StockBlogs.com Blog of the Week

Blog of the Week: Invest 2 Success

2006-12-05T13:48:00.000-08:00

Fundamental Principles of Investing

Stock trading basics are a necessity for traders to become prosperous in the stock market. It is necessary, if you will, to establish some fundamental principles as you are beginning investing in the stock market. Here are some basic strategies to follow:

Stock Trading Basics

Develop a stock trading plan! It’s pretty difficult to make a cake without a recipe and the same definitely applies to stock trading basics. Even the most experienced traders can get themselves into trouble by not following their plan. When are you going to buy a stock? When are you going to sell it? What are you going to do to prevent losing a lot of money if your stock goes bad?

Once you’ve developed your stock trading system, stick with it.

Trade safe and often. Especially for beginner investing, this is an important stock trading basic. Although your daily profit might seem small, it accumulates over an entire year. It is always better to win small than to lose big!

Look for stocks with the highest growth possibilities, and don’t hold stocks when their growth possibilities are close to the average value. When this happens, a wise stock tip is to switch to a stock that is more profitable. This requires stock technical analysis, but the results are worth the effort. Remember to factor in your transaction costs such as bid-ask spread and brokerage fees.

Avoid risks as much as possible and only take calculated ones at that. The most important stock trading basic is to remember that you are in this to make a profit and the best way to do that is conservatively. Don’t put all of your capital into just one stock. Portfolio diversification will be the thing that keeps you alive in the market, especially as you learn the stock trading basics.
Risk Reward Ratios...

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Blog of the Week: Kirk Report

2006-10-06T14:59:00.000-07:00

How To Trade While Away

Some of you have asked me how I trade when I'm away, and my answer is that, I simply don't do it. If I'm away, I'm out of the routine and that puts me in a severe handicapped position.

When I'm home and working you can literally set your watch to the trading routine I have every day. Having a consistent approach to how you manage your investments is important. While you can't possibly control what the market and your portfolio is doing, you can control how you approach it. Every successful trader I know has a set routine and does not alter it very often.

That being said, a few years ago Alan Farley wrote an excellent article that outlined the 10 tips for effective remote trading. In that he provided the following tips...

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Blog of the Week: Stock Market Beat

2006-09-25T15:53:00.000-07:00

More On Commodities

We recently wrote that an investor’s starting point for exposure to commodities should be their relative weight compared to all possible investments.

For example, if commodities are 5% of the investable universe, the average investor has to be at 5%. If all investors shifted to 10% it would simply bid the price up artificially. On the other hand, it is reasonable to assert that investors have had too little exposure to commodities historically, and that the weight may still be too low to reflect the fact that the investing world has to play catch-up.

Morgan Stanley’s Stephen Roach sees the trend as having reached bubble proportions.

Virtually every major institutional investor I visit around the world — from pension funds and insurance companies to mutual fund complexes and hedge funds — has a large and growing commodity department. The same is true of foreign exchange reserve managers and corporate treasury departments of multinational corporations. One major Wall Street firm is now run by a former commodity executive, and another has turned over management of its global bond division to the architect of its thriving commodity business.

Of course, the same could have been said in the mid-1980’s regarding equity departments, when they still had a long run ahead of them. As you know, we are not shy about drawing comparisons between today’s commodity markets and the mid-1980’s equity market. Roach, too, has picked up on this.

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Blog of the Week: Global Growth Investor

2006-09-18T14:42:00.000-07:00

10 ways to keep your chart reading fresh

While on a short break last weekend, I picked up Did You Spot the Gorilla? in the hotel library. Yes, it’s a cheesy self-help book, but it did have some good tips on creating the right mindset to spot opportunities.

One of the points the book made was how the human brain shifts to autopilot when we repeat things over and over. “When the world becomes too familiar, your brain reverts to autopilot and stops thinking and noticing,” the book said. “This is when opportunities can be missed. Stimulate your mind and switch to manual.”

It got me thinking about things I repeat every day: going for a walk in the morning, checking email when I get into work, walking home from the station . . . and chart reading! Technical analysis lends itself to repetition. You download your data each day and plough through hundreds of charts. If you have a system you’re trying to stick to, there is little variation.

One thing I realised is that every day for years I’ve scanned candlestick charts using the same software on the same computer. Yet when I check stocks at work on the shared Bloomberg machine it is in OHLC form because that’s what everyone else looks at. I have realised that chart patterns often look clearer and I spot more opportunities on the Bloomberg.

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Blog of the Week: Going Private

2006-09-11T11:31:00.000-07:00

Win Ben Stein's Ire

As a rule, I usually don't spend a lot of time on reader mail, or on the analysis of it here in these pages. It always feels self-serving to wax poetic at audience response to one's writing. For the same reason I don't turn comments on for the entries here. (A few readers have asked me to, and sometimes I actually consider it). Recently, however, reader mail has been interesting and insightful enough to warrant more comment. The three recent posts that have gotten me the most reader interest (as measured by influx of mail) here at Going Private include:

1. Imminent Death of Private Equity Predicted,
2. Nicole Kidman Should Run a Hedge Fund, and;
3. Voodoo Economics.

The majority of replies to "Voodoo Economics," my critique of the piece in last Sunday's New York Times on the evils of management buyouts by econ guru, general figure of shareholder menace and sometime economics teacher actor, Ben Stein, began with some version of:

"Ben Stein is off his rocker, but..."

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Blog of the Week: Daily Options Report

2006-09-05T17:26:00.000-07:00

STOP TRADING!

Interesting interview with Kyle Rosen Rosen in this week's Barron's. His main point? Volatility is historically cheap.

We've seen how quickly risk can be repriced. We will see a lot more of that, and there will be some wild swings back and forth. But across the board, risk premiums have been taken down to almost zero.

In options, a simple historical analysis of reversion to the mean shows implied volatility has averaged around 20% in any rolling three-, five-, 10-, 15- and 20-year period since options have been trading. Now we are hovering around 12%, a 40% discount just to the average. Even if we get back to the average, a lot of money can be made trading volatility. As implied volatility has been coming down near all-time lows, actual volatility has been creeping up.

He's right; risk premium in options is effectively zero. We are priced to perfection.

Unfortunately, I am not so sure 20 is *fair* VIX any more, I suspect it is lower now. The last decade has seen historic improvement in...

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Blog of the Week: The Fly on the Wall Blog

2006-09-01T16:42:00.000-07:00

Editor772

Through TheFLY's Eyes: Money Matters

from Theflyonthewall.com

Editor’s note: In our new “Money Matters” column, look for incisive commentary on this blog featuring a summary and analysis of the week’s most important issues affecting money, markets, and investing. It’s no-nonsense analysis timed to arrive when you have the time to read.

The U.S. Economy At Mid-2006

Four years into the current global expansion, it is not a stretch to state that the United States and global economy is entering a critical period. It’s appropriate, then, to review the economic health of both at this juncture, in mid-2006.

The U.S.’s $13.2 trillion economy continues to grow at a healthy rate in 2006, after registering a solid 3.5% GDP growth rate in 2005. In Q2 2006, the most recent quarter, the economy grew at a 2.5% rate after registering a red-hot 5.6% rate in Q1 2006.

The Fed’s Controlled Slow-Down

The deceleration in GDP growth in Q2 2006 primarily reflects a deceleration in orders for durable goods, equipment & software, private inventory investment, nonresidential structures, exports, and state & local government spending, partially offset by a deceleration in imports, services, and private inventory investment.

The deceleration also reflects the intentions of the U.S. Federal Reserve.

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Stock Blog of the Week: Contrarian Edge

2006-08-14T13:33:00.000-07:00

Dividends on the Ride Down

August 11, 2006 - The Motley Fool

By Vitaliy Katsenelson, CFA

As I began analyzing amusement-park operator Cedar Fair (NYSE: FUN), it reminded me of a computer game that I used to play called Rollercoaster Tycoon, because I felt like I was on a roller coaster when debating whether to open a position in this company.

Cedar Fair is known as a pure-play, profitable, well-managed company that has paid and raised dividends every year for the past 19 years. Though competitor Six Flags (NYSE: SIX) is a pure-play amusement-park operator as well, it lacks all of the other qualities that Cedar Fair brings to the table -- it is buried in debt, and its cash flow reminds me of its wilder coaster rides.

Then, several months ago, Cedar Fair revealed its plans to purchase all six Paramount Parks from CBS for a tidy $1.25 billion. That announcement shocked investors, who were attracted to Cedar Fair for its reputation as a relatively low-risk and stable dividend-payer. The stock fell from the low $30s to the mid-$20s, while the dividend yield rose from 6% to 7.6%.
Being a sucker for a dividend, I decided to take a peek at the stock. I wanted to find out whether the sell-off was warranted.

The upside of the roller coasterI also knew that...

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Blog of the Week: 10Q Detective

2006-08-07T11:58:00.000-07:00

Hezbollah Rockets and SEC 10-Q Filings: "Duck & Cover!"

Is cannon fire now being met by muted optimism?

Shares of many U.S. listed-Israeli companies, after initially slumping following Hezbollah's capture of two Israeli soldiers in a cross-border raid on July 12, have either rebounded or remained relatively flat in the last ten trading sessions. For example, the Common Stock prices of software developer AmDocs (DOX-$35.83), Internet security software maker Check Point Software Technologies (CHKP-$16.72), and generic drug maker Teva Pharmaceutical Industries (TEVA-$34.31) climbed/ (fell) from July 12 – July 21 and then climbed/ (fell) from July 24 – August 4, respectively: $1.95 / $(0.77), $(0.65) / $0.18, and $(1.86) / $4.55.

After falling nearly 10% during the first two days of the fighting, the Tel Aviv 100 index was up 3% this past week Our view is that investors believe that historical Israeli economic resilience during past conflicts will stand the test this time around, too.

Dun & Bradstreet (Israel) optimistically points out that...

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Blog of the Week: ContraHour

2006-07-31T13:13:00.000-07:00

A Handy Cheat-Sheet For KKR and Blackstone Group

Almost every month the private equity industry raises a new record fund and completes a record sized deal. Just last week, KKR, Bain Capital and Merrill Lynch agreed to the largest ever private equity buyout when they bought HCA in a transaction valued at $33 billion.

And these mega deals will likely continue. Last month, the Blackstone Group closed on a $15 billion world wide private equity fund. Not to be outdone, KKR recently announced it is raising a $10 billion world wide private equity fund. To put the size of these funds in perspective, I've pulled a paragraph from the "New Kings of Capitalism" article from the Economist from just a couple of years ago.

...there has been a dramatic growth in the size of private-equity funds, and in the size of the top firms that manage them. Most private-equity firms raise funds as limited partnerships. The firm is the general partner that manages the fund and gets paid an annual fee (a percentage of the money in, or promised to, a fund) and later a large slice of any profits; outside investors (who often lock up their money for up to ten years) become limited partners who share only in the profits.

In 1980, the world's biggest fund (KKR's) was $135m. Today there are scores of funds with over $1 billion each. J.P. Morgan's latest one is currently the biggest, at $6.5 billion, ahead of Blackstone's; Permira has Europe's largest, at around $6 billion at today's exchange rate. A $10 billion fund can be only a matter of time, if only for the fabulous annual fees.

A billion dollar buy-out fund is now relatively small change in the world of private equity so...

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Blog of the Week: Berkshire Ruminations

2006-07-24T11:27:00.000-07:00

A few thoughts on dividend policy

Famously, Berkshire Hathaway has never paid a dividend. In theory, dividends represent a way to distribute money to the owners of a business should the business have no better use for that money. A textbook might say that in the absence of any “positive NPV projects” a company is better off paying a large dividend. Again, the analogy to the small business owner is one that I think best illustrates the theory behind a dividend policy.

Imagine you are a sole proprietor and, as such, have a right to all the income your business earns. You would then have two options as to what to do with this newly acquired cash. You could reinvest the income in the business (retain earnings) or you could pay yourself, the individual, a large dividend. Which would you prefer?

Your preference ought to be determined by where you could best deploy that excess cash. If you as an individual see a great investment opportunity outside your business – say for instance shares of WAG selling at a huge discount - you might want to pay yourself a dividend to take advantage. But you should only do this if your business looks to be an inferior investment. That is, it would make no sense for you to pay yourself a dividend and buy WAG if your business is growing wildly, say for instance at a 40% annual rate and you could expand it should the business retain those earnings.

Such is the justification for Berkshire’s no-dividend policy. Mr. Buffett has always felt...

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Blog of the Week: Dismally, as it relates to the markets

2006-07-17T14:04:00.000-07:00

What tensions in the Middle East would mean to markets.

Israel responded to Hezbollah's cross boarder attacks into Lebanon yesterday sending a few waves throughout the world. The geopolitical implications of such attacks, which included a direct attack on Beirut Airport, are quite huge, really. Iran and Syria have both responded by declaring any new attacks by Israel would be an attack on all of Islam.

Setting aside all the political aspects of this kind of move, let's focus on the financial implications as this blog would normally do.

The question really is: Will there be any kind of escalation from the attacks we are already seeing? Israel has responded to attacks from Hezbullah into Lebanon. Iran has made it clear that any new attacks on Lebanon would mean a war. Well... this is the third day of attacks. So, it's reasonable to believe that there is going to be an escalation. And, to be honest, this could get ugly.

With that, there are several prime financial instruments that are involved here: Gold, oil, bonds, and equities. Then there are the currencies.

Gold is an obvious safe haven choice during any kind of escalated conflict. For centuries, the shiny metal has been sought out as the safest place to move assets during times of crisis. The price of gold has already been moving lately. Now, sitting at almost $670.00, it's moved up about $100.00 in the past two weeks or so. This trend looks to remain in tact. Escalations would continue to push this safe haven investment higher and higher. We could easily see prices above the highs we just saw a couple of months ago.

The second item is oil. This region is the heart of oil country. Any disruption in the flows would mean...

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Blog of the Week: The Big Picture

2006-07-11T15:15:00.000-07:00

Capitulation? Hardly

For the past 2 days, Rev Shark at Real Money has been talking about the recent action as a Capitulation.

I have to disagree. Perhaps I have a different definition of Capitulation than does Rev Shark; While we both describe the recent market action as "lousy as all get out," I would hardly call it Capitulatory.

For a true Capitulation to occur, we need to see a "total surrender;" Interest in equity ownership will be replaced with disgust and loathing. I do not think we are there yet

I don't think of 1987 as a capitulation at all; stocks got ahead of themselves, and they saw a major correction. It was a short sharp drop that gave back 8 months of gains -- yet 1987 was still a positive year. Within a few days of the 23% drop, stocks started to climb again, and didn't let up until March 2000. The appetite for equities was hardly diminshed, and the correction was only temporary. Indeed, at the time, we were still in the first third of the 1982-2000 bull market.

True capitulation involves laying down of arms, an admission of defeat. That does not define 1987 to me.

Think back to the selling climax we saw June 13/14 -- I would say that was mildly capitulatory at best. After a solid month of selling, we saw some extreme readings. But that was as much as buyers strike than a true capitulation. I think of 9/21/01, the Friday after markets reopened post 9/11. Sellers sold until they were exhausted.

Maybe this is only a semantic disagreement, but that's not where we are now; Heck, as of last Thursday, markets were the highest they had been since...

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Blog of the Week: InvestorGeeks

2006-07-05T14:33:00.000-07:00

Homebuilder Industry Analysis

by Peter

Last week the Federal Reserve raised interest rates for the 17th time in a row. This is dire news for the Homebuilder Industry because with every interest rate hike, it gets that much tougher for new home buyers to afford to buy a home. It also introduces an additional negative factor into the equation, in that existing homeowners become worried as to whether they are losing equity in their homes. This may induce them to panic and to put their homes up for sale. These same homeowners, many of whom took out ARMs (Adjustable Rate Mortgages) or “Interest Only” mortgages a few years back, will soon see reality knocking at the door.

Reality will come in the form of higher mortgage payments adjusted to current interest rates. Fortunately, many homeowners have seen their homes appreciate in value significantly over the past 3 years and this signifies higher equity in their homes. As a consequence, some were able to get fixed mortgages, but nevertheless may be concerned about falling house prices in their area, which may induce them to sell as well. With each existing home that goes on the market, it makes it that much harder for the Homebuilder Industry, as existing home sales constitute strong competition.

As an analyst, I like to take theories such as the one presented above and go out and see for myself what is happening on Main Street. Over the past few years I have been driving around the various neighborhoods...

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Blog of the Week: Land of Black Gold

2006-06-26T12:06:00.000-07:00

Canadian Oil Sands - the Next El Dorado in North America?

Dr. Michael Economides, a petroleum engineer and Professor at the University of Houston, has recently suggested that the Canadian oil sands could be the next El Dorado in North America.

This comment comes, interestingly, from a gentleman who believes peak oil won't hit until roughly 2050 and that both Saudi Arabia and Russia will eventually increase production substantially. His other views: He's bullish on natural gas, believes that Venezuela's Hugo Chavez is the biggest threat to the United States and it's oil needs, and is convinced that Chinese demand, geopolitics and OPEC's inability to raise production in the short term are the main cause of high oil prices, not an imminent Hubbert's Peak of global production.

While his views thus differ substantially from peak oil proponents including Boone Pickens, Kenneth Deffeyes and Matthew Simmons, in seeing huge potential in Canadian oil sands, Dr. Economides joins a chorus of oil industry types, analysts, and investors.

On the potential of Canadian oil sands I highlight, in no particular order, the comments of...

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Blog of the Week: Abnormal Returns

2006-06-19T13:32:00.000-07:00

Market timing follies

Is market timing using widely used, publicly available data possible? One widely-used model, the Fed model, has largely been discredited on a number of grounds. That is not going to stop many analysts from trying to generate market-timing models - the potential gains are simply too big. One need only look at this graph from Ticker Sense to see the attraction in market timing.

We noted yesterday a piece by Mark Hulbert in the New York Times that examines a market timing model derived from the Value Line Investment Survey. Barry Ritholtz spends some more virtual ink on the model and admires the fact that the inputs into the model are "unbiased and uncorrupted." Those are indeed admirable qualities and the Value Line based model is an interesting one.

Although we have mentioned it previously some analogous data is also available from Morningstar. Like Value Line, Morningstar has dozens of analysts who generate fair value for hundreds (if not thousands) of companies using a consistent process. Morningstar compiles the deviation from fair value for their universe in a series of graphs. As you can see the model dipped decisively into undervalued territory last week which coincided nicely with the bounce we saw. We do not remember seeing any statistical work done on this measure, in part because it has a shorter history than the VL system, but it would be worth examining.

Paul Kedrosky (via TheStreet.com) pointed to a (soon to be) published paper by Kenneth L. Fisher and Meir Statman, "Market Timing in Regressions and Reality" (pdf) that compares the market timing ability of valuation based measures, like P/Es and dividend yields, against sentiment measures. While they find the sentiment measures superior to the valuation measures, neither were particularly useful. This may be due in part to...

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Blog of the Week: Catablast

2006-06-12T14:39:00.000-07:00

Cold Stone Creamery: IPO in the Making?

The hardest part about being obsessively in love with business and stocks is having to deal with privately held companies. By that we mean this: you visit a business. You like what you see. You feel good inside. Now you want to find out how the firm is doing in a strictly economical sense -- does the company make money? How much in annual sales? Does it throw off cash? Does it grow organically or does it buy sales? Who runs the show, some freshly minted MBA or a seasoned vet? Are they operating in Montana or Mumbai?

Alas, you arrive home to your 6 monitors and ThompsonONE/Bloomberg setup, only to discover that your new obsession is privately owned. Having encountered a dearth of information, you catch a case of the business blues.

Case in point: Cold Stone Creamery. The ice cream shop was founded in 1988 by the Sutherland family. The company now owns 1,000 different stores in 47 states. Each Cold Stone Creamery is privately owned, with each owner setting his/her own catering policy. The concept is unique, we think: Cold Stone is all about ice cream that is “smooth and creamy”, rather than the traditional hard-packed or soft-serve varieties. Using only the finest ingredients, Cold Stone produces the high quality ice cream, made fresh each day in their store. Every ice cream creation...

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Blog of the Week: Value Discipline

2006-06-05T12:11:00.000-07:00

Cascade Corp...Not the Dishwashing Detergent Company

Cascade Corp (CAE) will not get your dishes clean and shiny. But this relatively unknown company may shine in your portfolio.

Cascade, based in Fairview, Oregon, manufactures material handling "load engagement" products that are widely used on lift trucks. As per the 10-K: "Products are designed to handle loads with pallets and for specialized application loads without pallets. Examples of specialized products include devices specifically designed to handle loads such as appliances, carpet and paper rolls, baled materials, textiles, beverage containers, drums, canned goods, bricks, masonry blocks, lumber, plywood, and boxed, packaged and containerized products."

The company markets worldwide both to the end-use customer through the retail lift truck dealerships as well as to lift truck manufacturers. In emerging industrialized economies, lift trucks are repolacing manual labor and are viewed as productivity enhancements, consequently, softening the cyclicality of the business.

The company has leading market share in North America, and Europe, but holds significant share in Asia Pacific countries. It has had a strong presence in China for 20 years. The company has manufacturing facilities in the US and Canada as well as the Netherlands,Germany, England, Italy, France,Australia, Korea, and China.

Foreign sales are significant at Cascade representing $200 of $451 million in sales or 44%.The level of profitability of the European businesses has suffered due to price competition from several privately-owned companies in local and regional markets. The company, as a result of the integration of several acquisitions as well as new management is addressing European issues.

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Blog of the Week: TraderFeed

2006-05-31T11:54:00.000-07:00

When the VIX Itself Becomes Volatile

Yesterday, we had an enormous daily rise in the VIX of over 30%. To put this into perspective, we have only had one larger VIX spike in percentage terms since 1998, and that was the day we opened after 9/11. A chart in my most recent post on the Trading Psychology Weblog puts this into perspective.

What typically happens after a single day spike in VIX?

Since January, 1998 (N = 2108), we have had 27 occasions in which VIX has moved more than 15% in a day. All but one of these occasions were market declines. The next day, the market (SPY) was up by an average .37% (18 up, 9 down). That is much stronger than the average daily change for the entire sample (.02%; 1092 up, 1016 down).

Just as important, the five days following the VIX spike day showed much higher VIX (and price) volatility than average. The average daily VIX change over the next five days was 7.91%, and the average daily price change was 1.42%. Those compare with the averages for the sample of 4.13% and .89%, respectively.

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Blog of the Week: 24/7 Wall St.

2006-05-22T10:59:00.000-07:00

Is There A Ford In Ford's Future F, GM, DCX

Now that Ford's (NYSE:F) chief operating officer, Jim Padilla, has announced his retirement at 40 years at the company, and is heading out the door, the question is whether Bill Ford will be next. He should be.

According to the Associated Press, a JPMorgan survey of the credit markets now puts the chances of a Ford bankruptcy at 43%. Call it Las Vegas for investment bankers.

The structure that gives the Ford family a super-majority of voting shares and effective control of the company remains in place, which means that shareholders and the board have little say in what happens to the company.

The company still plans to cut 30,000 jobs, but if Ford's market share, especially in North America, continues to shrink, it may not be nearly enough. The labor problems that the company shares with GM (NYSE;GM) and DaimlerChryler (NYSE:DCX) are not going away. Chrysler recently added dealer incentives to reduce inventory, and Ford and GM may be forced to match them to keep share.

Ford's truck sales fell 14.5% in April, which is tough, since this is...

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Blog of the Week: The Confused Capitalist

2006-05-15T15:24:00.000-07:00

It's different this time ...

It's different this time ... that's always the siren call when a market of any sort has gained on, and on, for longer than anyone thought possible.

It was heard at the NASDAQ peak in 2000, and I'm sure in the tulip bulb mania too. While it is a sensible thing to consider - and to remember that more often that not it is a siren song - it isn't always. And I think that the emerging markets phenomenon is one of those cases, where there's a fundamental shift going on, possibly a change or modification to the old world order.

I've made the point several times on this blog that I think the US market in particular appears extended and certainly leading indicators have suggested that the excess liquidity flowing around the world have led to global asset inflation.

A finger is often pointed at the emerging markets, saying that this is a particularly risky market, and it has experienced outsized gains over the past three years, placing its stock valuations on par - in many key ratios - with US markets. This, some pundits say, is clear evidence that the overall market is overvalued and that emerging markets in particular are poised to tumble, when sense returns to the market.

Overall, I agree that many markets are high: I just don't agree that the emerging markets are the clear sign of this. Stock markets are like a reputation: it takes a long time to get one, but once it's in place, many people stop thinking about the market, and consider only its reputation. They start only seeing what was once there. I think this currently provides a benefit to the US markets, and a disservice to many emerging markets.

Many emerging markets have, over the past decade, opened their economies, freed their currencies, and placed their public finances on sound footing. Their companies are more robust than ever before, with modern management (trained in the US in many cases), and robust internal key ratios - like return on capital and equity, earnings growth and cash-flow, and so on. They are, in many instances, true peers to some of the best global corporations - or very close to it.

In the US, on the other hand, there is...

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Blog of the Week: The Seeking Alpha Network

2006-05-08T13:50:00.000-07:00

Growth Indicators for Software Companies — An Investors’ Guide

William Trent (Stock Market Beat) submits: Software companies have unique characteristics that help investors spot potential positive or negative trends earlier than is possible for many other types of companies. Two of these characteristics are license revenue and deferred revenue. If these two line items are growing at a faster rate than overall sales the implications are generally positive for the company. If they are growing at a slower rate, investors may want to inquire further before making an investment decision. Here’s why.

Software companies typically generate (at least) two types of income streams. License revenue is earned when the company provides the software itself. This gives the customer the right to use the software. Frequently customers also pay for maintenance and support, which could include updates, training and other support. It follows that the more computers a company’s software is installed on, the more need there will be for maintenance and support. So trends in licensing revenue can be an early indicator for the direction of future maintenance revenue. Software maker ANSYS (ANSS) offers the following elaboration on page 22 of its recently filed 10Q:

A substantial portion of the Company’s maintenance revenue is derived from annual maintenance contracts. These contracts are generally renewed on an annual basis and have a high rate of customer renewal. In addition to the recurring revenue base associated with these contracts, a majority of customers purchasing new perpetual licenses also purchase related annual maintenance contracts. As a result of the significant recurring revenue base, the Company’s maintenance revenue growth rate in any period does not necessarily correlate to the growth rate of new maintenance contracts sold during that period. To the extent the rate of customer renewal for maintenance contracts remains at current levels, incremental maintenance contracts sold with new perpetual licenses will result in maintenance revenue growth.

The second indicator software companies have is...

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Blog of the Week: Berkshire Ruminations

2006-05-01T16:10:00.000-07:00

Should we try to play ethanol?

Yes. But be careful. Once it becomes widely known how easily this nation can switch away from gasoline and toward ethanol, plenty of traders will be eager to snatch up every small supplier or research firm with any connection to the fuel. This approach is a crap shoot and very unwise. The best approach, I feel, is to invest in an established, profitable company that is currently trading at a reasonable price. And I’ll be darned if there isn’t one sitting right in front of us. It’s called Archer Daniels Midland.

What prompted this post of mine is an article a friend of mine told me about by know-it-all trend maven Jim Cramer. Apparently Cramer’s rant of choice this morning was how foolish buying anything and everything ethanol can be. Seems like a legitimate take, but then he goes on to dismiss ADM as becoming “such a momentum play it makes a mockery of the fundamentals.” Mockery of fundamentals? Seems like a little bit of a stretch for a company selling at 23 times ttm earnings and less than three times book value. So, as if you need any convincing that Cramer hasn’t fully thought an idea through, let me explain why this is not true.

Ethanol is, admittedly, not what ADM has traditionally produced...

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Blog of the Week: ClearFish Research

2006-04-26T16:35:00.000-07:00

Dirty Rotten Coal

Coal. Dirty, old world coal. Surely, after a couple hundred years of use, there's nothing particularly interesting about such an anti-environmental dirty, destructive (strip mining and acid rain, particulates and mercury) commodity. Solar and ethanol are the way to go, right? Well, yeah, except for one little niggling bit about them both being completely uncompetitive with coal based on price alone. So there are lots of market manipulations (taxes, 'total environmental impact accounting', etc.) to try and make the 'green' energy sources look price competitive with the 'dirty' sources. But at the same time, there has been 30 years of work (since the 1971 Clean Air Act) to make those 'dirty' sources clean, and those efforts have been enormously successful.

Today, the drivers toward 'clean' energy are not really pollution derived, since almost any energy source can be used today in a relatively pollution-free fashion. They are rather price-based, and more nebulously political. On the political front there is the environmental contingent that is wedded to particular 1970's based ideas (that are seeing a current resurgence), and not wholly disjointed from that movement there is a wider dislike for sending petro-dollars to distasteful foreign regimes. That's the 'energy independence' crowd. Coal dovetails with both those desires.

The energy independence bit is easy. The US has more energy reserves in the form of...

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Blog of the Week: MarketMoneyLetter.com

2006-04-18T11:01:00.000-07:00

Watch Akamai Fly!

Shares of Akamai are up more than 50% in 2006 and I don't think the run is over. Investors with a short term time horizon could be interested in "riding" the momentum in Akamai's shares. This equity is a classic "story stock" and I don't think the valuation is too extreme, yet.

Akamai's customers are drawn to the company because they are able to use their existing technological infrastructure. In doing so, customers spend less money than they would if they were building their own infrastructure, in entirety.

Akamai made a transformation in 2004 in beginning to focus on the growth in a specific media and entertainment niche on the net at a time when streaming content began occurring in many media companies. Thus, the media delivery services business was born. Companies interested in streaming their content via Akamai's technologies do not face server and bandwidth limitations, and Akamai can better handle peak traffic and large file sizes. In 2005 Akamai acquired Speedera Networks in a merger transaction. In doing so, Akamai added both clients and services to their growing media delivery services segment of business.

Akamai is the dominant player in the media delivery services business, as can be demonstrated by the company's name often appearing in conjunction with announcements of media companies bringing content online.

Here are some example...

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Blog of the Week: The Average Joe Investor

2006-04-10T12:36:00.000-07:00

Back to the Basics: Price to Earnings Multiple (P/E)

This is a topic that I covered somewhat in a past post (Jumping on Opportunities), but this is a concept that really merits its own article. The price to earnings multiple, aka P/E, price to earnings ratio or just earnings multiple is easily the most used gauge of a stock's valuation in the world of investing, so having a good understaning why and how it's used is pretty crucial.

As an example here, let's take a look at two stocks, Goldman Sachs Group Inc (ticker: GS) and JDS Uniphase (Nasdaq: JDSU). Goldman Sachs has a per share price of about $161 while JDSU trades at just under $4 per share. So does this mean that Goldman Sachs stock is worth 40x more than JDSU? Well, the simple answer is no. Now here's the reason why: people buy stocks to make money and they make money when the stock's price goes up. A primary reason that the price of a stock goes up is that either the company is making a lot of money (profit) or people have expectations that the company will soon be making more money.

Now, of the money that the company makes, each shareholder theoretically gets to take part in a portion of those profits equal to the percentage ownership they have. So if a company makes $10 in profit and has 10 shareholders, each shareholder would get $1 of those profits. This is called the earnings per share (better known as EPS). Since shareholders want to maximize the return (profit) that they get in relation to how much they had to invest in the company in the first place, they use the price to...

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Blog of the Week: Option Investor Blog

2006-04-03T12:25:00.000-07:00

Credit Spreads - A conservative approach to Options

This week we are going to look at a Credit Spread, and how you can use it to generate cash flow. The credit spread is an options trading technique that involves the purchase of an option and the sale of an opposing option position for a net credit, and is a powerful option strategy that can be used to gain consistent profits

Introduction to Spread Trading

In option markets there are many ways to trade for profit. The most common strategy involves speculating on the direction in which the underlying security will move. If a trader correctly predicts the market direction and takes the appropriate position he can expect to make a profit. But even when the market moves in the expected direction, owning the correct position (call or put) will not necessarily be profitable. The problem is, while the trader is waiting for the option's price to move towards its theoretical value, the position is at risk from a wide variety of changes in the market which threaten its potential profit. For this reason, the majority of successful derivatives traders engage in spread trading.

A spread is a strategy which involves the buying and selling of simultaneous but opposing positions in different option series. The use of spreads or stock/option combinations is simply a way for traders to take advantage of favorably priced options, while at the same time reducing the effects of short-term changes in the market so that he or she can safely hold an option position to maturity. Spreading techniques basically help to maintain an acceptable level of profit while limiting potential losses and although there is no "perfect" strategy in the options market, successful traders attempt to reduce risk as much as possible in every portfolio position.

Credit Spread Basics

A credit spread is a simple strategy that...
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Blog of the Week: Stock Pick Bob's Stock Advice

2006-03-27T16:39:00.000-08:00

Candela Laser (CLZR) Revisiting a Stock Pick

Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

I was looking through the list of top % gainers on the NASDAQ today, and came across Candela Laser (CLZR) which as I write is trading at $20.68, up $1.48 or 7.76% on the day. I do not own any shares nor do I have any options on this stock.

I first reviewed CLZR on Stock Picks Bob's Advice on January 28, 2004, a bit over two years ago, when it was trading at $26.38. CLZR split 2:1 on 3/17/04, giving my pick an effective price of $13.19. With today's price of $20.68, this represents a gain of $7.49 or 56.8% since posting on the blog.

Let's take a closer look at this company and I will share with you my thinking as to why this stock deserves a second look.

First of all, what they do:

According to the Yahoo "Profile" on Candela, the company

"...engages in the research, development, manufacture, marketing, sale, and servicing of lasers and light-based products used to perform aesthetic and cosmetic procedures worldwide. Its product line includes GentleLASE family of lasers for the treatment of unwanted hair and for the treatment of vascular lesions, pigmented lesions, and wrinkles; Vbeam for the treatment of vascular lesions, wrinkles, psoriasis, and other conditions; ALEXLAZR for the treatment of pigmented lesions and tattoos; Smoothbeam diode laser for nonablative dermal remodeling of wrinkles, and the treatment of acne and acne scars; C-beam pulsed dye laser for treatment of psoriasis and surgical scars; and Ellipse Intense Pulsed Light system for the improvement of sun-damaged skin by photo rejuvenation through removal of both vascular and dyspigmentation."

And how about the latest quarterly result?

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Blog of the Week: In The Money

2006-03-20T11:26:00.000-08:00

Weekly Recap

Here is a recap of this week's market activity:

The S&P 500 index was up every day this week. This was not due to specific news, but rather to a growing belief that the Federal Reserve may be nearing the end of its current rate hike phase.

That line has been heard before. That doesn't matter, and neither does the fact that there was little from the Federal Reserve to change market perceptions. There was a bit of data that helped, but not much.

The February core CPI was up 0.1%. That was a bit below an expected gain, but the underlying trend in inflation hasn't changed much. On a year-over-year basis, the core CPI is up 2.1%. The annualized rate of increase the past three months is 2.0%. The past two months it is also 2.0%. That isn't a lot for the Fed to hang its hat on in terms of claiming victory. The inflation news clearly isn't bad, but it also isn't a change in trend.

Economic expectations haven't changed either...

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Blog of the Week: Technically Speaking

2006-03-13T14:54:00.000-08:00

Conor's Market Overview

Educational use only. Never intended as advice.

The "deflation trade" was in full effect this week. The S&P was down 6. The NDX was down 36. These numbers mask how bad the damage was, as the number of declining stocks on the NYSE significantly outpaced the number of advancing stocks until Friday's relief rally. Deflation wasn't confined to stocks, though. Crude oil was down about $3.50 to $59.96. Natural gas fell 13 cents to $6.65. Gold fell $24 to $541. Silver fell 39 cents to $9.93. Zinc was down 3%. Aluminum was down 4.4%. Lead was down 3.8%. Copper was down 2.8%. Editor's note: paradigm shift or mean reversion opportunity?

But that still isn't everything. Global bonds fell as well, shifting global long-term rates up. The US 10-year bond's yield rose 7bps to 4.76%. Japan's rose 3bps to 1.66% . The UK's rose 8bps to 4.34%. And Germany's rose 10bps to 3.69%. Editor: competition for scarce investment dollars, stocks or bonds?

That's the problem with deflation -- everything drops in value, so the only way one can profit from it is going short. All you can really do is put your money into short-term bonds and wait it out. Of course, if everyone does that, short-term rates go to zero, and output shrinks as people reduce consumption -- which is exactly...

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Blog of the Week: Internet Outsider

2006-03-06T12:19:00.000-08:00

Google: Reading The Q1 Tea Leaves

All right, bearing in mind that even Google executives seem to have very different views about where the business is going, let's think through what the events of the last few days might mean.

On Tuesday, in answer to a question about whether growth might have been turbocharged last year by anything of a one-time nature, CFO George Reyes told a compelling story about why growth accelerated then and why it is slowing now. The stock instantly got crushed. Eight hours later, Google put out a press release that ignored Reyes' story, and, therefore, essentially denied it. The stock recovered a bit. Two days later, a parade of Google executives, including Reyes, gave glowing presentations about how the future contained nothing but upside, upside, upside (and no mention of the "law of large numbers," either). The stock recovered a lot.

So...What happened in the eight hours between when George tanked the stock and Google issued its tacit-denial press release? Most likely, Eric, Larry, Sergey, George, Google's General Counsel, Google's external law firms, and Google PR team held a series of meetings/phone calls to deal with the crisis. In these meetings, they probably reviewed exactly what George said, and compared this to the actual, real-time performance of the business. Then...

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Blog of the Week: Gannon on Investing

2006-02-27T13:58:00.000-08:00

On Sherwin-Williams’ Profitability

Sherwin Williams (SHW) scores well on just about every profitability measure. Some companies I’ve mentioned in the past are more profitable than Sherwin-Williams. For instance, Timberland (TBL) scores much higher than SHW on just about every measure of profitability. The clearest difference between the two businesses is their pre-tax returns on non-cash assets (PTRONCA).

This is one of my favorite profitability measures. For the last five years, Timberland has consistently had a PTRONCA of 35 – 55%; Sherwin-Williams’ PTRONCA has been in the 12 – 16% range. This post isn’t intended to be a comparison between Timberland and Sherwin-Williams. I wanted to introduce you to my preferred method of calculating return on assets, and Timberland is the obvious choice for a PTRONCA comparison. Very few businesses earn a pre-tax return on non-cash assets greater than 25%.

The easiest way to earn a very high pre-tax return on non-cash assets is to have very few tangible assets. Businesses with very high PTRONCAs can grow without retaining earnings. Generally, maintenance cap ex is minimal, and little investment is required beyond additions to working capital.

Sherwin-Williams’ pre-tax return on non-cash assets of 12-16% is very good...

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Blog of the Week: Lloyd's Investment Blog

2006-02-21T10:46:00.000-08:00

Shopping for Kid-Friendly Growth: "Hey, Dad. Where's the Next McDonald's?"

How should a 10-year old kid invest $500? After spending the past year in CDs at our local WAMU earning 4% interest (in case you are wondering, we exercised the bump-up options), my kids are gearing up to make their first stock investments. We are planning to open up custodial accounts at Sharebuilder, since the company has no minimum balance requirement and offers attractive, rock-bottom commissions of just $4 per trade.

On its Website, Sharebuilder provides a list of the most popular 50 stocks that its customers buy. Among the household names that every kid has heard of are...

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Blog of the Week: The Stalwart

2006-02-13T17:40:00.000-08:00

Do we need Exports?

There he goes again. Stephen Roach of Morgan Stanley is talking about the trade deficit, global rebalancing, and how the U.S. can't recover because we don't have anything to export. You'd think we were already in a recession:

The export solution also suffers from an even more glaring deficiency -- the hollowing of Smokestack America. With manufacturing capacity and jobs moving steadily offshore over the past 20-plus years, the US simply lacks the wherewithal to spark an export-led turnaround in foreign trade. In all too many cases, the loss of US manufacturing prowess has been a permanent, or structural, erosion. The list of “lost industries” -- from steel and autos to textiles and even computers -- speaks of a competitive dynamic that makes it all but impossible for the US to recapture its once leading market share as an industrial powerhouse. As I noted recently, that leaves the US on the outside looking in when one of its formerly large trading partners like Japan springs back to life.

I hate to sound all "new economy", but I don't understand why we need smokestack industries. That's not to say we shouldn't have them, or that an optimally diverse economy wouldn't have them. In fact, it's just the opposite, I suspect that manufacturing will always be an important part of our output. But what's unique about smokestack industries as opposed to software, financial services, or search engines. Surely, there are economies that have thrived without much physical output.

Is it logical that...

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Blog of the Week: The New Wall Street

2006-02-06T12:33:00.000-08:00

XM Radio Company Profile

Strong Buy
12 Month Price Target $40.00
3-5 Year Price Target $150.00

First things first, lets get the bad news out of the way. Don't worry it wont take long.

XM Radio does not have Howard Stern.

Whether you like Stern or not, you cannot deny the impact he has had on Sirius Satellite Radio. His effect can on Sirius can be seen in both their stock price and their fundamentals. Before signing Stern, Sirius was a distant second to XM. In the latest quarter, they added more subscribers than XM for the first time in company history. Sirius currently has the greater momentum in this industry, with Howard Stern to thank.

So if Sirius grew faster last quarter, and has the momentum in the Satellite Radio industry, what is it that we find so attractive about XM? This wont take too long either...

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Blog of the Week: BlogginWallStreet

2006-01-30T11:14:00.000-08:00

Straight for the straightjacket

Ready for $262/barrel oil?
Two of the world's most successful investors say oil will be in short supply in the coming months.
…billionaire investor George Soros, wouldn't make any specific predictions about prices. But as a legendary commodities player, it's worth paying heed to the words of the man who once took on the Bank of England -- and won. "I'm very worried about the supply-demand balance, which is very tight," Soros says.

Editors Note: This is also the same guy that called for the collapse of capitalism in his 1998 book then promptly proceeded to lose $2 billion in the collapse of Russia. I can imagine him saying something like this: Oh crap, communism, I meant to say communism not capitalism, It's the publishers fault, the title was supposed to read The Crisis in Global Communism, but they thought Capitalism would be more controversial and sell more books.

Of course, for all we know...

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Blog of the Week: Abnormal Returns

2006-01-23T12:15:00.000-08:00

Google is everywhere

Nary a day goes by without Google gracing the headlines in some manner. Now Google (GOOG) is being credited with swelling the endowments of some of the most well-funded universities in the country.

John Hechinger in the Wall Street Journal reports that Stanford University’s endowment leaped to third place on the list of the wealthiest endowments due in part to the performance of Google stock. A number of the top endowments have been investing in venture capital, in its many forms, for quite some time. This is leading to a two-tiered system of higher education with haves and have-nots.

Stanford’s achievement illustrates a great divide in higher education that may only grow wider. Elite schools, already among the nation’s richest charitable institutions, are now increasingly able to pair stellar investment returns and wealthy alumni to build war chests that enable them to hire away top professors and give the most generous financial-aid packages to coveted students. The big risk: The college education available to most in the U.S. could end up weaker, especially in relative terms.

Part of this simply comes down to

Blog of the Week: The Big Picture

2006-01-17T10:34:00.000-08:00

Remodeling, Building Brace for Slowing

in Real Estate

For some strange reason, the WSJ published on Monday, when the markets were closed. If you missed that edition of the paper, you may have missed them this pair of worthwhile reads:

Home Builders Brace For a 'Simmering Down' of Sales As Few Fear a Serious Decline
and
Home-Remodeling Boom Cools As Higher Loan Rates Begin to Bite
>

It seems that Builders and Contractors are bracing for the inevitable:

"The home-renovation boom, spurred by low mortgage rates that made home-equity loans popular and cheap, appears to be cooling off.

The latest government construction-spending data -- for November -- shows spending on home renovations was down 4.1% from the month before, and down 5.6% from November 2004.

And the latest quarterly Remodeling Activity Indicator, a measure crafted by Harvard University's Joint Center for Housing Studies to predict trends before the government releases hard numbers, suggests the pace of home-improvement spending continues to slow. "We are starting to see signs of softening in the remodeling market," said Nicolas P. Retsinas, the center's director. "Rising short-term interest rates and slowing home-price appreciation have tempered homeowner spending on home improvements."

The center's quarterly Remodeling Activity Indicator suggests...

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Blog of the Week: Catablast

2006-01-09T10:10:00.000-08:00

Opening the Books: How We Pick Stocks

Ever wonder how we pick our buy/sell recommendations?

Us too. So we thought we'd use today to open the books and show you how we do it.

For the most part, we implement a top-down approach to investing.

Every company operates within a certain environment, so the first thing we try to do is understand a given company's industry/sector.

Know the climate.

Let's use the beleaguered airline industry as an example.

It's characterized by bloated pension/health care costs, cutthroat competition, and high energy prices.

Those sorts of ills cripple margins, eat into profits, and even bring industries under regulatory scrutiny.

If the milieu is ugly, the stock is probably ugly. This is why you avoid the financials when rates climb and elude export-heavy stocks when the dollar's high.

Stocks only move for three reasons: corporate profits, interest rates, or exogenous shocks. Exogenous shocks, as you can imagine, include everything from earthquakes to lawsuits to a CEO's unexpected death.

After we digest macrowave data like economic sentiment and industry mood, we dig into the micro-specifics...

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Blog of The Week: Value Discipline

2006-01-04T09:11:00.000-08:00

LookSmart (LOOK)

LookSmart (LOOK) was initiated as a buy last night. LookSmart is a provider of products for advertisers who wish to pay to be included in relevant web search results. Their suite of products provides businesses of all sizes the opportunity to have listings for their company and products included in distributed web search results, so that their listings are available to Internet users at the moment when they are searching for relevant information.

This morning’s WSJ front page highlights the shift that is taking place in the upfront TV advertising process where advertisers are becoming much more reluctant to commit to unknown and untested programming with big bucks. There is a major switch to Internet advertising, and companies like LOOK could well be beneficiaries...

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Blog of the Week: The Kirk Report

2005-12-19T11:17:00.000-08:00

PPI Is The Last Major Hurdle

Good morning. As the experts debate on what is in store for the next two weeks, we know that the market tends to have a bullish bias in the final two trading weeks of the year.

As you know, the market has been consolidating the 4Q rally for several weeks setting up for interesting year-end trading. Sure, there are concerns over inflation, energy prices, holiday shopping, etc., but these are the same concerns that have been with us for some time now. And, although we have a lot of economic data to sift through this week, tomorrow's PPI is the last major hurdle for the bulls and it comes at a time when the market is no longer overbought...

Blog of the Week: Trader Mike

2005-12-12T09:41:00.000-08:00

Time to Change Low Volatility to High Volatility?

December 11, 2005

Volatility has really dropped off the last few weeks. The QQQQ chart below shows that it's gone exactly nowhere over the last 15 trading sessions. I saw a lot of NR7 bars in my scans today, which is often a sign that we're in for an increase in volatility. And what better time for that than expiration week? Of course the big question is which way do we move. After 3 weeks of sideways action I think the indices could just as easily go either way. But from watching the tape over the last few days it feels like there's pretty good support nearby. So without some kind of catalyst to motivate sellers I think we go higher.

Despite the lackluster action in the indices of late there are some good looking individual stock charts out there. Here are some of the ones that caught my eye as I went through my scans today...

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Blog of the week: Footnoted.org

2005-12-05T11:44:00.000-08:00

All I want for Christmas is a golden parachute

December 5th, 2005

Guess who just might get it? John Alm, who announced last week that he is stepping down January 1, 2006 from the CEO post at Coca-Cola Enterprises ((CCE)). The 8-K and accompanying press release were, as usual, sweet but short on details.

However, a look back at CCE’s filings may have made Alm’s departure anything but surprising. Check out this exhibit to an 8-K filing that conveniently coincided with (and was likely overshadowed by) the release of third-quarter earnings announcement on Oct. 27.

The exhibit, an updated severance agreement, provided for payments equal to 24 months of salary and 2 “annual bonus awards” for employees with greater than 10 years of service. The exhibit also noted that:

“An officer may also receive a payment equal to the annual bonus that would have been payable for the year of termination, which amount shall be based on actual performance results and prorated for his or her actual period of service during such year.”

That means...

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Blog of the Week:Swing Trading with the Stock Bandit

2005-11-28T11:14:00.000-08:00

When to Raise Stops

Trading rules are a must if you want to trade for a living. Only by following a systematic approach will you be able to find trading success. Most of the time, stocks require some room to move, and tight stop loss orders don’t offer a lot of upside potential for swing trading. However, on rare occasions, you can book greater profits by knowing when to raise stops and pay yourself with big gains.

Recently, the market has been tremendously strong. We’ve had a number of big winning stock picks, and it’s important to know when to tighten stops. Because the market has moved almost straight up (nearly a parabolic uptrend), it's time to get more conservative and raise stop loss orders on open positions. Markets don’t move in straight lines for very long, so it’s important to recognize when an uptrend is getting a bit tired and due for a rest. It’s at times like this when a stock trading strategy can use some conservative adjustments to capture profits.

Last week, instead of following my swing trading strategy which gives...

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Blog of the Week: Phil Town on Investing

2005-11-21T12:42:00.000-08:00

HOW DO YOU REALLY KNOW YOU KNOW A COMPANY?

Here's an exchange I had with Greg, who's been trying to find something to buy. He understands how to run the numbers, but he's stumbling on Meaning and Moat. Read on.

Phil,

Dell does seem cheap, but no one seems to be taking the bait. And I don't feel like I KNOW the business. In fact, I am not sure how to really know any business.

I have read several entries on your blog where you say that you agree with the research someone has presented and often let them know something that they didn't see, but then you tell them that if you only knew the company you might invest in them too, but you don't so you won't.

So how do I know...

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Blog of the Week: Jeff Matthews Is Not Making This Up

2005-11-14T11:38:00.000-08:00

The $14.9 Million Small Pheasant Vase

I don’t know too much about Sotheby’s, the old-line auction house—save that its sales peaked during the 1999 bubble year and dropped four straight years; its CEO went to jail for conspiring with Christie’s to fix the market, and after a few years out of the headlines the company has rebounded along with the art market, which appears to be on fire.

So I found the recent earnings call interesting, both from a Sotheby’s-specific point of view, as well as the company's own world view from the vantage point of its auction business.

Most interesting was the company’s commentary on the exploding international art markets, particularly in Russia.

Now, I am not suggesting Sotheby’s is a good “Russia Play,” or “China Play,” or any other kind of play.

But I find it intriguing that Ariel Capital...

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Blog of the Week: Stock Picks Bob's Advice

2005-11-07T13:27:00.000-08:00

November 7, 2005 Tennant Co. (TNC)
Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

As I work through the process of finding new stock market investment ideas, I first like to look through the lists of stocks that are showing strong upward momentum. In practice this means checking the lists of top percentage gainers for the day!

Reviewing the list of top % gainers on the NYSE today, I came across Tennant (TNC) which appears to fit my idea of a good idea for an investment! As I write, TNC is trading at $47.85, up $2.50 on the day or 5.51%. I do not own any shares or options on this stock...

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StockBlogs Blog of the Week

2005-11-02T09:56:00.000-08:00

Here is where we will show our favorite post of the week, with a link back to the blog it came from.