Saturday, December 17, 2011

Review of Barron's, Dated 19 December

Having been away for a while and not even having the option to be able to even BUY Barron's left me a little adrift, at least from the conventional front of financial reporting (no CNBC in Peru either).

So, as I started my usual Saturday routines, in which I start up at the far end of our main drag and bing, bing, bing head back towards home running a little errand at each stop along the way.  First errand is at 7-11, where I buy coffee and (typically) Barron's for my reading pleasure Saturday afternoon.

This time I did not even bother looking at the Cover Story until I was at the register to pay: "Outlook 2012", well, that looked promising.

State Street Global Advisors was once again kind enough to publish their Top 10 holding in each of their SPDR ETFs (Page 3, at least in my edition).

Alan Abelson wrote that just as he was getting bullish on gold, it shellacked.  Well, we know that feeling!  He went on to write that more $$$ are going to be spent on the aftermath of the Iraq War (wounded soldiers).  Market Watch guestimates the total cost of Iraq to be $4 - $6 trillion dollars.  Does even $6 trillion matter anymore?  He finishesd by writing about David Rosenberg and Bob Farrell, how they had lunch together and talked over gloom and doom....

"Streetwise" (Jacqueline Doherty and Andrew Bary) quote Lee Quaintance and Paul Brodsky (QB Asset Management): "There will be global hyperinflation that peels the skin off your face."  They sound like they have been reading Zero Hedge...

And just when I think that the staff of Barron's is learning something from ZH, I find a bullish article ("Follow-Up") on GM (in that they say David Einhorn is now an owner).  GM?!  They mention some other car companies as being attractive too (valuation), but NO MENTION of Hyundai...  The article DOES go on to somewhat trash the new Chevy Volt car, but one of my blog's readers bought one and REALLY LIKES THE CAR!  He is an engineer and real smart guy, and has explained many things to me (thanks "DCFusor!").

Christopher Williams writes on bright prospects for Ambev, the Brazilian/American/Belgian beer company.  They now own Budweiser.  They also own Brahma beer (Brazil), which they export to Peru.  The same billboard in Lima is still advertising it as last time I was there.  But, Brahma is just not a good beer, sorry guys...  But, then again, I am not Brazilian...

DVD rental (by kiosk) company Coinstar is talked up in and article by Andrew Bary.  No comment, as I have NO FEEL of this business or company.  He mentions that they are teaming up with Starbuck's to offer "Seattle's Best" coffee from a new kiosk.  Coffee from a kiosk?  I'll stick with 7-11...

Erin Arvedlund ("The Silver Rush at MF Global") writes a focused piece on part of the MF Global mess: namely that the trustee has frozen all silver bars and similar assets while he figures out what to do.  He has proposed selling ALL such assets and distributing the money to those  customers of MF Global.  Erin notes that customers would only get some 72% of the value of such assets sold.  And THAT'S AFTER the price of silver has gone down so much, so any MF Global silver account holders (yes!  They have "warehouse receipts"!  Doesn't matter says the trustee!).  In other words, MF Global paper silver (allocated even!) are getting screwed by not just Corzine, but the trustee as well!  Maybe (as said at ZH: JP Morgan too).  The trustee's name is James Giddens.  Perhaps someone at Zero Hedge would like to find out more about this guy...  Mr. Giddens could not be reached for Erin's story, what a surprise.  Anybody reading this who is a victim of MF Global now may want to pass along your feelings to Mr. Giddens, looks like he needs to, um, hear from the folks...  Hardly mentioned by Ms. Arvedlund was Corzine's testimony before Congress, where he and CME chief Bryan Durkin blamed each other...  One or both are LYING, and BOTH ARE NOT serving their besieged investors...  This should be a lesson to all: if you don't have it in or near your hands, it's not yours!

The Cover Story (2012 Outlook: Buckle Up!) seemed to me to be surprisingly thin on specifics.  Vito Racanelli reviewed 2011 (little change in the Dow).  He gets a few specifics from the 10 investment advisers:
-- PM
-- MCD
-- COST (all these four pay a decent dividend)
-- WAG
-- UNP
-- CTL (a telecom-services provider paying an 8.2% yield, uhh, no thanks Ms. Subramanian!)
-- XEL
Take that for what it is worth...

Lately each time I read "CEO Spotlight" I find I am liking the column ever more.  This week (by Leslie P. Norton) is about Sam Palmisano, the head of IBM, soon to retire.  He has done a great job in fixing up IBM! (Disclosure: I have a tiny holding of IBM stock and it has gone up since I bought it)  Palmisano has a great story, he had his ups and downs as a tough guy when a kid.  When he graduated from Johns Hopkins, he declined to even try out for the Oakland Raiders and just went straight into IBM.  And a great career.  A really wonderful story.  + 1000!

Apple got both a positive review and a negative review in this weekend's edition!

"ETF Focus" (Murray Coleman) mentions that Mr. Alan Zafran wants to buy GLD, you know when the price stabilizes...  LOL...  GLD?  I guess Mr. Zafran dismisses MF Global hypothecating their customers assets (as GLD apparently is allowed to do).  Mr. Zafran works for Luminous Capital, anyone with money there should be asking some pretty tough questions from those guys.

Leslie P. Norton interviews Van Hoisington.  Mr. Hoisington expects the US to go into recession next year [I agree] as well as the rest of the world.  Hoisington mentioned that Operation Twist has helped the banks, including his own investment management firm (how?).  He also mentions the fine book I mention over and over again: Rogoff and Reinhardt's This Time It's Different.  Yet he is a Treasury bond bull, because of the recession threat.  Ahh, I would not put all my eggs into that basket though......

Editor Thomas Donlan is back on the attack!  Go get 'em Tom!  A bad set of proposals from our very own .gov mandating new fuel-economy standards.  He also takes a separate swipe at both parties playing tricks on temporary tax cuts, etc.  Nice bar cartoon on the page facing the Editorial (a bar scene, a customer is on his cell phone and tells the rest that George will be drinking from home today).

In the Market Section the only two gun makers publicly owned (Smith & Wesson (SWHC) and Sturm Ruger (RGR)) are both discussed by Vito Racanelli.  He notes that gun sales are WAY UP (which alert ZH readers already knew).  But, he believes Ruger has a better Balance Sheet and so might be the safer bet.  I do not know the companies well enough to comment.

Randall Forsyth ("Current Yield") forecasts higher Treasury yields, directly opposite of above Mr. Hoisington.   Well, it is perfectably acceptable to have professional disagreements, no foul to either gentleman...

Another good cartoon: the firing squad is preparing to shoot the guy tied to the post, and as one of them offers a cigarette to the poor fellow, they guy says "No thanks, I'm trying to quit."  I have never mentioned the sometimes excellent cartoons I have seen in Barron's, my bad!

Money matters:

-- WTF is going on at the Fed?!  Fed assets were up $69 BILLION  (about 2.3%)!!!
-- M1, M2 and Monetary Base had but tiny changes, not even rounding errors
-- The mighty Peruvian Sol marched UP again vs. the dollar!  Vamos Peru, pues!

Verdict: Barron's this week is a Strong Buy!

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