Archive for October, 2007
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Date Of Apple Backlash Set For March 21, 2008
Eddy Elfenbein, October 3rd, 2007 at 3:09 pmIn the face of Apple, Inc.’s 3-billionth iTunes sale and soaring stock price, some Wall Street forecasters are predicting that consumers will finally get fed up with the computer manufacturer’s high retail prices and various product bugs sometime between March 20 and 22 of next year.
“At the current rate, we believe that at this time a sea change will occur in which people will look down at their glossy white or black devices and feel a sense of embarrassment and gullibility,” Goldman Sachs analyst Steven Shore said. “They will realize that, despite all the sleek design, they got caught up in a wave of hype that made them shell out additional hundreds of dollars for options and features they didn’t need. Until then, I would like to point out that my iPhone is awesome.”
Apple has responded to the backlash rumors by announcing the late-October release of a mint green iPod in time for the holiday shopping season, a strategy that appears to have silenced naysayers at least temporarily. -
The Dow’s Annual Trend
Eddy Elfenbein, October 3rd, 2007 at 11:59 am
Here’s a look at how the Dow has performed, on average, throughout the year. I used all the daily closings since 1896.
Looking at the annual trend, there are two basic surges. The biggie is from October 29 to May 6, when the Dow rises 7.79%, which is about 93% of the annual gain. The rest of the time, the Dow gains just 0.49%. The other big surge is from May 25 to September 6 when the Dow rises an average of 4.72%.
The average sell-off from May 6 to May 25 is -1.25%, and the one from September 6 to October 29 is -2.82%.
The most impressive short-term gain is from December 21 to January 7 when the Dow averages a gain of 3.39%. -
Right on Walgreen
Eddy Elfenbein, October 2nd, 2007 at 11:40 amLast year, I wrote that Walgreen was too expensive at $44 a share. Let’s just say that it wasn’t one of my more popular posts. One commenter at Seeking Alpha was abusive that the editors there had to rewrite his comment.
Today, the company announced a 4% profit decline. The shares are now down to $39. It doesn’t look like things will get better soon:Net income was $396.5 million, or 40 cents a share, compared with $412.3 million, or 41 cents, in the quarter a year earlier.
It was the first decline in quarterly profit since early in the 1998 fiscal year, and executives warned that trouble could persist.
Revenue in the period, which ended Aug. 31, rose more than 10 percent, to $13.4 billion from $12.2 billion.
Analysts expected earnings of 47 cents a share and revenue of $13.5 billion.
“Many of the challenges we faced in this quarter will continue, including comparisons to last year’s blockbuster generics,” said Rick Hans, the company’s director of finance. -
GorillaTrades Unmasked
Eddy Elfenbein, October 2nd, 2007 at 11:14 amBusiness Week looks at GorillaTrades:
But does the gorilla deliver for investors? A BusinessWeek analysis of the service’s picks found they performed far worse than the stock market as a whole.
The company has attracted attention thanks to its quirky approach and heavy advertising. It has refused to divulge the identity of the firm’s founder and chief spokesman, who calls himself “the gorilla.” Nor does it give out results on the overall performance of his picks. However, BusinessWeek has learned that the gorilla is a former stockbroker named Ken Berman, in Jupiter, Fla., who has confirmed that fact in an interview. -
The Write-Off
Eddy Elfenbein, October 1st, 2007 at 3:02 pmUBS AG, the world’s largest wealth manager, unveiled $3.4 billion in losses, swept out senior managers and slashed jobs in one of the biggest casualties yet worldwide from the credit crunch.
UBS said on Monday it would write down 4 billion Swiss francs ($3.42 billion) in losses in its fixed income portfolio and elsewhere, resulting in a third-quarter loss of 600-800 million Swiss francs, its first quarterly loss in nine years.
UBS said it would shed 1,500 jobs in its investment bank.Jerry : So were going to make the Post Office pay for my new stereo?
Kramer : It’s just a write off for them.
Jerry : How is it a write off?
Kramer : They just write it off.
Jerry : Write it off what?
Kramer : Jerry all these big companies they write off everything
Jerry : You don’t even know what a write off is.
Kramer : Do you?
Jerry : No. I don’t.
Kramer : But they do and they are the ones writing it off.
Jerry : I wish I just had the last twenty seconds of my life back. -
Fox Business News Is Coming
Eddy Elfenbein, October 1st, 2007 at 2:23 pmFox Business News is coming October 15. The Web site is now live.
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Buy List Update
Eddy Elfenbein, October 1st, 2007 at 11:19 amNow that we have three quarters under our belt, let’s look at the Crossing Wall Street Buy List. For the year, the Buy List is up 1.88% compared with 7.65% for the S&P 500 (dividends not included). The Buy List has been about 7% less volatile than the S&P 500.
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Predatory Lenders Are Now Murdering Little Girls
Eddy Elfenbein, October 1st, 2007 at 11:09 amWith today’s announcement from Citigroup, the subprime may still have a ways to go, but the political issue is just getting started.
Yesterday’s Washington Post had an absolutely wretched article by Jim Rokakis, the treasurer of Cuyahoga County, Ohio. It’s almost something out of the The Onion. He basically blames the death of a little girl and an elderly man on predatory lenders. I’m not exaggerating:Twenty years ago, the Slavic Village neighborhood of Cleveland was a tightly knit community of first- and second-generation Polish and Czech immigrants. Today, it’s in danger of becoming a ghost town, largely because a swarm of speculators, real estate agents, mortgage brokers and lenders saw an opportunity to make a buck there.
You could say it was because of them that 12-year-old Asteve’ “Cookie” Thomas lost her life on Sept. 1, shot in Slavic Village when she stumbled into the crossfire of suspected drug dealers.No, you can’t. You could, however, blame her death on the suspected drug dealers who fired at her. I’m going to take a wild guess and say that they’re probably actual drug dealers as well.
It gets worse:The Federal Reserve’s recent decision to cut interest rates may calm the nerves of Wall Street bankers, but it won’t bring back Cookie Thomas or Joe Krasucki.
Vile.
I think another Sarbanes-Oxley is on the way. -
Can We Turn Off Our Emotions When Investing?
Eddy Elfenbein, October 1st, 2007 at 10:49 amJoe Nocera has an interesting story about investing and emotions (via Mankiw).
“There is a story in the book about Harry Markowitz,” Mr. Zweig said the other day. He was referring to Harry M. Markowitz, the renowned economist who shared a Nobel for helping found modern portfolio theory — and proving the importance of diversification. It’s a story that says everything about how most of us act when it comes to investing. Mr. Markowitz was then working at the RAND Corporation and trying to figure out how to allocate his retirement account. He knew what he should do: “I should have computed the historical co-variances of the asset classes and drawn an efficient frontier.” (That’s efficient-market talk for draining as much risk as possible out of his portfolio.)
But, he said, “I visualized my grief if the stock market went way up and I wasn’t in it — or if it went way down and I was completely in it. So I split my contributions 50/50 between stocks and bonds.” As Mr. Zweig notes dryly, Mr. Markowitz had proved “incapable of applying” his breakthrough theory to his own money. Economists in his day believed powerfully in the concept of “economic man”— the theory that people always acted in their own best self-interest. Yet Mr. Markowitz, famous economist though he was, was clearly not an example of economic man.
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