• Buy List Update
    Posted by on November 28th, 2007 at 7:28 am

    The Buy List continues with a very impressive fourth-quarter rally in terms of relative performance. Through yesterday, the Buy List was down 0.32% for the year while the S&P 500 is up 0.70%. That’s a gap of just 1.02%.
    But on October 18, the Buy List was getting creamed by the S&P 500, 8.59% to 1.77%. That’s a gap of 6.82%.
    It looks like we have an outside chance of catching the index before the year is out. That was something I wouldn’t have believed just five weeks ago.
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    Yesterday, the Buy List jumped 1.93% compared with 1.49% for the S&P 500. The big help came from Donaldson (DCI) which jumped 8.5%.
    Donaldson announced earnings of 53 cents a share for its fiscal first quarter compared with 43 cents last year. Analysts were expecting 48 cents a share. The company also said it expects full-year earnings (their fiscal year ends in July) of $1.97 to $2.07 a share. That would make their 19th straight record year.

  • The Plunge of the 10-Year Yield
    Posted by on November 27th, 2007 at 11:49 am

    Yesterday was the 11th largest fall in the 10-year T-bond rate since 1962. (Note: I’m referring to the percent change in the rate.)
    Date……………………..Change
    10/20/1987……………..-7.39%
    4/16/1980……………….-5.79%
    10/7/1982……………….-5.13%
    3/5/2004…………………-4.96%
    9/17/2001………………..-4.75%
    12/19/1980………………-4.39%
    6/6/1986………………….-4.33%
    8/6/2004………………….-4.09%
    8/16/1971…………………-4.04%
    2/28/1980…………………-4.01%
    11/26/2007……………….-3.99%

  • Wall Strip Looks at Fair Isaac
    Posted by on November 27th, 2007 at 10:31 am

  • An Official Correction
    Posted by on November 26th, 2007 at 4:51 pm

    The Dow is now down 10% from its all-time high close. On October 9, the Dow closed at 14,164.53. Today’s close of 12743.44 makes for a drop of 10.03%. The S&P 500 is down 10.09%.

  • Bed Bath & Beyond Is Now Below $30
    Posted by on November 26th, 2007 at 12:37 pm

    Shares of Bed Bath & Beyond (BBBY) are now trading at $29.72. This is the lowest the stock has been in the last five years.
    I’m not a believer that the housing market is having a severe impact on its business. There is some impact, but it’s easy to overstate.
    The company’s quarterly sales growth numbers have been pretty stable for the past three years, each quarter coming in around 10%-14%.
    BBBY is a remarkably efficient company. Gross margin usually run in the low 40% range. Operating margins have slipped a bit from 15% to 13%, but that’s to be expected. Net margins are down from 10% to about 8.5%. Both are higher than they were during the run-up in housing prices.
    There’s a big difference is a slowdown in earnings growth and losing a lot of money. Now let’s look at some of the homebuilder.
    Lennar (LEN) will see its EPS drop from $8.32 two years ago to $-4.90 this year. DR Horton (DHI) will drop from $4.62 to $-2.27. KB Home (KBH) will drop from $9.53 to $7.61.
    Basically, BBBY’s return-on-equity has fallen from about 24% to around 20%, yet their shares have fallen by one-third. Compare 20% ROE to the 10-year T-bond that’s now paying about 4%.

  • Cyber Monday Myth and Reality
    Posted by on November 26th, 2007 at 9:50 am

    Don’t get too worked up about Black Friday or Cyber Monday. They’re not the busiest days of the year.

    While not as famous as Black Friday, retailers just a few years ago invented Cyber Monday as a way to create buzz around online shopping.
    The National Retail Federation’s online division, Shop.org, coined the term in November 2005.
    Some retailers had noticed an uptick in online sales, and the federation decided to brand it. Now, two years later, more and more stores are playing off the Cyber Monday theme and offering sales.
    “It’s a starting point. It’s a kickoff point where many retailers have special deals and bargains,” said Scott Krugman, spokesman for the National Retail Federation. “Retailers are having special Cyber Monday sales, and the way I see it, if retailers are attaching a sale and calling it Cyber Monday, it’s true.”
    Shop.org said that 72 percent of online retailers are planning a special promotion for Cyber Monday this year, up from nearly 43 percent just two years ago.
    But don’t confuse the name with big purchases. Cyber Monday is by no means the busiest day for online sales, just as Black Friday is not the biggest day of sales for most stores.
    “Black Friday is a great day for creating energy, buzz and excitement about the holiday season,” Krugman said.
    So, what is the busiest shopping day of the year?
    The Saturday before Christmas.

  • Barron’s on Harley-Davidson
    Posted by on November 24th, 2007 at 7:50 pm

    Interesting:

    Yet when the Street throws in the towel on Harley-Davidson — as it seems to do every few years — that is usually the best time to buy the shares. Harley has fallen 30% to 40% ahead of previous U.S. recessions, only to rebound when the economy perks up. This time, the stock could top 60, although that is unlikely to happen tomorrow, or the day after.

  • Web Freebies
    Posted by on November 24th, 2007 at 4:33 pm

    This is cool. Business Week has listed 101 freebies on the Web.

  • The World’s Largest Outlet Mall
    Posted by on November 24th, 2007 at 3:53 pm

    In the eyes of Europeans, the United States has become one enormous outlet mall:

    Hours after her flight from Dublin landed in Boston on Thanksgiving, Alice Kinsella headed in a white van with a dozen relatives and friends to Wrentham Village Premium Outlets. The 36-year-old has never visited Boston, but she is bypassing the sights for an extended weekend of binge shopping that started at midnight yesterday.
    For Kinsella and other Europeans, America is one big discount bin, thanks to a weak dollar that slid this week to another record low against the euro. As a result, tourists are spending thousands to travel to the United States to snag blockbuster bargains on everything from iPods to designer clothes and handbags.
    By 4 a.m. yesterday, Kinsella had rung up nearly $2,000 in Christmas presents and winter clothes, including a $79 black leather jacket at Guess that she estimated would cost more than $250 in Ireland.
    “The bargains for us are so great,” said Kinsella, who paid $1,000 for a flight and hotel but expects to save even more on purchases here.

  • The S&P 500 Is Down for the Year
    Posted by on November 22nd, 2007 at 12:10 pm

    Since the start of 2007, the S&P 500 is down 0.11%.
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    Including dividends, the index is up 1.56%. The Wilshire 5000, which is the broadest index, is up 0.22% for the year. With dividends, it’s up 1.72%