Varian Joins the S&P 500
Posted by Eddy Elfenbein on February 8th, 2007 at 9:44 am

Congratulations to Varian Medical Systems (VAR) for its inclusion in the S&P 500. This is Wall Street’s equivalent of being a “made man.” The opening was made thanks to Blackstone’s acquistion of Equity Office.
Also, Joe Bank (JOSB) just raised its forecast for this year to $2.25 a share from its earlier estimate of $2.15.
Finally, Harley (HOG) said it will miss Q1 shipment targets due to the strike.

The Disposition Effect
Posted by Eddy Elfenbein on February 8th, 2007 at 7:02 am

From Wikipedia.

The Disposition Effect is an anomaly discovered in Behavioral Finance. It relates to the tendency of investors to sell shares whose price is increasing, while keeping assets that have dropped in value.

Don’t let this happen to you.

The Buy List So Far
Posted by Eddy Elfenbein on February 7th, 2007 at 5:07 pm

Through today, the Buy List is up 2.54% (the red line) versus 2.24% for the S&P 500 (the black line).

WR Berkley (BER), one of our weaker stocks this year, reports tomorrow after the close.

CNBC Newsbabes in Cocktail Dresses
Posted by Eddy Elfenbein on February 7th, 2007 at 2:14 pm

Featuring Liz and her Clamen in a Vera Wang.

Welcome Back, Carney
Posted by Eddy Elfenbein on February 7th, 2007 at 1:42 pm

We at Crossing Wall Street are very pleased to welcome back John Carney of DealBreaker to the world of blogging.
For the last three weeks, John was out while he was recuperating from a (ahem) “car accident” of some sort. We’ve constructed a timeline of the relevant events.
January 13: Lindsay Lohan checks into rehab.
January 14: John’s “accident.”
February 6: Lindsay Lohan checks out of rehab.
February 7: John returns.
We encourage you not to put two and two together* (although didn’t the Beatles try something like this).
Welcome back, John. We’ve missed you.
*And rehab is so ’05 anyway.

Highlights from Cisco’s Conference Call
Posted by Eddy Elfenbein on February 7th, 2007 at 12:13 pm

Courtesy of SeekingAlpha:
#1

Operator: Thank you. And our first question from Brant Thompson, Goldman Sachs.
(The call doesn’t go through)
We’ll move to our next question.
John Chambers: Brant, we’ll get back to you. If you’d replace the phone call for some reason it didn’t go through. Probably not using a Cisco IP phone. We’ll give you a special discount if you want one.

#2

Charlie Giancarlo: So we view it as a very promising new area for us. Already many hundreds of millions of dollars for us in revenue. And we really see it as being something that will allow us to gain market share and achieve our growth goals there.
John Chambers: Jeff, two comments. For those of you that haven’t heard Charlie talk very often, that’s has excited as Charlie gets.

#3

John Chambers: The exciting thing is that video in my opinion. I’ve never seen there was a killer App until I talked about video.

Flashback to 2001.

“E-learning is the next major killer application,” Cisco CEO John Chambers proclaimed in his keynote here Monday.

#4

Bill Choi – Jeffries: Okay. Thanks. Maybe two quick questions, sir. One, you talked about loosely and then tightly coupling of product architecture strategy. As far as video strength we’re seeing, so far it seems to be very assay specific.
Can you talk about when you anticipate the tight coupling of this, particularly in the 9K as our markets into the routing space when do you expect the strength to occur? And then a follow-up question on switching.
John Chambers: Let me ask, which one do you want? I apologize, because Blair is going to shoot me about talking too long. Give us one question. And I apologize for holding you to one? Would you want the answer to that first one or would you want us to do the second one?
Bill Choi – Jeffries: Let’s do the second one. Switching…
John Chambers: I had a good answer to that first one.

(Hat Tip: Owen Thomas).

S&P 1450
Posted by Eddy Elfenbein on February 7th, 2007 at 11:34 am

The S&P 500 just got up to 1452. It was briefly — very, very briefly — above 1450 yesterday.
The first time the index closed above 1450 was December 23, 1999. The last time was September 28, 2000. Once we hit 1469.25, then we can say we’re flat for the millennium. The Dow is also in record territory and briefly touched 12,700.
On our Buy List, both FactSet Research Systems (FDS) and Fiserv (FISV) are at new all-time highs.

The Biggest Secret on Wall Street
Posted by Eddy Elfenbein on February 7th, 2007 at 10:52 am

Well, I already used that title before, but here’s another very big secret on Wall Street — mutual savings banks.
Don’t laugh, whenever you hear that a mutual savings bank is about to go public, pay attention. A mutual savings bank is a bank that’s “owned” by its depositors. Most of these institutions are a zillion years old. They’re well run, and they basically have zero overhead.
Most are still based in the Northeast. Every year, a few more decide to go public, and that can be very good news. When the bank’s IPO, the depositors usually get first crack at buying the shares. Also, the IPOs tend to do very well. This is from the Wealth Effect Web site:

Historically, these IPOs have been very profitable. The biggest reason for this is the unusual advantage a mutual bank has going into the public offering: the book value (assets minus liabilities) of a bank is essentially cash, and this cash remains the property of the bank after the offering; add to this the cash the bank receives from the IPO, and you will always be buying shares for less than the book value of the newly public bank.
Another reason why mutual bank IPOs have done well, some suggest, is that the bank managements — which receive shares at the offering price — want that price set low enough to leave plenty of room for future gains. A third reason for the success of bank IPOs is that many of these banks were eventually purchased (at a premium) by larger banks looking to consolidate a banking industry strewn far and wide by the legislation of the Great Depression.

A few days ago, a reader asked me about Hampden Bancorp (HBNK), which is a MSB that just went public. The bank was founded in 1852, and it has seven branches in and around Springfield, MA.
Last month, the bank sold 7.6 million shares to its depositors at $10 a pop, and the stock is already around $12.50. I found the prospectus at the bank’s Web site. The prospectus also lists the seven MSB IPOs since the beginning of 2005, and the performance of their shares.
Stock……………………………….IPO……After 1 Day….Through 9/1/06
Chicopee Bancorp (CBNK)…..7/20/06……..44.6%…….46.1%
Newport Bancorp (NFSB)…….7/7/06……….28%……….36.2%
Legacy Bancorp (LEGC)………10/26/05……30.3%…….50.4%
BankFinancial (BFIN) ………….6/24/05…….36%……….74.7%
Benjamin Franklin (BFBC)…….4/5/05……….0.6%……..40.7%
OC Financial (OCFL)……………4/1/05………20%……….10%
Royal Financial (RYFL)………..1/21/05……..16%………..51%

Put this Guy at the Fed
Posted by Eddy Elfenbein on February 6th, 2007 at 9:23 pm

Calgary man fined for charging 207,981% interest:

Actually, I do not feel bad for what happened. I was doing like everybody else does. A bunch of other pawn shops in Calgary are doing the same.

Bernanke Warns
Posted by Eddy Elfenbein on February 6th, 2007 at 5:07 pm

Bernanke Warns of Possible ‘Crisis’ From Budget Gap
Bernanke warns of falling economy
Bernanke warns of growing rich-poor gap
Bernanke warns action needed soon on budget
Bernanke warns US about burden of ageing population
Bernanke warns against protectionism
Bernanke warns of deficit balloon
Bernanke warns of threat to US prosperity
Greenspan: I’m Totally Broke