Archive for May, 2007

• I’m Outta Here
  Eddy Elfenbein, May 25th, 2007 at 11:23 am

  I’m taking off for the long weekend so no posting today. I hope everyone has a great Memorial Day weekend!

• 30-Year T-Bond Over 5%
  Eddy Elfenbein, May 24th, 2007 at 10:25 am

  Yesterday, the yield on the 30-year Treasury bond closed over 5% for the first time in nine months. With the yield at the short-end falling, the yield curve is becoming normal again.
  

• Microsoft Says No to Yahoo Deal
  Eddy Elfenbein, May 24th, 2007 at 9:26 am

  Reuters reports:

  Microsoft said Wednesday that it did not need to buy Yahoo to gain scale in online advertising, because it had “all the pieces” to build a successful ad business.
  Speaking at the Goldman Sachs Internet Conference in Las Vegas, Microsoft’s chief advertising strategist, Yusuf Mehdi, said that the company was already bigger than Yahoo in terms of users of its Web services like e-mail and instant messaging.

  Three weeks ago, I calculated the odds of a MSFT/YHOO deal:

  No. No way. Never.

  I was able to see where this story was going due to my detailed knowledge of the tech industry, my comprehensive understanding of corporate finance and not being totally retarded.

• SEI Investments Announces Stock Split, Boosts Dividend
  Eddy Elfenbein, May 23rd, 2007 at 8:17 pm

  Good news from SEI Investments (SEIC). The company announced a two-for-one stock split for next month. SEIC also raised its dividend from 12 cents a share to 14 cents a share.

• Medtronic’s Earnings
  Eddy Elfenbein, May 23rd, 2007 at 11:15 am

  Medtronic (MDT) reported earnings of 66 cents a share for its fiscal fourth quarter.. This was four cents ahead of analysts’ expectations. Some analysts, however, believe the higher earnings were due to a strong sales effort near the end of the quarter which will only hurt sales this quarter.
  The company said that it expects sales to rise in the low single digits next year, and EPS a little faster.
  I don’t see why this stock has barely moved in four years. Here’s a look at MDT’s sales and earnings for the past few quarters:
  Quarter………..EPS………….Sales
  Jul-01…………$0.28………..$1,455.70
  Oct-01………..$0.29………..$1,571.00
  Jan-02………..$0.30………..$1,592.00
  Apr-02………..$0.34………..$1,792.00
  Jul-02…………$0.32………..$1,713.90
  Oct-02………..$0.34………..$1,891.00
  Jan-03………..$0.35………..$1,912.50
  Apr-03………..$0.40………..$2,148.00
  Jul-03…………$0.37………..$2,064.20
  Oct-03………..$0.39………..$2,163.80
  Jan-04………..$0.40………..$2,193.80
  Apr-04………..$0.48………..$2,665.40
  Jul-04…………$0.43………..$2,346.10
  Oct-04………..$0.44………..$2,399.80
  Jan-05………..$0.46………..$2,530.70
  Apr-05………..$0.53………..$2,778.00
  Jul-05…………$0.50………..$2,690.40
  Oct-05………..$0.54………..$2,765.40
  Jan-06………..$0.55………..$2,769.50
  Apr-06………..$0.62………..$3,066.70
  Jul-06…………$0.55………..$2,897.00
  Oct-06………..$0.59………..$3,075.00
  Jan-07………..$0.61………..$3,048.00
  Apr-07………..$0.66………..$3,280.00

• Refiner Stocks
  Eddy Elfenbein, May 23rd, 2007 at 10:36 am

  Here’s a look at Valero Energy (VLO), Holly (HOC) and Frontier Oil (FTO) since October 2002. The flattish gold line at the bottom is the S&P 500 (in other words, the bull market).
  

• Shanghai Bubble Watch
  Eddy Elfenbein, May 23rd, 2007 at 10:23 am

  When I used to be a sales assistant, I remember one day telling a client that her stock was up just one day after she bought it. She asked me, “how often do they change the price?”
  At first, I wasn’t sure what to say. I mean, in capitalism “they” change the price nearly every second. Maybe she thought that some guys simply adjusted the price a few times a day. It’s amazing how many people don’t get the markets on any level.
  The AP reports that many Chinese investors have little idea what their stock market is about:

  Respondents to the survey were mainly office workers, 60 percent of whom had monthly salaries of 3,000 yuan ($390) or less, the firm said.
  Despite their interest in the market, few respondents said that had negatively affected their jobs, with 45 percent saying they felt “reinvigorated” at work through investing in the market.
  Among other conclusions, nearly 75 percent of respondents said they were using their bank savings to finance stock buys, underscoring concerns about the possible ripple effects of any market downturn.
  Yet just 32 percent said they were reinvesting their market earnings, while 68 percent said they used profits to pay bills or buy cars and apartments.

• Department of Irony
  Eddy Elfenbein, May 23rd, 2007 at 9:42 am

  The new head of the U.N. Commission on Sustainable Development is….
  Zimbabwe?

  Zimbabwe is suffering its worst economic crisis since independence in 1980, with acute shortages of food, hard currency, gasoline, medicines and most other basic goods. Official inflation is running at about 2,200 percent annually, the highest in the world.

• Guess This Stock
  Eddy Elfenbein, May 22nd, 2007 at 2:04 pm

  Here’s a blatant ripoff of a feature at the Kirk Report: Can you guess what stock this is?
  
  Here are some clues:
  It’s up nearly 100-fold in the last 19 years (plus another seven-fold with dividends).
  The stock currently pays a 4% dividend.
  It’s based in the U.S., but half the company is owned by a French company.
  Give up? The answer is…

  (more…)

• The Science of Central Banking
  Eddy Elfenbein, May 22nd, 2007 at 12:12 pm

  Here’s a very odd story. The Bank of China recently raised interest rates by 18 basis points and its one-year deposit rate by 27 basis points. Strange that both numbers are divisible by nine. Strange, but no accident. You see, in China, all interest rates set to multiples of nine. Would you believe it has to do with the abacus?
  No, really.