Futures Exchange.
All in all, today was a good day for oil companies, so if you are heavily weighted in energy and oil companies you will see short term gains. I would look at companies in the Northeast, because of the discounts they receive on heating oil. Additionally, companies in states like WY and MA have been doing very well with Nature Gas exploration.
Tips: Ultra Petroleum Inc. (UPL); Avalon Oil and Gas; and SAP. Don't forget, everyone needs software.
Tuesday, September 11, 2007
Pay Less at the Pump?
OPEC Speaks
Even though the United States does not get the majority of its crude oil from the Middle East (only about 15% comes from Saudi Arabia), The USA does receive more than 50% of its crude oil imports from OPEC. With imports that high, its not hard to see why the US oil market is still has an indurate link to the OPEC cartel. It just a fact of life. The USA's largest crude importers are Canada and Mexico (both whom are non-OPEC countries), but they are followed closely by Venezuela and Saudi Arabia. Logistically, this makes sense, it is easier to ship form Canada then it is from Kuwait.
However, good news from from the sandy pond region today; Kuwait's Oil Minister, acting Spokesman for OPEC, announced today that OPEC would increase crude production by 500,000 barrels per day. This should ease oil futures and loosen up prices in about 30 days.
Another falsehood that many American's believe is that OPEC is made up of only Middle Eastern countries, this simply is not true. The countries that comprise OPEC: Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, The United Arab Emirates, and Venezuela.
Even though the United States does not get the majority of its crude oil from the Middle East (only about 15% comes from Saudi Arabia), The USA does receive more than 50% of its crude oil imports from OPEC. With imports that high, its not hard to see why the US oil market is still has an indurate link to the OPEC cartel. It just a fact of life. The USA's largest crude importers are Canada and Mexico (both whom are non-OPEC countries), but they are followed closely by Venezuela and Saudi Arabia. Logistically, this makes sense, it is easier to ship form Canada then it is from Kuwait.
However, good news from from the sandy pond region today; Kuwait's Oil Minister, acting Spokesman for OPEC, announced today that OPEC would increase crude production by 500,000 barrels per day. This should ease oil futures and loosen up prices in about 30 days.
Another falsehood that many American's believe is that OPEC is made up of only Middle Eastern countries, this simply is not true. The countries that comprise OPEC: Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, The United Arab Emirates, and Venezuela.
Monday, September 10, 2007
What goes Down will go back up
For any of our readers who viewed this blog yesterday you will see that we advised you to buy APPLE early this morning. Sometimes with the glut of raw data in our arena, and in a time when 24 hour financial news is available at the push of a remote control, sometimes it all come down to good old fashion common sense. In this case that is what happened.
Apple's stock frequently experiences high volatility, however that is not odd for the technology sector. When Steve Jobs announced that they would cut the price of the wildly popular, iPhone, the markets reacted unfavorably. How quickly we forget, Apple announced today that it has sold 1,000,000 iPhones, more than one month ahead of analyst predictions. Based on that news the bulls came out to run through Silicon Valley.
All signs indicate that Apple will continue to rise, the prices have fallen and customer demand is creeping upward, in spite of hard financial times for many. This is a stock that you can get in for the short term, but it will pay off in the long term as well.
Sunday, September 9, 2007
Sir Issac Newton
The goal is to buy low - so buy apple. This week the stock will bounce back from its downturn last week, when it cut the price of the iPhone. There is no reason to think it will stay down, so buy now! Right Now! This is a short/medium term investment.
Buy Sony, Samsung, and Mitsubishi, while they have all dropped, they too will bounce back.
Buy Sony, Samsung, and Mitsubishi, while they have all dropped, they too will bounce back.
Saturday, September 8, 2007
Week in Review
Friday DJ plunge
The Dow tumbles more than 240 points after the Labor Department reports the weakest jobs data in four years. Investors also weigh comments from former Fed chief Alan Greenspan about volatility in the stock market.
Country Wide cute more jobs
Reacting to a meltdown in the subprime housing market, the largest U.S. home-mortgage lender is expected to announce plans to reduce its work force over the next several months by about 20 percent. This is in the wake of the Bank of America bailout. What's next?
Home prices have fallen in 1/3 of the metropolitan areas in America over the past three months. How are values where you live? If you are trying to sell now, you may want to be very careful the time is bad. On one street in Cuyahoga County, OH there are 9 houses for sale.
The mortgage "bubble", while it has not you extended into the Prime markets, it has made its way into the creative market. Even high value homes are loosing their value and people are loosing their homes. What happened was that years ago, a man with a 680 credit score could either take a standard mortgage on a 3 bedroom, $250,000 home or he could take a "creative" mortgage and move into a 5 bedroom 1/2 million dollar home. In short prices are falling, and falling fast.
Fed to cut rate?
NEW YORK (AP) - The arrival of September was supposed to bring more clarity to the economic impact of the current credit crisis. Instead, each new bit of data coming out seems to be creating more confusion.
The first labor market contraction in four years, as revealed Friday in a weaker-than-expected jobs report, shows that the housing and mortgage collapse is putting some strain on the economy. And the continued dislocation in commercial paper markets, where companies raise cash to fund their operations, should be taken as a warning sign - in flashing red - that more bad news may be coming.
Yet plenty of good economic news still stands out. Strong August sales results from retailers and manufacturers suggest the painful credit crunch's effect on the broader U.S. economy has been limited so far.
Anyone hoping that Federal Reserve policymakers will reduce the overnight bank borrowing rate when they meet on Sept. 18, should not ignore the positive signs the economy is giving.
The Dow tumbles more than 240 points after the Labor Department reports the weakest jobs data in four years. Investors also weigh comments from former Fed chief Alan Greenspan about volatility in the stock market.
Country Wide cute more jobs
Reacting to a meltdown in the subprime housing market, the largest U.S. home-mortgage lender is expected to announce plans to reduce its work force over the next several months by about 20 percent. This is in the wake of the Bank of America bailout. What's next?
Home prices have fallen in 1/3 of the metropolitan areas in America over the past three months. How are values where you live? If you are trying to sell now, you may want to be very careful the time is bad. On one street in Cuyahoga County, OH there are 9 houses for sale.
The mortgage "bubble", while it has not you extended into the Prime markets, it has made its way into the creative market. Even high value homes are loosing their value and people are loosing their homes. What happened was that years ago, a man with a 680 credit score could either take a standard mortgage on a 3 bedroom, $250,000 home or he could take a "creative" mortgage and move into a 5 bedroom 1/2 million dollar home. In short prices are falling, and falling fast.
Fed to cut rate?
NEW YORK (AP) - The arrival of September was supposed to bring more clarity to the economic impact of the current credit crisis. Instead, each new bit of data coming out seems to be creating more confusion.
The first labor market contraction in four years, as revealed Friday in a weaker-than-expected jobs report, shows that the housing and mortgage collapse is putting some strain on the economy. And the continued dislocation in commercial paper markets, where companies raise cash to fund their operations, should be taken as a warning sign - in flashing red - that more bad news may be coming.
Yet plenty of good economic news still stands out. Strong August sales results from retailers and manufacturers suggest the painful credit crunch's effect on the broader U.S. economy has been limited so far.
Anyone hoping that Federal Reserve policymakers will reduce the overnight bank borrowing rate when they meet on Sept. 18, should not ignore the positive signs the economy is giving.
Thursday, September 6, 2007
HSBC is at it again
Banking behemoth HSBC Holdings announced on Monday that it has agreed to purchased a majority stake, 51.02%, in Korean Exchange Bank. What this does is effectively increase HSBC's footprint in a new and emerging market, the Korean Peninsula.
"HSBC's presence in Korea is very small, compared with Citibank and Standard Chartered. So I think they needed some acquisition to have a meaningful presence in that market, and KEB is a good platform," said Paul Lee, a banking analyst with Tai Fook Research in Hong Kong.
"It reinforces the strategy to expand in the Asian markets through acquisition, if necessary," said Lee. "Korean Exchange Bank will be worth more under HSBC than with Lone Star due to banking synergies."
If you are looking for a value stock in an emerging market, KEB will be a good. While HSBC has wide exposure to the mortgage markets in the USA, it also is so well diversified that profits are not an issue. Therefore, they will increase KEB's efficiency and share price. Also keep in mind that China is expected to raise interest rates before the end of the year. How will this rise affect Korea is yet to be seen.
HSBC is aggressive, do not expect this to be the last you hear from them before the end of the year. I expect to see them take over other smaller banks in other emerging markets such as Central America and Eastern Europe. When the Beast is hungry he will eat.
"HSBC's presence in Korea is very small, compared with Citibank and Standard Chartered. So I think they needed some acquisition to have a meaningful presence in that market, and KEB is a good platform," said Paul Lee, a banking analyst with Tai Fook Research in Hong Kong.
"It reinforces the strategy to expand in the Asian markets through acquisition, if necessary," said Lee. "Korean Exchange Bank will be worth more under HSBC than with Lone Star due to banking synergies."
If you are looking for a value stock in an emerging market, KEB will be a good. While HSBC has wide exposure to the mortgage markets in the USA, it also is so well diversified that profits are not an issue. Therefore, they will increase KEB's efficiency and share price. Also keep in mind that China is expected to raise interest rates before the end of the year. How will this rise affect Korea is yet to be seen.
HSBC is aggressive, do not expect this to be the last you hear from them before the end of the year. I expect to see them take over other smaller banks in other emerging markets such as Central America and Eastern Europe. When the Beast is hungry he will eat.
iPod Touch
As anticipated Steve Jobs has done it again. This time he has made the iPod obsolete. When Apple released the iPhone 3 months ago, stores were mobbed! That hype has paved the way for the new iPod Touch. Apple currently sells almost 10 million iPods (in its numerous variations) every quarter. With the Holidays around the corner, expect those numbers to surge again. The P/E ratio of Apple makes it an attractive long term investment and very stable. There will always be a certain amount of volatility, but if you are looking for a "safe" gamble, bet on Apple.
There are a number of sites that will offer much more technical information as well as ipod Touch diagrams. You may want to check out some of the iPods upgrades so you can become with that your kids will wants for Christmas.
There are a number of sites that will offer much more technical information as well as ipod Touch diagrams. You may want to check out some of the iPods upgrades so you can become with that your kids will wants for Christmas.
Wednesday, September 5, 2007
Today's Picks
VMWare Inc (VMW): Virtual is the new real, or so it seems. A quick chart and y
Apple (APPL): The new iPOD release was flawlessly timed, school has just started for the youth of America, and no teenage wants to be left behind. Expect to see sales surge - again - in the coming months. You have birthdays and holidays rapidly approaching.
Oracle (ORCL): Here they go again buying another company. I am not sure if they are good for competition or they stiffle it. But they bought a UK (Ireland) internet company for an undisclosed amount of money this week. Expect internations number to surge
Tullow Oil: There is more oil in Africa then everyone thought
Monday, September 3, 2007
American Elitism
Sometimes good ol American arrogance affects us all. Isn’t it odd that most Americans can only name 2-4 stock exchanges? Now we seem to think that our mortgage crisis, which will lead to an eventual recession, will affect the rest of the world’s markets. While CDO (collateralized debt obligations) defaults are at a high point, there are so many sectors to our economy that remain unaffected. Example: when Ford (F) was downgraded by S&P from AA to below “investment grade” , did the US car market plunge? Did prices drop? The “Market” is kind of like the Earth; no matter what we throw at it, the greater good always seems to win out. After an ice age, come the Grand Canyon and Great Lakes. CDO, CDO2, and other mortgage backed securities. That said, in the spirit if “buy low, sell high,” if you have some extra money look at things like Freddie Mac, Fannie Mae, and Wells Fargo. These are all companies that will see short-term dips, but each has what we at Landes refer to as FSP or financial staying power. Basically, over the long haul, these companies will bounce back into the black and see continued growth.
For the more immediate returns you will need to look places like: Tech, Pharma, and Blue Chips. There are some good values in small caps, but you have to look. One other place to look is at short term luxury goods and services, like restaurants. This short-week will see a lot of moving and shaking. I expect to see a lot of volatility, but all-in-all we will be up for the week. My suggestions are: NVIDIA (NVDA), Ultra Petroleum (UPL), and BP.I hate to say this but perennial disasters lead (one month later) to oil spikes. Oh yeah, BP will be pumping in Oman by 2011.
For the more immediate returns you will need to look places like: Tech, Pharma, and Blue Chips. There are some good values in small caps, but you have to look. One other place to look is at short term luxury goods and services, like restaurants. This short-week will see a lot of moving and shaking. I expect to see a lot of volatility, but all-in-all we will be up for the week. My suggestions are: NVIDIA (NVDA), Ultra Petroleum (UPL), and BP.I hate to say this but perennial disasters lead (one month later) to oil spikes. Oh yeah, BP will be pumping in Oman by 2011.
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