Saturday, September 10, 2011

Barron's Review for This Weekend (Dated Sept. 12)

As in the the past two pieces where I have reviewed Barron's for my readers I once again advise you that it is not possible to do justice to a big paper like Barron's in one article by a junior blogger...

For me to continue to review Barron's, PLEASE send me your feedback!  Hey, I feel like I am howling into the wind here, and that my words are reaching few...


This weekend's issue has a Cover Story about the airline business (Bluer Skies Ahead).  The general tone of the article is that the airlines, despite their many problems, are cheaply valued.  That they are becoming more efficient and able to make some extra money in creative ways (charging for suitcases, etc.).  And that they are making money in most cases (except American, of course the airline we fly on the most).  All of the stocks are down off their recent highs, some WAY down.

The industry is burdened by labor unions and overcapacity (although overcapacity is being worked on as older planes are retired), and further is at the mercy of big cycles of varying fuel costs and a variable economy.

My take is that airlines are for taking trips, not for investing money into right now.

I read somewhere that the airlines have LOST more money in the history of the business than made money (in the aggregate), I invite readers to fact-check that for me.  If that is true, then it seems like a losing business.  Like going to Hollywood as a young adult, hoping to make it in a glamorous industry, you wind up waiting tables instead...  Rather than taking the job as a Chemical Engineer there at DuPont...


Alan Abelson's first two pieces (on how (in)effective Ben's, Barrack's and Republicans' speechifying) are no surprise.  Nothing about any of their performances this week inspired him.  In his second piece he outlines some thinking on why Europe is heading into worse straits, and then it will come and get us.  And equities will suffer accordingly.


Robin Blumenthal writes a nice article (laced with some humor) about her Most Excellent Adventure going off to see an actual gold mine.  She rightly questions, how much can one learn about how much gold is down there even if you visit the mine?  A mine that is not even in production.

She offered a up a great point though: other visitors who have more experience with miners are often good sources of information and often ask GOOD QUESTIONS...

In another article on gold, Neil Martin interviews Martin Murenbeeld (Chief Economist at DundeeWealth) who paints a pretty moderate & normal case of gold bullion being in a long-term bull market (for gold fans like me anyway).

No heavy breathing, no conspiracies.  Increased demand for physical gold, especially from the BRICs.  He sees a 5 - 10 year period of rising prices for all the usual reasons.

Murenbeeld is 67, with over 40 years in the business.  I have no quarrel with anything I saw by him.  Very professional.  Good interview, highly recommended to all of those not following gold (what, at THIS blog?!).


Article on Yahoo: more work needs to be done.
Article on JNJ: things may be looking better under their new CEO.


Breaking news: no Groupon IPO!  I can live with that, as I know a guy who was rudely treated by Groupon people at a job interview.  So, the hell with Groupon!  A little late and a little slow to get your money off the suckers buying IPOs...


In his "D.C. Current" column, Jim McTague shows that both the unions and the U.S. Chamber of Commerce are not going to get what they want re Obama's new $447 bn job initiative.

[R Mix comment: A $447 bn waste of money]


In the MarketWeek section there are articles on the below:

** Europe's woes increase U.S. markets' gloom (who'd of thought of that?)
** Despite low yields, money is STILL going into US bonds ("Current Yield")

The resignation of Juergen Stark as well as investor unease about Greece hit Euroland stocks hard (our stocks then followed suit, but with lower percentage losses).  [R Mix comment: Stark is the 2nd high level German to get OUT of the ECB, I guess they do not want the blame when the storm arrives...]

In the always of interest to me "Commodities Corner" column Anna Raff writes of how the bulk shipping business has been getting BETTER lately, something I did not know.  The benchmark Baltic Dry Index is up over 40% lately.  She writes that some in the business see a good (if bumpy future) for bulk shipping.  [Unless recession hits China...]

Finally my favorite number, the "Total" in the Federal Reserve Data Bank is $2.901 tn, up an insignificant amount.  Three weeks in a row of calm here.  The "Total" doesn't change much until it does...


  1. Robert, I think you're right about the airlines, structurally the ecoonomics have changed due to (a) siphoning off of high end customers to fractional jets (b) loss of customers to teleconferencing, and (c) permantently higher oil prices. Also the UA/CO merger probably completes the consolidation of the industry.

  2. The decline continues this week, but still doesn't have the look of a capitulation/panic.

    Making profile look more like my ZH profile, so you'll remember who I am.. test post.

  3. John, I agree that the airlines are suffering from the siphoning off of high end customers (I know a couple of those types, not one myself though). Teleconferencing and high energy prices I do not know how to factor those in, but both matter. So, I will not even look at any airlines stocks when the time comes for me to buy equities.

    Urban, we are off to just the start you predicted! Your test post came through fine. Welcome!

  4. Robert, I'd never get a chance to read Barrons, but I enjoy your review...any chance you could do the same for zerohedge? I can never keep up with the signal to noise ratio there.
    BTW - unreal pictures from your trip! awesome.

  5. Tim, reviewing Zero Hedge... That is the most interesting idea I have run into for a while yet. I better think it over, LOL...

  6. I think Zerohedge is falling victim to the same disease of all media outlets: volume for the sake of volume. Here's an interesting article about the phenomena:


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