Saturday, April 28, 2012

Review of Barron's -- Dated 30 April

Before starting with anything else, take a look at the debt widget above.  $16 trillion!  Whee!

Now enjoying the normality of our weekends, I am pleased to offer up this Saturday review of Barron's!  This week was a relative busy one, those of you (few!) who know us personally know that "we don't get out much" they say...  Well we did this week (Tuesday night dinner with another couple, the two ladies then went to the opera), Wednesday featured Tai Chi class followed by two episodes of "Dexter" (Season Four, our kid says Season Four is the best, so far very good...), Thursday we saw the new movie "The Three Stooges" (if you liked the show, you'll like the movie), Friday we went to see the Marlins play baseball in their brand new ball park (very nice).  So, to our friends and family who say we don't get out: pffft!

Barron's Cover Story is "Can the Dow Stay Relevant?"  Many know that Dow is an index of 30 stocks, but measure in a peculiar and quite imperfect way.  Stock market pros typically follow the S&P 500, which is better suited for both diversity and for using market value of companies in its index (where the Dow just measures share price, that's it).  Apple and Google are clearly big enough companies to be warranted being in the Dow, but the problems is that their very high share prices would skew the Dow a lot.  And yet, the Dow is known and watched closely.  There is not a simple way out of this contradiction: either the Dow changes to become more relevant (but at the cost of making the index behave differently than in the past), or not making the changes and becoming more irrelevant as time goes by.

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Alan Abelson writes about the woes of Walmart's recent outing of its corruption in Mexico (to get building permits, etc.).  Mexico, corrupt?  Who would have thought of that?  Total bribes paid: $24 million, that's million not those peskier numbers like billions and trillions).  Investigations and lawsuits are coming writes Abelson.

He then goes on to write that Bernanke's position may have eased a bit.  With the weaker than expected economic growth figures just out, it may make it easier for him to do a QE 3 when the time comes.  Briefly, the growth was a lower than expected 2.2%, and spending by consumers went up, so their savings rate went down (to 3.9% vs. 4.5%).

Abelson then finishes with a piece on how bank robberies have gone DOWN in recent years.  It seems that banks keep less cash on-hand (the average bank robbery nets only $8623.00...  Nicholas Colas: "It's tough to imagine a good hacker getting out of bed for the $8623 average take of the modern robber."


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Pump-Price Politics!  A short article by Jim McTague takes some umbrage with president Obama blaming it all on the speculators...


Miriam Gottfried wites another short piece: "Dear Robot: Hire Me!", in which even the Cover Letters going out along with the resume are getting read by computers rather than humans.  The main downside: "Unusual letters -- even strong, creative ones -- might get no extra credit."


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"He Said:"


"Europe is similar to the Soviet Union in the way that the euro crisis has the potential of destroying, undermining the European Union."

-- George Soros

They sure do quote him a lot...

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Michael Santoli writes positive piece on eBay (ticker: EBAY).  I do not have an opinion on eBay.  I will mention, though, that Zero Hedge's "Rocky Racoon" sells numismatic coins on eBay and is happy with their service.

Lawrence C. Strauss writes a bullish piece on Thermo Fisher Scientific (TMO).  They sell a broad spectrum of lab equipment mostly in medical and biotech, but some to general industry.  They also are getting stronger around the world, including local production for local sale in China.  This is a company I might look at.

Mark Veverka writes an optimistic  piece on Oracle (ORCL).  Oracle is kind of late to "The Cloud" and has been slow to move into the space of putting "unstructured data" (think pictures, email, health care records, etc.).  This hgas now changed, although Oracle has competitors with products that have been out a little longer.  Oracle is a company I have long watched.  They are pretty mighty even if it takes them awhile to take up new technologies.  If it's important in "their space", they always seem to get around to it.  In that sense, they are like Google.

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"D. C. Current" author Jim McTague writes the disappointing news that President Obama is the first president to politicize the White House Web Page.  President Clinton first set that one up, and until now it has been free of blatant politicking until now.  Officials at the White House deny that the page is political, it is all "official business."  Sure.

Note to Barron's management:  Jim McTague is one of your very best, give him a raise!


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Tiernan Ray ("Technology Week") writes about Apple (AAPL)...  I guess that he pretty much HAS TO, with Apple being the largest company int he world (by market value).  He writes that the future of the iPhone is a little bit uncertain, but that Apple will likely have continued success.  "Even if growth slows, the larger picture is that Apple is one of the very few companies able to marshal the tremendous resources required to make these phones smaller, faster, lighter, possessed of longer-lasting batteries, and to get them to market everywhere in the world."

He then writes a small but interesting piece on how it is difficult for smaller companies in the smart-phone space to get enough of the ever-sophisticated chips.  Only Samsung Electronics and Apple have that problem solved.  Qualcomm is working on it with their manufacturing partner Taiwan Semiconductor Manufacturing (TSM), the latter to boost capital investment by 42% more than planned for.

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Mark Veverka (busy this week) writes ("Plugged In") that Amazon (which also beat the consensus numbers, and whose stock moved up 15% last week) may have an even better future in that its "Cloud" presence (Amazon Web Services) is moving right along.

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Mike Hogan (The Electronic Investor") writes of two services that provide (free I guess) nice dashboards/portfolio web pages.  Wikinvest (wikinvest.com) and Rover (stock-rover.com or stockrover.com, the word was maybe broken up because it was at the end of the line there).  These two are packed with relevant information and are free of clutter (ads?).  Wikinvest seems more ready for prime time...

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Vito Racanelli has a FABULOUS interview with economic and financial historian Niall Ferguson.

***** (five stars)

America is at risk of losing its pre-eminence by becoming a welfare state.  Ferguson in his latest book (Civilization, The West and the Rest) writes that six "killer apps" made the West what it is today: Rich.  The killer apps are:

-- competition
-- science
-- rule of law
-- modern medicine
-- consumerism
-- the work ethic

The "Rest" are starting to catch on to many of these, and so the West (including America, although his is positive on America -- other than our inability to fix our budget problems) is at risk of being surpassed as the "Rest" start taking on more of those killer apps...   Highly recommended, great reading.

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Editor Thomas Donlan does some great homework in picking apart the completely fictional nature of Social Security and Medicare.  Their trustees have just issued reports on the health of these entitlements.

He goes into much detail, so I will not.  Needless to say "Government Accounting" is so F.O.S. that it ought not even be believed, even approximately.

Donlan: "That's what we call GAAP -- governmentally absurd accounting principles."  Nice!

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In the Market Week section, Vito Racanelli (what, these guys at Barron's seem to run their writers pretty hard?!) writes that because the Bush tax cuts will disappear at the end of 2012 if nothing is done, well that would mean much higher taxes on dividends starting in 2013.  This would obviously be stupid, but it could very well happen.  Racanelli writes that some companies that have a lot of cash might just declare BIG special dividends.  Limited Brands (LTD), DSW (DSW), Stein Mart (SMRT), Carnival (CCL), Saks (SKS), Boyd Gaming (BYD), Campbell Soup (CPB), Buckle (BKE), HCA Holdings (HCA) and Covanta Holding (CVA) are all mentioned as companies that might do this.

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"Barron's Europe Go-to Guy Jonathan Buck" writes ("European Trader") that Spain, yes, Spain might offer long-term value.

Well, maybe so.  But, they have a lot of short-term pain to go through first.  I think you can wait on placing bets in Spain.  Hey, just IMO.  Buck knows more than I do!

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Jamie Miyazaki writes that there re only two ways to invest in Myanmar now ("Asian Trader").  Both companies are out of Singapore and are micro-caps.  I think that you can wait on further developments in Myanmar before putting any money down on it...

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Silver fans may not like Tatyana Shumway's (Commodities Corner") take on silver!  "Silver is the one that doesn't get invited to the birthday party because it bites people; it's nasty." (analyst Sterling Smith).

Trading in "paper silver" is down, and the CME claims to have a 10-year high of 140 million oz in their warehouses.

Demand for Silver Eagles is down some 29.7% from last year (which I believe was very high).

Industrial demand is going down due to the global economy continuing to struggle.

So many people DOWN on silver might make it a contrarian good play.  But, silver IS very volatile...  That's why it does not get invited to the birthday parties...

[Ed. Note: Don't shoot the messenger!]

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I like it when I can when I can summarize a Barron's cartoon with just words.  Cartoonist Hafeez has a guru and his student sitting face-face their on mats on the floor.  The guru says: "For security reasons, your mantra needs to be at least six characters long."  I liked it!

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Nothing in the Classifieds nor in the Insider Buying and Selling stood out this week for me.

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But, the Mighty Peruvian Peruvian Sol keeps stomping on the US Dollar!  This week up a bit over one half of one percent!  At this rate, my next haircut down there will cost me maybe $5.00!

1 comment:

  1. Mr.Robt,

    A word on eBay, since you have nothing for,or against.

    IMHO they are crooks,they are the owners of PayPal,which if memory serves is the way you deal with eBay.

    Sellers have almost no rights on PayPal, and if a Buyer gets a product,and lies about it, then PayPal will FREEZE the eBay account holders assets,and its a fight on from here.

    I have a Nephew who sells 90% silver there (used to constantly),now the fees and charges from eBay & PayPal, are eating up so much of his profits, he can no longer make any money(maybe 5%),and then he still has shipping and handling,insurance,proof of delivery Conf stamp to add to that,postage to pay to ship to a buyer, and if there is ANY glitsch, PayPal freezes the SELLERS account.

    And can and often does back charge your credit card, you must provide one when you set up your PayPal acct.

    Also, legally, Seller has very little recourse with his CC company, and or LE,on fraud issues.

    While others may make a killing on other items, my nephew has stopped selling on eBay, because a Buyer said he did not recive an item.

    Total charges for PayPal freezing his account?, the amount in dispute was $3.00,and they backheld $1,255.00.

    Plus, if your a believer in the 2nd Amendment, you cannot even think of selling any firearms internal parts there.

    Weapons, Pssssh, forget it,been anti gun for MANY years.
    So,I do not feed the enemy,if your a believer in our Founding documents and or Rights neither will anyone else.

    On Silver, the source(you know well from ZH) say's CME has only 30 million ounces on hand,and there is a double inverse head pattern formed on both gold and silver.

    So get ready and keep your powder dry, as we may soon see the last shot at sub $1,600.00 gold,and sub $28.00 silver.

    He expects it to drop maybe for a week,and we are off to the races after that,the EU is the fuse for this,as the Iran attack seems to be off.

    ReplyDelete

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