Wealth Today » Stocks and Bonds

Wall Street Whacked In Its Pants Today

joshuak — Tue, 07 Oct 2008 02:20:32 +0000

The AP reported on a rough day on another rough day in Wall Street. It is one of the best articles I have read in awhile. Having dropped 800 points during the day, it finished at 370 less than last closing. Indeed it was rough. The article has an interesting statement : “[he] believes investors are sensing that what’s happening in the economy is a shift in the extent to which consumers and businesses take on debt.” I am interested in seeing how this will carry out. Will we have some way of engaging self-finance? It is obvious that will change banking, but how will it affect other markets. We can assume technology through forms of automation.

Also significant in the article is Joseph V. Battipaglia’s discussion on the deleveraging of economies and the open discussion that this phenomenon is occurring right now and very quickly. It will be interesting to see what will happen after the deleveraging of the economies, which is omitted from the article. I expect it to have some radical impacts on politics and perhaps even borders.

I also appreciate the candidness which fund manager Ryan Jacob openly admits that other big name players are still attempting to gain ground in the market, mentioning Buffett’s new checkmate and the melee over Wachovia.

You can find the article here.

Wall Street Battered by Brutal Reports

joshuak — Fri, 05 Sep 2008 02:46:51 +0000

Today, the Dow Jones dropped 340 points as the US government released its poor report on the employment status of Americans, revealing a further weakening economy. The Department of Labor’s report showed a reversal of continued decline in unemployment, with an increase of 15,000 applications for unemployment during August.

Also reported were further slumps in retail markets, that pointed to necessity spending by consumers and an abandonment of demand for luxury items.

Icahn Gets a Seat on Yahoo’s Board

joshuak — Tue, 22 Jul 2008 00:13:45 +0000

Today, Yahoo gave Icahn 3 seats on the board of directors, bringing the total to eleven. Icahn takes a seat as the second largest institutional shareholder. While Icahn has failed to get a majority of seats, the situation continues to be a disruption to their business. Icahn’s unable to negotiate on behalf of the company without Yahoo’s permission, and must be allowed to participate on any committee that deals with a possible deal topic. While Icahn has a history of success in these ventures, we still have yet to see if there will be any deal between Microsoft and Yahoo.

Dow Jacks Up Prices Again

joshuak — Wed, 25 Jun 2008 14:56:04 +0000

For the second month in a row, Chemical magnate Dow increased prices. This time by as much as 25 percent, compared to last month’s increase of 20 percent. Interestingly enough, they uncover a plan of surcharges for each truck delivery and railcar delivery. They offer consumers the same reason so many other business do when raising prices : rising fuel costs.

Icahn Stirs Muck for Yahoo on the Tails of the Microsoft Bid

joshuak — Tue, 03 Jun 2008 23:34:39 +0000

Carl Icahn, an ambitious investor and significant stockholder of Yahoo shares, expects to win a vote by the board to remove current CEO, Jerry Yang from his title. Icahn is disappointed with Yahoo’s rejection of Microsoft’s takeover bid, and with just cause. The company’s shares continue to deteriorate, falling 32 from last year. Yahoo claims their stock was worth more than what Microsoft offered and allows them to refocus their efforts to core business. With another drop in value today, the bid, no longer on the table, becomes a more attractive offer to shareholders, and momentum is building.

Dow Chemical Increases Prices By Twenty Percent

joshuak — Wed, 28 May 2008 20:50:30 +0000

Dow’s CEO, Andrew Liveris, blames the US Government’s long-standing policy of inaction towards the rising energy crisis for the company’s recent hike in prices on all products across the globe by up to 20%. Dow claims a 42 percent increase in cost of their energy and “feedstock” (the raw petroleum from crude oil) for the first quarter compared to a year ago. My concern : Dow’s extensive list of products and services is a far reaching bohemeth and this price increase will gouge into the pockets of other industries that are already hit hard by the increase in fuel prices.

AMD Goes Head To Head Against Intel

joshuak — Wed, 07 May 2008 23:10:36 +0000

This time, though, AMD will let the battle be decided by the clout-swinging suits instead of the cutting-edge Samurai-style technology touting ninja-neers. AMD has filed suit against Intel in a statement of anti-trust, alleging that Intel intervened and was able to sway decisions against AMD’s favor in many attempted business and marketing negotiations. Analysts expected this kind of response over 6 months ago. If the result of the complaint is in AMD’s favor, will it be enough to dig them out of this hole? Likely. They expected some losses this year as it acquired ATI, and have a new product launch planned this summer. While the move didn’t mangle Intel in today’s market, it didn’t look good. Intel seems adamant that they will come out ahead in the long run. On the other hand, AMD has already produced their statement of how they will continue to be successful as the move to integrated CPU and GPU architecture over the next generations of product lines. It is yet to be seen, but I am not convinced the outcome of the suit will make significant changes for AMD or it’s stock. We will also have to pay attention to how it will affect the consumers to see how that will play out.

Warren Buffett Doles Out Advice

joshuak — Mon, 05 May 2008 20:55:17 +0000

In a press conference on 5/4, Warren Buffett spoke these words of advice to would-be investors:

“You should be able to write down on a yellow sheet of paper, ‘I’m buying General Motors at $22, and GM has [566] million shares for a total market value of $13 billion, and GM is worth a lot more than $13 billion because _______________.” And if you can’t finish that sentence, then you don’t buy the stock. [he mentioned GM for example purposes only.] All this requires some temperamental detachment from other people’s behavior. Both Charlie and I have a natural instinct in that direction. We value our opinions more than others’ — perhaps to an extreme!”

Buffett goes on to explain his philosphy of buying stocks. He commends the stock shopper whom looks for the bargain, those stocks who are already low. The lower stock prices enable the shopper to purchase more of something, at a better price.

This might be really simple and basic common knowledge to many, but it’s the strategy that Berkshire Hathaway will continue to use for success according to Charles Munger.

The Biggest Fortune Losers

joshuak — Wed, 23 Apr 2008 18:17:31 +0000

Fortune 500′s posted their Biggest Losers of 2007. Some I was not surprised by and some I’m rather shocked about.

General Motors (loss 38.73 billion USD)
Sprint/Nextel (loss 29.58 billion USD
Merrill Lynch (7.77 billion USD)
Advanced Micro Devices (3.38 billion USD)

We knew GM was having problems. With losing as much as ExxonMobil made in profits during 2007, I’m staggered by the irony. With Sprint, we all knew it was just a bailout of Nextel and to provide a transition as people move to more standard wireless connectivity. Merrill Lynch was hit hard by the falling real estate so we all expected it. The one I was surprised about was AMD. The CEO, Hector Ruiz, sees it like I do though. With the acquisition of ATI, AMD had to spend a little to prepare themselves for the future, calling 2007 a “transitional year”. This is going to mean excellent big things for them because of GPU and CPU integration, but the combination of the purchase and the slow release of Opteron and Phenom processors set them back shiny gem.

Two Reasons the VISA IPO is of interest

joshuak — Thu, 28 Feb 2008 15:17:30 +0000

There’s been a lot of talk about the VISA initial public offer filing. Here is why people are talking:

Since MasterCard’s unprecedented success in 2006. VISA believes they can do it better, which raises a lot of attention by investors, and with good reason.
They claim to process almost twice as many transactions as MasterCard. This expresses some huge potential for revenue, especially with the compounded growth of the Asian and Pacific economies.

According to Fortune Visa’s coming to the table with a price to earning ratio of 27. This makes the VISA IPO a tasty treat to any investor.