Saturday, April 7, 2012

Review Of Barron's -- Dated 9 April

With relatively little to do today (for a Saturday) I went ahead and bought the current issue of Barron's.  I was not optimistic based upon a quick scan of the stories on the front cover, but I DO own stocks and bonds and stuff, so I thought it was my duty as an "Asset Manager" to read it (and then review it).

The Cover Story ("Can Legg Mason Bounce Back?"), part of the Mutual Funds special section looked beyond my scope (boring) so I did not bother reading it.


If any of you BUY Barron's I offer up a challenge!  On the very back page of that special section about the mutual funds, there is an ad from Delaware Investments.  The ad also has one of those almost omnipresent scan-things for smart phones.  Take a look at the scan thing...  If you can tell me what is so unusual about it (vs. other scan-able things like this), by Comment or by email, I will send you the $5.00 you spent (sales tax is on you though), you would only have to tell me where to send it.

So, game on!  (This challenge is only open to people I "know" -- I will not be sending $5.00 to every T, D and H on your email buddy lists if you figure it out and tell them...)


Randall Forsyth takes Alan Abelson's place this week.  He starts:

"QE or not QE?  That is the question."

He goes on to write that the whole employment/unemployment figures sure are confusing (LOTS of people dropping out of the labor force and other variables cloud all of this), and that the FED does not seem to have a clear path before it, sometimes hinting at eventually letting Op. Twist go, or maybe not.  QE3?  Maybe yes, maybe no.

Past performance of recent QEs has not been very rewarding.  More QE would be?  For those of us in the 99%, we will see the price at the pump go up before we would see any benefits.


Michael Santoli ("Streetwise") writes that ConocoPhillips is going to do what Marathon recently did, namely spin-off its LARGE refining and distribution assets off from oil and gas production.


On Page 14 (my edition, "Review & Preview" pages) David Ader writes a short column "The Fruits of Foreclosure", writing of the over 1,000,000 hanging around their homes, not paying, but still in some stage of foreclosure (why your congenial host even KNOWS a guy doing that).  The Robosigning and related scandals have gummed up the works (still).  In Florida it takes an average of 806 days for the foreclosure process to run its course.  In New York (state) it is 1019 days.

Ader estimates that that is $42 billion per year that they can spend on other things...  But, he thinks this will start unwinding pretty fast, and then those foreclosed upon will have to go and rent.  Keep and eye on retail he says...

"He Said":

"A small number of big banks have monopoly status.  To allow private capital to flow into finance, basically we need to break the monopoly."

?  <---  Think about who might have said that, I will reveal the surprising name later...


Barron's economist Gene Epstein says the 1% are already paying their fair share.  First President Obama's relatively famous quotation, then some facts"

"If you make more than $1 million a year, you shouldn't pay less than 30% in taxes."

Well, the the top 1% ("minimum adjusted income" of $350,000 per year) ALREADY IS paying about 30.4%.  Also, the number of people making more than $1 million per year churns, as per IRS data.  Over the past 17 years the IRS has collected the data of the 400 top payers each year.  Only four have made the list all 17 years.  Only 27% of those 400 per year have made the list even TWICE.

Tax rates are lower across the board (2006-2007 vs. 1979-1980), and yet they remain progressive across the board as well (you make more money, you pay a higher rate).


"He Said" answer from above:  Chinese Premier Wen Jiabao, to a national audience.


Author Kenneth Squire writes how you can hop on the Carl Icahn train (via Icahn Enterprises, ticker IEP).  Icahn is famous for being an activist investor, forcing companies to tighten ship...


"CEO Spotlight" is an article I now always read.  This week it is about Larry Merlo, CEO of CVS Caremark (CVS).

Genial and unpretentious, yet adept and detail-oriented.  Read about a Good Guy!


Dimitra DeFotis writes a bullish case for Encana (ECA), the second largest producer of natural gas in North America.

They are looking at producing more more "natural-gas liquids" (light hydrocarbons, sort of like very light oil) as well as exporting LNG.

At some point, a LOT of money is going to be made in the natural gas sector, which has suffered horribly lately.  This might be one of those stocks to buy, and "just throw it into the closet" for a few years...


Jim McTague is a pro who impresses me more-and-more as I read his pieces ("D. C. Current").  It seems President Obama and six of his top aides wanted to reach out to the non Main Stream Media (20 financial journalists whose work appears on influential Internet sites).  It seems that many interested in financial topics don't read the papers much nor watch much TV...  Jim was there at the cozy encounter and reports that it looks like Obama will try to avoid talking about his first two years at the helm.  And blame the Republicans.

Obama and his team handed out "some numbers", which McTague then ran the numbers past Glenn Hubbard (a Romney advisor).

Hubbard sez:

"Having to demomstrate you are in a vigorous recovery likely means that you are not..."

McTague finishes his column:

"Small wonder Obama doesn't want this on paper."  Priceless, a big + 1 to ya Jim!


Tiernan Ray ("Technology Week") had several spicy things to say about Google (GOOG).  The stock has not performed well recently despite somewhat better numbers (from ads, etc.).

What troubles him about Google is that they do not communicate well to their investors.  Apple DOES communicate well with theirs (apparently).  Google IS impressive (I write here on Google's Blogger), but they have a penchant for secrecy and no communicating.  Which bothers some investors (disclosure, I do own not any GOOG nor am I in the market anytime soon).

Tiernan Ray also writes "Our Gadget of the Week", which is the new Nokia / Microsoft smartphone, now available from AT&T for $99 (two year contract).  Windows Phone 7 OS.  Since Windows Phone 8 is just around the corner, he suggests that you might want to wait, as the Nokia Lumia 900 is just not compelling (three stars out of five).


"MarketWatch" (A Sampling of Advisory Opinion) had one interesting column on Greek shipping companies and German ones.

It seems the Greeks (who are VERY familiar with shipping) saw trouble in 2007-08, and pulled in their horns (did not buy more ships).  The Germans did, and now many German owners are now facing bankruptcy...


"Other Voices" was extremely interesting this week (the column is always written by a non-Barron's person).

Johyn R. Siegel says that the USA could (by 2017, not too long from now) could become teh world's largest LNG supplier!

He makes a very good case that if .gov just gets out of the way, this could be $$$$$....


Editor Thomas Donlan writes of the troubles Obama is having with his Obamacare plan.  Donlan thinks it would be best to have the American people decide this one (in November) rather than the Supreme Court.

He makes a good case...


In the Market Week section Vito Racanelli ("The Trader") writes positively of Joy Global (JOY), now in the doldrums because of lower coal production.  Disclosure: I DO own a small position in JOY.

Jonathan Buck ("European Trader") is entrenching his position as Barron's "Europe Go To Guy."  This weekend's column is titled "What Would Warren Buy in Europe?"  He then matches up The Warren's typical things he looks for and rolls approximately 16 candidate companies that Warren "would" buy.

Tatyana Shumway ("Commodities Corner") writes that commodities as a whole had a fairly weak performance as an asset class in the First Quarter.  Of course, some did better than others.  She then goes on to write that the Second Quarter might not be very good either, our friends at Goldman Sachs advised their clients to shidt to Neutral from Overweight in the sector.  Goldman predicts that GOLD will likely go up though...


I am going to make a change starting with this Review.  I will no longer report the economic numbers that I typically do (The FED Total, the various money measurements, etc.).  It looks like these measurements I do not understand and sometimes conflict with each other.

Reader advice to me would be most welcome on this matter.

Of course the above will NOT apply to the Mighty Peruvian Sol, which once again trounces the US$, jumping an impressive 0.37% just last week.  Looks like my haircut the next time I go to Peru will cost me $4.75...  On the other hand, the Sol going up is GOOD for our company (when you net it all out) down there, and of course makes our company worth more in US$ terms.

Two or so years ago the Sol was worth $0.29, now it is $0.3764, up 30%...


Verdict:  Sometimes you can't judge a Barron's by its cover...  Buy!

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