I own a couple of municipal bond funds and they have taken a beating the last two days. Down about 5%. I am not sure why but suspect a variety of things. First, Harrisburg, Penn. defaulted on a bond, second, the general fear of inflation.
Other than those two reasons I don't have a clue. I also don't think it is the beginning of a general bond bubble collapse. I am still well ahead with these funds so I am holding pat for now. Anyone have any ideas?
Great article in today's NY Times. Bubbles starting to pop up all over the place. Be careful out there - especially on the commodity front. I really hate many of these futures markets. They effect the current economy with pricing today that should only happen once a recovery is well past a dangerous stage. Leverage, leverage , leverage - when is someone ever going to do something about it. Small commodity trades in thin markets that are often highly leveraged (we are getting back to 20:1) determine prices in an economies that are weak and fragile and have low demand that has no support for such prices. Someday we'll look back on this and realize how stupid we were. Just put the same 2:1 leverage ratio on commodities that exist on stocks and this will stop happening.
The Fed money is going in all the wrong places. Let folks use 50-75% of their money to invest, kill the worthless stimulus programs and let money flow to individuals via tax cuts instead of folks that warp things in their own interest and we may actually get a real recovery with real jobs instead of a jobless Wall street recovery.
The writer sounds like they have pegged our economy and financial situation. I think there are a lot of people with a horde of cash afraid to invest in anything right now. There is also a horde of people with no job or decent job prospects wondering when this new government of Hope and Change will fulfill their promises. I like to stay optimistic. And for myself there is no real reason not to be. I just don't have a lot of hope for those trying to survive in this mess. Which bubble do I float out of here on?
Keith... you are absolutely right about Alan Mullally. The guy is a genius and a gentleman... a great leader. I also saw the program and it defintely reinforced my convictions about Ford.
Some analysts now believe Ford shares will hit $30, so I guess my prediction of $22-$25 might not be too far off.
You will join the rest of us here that own Ford shares... even though myself and others bought some of it when it was much, much cheaper... as you have read, I and others here continue to add more of it to our portfolios, especially during any significant dips.
I'm not worried... Charlie will tell us when the next bubble is about to pop. And if my crystal ball agrees with him, then we'll all KNOW for sure that it'll be time to sell off everything and wait on the sidelines with cash to scoop up the remains.
Obama could learn a thing or two about managing and handling a crisis from him.
Him, or anyone else who has run anything of significance in the private sector.
Neighborhood organizing experience will only get you so far. Well, check that -- it'll obviously take you to the Presidency, so long as it's combined with a glib delivery and a good teleprompter, but what happens after that. . .
I absolutely agree that Ford is being run well, particularly when compared to the other two.
Obama could learn a thing or two about managing and handling a crisis from him.
That's why I rather have a governor over a senator any day in a presedential election. You need a senator with a lot of experience to have a shot at being a good president. Obama had little senatorial experience and never led anything so how could he have ever been a good president? A governor is used to decisions and has so much more experience at making important ones and is the closes thing we have to a CEO in political positions.
Yes... and today is another buying opportunity [Ford] with a significant enough dip, IMO. I have just purchased even more. Even if the market drags this stock down, don't despair. Long-term it should be terrific.
To be frank, I am more concerned about a company like QLIK than a solid company like Ford... especially recently, as it has been struggling quite a bit to hold its own, even when the market was advancing... not a good sign. What's your opinion?
The honeymoon is over. Time to get our finances in order:
After five largely harmonious meetings in the past two years to deal with the most severe downturn since the Depression, major disputes broke out between Washington and China, Britain, Germany, and Brazil.
Each rejected core elements of Obama’s strategy of stimulating growth before focusing on deficit reduction. Several major nations continued to accuse the Federal Reserve of deliberately devaluing the dollar last week in an effort to put the costs of America’s competitive troubles on trading partners, rather than taking politically tough measures to rein in spending at home.
The result was that Obama repeatedly found himself on the defensive. The disputes were not limited to America’s foreign partners. Treasury Secretary Timothy F. Geithner got into a trans-Pacific argument with one of his former mentors, Alan Greenspan, the former chairman of the Federal Reserve, after Greenspan wrote that the United States was “pursuing a policy of currency weakening.’’ Geithner shot back on CNBC that while he had “enormous respect’’ for Greenspan, “that’s not an accurate description of either the Fed’s policies or our policies.’’
Much of the rest of the world seemed to share Greenspan’s assessment. Moreover, Obama seemed to be losing the broader debate over austerity. The president has insisted that at a moment of weak private demand, the best way to spur economic growth is to have the government prime the pump with cheap credit and government stimulus programs. He quickly found himself in an argument with Prime Minister David Cameron of Britain and Chancellor Angela Merkel of Germany.
We've got an inexperienced liberal President going up against highly experienced conservatives and everyone has theire own agenda to boot. Obama has demonstrated almost no knowledge of finance, so not only will they not listen to him but their respect for him has trickled down from early on and is now in freefall. I also saw this story when it was in the Times, meant to post it but forgot, and while I d'ont agree with every aspect of it (eg other nations are trying to keep their currency low in value, China leading the list) it's the overall tone that scares me. I think what Bernanke is doing is a brilliant offset to what the rest of the world is doing and so far in reaction the dollar has strengthened rather than weakened. So that makes some of the international community's comments lame. Bernanke knows that sooner or later China will be dealing with high inflation if they d'ont start raising rates and as that happens it puts a lot of pressure on commodities and offsets more, or a lot more than any dollar easing does to push commodity prices up. Bernanke is forcing the issue and is a lot more effective than anything Obama is doing.
BTW - this is where far right liberals like Pelosi are so completely out of touch with the world.
I am sure you are more in touch with all the ramifications of the recent moves by the Fed. I look at it from a much more simplistic level. I see the lower end of the wage earners being impacted by higher prices on food and energy. While the over paid Union workers will not feel the pain as much as those on lower and fixed incomes. I personally can lose a bit without feeling the crunch. A lower dollar should make US made goods more salable on the World market.
Who do you believe, Greenspan that many blame for our current crisis or Bernanke who holds the purse strings currently?
Greenspan has done a lot of backpeddling in his old age. Similar to McNamara and the Vietnam war. Greenspan is probably just trying to break into TV. So many retired folks taking bit jobs on the TV. Playing Monday morning quarterback.
We thought about tax exempt bonds. What happens if the city or state goes into default or bankruptcy? Do you lose your money like people that had GM bonds? I just don't know enough about such things to take a big risk. With real estate I know it will always be worth something. Stocks and bonds do not give me that comfort. And now what will the dollar do?
We're coming down the stretch and the market is dealing with a lot of issues now. I've gone on the record as saying a peak of 11,200 than a fall to 10,800. We exceeded my peak but the 10,800 is starting to look quite possible. Had dinner with my buddy again and he's thinking 11,500 for year end now. I know that's where Tag was. But has anyone changed their mind. Asia raising rates may well cap gold and oil was way ahead of itself with speculation recirculating back to the level it had when oil was at $147. Can spec get higher than that? Treasuries remain in high demand of China and Japan (both increased their holdings last month) which is telling me they expect the dollar to come back somewhat. That will also put commodities and gold under pressure. I believe next quarter earnings will be strong and that, other than a Santa claus rally, is our next step up.
Frankly, I don't have a clue as to what might happen over the short term, or the next couple of years for that matter. The trend appears to be down to me as long as we have so many people out of work.
No... although I do have a feeling we are experiencing the correction I was recently talking about. It's hard to say with the same certainty that the Dow will rebound enough before the end of the year, but I still firmly believe that it has more upside ahead. That said, I think there are some serious problems looming like dark clouds. We've got real idiots in Washington, both sides of the aisle.
I'm just going to stick with my original prediction... that the Dow will trade in a range between 11,250 - 11,500 at the end of the year.
That's exactly what I said, and so far, I'm sticking to it.
But, I'm admittedly a bit jittery about the situation we are in and in the direction things are going. Essentially our government has spent itself beyond the brink of running out of money, and printing more and more of it isn't going to work. We're all in a heap of doggie doo.
See post#2320....right in the middle of your range prediction. As liquid gold and other commodities are spiking while the Fed tries to ease against the balancing tide, we tread water.
No jobs, no solid rally. Agree on keeping Bush tax cuts and Santa might sleigh the upper end of your range by Midnight of Dec 31st.
GM IPO: Good For Banks and Wall Street But Bad for Joe The Investor
In an ironic twist, the shares will hardly be available to the taxpayers who bailed out GM at the issuing price. GM and its investment bankers are doling them out to institutional investors, and even a Chinese automaker. But "Joe Taxpayer" won't be able to invest in GM until after some of the big institutional investors start selling them after they make a big profit in the expected early run-up on the price.
The banks managing the deal are JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp., and Citigroup Inc., each of them recipients of billions of dollars from the $700 billion Troubled Asset Relief Program. E-Trade, Ameritrade, Charles Schwab and other brokers catering to smaller investors were cut out.
I don't think I would be interested even if the little guy was given the opportunity. I took my risk with Ford and it paid off. I don't think I want to get greedy. I still don't trust those in charge at GM.
Met with a person today that I have about a 20 year relationship with in acquistions. In my past CFO job I've done 4 deals with him, 3 of which he represented the seller and one in which I did a divisional merger with. He's always chasing me around this time of year to see if myself and partners may want to sell in the next year. He's a guy I deeply respect and is a rarity as he's engaging, gregarious and couples that with very deep anatical skills (IMO the best) in our industry. We are not there yet (probably 12-18 months away) but basically M&A activity is quite robust and strategic multiples have come back to 9X EBITDA and 10-11X EBITDA when you have multiple interested parties. But the fact is the private equity coalitions backing a platform of companies are doing the most buying now.and paying the highest prices as they see a ripe IPO market in 2011/12. That bodes well for the market IMO and I can see you verifying on a Dow 12,000 sometime next year.
We briefly discussed a number of stocks, most notably AAPL. He asked me when I would drop the stock and I noted my moment of weakness. But in the end I said the moment Steve Jobs stops mentioning non-GAAP earnings is the moment I am out. In the end all non-GAAP really represents is your contract base/known minimum revenue stream less your current operating costs. It's your actual profit level in real time. GAAP is either behind it in an increasing order environment or ahead of it in order development that is flat or down. Hence Jobs and others will only note non-gaap when it favors them, usually in a big way. I'm very tiny next to any of these companies but my year end closing non-gaap earnings will be at least 9-10% above the GAAP I report and if one large order comes in it could be 18-20% more. That order will close and whatever quarter it closes in will bring that big discrepancy between non-GAAP and GAAP on a trailing twelve month basis. Non-GAAP is how I look at and value my business for example, if I were selling today. GAAP earrnings and the reliance on them is history now. We need them for financial reporting but no one makes decisions off them anymore. Most businesses are acquiring or making major cost platforms, including R&D, major capex etc based on the strength of current order volume on the very day they are looking at it. I refer to this more as net new business, new orders +price increases minus cancellations. With modern day accounting systems showing actual orders and percentage of pipeline executions is much more crucial than last months P&L on a GAAP basis. So another big yard marker to where stocks are going is to note how offensive looking their R&D, acquistions and capex decisions in real time is. Anyone that cuts back on any of them is a company you want to stay far away from and any that looked strong in the past on that front and became more tepid is also showing coming problems. I think this is one of the reasons folks exited Cisco so rapidly.
It's easier than you think. and I'll use small figures to make it even easier.
Let's say you have a reported GAAP P&L (GAAP meaning general accepted accounting principles) at the end of this year of 20mln in revenue and 12 mln in expense - so you have EBITDA of 8mln. For many businesses order volume is high in the second and 4th quarters because most companies are on June 30th or Dec 31st year ends. So their expense budgets for the following year are approved in the months just before year end, allowing them to spend in that short time frame. Most folks running departments that have a need will spend quickly before any new forecast reduces their budget 3 or 6 months later. Now lets say that the forward costs of your business are 12.6mln and you just signed 3 orders worth 2mln in the last month of the year, maybe because you have a new product that is in high demand. In the media business and many others - the revenue model is subscriptions. So you recognize revenue on a monthly or quarterly basis. Even in manufacturing you may get a deal for set product volumes over a 12 month period, in effect making it a subscription revenue model. In such a situation only $166K of revenue (1 month) got recognized in your GAAP P&L. It could also be that nothing got recognized as the contract or order may start in the first month of the new year. Looked at from a non-GAAP real time perspective though results are now $21.833 mln in revenue and $12.6mln in expense for a real-time profitability of $9.233 mln,, 15% more than your just reported earnings, and you have a year to build that up. So you start the year at 15% growth. A CEO of such a company would be inclined to be a lot more agressive than one who lacks these dynamics. Anyone with strong growth potential will note non-GAAP in order to stress where his business is relative to the reported earnings. So if Steve Jobs stops talking non-GAAP when he's delivering news on earnings then AAPL has a wart.
That makes it a little easier for me to understand.
Gary,
You might be surprised to realize that GAAP, which stands for Generally Accepted Accounting Principles is not a law. The accounting industry follows a code of ethics that incorporates the use of the GAAP for all transactions. You might think that this is a great idea and that it works everything out, but there's been plenty of evidence to suggest that it doesn't always work very well. Just take a good look at all the corporate scandals that we have witnessed on a continual basis.
I'm not saying that GAAP isn't a step in the right direction, but I am saying that it has a ways to go. The FASB oversees accounting practices, and I suppose there is an evolutionary process at work here that we are all witness to, but so far, we continue to see accounting irregularities within corporate America, regardless of the FASB.
With regards to Len's comments on AAPL... from my perspective, I see AAPL as a company that is so much about innovative products that stand above and ahead of the competition. As long as they continue to innovate and release new exciting products that have that magical and seductive quality, I will continue to own the stock. If I see the their products losing their edge, then I will sell the stock.
I believe AAPL will continue to grow, inspite of competition from Android, for example... I think we are going to see surprising growth within their desktop product category, as well as their entire Mac product line. The upcoming releases of the Mac App store as well as their new Lion operating system are going to increasingly integrate and synchronize their mobile operating environment with their desktop operating environment. It's all coming together.
I am about to purchase new computers for my business. We currently only use 13 computers. A few of them are Macs. Moving forward, I am going to replace them ALL with Macs. They are simply better, and they will run Windows as well as MacOS, so it makes sense to get the Mac hardware and have the capability of running both operating systems. I am convinced that I am not alone with this type of decision, and as a result, I expect more growth from AAPL as many companies and individuals purchase more and more Macs.
BTW, I am not buying into any General Motors stock, regardless of what happens with it. I will continue with my significant investment in Ford for the long run.
I appreciate all the explanation you fellows have to offer. As far as AAPL, I see it as a one man show. Without Jobs, I would be afraid of the gamble. Apple makes excellent hardware at the leading edge of technology. I see Apple as a bit too expensive for most businesses to adopt. BP in Alaska bought 100s of Macs in the 1990s. They were soon abandoned by the engineering department. They were just not compatible with the rest of the world. The move was pushed by the fact that so many people had used them in College. I played with the new MacBook Air 13 inch at Best Buy. I may fall victim to Mac-a-mania. That is a dandy piece of hardware. Nothing else in recent years turned me on from Apple. I will wait for the price to drop down a bit.
Whether it is or not, that's certainly how the market sees it. I have a small position in apple, and I don't know if I'll add to it or not. At this point, i probably will not and hope to make a decent profit and bail. I'd hate to be long if something unfortunate were to happen to Jobs.
I think the perception that Apple will struggle without Jobs is not correct. But, whether it is or isn't a true perception... I agree that it's likely the market will spank AAPL shares when Jobs finally goes the wayside, which is inevitable.
I'd be a strong buyer of AAPL after Jobs is gone, and after the market has reacted. When Steve is gone, it won't be long before the geniuses that have been hiding in the background under Steve's shadow, will get their chance to emerge and prove themselves. I am totally confident that there are plenty of smarties at Apple.
In some ways, Jobs holds Apple back. For example, maybe we will finally see a better relationship with Adobe, and the iPhone will be able to play Flash... which it currently can't do in a native form because Steve won't allow it. Apple will do fine without Job's stubborness at the helm.
I agree with your post 100%. The stock would get hammered, then a huge buying opportunity would present itself. No way all of Apples innovation and success is due to one guy and your point regarding Adobe and Flash are spot on.
I think Jobs stubbornness was why they pushed him out years ago. It may have just been bad timing. It is hard to imagine one guy being that important. Like Gates has found people to run his show pretty well. I am with the rest though. When he goes it will be a buying opportunity. As long as Apple stays on the leading edge. And China does not turn on US.
IMO - by the time Jobs reaches retirement age, Apple will reach Microsofts stage, where earnings growth and great hoardes of money are ignored by the market because valuations can no longer double in a short enough period. Now if Jobs health were an issue during Apple's rise than I agree it would be a buying opportunity. Apple seems to be even worse than Microsoft. The former is all Jobs. But Microsoft at least gave you several names besides Gates.
Steve's health might very well be the reason he relinquishes his post... more like his throne. The reason we don't see the other names like we did with Microsoft is because Steve, unlike Gates, is an emperor. There is an abundance of geniuses under his shadow... and we will see that in the future. I think Apple will get even better when Jobs is gone. I really do.
I agree with your asessment. Anyone that thinks Apple pulled this off solely through Jobs is crazy. The brilliance of AAPL's strategy is that it has pulled off a luxury market product (ala the cars we always talked about) but has a market that goes far beyond luxury buyers. Apple products will always be high quality because of closed architecture while Google's products are open to developers that will make its products dirty, less reliable and less sexy. Going to be an 80-20 and 60-40 rule here with Apple garnering 40% of the market and 80% of the profits.
Hello everyone! My wife and I enjoyed visiting MI and MA the past couple weeks.
I have not been following the comments here much during this period. However, I am getting the impression from what little I have read that there is some additional nervousness the past week or so. Personally, I am definitely staying the course. Ultimately, I think the Dow will reach close to 13,000 some time next year. I think that was my prediction from several weeks ago anyway. I know, I know. Some of you are probably thinking, I am pulling that out of my rear end. But honestly, I truly believe that things are going to be considerably better over the next year than most other "prognosticators". For example, I am of the strong opinion that spending by the average consumer will be slowly increasing.
In any case, I bought 50 more shares of AAPL yesterday in my SEP account. I had never before traded individual stocks in this account that was opened about 3 years ago. I also sold the mid caps and bought large caps instead yesterday in this account. Go AAPLE and go large caps!!! Having said all of this, I want o point out that for both accounts combined, I am obviously not betting the farm. If they go to zero, I should still be OK except that if these things go to zero, that would probably mean that the world is about to end and everyone will be in the same predicament and it must also mean that it is very close to "December 21, 2012" .
Glad to see you back Charlie. Still no hint of winter here on the east coast. Today reached the mid 60's in this area and it felt warmer than that.
Couple of things we need to monitor.
China is going to have to raise rates and stop fooling with it's devalued currenvy. Game changing inflation is now starting to happen there as per link below.
Commodity bubble may be breaking down. Oil is showing signs that it can't hold its huge speculation that recently drove up prices. RBOB back to $2.13 now and oil may be headed back into the $70's. We'll see.
With all this going on and the likelihood of firms locking in their gains for the year I'm getting more and more concerned about a year end 10,800 Dow again and a breakdown of commodities.
On the local front NY state has seen a big jump in hiring recently but I had another quarterly meeting with small business and they are still not hiring and can't believe Washington can't get the Bush tax cuts decided. We've put 2 new hires into our budget for next year and passed on 2 others until we know what the tax decision is. But we are having a great year so the tax matter is somewhat lessened for us. Plus a key client just re-upped for 5 years.
Len, you could very well be correct about the stock market in the next few months. However, I am quite confident that this Chinese stuff along with some "bad" news from Europe again is water over the bridge. It will pass and be forgotten sooner or later. Our economy will be growing slowly but methodically next year.
I think this break in the market is a buying opportunity, but I am not going to buy more now since I have more than enough stocks. I will ride this out without too much concern.
You and I seem to have a fair level of agreement regarding our assessment of the market. While you were away on your trip, Len and I both posted our concerns about the market. I posted that in spite of looming issues, I tend to see this latest downturn as a correction rather than anything serious... At this point, I also think that the market is using the latest negative media hype as a catalyst. Quite frankly, the market had run up quite quickly over the last months, and this correction is simply necessary to put things in better balance, IMO.
That said, I am still holding to my original prediction, although starting to look possibly overly optimistic, that the market will trade in a range between 11,250 and 11,500 at the end of this year.
I think it is noteworthy that the just-released revised economic data has shown that our economy actually grew more than originally reported. But, it also turns out that our elected idiots in Washington have also spent more than originally reported... duh... like that's any big surprise.
I tend to agree with you more than Len about the market and increased consumer spending, although when we all originally posted about spending, I agreed with your position that spending would increase but not to the point that you were posting... due to the strains of a crippled housing market which has seriously reduced the ability of consumers to tap into equity, since so much of it has literally vanished.
I am curious if the Obama tax changes could cause investors to sell out of some of their investments before year's end in order to take profits this year at lower tax rates, and therefore avoid future higher tax liabilities on some of their investments. (???) If so, that could potentially place serious downward pressure throughout the rest of the year. Do any of you guys have thoughts or knowledge about this possibility?
BTW, I hope all of you guys have a great Thanksgiving... I am going to attend the Los Angeles Car Show tomorrow afternoon... of course my son can't wait to go... so we'll be there... and we will try to avoid photographers... LOL. Anyway, I'll let you know if I see anything amazing, and I'll certainly check out the most beautiful "models" and "body styles". :shades:
(I might just have to look for Laurasdada's girlfriend at the Nissan or Infinity display... hmmm, wonder how he's doing).
OK... I am going against my own grain here, and reversing myself. I had first thought I would not buy any GM stock, no matter what. But, since the hype surrounding the IPO is over, and GM's share price has come back down, and since today is a bad day for the market in general, I decided to take the plunge... I am now the proud (hopefully) owner of $10K of GM stock.
I already own a ton of Ford, otherwise I would take advantage of its bargain price today.
Other than the GM purchase, I will likely just ride out this correction... same as Charlie. I fully expect it will all get better before too long.
Well, have fun at the show. Remember, Dada's girl is "Dre Mazzenga". Perhaps you can still find her at Infinity but perhaps she migrated to Audi which I believe is at the forefront in style at the moment.
God Bless Laurasdada!
Too bad BMW is in a funk AFAIC but at least the 5'er looks a "ton" better than the bangled era.
Take a look at the Sonata 2.0T for me! best bang for the buck and could teach even the Luxo Lounge mfgers a thing or 2.
Seriously, does anyone know how Laurasdada is doing? I sure hope he will have a Happy Thanksgiving with his family. I miss his incredible posts at the Luxury Lounge Forum from a couple years or so ago.
Happy Thanksgiving to everyone here! I feel confident that 2011 will be good to us.
He occasionally posts in the "Stories from the Sales Frontlines" forum. Last post was in October 2010. He seems to be doing fine and still using that Zaino !!
I would say the leaders of China and Russia have thumbed their nose at our weak dollar and President.
China, Russia quit dollar
St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.
Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.
"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.
The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.
The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.
Problem there is, China is the most overheated (and therefore one of the most risky risky) market in the world, and Russia remains a hopeless mess.
Sure am glad we opened China and gave so much aid to the Soviets, who are still alive and well with Stalputin.
It has nothing to do with Barry, who in turn has nothing to do with the dollar. The greenback has actually gained markedly in the past few weeks as more Eurozone problems are unearthed.
Comments
Other than those two reasons I don't have a clue. I also don't think it is the beginning of a general bond bubble collapse. I am still well ahead with these funds so I am holding pat for now. Anyone have any ideas?
Tag, I am going to take a serious look at Ford.
2013 LX 570 2016 LS 460
The Fed money is going in all the wrong places. Let folks use 50-75% of their money to invest, kill the worthless stimulus programs and let money flow to individuals via tax cuts instead of folks that warp things in their own interest and we may actually get a real recovery with real jobs instead of a jobless Wall street recovery.
http://dealbook.nytimes.com/2010/11/10/where-the-bubbles-are/?scp=1&sq=jesse%20e- - - - - - - - - - isinger&st=cse
Some analysts now believe Ford shares will hit $30, so I guess my prediction of $22-$25 might not be too far off.
Glad to hear you also own Ford shares.
TM
You will join the rest of us here that own Ford shares... even though myself and others bought some of it when it was much, much cheaper... as you have read, I and others here continue to add more of it to our portfolios, especially during any significant dips.
Good luck.
Sorry to hear about those muni bonds.
TM
TM
Him, or anyone else who has run anything of significance in the private sector.
Neighborhood organizing experience will only get you so far. Well, check that -- it'll obviously take you to the Presidency, so long as it's combined with a glib delivery and a good teleprompter, but what happens after that. . .
I absolutely agree that Ford is being run well, particularly when compared to the other two.
That's why I rather have a governor over a senator any day in a presedential election. You need a senator with a lot of experience to have a shot at being a good president. Obama had little senatorial experience and never led anything so how could he have ever been a good president? A governor is used to decisions and has so much more experience at making important ones and is the closes thing we have to a CEO in political positions.
What do you guys think?
TM
Yes... and today is another buying opportunity [Ford] with a significant enough dip, IMO. I have just purchased even more. Even if the market drags this stock down, don't despair. Long-term it should be terrific.
To be frank, I am more concerned about a company like QLIK than a solid company like Ford... especially recently, as it has been struggling quite a bit to hold its own, even when the market was advancing... not a good sign. What's your opinion?
TM
After five largely harmonious meetings in the past two years to deal with the most severe downturn since the Depression, major disputes broke out between Washington and China, Britain, Germany, and Brazil.
Each rejected core elements of Obama’s strategy of stimulating growth before focusing on deficit reduction. Several major nations continued to accuse the Federal Reserve of deliberately devaluing the dollar last week in an effort to put the costs of America’s competitive troubles on trading partners, rather than taking politically tough measures to rein in spending at home.
The result was that Obama repeatedly found himself on the defensive. The disputes were not limited to America’s foreign partners. Treasury Secretary Timothy F. Geithner got into a trans-Pacific argument with one of his former mentors, Alan Greenspan, the former chairman of the Federal Reserve, after Greenspan wrote that the United States was “pursuing a policy of currency weakening.’’ Geithner shot back on CNBC that while he had “enormous respect’’ for Greenspan, “that’s not an accurate description of either the Fed’s policies or our policies.’’
Much of the rest of the world seemed to share Greenspan’s assessment. Moreover, Obama seemed to be losing the broader debate over austerity. The president has insisted that at a moment of weak private demand, the best way to spur economic growth is to have the government prime the pump with cheap credit and government stimulus programs. He quickly found himself in an argument with Prime Minister David Cameron of Britain and Chancellor Angela Merkel of Germany.
http://www.boston.com/news/world/asia/articles/2010/11/12/us_south_korea_trade_a- ccord_not_a_done_deal/
BTW - this is where far right liberals like Pelosi are so completely out of touch with the world.
Who do you believe, Greenspan that many blame for our current crisis or Bernanke who holds the purse strings currently?
http://www.nytimes.com/2010/11/13/business/economy/13bond.html?_r=1&ref=business-
2013 LX 570 2016 LS 460
2013 LX 570 2016 LS 460
No... although I do have a feeling we are experiencing the correction I was recently talking about. It's hard to say with the same certainty that the Dow will rebound enough before the end of the year, but I still firmly believe that it has more upside ahead. That said, I think there are some serious problems looming like dark clouds. We've got real idiots in Washington, both sides of the aisle.
I'm just going to stick with my original prediction... that the Dow will trade in a range between 11,250 - 11,500 at the end of the year.
That's exactly what I said, and so far, I'm sticking to it.
But, I'm admittedly a bit jittery about the situation we are in and in the direction things are going. Essentially our government has spent itself beyond the brink of running out of money, and printing more and more of it isn't going to work. We're all in a heap of doggie doo.
TM
No jobs, no solid rally. Agree on keeping Bush tax cuts and Santa might sleigh the upper end of your range by Midnight of Dec 31st.
Regards,
OW
But Bad for Joe The Investor
In an ironic twist, the shares will hardly be available to the taxpayers who bailed out GM at the issuing price. GM and its investment bankers are doling them out to institutional investors, and even a Chinese automaker. But "Joe Taxpayer" won't be able to invest in GM until after some of the big institutional investors start selling them after they make a big profit in the expected early run-up on the price.
The banks managing the deal are JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp., and Citigroup Inc., each of them recipients of billions of dollars from the $700 billion Troubled Asset Relief Program. E-Trade, Ameritrade, Charles Schwab and other brokers catering to smaller investors were cut out.
http://autos.aol.com/article/gm-ipo/
Watch out GM.....Reality Bites!
Regards,
OW
That makes two of us.
Met with a person today that I have about a 20 year relationship with in acquistions. In my past CFO job I've done 4 deals with him, 3 of which he represented the seller and one in which I did a divisional merger with. He's always chasing me around this time of year to see if myself and partners may want to sell in the next year. He's a guy I deeply respect and is a rarity as he's engaging, gregarious and couples that with very deep anatical skills (IMO the best) in our industry. We are not there yet (probably 12-18 months away) but basically M&A activity is quite robust and strategic multiples have come back to 9X EBITDA and 10-11X EBITDA when you have multiple interested parties. But the fact is the private equity coalitions backing a platform of companies are doing the most buying now.and paying the highest prices as they see a ripe IPO market in 2011/12. That bodes well for the market IMO and I can see you verifying on a Dow 12,000 sometime next year.
We briefly discussed a number of stocks, most notably AAPL. He asked me when I would drop the stock and I noted my moment of weakness. But in the end I said the moment Steve Jobs stops mentioning non-GAAP earnings is the moment I am out. In the end all non-GAAP really represents is your contract base/known minimum revenue stream less your current operating costs. It's your actual profit level in real time. GAAP is either behind it in an increasing order environment or ahead of it in order development that is flat or down. Hence Jobs and others will only note non-gaap when it favors them, usually in a big way. I'm very tiny next to any of these companies but my year end closing non-gaap earnings will be at least 9-10% above the GAAP I report and if one large order comes in it could be 18-20% more. That order will close and whatever quarter it closes in will bring that big discrepancy between non-GAAP and GAAP on a trailing twelve month basis. Non-GAAP is how I look at and value my business for example, if I were selling today. GAAP earrnings and the reliance on them is history now. We need them for financial reporting but no one makes decisions off them anymore. Most businesses are acquiring or making major cost platforms, including R&D, major capex etc based on the strength of current order volume on the very day they are looking at it. I refer to this more as net new business, new orders +price increases minus cancellations. With modern day accounting systems showing actual orders and percentage of pipeline executions is much more crucial than last months P&L on a GAAP basis. So another big yard marker to where stocks are going is to note how offensive looking their R&D, acquistions and capex decisions in real time is. Anyone that cuts back on any of them is a company you want to stay far away from and any that looked strong in the past on that front and became more tepid is also showing coming problems. I think this is one of the reasons folks exited Cisco so rapidly.
Thanks, from someone who (almost) understands the terms but has only the vaguest notion of how to manipulate them properly.
Let's say you have a reported GAAP P&L (GAAP meaning general accepted accounting principles) at the end of this year of 20mln in revenue and 12 mln in expense - so you have EBITDA of 8mln. For many businesses order volume is high in the second and 4th quarters because most companies are on June 30th or Dec 31st year ends. So their expense budgets for the following year are approved in the months just before year end, allowing them to spend in that short time frame. Most folks running departments that have a need will spend quickly before any new forecast reduces their budget 3 or 6 months later. Now lets say that the forward costs of your business are 12.6mln and you just signed 3 orders worth 2mln in the last month of the year, maybe because you have a new product that is in high demand. In the media business and many others - the revenue model is subscriptions. So you recognize revenue on a monthly or quarterly basis. Even in manufacturing you may get a deal for set product volumes over a 12 month period, in effect making it a subscription revenue model. In such a situation only $166K of revenue (1 month) got recognized in your GAAP P&L. It could also be that nothing got recognized as the contract or order may start in the first month of the new year. Looked at from a non-GAAP real time perspective though results are now $21.833 mln in revenue and $12.6mln in expense for a real-time profitability of $9.233 mln,, 15% more than your just reported earnings, and you have a year to build that up. So you start the year at 15% growth. A CEO of such a company would be inclined to be a lot more agressive than one who lacks these dynamics. Anyone with strong growth potential will note non-GAAP in order to stress where his business is relative to the reported earnings. So if Steve Jobs stops talking non-GAAP when he's delivering news on earnings then AAPL has a wart.
Gary,
You might be surprised to realize that GAAP, which stands for Generally Accepted Accounting Principles is not a law. The accounting industry follows a code of ethics that incorporates the use of the GAAP for all transactions. You might think that this is a great idea and that it works everything out, but there's been plenty of evidence to suggest that it doesn't always work very well. Just take a good look at all the corporate scandals that we have witnessed on a continual basis.
I'm not saying that GAAP isn't a step in the right direction, but I am saying that it has a ways to go. The FASB oversees accounting practices, and I suppose there is an evolutionary process at work here that we are all witness to, but so far, we continue to see accounting irregularities within corporate America, regardless of the FASB.
With regards to Len's comments on AAPL... from my perspective, I see AAPL as a company that is so much about innovative products that stand above and ahead of the competition. As long as they continue to innovate and release new exciting products that have that magical and seductive quality, I will continue to own the stock. If I see the their products losing their edge, then I will sell the stock.
I believe AAPL will continue to grow, inspite of competition from Android, for example... I think we are going to see surprising growth within their desktop product category, as well as their entire Mac product line. The upcoming releases of the Mac App store as well as their new Lion operating system are going to increasingly integrate and synchronize their mobile operating environment with their desktop operating environment. It's all coming together.
I am about to purchase new computers for my business. We currently only use 13 computers. A few of them are Macs. Moving forward, I am going to replace them ALL with Macs. They are simply better, and they will run Windows as well as MacOS, so it makes sense to get the Mac hardware and have the capability of running both operating systems. I am convinced that I am not alone with this type of decision, and as a result, I expect more growth from AAPL as many companies and individuals purchase more and more Macs.
BTW, I am not buying into any General Motors stock, regardless of what happens with it. I will continue with my significant investment in Ford for the long run.
TM
Whether it is or not, that's certainly how the market sees it. I have a small position in apple, and I don't know if I'll add to it or not. At this point, i probably will not and hope to make a decent profit and bail. I'd hate to be long if something unfortunate were to happen to Jobs.
I'd be a strong buyer of AAPL after Jobs is gone, and after the market has reacted. When Steve is gone, it won't be long before the geniuses that have been hiding in the background under Steve's shadow, will get their chance to emerge and prove themselves. I am totally confident that there are plenty of smarties at Apple.
In some ways, Jobs holds Apple back. For example, maybe we will finally see a better relationship with Adobe, and the iPhone will be able to play Flash... which it currently can't do in a native form because Steve won't allow it. Apple will do fine without Job's stubborness at the helm.
TM
I agree with your post 100%. The stock would get hammered, then a huge buying opportunity would present itself. No way all of Apples innovation and success is due to one guy and your point regarding Adobe and Flash are spot on.
TM
I have not been following the comments here much during this period. However, I am getting the impression from what little I have read that there is some additional nervousness the past week or so. Personally, I am definitely staying the course. Ultimately, I think the Dow will reach close to 13,000 some time next year. I think that was my prediction from several weeks ago anyway. I know, I know. Some of you are probably thinking, I am pulling that out of my rear end. But honestly, I truly believe that things are going to be considerably better over the next year than most other "prognosticators". For example, I am of the strong opinion that spending by the average consumer will be slowly increasing.
In any case, I bought 50 more shares of AAPL yesterday in my SEP account. I had never before traded individual stocks in this account that was opened about 3 years ago. I also sold the mid caps and bought large caps instead yesterday in this account. Go AAPLE and go large caps!!! Having said all of this, I want o point out that for both accounts combined, I am obviously not betting the farm. If they go to zero, I should still be OK except that if these things go to zero, that would probably mean that the world is about to end and everyone will be in the same predicament and it must also mean that it is very close to "December 21, 2012"
Couple of things we need to monitor.
China is going to have to raise rates and stop fooling with it's devalued currenvy. Game changing inflation is now starting to happen there as per link below.
Commodity bubble may be breaking down. Oil is showing signs that it can't hold its huge speculation that recently drove up prices. RBOB back to $2.13 now and oil may be headed back into the $70's. We'll see.
With all this going on and the likelihood of firms locking in their gains for the year I'm getting more and more concerned about a year end 10,800 Dow again and a breakdown of commodities.
On the local front NY state has seen a big jump in hiring recently but I had another quarterly meeting with small business and they are still not hiring and can't believe Washington can't get the Bush tax cuts decided. We've put 2 new hires into our budget for next year and passed on 2 others until we know what the tax decision is. But we are having a great year so the tax matter is somewhat lessened for us. Plus a key client just re-upped for 5 years.
http://www.bloomberg.com/news/2010-11-22/china-inflation-volcano-may-prove-too-h- - ot-for-controls-after-cash-surge.html
I think this break in the market is a buying opportunity, but I am not going to buy more now since I have more than enough stocks. I will ride this out without too much concern.
You and I seem to have a fair level of agreement regarding our assessment of the market. While you were away on your trip, Len and I both posted our concerns about the market. I posted that in spite of looming issues, I tend to see this latest downturn as a correction rather than anything serious... At this point, I also think that the market is using the latest negative media hype as a catalyst. Quite frankly, the market had run up quite quickly over the last months, and this correction is simply necessary to put things in better balance, IMO.
That said, I am still holding to my original prediction, although starting to look possibly overly optimistic, that the market will trade in a range between 11,250 and 11,500 at the end of this year.
I think it is noteworthy that the just-released revised economic data has shown that our economy actually grew more than originally reported. But, it also turns out that our elected idiots in Washington have also spent more than originally reported... duh... like that's any big surprise.
I tend to agree with you more than Len about the market and increased consumer spending, although when we all originally posted about spending, I agreed with your position that spending would increase but not to the point that you were posting... due to the strains of a crippled housing market which has seriously reduced the ability of consumers to tap into equity, since so much of it has literally vanished.
I am curious if the Obama tax changes could cause investors to sell out of some of their investments before year's end in order to take profits this year at lower tax rates, and therefore avoid future higher tax liabilities on some of their investments. (???) If so, that could potentially place serious downward pressure throughout the rest of the year. Do any of you guys have thoughts or knowledge about this possibility?
BTW, I hope all of you guys have a great Thanksgiving... I am going to attend the Los Angeles Car Show tomorrow afternoon... of course my son can't wait to go... so we'll be there... and we will try to avoid photographers... LOL. Anyway, I'll let you know if I see anything amazing, and I'll certainly check out the most beautiful "models" and "body styles". :shades:
(I might just have to look for Laurasdada's girlfriend at the Nissan or Infinity display... hmmm, wonder how he's doing).
TM
I already own a ton of Ford, otherwise I would take advantage of its bargain price today.
Other than the GM purchase, I will likely just ride out this correction... same as Charlie. I fully expect it will all get better before too long.
TM
God Bless Laurasdada!
Too bad BMW is in a funk AFAIC but at least the 5'er looks a "ton" better than the bangled era.
Take a look at the Sonata 2.0T for me! best bang for the buck and could teach even the Luxo Lounge mfgers a thing or 2.
Still sticking to 11K on the Dow on 12/31/10.
Regards,
OW
Happy Thanksgiving to everyone here! I feel confident that 2011 will be good to us.
2013 LX 570 2016 LS 460
China, Russia quit dollar
St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.
Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.
"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.
The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.
The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.
http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm
Sure am glad we opened China and gave so much aid to the Soviets, who are still alive and well with Stalputin.
It has nothing to do with Barry, who in turn has nothing to do with the dollar. The greenback has actually gained markedly in the past few weeks as more Eurozone problems are unearthed.