Archive for May, 2008

  • The Yen’s Negative Beta
    , May 29th, 2008 at 4:09 pm

    Greg Mankiw sees this chart and wonders, “Is the yen a negative beta asset?” Well, let’s take a look.
    The graph below shows the daily changes for the past year of the S&P 500 (^GSPC) on the X-axis. On the Y-axis are the daily changes of the Yen ETF (FXY). The slope of the least-squares line is the estimated Beta coefficient, which in this case is -0.3905.
    image668.png
    So, yes Professor. It is.

  • But Of Course
    , May 29th, 2008 at 8:46 am

    From The Economist‘s corrections box:

    Our Contents box last week in some editions referred to Albert Hofmann, the father of LSD, as German. He was, of course, Swiss. Our apologies.

    The “of course” is just perfect. More British would have been “apparently.”
    (Shamelessly stolen from Elizabeth Spiers.)

  • The Buy List Is Holding Up Well
    , May 28th, 2008 at 4:51 pm

    Even though the market has been a bit shaky, our Buy List is doing fine. In the last six sessions, the S&P 500 is down -2.51%, but our Buy List is up 0.12%.

  • Revenues at the Internet Stocks
    , May 28th, 2008 at 3:42 pm

    Growing sales isn’t everything, but it sure helps. Here’s a look at the growth in revenues over the last ten years at Amazon (AMZN), Yahoo (YHOO), eBay (EBAY) and Google (GOOG):
    image667.png
    The number is in millions.

  • Donaldson Raises Its Estimate for the Third Time
    , May 28th, 2008 at 12:08 pm

    More good news from another boring stock. After the bell yesterday, Donaldson (DCI) reported earnings for its fiscal third quarter of 57 cents a share. That’s six cents higher than Wall Street’s estimate, and it’s also a nice gain over last year’s third quarter when DCI netted 49 cents a share.
    I was also very happy to see that for the third time, Donaldson raised its FY 2008 earnings-per-share forecast. Back in September, the company expected EPS of $1.92 to $2.01. Then in November, they raised it to $1.97 to $2.07. In February, they went to $2 to $2.10 a share, and now in May, they’ve raised it to $2.08 to $2.13. Their fiscal year ends at the end of July.
    The company is well on its way to a 19th straight record year for earnings. For the first three quarters of this fiscal year, Donaldson has earned $1.52 a share, which is a 17% increase over the $1.30 they made last year. The only need to make another 32 cents a share in the fourth quarter to beat last year’s total, and the company expects EPS of 56 cents to 61 cents. Also, in January, the company increased its dividend for the 22nd straight year.

    Year………….Sales……………..EPS
    1990…………$422.9……………$0.19
    1991…………$457.7……………$0.21
    1992…………$482.1……………$0.23
    1993…………$533.3……………$0.26
    1994…………$593.5……………$0.30
    1995…………$704.0……………$0.37
    1996…………$758.6……………$0.42
    1997…………$833.3……………$0.50
    1998…………$940.4……………$0.57
    1999…………$944.1……………$0.66
    2000…………$1,092.3…………$0.76
    2001…………$1,137.0…………$0.83
    2002…………$1,126.0…………$0.95
    2003…………$1,218.3…………$1.05
    2004…………$1,415.0…………$1.18
    2005…………$1,595.7…………$1.27
    2006…………$1,694.3…………$1.55
    2007…………$1,918.8…………$1.83
    2008…………$2,170.0…………$2.08 to $2.13 (est)

  • Jos. A. Bank: Clearance Sale
    , May 27th, 2008 at 11:02 am

    Kiplinger looks at one of our most frustrating stocks, Jos. A. Bank (JOSB):

    Investors are uneasy with Bank because the Hampstead, Md., retailer shuns Wall Street. In January, the company (symbol JOSB) stopped reporting monthly same-store sales, which track sales at stores that have been open for a year or more. Same-store sales give investors a clearer sense of how the retailer is performing because the measure excludes revenue from newly opened locations. Bank also skips the customary question-and-answer sessions with analysts on its quarterly conference calls and doesn’t make earnings projections.
    But look past Bank’s unfortunate cone of silence and you’ll see a high-end retailer in better financial shape than its battered stock would indicate. The company has grown rapidly under chief executive Robert Wildrick, who took control of the 103-year-old retailer in 1999.
    Sales have tripled from $194 million in fiscal 1999 to $604 million in fiscal 2007, which ended last January 31. Net profit has gone up every year, from $3 million in 1999 to $50 million in 2007. In 1999, Bank had less than 100 stores in the U.S. Now it has more than 420 locations.

  • Wall Strip on Hasbro
    , May 27th, 2008 at 7:35 am

    Julie looks at Hasbro (HAS). After nine long years, the stock finally made a new all-time high recently. In 1974, you could have picked up shares of Hasbro for about 2.4 cents each. That’s adjusting for many, many splits. Not including dividends, the stock is up about 140,000% since. In other words, there’s a lot of money to be made in toys…just ask any adult male.

    (Note to Julie: There’s no capital of Istanbul. It’s the capital city of Constantinople.)

  • In Memoriam
    , May 26th, 2008 at 4:36 pm

    a200406071141.jpg

    It is, in a way, an odd thing to honor those who died in defense of our country, in defense of us, in wars far away. The imagination plays a trick. We see these soldiers in our mind as old and wise. We see them as something like the Founding Fathers, grave and gray haired. But most of them were boys when they died, and they gave up two lives — the one they were living and the one they would have lived. When they died, they gave up their chance to be husbands and fathers and grandfathers. They gave up their chance to be revered old men. They gave up everything for our country, for us. And all we can do is remember.
    —Ronald Reagan

  • Momentum Has Lost Some Momentum
    , May 23rd, 2008 at 11:04 pm

    Kirzner Fervor has a great post on building a trading strategy off the stocks market’s momentum. The bottom line is that historically, it’s worked very well, but the in recent years, the advantages have dissipated. Such is the story of much data-mining.
    After my initial post on the market’s ability to carry a one-day rally or sell-off into the next day, I had an emailer point out that the effect has worn off in recent years. I had meant to follow up on it, but I got distracted. Such is the story of much blogging.
    I’m still amazed at the historical effect of the stock market’s momentum. To quote myself:

    This means that the market’s entire gain (capital gains since 1950) has come on days following a 0.64% up move. The rest of the time (over 80%), the market is net flat. Half the market’s gain came on day’s following 3.2% up moves. On average, that happens slightly less than once a year.

  • Maxine Waters Threatens to Nationalize Oil Companies
    , May 23rd, 2008 at 1:34 pm

    No, really. From the NYT:

    In one of the more pointed exchanges, Representative Maxine Waters, Democrat of California, seized on the record $40.6 billion profit of Exxon Mobil in 2007. She pounded on the company’s senior vice president, J. Stephen Simon, demanding to know if gas prices would be lower if the company earned a few billion dollars less.
    At another point, Ms. Waters brazenly suggested that perhaps the American oil industry should be nationalized, acknowledging that it was an “extreme step” but one that might be necessary if outsize profits and exorbitant gasoline prices continued.

    I have one small correction. Last year, ExxonMobil didn’t earn $40 billion, it earned $70 billion. Guess where that missing $30 billion went? I’ll give you a hint: Rep. Waters’ salary.
    Here’s the video: