Investing
Let the gains begin. Fortune smiled upon stock markets last week, with the S&P 500 Index scoring its first back-to-back weekly gain since April as the US dollar rallied strongly and oil and commodities plummeted. The S&P 500's gain since the low of July 15 has been 6.7%, with the Financial SPDR up by 27.8%. Read all about this in Prieur du Plessis's guest blog post, highlighting some thought-provoking news items and quotes from market commentators during the past week.
As oil prices seesawed through the past week, fresh uncertainty about the outlook for the beleaguered financial sector triggered another wave of volatility in financial markets. Economic data were mixed, whereas earnings were mostly better than feared. After all the action, the S&P 500 Index closed the week virtually unchanged, posting a small gain of 0.2%. Read all about this in Prieur du Plessis's weekly review, highlighting some thought-provoking news items and quotes from market commentators during the past week.
In spite of a "teaser" of a rally and stock markets holding their July 15 lows, equities were still in the red for the month of July. I have put together a table of global stock markets' performances over various measurement periods, showing a rather unpleasant message.
The bearer of the bad tidings today is money manager Jeremy Grantham, chairman of GMO, who has just published the July edition of his quarterly newsletter entitled "Meltdown! The Global Competence Crisis". In short, Grantham opines: "Events must now be disturbing to everyone, and I for one am officially scared!"
Financial markets witnessed another roller-coaster week as renewed concerns about the global economy and the health of the financial sector surfaced, resulting in a mixed week for world stock and bond markets, an improved US dollar and continued weakness in oil and commodities. Read all about this in guest blogger Prieur du Plessis's weekly review.
Albert Einstein described compound growth as the eighth wonder of the world. Although he may have passed away in 1955, the concept of compounding remains the single most important principle governing investment. This post provides the empirical evidence.
Once again, Tom Vanderwell here with some thoughts about moral hazard....Barry Ritholz at The Big Picture had these two comics that brought to the forefront again the issue of moral hazard. Check out the comics and then we'll talk "on...
Quantifiable Edges has an interesting little statistic on 52 week lows.
Basically, 1/3 of all the stocks on the NYSE hit a 52 week low yesterday. The last time this has happened was in 1990.
This has only happened a few times since 1971 (5) and in all 5 instances the market was higher 4 days later and 20 days later. Not enough data to make any reasonable conclusion. Whats interesting is that if you go one further year back, 1970, there's three more occurrences and they were all negative 4 days later. Again, not interesting (too few examples) but its
A) another example of the extreme level this market has taken a beating, even when compared with 2000-2002 (which is somewhat striking if you think about what was going on then: Internet bust, enron/wcom, 911, recession, etc).
B) another example where people are comparing this year to the 70s. I disagree with this. I don't think we are in stagflation. I'm more worried about eventual serious deflation a la what "Helicopter Ben" was worried about in 2002. But I'm hoping at least over the next 4 days (and over the next decade), that 2008 isn't the new 1970 but the new 1990.
-James Altucher
The follow, from a Friday 8-K filing by Google, makes July of 2008 like a good starting point for picking an AOL initial public offering date: Registration Rights. HoldCo will grant us certain registration rights as follows: Beginning on July...
Courtesy of a mention in this weekend's Barron's, I am now subscribed to the "Footnoted.org" blog. As the name suggests, it as an enthusiastic meander through the many fascinating things you find in the small print of financial disclosures:So what’s...
There is a thoughtful and highly readable interview with ex-Barings Bank rogue trader Nick Leeson available here. I’ve previously confessed to a fondness for rogue trader stories, so an interview with Nick Leeson is basically mainlining the stuff. And the most...
From a wonderfully deadpan new paper (Rain or Shine: Where is the Weather Effect?) by William Goetzmann at Yale on the impact of the weather on stock prices:NYSE spreads widen on cloudy days. I plan to overuse this factoid endlessly...
The following is from a great presentation by money managers at GMO back in November. It shows how common utterly uncommon events are in the capital markets:...
An apt G.K. Chesterton quote which I've seen in a number of financial presentations lately:"The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest...
David Swensen is arguably among the most creative and successful investors in America, with a stellar record running the $15-billion Yale endowment. He is well known for being an early and aggressive enthusiast about private equity, natural resources, and energy,...
Not to diminish the terrible effects of Hurricane Katrina on New Orleans, but it did have an unheralded effect: It drove down the performance of the Vice Fund, a mutual fund specializing in "booze, bets, butts, and bombs". The Vice...
I always enjoy when bullish CEOs of major companies (especially perenially bullish ones like Sun's Scott McNealy) actually speak the truth about their tirelessly upbeat nattering: But again, it's so hard to know when that day is going to come....
Tim Hortons, the quintessential Canadian doughnut chain (even if it’s owned by Wendy’s) — right down to being named after a hockey player — is going public. The company filed its S-1 today, and it’s fun reading. For instance, by my quick...
Most times when people say that "this time it's different" about a kind of investing, they're wrong. The only thing different is the person (wrongly) saying that this time it's different. Such is not, however,the case in residential real estate,...
There is a decent piece in the N.Y. Times today on the myth of “portable alpha” (juicing an ordinary stock or bond index with something that (theoretically) increases returns) in hedge fund portfolio construction. About the only thing that’s truly...
Maybe I’m just over-emotional today, but I found the results of this new Forbes poll on how respondents use analyst research to be touching: Only 10% of respondents said “tinder”, and nearly half of respondents said they’d use equity research ...
While two data points don’t make a trend, lots of real estate red ink on the BubbleWire today. San Francisco and Chicago in particular have sizable amounts of house and condo inventory coming off. Is it because they are selling, or...
Accorrding to the TimesOnline, hedge fund manager Daniel Loeb (of LoebWire "fame"), author of many entertaining screeds to executives, is buying a staggeringly expensive New York penthouse: New York flat whose $45m price towers above its rivalsBy James Bone A...
Carl at Accuweather wants to know of people who are using weather forecasts to trip alarms about upcoming severe weather, and then that are trading the news. I know I’ve heard from people claiming to do that, so let him...
There is a blackly intriguing new paper out from Stanford GSB researcher Camelia Kuhnen that uses a novel data data set from the mutual fund industry to look at a dark side of social networks: the effect of such things...
A confession: I love rogue trader stories. From Nick Leeson on outward, they're all domain-constrained amorality tales of greed run amok in markets that very briefly had the appearance of harmless video games -- only to have the in-game monster...
While billionaire Warren Buffett isn't given permission to keep secret his stockholdings as often as he used to be, he is still up to the usual stock skullduggery in his latest 13F-HR filing. In an entertaining bit, he concedes that...
A little over a year ago on this blog, way back in October of 2004, I put a $400 price target on Google. It was partly to be provocative, but it was also because too many people were underestimating the...
From Barron's this weekend, Bill Miller's streak of beating the S&P 500 could be in jeopardy:Legg Mason Value Trust, run by longtime manager Bill Miller, has beaten the Standard & Poor's 500 Index in each of the past 14 years....
Last week I had a post here citing the downbeat factoid that airlines have been a crummy investment, what with having lost money cumulatively through their history. Well, my timing was contrarianly auspicious as The Economist weighs in this week...
Made a bunch of changes in my previously announced RSS wire of Daniel Loeb's screeds to investees. Most people won't notice the differences, but the app should now run much faster in the background here -- meaning that updates will...
I said a few days ago that I had a new little tool/service/thingie I had written to which I was about to give people access. While that's getting closer, I thought I'd slice off a corner of it and give...
Here is Jim “Mad Money” Cramer opining entertainingly on Google, media, and the outlook for newspapers: On big media’s fear of Google … “The cowering has to do with the fact that they don’t even know what the Web offers. They’re...
From Dan Primack’s PE Week Wire, the following factoid is astounding concerning private equity powerhouse Carlyle Group: …Carlyle spent around $500 million in I-banking fees over the past year. ...
Mark Gilbert of Bloomberg has a good column up echoing some of my puzzled prior posts about the essential absurdity of defrocked equity analyst Henry Blodget freely opining (for practical purposes) on stocks:Henry Blodget, who paid a $4 million fine...
It's a favorite airline industry stat, but it's nice to see a Bloomberg article offer it up again: Historical profits: $18-billionHistorical losses: $32 billionGranted, I'm sure the same is true in some other high fixed-cost businesses (name 'em), but it's...
Back when I was an equity analyst I had a telecom company I followed that every quarter would blow the Street estimates up by having a litany of "non-recurring" charges appended to the income statement. The trouble was, the non-recurring...
Machine vision vendor Cognex has the most fun annual reports: 2003 report 2004 report ...
The following is excerpted from an email today to me from a VC friend of mine. He decided to remind me about some public predictions I made in a December 2004 column about the outlook for Apple. Here is what...
Goldman Sachs’ longtime software axe Rick Sherlund made a nice call this morning on the Greg Maffei issue at Oracle. With the four-month CFO announcing his departure from Oracle today (reportedly for a CEO job elsewhere), Sherlund’s comment to GS...
According to MediaPost, 2005 is turning into one of the worst years in recent history for newspaper-based advertising. While that will come as no surprise to most of us who moved from paper-based papers to online years ago, it is striking...
Not to turn this site into All Dan Loeb, All the Time, but there is an entertaining profile of the poison pen fund manager in Bloomberg Markets magazine [courtesy of Daily Dose of Optimism]. While Loeb’s brush with Bob Marley...
I have seen the future of trading, and it is Gawker. In one of the funniest bits of intentionally wacky financial analysis I have seen in some time, The Stalwart has taken a pithy and penetrating look at the relationship...
I give this 18 months: Mohamed El-Erian has been chosen to run the $25.9 billion Harvard Management Co., according to The Boston Globe. El-Erian is an emerging markets bond manager for Pacific Investment Management Co. (Pimco), and previously spent 15...
Jim Cramer’s Mad Money show is a guilty pleasure of mine. Sure, it’s full of hystrionics and hyperbole, but it’s also engaging and genuinely interesting, like a cross between Cops, the movie Network, and a Japanese anime cartoon, all with...
I’ve had some interesting conversations lately with a number of folks who are much closer to Microsoft than I am. Not to be offensively vague, but more than a few people are hinting at something significant impending on the financial/strategic...
Here is another excerpt from a continuing series of not-so-love letters from hedge fund manager Daniel Loeb of Third Point to CEOs of companies in which he has an interest. This time it’s David Robinson, CEO of Ligand Pharmaceuticals here...
Among other things, the AOL acquisition of Weblogs, Inc., has apparently convinced some people that AOL has set a stake in the ground for how Weblogs are to be valued. While I’m entertained by the analysis, one anomalous purchase does...
A fun factoid from a John Bogle editorial in today’s WSJ (in service of his new book “Battle for the Soul of Capitalism”): … direct ownership of stocks by American households has declined from 91% in 1950 to just 32%...
I see this that Yahoo Finance has added columnists to its site. While a welcome step forward from living off the Reuters-delivered finance & investing feed, the current crop of YF columnists is a motley crew that should deservedly go...
Hedge fund manager Daniel Loeb of Third Point apparently continues to produce cheerfully ill-tempered stuff. Rather than being part of an investment filing, however, this one supposedly comes from an email to Citadel Investment who he says has been poaching Third...
It's not often I agree with Fast Company, but David Lidsky nails it in this post about the launch today of the Wall Street Journal’s weekend edition: Weekend (Yawwwn) Journal (Yawwwn) Debuts, Disappoints If you've seen or heard any media...
Only Fortune magazine running a “Microsoft is Doomed !!” cover next week could make things any cheerier for Bill Gates and his Washington-based software company. After all, this week we have a contrarian two-fer, with both BusinessWeek (“I’m Outta Here!:...
Zack’s Investment Research has launched some interesting new RSS investment feeds. So far, I’m fond of the “Bear of the Day” feed. Nice skeptical way to start the day....
This is unquestionably the strangest SEC filing I have ever seen. A Canadian company called Apollo Publications has filed an offering to raise $1–billion to teach the world a single language, create a single currency, and generally you know .....
Analyst Mary Meeker is back with a typically breathless report, this time on Chinese Internet stocks. NakedShorts has the most penetrating assessment: Internet Queen returns to the pump Henry Blodget and Jack Grubman are banned from the securities industry for...
EBay’s press release on buying Skype contains a Vegomatic-y (It dices! It minces! It chops!) justification for its purchase of Skype: – Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace....
The price on the blockbuster Oracle deal for Siebel works out to around 3.7-times sales for the CRM company, a fairly steep price, me-thinks, for a moribund enterprise software company growing under 5% a year. But when you factor in Siebel's $4.29...
I should have mentioned this sooner, but I’m too darn bashful to toot my own horn. Anyway, check for a mention of this site (Thanks Mark!) about mid-way through the following piece from Barron’s this past weekend. [Ed.: I’m not...
Today’s WSJ has a great page one story on how some day traders profited from being able to listen in on a Merrill Lynch squawk box, and then front-run institutional orders. My favorite quote is this one: Traders used various...
While most of the media chatter has been about what a crummy year it has been for IPOs, one of the consequences of a difficult IPO market is that the companies that do make it public can outperform. I documented this...
Speaking as the recent acquirer of two (!) high-definition televisions — a Samsung 56” DLP unit and a Sony 34” LCD panel — I’m newly fascinated by pretty much anything that augurs more and better HD content for my two...
The eclectic, insightful, and typographically ebullient Pip Corburn has released his first new piece of equity research since leaving UBS Securities. Those of you on the buy (or sell) side of things in technology will know Coburn well. He was...
Our man Dan Loeb is at it again, this time with a cheery letter to management of Western Gas, a Third Point portfolio company. After applauding the company’s potential for increased growth, and helpfully recommending that the company should initiate...
The mordant Jeff Matthews is on a roll concering Patrick Byrne and the bizarre Overstock.com story: Did I stutter? Did I stutter or did I say I was going to take this fight to you? Well now you know what...
One of the most misunderstood and screwed-up areas in business has to be probabilities. People constantly attribute to skill that which can be explained by luck (CEOs getting overcompensated because their stock has risen in a twelve-month period), and they...
Today’s SF Chronicle contains a look at Google’s growing pains, with the company having long outgrown the small company description. Matter of fact, it is looking more and more like another large and bureaucratic outfit: But Google is also feeling...
Single-letter stock tickers are prized things, and tomorrow Sprint Nextel will take over the letter “S” from Sears. It’s a good time to look at the list of single-letter tickers: A - Agilent Technologies C - Citigroup F - Ford...
From an interesting interview with Flickr’s Eric Costello about the evolution, history, and development strategy of Flickr: The inspiration in large part for [Flickr’s precursor] was actually Neopets, which had tremendous success among young people as a way to interact...
I ran across a classic 1993 piece from Financial Analysts Journal today on the subject of consensus, forecasting and investment returns, and it has some points worth repeating. Let’s start with the following: Everyone’s forecasts, taken together, form the consensus forecast....
Given yesterday's record (in current dollars) $3-million sale of a New York Stock Exchange seat, I thought it would be interesting to show readers my own chart of inflation-adjusted historical NYSE prices. I average the prices for each year, and...
The Stalwart has a thoughtful look at why Google’s shares are currently weaker than you might expect — and why that might last thru August 19th....
Giving guidance as a public company is one of those things that you have to practise. There is a knack to being empirical and elliptical at the same time; it’s not something you just do, like taking a turn at bat...
Good mischief-making piece in today's L.A. Times on the investment practices of Nobel prizewinners:Experts Are at a Loss on Investing Nobel winners and top academics fumble the sorts of decisions Bush's Social Security overhaul plan would ask average Americans to...
Here are some things that caught my eye in Google's newly-released Q1 report tonight:EPS up 530% y-o-y, from $0.24 to $1.29 EPS (vs. $0.92 consensus) Revenues up 93%, to $1.26-billion from $651-million Google's Q1 earnings are roughly what it reported...
Brent Buckner makes a great point in a comment to an earlier post here. He says, somewhat archly (I think), that, "Willingness to undergo tedium may thus be a competitive advantage for active investors."I agree strongly. One of the things that...
One of the more predictable algorithmic stock market trades in recent years has been the Russell Reconstitution. Eminently predictable, investors have a darn good idea which stock will be added and deleted from the various Russell indices each year, and,...
Say you're a struggling early-stage biotech company in a hot area, there are few more desirable things to have happen than for the NY Times to write favorably about you in a Sunday NY Times piece -- one that also...
It is fairly remarkable how the winds in search (and related) markets have shifted. While Google had the wind at its back for almost a year, it now feels like the momentum is behind Yahoo. From the Flickr acquisition, to...
Those of you subscribed to this site via the feed will have seen this photo already, but I still thought it was interesting to put it in context. The 8/13/79 BusinessWeek "The Death of Equities" cover is a famously contrarian...
I have been having some entertaining conversations lately (in email and elsewhere) about super-investor Warren Buffett. The main reason? The release last weekend of his annual letter to investors in the Berkshire Hathaway report. Rather than diving into his over-dissected...
From the estimable Ask Metafilter:Ok, so it says that the typical person earns $14/hour, and the typical household earns less than $40k/year. Yet everywhere I look, I see displays of wealth. Expensive homes, cars, boats, TVs, activities, etc. So my...
The average price paid for search keywords dropped 3% in January. Leading the way down were telecom/wireless-related keywords, which were off 28%, according to researcher Fathom Online. While this was mostly seasonal and therefore predictable, somewhat more interesting was the...
I wrote a column last week for the National Post wherein I predicted that Google's stock would follow eBay's south by early February. Sadly, Google's mischievous shares have seemingly chosen to go lower early. When I wrote the column at end-of-day...
I don't know where Dow Jones keeps the graphics elves that do its pop-ups, but those pointy-eared Photoshop-ers have this stuff down to a science, with the right mix of color, graphics, and VH-1-style pop-history, as a graph in today's...
I don't usually do the "forecasting" thing, but Jim Cramer is such a tireless provocateur that I thought repeating his ten predictions for 2005 from NY magazine would be interesting to readers. Check predictions #5 and #7 for typically Cramer-ian examples:1....
There is apparently some juicy stuff in the new book "Blood on the Streets" by Newsweek writer Charles Gasparino. According to a Newsweek press release, the book "details the rise and fall of three high-profile Wall Street analysts -- Merrill...
One of the more perverse aspects of the so-called "sell"-side of the brokerage business is that many clients prefer to talk to salespeople rather than analysts. Why, one initially wonders, would you want to talk to a passionate flogger rather...
Ross Mayfield has created an interesting Flickr group called Parking Lot Indicatr. The idea: Have people take pictures during non-business hours of parking lots at public companies under the theory that it means something:Off-hour parking lot density is a leading...
Good, contrarian piece in the current Economist on the equity market outlook for 2005 and beyond. Contrary to received wisdom, even long-term investing can be perilous, especially when people become convinced that long-term investing isn't risky:History has no doubt helped investors...
An interesting anti-EU factoid from a Barron's weekend interview with money manager Jeremy Grantham of GMO:... emerging markets have never looked higher-quality than now. Their reserves are fabulous. Their currencies, consequently, all look pretty good. Their growth rates are fabulous....
Smith Barney has an interesting report out arguing that content is on the rise and undervalued online: Data gathered by the Online Publisher Association indicates that consumers are devoting more of their incremental time online to content than to any...
I somehow missed this WSJ piece [no sub required] from back in October that provides a nice overview of recent scuffles in efficient market theory. As the piece points out, efficiency-guy Eugene Fama seems to have softened his views somewhat,...
Could there be any clearer sign of a rate-driven market top in private equity -- buyouts, LBOs, etc. -- than the Economist's current cover piece? Titled "Capitalism's New Kings", the article is a 14-page paean to the bliss-out wonders of...
This weekend's Barron's tries to summarize the merry ways that analysts attempt to justify Google's current $50-billion valuation:...
Al Gore is a funny flitty fellow, so it should come as no surprise that the former U.S. veep has flitted off to start a new global investment fund focusing on green stock-picking. No, he and his partners (or more...
Ever-entertaining portfolio manager Jeremy Grantham is a smart and successful fellow, and a literate writer as well. Last I checked, he had run his GMO money management firm up to a few tens of billions in asset following conservative and...
So, the new Google is more forthcoming and transparent, as evidenced by CEO Eric Schmidt's saying early on that he was "eager and interested" in people's questions on last night's earnings call, right? Well, here is the first question out of...
The Google results are out, and the call starts in three minutes. Others will spend way more time on this than I will, but here are the highlights and some quick analysis. Analysts were looking for $0.56 this quarter, and...
Lots of speculation afoot this week given the arrival on Thursday of Google's first quarterly results as a public company. The trouble is, it is turning out to be a little like the first quarterly results for some newly-public KGB:...
One of the more bizarre quotes in recent years was Donald Rumsfeld's sparkingly obfuscatory prose-poem on the inscrutability of existence (from a Feb. 12, 2002, press briefing):As we know, There are known knowns. There are things we know we know....
In typical too-late-to-be-useful financial-press fashion, the NY Times weighs in Wednesday with the belated realization that Google's share were winners after all. Why? The company's share performance, of course, with Google stock up more than 50% from the $85 offering...
While correlation ain't causality, I've long been entertained by the relationship between a CEO's golf handicap and their company's return to shareholder. As Graef Crystal reminds us again this year, low-handicap CEOs turn in higher returns than higher handicap CEOs....
There is a certain cyclical inevitability to these things. A year ago we were in the "Whoa, look at all the money these people are getting" stage. Now, a year later, we are in the "Oh-oh, social software companies are...
Ray Lane of Kleiner Perkins -- and ex- of Oracle -- says Oracle Corp. would be worth more if it stopped dabbling in non-database businesses:"If Oracle were a database business only, it would be much more profitable than Microsoft and...
From my column in tomorrow's National Post:So where are all the naysayers now? It is almost exactly a month since Google went public and the search company's stock is up an impressive forty percent from its $85 selling price. It...
I was talking to a conservative (and smart) billion-dollar fund manager friend last week who loves RIM, so I have been feeling better lately about my cheery feeling toward the wireless messaging company. Not surprisingly, many out there think that...
Judging by the buzz, you would think Wal-mart had whole buildings full of people doing nothing but planning the downfall of entire industries via RFID. That is apparently not the case, as this Information Week piece makes abundantly clear:InformationWeek: Are...
There is a nifty paper in the October issue of the Journal of Finance arguing that hedge funds, contrary to orthodox efficient market theory, rode the technology bubble of the late 1990s rather than trading against said overpriced stocks. What's...
Nasty news from Intel in its mid-quarter update tonight. The company had been guiding analysts toward Q3 revenues of $8.6b-$9.2b; now it is saying the quarter looks more like $8.3b-$8.6b. From peak to trough that is a 9.8% cut in...
Not to overdo it on the stockmarket topic, but this weekend I ran across the following two interesting figures. The first figure shows the average path of 26 market bubbles in developed markets since the 1700s. What is interesting about...
The following is from an excellent Canaccord Capital summary of the current bizarre trading behavior of Air Canada's bonds. Keep in mind that the airline is trying to emerge from bankruptcy:Depending on what the ultimate claims are against Air Canada...
You would expect that, on average, the fund industry would underperform the market roughly by the amount of their administration fees. They do that - and more, according to a new report cited in the Telegraph:An astonishing 94 per cent...
From a WSJ story this morning on Microsoft's fourth-quarter earnings release:"We've got a really great end to the year and an extraordinarily good pipeline for the future, so we are very jazzed here in Redmond."Investors might disagree with all that...
According to this piece in the San Diego Union-Tribune, rooms around San Diego this weekend are going for $667 a night and more. And that's just for the tony climes of the Super 8 Motel in Mission Valley, or the...
Meir Statman's new behavioral finance paper on Martha Stewart's errant investing technique is being quoted all over. It is a good piece, and you should read it even if you do scan any of the summaries in the various papers....
What is different about shareholder activist Ralph Whitworth (of San Diego-based Relational Investors) is that he actually believes in management. Too many supposed activist sorts actually distrust management; they would rather run the place themselves. Not Whitworth, and that is...
Most financial sorts know syndication less as having to do with RSS/Atom/etc., but more with being lucrative groups they form to sell equity and debt. Syndicate members have long been well-rewarded for the relatively risk-free task of selling IPO shares...
As Floyd Norris points out in today's NY Times, the real estate market is an unusual one in that, in a sense, it isn't a proper market at all:Home prices are perhaps the only market where buyers and sellers measure...
This weekend's Barron's tips poker as the "hot thing" among stock market sorts. Along the way, it cites an excellent talk by David Nelson of Legg Mason Funds on "what poker can teach you about investing".Both, after all, are games...
The volume of new Canadian real estate listings in major markets is on a tear, as the following graph shows. Among other things, what I find interesting here is how listing volume is speedy upward, but sticky downward. It also...
I just ran across an inadvertently entertaining 2002 interview by a Harvard Business School magazine with David Roux, Founding Partner of Silver Lake Partners. Here are two good snippets: Do you find that in your successful portfolio companies some of...
My previous piece on the sad life of investment bankers unable to buy jets attracted a comment from economist Brad DeLong: It's now official: Paul Kedrosky has left the normal world behind completely. There is a value of "that well"...
I was traveling most of last week, so that explains the few posts. Nevertheless, an article in Friday's WSJ on Canary Island date palm arbitrage is fascinating. A fellow drives around suburban southern California neighborhoods looking for mature Canary Island...
Three provocative pieces in this weekend's money-oriented edition of the N.Y. Times magazine:Paul Krugman argues Alan Greenspan's legacy will be "aid & comfort" to a fiscally irresponsible administration Michael Lewis on the "joys" of investing in socially responsible companies Bill...
Ex-analyst Bill Burnham has a savvy piece on his blog about the madness of so much money being throw at hot-hot wireless software companies like Good Technology and Visto. The two private outfits have received a combined $160mm in financing....
"Rev. Sharpton Joining CNBC As Commentator". Fill in your own joke here: ______________________"...
The SF Chronicle has a nice piece on the outlook for tech.biz trades Wired and Business 2.0. A favorite factoid:In 2000, the Industry Standard sold more ad pages than any magazine in history. In 2001, it went bankrupt....
The FT has an amusing bluffer's guide to foreign exchange (and options) lingo in a supplement today. Here are some highlights -- the best of which is Vega:The Greeks. Uniquely, both novices and those who have mastered options can claim "this...
It was a baffler of a decision the first time around, and it's no better this time. Three years ago Boots, the billion-dollar U.K.-based health & beauty outfit, announced it was abandoning equities in its $2.3-billion pounds pension portfolio. It went...
Tim Draper of venture firm Draper Fisher Jurvetson apparently doesn't have enough work to do. For the second year in a row he is inviting anyone and everyone on the planet to pitch him an idea over at the Always-on...
When I saw the headline in Barron's this weekend I thought they were kidding: "[Mary Meeker] Sees Big Opportunities in China". Mary, the last big-firm Internet analyst standing from the go-go days, is fond of Chinese Internet stocks, those playthings...
It had to happen -- a market has grown up around Google's not-yet-launched Gmail email service. On one side of the market you have current Gmail beta users, some of whom apparently are allowed to invite one friend to join the...
Salesforce.com CEO Marc Benioff is trying unsuccessfully to stay quiet through an entire I.P.O. quiet period. The N.Y. Times reports today that the chatterbox company founder is in trouble for talking to that paper on May 9th. He spoke...
Google is about to do something that many thought would happen eons ago: Introduce a free search tool for Windows PCs. Supplanting the woeful search function that comes with Windows PCs, and overnight wiping out tiny search tool upstarts like...
In the comments to my earlier post on this whole Six Apart/MT/free software affair, a reader writes that Six Apart isn't alone in turning a "free" product into a "commercial" product:As an example, look at Nick Bradbury's software. His FeedDemon...
Weather has become an economic battleground. First we had Sequoia Capital's recent sizable investment in WeatherBug, and now we have James Fallows' N.Y. Times piece (see last para) which notes in sidelong fashion how AcuWeather and others are trying to...
Rosy-eyed sorts optimistic about the wonders of wireless would do well to read the following snippet from an AirDefense press release. It is a collection of just some of the WiFi shenanigans that occured on the conference floor this week...
Yahoo won CNN's search business from Google today, increased free mail storage to 100MB, and showed analysts upcoming technology that streams news headlines, stock quotes and weather updates to a user's desktop bar. In case you ever doubted that competition...
Here is the sort of up-with-technology quote from the FDA that will overnight make it into the business plans of a thousand platform-oriented life sciences startups:"In FDA's view, the applied sciences needed for medical product development have not kept pace...
Only two weeks after then-CEO Jim Cantalupo died of a heart attack, the company's current CEO has gone in for cancer surgery. While the surgery was apparently a success, it is a bizarre two-step of events for the recovering fast-food...
Management consultancy McKinsey interviewed directors of operations at 100 companies in France, Germany, the United Kingdom, and the United States about their use of three management techniques: lean manufacturing; talent management; and performance management. After scoring the company and comparing...
According to the Corporate Library, as of March 2004:377 CEOs now chair their own boards (a 4% decrease) 71 former CEOs now chair their boards 16 Chairs are either former or current executives of the firm 25 Board chairs are...
You heard it here first, but my bet is that Google will eventually file a revised S-1 where it backs away from or ameliorates its proposed dual-share structure. I described my beefs in a prior post, and the drumbeat is...
As I said yesterday, Google's offering looked controversial right away, from its dual-class share structure to its preachy "Google knows best" opening letter. Here are the opening paragraphs of my Saturday National Post column on the subject:An IPO filing replete...
Okay, one more fun tidbit from the Google S-1 filing today:# Harvard mentions: 1# Stanford mentions: 16Stanford wins over Harvard in a walk....
Eagerly awaited in envious technology transfer offices across the U.S. was the specifics of Stanford's licensing deal with Google. After all, Stanford is the patent-holder for the PageRank technology underlying Google's architecture. How much was Stanford going to make on...
In case folks haven't had enough of Google already, the company has filed its S-1. The most interesting part is not the revenues (nearly a billion), profits (over $100-million), or number of employees (almost 2,000), however. No, the most interesting...
I have no idea who Ross Healey is, and I have even less idea what his Toronto-based "Strategic Analysis Corp." might be, but his quote in an article today about Nortel's troubles and Frank Dunn's demise is truly goofy:"I will...
William Owen is doing some sort of fog circumnavigation by becoming the new CEO at Nortel Networks. It used to be the "no-telling" fog of war, and now it's the fog of Nortel that the former top-ranked military officer must...
This is one of those "it's always high growth when you start from zero" examples, but it is still an interesting factoid:According to an ITU report to be released May 3rd, Africa is now the fastest-growing mobiles market in the...
The WSJ online is asking the following survey question: Of the group including Amazon, eBay, Google, InterActive Corp., and Yahoo, which one will have the largest market capitalization by 2005? Not having seen the list until after I voted, I...
The news tonight is that Google has selected Morgan Stanley and CSFB to co-manage its imminent IPO. Now, the selection hasn't been publicly announced, per se. Instead, the WSJ tipped the news as follows:Internet-search pioneer Google Inc. has tapped Credit Suisse...
Over the last few months I have written a few pieces over on RealMoney saying nice things about Microsoft's stock. The latest quarterly earnings from the company are a nice capstone to all of that. The company's stock is up...
Most people will have almost certainly seen this, but the April 29th SEC deadline has apparently done its magic: the WSJ is reporting from insiders this morning that Google will file it's S-1 in the next few days....
Apparently hope springs eternal in software markets. Lindows has filed to do an IPO, projecting proceeds of $57.5-million. Company has trailing 12-month losses of $4.1 million on revenue of $2.1 million. They are hoping to do a Dutch auction led...
Changed terms on the revised S-1 for Salesforce.com's upcoming IPO are interesting. Leaving aside the change in accounting policy, company is now planning to raise less money than it said back in December. Back then Salesforce said it would raise...
Herb Allen has a scathing editorial out about ISS's calls for investor Warren Buffett to resign from the Coke board -- a company in which he holds shares:"...an outfit called Institutional Shareholder Services (ISS) accused Warren Buffett of conflicts of...
While I don't agree with all (most?) of his recommendations, Alex Berenson's new book "The Number" is crisply written and better than most of its post-boom ilk. Cynical about the machinations of Wall Street? You have found yourself a kindred...
Barron's worked hard this weekend to make the case that analysts are as bullish as ever on stocks. Trouble is, their data doesn't really support their case. Here are the aggregate figures comparing analysts' recommendations now and a year ago:The...
Insider trading is a tricky charge to make stick in equity markets, and it is almost unheard of in bond markets. But two years ago it happened, and today the insider was sentenced.John Youngdahl, a Goldman Sachs economist, plead guilty...
The bizarre business espionage allegations by Air Canada about WestJet, a discount airline, are the subject of my column today in the National Post. I suggest, not entirely mischievously, that there is something much stranger going on here than mere busines...
Interesting data from Fenwick & West on recent trends in venture investing rounds in Silicon Valley. As you can see, for the first time in two years the number of "down" rounds has almost been equalled by the number of...
Most stories about Wal-mart's loss in a voter referendum in Inglewood, California, are not telling the tale correctly. Yes, Wal-mart was spurned in its attempt to go directly to voters in its attempt to create a massive (17 football fields) Supercenter...
From Paul Kasriel's excellent Northern Trust piece today on the U.S. Federal Reserve being checkmated right now by both rising real estate and rising production prices:If the Fed hikes interest rates now to preempt inflation of goods and services prices, it...
There is a strange provision in Juniper CEO Scott Krien's employment agreement. According to the Wall Street Journal:Mr. Kriens's bonus for this year is dependent on Juniper's "entry into new businesses by means of acquisitions." The board is serious: Without...
Expensing stock options remains bafflingly controversial, so it was a pleasure to read an entertainingly direct OpEd on the subject in today's Wall Street Journal. Reed Hastings is CEO of Netflix, and he disagrees with the Silicon Valley tribe-think that says...
Reuters is quoting Swedish TV which is quoting a Swedish news magazine (got all that?) as saying that IKEA founder Ingvar Kamprad has surpassed Microsoft's Bill Gates to become the richest person in the world. According to the story, Kamprad...
It isn't exactly boom, baff, pow, but is an interesting debate anyway. Jeremy "Stock for the Long Run" Siegel waxes bullish and institutional fund manager Robert "First Quadrant" Arnott does bearish in this Forbes-hosted tussle. Who comes out on top?...
From the latest issue of Review of Financial Studies, a fascinating paper on skewed information in the real estate business:There are relatively few direct tests of the economic effects of asymmetric information because of the difficulty in identifying exogenous information...
Monster's help-wanted numbers are now out, and here is a quick summary of how its help-wanted index compares to a similar long-standing measure from the Conference Board:...
News that Monster.com is introducing a new employment index is pleasing to me along a couple of dimensions. First, it recognizes that "offline" employment indexes are no longer very representative of the broader population. After all, I'm assuming most job...
So, it's the eve of Google's IPO offering. The company spiffs up its interface, adds a few search thingies, and caps it all today by announcing ... free email? Good golly, but that feels awfully 1997. Sure, it's nice having...
The FT is joining the chorus of people musing about how Google's current market position is likely to be transient:Remember AltaVista? It was once market leader, too. As George Colony, chief of Forrester Research, observes: "There are no walls protecting...
One of the more remarkable balancing acts in markets is that of increasing revenues in a fast-growing semiconductor market. Why? Because average selling prices (ASPs) tumble so quickly that you have to grow like asparagus weed merely to maintain the status...
James Altucher's new "Trade Like a Hedge Fund" book is excellent. While the title might seem a little off-putting, like a "...for Dummies" book aimed at jejeune hedge fund managers, the book is among the very best of its (admittedly...
Private equity firm KKR has had positively prodigious investment results of late. Compound returns of 18.2% over the last five years, driven by buoyant recent equity markets (for exits), has meant that KKR tripled its capital and is handing back about...
Bankruptcy proceedings are usually hard-fought affairs, but it is ordinarily the creditors and their lawyers who do most of the fighting. It is unusual for the presiding judge to weigh in with any sort of pithy riff. The judge in...
Who is the most influential businessperson ever? Forbes is asking that question, and business historian Joel Mokyr has helped out with a starter list. Was it Matthew Boulton, who powered the Industrial Revolution? Andrew Carnegie, the steel baron? Walt Disney, the first media...
This piece on different financial terms across the U.K. and the U.S. is interesting. In general the U.S. term implies something more positive than the U.K. one does, and the U.K. term is also clearer on who pays. For example:Net...
The Association for Investment Management and Research has issued new proposed guidelines for equity analysts. Some highlights:Information in analyst reports must be clear and complete; facts should be distinguished from opinion. Analysts must not threaten to use their research reports...
12/31/2003: 2003.373/10/2004: 1964.15...
Fund manager Paul Macrae Montgomery makes an entertaining connection in this weekend's Barron's. He points out that the dollar hit a bottom against the Euro right when the Economist magazine's February 7-13 issue had a dollar-bearish cover article titled "Let...
Another year, another annual letter from uber-investor Warren Buffett wherein he self-servingly complains that there aren't enough cheap stocks:"...we've found it hard to find significantly undervalued stocks"Ah, if only the world would oblige Warren, and everyone else....
I'm not normally much for technical analysis, but Nasdaq has been doing some strange hiccupping of late. Check the following figure:Basically, the index climbs on the open, falls, and then recovers through the day. While the pattern didn't hold today, it...
The following is a magnificently bizarre confidential letter from Disney CEO Michael Eisner to then-Disney executive Michael Ovitz. It was unsealed last week in a Delaware lawsuit. Ovitz left his job as president of Disney back in 1997, and the...
Forbes Magazine's current billionaires issue contains possibly the least surprising opening pull-quote of all time: I want to meet the people for whom the statement "[Forbes readers] overwhelming want to be billionaires" comes as news. Strike that. Better yet, I'd like to...
The Google IPO march continues apace. I see that as of today the company is looking for a Sarbanes-Oxley compliance officer. Not much point in having one of those folks skulking about unless you're serious about going public sometime (relatively)...
The puffy profile piece on Google's upcoming IPO that is the cover of the current Wired has an entirely appropriate URL. It is http://www.wired.com/wired/archive/12.03/google_pr.html. Notice, of course, the trailing "pr", as in "printable version", but also as in "public relations".To...
So what's next for Nasdaq? The history of the index is that long-ish declines create considerable pent-up pressure for reversion. In other words, technology traders are impatient folks and they can't seemingly resist "buying the dip". Let's leave aside whether...
Well, six weeks of advances on the Nasdaq are now followed by five-and-a-half weeks of declines. The result: The Nasdaq Composite index is almost exactly back to where it was at the start of the year....
Good "Where are they now?" story in today's Wall Street Journal about the stockmarket bubble of the late 1990s. Here is an interesting chart from it comparing the Dow crash of 1928, the Nikkei correction beginning in 1987, and the ongoing...
Fascinating and somewhat bizarre interview with Disney Chairman Michael Eisner on Larry King last night. The consummate corporate politician, Eisner consistently rapped Larry King's (and callers') softball questions out into left field for easy base hits.For example, he got away...
Conrad Black's Hollinger vs Hollinger case is underway in Delaware, and it is predictably juicy. The gist of the three-day trial in Delaware's Chancery Court is that Hollinger International (not Black) is trying to block the sale of Hollinger Inc....
I'm a tireless reader of corrections in the financial press and so I thought I had seen it all. But this correction from today's WSJ concerning a recent Money & Investing story is a classic:Corrections & AmplificationsChapman Capital LLC didn't state...
What is really going on with Warren Buffett and Cadbury-Schweppes? First, on Tuesday, Buffett's Berkshire-Hathaway told the SEC that as of December 31st, 2003, it controlled $73.3-million in Cadbury-Schweppes ADRs (American Depository Receipts).Then, two days later, Buffett's filed with the...
Funny that this piece on Google's dumbing-down of research has come out when it has. I just went through a similar exercise, one where I weaned myself off the knee-jerk reflex of immediately going to Google every time I want...
A legit question for people who think well-known properties like Disney's are licenses to print money is this: Why aren't the Muppets worth more? News today is that Disney has purchased the Muppets from the Jim Henson Company for what...
With Google's IPO almost certainly coming in the first half of this year, the pundits are at the post. Financial sorts can't help playing Ladbroke's on possible offering prices, while technologists pick holes in Google's core technology. I've staked out...
The following table comes from Fred Hickey's High Tech Strategist newsletter, courtesy of this weekend's Barron's. Put bluntly, chips aren't cheap. I pointed out something similar in a column this week for RealMoney. I ran a graph there of Apple...
Disney's Michael Eisner, under fire for his company's performance, and facing pressure over the hostile aquisition offer from Comcast, cracked wise this week at Disney's investor & analyst conference in Orlando:On aquisitions:"Oh, yeah -- we're buying Comcast. No, terrible answer....
Interesting George Colony piece on Google's upcoming IPO. He argues fairly convincingly that the likely $10-billion-plus market capitalization will be wrong and destructive.George is right, but trust me, it won't matter. This is the right confluence of IPO, market, awareness,...
While Donald Trump has been basking in the glow of the successful "The Apprentice" fake reality show, real reality keeps trying to intrude. His Trump Casino Holdings LLC had its debt downgraded this morning by S&P. The ratings firm put...
I ordinarily find Andy Kessler's market comments fairly savvy, so I was somewhat disappointed to read his editorial in today's WSJ on the Comcast-Disney deal. He points out that cable is a municipal monopoly, and then argues Comcast is buying...
This Disney-Comcast tieup is the best thing that could have happened to Michael Eisner. He solves his board problem, his succession problem, and his share-price performance problem courtesy of Brian Roberts at Comcast. He should be sending Roberts a thank-you...
There is a nifty supplement in today's WSJ on the joys of trend-parsing. As part of the piece various folks, from venture capitalists to portfolio managers, talk about how they keep an eye on what's changing and what's hot. The...
There is a fairly savage piece in today's Wall Street Journal criticizing fund manager Ken Fisher of Fischer Investments and Forbes "fame". (Whew, that was some serious "f" alliteration.) The main complaints: The firm's 10-year figures, which show the firm...
The National Venture Capital Association has its latest investment data out, and while returns are on the increase, one part of the market is apparently declining. Seed capital has been shrinking for some time as a percentage of total venture...
In what is likely the beginning of many such bankruptcy restructurings, word tonight is that Tower Records is (again) on the verge of filing for Chapter 11 protection. The company, which pioneered the music megastore concept, is in deep trouble....
Calling it believing in "four impossible things before breakfast", the ever-interesting Financial Times columnist Martin Wolf today tries to debunk the idea that the bear market is over. Coming alongside a front-page piece in today's Wall Street Journal about the...
To the old adage "don't fight the Fed" we should add "don't fight the U.S. election cycle". Consider the following chart, courtesy of the estimable Jeremy Grantham of Grantham Mayo: Fascinating, non? Historically speaking, the excess returns on the S&P...
From my RealMoney Weekend Reading column, here are a couple of interesting things I cite from this week's business & finance press: How presidential hopefuls would deepen the deficit (NTU) Excellent overview of advances in behavioral finance (UCLA working paper)...
The Wall Street Journal had a nice graphical "diff" today of the minor text changes from last Federal Reserve meeting to the one yesterday. Fed Chairman Greenspan going from "considerable period" to "patient" cost some investors billions of dollars. Ah,...
There is funny business going on at the close for various Nasdaq stocks that are part of the S&P 500. According to Gretchen Morgensen at the New York Times, these companies' stocks are blipping up at the close on unusual...
What is the best way to measure an equity index's movements, capitalization-weighted or equally-weighted? As the Wall Street Journal points out this morning, the former method is common and showed a loss on the S&P 500 over the last three...
According to the current Advertising Age, things were busy, if nervous, at this week's National Association of Television Program Executives (NATPE -- pronounced to (sort of) rhyme with "nasty") conference in Las Vegas. TV execs can't figure out where the...
My National Post column today was on bumpf and posturing at the World Economic Forum annual meeting in Davos.Update: Ah, if only I had seen this story before I had written the above column. Apparently the WEF anticipated my criticisms...
Nortel's Chahram Bolouri just can't seem to stick to the assigned speaking points. He tries to pacify people by saying that Nortel's decision to sell off the last of its manufacturing plants is about more than money, then goes to...
Microsoft's quarterly financial results tonight seemingly have many investors in a tizzy. It has nothing to do with the higher-than-expected equity compensation costs, however. Those are shuffling of costs from one period to another, and it isn't all that important...
According to a piece in today's Financial Times, most fund managers are above average. Standard & Poor's was cited in the piece as saying that in 2003 52.3 per cent of actively managed US equity funds outperformed the Standard &...
Quirky piece in the Independent about Oracle CEO Larry Ellison's recent marriage to romance novelist Melanie Craft. It is requisitely snide in that U.K. way, so you get bon mots like the following: "At 34, Ms Craft is 25 years...
Business news network CNBC said yesterday that it would severely limit ownership of individual stocks and bonds among its employees. Other than holding stock in GE itself (the owner of CNBC), CNBC managers and on-air staff are not allowed to...
I'm trying very hard to make sense of the changes at Oracle Corporation announced today, and here is what I have come up with: Larry Ellison, the company's founder and largest (26%) shareholder, is no longer the Chairman and CEO;...
Excerpts from an email this morning: In order to provide an orderly & peaceful Exit from the credit based economy, the Board of Security is sponsoring the Operation: Exit for Security, Liberty, Prosperity, Peace & Justice. The Purpose of the...
Alan "Ace" Greenberg is one of a kind. The chairman of investment bank Bear Stearns is a profligate donor to charities, a fountain of one-liners, a champion bridge-player, an accomplished amateur magician, a darn good yo-yo user, and perhaps the...
One bear down, another few ursas (both major and minor) to go. Professor Didier Sornete of UCLA, a geophysicist and part-time market seer, has apparently decided that the market may be going up for a while after all. Sornette had...
The New York Times' Floyd Norris is far from alone, but his piece today, while verging uncharacteristically on optimistic at the close, demonstrates the indefatigable bearishness in many media quarters about the resurgent bull market. Here are some sample quotes...
What would AOL and Time-Warner have looked like if AOL hadn't bought Time-Warner? A Financial Times guest editorial today considers the question and comes up with defensible numbers, but an indefensible conclusion. Before the Time-Warner deal was announced, AOL shares...
People who missed the recent bear hunt in New Jersey may soon be able to cross over into New York and have another go. Many argue that before the current bull market in equities sputters, the media (and investors) will...
While some are (correctly) complaining that Forbes' list of the ten greatest business movies is strangely anti-business, my main beef is that too many of the movies named are boring. Here is the list: Citizen Kane, The Godfather: Part II,...
So we finally have some details about Victor Li's (winning) bankruptcy bid for Air Canada, as well as on Cerberus Capital's (losing) bid. You wouldn't know, having looked at the details of the respective offers, that Cerberus's was the...
Fifteen people from Vancouver, British Columbia, placed disproportionate bets on Survivor-winner Sandra even before the first episode aired. As a result, BetWWTS.com ended betting on Survivor back in September, thinking that something was up and they stood to lose a...
It is verging on scandalous that the details of the latest (and supposedly final) Cerberus Capital offer for Air Canada have not been made public. Yes, tiny details have leaked out, and yes, ordinarily such auctions are better handled in...
The current Forbes is cited by economist Tyler Cowan at Marginal Evolution as he makes an entertaining argument blaming mutual fund investors for their performance problems, as opposed to blaming fund trading scandals. In particular, he pulls the following factoids:...
The story this morning that one of the chief critics of market timing also profited from it puts a neat point on how tricky this issue is. During the middle of 2003, according to the WSJ, Stanford professor Eric Zitzewitz...
The Economist's Buttonwood columnist, sounding more and more like Michael Lewis by the day, muses aloud the current ahistorical disconnect between the bond market and the economy -- things are getting better in the economy, yet the bond market hasn't...
With Google's IPO impending, Fortune magazine makes a pre-emptive strike. It credibly calls Sergey and Larry's search company chaotic, caste-oriented (educationally speaking), and lacking a credible chain of command -- it's all command, no chain. I'm largely convinced, but then...
Even Warren Buffett can't use the rules to keep all his holdings quiet: Warren E. Buffett lost a bid for confidentiality from the S.E.C., meaning that the public may learn more about which stocks Mr. Buffett was buying last fall....
Inflation may not be a hill of beans, but a hill of beans is certainly inflating: A worldwide increase in tomato paste prices has forced up the price of baked beans, says Heinz. [BBC Business]...
The following are some key venture investing terms. I get questions about these all the times, so when I ran across a list recently, I thought I'd reprint it here: Common Stock Common stock is the basic equity interest in...
Interesting piece in the WSJ this morning that got me thinking about the "GE alumni anomaly". As the WSJ pointed out, recent GE alumni, from Gary Wendt at Conseco, to Robert Nardelli at Home Depot, haven't been unalloyed successes. Their...
