A Demographic Headwind for the U.S. Dollar
July 3, 2008
Cam Hui submits:
What if we had a time machine that could tell you how the world markets and economies are going to behave? We do – it’s called demographics. While this time machine won’t tell you the winner of the Super Bowl in 2015, it will tell us a lot about the probable behavior of world economies, consumer behavior and investment and saving preferences.
We all know about the Baby Boomers in America. The appearance of this cohort has dramatically affected American consumer and investment behavior for the last half of the 20th Century and will do so into the 21st Century.
A Demographic Headwind for the U.S. Dollar
The Dow In Euros
July 3, 2008
J.C. Kommer submits:
The Dow Jones Industrial Average - in Euros - is almost 50% off from 2001:
Thursday Options Outlook: ZION, KEY, JEF, AKS, DIA, RIO, NVDA, VCLK, BIG
July 3, 2008
Rebecca Engmann Darst co-authored this article.
Zions Bancorp (ZION) –Despite welterweight volumes trading on an
abbreviated pre-holiday session, option activity in regional bank suggested
more punishing declines in store when the market resumes trading after the
weekend. Implied volatility is higher across the board and put trading is
elevated on most sector names after Zions Bancorp shares tanked 14% on
talk of its exposure to bad home loans in Arizona and Nevada. This followed
comments from an analyst at Stifel Nicolaus as quoted on Bloomberg.
Implied volatility in Zions Bancorp is up 27% today and a read of the option
activity shows buying at the July 25 and 22.50 strikes, implying further
erosion under these new lows. Other sizable spikes in implied volatility were
observed in Corus Bankshares and Keycorp – while many these companies are
due to report earnings before expiration, explaining some of the positioning
(i.e. Zions Bancorp), the skew to puts has been fairly consistent throughout
the sector.
Thursday Options Outlook: ZION, KEY, JEF, AKS, DIA, RIO, NVDA, VCLK, BIG
03 Jul 2008 13:00:00 - Top 5 Stocks up on Unusual Volume
July 3, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change |
Price % Change |
News | |
| PENN | 2039% |  29.66% |
news | |
| CHDX | 279% | 16.40% |
news | |
| WDFC | 278% | 28.33% |
news | |
| MDRX | 226% | 13.27% |
news | |
| SHLM | 217% | 23.02% |
news | |
|
||||
03 Jul 2008 13:00:00 - Top 5 Stocks up on Unusual Volume
Inflation, at the Core, Is Food and Energy
July 3, 2008
Michael Steinberg submits:
The Federal Reserve claims that it cannot directly control the cost of food and energy, partly because they are pure commodities. It is not until these commodities enter the value added chain that their inflated prices are meaningful. For the purpose of this discussion, I won’t breach the argument as to whether food and energy prices are volatile or just plain up.
Value has to be added to energy through refining and distribution; regardless of whether we are talking about gasoline or diesel for our cars and trucks, or natural gas and electric for our homes and factories. The Fed can easily control the process costs through monetary policy by reducing demand within the US borders. I do not believe the Fed can control the raw cost of energy.
Inflation, at the Core, Is Food and Energy
Blockbuster to reconsider Circuit City plan later?!?!? (BBI, rated SELL)
July 3, 2008
Blockbuster Inc, which abandoned its offer to buy Circuit City Stores Inc this week, may try to acquire the electronics retailer later, the New York Post said Thursday citing insiders.
One source told the paper that Blockbuster "verified the long-term benefits of a deal," and added that a there was a "real opportunity" to cut costs in combining the two chains’ operations.
"Management didn’t really put its case in front of shareholders yet," the source told the paper.
The video-rental company in April disclosed that it had offered to buy Circuit City in February for $6 to $8 a share, or up to $1.3 billion.
However, Blockbuster Chief Executive Jim Keyes had cited "market conditions" as a reason for withdrawing the offer and said the deal was not in the best interests of its shareholders.
Blockbuster to reconsider Circuit City plan later?!?!? (BBI, rated SELL)
BristolMyers Squibb Company (BMY, rated BUY)
July 3, 2008
BMY has paid a dividend of $0.31 per share.
| Analysts’ Recommendation: |
Buy |
| 30 Days Ago: | Buy |
|
|
|
| Analysts’ Target: | $30 |
BristolMyers Squibb Company (BMY, rated BUY)
Japan is cash rich,inflation is picking up which will increase spending (JSC, rated BUY)
July 3, 2008
When one expects deflation,people fail to spend-why buy something today when one can buy the same thing at half the price one month from now.So spending is deferred which is very bad news for consumer oriented industries.What is happening now is a seismic shift-prices are rising in Japan after close to a decade.While this would be disastrous for poor countries,Japan is incredibly rich.It has a trillion dollars tucked away in cash and bonds both of which will lose value with rising inflation.So what would be the course of action for the Japanese -spend the cash to buy stuff today as it will be costlier tommorow+shift the money to equities which would be further increased when the increased consumer spending translates into better earnings.Of course the higher input costs would weigh on earnings but the moot point here is that the Japanese consumer can afford to buy stuff(unlike their Americans or British counterparts).What is needed is a shift in thinking patterns.Of course in the long run they would end up just like the US now,spending money they don’t have on stuff they don’t need.But that is years away from now when one should sell commodities,Japan(everything in my current portfolio) and buy the S&P 500 and the dollar(everything I am short right now-of course GM and FNM will cease to exist,I mean the survivors).
Why buy the JSC and not the EWJ?
Marc Faber advised to buy small caps because they are mostly dependent on the local Japanese economy.Increased spending by the Japanese consumer is what is likely to drive growth.The Japanese exporters which have a high weightage in the major indices would be battered by multiple factors-the rising Yen,reduced global growth and rising input cost.This is not to say that the Japanese won’t buy Toyota cars.They will but the current stock prices are built on too optimisitic earnings forecast which would be revised downwards going forwards.Or in other words EWJ is more riskier than JSC given problems facing global growth.
Why buy the index?
Index investing has beaten stock picking hands down unless of course one is named Warren Buffett or Peter Lynch.But then one has to know what index one has to be in.I hope I am in the right one with this.Besides it would be difficult to find any US listed small cap ADR.
Disclaimer:Any gain anyone makes from this,feel free to give me credit.Any loss is completely your fault.
Japan is cash rich,inflation is picking up which will increase spending (JSC, rated BUY)
200 wk SMA has been broken (UTX, rated SELL)
July 3, 2008
200 wk SMA has been broken (UTX, rated SELL)
Susser… Haven’t heard of it? About time… (SUSS, rated BUY)
July 3, 2008
Susser Holdings Corp. is a company that owns and operates convenience stores throughout the Southwestern United States. As the price of oil continues to rise, many of the large energy companies are divesting their retail stores and focusing on research, development, and most importantly discovering new sources of oil. Exxon Mobil has recently accounced its plans to divest 2,300 retail stores over the next three years. This divestiture of retail stores is where companies such as Susser can gain a competitive advantage in the market place. The company not only makes profits off of the sales of foods, beverages, and gas through its retail stores, but it also distributes gasoline to the unbranded, branded, and its own retail stores. They also install new gasoline station equipment. Susser is unique in that it can provide a “from the refiner to pump” vertical that many other companies cannot. It is similar to The Pantry (PTRY), who does not have the revenue from gasoline distribution and is trading at a multiple of 13.97. With Susser trading at 8.50 with a multiple of 0.15, I think it is a strong play for 2009. Susser Holdings Corporation, together with its subsidiaries, operates convenience stores, and distributes motor fuels in Texas, New Mexico, and Oklahoma. It operates in two segments, Retail and Wholesale. The Retail segment operates stores that offer food, beverages, snacks, grocery, and motor fuel, as well as candies, packaged foods, magazines and newspapers, health and beauty aids, and various non-food items. This segment also owns and operates ATMs, pay telephones, and proprietary money order systems in its stores, as well as provides other services, such as lottery, prepaid telephone cards, wireless services, and car washes. As of December 30, 2007, the company operated 504 stores, including 337 stores operating under the Stripes brand, 160 stores under the Town & Country brand, and 7 stores under the Village Market brand. The Wholesale segment purchases and distributes branded and unbranded motor fuel to the company-operated retail convenience stores, contracted independent operators of convenience stores, commercial users, unbranded convenience stores, and unattended fueling facilities. In addition, the company sells and installs motor fuel pumps and tanks, as well as provides various environmental consulting services, such as hydrocarbon remediation and Phase I and II site assessments. Susser Holdings is headquartered in Corpus Christi, Texas. (Summary was taken from Yahoo Finance).
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