Archive for November, 2009

  • Today’s Jobs Report
    , November 6th, 2009 at 9:25 am

    Ugh! Today’s jobs report was ugly. Hideous.
    The nation’s unemployment rate is now up to 10.2% which is the highest in 26 years. Even though the economy may be growing, we’re not creating jobs. Here are some stats to consider. Over the past two years, the number of unemployed has jumped by 8.4 million to 15.7 million. The number of employed has dropped by 7.6 million and only 0.8 million have joined the workforce. Add the two together and you get the 8.4 million increase in unemployment.
    However, that 0.8 million increase in the workforce is puny. During the same time, the civilian population grew by 3.8 million, meaning only about one-fifth of the increase joined the jobs market compared with the historical average of three-fifths.
    The ratio of employed to the population is now 58.45%. Nine years ago, it was 64.24%. If we had the same rate today, over 13.6 million more people would be employed.
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  • NYC Election By Precinct
    , November 5th, 2009 at 11:27 pm

    The New York Times has a great interactive map of the New York City Mayoral election at the precinct level. I love this kind of stuff. I could spend hours browsing through the boroughs.
    I’m curious what the average victory margin is. After looking at the map, it seems like most them go 80% or more for either Bloomberg or Thompson. I noticed that one precinct in Brighton Beach voted for Bloomberg by 216 to 4. That’s so extreme that it makes me less likely to think it’s fraudulent. Cheaters aren’t that bold. Not too far away, there’s a precinct that voted for Thompson 212 to 22.
    Ah, New York! You’re one big finely sliced Apple.

  • Your Government at Work
    , November 5th, 2009 at 6:40 pm

    Consumers have been saved from the evils of a corporate monopoly — in the pretzel industry.

    Over in Europe, regulators are playing it tough with the likes of Sun Microsystems and Intel.
    Here in the U.S., anti-trust regulators are cracking down on pretzels?
    This afternoon, the small, family-owned pretzel company, Synders of Hanover, Penn., said it was scuttling its plans to acquire crosstown snack food maker Utz Quality Foods Inc. because it didn’t want to bare the cost of an escalating inquiry in into the deal by the Federal Trade Commission. According to Utz, the FTC had made a second request for information about its business.
    “We knew that participating in another FTC request would put a strain on our company and ultimately distract us from what we are here to do every day, which is to provide high-quality snacks to our customers and serve our community,” said Utz chief executive Michael Rice in a statement.

    (HT: Vince Veneziani)

  • See a Pattern?
    , November 5th, 2009 at 2:01 pm

    Here’s the S&P 500. I think I can make out a pattern of four rising humpy things. I have no idea what it means, but there you go.
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    If the current humpy thing doesn’t pass the last humpy thing, then that probably won’t be good*. Unless of course, there’s a new and higher humpy thing. Bottom line: It remains to be seen.
    * This how all technical analysis sounds to me.

  • Sell In May and Go Away Didn’t Work
    , November 5th, 2009 at 12:50 pm

    From Gary Alexander:

    One of the most widely-touted market calendar myths is that you should “sell in May and go away.” This system apparently worked well from 1950 until 2004. The theory runs like this: Brokers love to enjoy the summer market doldrums at the beach and then come back after Labor Day to sell stocks, causing a scary decline. Then, in November, they buy back for year-end “window dressing” in a “Santa Claus Rally.”
    According to the Stock Trader’s Almanac (2006 edition), the 55-year Dow gain (1950 to 2004) from November 1 to April 30 was nearly 50-fold (or +7.9% per year, on average), while you actually lost money (-5%) in the May 1 to October 31 period. Final tally: +4,900% in cold months vs. -5% in warm months. Practically, this means investing in stocks November 1 and switching to fixed income on May 1.
    Sounds convincing! Alas, this hoary old theory didn’t work in 2009: The S&P 500 gained 18.7% from May to October, even including the disappointing 250-point Dow drop last Friday. In the previous six months – in the supposedly superior November 1 to April 30 period – the S&P fell 9.9%. Over the past seven years, the November-April gains have averaged 1%, while the May-October gains averaged +3.3%.
    So, ask yourself: Do you really want to throw away the 3.3% average recent gains from May 1 to October 31, based on a theory that worked last century? And do bank CDs or Treasury bonds on the “sidelines” offer you anything better than a 6.6% annual rate? And don’t forget the tax consequences of short-term trading. If you’re trading in a taxable account, six-month switches can decimate your after-tax gains.
    My answer: Don’t sell in May, and don’t go away. Switching sectors might be prudent, but not leaving stocks altogether. However, if you’re looking for a good time to buy, November is still #1, historically.

  • Earnings from Moog and Becton, Dickinson
    , November 5th, 2009 at 12:08 pm

    We had two more Buy List earnings reports. Becton, Dickinson (BDX), which I like a lot, saw its earnings rise to $1.25 a share for its fiscal fourth quarter which matched estimates. They made $1.11 for last year’s fourth quarter. Wall Street expects earnings next year of $5.09 which works out to a growth rate of 3%. This means the stock is currently going for about 13 times earnings.
    As I’ve mentioned before, I haven’t been very pleased with Moog (MOG-A) this year. The stock is down about 30% and it’s the worst performer on the Buy List. For this past quarter, the company earned 35 cents a share which was less than half what they made for last year’s third quarter. They missed Wall Street’s call by a penny a share. For the second quarter, they missed the Street by 10 cents a share.
    The only good news is that Moog sees EPS ranging between $2.15 and $2.35 for next year, which means the stock is somewhat reasonably priced.

  • The Periodic Table of Finance Bloggers
    , November 5th, 2009 at 10:18 am

    I’m honored and humbled to be included on The Reformed Broker’s Periodic Table of Finance Bloggers.

  • Today’s Productivity Report
    , November 5th, 2009 at 10:15 am

    I’m simply stunned by today’s report on productivity.

    The productivity of U.S. workers surged in the third quarter at the fastest pace in six years as companies squeezed more from remaining staff to boost profits.
    The measure of employee output per hour jumped at a 9.5 percent annual rate, topping the highest estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. Labor costs fell at a 5.2 percent rate, capping the biggest 12-month drop since records began in 1948.

  • Quote of the Day
    , November 5th, 2009 at 10:10 am

    From Eric Falkenstein: “A prig is someone wedded to a theory that explains everything, and can be highly mathematical and conventional, like Phillipe Jorion, or highly obtuse, like Nassim Taleb’s insight that ‘risk is what you don’t expect’ [which I find not profound, but irrelevant].”

  • Something about Decades
    , November 4th, 2009 at 9:49 am

    With only a few trading left for the “aughts,” I’m reminded that many cycles have begun and ended when the tens digit changes on the calendar. There was, of course, some unpleasantness in 1929. Also, the price of gold peaked a few days into 1980. The Japanese market peaked on the very last day of the 1980s. The Nasdaq’s run reached its zenith not long into 2000. Gold also reached its most recent low point in mid-1999.
    If read this kind of thing in the newspaper, I’d dismiss it as someone being fooled by randomness. Still, it is interesting to note.