Sunday, January 8, 2012

Review of Barron's, Dated 9 January 2012

My weekends normally have a fairly steady rhythm, on Saturdays I run errands while my wife does the grocery shopping.  Sundays is doing things around our apartment.  Sometimes we get out, yesterday was one of those days.  I took her to a mall for several hours, and since I knew that I would likely have the time to read Barron's, I bought it and brought it along.

This week's review will be shorter than normal, and even when I review it at more length, it will still be an injustice to a weekly newspaper that is both big and densely packed with information.  The MAIN reason this week's review is short is that my wife is having company today: two of her friends are coming over to speak in Italian.  I of course want know part of that...

Alan Abelson wonders if the little recovery in the stock market was just a "Holiday Pop".  Of more interest to me was his last section, partly about gold (hey what else), in which he quotes from Tom Fitzpatrick of Citigroup. Tom is bullish on gold, he feels that it is on its way to $2400 after a first stop at $1802 ($1802?  why not just leave it at $1800?).  Fitzpatrick likes the technicals of gold here.  Tom goes on to make other predictions:

-- 10-year Treasury yields to an even lower 1.25%, 30-years to 2%
-- the euro down to $1.20, maybe even $1.10
-- the S&P (now at 1277) takes a dive to about 1000 before bouncing back up to about 1200


On Page 12, Barron's quotes George Soros:

"If the common currency were to break down, it will lead to the breakup of the [EU].  This will be catastrophic... for the global financial system."

FWTW (I am not a George Soros fan)


Union Pacific (UNP), Cisco (CSCO), Robert Half (RHI) and Alcoa (AA) are all mentioned favorably in separate articles on each company.  Medifast (MED), a competitor of Weight Watchers, not so much...


Ray Tiernan ("Technology Week") writes on the upcoming Consumer Electronics Show coming soon in Las Vegas.  Last year, a bunch of companies announced their own versions of "tablet computers" to compete with Apple's iPad.  Despite the fanfare, none of them sold very well.  Mighty Apple.

This year, Tiernan notes, may very well have old names like Microsoft and Intel come out with a bang.  Microsoft is likely to sell its new Windows 8 operating system as well as make a bigger push into cellphone OS.  Intel also will introduce "three-dimensional" transistor (no details were given) as well as cell phone chips.


John Steele Gordon writes a guest article on how even in the 1800s the government was a bad venture capitalist (the Erie Railway, to compete with the Erie Canal).  The Erie Railway never worked out well, very expensive, way over budget and much slower to build than anticipated.  The Erie Railway went bankrupt, over and over again.  Kind of reminds me of the California Hi Speed rail project, which will connect Fresno with Bakersfield (later LA and SF) or Solyndra...


The Classifieds had a few gems of note.  You might want to check out "The Most Luxurious Residence in the Caribbean":  Other things there include another midwest farm for sale (1525 acres), internet website domain names for sale, a Colorado ski resort and a "reverse merger" opportunity.


Editor Thomas Donlan writes that even with ethanol subsidies expiring, he sees no end to government distortion of our energy markets.  Sigh...


This weekend's Cover Story is about the money market funds ("Broken Forever"), where we see that even non-insured (FDIC) money market funds are only offering some 0.02%...  This story is in the quarterly Mutual Funds section.


In the Markets Section on Page M5 is an update on Joy Global (JOY, recently moved to the NYSE).  Joy is one of the very few makers of BIG mining equipment and machines.  This is a company I like, and the future looks good for mining machinery makers...


NOTHING of note happening in Europe (!), Asia, the bond markets or even in commodities.

Money stuff:

-- A fairly big drop in Federal Reserve assets (still very close to $3 tn...)
-- No real changes in M1, M2 or the Monetary Base
-- The US$ is stronger vs. everything except: the mighty Peruvian Sol kicking the dollar's teeth!


Verdict: You make the call.


  1. $1802 and $2400 sounds great to me on gold! And that was an amazing presentation on the Caribbean property. Thanks!

  2. Hey Robert, this is so cool, did you see this?


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