Category Archives: stocks

Who’s Buying Financials?

Posted on August 14, 2008 by Felix

What adjective would you use to describe someone who kept on buying bank stocks even as they fell and fell and fell? I’m not sure if there’s a word in English for "someone who doesn’t learn from his mistakes", but … Continue reading →

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Apple vs Google

Posted on August 14, 2008 by Felix

Apple is worth more than Google. Huh? This doesn’t make sense to me. Let’s start with the obvious: Google makes more money than Apple does. It had earnings of $10 billion over the past 12 months, compared to $8 billion … Continue reading →

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The Curious Thomson Reuters Share-Price Arbitrage

Posted on August 14, 2008 by Felix

Does anybody out there still believe in the efficient markets hypothesis? If so, I disprove it thus. Thomson Reuters is listed both in the UK and in the US. As CEO Tom Glocer says, "a share in one place is … Continue reading →

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The Short-Selling Ban: A Post-Mortem

Posted on August 13, 2008 by Felix

Floyd Norris gets out his calculator this morning and crunches some numbers on short-selling and stock performance during the now-expired period when the SEC banned naked shorting of 19 financial stocks. As you might expect, there aren’t any obvious conclusions. … Continue reading →

Posted in regulation, stocks | 3 Comments

Falling Stocks: Cheap, or Cursed?

Posted on August 12, 2008 by Felix

John Hempton emails with an insight about Bill Miller: Buying a stock when it falls precipitously is selling volatility. This helps explain Miller’s outperformance over the course of the Great Moderation: by doubling down on his losers, he was selling … Continue reading →

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Frank Quattrone, Whiner

Posted on August 12, 2008 by Felix

Frank Quattrone made his fortune by taking Silicon Valley startups public during the dot-com boom. Even at the time many awkward questions were asked: weren’t most of these companies too small and too young and too unprofitable for a full-scale … Continue reading →

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Did Reg FD Have Unintended Consequences?

Posted on August 1, 2008 by Felix

Heidi Moore has an interesting interview with Vanderbilt professor Robert Whaley, who claims to have found some nasty unintended consequences to the SEC’s Regulation Fair Disclosure, which tried to ensure investors were on a level playing field with respect to … Continue reading →

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How is GM Still Alive?

Posted on August 1, 2008 by Felix

In the world of eye-popping earnings, GM has managed to beat even Exxon Mobil. Exxon made a profit of $11.7 billion in the second quarter; GM has manged to come out with a $15.5 billion loss, or $27.33 a share. … Continue reading →

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Buying Berkshire

Posted on July 30, 2008 by Felix

I’m not really a stock-market kinda guy, but there’s a handful of individual stocks, foremost among them Apple, which seem to be able to transcend financial-asset status and be of interest to a much broader audience, including me. And one … Continue reading →

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Adventures in Technical Analysis, McClellan Oscillator Edition

Posted on July 29, 2008 by Felix

When I dumped on technical analysis last month, one of the more unexpected results was a long email thread with a chap called Jeff Drake, on the subject of something called the McClellan Oscillator. He’s a big fan, while I … Continue reading →

Posted in charts, investing, stocks | 1 Comment

The Unconvincing Rally in Financials

Posted on July 17, 2008 by Felix

Financials are on a roll right now: the XLF index fund, which tracks the S&P financials index, traded as high as $20.89 this morning, exactly $4 or 23.6% higher than where it traded at the same time Tuesday morning. That … Continue reading →

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The Competitive Advantage of Stock Exchanges Without Parking Lots

Posted on July 17, 2008 by Felix

The headline of the day, without a doubt, is at Bloomberg News: Pakistani Investors Stone Karachi Exchange as Stocks Plunge Yes, they really started throwing stones at the physical stock exchange. In Karachi investors today broke windows, threw plant holders … Continue reading →

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The SEC Panics

Posted on July 15, 2008 by Felix

I think it was about the time that the SEC started trying to curtail short selling that I finally decided that we’re in panic mode. The market’s actually flat, as I write this, although Fannie and Freddie are down 20%, … Continue reading →

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The Upside of Falling Bank Stocks

Posted on July 15, 2008 by Felix

Financial stocks are plunging right now: if Fannie and Freddie can be brought to their knees, then no bank is safe. And falling bank stocks are systemically very worrying: the equity cushion is an important part of the way in … Continue reading →

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A Look at Long-Term Stock Valuations

Posted on July 8, 2008 by Felix

Rob Bennett emails to tell me about a handy little tool he’s constructed, which looks at stock valuations and calculates what kind of real return you can expect to get from investing in US equities over the next decade or … Continue reading →

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Market Rumors: Inevitable

Posted on July 8, 2008 by Felix

Andrew Ross Sorkin today tackles the issue of market rumors. He’s with Jamie Dimon, and doesn’t like them: As Schulte Roth said in its note to clients, which include SAC Capital Management and Jana Partners, two big hedge funds, “spreading … Continue reading →

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Why GM Should Embrace Bankruptcy

Posted on July 8, 2008 by Felix

Tom Krisher has a good overview of the travails at General Motors, where the stock is trading at a 50-year low, battered by speculation that the company might end up declaring bankruptcy. Bankruptcy actually seems like a very good idea … Continue reading →

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Chart of the Day: They are the Eggmen

Posted on July 7, 2008 by Felix

This is a chart of the S&P 500, priced in terms of eggs. Notes DeForest McDuff: With the price of eggs going up 75% since 2001, one share of the S&P 500 used to buy as much as 1200 eggs … Continue reading →

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When Pundits Discover the Repo Market

Posted on June 30, 2008 by Felix

If you want to get a good idea of the disconnect between politics and the markets, try looking across the pond, to Will Hutton’s 1200-word jeremiad against hedge funds. Hutton is a highly respected political commentator, but he clearly knows … Continue reading →

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Zimbabwe Datapoints of the Day

Posted on June 24, 2008 by Felix

Comparing Old Mutual’s share price in London and Harare, Josh Giersch concludes that there are now 35 billion Zimbabwean dollars to one US dollar – up from a mere 17 billion on Friday. Which would put annualized inflation, he says … Continue reading →

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Still No Vision at Citigroup

Posted on June 23, 2008 by Felix

Another day, another 6,500 job cuts at Citigroup’s investment bank. (For reference, that’s pretty much exactly the total number of employees that Salomon Brothers had in the early 1990s. Now, it’s just 10% of the investment-banking workforce at Citi.) But … Continue reading →

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Adventures in Technical Analysis, Jim Cramer Edition

Posted on June 23, 2008 by Felix

If you like seeing Jim Cramer get his comeuppance, you’ll love this video. It’s a bit long, but basically on Friday June 13, Cramer told his viewers to "buy buy buy" banks, homebuilders, etc, on the strength of something called … Continue reading →

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The Wealth of Randy Baker

Posted on June 20, 2008 by Felix

Let’s say you’re the CFO of a company which is worth more than $65 a share. You get 200,000 options to buy shares at $30 apiece, and the shares are trading at $52. You could sell the shares immediately and … Continue reading →

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Missed Opportunities, Felix Edition

Posted on June 17, 2008 by Felix

I was teased a lot about my name when I was a kid, but I’ve definitely embraced it now. My instant-messenger icon is Felix the Cat. Two of my favorite wines are Vasse Felix, from Australia, and Cuvée des Félix, … Continue reading →

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The Long Crisis

Posted on June 16, 2008 by Felix

Jesse Eisinger reckons that America is cognitively incapable of understanding a long crisis as opposed to a short one: As a culture, we’ve gotten so good at disseminating and assimilating an idea and then moving on, that we can no … Continue reading →

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