Some stuff I read online 4/16/08

The market is trading up big today on beats by JP Morgan and Coke. Jamie Dimon of JPM is claiming the worst is over. I think the next day or two will tell when we start to see some more financials reporting. Citi reports on Friday before the market opens and as a holder of C, I am anxious to hear what Vikram Pandit has to say.

Here is today’s list of interesting articles I have read online.

The Wall Street Journal has a list of the 10 richest hedge fund managers and how they got that way. An interesting read.

How The 10 Richest Hedge Fund Managers Got That Way

Under the heading of “context is critical”, Fortune is reporting that Jack Welch took a shot at Jeff Immelt. I heard the discussion on CNBC this morning and while Jack did use the words Fortune is quoting, it was definitely not as bad as suggested.

Here is the Fortune piece: Welch takes shot at Immelt over GE miss

Here is CNBC’s page on the comments: Jack Welch: GE CEO Immelt Has 'Credibility Issue'. Jack also makes some interesting comments on GE that make it sound like a nice buy.

Thanks for reading…

Disclosure: Long Citi (C)

Some stuff I read online 4/15/08

It has been a while since I posted. As I mentioned 3 months ago, my day job keeps me pretty busy once a quarter (last week was a 70 hour week) so reading and writing are luxuries during quarter end.

We are deep in earnings season again and so far quite the mixed bag. While no one has blown the numbers away yet, there have been few big disappointments. The biggest was probably GE who surprised the market with a sizeable drop in earnings last week. The market then moved into worst case scenario mode and traded slightly down in anticipation of future misses. Johnson and Johnson posted some good numbers today so maybe it will be a catalyst to the upside. The big banks start reporting this week and hopefully they can put some nice spin on the remainder of the year. They have recently begun lightening the balance sheet of some of their less liquid notes so it will be important to see if there are any write-ups coming down the pipe.

Here is today’s list of interesting articles I have read online.

In the worlds worst kept secret, Delta and Northwest have agreed to merge, creating the #1 airline in the world. While there are still a number of hurdles to work out, the CEO’s are fairly confident this deal will receive approval citing recent decisions in Europe to help clear the foreign hurdle. I have always thought there was a better way to run an airline and was disappointed that Gerry Schwartz of Onex did not get the chance to take a swing at it a few years ago. I suspect he may have had the model.

Delta, Northwest agree to merger; now the hard part

Jerry Zucker made a lot of noise in Canada when he took over Hudson’s Bay, the first company in Canada. Jerry died this past weekend and there is a lot of concern and speculation over the future of the company, especially in the current retail landscape.

HBC sale would face radically changed landscape


Chad Brand over at Peridot Capital has an interesting piece on the underlying performance of FI’s. He points to Wachovia who reported earlier this week and suggests that 90% of the business is still profitable.

Despite Writedowns and Loan Losses, Core Banking Businesses Remain Very Profitable

I have mentioned in the past my small addiction to Starbucks (one of the key reasons I am not yet retired…and that is only partially in jest). The Portfolio Strategist has some positive comments on SBUX suggesting that it may be time to dip your toe in the triple-venti-non-fat-no-whip-mocha-latte. And maybe you can try one of their $2 donuts while you are there.

Is Starbucks Getting a Caffeine Boost?

Thanks for reading…

Should You Take Out A Payday Loan?

Payday loans are becoming more expedient for people who have lost other forms of easy credit. That, however, doesn’t make them the best place to get an easy loan. There are reasons to avoid getting a payday loan , particularly if you think you can’t pay it back in time. Interest rates can be very high for such a short-term loan and they should never be used for non-essential purchases. You might even be able to get a cash advance from your employer. It might be a bit more embarrassing, but at least it won’t cost you as much and it will be taken directly out of your paycheck. There’s no danger of not repaying the loan when it’s from your employer.

The penalties for taking out a payday loan and not paying it back in time can significantly increase what you owe down the line. Also, just because you don’t have to have spotless credit to obtain a payday loan does not mean that defaulting on one won’t show up on your credit report. You should check out other sources of credit if you have great credit rating, although revolving credit like credit cards can be a long-term debt trap.

Having said this, there are occasions when using a payday loan makes sense. If you work in a financial industry or one that might not like to know your credit is in the dumps and you’re short on money, then you shouldn’t check to see if you could get a cash advance through your employer. Instead, opting for confidentiality in these cases can help you keep your job. If the emergency you are experiencing affects your health or your ability to keep working, it’s probably important to make sure the need is met immediately. In that case, a payday loan can be a godsend, particularly if your credit is lousy and you are trying to avoid late fees and penalties from other creditors.

Disclosure: This is a paid posting and does not necessarily reflect Freedom 45’s opinion

Some stuff I read online 4/3/08

The market is trading to the upside today after a slight decline yesterday. I suspect this kind of action is valuable to the eventual upside move the market seems to want to make. Financials have been trading up nicely again which makes me quite happy. The talking heads on CNBC have been replaced with ongoing testimony on the Bear takeout. Not nearly as much fun.

Here is today’s list of interesting articles I have read online.

There have been reports recently that Apple stores are running low on iPhones leading to many analysts to predict that Apple will release its long awaited 3G phone imminently. Here is thestreet.com take on the shortage.

Apple Facing the Great iPhone Shortage

There is a piece on Seeking Alpha about Clorox. I had looked at Clorox as an investment about a year ago and never pulled the trigger. This piece makes we think it is worth a look in the dividend portfolio

Clorox: A Reasonably Valued, Dividend Growth Stock?

IBM has run afoul of the government and currently has been suspended from bidding on new deals with all US agencies.

IBM Takes a Hit - Suspended From New Federal Work

Only eBay wrote a piece outlining a fairly positive outlook for eBay Skype and PayPal divisions.

eBay Watch: Q1 Predictions for PayPal and Skype

Lastly, a piece on how Dell is using a social network to influence business decisions.

Dell's IdeaStorm: Social Network Driving Business Innovation

Thanks for reading…

Disclosure: Long Apple (AAPL)

Some stuff I read online 4/1/08

The market is rallying nicely this morning on news that UBS is writing off $19B and Lehman is raising $4B (Note that Lehman is raising money not because they say they need it but because there are persistent bankruptcy rumors on LEH and they want to put them to rest). The Lehman offer is actually oversubscribed and is trading at a premium. When the market goes up…WAY UP…on bad news, that is a good sign for the bulls. Let’s hope that things do not get overheated too quickly and have as retrenchment as quickly as the run up. Volatility has been the name of the game of late so time will tell if this holds.

National City (NCC) has hired Goldman Sachs to help it pursue strategic options for the business. Widely speculated, this confirms that NCC is looking for a buyer for the business. The talking heads are saying this may be a big turning point for the market depending on what kind of a premium NCC might fetch in the market. A decent premium may just spur a big (or bigger) rally in financials.

Here is today’s list of interesting articles I have read online.

Reuters is reporting that Google is going to allow offline editing of Google Docs files. The technology, made possible by Google Gears, will allow users to update files when not connected to the net and will sync once they reconnect. I have often thought this was a fabulous idea and were this to come bundled with something like what the Palm Foleo was to be or what the eee PC is, I think you have a “killer ap”.

Google starts letting users edit documents offline

Rob Carrick over at The Globe and Mail has a great piece on the investment value of Canadian Financial institutions and uses input from StockPointer to EVA rank the FI’s.

Thinking of buying the banks?


Citigroup re-organized yesterday and sparked further speculation that the company may be split up. The most likely candidate for spin-off appears to be the credit card business which was re-organized under a global banner and split from the rest of the business.

Citigroup restructures, breaks out cards as new unit

Thanks for reading…

Disclosure: Long Citi (C) and National City (NCC)

Some stuff I read online 3/27/08

After a brief run-up at the open, the markets are trading to the downside, largely lead by financials. Nothing catastrophic. All runs up will pull back and base at some point. Lets hope that this is basing and not resistance.

Here is today’s list of interesting articles I have read online.

Mark McQueen has an interesting note on the BCE takeover in light of the Clear Channel ruling yesterday compelling the banks to fund the deal. One of the highlights of the article is the fact that, even though these loans will likely be performing, they will need to be written down from the outset due to current market conditions. I have heard and made this argument several times with respect to the huge write downs being taken by the banks right now. I look for significant write ups in the future.

Clear Channel ruling will boost BCE shares

Chand Brand at Peridot Capitalist has a piece on the drop in values of CA homes. Looks like year over year there was a 26% drop in the average home price in CA. He also highlights recent ads by the National Association of Realtors claiming that housing is s great investment since it doubles every 10 years. That suggests a growth rate in excess of 7% annually for residential real estate. Maybe in a bubble but definitely not the norm. As with the sub-prime lenders picketing Bear Stearns, a little “talking your own book” going on here.

Yikes, California Home Values Drop 26% in February

The dividend guy has a piece on asset allocations suggesting starting with pension fund allocations as a base for allocation decisions. As one of the commenter pointed out, pension funds would tend to have a much longer time horizon than you or I, one can still use the concept in their own portfolio allocations. In a future post, I will write about duration that you can use to help match the fixed income portion of your portfolio to your investment horizon. I will also do some research and try to come up with a list of some of the better asset allocation models on the web.

Pension Fund Asset Allocations You Can Use

Thanks for reading…

Some stuff I read online 3/26/08

The financials are getting spanked again today. Meridith Whitney is out with another nasty report on the sector highlighting her fears around Citi (I get the feeling she does not like them very much). Overall, the market is getting beat up a bit but only being down 130 on the financial weakness is not bad. I took advantage of the pullback to add Blackstone to my portfolio writing June 22.50 calls versus long stock. With management committed to a minimum 1.20 worth of dividends for the next two years, there is about 20% of downside protection to a stock that trades at half its 52 week high. I fully expect this to be a very profitable investment both through ongoing dividends and stock appreciation.

I was listening to CNBC this morning and a guest suggested a way to get the price of oil and other high flying commodities to come back to earth and it seems like both a pretty easy and possibly very effective one. Increase margin requirements for commodity futures. This would force hedge funds and other speculators to reign in their position sizes that many have blamed for the run up. Interesting.

Here is today’s list of interesting articles I have read online.

I suspect that there will be a lot written for many weeks and months to come about the Bear Stearns acquisition. Here is a great piece trying to get in the head of Jamie Dimon from JP Morgan.

Dimon's dog

With all the talk of US banks recapitalizing, Mark McQueen over at Wellington Financial has an interesting piece on the stealth recapitalization of some of the Canadian banks.

Canadian banks quietly rebuilding capital

Motorola is splitting itself into two. Carl Icahn has been lobbying for change at the tech giant for a while now and it seems that he may have won at least a small victory. I am curious as to the move since recently MOT said they were looking to sell off the handset business. Were there no buyers? Stock has moved off its opening high of 10.30 to trade 9.85 up a mere dime. Looks like the market does not think much of the move.

Motorola to split into two companies

And lastly, a piece on a Dividend Aristocrat, 3M. A great piece suggesting that it is on sale right now and that the dividend is primed for safe long term growth as a result of a lowered payout ratio over recent years.

3M Company: Dividend Aristocrat Available on the Cheap

Thanks for reading…

Disclosure: Long Citi (C) and Blackstone (BX)