Citigroup, Merrill Lynch and JP Morgan Chase will write down an additional $33 billion in the fourth quarter, predicted Goldman Sachs analysts this morning.
Goldman Sachs economists forecast a 40% cut in Citigroup’s dividend, coupled with an additional $18 billion write-down. Merrill and JP Morgan will write down an extra $11 billion and $3 billion, respectively.
The U.S. dollar fell again yesterday and overnight. The euro climbed back into the $1.45 range, and the pound regained its footing at $1.99. The dollar index now barely clings to a score of 77.
Crude oil prices took another shot at the $100 mark yesterday and this morning, rising over $2, to $97.
Analysyts are expecting today’s Energy Department report to show the sixth straight week of supply decline… coupled with the Turks and Kurds sharing some extra special holiday cheer this week, oil’s back on the rise.
Gold jumped to $825 overnight. “After Monday’s quiet half session,” reports Doug Casey, “gold came charging out of the box in New York yesterday. Combined with the strength showed during the latter part of last week, gold may well be signaling that the year-end position squaring is over and it’s ready to start the next leg up of this bull run. Of course, it didn’t hurt that yesterday also brought renewed weakness in the dollar and a rise in oil prices.”
This morning, as news of Benazir Bhutto’s assassination crossed the wires, we saw a small flight to quality into gold. The attack pushed gold up to $834.
Thursday, December 27, 2007
Wednesday, December 26, 2007
More news for MER
Merrill Lynch grabbed the biggest financial headlines while you enjoyed your yuletide festivities. The bank, like many before it, announced it needed a multibillion-dollar bailout to stay afloat, and consequentially scrambled abroad for SWF capital.
The bank announced it would raise over $6 billion in the near future, $4.4 billion of which will come from the Singaporean sovereign wealth fund Temasek.
Ironically, we were surprised to hear the remaining funds were originated on American soil. U.S. firm Davis Selected Advisors will snatch up $1.2 billion of Merrill common stock, while Outstanding Investments pick GE has agreed to buy most of Merrill’s commercial finance biz, Merrill Lynch Capital.
The bank announced it would raise over $6 billion in the near future, $4.4 billion of which will come from the Singaporean sovereign wealth fund Temasek.
Ironically, we were surprised to hear the remaining funds were originated on American soil. U.S. firm Davis Selected Advisors will snatch up $1.2 billion of Merrill common stock, while Outstanding Investments pick GE has agreed to buy most of Merrill’s commercial finance biz, Merrill Lynch Capital.
Tuesday, December 25, 2007
Brothers! --- Stand up!
Hi Folks, Merry Christmas! Though a tough 2007, we will never give up ourselves!
Saturday, December 22, 2007
Shall we buy Financial Stock now?
“We issue this highly qualified forecast on the basis of poetic irony…and not much else. Last week, Morgan Stanley analyst Betsy Graseck scorned the shares of Citigroup as Morgan's No. 1 short sale recommendation for 2008.
“Morgan's recommendation to sell short Citigroup shares arrived on a day the stock closed almost 50% below its all-time high. Throughout Citi's slow-motion collapse of the last 12 months, Morgan steadfastly maintained some version of a ‘Buy’ recommendation on the stock. In fact, as the nearby chart illustrates, Morgan reiterated its favorable forecast for Citi several times during the stock's drop from $57 a share last December.
“If Morgan's advice was so misguided during Citi's collapse, would the Fates and Furies of the financial markets permit Morgan's advice to be timely and accurate now? Not likely. To the contrary, Ms. Graseck's ‘sell short’ recommendation feels an awful lot like a contrarian ‘Buy’ signal.”
Therefore, we should not take the recommendation by analysts to sell short any financial stocks at current price. Because big money are continuously pumping into the US bank.
UBS, Citigroup, Bear Stearns, Blackstone, Morgan Stanley and now probably Merrill Lynch -- all handing over massive stakes in their businesses to funds controlled by foreign nations. The Free Market Investor’s Chris Hancock has composed a report on the effect of these sovereign wealth fund investments… read it here.
“Morgan's recommendation to sell short Citigroup shares arrived on a day the stock closed almost 50% below its all-time high. Throughout Citi's slow-motion collapse of the last 12 months, Morgan steadfastly maintained some version of a ‘Buy’ recommendation on the stock. In fact, as the nearby chart illustrates, Morgan reiterated its favorable forecast for Citi several times during the stock's drop from $57 a share last December.
“If Morgan's advice was so misguided during Citi's collapse, would the Fates and Furies of the financial markets permit Morgan's advice to be timely and accurate now? Not likely. To the contrary, Ms. Graseck's ‘sell short’ recommendation feels an awful lot like a contrarian ‘Buy’ signal.”
Therefore, we should not take the recommendation by analysts to sell short any financial stocks at current price. Because big money are continuously pumping into the US bank.
UBS, Citigroup, Bear Stearns, Blackstone, Morgan Stanley and now probably Merrill Lynch -- all handing over massive stakes in their businesses to funds controlled by foreign nations. The Free Market Investor’s Chris Hancock has composed a report on the effect of these sovereign wealth fund investments… read it here.
Wednesday, December 19, 2007
The collapse of the housing market is worse than it looks
“Interesting story in the WSJ today about how sellers are offering bigger incentives to buyers. These incentives don't show up as part of the public record, which records housing transactions. But they can be substantial.
“What's happening is something like this: Someone sells a house for $200,000, but gives $20,000 in incentives. For purposes of tracking housing prices, $200,000 is the sale. In reality, of course, the true net price is only $180,000.
“This practice fools all the data-gathering services. Bottom line: Housing prices are falling more than reported.”
“What's happening is something like this: Someone sells a house for $200,000, but gives $20,000 in incentives. For purposes of tracking housing prices, $200,000 is the sale. In reality, of course, the true net price is only $180,000.
“This practice fools all the data-gathering services. Bottom line: Housing prices are falling more than reported.”
Tuesday, December 18, 2007
Agriculture will be a hot spot in 2008
The Chinese government has moved to discourage grain exportation. Encouraged by yesterday’s all-time high in wheat and 34-year high soy prices, officials announced yesterday that China will nix its 13% tax rebate on grain exports, including rice, soy, corn and wheat.
Food prices in China are up over 18% this year, according to the Times Online, and with 1.3 billion mouths to feed, China now seems less focused on selling won ton chips and soy sauce to gaijin.
“The farming situation in China is getting out of control,” , “China has five times the population of the United States, but less than half the farmable land.”
What’s more, each year, soil erosion causes China to lose some 61,000 square kilometers of land -- a plot about the size of West Virginia. If you’re betting on continued agricultural support from the Red Nation… think again.
Food prices in China are up over 18% this year, according to the Times Online, and with 1.3 billion mouths to feed, China now seems less focused on selling won ton chips and soy sauce to gaijin.
“The farming situation in China is getting out of control,” , “China has five times the population of the United States, but less than half the farmable land.”
What’s more, each year, soil erosion causes China to lose some 61,000 square kilometers of land -- a plot about the size of West Virginia. If you’re betting on continued agricultural support from the Red Nation… think again.
Thursday, December 13, 2007
Why does Fed only cut 0.25%?
Fed changes their wording of ‘balanced growth’. They didn’t go so far, but they did say, ‘Economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks.’
Hmmm...doesn’t sound as if growth is balanced with risk/inflation, does it? So why didn’t they just drop the bias? Because, they know that it could ‘spook’ foreign investors. And when foreign investors get spooked, they don’t buy our assets, and when they don’t buy our assets, the current account doesn’t get financed, and when the current account doesn’t get financed...the dollar gets weaker!
However, traders are not happy about that when they all trade on a minute basis today. If you follow their steps as a small investors, probably you could get wiped out soon.
Hmmm...doesn’t sound as if growth is balanced with risk/inflation, does it? So why didn’t they just drop the bias? Because, they know that it could ‘spook’ foreign investors. And when foreign investors get spooked, they don’t buy our assets, and when they don’t buy our assets, the current account doesn’t get financed, and when the current account doesn’t get financed...the dollar gets weaker!
However, traders are not happy about that when they all trade on a minute basis today. If you follow their steps as a small investors, probably you could get wiped out soon.
Wednesday, December 12, 2007
Those economists are right the first time, not easy
According to poll results The Wall Street Journal published this morning, a poll says 38 out of 100 economists think the U.S. economy will be in recession in 2008. That number is up 5% from last month’s poll. The same group of economic thinkers also drastically lowered their GDP forecast for this final quarter of 2007, from an annualized 1.6% down to 0.9%.
Of the economists surveyed, 96% thought the Fed would cut rates today. Most said by 25 points. This time, they were right…
Minutes after the Fed cuts rate, Dows tanks 290 points, indicating that traders are all hoping 50 points cut. Well, let's put this into a short question. Do those traders know what the economic situation is?
Of the economists surveyed, 96% thought the Fed would cut rates today. Most said by 25 points. This time, they were right…
Minutes after the Fed cuts rate, Dows tanks 290 points, indicating that traders are all hoping 50 points cut. Well, let's put this into a short question. Do those traders know what the economic situation is?
Monday, December 10, 2007
US in Recession while China won't
the U.S. economy is already in recession. At least, that’s what Friday’s jobs report suggests.
“The Bureau of Labor Statistics (BLS) used a full suite of gimmicks on the November jobs report,” says John Williams of Shadowstats.com. “It was not credible and showed indications of heavy manipulation aimed at keeping jobs growth positive but still weak enough to pressure the FOMC toward an easing.
“Even so, the BLS reported seasonally adjusted November payrolls up by 94,000, following October's revised 170,000 gain. Unadjusted year-to-year payroll growth fell in November, to 1.04%. The decline in November annual growth, to 1.0%, has historic parallels seen only during recessions.”
This morning, the Chinese government made another attempt to cool down their bubbling economy. The central bank raised the required reserve ratio (RRR) -- the proportion of cash banks are required to keep on hand -- for the 10th consecutive time this year.
Under normal conditions, hiking the RRR has a cooling effect on the stock market. Not so in China. An RRR of 14.5%, the highest in China since the mid-1980s, barely gave buyers pause. The Shanghai Composite (SSE) rose a full 1% on the news.
Despite a hefty fourth-quarter correction, the SSE is still looking to return 90-100% this year.
Investors in Shanghai could barely spit on the sidewalk for the past two years without hitting a highflying stock.
“The Bureau of Labor Statistics (BLS) used a full suite of gimmicks on the November jobs report,” says John Williams of Shadowstats.com. “It was not credible and showed indications of heavy manipulation aimed at keeping jobs growth positive but still weak enough to pressure the FOMC toward an easing.
“Even so, the BLS reported seasonally adjusted November payrolls up by 94,000, following October's revised 170,000 gain. Unadjusted year-to-year payroll growth fell in November, to 1.04%. The decline in November annual growth, to 1.0%, has historic parallels seen only during recessions.”
This morning, the Chinese government made another attempt to cool down their bubbling economy. The central bank raised the required reserve ratio (RRR) -- the proportion of cash banks are required to keep on hand -- for the 10th consecutive time this year.
Under normal conditions, hiking the RRR has a cooling effect on the stock market. Not so in China. An RRR of 14.5%, the highest in China since the mid-1980s, barely gave buyers pause. The Shanghai Composite (SSE) rose a full 1% on the news.
Despite a hefty fourth-quarter correction, the SSE is still looking to return 90-100% this year.
Investors in Shanghai could barely spit on the sidewalk for the past two years without hitting a highflying stock.
Thursday, December 6, 2007
Thursday, November 29, 2007
GS GS wanna dominate the whole Wall Street
The U.S. markets continues its gain for 3 days!… Yesterday big time. The Dow rose 331 points, or nearly 2.6%, to its second-best single-day jump of the year. The S&P 500 followed suit, adding 2.9%. The Nasdaq outperformed nearly all sectors… launching 3.2%.
Coupled with Tuesday’s gains, markets staged their best two-day performance since October 2002.
But Goldman Sachs wants even more… “The increased risk of recession is likely to lead the FOMC to cut its federal funds rate target to 3% by mid-2008,” Goldman Sachs wrote to its investors recently, with a more temperate approach to a similar request made in Cramer’s now infamous tantrum this summer. “We believe such aggressive action is necessary to counteract the effects of the housing downturn and the associated credit crunch.”
The way things are going, their wish is the Fed’s command.
Yet according to ebullient quants at the Bureau of Labor Statistics, everything’s just peachy. Gross domestic product (GDP) in the third quarter grew at an unanticipated rate of 4.9% , they crowed this morning.
That rate beats the government’s own forecast by a full 1% and marks the strongest quarterly economic growth since the same quarter in 2003, and the second-best GDP reading since the height of the tech boom in early 2000.
Peachy. These numbers seem so clearly disconnected from reality… oy. We’ll follow up tomorrow.
Coupled with Tuesday’s gains, markets staged their best two-day performance since October 2002.
But Goldman Sachs wants even more… “The increased risk of recession is likely to lead the FOMC to cut its federal funds rate target to 3% by mid-2008,” Goldman Sachs wrote to its investors recently, with a more temperate approach to a similar request made in Cramer’s now infamous tantrum this summer. “We believe such aggressive action is necessary to counteract the effects of the housing downturn and the associated credit crunch.”
The way things are going, their wish is the Fed’s command.
Yet according to ebullient quants at the Bureau of Labor Statistics, everything’s just peachy. Gross domestic product (GDP) in the third quarter grew at an unanticipated rate of 4.9% , they crowed this morning.
That rate beats the government’s own forecast by a full 1% and marks the strongest quarterly economic growth since the same quarter in 2003, and the second-best GDP reading since the height of the tech boom in early 2000.
Peachy. These numbers seem so clearly disconnected from reality… oy. We’ll follow up tomorrow.
Wednesday, November 28, 2007
don't catch the due rebounce
A couple days ago, I mentioned that when SPY touched 140~141, we might see a local bottom which came true now. However two days' due rebounce is just a short term effect. Be patient!
Financial stocks are oversold, and may be due for a bounce," declares Dan Amoss, editor of Strategic Investment. "But they are not out of the woods yet."
Hmmm....
Dan's assessment seems balanced and reasonable, but we're not sure WHICH part of Dan's message deserves greater weight: the "due for a bounce" part or the "not out of the woods" part.
Financial stocks certainly seem to be due for a bounce. Most technical indicators for the financial sector portray a "deeply oversold" condition. And most gauges of investor sentiment tell a similar tale. To top it all off, most anecdotal evidence seems to be screaming "Buy!"
Financial stocks are oversold, and may be due for a bounce," declares Dan Amoss, editor of Strategic Investment. "But they are not out of the woods yet."
Hmmm....
Dan's assessment seems balanced and reasonable, but we're not sure WHICH part of Dan's message deserves greater weight: the "due for a bounce" part or the "not out of the woods" part.
Financial stocks certainly seem to be due for a bounce. Most technical indicators for the financial sector portray a "deeply oversold" condition. And most gauges of investor sentiment tell a similar tale. To top it all off, most anecdotal evidence seems to be screaming "Buy!"
Tuesday, November 27, 2007
More shoppers but fewer sales
147 million shoppers pillaged stores in the U.S. for their holiday booty over the weekend… up nearly 5% from last year. But even with the added help, sales were down 3.5% from the same period the year before.
"While last year showed a greater emphasis on high-definition televisions," says National Retail Federation (NRF) CEO Tracy Mullin, “this year, consumers were focused on lower-priced doorbusters like digital photo frames, laptops and cashmere sweaters.” The average shopper spent $347.44, down over $10 from last year.
- Nearly 15% of “Black Friday” shoppers were nutty enough to hit stores for those 4 a.m. sales -- up nearly 2% from 2006.
- 1 in 12 consumers have finished their holiday shopping already. On the other hand, 2 out of 2 of your editors started thinking about Christmas about 5 minutes ago and will finish their holiday shopping sometime around 10 p.m. on Christmas Eve.
- Men so far this year have spent an average of $393 shopping; women less… $303.
- The NRF expects holiday sales from now till the end of December to rise 4%, to $474.5 billion -- the slowest growth rate in 5 years. If you’re the betting type, you might still find a few good shorts on retailers this week…
"While last year showed a greater emphasis on high-definition televisions," says National Retail Federation (NRF) CEO Tracy Mullin, “this year, consumers were focused on lower-priced doorbusters like digital photo frames, laptops and cashmere sweaters.” The average shopper spent $347.44, down over $10 from last year.
- Nearly 15% of “Black Friday” shoppers were nutty enough to hit stores for those 4 a.m. sales -- up nearly 2% from 2006.
- 1 in 12 consumers have finished their holiday shopping already. On the other hand, 2 out of 2 of your editors started thinking about Christmas about 5 minutes ago and will finish their holiday shopping sometime around 10 p.m. on Christmas Eve.
- Men so far this year have spent an average of $393 shopping; women less… $303.
- The NRF expects holiday sales from now till the end of December to rise 4%, to $474.5 billion -- the slowest growth rate in 5 years. If you’re the betting type, you might still find a few good shorts on retailers this week…
Monday, November 19, 2007
Dollars under nerve
"They get our oil and give us a worthless piece of paper," Iranian President Mahmoud Ahmadinejad told his OPEC cronies on Sunday. OPEC’s 13-member cartel met over the weekend, and the decline of the dollar was clearly on the minds of its ministers.
"All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency," Ahmadinejad said. "Some said producing countries should designate a single hard currency aside from the U.S. dollar... to form the basis of our oil trade."
“That’s right heathens… 2… $200 a barrel”
"Don't you see how the dollar has been in free-fall without a parachute?" chimed in fellow nutjob and OPEC minister Hugo Chavez. "The empire of the dollar has to end," said he, urging his OPEC brethren to shift to the euro.
Curiously, neither mentioned their own worthless paper currencies during the press conference.
Sunday, November 18, 2007
Do NOT try to catch the BOTTOM
We might see a 3% rebounce next week but just hold it position for short time and quick profit.
Friday, November 16, 2007
Thursday, November 15, 2007
The U.S. and China both released October “retail” numbers
One nation reported 0.2% growth, the other 18.1%… we’ll let you guess which country consumed more.
Here’s a hint from Ian: “That number helps explain a 8% hike in Wal-Mart earnings… and a 6% boost in the stock yesterday.
Foreclosure filings, for example, were up a staggering 30% in the third quarter of ’07 compared to the previous three months. California, Ohio and Florida are still leading the charge, says RealtyTrac.
Of the nation’s 100 largest metropolitan areas, 77 saw a rise in delinquencies in the third quarter. The worst city in the third quarter proved to be Stockton, Calif., where one in 31 households was delinquent. Close behind was Detroit -- 1 in 33.
For what it’s worth, the metro areas least affected included Greenville, S.C., McAllen, Texas and Baton Rouge, La.
Here’s a hint from Ian: “That number helps explain a 8% hike in Wal-Mart earnings… and a 6% boost in the stock yesterday.
Foreclosure filings, for example, were up a staggering 30% in the third quarter of ’07 compared to the previous three months. California, Ohio and Florida are still leading the charge, says RealtyTrac.
Of the nation’s 100 largest metropolitan areas, 77 saw a rise in delinquencies in the third quarter. The worst city in the third quarter proved to be Stockton, Calif., where one in 31 households was delinquent. Close behind was Detroit -- 1 in 33.
For what it’s worth, the metro areas least affected included Greenville, S.C., McAllen, Texas and Baton Rouge, La.
Tuesday, November 13, 2007
Today marks the first day of rally attempt
Today will mark the day one of rally attempt.
Wall Street's funds are quite abundant, no funds, no matter how good the economy falters. In the past few years the A shares. There
Funds and, the poor economy,
On the same day 300 points.
Today, the United States economy changed? No. The difference is that MM has scored cheaper chips. This time of the two
Possible, 1) did not collect enough chips to continue to suppress, 2) chips today eat enough, the next拉高prepared to spend money.
From today's盘面point of view, is obviously not the first, not so easy for retail investors with a fortune.
Yesterday I said that AAPL from 153 to return to the 161 do not need more than three days, today is my estimation is too conservative Rafah.
Get on the half-hour. Today AAPL fundamentals changed?
Stock 10,000 years remaining unchanged and retail eat the meat, drink the blood of small investors. Play option, I play but they Global DRAM Pricing hand, play
Stocks, they now take my没辙.
DOWS will continue to maintain the high end of the judgment because it is external funds too much pull. The money, the stock market was up,
Pieces will acquire Rafah. Why can double A-shares? God is the mother shares set out all the resources of Latin America. Now why Wall Street
That was up? This year's hedge fund their cash flow reached record highs this month. Their past two weeks
Mainly in the short.OMG, when they cover and turn to bullish?
==============================
Statement: This article only representative of my view, does not mean necessarily the case, for reference purposes only.
Wall Street's funds are quite abundant, no funds, no matter how good the economy falters. In the past few years the A shares. There
Funds and, the poor economy,
On the same day 300 points.
Today, the United States economy changed? No. The difference is that MM has scored cheaper chips. This time of the two
Possible, 1) did not collect enough chips to continue to suppress, 2) chips today eat enough, the next拉高prepared to spend money.
From today's盘面point of view, is obviously not the first, not so easy for retail investors with a fortune.
Yesterday I said that AAPL from 153 to return to the 161 do not need more than three days, today is my estimation is too conservative Rafah.
Get on the half-hour. Today AAPL fundamentals changed?
Stock 10,000 years remaining unchanged and retail eat the meat, drink the blood of small investors. Play option, I play but they Global DRAM Pricing hand, play
Stocks, they now take my没辙.
DOWS will continue to maintain the high end of the judgment because it is external funds too much pull. The money, the stock market was up,
Pieces will acquire Rafah. Why can double A-shares? God is the mother shares set out all the resources of Latin America. Now why Wall Street
That was up? This year's hedge fund their cash flow reached record highs this month. Their past two weeks
Mainly in the short.OMG, when they cover and turn to bullish?
==============================
Statement: This article only representative of my view, does not mean necessarily the case, for reference purposes only.
Wednesday, November 7, 2007
Market traded in shorters' view, but it will hold
Friends are so worried about what happen , what happen today?
Several reasons to be considered here,
1:
“The world's currency structure has changed; the dollar is losing its status as the world currency,” said Xu Jian, a Chinese central bank vice director, yesterday. “We will favor stronger currencies over weaker ones, and will readjust accordingly,” confirmed Cheng Siwei, vice chairman of China's National People's Congress, at the same conference.
And that was all she wrote for the U.S. dollar.
While China has yet to formally announce a change in its foreign exchange reserves, the allusion was enough to spook traders. Here’s the breakdown:
Euro: $1.47 -- an all-time high versus the dollar
Pound: $2.10 -- 26-year high versus the dollar
Canadian dollar: $1.10 -- rose almost 2 cents in one day, a new all-time high
Australian dollar -- 93.9 cents -- gained over a cent overnight, to a new 23-year high
Yen: 113 -- gained a full point versus the dollar to 2-month highs
The dollar fell against every other actively traded currency… 16 in all.
Profit-taking has since chased down several of these currencies from their peaks, but as we write, all remain above previous highs.
2:
Oil prices also responded to the increasingly weak dollar, rallying as high as $98 this morning. $100 oil… please… it’s in the bag, baby.
3:
The former largest automaker in the world, GM, announced a staggering $39 billion loss in the third quarter. Shares fell over 5% in premarket trading after the U.S. automaker revealed the second largest quarterly corporate loss for an S&P 500 company…ever.
GM attributed the losses to a somewhat complicated charge involving unused tax credits, as well as mortgage losses from its since divested financial arm, GMAC.
====================
Overall, market will find bottom around 200 ma.
Several reasons to be considered here,
1:
“The world's currency structure has changed; the dollar is losing its status as the world currency,” said Xu Jian, a Chinese central bank vice director, yesterday. “We will favor stronger currencies over weaker ones, and will readjust accordingly,” confirmed Cheng Siwei, vice chairman of China's National People's Congress, at the same conference.
And that was all she wrote for the U.S. dollar.
While China has yet to formally announce a change in its foreign exchange reserves, the allusion was enough to spook traders. Here’s the breakdown:
Euro: $1.47 -- an all-time high versus the dollar
Pound: $2.10 -- 26-year high versus the dollar
Canadian dollar: $1.10 -- rose almost 2 cents in one day, a new all-time high
Australian dollar -- 93.9 cents -- gained over a cent overnight, to a new 23-year high
Yen: 113 -- gained a full point versus the dollar to 2-month highs
The dollar fell against every other actively traded currency… 16 in all.
Profit-taking has since chased down several of these currencies from their peaks, but as we write, all remain above previous highs.
2:
Oil prices also responded to the increasingly weak dollar, rallying as high as $98 this morning. $100 oil… please… it’s in the bag, baby.
3:
The former largest automaker in the world, GM, announced a staggering $39 billion loss in the third quarter. Shares fell over 5% in premarket trading after the U.S. automaker revealed the second largest quarterly corporate loss for an S&P 500 company…ever.
GM attributed the losses to a somewhat complicated charge involving unused tax credits, as well as mortgage losses from its since divested financial arm, GMAC.
====================
Overall, market will find bottom around 200 ma.
Tuesday, November 6, 2007
Maybe it is time to take some profit of gold off table
Gold soared to fresh 27-year highs overnight. In Hong Kong and London, gold rocketed up a staggering $15 and currently trades around $822 for immediate delivery.
Analysts at UBS upgraded their one-month forecast to $850. “With the two external drivers of gold, a weak dollar and strong oil, together conspiring to lift the metal higher,” said UBS analyst Robin Bhar, “we are now in range of a move to the all-time nominal high.”
But what then? “Assuming that $850 trades,” says Bahr, “a scramble for upside could see gold push higher still. But one thing is sure, once the dust settles, gold will likely correct sharply lower.” UBS’ three-month forecast for gold remains the same -- $750.
Analysts at UBS upgraded their one-month forecast to $850. “With the two external drivers of gold, a weak dollar and strong oil, together conspiring to lift the metal higher,” said UBS analyst Robin Bhar, “we are now in range of a move to the all-time nominal high.”
But what then? “Assuming that $850 trades,” says Bahr, “a scramble for upside could see gold push higher still. But one thing is sure, once the dust settles, gold will likely correct sharply lower.” UBS’ three-month forecast for gold remains the same -- $750.
Monday, November 5, 2007
PetroChina is now the world’s biggest comp
The state-owned oil giant raised just short of $9 billion for its IPO in Shanghai. As Chinese markets closed this morning, shares of PetroChina nearly tripled in their first day of trading. Coupled with shares trading in Hong Kong and New York, Shanghai buying sprees vaulted the net worth of this company to… sit down for this…
Over $1 trillion.
That is DOUBLE the market cap of Exxon Mobil, the world’s second largest company. When trading closed on Friday, PetroChina was worth $456 billion, not too far behind Exxon’s $488 billion. But… throw in a few million foaming Chinese investors… poof! A trillion bucks.
How does it fare in the earnings category? Dare we ask? PetroChina isn’t even in the top 50 of global companies.
sell PTR, we recommend to sell and its PE ratio over 60 can't be justified in any perspect while we think the reasonable one should be around 25.
Over $1 trillion.
That is DOUBLE the market cap of Exxon Mobil, the world’s second largest company. When trading closed on Friday, PetroChina was worth $456 billion, not too far behind Exxon’s $488 billion. But… throw in a few million foaming Chinese investors… poof! A trillion bucks.
How does it fare in the earnings category? Dare we ask? PetroChina isn’t even in the top 50 of global companies.
sell PTR, we recommend to sell and its PE ratio over 60 can't be justified in any perspect while we think the reasonable one should be around 25.
Saturday, November 3, 2007
The sell-off should bring our caution
The sell-off after the Fed-meeting already catch our attention. The information are mixed so far. Several big names got hammered, such as GS, ISRG, IBM while the technolgy stock rallys during the market sell-off. The breakout of msft leads GOOG, BIDU 's really into new high. However this action normally means market may see another round of sell-off before the year end rally starts.
We should be caution on the early next week.
We should be caution on the early next week.
Wednesday, October 31, 2007
Year End rally will start soon, get on and tight belt!
Today after the Fed announce the 0.25 point cuts, a number that market has been waiting for, all the indexs shoot higher and higher. The Earning of Mastercard(MA)
lifts the whole financial sector that promote market from tanking after the news releases.
In our view, market rally will come at any time.
The rate cut fever has gripped even the best financial commentators
Gross called for a staggering 1.25% rate cut in his monthly musings yesterday, taking a big honking gulp of Kool-Aid while writing.
“Mortgage write-offs, credit card losses and increasing defaults on small business loans,” explains Gross, “will squeeze bank balance sheets and income statements for the next several years. That pressure in turn will result in more conservative lending practices, which will induce not a contraction in credit growth, but a noticeable slowdown.
“An increasingly recessionary-looking U.S. economy will likely require 1% real short rates and 3.5% fed funds in order to stabilize a potential growth contraction in lending not witnessed since the early 1970s or, to be honest, Roosevelt’s Depressionary 1930s. We can only hope that Bernanke, Paulson and their cohorts recognize the danger.”
Where’s Greenspan when you need ’im, eh? Oh yeah, he wouldn’t be much help in this situation, would he? On his book tour recently, Greenspan told USA Today he doesn’t think Bernanke has the luxury of cutting rates during every global crisis he will face… because if he does, the dollar will burn.
lifts the whole financial sector that promote market from tanking after the news releases.
In our view, market rally will come at any time.
The rate cut fever has gripped even the best financial commentators
Gross called for a staggering 1.25% rate cut in his monthly musings yesterday, taking a big honking gulp of Kool-Aid while writing.
“Mortgage write-offs, credit card losses and increasing defaults on small business loans,” explains Gross, “will squeeze bank balance sheets and income statements for the next several years. That pressure in turn will result in more conservative lending practices, which will induce not a contraction in credit growth, but a noticeable slowdown.
“An increasingly recessionary-looking U.S. economy will likely require 1% real short rates and 3.5% fed funds in order to stabilize a potential growth contraction in lending not witnessed since the early 1970s or, to be honest, Roosevelt’s Depressionary 1930s. We can only hope that Bernanke, Paulson and their cohorts recognize the danger.”
Where’s Greenspan when you need ’im, eh? Oh yeah, he wouldn’t be much help in this situation, would he? On his book tour recently, Greenspan told USA Today he doesn’t think Bernanke has the luxury of cutting rates during every global crisis he will face… because if he does, the dollar will burn.
Sunday, October 28, 2007
Big surprise… The dollar furthered its record lows overnight.
The euro traded to a new high within the $1.43 handle, now just a few pips from $1.44. The British pound dug deeper into $2.05, and the yen stayed the same, at 114.
The dollar index came to rest at 77.2, just shy of the all-time low set on Monday.
Gold soared to new 28-year highs overnight. The metal’s steady rise this week left it at $775 this morning, its latest high.
Crude oil went through the roof late yesterday and overnight. The world’s energy closed at a record high of 90.46 in the States, and overnight futures climbed as high as $92.22.
The dollar index came to rest at 77.2, just shy of the all-time low set on Monday.
Gold soared to new 28-year highs overnight. The metal’s steady rise this week left it at $775 this morning, its latest high.
Crude oil went through the roof late yesterday and overnight. The world’s energy closed at a record high of 90.46 in the States, and overnight futures climbed as high as $92.22.
Thursday, October 25, 2007
Overnight, the dollar lost ground against most of its major adversaries.
The euro sprung back to $1.43 this morning. The pound regained $2.05. The yen held still at 114. And the Canadian loonie gripped $1.03 tight like a 4-year-old caught nicking a Fruit Roll-Up before breakfast.
the idea behind the weaker dollar is that you wanna invest your money into company that have other currency exposure, Like AAPL, POT, MSFT...
If the Fed cuts rate, we will see hair trimmed of dollar again. Gold will break up into $800. Remember when we started to mention gold play, it was 710. Now close at 766. Buy Gold stock (AZK,GG) or gold ETF (GLD).
the idea behind the weaker dollar is that you wanna invest your money into company that have other currency exposure, Like AAPL, POT, MSFT...
If the Fed cuts rate, we will see hair trimmed of dollar again. Gold will break up into $800. Remember when we started to mention gold play, it was 710. Now close at 766. Buy Gold stock (AZK,GG) or gold ETF (GLD).
Tuesday, October 23, 2007
Of the world’s biggest companies, eight of the top 20 are Chinese, the most of any country
Pls keep focusing on Chinese ADR in USA.
The U.S. stock market bubble was about to mutate into a housing and consumption bubble in the U.S. and that China was likely to be the next destination for the world’s capital. The chart below shows in bas-relief how evident this migration has been:
Since 1999, the U.S. has lost 50% of its spaces on the top 20 list and about a third of its global market cap.
Compared to their total absence on the same list in 1989 and 1999, China’s growth appears all the more incredible. Companies like PetroChina(PTR), China Mobile and Bank of China are well within striking range of the top three positions. Also, don't forget China life insurance(LFC).
Sunday, October 21, 2007
Saturday, October 20, 2007
The Ghosts of October 19
I read a good article, share with folks here.
===================
The Ghosts of October 19
By Mark Skousen
Certain dates stand out in my life. One is October 19, 1987, the day the Dow Jones Industrial Average suddenly collapsed by 22%. That day is also significant because it happened to be my 40th birthday. Ever since then, I've been known as the "crash baby."
Most of my broker friends and investors were in a somber mood that Monday evening, stunned by the 509 point drop in the Dow. I was ebullient because by some fortune I sent out a "flash alert" on September 8, 1987, six weeks before the crash, telling my subscribers: "The coming credit squeeze could devastate the stock and bond markets; get out now! I advise you to sell all stocks and long-term growth mutual funds."
That evening, my wife had arranged a surprise birthday party. I had a lot of fun, but the party ended early as friends rushed home to check the financial news overseas.
Was the crash a portend of something more ominous, another Great Depression perhaps? After all, a similar stock market crash occurred in October, 1929, followed by the worst economic collapse in world history.
One of my technical trader friends was deeply worried. His trading system was based on moving averages of stock indexes like the Dow. At the New Orleans investment conference a month later, he showed a chart of the Dow with a "triangle" formation. He pointed to the triangle. "If the Dow breaks below the triangle formation," he warned, "the Dow could fall another 1,000 points or worse!"
I thought it was all a joke, but he was dead serious. He staked his reputation on his prediction. A few days later, the Dow started falling again, ominously below the point of the triangle. Yet, miraculously, the Dow never crashed. In fact, it rallied to new highs. My friend soon ended his newsletter, shamed perhaps by his failure to predict the next Great Depression.
As a macro-economist, I look at the economic fundamentals before making a prediction. And, in the case of the October, 1987, crash, the economic fundamentals looked to me to be largely sound. Business across the nation was doing well, both before and after the crash. The economy was growing, inflation was under control, and interest rates were relatively stable. So while I anticipated short-term trouble, I thought the long-term outlook looked good, and it wasn't long before I started recommending stocks again.
So why did the Dow Jones Industrial Average collapse by 22% on October 19, 1987?
Historians point to several factors, such as comments by the Treasury Secretary about a weak dollar and trade deficit, but I believe the crash can be blamed in large measure on an impulsive "Mr. Market" and the technical traders who encouraged mindless trading based on a line on a chart rather than business fundamentals. Too many investors were listening to my friend with the charts.
In the summer of 1987, telephone-switching between no-load mutual funds was all the rage, based solely on a technical charting system of a 39-week moving average. Mutual fund investing was extremely popular, to the point where you
couldn't go through a meal at home in the evening without a broker calling and telling you about the latest mutual fund. Few investors knew or cared about the companies the fund managers were buying. Just follow the line on a chart showing the mutual funds were moving higher. The brokerage business had become so successful that a book was released that year written by a Merrill Lynch broker entitled No Experience Necessary: Make $100,000 a Year as a Stockbroker (Simon & Schuster, 1987). How? By buying and selling mutual funds.
As a result, the market got way ahead of itself, with everyone following the same charts. Then when the price of the mutual funds went below their 39-week moving averaging, on the Friday before the Monday crash, everyone sold at once. The October 1987 crash was purely a technician's folly, and with the business fundamentals sound, the market quickly recovered within a few weeks.
As we celebrate the 20th anniversary of the 1987 crash, the media has recently asked me repeatedly this question: What factors could cause the stock market to collapse again? Or are we immune to another financial disaster?
Here is my answer: There are several potential financial crises out there that could cause the market to suddenly turn south. At the beginning of this year, I attended the American Economic Association meetings in Chicago, where I was fortunate to attend a luncheon with Fed chairman Ben Bernanke. He wouldn't take questions about current Fed policy, including interest rates, but he spoke volumes when he gave his formal talk to us at the luncheon. Ostensibly, the topic was "Central Banking and Bank Supervision in the United States," but reading between the lines, it was clear to see that Bernanke was worried about a financial storm ahead.
In his speech, he used the terms "crisis," "risk," "panic," "threats," "stress," and similar words at least 36 times.
Bernanke said that the Fed has set up a "crisis center" to handle potential global financial problems - to anticipate them, and to deal with them if they occur. What are the possibilities?
* A dollar collapse, like the one Paul Volcker suggested would happen in the next few years. (We're certainly moving in this direction.)
* A non-dollar currency crisis in Asia, Europe or Latin America (shades of the 1997 Asian currency crisis).
* A housing crash and foreclosure crisis (we suffered one this summer).
* A major terrorist attack on a financial center, such as New York, London or Tokyo.
* A sharp unexpected rise in inflation.
Bernanke revealed the various policy measures the Fed might take in response to a crisis: buying government bonds, providing overdrafts and other short-term credits to banks, facilitating currency swaps (to boost the dollar), and "securities lending," that is, lending money to institutions to buy stocks.
In sum, the answer is always the same: inject liquidity into the system to keep the stock market from collapsing. So far it's worked like a charm. Alan Greenspan applied this bailout policy several times during his 19-year tenure -- during the 1987 crash, and 1997 Asian currency crisis, the Y2K computer threat, and the 2001 terrorist attacks. (His new book "The Age of Turbulence" addresses all these events in detail.)
Bernanke had his first test this past summer with the mortgage credit crunch. The world's markets were on the verge of collapse on August 18 when the Fed intervened...by injecting liquidity.
But what if the same old medicine stops working, and the Fed injects liquidity, but the dollar and the stock markets keep on falling? There's only one protection: buy gold! And buy the products gold will buy. And that raises the specter of hoarding and the collapse of the world monetary system. And that leads to social unrest and...the institution of new emergency powers by the Federal government.
===================
The Ghosts of October 19
By Mark Skousen
Certain dates stand out in my life. One is October 19, 1987, the day the Dow Jones Industrial Average suddenly collapsed by 22%. That day is also significant because it happened to be my 40th birthday. Ever since then, I've been known as the "crash baby."
Most of my broker friends and investors were in a somber mood that Monday evening, stunned by the 509 point drop in the Dow. I was ebullient because by some fortune I sent out a "flash alert" on September 8, 1987, six weeks before the crash, telling my subscribers: "The coming credit squeeze could devastate the stock and bond markets; get out now! I advise you to sell all stocks and long-term growth mutual funds."
That evening, my wife had arranged a surprise birthday party. I had a lot of fun, but the party ended early as friends rushed home to check the financial news overseas.
Was the crash a portend of something more ominous, another Great Depression perhaps? After all, a similar stock market crash occurred in October, 1929, followed by the worst economic collapse in world history.
One of my technical trader friends was deeply worried. His trading system was based on moving averages of stock indexes like the Dow. At the New Orleans investment conference a month later, he showed a chart of the Dow with a "triangle" formation. He pointed to the triangle. "If the Dow breaks below the triangle formation," he warned, "the Dow could fall another 1,000 points or worse!"
I thought it was all a joke, but he was dead serious. He staked his reputation on his prediction. A few days later, the Dow started falling again, ominously below the point of the triangle. Yet, miraculously, the Dow never crashed. In fact, it rallied to new highs. My friend soon ended his newsletter, shamed perhaps by his failure to predict the next Great Depression.
As a macro-economist, I look at the economic fundamentals before making a prediction. And, in the case of the October, 1987, crash, the economic fundamentals looked to me to be largely sound. Business across the nation was doing well, both before and after the crash. The economy was growing, inflation was under control, and interest rates were relatively stable. So while I anticipated short-term trouble, I thought the long-term outlook looked good, and it wasn't long before I started recommending stocks again.
So why did the Dow Jones Industrial Average collapse by 22% on October 19, 1987?
Historians point to several factors, such as comments by the Treasury Secretary about a weak dollar and trade deficit, but I believe the crash can be blamed in large measure on an impulsive "Mr. Market" and the technical traders who encouraged mindless trading based on a line on a chart rather than business fundamentals. Too many investors were listening to my friend with the charts.
In the summer of 1987, telephone-switching between no-load mutual funds was all the rage, based solely on a technical charting system of a 39-week moving average. Mutual fund investing was extremely popular, to the point where you
couldn't go through a meal at home in the evening without a broker calling and telling you about the latest mutual fund. Few investors knew or cared about the companies the fund managers were buying. Just follow the line on a chart showing the mutual funds were moving higher. The brokerage business had become so successful that a book was released that year written by a Merrill Lynch broker entitled No Experience Necessary: Make $100,000 a Year as a Stockbroker (Simon & Schuster, 1987). How? By buying and selling mutual funds.
As a result, the market got way ahead of itself, with everyone following the same charts. Then when the price of the mutual funds went below their 39-week moving averaging, on the Friday before the Monday crash, everyone sold at once. The October 1987 crash was purely a technician's folly, and with the business fundamentals sound, the market quickly recovered within a few weeks.
As we celebrate the 20th anniversary of the 1987 crash, the media has recently asked me repeatedly this question: What factors could cause the stock market to collapse again? Or are we immune to another financial disaster?
Here is my answer: There are several potential financial crises out there that could cause the market to suddenly turn south. At the beginning of this year, I attended the American Economic Association meetings in Chicago, where I was fortunate to attend a luncheon with Fed chairman Ben Bernanke. He wouldn't take questions about current Fed policy, including interest rates, but he spoke volumes when he gave his formal talk to us at the luncheon. Ostensibly, the topic was "Central Banking and Bank Supervision in the United States," but reading between the lines, it was clear to see that Bernanke was worried about a financial storm ahead.
In his speech, he used the terms "crisis," "risk," "panic," "threats," "stress," and similar words at least 36 times.
Bernanke said that the Fed has set up a "crisis center" to handle potential global financial problems - to anticipate them, and to deal with them if they occur. What are the possibilities?
* A dollar collapse, like the one Paul Volcker suggested would happen in the next few years. (We're certainly moving in this direction.)
* A non-dollar currency crisis in Asia, Europe or Latin America (shades of the 1997 Asian currency crisis).
* A housing crash and foreclosure crisis (we suffered one this summer).
* A major terrorist attack on a financial center, such as New York, London or Tokyo.
* A sharp unexpected rise in inflation.
Bernanke revealed the various policy measures the Fed might take in response to a crisis: buying government bonds, providing overdrafts and other short-term credits to banks, facilitating currency swaps (to boost the dollar), and "securities lending," that is, lending money to institutions to buy stocks.
In sum, the answer is always the same: inject liquidity into the system to keep the stock market from collapsing. So far it's worked like a charm. Alan Greenspan applied this bailout policy several times during his 19-year tenure -- during the 1987 crash, and 1997 Asian currency crisis, the Y2K computer threat, and the 2001 terrorist attacks. (His new book "The Age of Turbulence" addresses all these events in detail.)
Bernanke had his first test this past summer with the mortgage credit crunch. The world's markets were on the verge of collapse on August 18 when the Fed intervened...by injecting liquidity.
But what if the same old medicine stops working, and the Fed injects liquidity, but the dollar and the stock markets keep on falling? There's only one protection: buy gold! And buy the products gold will buy. And that raises the specter of hoarding and the collapse of the world monetary system. And that leads to social unrest and...the institution of new emergency powers by the Federal government.
Friday, October 19, 2007
Thursday, October 18, 2007
If you have ever remember the "neuclear bomb" we mentioned?
We first talked about this in our older gold investment idea post
China sold 9 billion bond reduction at a 5-year high
Times amiable (backchina.com) The Treasury Department yesterday released data indicating that China, Japan August reduction of the speed of both the United States government bonds hit a new high at least five years, of which China's bond holders scale of the month decreased by 2.2% about 9 billion US dollars to 400 billion US dollars, set since April 2002 has been the fastest speed. The market, the impact of Subordinated Debt crisis, the dollar assets are being since the Russian debt crisis of 1998 the largest wave of selling.
According to the Ministry of Finance revealed that the United States, in August, in July revised data emerged 19.5 billion US dollars inflow of funds after the United States sold a net asset markets (including bonds, notes and stock) reached 69.3 billion US dollars. August capital outflows exceeded March 1990 21.2 billion US dollars the highest on record.
Japan's reduction of China's more than significant, August bond holders size decreased 4% to 586 billion US dollars, reducing the speed record since March 2000 high; China Taiwan is a decrease of 8.9% to 52 billion US dollars, setting 10 since 2000 , a new high since.
China sold 9 billion bond reduction at a 5-year high
Times amiable (backchina.com) The Treasury Department yesterday released data indicating that China, Japan August reduction of the speed of both the United States government bonds hit a new high at least five years, of which China's bond holders scale of the month decreased by 2.2% about 9 billion US dollars to 400 billion US dollars, set since April 2002 has been the fastest speed. The market, the impact of Subordinated Debt crisis, the dollar assets are being since the Russian debt crisis of 1998 the largest wave of selling.
According to the Ministry of Finance revealed that the United States, in August, in July revised data emerged 19.5 billion US dollars inflow of funds after the United States sold a net asset markets (including bonds, notes and stock) reached 69.3 billion US dollars. August capital outflows exceeded March 1990 21.2 billion US dollars the highest on record.
Japan's reduction of China's more than significant, August bond holders size decreased 4% to 586 billion US dollars, reducing the speed record since March 2000 high; China Taiwan is a decrease of 8.9% to 52 billion US dollars, setting 10 since 2000 , a new high since.
Tuesday, October 16, 2007
Countrywide CEO Angelo Mozilo is bracing his portfolio for further CFC bloodshed.
Here’s the rundown of his trading activity last week:
That’s about $16 million in stock value for Mozilo. If his portfolio allocation is any indication of CFC’s future performance, look out below. We wouldn’t be surprised to see another round of layoffs this week.
On the other hand, if you’re holding puts,congratulation!
Thursday, October 11, 2007
Gold rebounces while market tanks today
Gold continued its rebound overnight, trading in London all the way up to $748 for immediate delivery -- a brand-spanking-new 27-year high. Only one other time in history has gold been this expensive. Also, as we noted last week, never has gold been able to sustain this high of a range for this long…
A good sign?
But the mkt sells off at the late trading today because a major Wall Street bank lowered its sales expectations for Chinese Internet company Baidu.com. Recently this company, together with other technical stocks, shows a strong yet extended rally with about 70% gain in past month. The pull back caused the sell off in the tech sector which also lead to big market pullback. However, tech sector just rebounce from their low on August, we view opportunity for the correction in this sector.
A good sign?
But the mkt sells off at the late trading today because a major Wall Street bank lowered its sales expectations for Chinese Internet company Baidu.com. Recently this company, together with other technical stocks, shows a strong yet extended rally with about 70% gain in past month. The pull back caused the sell off in the tech sector which also lead to big market pullback. However, tech sector just rebounce from their low on August, we view opportunity for the correction in this sector.
Tuesday, October 9, 2007
Money source for our retirement account
“China's got a massive plan to build many more nuclear power plants -- $50 billion and 32 plants by 2020,” notes Mayer. “The ‘whisper’ number of 300 more by the middle of the century is even more mind-blowing.”
Despite China’s rapidly growing appetite for oil (now second only to the U.S., as we reported yesterday ), the red nation is far behind on a nuclear scale. Only 2.3% of the country’s electricity is derived from nuclear power. Compared with 20% here in the U.S. or an incredible 80% in France…China’s got a long way to go.
“Given what China's demand for other commodities has done for the prices of those commodities, we should take note of its new surge into nuclear power. It would seem to bode well for the price of uranium and the profits of those who sell it.
“Even if uranium prices doubled over the next few years, nuclear energy would remain an extremely competitive energy source. Eventually, of course, new uranium mines will come online. And eventually, of course, the price of uranium might retreat. But so what; the price might soar in the meantime, especially because demand seems certain to increase sharply.”
go check the Uranium stock on the google finance if you are searching sth for your IRA account.
Despite China’s rapidly growing appetite for oil (now second only to the U.S., as we reported yesterday ), the red nation is far behind on a nuclear scale. Only 2.3% of the country’s electricity is derived from nuclear power. Compared with 20% here in the U.S. or an incredible 80% in France…China’s got a long way to go.
“Given what China's demand for other commodities has done for the prices of those commodities, we should take note of its new surge into nuclear power. It would seem to bode well for the price of uranium and the profits of those who sell it.
“Even if uranium prices doubled over the next few years, nuclear energy would remain an extremely competitive energy source. Eventually, of course, new uranium mines will come online. And eventually, of course, the price of uranium might retreat. But so what; the price might soar in the meantime, especially because demand seems certain to increase sharply.”
go check the Uranium stock on the google finance if you are searching sth for your IRA account.
Friday, October 5, 2007
Energy Crisis again?
I read a news today about the energy that would want people to pay attention to the potential energy sector play again!
===================
The latest figures released by the International Energy Agency,” comments Kevin Capp “show the global production of liquids dropped by 854,000 barrels per day from August 2006-August 2007.
“In addition, we're pumping out 1.53 million barrels per day less than the all-time high of 86.13 million extracted in July 2006. Translation: The sun may have already set on our ability to meet world demand.
“This is not good.
“Running that close to the bone means any systemic shock — a hurricane that damages drilling platforms in the Gulf, a terrorist attack on oil pipelines in Nigeria, an unexpected cold snap in the Northeast — could cause prices to skyrocket, impacting everything from costs at the pump to costs at the grocery store. What's worse, the less oil we have, the less it takes to zap the price upward.”
===================
The latest figures released by the International Energy Agency,” comments Kevin Capp “show the global production of liquids dropped by 854,000 barrels per day from August 2006-August 2007.
“In addition, we're pumping out 1.53 million barrels per day less than the all-time high of 86.13 million extracted in July 2006. Translation: The sun may have already set on our ability to meet world demand.
“This is not good.
“Running that close to the bone means any systemic shock — a hurricane that damages drilling platforms in the Gulf, a terrorist attack on oil pipelines in Nigeria, an unexpected cold snap in the Northeast — could cause prices to skyrocket, impacting everything from costs at the pump to costs at the grocery store. What's worse, the less oil we have, the less it takes to zap the price upward.”
Wednesday, October 3, 2007
The rumor on the street for gambling again
Let's see what it is, however we should remain cautious.
“Investors shrugged off a profit warning from Citigroup and instead focused on the possibility of more Fed rate cuts,” reads the first sentence of CNN’s report. Oh boy… that’s bad. The rates are being cut for a reason. And it’s not because Bernanke wants your 401(k) to return 20% this year.
we remind you: The Fed’s last rate-cutting spree began with a surprise cut on Jan. 3, 2001. The next day, stocks surged, just as they did last month. By the end of January, the buzz wore off and the Fed cut by 50 bps again… and stocks surged yet again. Less than two months later, the Dow lost 10%.
“Investors shrugged off a profit warning from Citigroup and instead focused on the possibility of more Fed rate cuts,” reads the first sentence of CNN’s report. Oh boy… that’s bad. The rates are being cut for a reason. And it’s not because Bernanke wants your 401(k) to return 20% this year.
we remind you: The Fed’s last rate-cutting spree began with a surprise cut on Jan. 3, 2001. The next day, stocks surged, just as they did last month. By the end of January, the buzz wore off and the Fed cut by 50 bps again… and stocks surged yet again. Less than two months later, the Dow lost 10%.
Monday, October 1, 2007
As we pointed out, 14300 is coming!!!
that is just a pause for the mkt, we will enjoy the rally first!~:)
Friday, September 28, 2007
Gold and Materials go crazy when US greenback tanks hard
We continuously say buy gold , buy materials , the downtrend of USD is not done yet with the irresponsible FED.
Traders now send the usd to hell , killing every hope!
Traders now send the usd to hell , killing every hope!
Tuesday, September 25, 2007
GS shows his dirty hands on Gold and Oil today
Goldman Sachs raised its six-month target price for gold from $775 to $800 this morning. “Gold continues to gain support from the structural realignment in the relationship between gold and the U.S. dollar,” as statement from the bank read, “driven mainly by rising consumer and central bank demand in the rapidly growing emerging markets.”
Goldman also predicted $85 oil by the end of 2007. In another release today, forecasters at Goldman raised their entire oil outlook through the end of 2008, predicting an average price of $85 for 2008 and a high of $95 by the beginning of 2009.
With the recover of material and energy sector, Market is doomed to test the new high 14300 for DOWS pretty soon.
Safe play would be gold and materials.
Goldman also predicted $85 oil by the end of 2007. In another release today, forecasters at Goldman raised their entire oil outlook through the end of 2008, predicting an average price of $85 for 2008 and a high of $95 by the beginning of 2009.
With the recover of material and energy sector, Market is doomed to test the new high 14300 for DOWS pretty soon.
Safe play would be gold and materials.
Friday, September 21, 2007
Gold’s ascent showed no signs of weakness overnight
Dollar woes pushed up the shiny stuff to $739 overnight -- a new 27-year high.
Thursday, September 20, 2007
Say hi to 27 year high in Gold Price
Gold loves this environment. Following the Fed decision, gold busted through its $720 high of 2006. In fact, at $733 this morning, gold is trading at a 27-year high.
We continuously to point out that Gold will soar , soar ,soar, now here we go !!!
We continuously to point out that Gold will soar , soar ,soar, now here we go !!!
Tuesday, September 18, 2007
We should forget about the Fed Rate cut from now on
The Federal Reserve cut its key interest rate 50 basis points at 2:15 p.m. today.
Now at 4.75%, the Fed’s main lending rate has been lowered for the first time since June 2003. By choosing to chop 0.50%, Bernanke and his brood have sent a clear message: The subprime meltdown and subsequent credit crisis are truly hurting the economy.
The whole world seems to have been waiting for this cut, and now that it’s happened, few investors know what to do. The Dow shot up 240 points within minutes of the Fed’s announcement, oil’s well past the $81 mark, and the dollar index is plunging toward 78…but will it last?
No matter what we should focus on the fundamental of the stocks we are holding, forget about the remaining. I personally think the rate cut this time still not good enough to stimulate a finish of the correction.
Now at 4.75%, the Fed’s main lending rate has been lowered for the first time since June 2003. By choosing to chop 0.50%, Bernanke and his brood have sent a clear message: The subprime meltdown and subsequent credit crisis are truly hurting the economy.
The whole world seems to have been waiting for this cut, and now that it’s happened, few investors know what to do. The Dow shot up 240 points within minutes of the Fed’s announcement, oil’s well past the $81 mark, and the dollar index is plunging toward 78…but will it last?
No matter what we should focus on the fundamental of the stocks we are holding, forget about the remaining. I personally think the rate cut this time still not good enough to stimulate a finish of the correction.
Gold is ready to soar after Fed's meeting
Whenever we see a rate cut, Gold will break its historical high.
Let's keep an eye on that.
Let's keep an eye on that.
Tuesday, September 11, 2007
When Fed Cuts rate, they also have problems
They have issues to deal with the weaker and weaker dollars, cutting rate so aggressively? Inflation fight will be out of control too. It is all about timing when they cut and how do they cut that could save the economy. However, Market is market, economy is economy though. We further recommend to buy into Gold, Silver as I noticed
the dollar hit another new milestone last night. It was reported yesterday that the St. Louis Fed’s dollar reserve has dropped below 77. Well, this morning, the JPMorgan index of the nation’s currency had dropped to 79… its lowest rank in 15 years.
As if on cue, Iran announced this morning that it will conduct all its foreign currency transactions in euro or yen. The euro was trading at $1.38 this morning. Yen at 113. The pound… $2.02.
Hally Hally, let's profit from the rate cut.
Today many people have seen that Ben didn't give any clue about the rate cut which comfort with our outlook that it is not that easy to do so. ( From Yahoo :Instead, Bernanke talked about the need for countries around the globe to cooperate toward economic stability. He said "global imbalances" occur when countries run up trade deficits or produce big trade surpluses. ) The imbalance here has also been more obvious from the job roll reported recently. Japan, Germany, India, Sweden, Australia, Costa Rica and Peru are all reporting the most optimistic hiring conditions in 40 years, says the Manpower Employment Outlook Survey released today.
While these seven nations tout stellar employment conditions, countries such as the U.S., Ireland, Taiwan and China are all reporting slowing trends in the jobs market.
What shall we do? It is all in your hands.
the dollar hit another new milestone last night. It was reported yesterday that the St. Louis Fed’s dollar reserve has dropped below 77. Well, this morning, the JPMorgan index of the nation’s currency had dropped to 79… its lowest rank in 15 years.
As if on cue, Iran announced this morning that it will conduct all its foreign currency transactions in euro or yen. The euro was trading at $1.38 this morning. Yen at 113. The pound… $2.02.
Hally Hally, let's profit from the rate cut.
Today many people have seen that Ben didn't give any clue about the rate cut which comfort with our outlook that it is not that easy to do so. ( From Yahoo :Instead, Bernanke talked about the need for countries around the globe to cooperate toward economic stability. He said "global imbalances" occur when countries run up trade deficits or produce big trade surpluses. ) The imbalance here has also been more obvious from the job roll reported recently. Japan, Germany, India, Sweden, Australia, Costa Rica and Peru are all reporting the most optimistic hiring conditions in 40 years, says the Manpower Employment Outlook Survey released today.
While these seven nations tout stellar employment conditions, countries such as the U.S., Ireland, Taiwan and China are all reporting slowing trends in the jobs market.
What shall we do? It is all in your hands.
Monday, September 10, 2007
Gold:Not just a good haven, but also a Good value investment
As I pointed out in previous note, the Gold price has been climbing steadily over the past few months above $700. Is it going to the top? Or is it going to break the $720 historical high? I think and will happy to see Gold price soars as Dollars value tanks to the historical low as FED intends to let the "dollar collapse". Once the Fed cuts the interest rate, we will see traders coming to kill the dollars, sending it to hell.And if there were ever a time for China to bail out of its ‘nuclear option’… this would be it. WOW, unbelievable! Well, what we could do is to buy a ticket into the safe harbor, (AZK:nyse, GG:nyse) will be a buy as ZZPT has done before.
Friday, September 7, 2007
Facts you gotta know: what behind the sell-off
Foreign central banks have sold $48 billion in U.S. Treasuries since late July… $32 billion in the last two weeks alone.
Coincidentally, the Chinese are in the early stages of launching a $300 billion sovereign wealth fund. What better way to raise money than selling the debt of a nation in a period of economic instability. Hmmn. Before this wave of sell-offs, China held about $900 billion in U.S. Treasuries.
The public won’t know which country has been selling its U.S. government debt until the Treasury Department releases TIC data in November.
Coincidentally, the Chinese are in the early stages of launching a $300 billion sovereign wealth fund. What better way to raise money than selling the debt of a nation in a period of economic instability. Hmmn. Before this wave of sell-offs, China held about $900 billion in U.S. Treasuries.
The public won’t know which country has been selling its U.S. government debt until the Treasury Department releases TIC data in November.
Friday, August 31, 2007
G. Bush and Obama step in the subprime and hold the market
Will President Bush be able to cover the market with his umbrella?
George W. Bush is expected to propose multiple initiatives to bail out troubled homeowners in a statement today. The president will outline reforms that will help keep subprime and struggling borrowers in their homes -- and keep Fannie Mae in business.No one really knows how he will pull this off. Least of all, him. But you can bet your last yuan the proposal will be audacious and its funding will come at your expense… capital for refinanced, bailout-rate loans doesn’t grow on trees. But it does get printed in dollars. Looks like Bill Gross is going to get what he wanted.
Not to miss an opportunity on the campaign trail, Barack Obama proposed yesterday that "unlicensed, unregulated, fly-by-night mortgage brokers who are hoodwinking low-income borrowers" ought to be fined and the proceeds should be used to bail out borrowers on the verge of foreclosure.Where were these jackasses when the market was in full swing and house prices were going up? No doubt giving speeches about how vibrant the American economy was… and lauding our ability to deliver the American Dream to anyone who wanted it. Probably buying property themselves somewhere, too.
Monday, August 27, 2007
We will see another run of correction on the way
History tells us it's usually foolhardy to doubt the power of the Fed to bail out financial markets, once the Fed starts a cycle of lowering interest rates. But the Fed is not all-powerful. The subprime/credit crisis is probably causing a lot of collateral damage in the multitrillion-dollar over-the-counter derivatives market. It's not like the Fed can immediately wipe the slate clean on every bad derivative trade made by hedge funds and banks. Much of the damage has already been done, no matter how the Fed responds. So this Fed easing cycle may be very different from prior ones.
It's also the case that the discount rate is more symbolic than effective in today's complex credit markets. The heart of today's credit market lies beyond the realm of old-fashioned banks…and therefore, beyond the realm of Fed rate cuts. Much of the credit risk that everyone's so worried about remains hidden on hedge fund balance sheets, transferred there via highly sophisticated derivative markets.
Downplaying the significance of Friday's rate announcement, veteran trader Dennis Gartman describes a dour future for the mortgage market:
"The decision to cut the discount rate and to open up collateral to mortgages and the like 'is not a shot of adrenaline to the economy, but is instead a shot of penicillin.' That is, the Fed is not moving to expand economic activity; it has moved to stem the spreading of contagion. If anyone actually believes that the nation's financial intermediaries are going to go out and suddenly become expansive once again, extending more mortgages at anything other than onerous terms, they are sadly and badly mistaken [emphasis added]. Having once been burned, the nation's banks et al. shall be like Mark Twain's cat that having once sat upon a very hot stove shall not sit upon any stove again, for they shall all look hot to him. The Fed's action on Friday has done nothing other than to quell the fever. The patient is far, far…very far…from being healthy. The Fed has not staved off recession; it has simply made the recession that is now upon us less likely to devolve into something much worse…and for that alone, the Fed is to be lauded!"
Perhaps the Fed should be lauded because its announcement temporarily restored market confidence, but the mortgage crisis is far from over. As Gartman correctly observes, the Fed's recent maneuvers may help the nation's mortgage lenders to avoid disaster, but the days of EZ credit are dead and gone. And now that banks will be much stingier, homeowners will not be able to refinance their upwardly re-setting ARMs and homebuyers will not be able to qualify for attractive mortgages. Even in the best of circumstances, therefore, banks will be issuing far fewer mortgages than they did during the Halcyon days of 2005 and 2006.
Unfortunately, banks that do not make loans do not make money. Many Wall Street analysts have been slow to recognize this fact, and are still expecting decent earnings from most banks. They are dreaming. At the same moment that banks will be making fewer loans, they will also be setting aside reserves to cover the bad loans they made in the past. So earnings will be squeezed from both ends at once.
It's also the case that the discount rate is more symbolic than effective in today's complex credit markets. The heart of today's credit market lies beyond the realm of old-fashioned banks…and therefore, beyond the realm of Fed rate cuts. Much of the credit risk that everyone's so worried about remains hidden on hedge fund balance sheets, transferred there via highly sophisticated derivative markets.
Downplaying the significance of Friday's rate announcement, veteran trader Dennis Gartman describes a dour future for the mortgage market:
"The decision to cut the discount rate and to open up collateral to mortgages and the like 'is not a shot of adrenaline to the economy, but is instead a shot of penicillin.' That is, the Fed is not moving to expand economic activity; it has moved to stem the spreading of contagion. If anyone actually believes that the nation's financial intermediaries are going to go out and suddenly become expansive once again, extending more mortgages at anything other than onerous terms, they are sadly and badly mistaken [emphasis added]. Having once been burned, the nation's banks et al. shall be like Mark Twain's cat that having once sat upon a very hot stove shall not sit upon any stove again, for they shall all look hot to him. The Fed's action on Friday has done nothing other than to quell the fever. The patient is far, far…very far…from being healthy. The Fed has not staved off recession; it has simply made the recession that is now upon us less likely to devolve into something much worse…and for that alone, the Fed is to be lauded!"
Perhaps the Fed should be lauded because its announcement temporarily restored market confidence, but the mortgage crisis is far from over. As Gartman correctly observes, the Fed's recent maneuvers may help the nation's mortgage lenders to avoid disaster, but the days of EZ credit are dead and gone. And now that banks will be much stingier, homeowners will not be able to refinance their upwardly re-setting ARMs and homebuyers will not be able to qualify for attractive mortgages. Even in the best of circumstances, therefore, banks will be issuing far fewer mortgages than they did during the Halcyon days of 2005 and 2006.
Unfortunately, banks that do not make loans do not make money. Many Wall Street analysts have been slow to recognize this fact, and are still expecting decent earnings from most banks. They are dreaming. At the same moment that banks will be making fewer loans, they will also be setting aside reserves to cover the bad loans they made in the past. So earnings will be squeezed from both ends at once.
Thursday, August 23, 2007
What does rally mean?
he Dow Jones Industrial Average is up 0.18% for the month of August...Just another ho-hum month.
Let's just ignore the fact that the Dow tumbled nearly 1,200 points between August 8th and August 16th – that happened BEFORE the Federal Reserve waved its magic wand and made everything better.
The wand that the Fed waved was a half-percent reduction in short-term interest rates. The stock market responded immediately with a robust rally...and the magic continued yesterday, as the Dow added another 145 points.
But the Fed's magic is not all that magical. Like a warm cup of cocoa on a cold winter day, it makes you feel better. But when trying to cure serious economic maladies, rate cuts and warm cocoa provide identical efficacy.
The nation's bankrupt mortgage-holders aren't any less bankrupt today than they were before the Fed reduced shortterm interest rates. And the nation's almost-bankrupt
mortgage-lenders aren't any less almost-bankrupt. But the Fed's magic makes everyone feel better; it makes them believe that everything's going to be okay. And so share prices go up...for a while.
Let's just ignore the fact that the Dow tumbled nearly 1,200 points between August 8th and August 16th – that happened BEFORE the Federal Reserve waved its magic wand and made everything better.
The wand that the Fed waved was a half-percent reduction in short-term interest rates. The stock market responded immediately with a robust rally...and the magic continued yesterday, as the Dow added another 145 points.
But the Fed's magic is not all that magical. Like a warm cup of cocoa on a cold winter day, it makes you feel better. But when trying to cure serious economic maladies, rate cuts and warm cocoa provide identical efficacy.
The nation's bankrupt mortgage-holders aren't any less bankrupt today than they were before the Fed reduced shortterm interest rates. And the nation's almost-bankrupt
mortgage-lenders aren't any less almost-bankrupt. But the Fed's magic makes everyone feel better; it makes them believe that everything's going to be okay. And so share prices go up...for a while.
Friday, August 17, 2007
Looks like Jim Cramer’s tantrum paid off after all
On CNBC on Aug. 3, Cramer pleaded like a grounded teenager missing the prom for Ben Bernanke to stop being an academic and open the “discount window.”
This morning, that’s just what the Fed did.
The Federal Reserve chose to cut its discount rate down to 5.75%. The “discount rate” is the rate the Fed charges “qualified” lenders (banks and stable corporations) for temporary loans. The move shows that, despite Fed Governor William Poole’s statements to the contrary, the Fed isn’t going to sit by and let investors in subprime garbage get what’s coming to them.
The U.S. market reacted by skyrocketing over 2% within the first five minutes of trading.
This morning, that’s just what the Fed did.
The Federal Reserve chose to cut its discount rate down to 5.75%. The “discount rate” is the rate the Fed charges “qualified” lenders (banks and stable corporations) for temporary loans. The move shows that, despite Fed Governor William Poole’s statements to the contrary, the Fed isn’t going to sit by and let investors in subprime garbage get what’s coming to them.
The U.S. market reacted by skyrocketing over 2% within the first five minutes of trading.
Wednesday, August 15, 2007
There is no need to explain the market
Recently I was reading a novel talking about the time history in which there is a sentence saying " History could repeat only people who know it will follow". Well, I am not a historian , also not a person to make any prediction. Making a prediction is as difficult as finding the historical reason, if not worse. Today if we look back, you won't be surprised that all of us got extremely excited when market soared above 14000 followed by a sell off. Now market has reached about 12900 at the close, have we reached the bottom? But if we check about the indicator, VIX, a well known one to monitor the market sentiment, suggests there will be more room to go for market hasn't got into deep panic yet. So for us long, it is still a time to hold on. We will know the market bottom once it comes and i believe it won't be too long. The better thing you need to do is to make intelligible bets over stocks who have solid fundamental.
Sunday, August 5, 2007
Market looks for stabilization
After market closes with a last miniute sell off, we have seen the panic selling triggered. Good or Bad, it is not important. From the market breathe, We still haven't seen any sign that market has been stabilized even both indexs are close to 100 MA. Several rally attempt could happen agains however, for short term traders, sell at rally attempt still outperform buy at any dip at current state.
For investors, set back and wait for chance , don't do too much. The only rally we could see is that 2 level of panic selling. That is what I am waiting for.
Good luck!
For investors, set back and wait for chance , don't do too much. The only rally we could see is that 2 level of panic selling. That is what I am waiting for.
Good luck!
Sunday, July 29, 2007
A week can change everything
We experienced the biggest sell off week in the past 5 years history, and many folks have been extremely waiting for bottom fishing. Sorry for my being absence for about one week before last on vacation which took me about one week to figure out what was going on the market. Let's take a quick review back onto those titles on the journalism again,
last week,the biggest titles include:
1. DOW hit record hight 14000
2. By year end, we will hit 15000
....
Seems everyone was extremely bullish for the mkt. But we have pointed out before, the rally we saw few weeks ago had not been confirmed by all the leading sectors previously. And the last run rally didn't come up as anticipated and directly jump into a correction. To make it simple, the sold off means that we probably will get into a relatively longer than anticipation correction period. I don't need to emphasize the chart here because all the charts can be read. But we need to understand what cause the reason to sell off the market. In my mind, those reasons include the following ones:
1. mkt has been waiting for an exclusive odds which is that we have a strong economy growth while the FED will has a rate cut. The energy sector soared previously due to gas price soar and eyes for stronger than expected economy. If we had good economy, can we expect a quick rate cut from FED? No, but that is what street hope for, and they will have nothing eventually. This is why we pointed out before we may get into a bear mkt after this last run of rally.
2. Shorter have covered most of their short position the week before last which mean the mkt is overheat at that moment. From a contrarian point, we should be cautious. I also made a mistake by leaving for vacation while keeping my account without watching. The sell off time came earlier than what I thought. The good thing is that I came back:)
Getting into the mkt itself, we will need to find out what sectors got hammered last week. If you pay attention enough, will find out that Energy sector, Finance sector got their biggest cut. Woops, doesn't that mean sth? The subprime woe has been there for quite a while and why should they react at this moment? Once you got the answer, could easily determine what strategy you could use. Do we see hope? yes I think so. Tech sector still outperform most of the sectors especially from the solid fundamental. AAPL,WFR,SNDK, AMZN, QCOM, BIDU, VSEA... all reported solid earning that support the hold-up of semi/tech sector. If mkt rebounce, they would be the first spot to indicate.
Strategy point of view for the next week
Mkt has got into extremely oversold area that could lead to a rebounce starting at the beginning of next week. But rebounce is rebounce, don't be fooled by holding your position longer after witness the possible rally. It would only be a time to reduce your cost and pls take your profit quickly. The force analysis between bull and bear currently implies a stronger force on the side of bear. Trading against the force could lead to mistake or huge lost eventually. So next week, cut your loss or take your profit asap when you see mkt rebounces. At the end of the week, if mkt rally more than 300 points, buying put or short will be a good consideration.
last week,the biggest titles include:
1. DOW hit record hight 14000
2. By year end, we will hit 15000
....
Seems everyone was extremely bullish for the mkt. But we have pointed out before, the rally we saw few weeks ago had not been confirmed by all the leading sectors previously. And the last run rally didn't come up as anticipated and directly jump into a correction. To make it simple, the sold off means that we probably will get into a relatively longer than anticipation correction period. I don't need to emphasize the chart here because all the charts can be read. But we need to understand what cause the reason to sell off the market. In my mind, those reasons include the following ones:
1. mkt has been waiting for an exclusive odds which is that we have a strong economy growth while the FED will has a rate cut. The energy sector soared previously due to gas price soar and eyes for stronger than expected economy. If we had good economy, can we expect a quick rate cut from FED? No, but that is what street hope for, and they will have nothing eventually. This is why we pointed out before we may get into a bear mkt after this last run of rally.
2. Shorter have covered most of their short position the week before last which mean the mkt is overheat at that moment. From a contrarian point, we should be cautious. I also made a mistake by leaving for vacation while keeping my account without watching. The sell off time came earlier than what I thought. The good thing is that I came back:)
Getting into the mkt itself, we will need to find out what sectors got hammered last week. If you pay attention enough, will find out that Energy sector, Finance sector got their biggest cut. Woops, doesn't that mean sth? The subprime woe has been there for quite a while and why should they react at this moment? Once you got the answer, could easily determine what strategy you could use. Do we see hope? yes I think so. Tech sector still outperform most of the sectors especially from the solid fundamental. AAPL,WFR,SNDK, AMZN, QCOM, BIDU, VSEA... all reported solid earning that support the hold-up of semi/tech sector. If mkt rebounce, they would be the first spot to indicate.
Strategy point of view for the next week
Mkt has got into extremely oversold area that could lead to a rebounce starting at the beginning of next week. But rebounce is rebounce, don't be fooled by holding your position longer after witness the possible rally. It would only be a time to reduce your cost and pls take your profit quickly. The force analysis between bull and bear currently implies a stronger force on the side of bear. Trading against the force could lead to mistake or huge lost eventually. So next week, cut your loss or take your profit asap when you see mkt rebounces. At the end of the week, if mkt rally more than 300 points, buying put or short will be a good consideration.
Wednesday, July 25, 2007
How much could AAPL be valuated?
In my model, based on its current qter earning, it should be valuated at lower end $144, and higher end $158. But since too much speculation eyes on AAPL, it could go much higher than this number in a short amount of time.
Apple quarterly profit rises on Mac strength
Wednesday July 25, 5:41 pm ET
SAN FRANCISCO (Reuters) - Apple Inc. (NasdaqGS:AAPL - News) posted a higher quarterly profit that zoomed past expectations on strong Macintosh sales and said it expected to sell one million iPhones by the end of the current quarter.
ADVERTISEMENT
It also reported a surprising rise in its profit margin from the previous quarter on Wednesday because of less expensive components and strong direct sales.
Shares of Apple, up 62 percent since the start of the year when Chief Executive Steve Jobs unveiled the iPhone, rose 6.5 after the report.
"Apple destroyed numbers for this quarter. Its Mac numbers were very strong and above expectations," said Shannon Cross, an analyst at Cross Research.
"Their gross margin at 37 percent was extremely strong and bodes well for HP and Dell from a commodity-price perspective."
Apple's net income for its fiscal third quarter ended June 30 was $818 million, or 92 cents per share, compared with $472 million, or 54 cents per share, a year earlier. Revenue was $5.41 billion, up 24 percent from $4.37 billion a year earlier.
Apple had been expected to earn $644.4 million, or 72 cents per share, on revenue of $5.29 billion, according to the average analyst forecast on Reuters Estimates.
Gross profit margin was 36.9 percent, up from the 35.1 percent the company achieved in the previous quarter, a show of strength that the company had not predicted.
Chief Financial Officer Peter Oppenheimer told Reuters that component prices and strong direct sales by Apple helped drive the increase in profit margin.
Apple also estimated earnings of about 65 cents per share on revenue of about $5.7 billion for its fiscal fourth quarter.
Apple said it shipped 1.76 million Macintosh computers in the quarter, a rise of 33 percent from a year earlier.
Shipments of iPods were 9.82 million, up 21 percent from the same period a year earlier.
The iPhone went on sale on June 29 but its impact on Apple's results was limited because it was available only in the last two days of the quarter and sales will be booked as subscription revenue over two years.
It sold 270,000 iPhones in the two days.
Sam Rahman, portfolio manager at Baring Asset Management in Boston, said the forecast for 1 million iPhone sales by the end of the first full quarter of sales was "a very big number" and predicted shares would move higher.
Apple shares rose 6.5 percent to $146.13 in after-hours trade from a close of $137.26 on Nasdaq.
Jobs at the beginning of the year set a goal of selling 10 million units in 2008, helping to fuel the stock run-up this year. Oppenheimer reiterated that goal in an analyst call on Wednesday. The shares trade at 30 times its expected 2009 profit, a level most analysts say represents a rich valuation.
Apple quarterly profit rises on Mac strength
Wednesday July 25, 5:41 pm ET
SAN FRANCISCO (Reuters) - Apple Inc. (NasdaqGS:AAPL - News) posted a higher quarterly profit that zoomed past expectations on strong Macintosh sales and said it expected to sell one million iPhones by the end of the current quarter.
ADVERTISEMENT
It also reported a surprising rise in its profit margin from the previous quarter on Wednesday because of less expensive components and strong direct sales.
Shares of Apple, up 62 percent since the start of the year when Chief Executive Steve Jobs unveiled the iPhone, rose 6.5 after the report.
"Apple destroyed numbers for this quarter. Its Mac numbers were very strong and above expectations," said Shannon Cross, an analyst at Cross Research.
"Their gross margin at 37 percent was extremely strong and bodes well for HP and Dell from a commodity-price perspective."
Apple's net income for its fiscal third quarter ended June 30 was $818 million, or 92 cents per share, compared with $472 million, or 54 cents per share, a year earlier. Revenue was $5.41 billion, up 24 percent from $4.37 billion a year earlier.
Apple had been expected to earn $644.4 million, or 72 cents per share, on revenue of $5.29 billion, according to the average analyst forecast on Reuters Estimates.
Gross profit margin was 36.9 percent, up from the 35.1 percent the company achieved in the previous quarter, a show of strength that the company had not predicted.
Chief Financial Officer Peter Oppenheimer told Reuters that component prices and strong direct sales by Apple helped drive the increase in profit margin.
Apple also estimated earnings of about 65 cents per share on revenue of about $5.7 billion for its fiscal fourth quarter.
Apple said it shipped 1.76 million Macintosh computers in the quarter, a rise of 33 percent from a year earlier.
Shipments of iPods were 9.82 million, up 21 percent from the same period a year earlier.
The iPhone went on sale on June 29 but its impact on Apple's results was limited because it was available only in the last two days of the quarter and sales will be booked as subscription revenue over two years.
It sold 270,000 iPhones in the two days.
Sam Rahman, portfolio manager at Baring Asset Management in Boston, said the forecast for 1 million iPhone sales by the end of the first full quarter of sales was "a very big number" and predicted shares would move higher.
Apple shares rose 6.5 percent to $146.13 in after-hours trade from a close of $137.26 on Nasdaq.
Jobs at the beginning of the year set a goal of selling 10 million units in 2008, helping to fuel the stock run-up this year. Oppenheimer reiterated that goal in an analyst call on Wednesday. The shares trade at 30 times its expected 2009 profit, a level most analysts say represents a rich valuation.
Tuesday, July 17, 2007
Novellus' outlook lifts chip-equipment stocks
Pls keep eyes on this group which in my mind will have a great show in this ER season.
hip-equipment stocks surged Tuesday, with Novellus Systems Inc. shares climbing 11% after the company offered a stronger order forecast than analysts had anticipated.
San Jose, Calif.-based Novellus said its bookings for the quarter ending in September would be flat to 5% higher than the three months ended June 30. The forecast pegs its bookings in the range of $316 million to $349 million.
Novellus (NVLS :
NVLS33.03, +3.34, +11.2% ) shares rose $3.34, or more than 11%, to close at $33.03 after reporting on Monday second-quarter earnings and revenue that beat Wall Street analysts' forecasts. Novellus earned $57.3 million, or 45 cents a share, on revenue of $416.3 million, while analysts had forecast Novellus to earn 43 cents a share on $413.13 million in sales.
Other chip-equipment makers followed Novellus north, with Lam Research Corp. (LRCX :
Lam Research Corporation
LRCX59.98, +5.53, +10.2% ) rising $5.53, or more than 10%, to $59.98, Varian Semiconductor Equipment (VSEA :
varian semiconductor equipmnt com
VSEA44.74, +4.03, +9.9% ) up $4.03, or almost 10%, to close at $44.74 and KLA-Tencor Corp. (KLAC :
KLA-Tencor Corporation
KLAC61.78, +5.08, +9.0% ) up $5.08, or almost 9%, to end the day at $61.78 a share.
More signs of market conditions could come this week, with all the companies scheduled to update analysts at Semicon West, the industry's trade show held in San Francisco.
Novellus noted that "several memory chipmakers were in the process of re-evaluating capacity needs, and the results of this analysis could have implications to bookings in the quarter," wrote Deutsche Bank analyst Steve O'Rourke, who maintained his sell rating on Novellus shares.
The direction of industry sales this year and into 2008 likely will be tied to spending for equipment to make DRAM memory chips used in PCs and NAND flash chips, which are used in portable music players, such as Apple Inc.'s iPod.
"More promising signs from NAND flash memory suppliers could be the underlying factor behind Novellus' more optimistic outlook, and these spending trends could emerge sooner than we even anticipated," wrote Stifel Nicholas analyst Patrick Ho, who reiterated his sell rating on Novellus based on market share and valuation concerns.
On Tuesday, semiconductor researcher iSuppli upgraded its near-term rating for DRAM suppliers to neutral, from negative.
It cited signs of increasing market momentum and an end to the severe price erosion that has hammered DRAM makers. DRAM chip prices have plummeted about 70% this year.
Chip-tool providers overall are facing a lull in demand, mostly due to the memory-chip market, with industry-wide sales forecasted to cool this year as electronics makers digest new equipment and weigh new orders.
Researcher Gartner Inc. predicts revenue will rise 2.7% to $43.1 billion after surging 23% in 2006
hip-equipment stocks surged Tuesday, with Novellus Systems Inc. shares climbing 11% after the company offered a stronger order forecast than analysts had anticipated.
San Jose, Calif.-based Novellus said its bookings for the quarter ending in September would be flat to 5% higher than the three months ended June 30. The forecast pegs its bookings in the range of $316 million to $349 million.
Novellus (NVLS :
NVLS33.03, +3.34, +11.2% ) shares rose $3.34, or more than 11%, to close at $33.03 after reporting on Monday second-quarter earnings and revenue that beat Wall Street analysts' forecasts. Novellus earned $57.3 million, or 45 cents a share, on revenue of $416.3 million, while analysts had forecast Novellus to earn 43 cents a share on $413.13 million in sales.
Other chip-equipment makers followed Novellus north, with Lam Research Corp. (LRCX :
Lam Research Corporation
LRCX59.98, +5.53, +10.2% ) rising $5.53, or more than 10%, to $59.98, Varian Semiconductor Equipment (VSEA :
varian semiconductor equipmnt com
VSEA44.74, +4.03, +9.9% ) up $4.03, or almost 10%, to close at $44.74 and KLA-Tencor Corp. (KLAC :
KLA-Tencor Corporation
KLAC61.78, +5.08, +9.0% ) up $5.08, or almost 9%, to end the day at $61.78 a share.
More signs of market conditions could come this week, with all the companies scheduled to update analysts at Semicon West, the industry's trade show held in San Francisco.
Novellus noted that "several memory chipmakers were in the process of re-evaluating capacity needs, and the results of this analysis could have implications to bookings in the quarter," wrote Deutsche Bank analyst Steve O'Rourke, who maintained his sell rating on Novellus shares.
The direction of industry sales this year and into 2008 likely will be tied to spending for equipment to make DRAM memory chips used in PCs and NAND flash chips, which are used in portable music players, such as Apple Inc.'s iPod.
"More promising signs from NAND flash memory suppliers could be the underlying factor behind Novellus' more optimistic outlook, and these spending trends could emerge sooner than we even anticipated," wrote Stifel Nicholas analyst Patrick Ho, who reiterated his sell rating on Novellus based on market share and valuation concerns.
On Tuesday, semiconductor researcher iSuppli upgraded its near-term rating for DRAM suppliers to neutral, from negative.
It cited signs of increasing market momentum and an end to the severe price erosion that has hammered DRAM makers. DRAM chip prices have plummeted about 70% this year.
Chip-tool providers overall are facing a lull in demand, mostly due to the memory-chip market, with industry-wide sales forecasted to cool this year as electronics makers digest new equipment and weigh new orders.
Researcher Gartner Inc. predicts revenue will rise 2.7% to $43.1 billion after surging 23% in 2006
Sunday, July 15, 2007
Market Recap and Anticipation
yet to come on Sunday :)
No surprised at all, we saw Market closed strong on thursday with a amazing 283 points gain which clearly clean out most of the shorts . Folks are all happy but can you really answer why we see such a big rally? How will the market perform in the coming weeks? Good, if you have thought about those questions, better you have got some ideas about why market can rally 283 points a day.
Inside the market, we have found constructive buildings of fundamental. During the time of market break out, we monitored the leading sectors also breakout, especially in Tech sector and Energy Sector. The gas price approachs to the new high, in another sense, supports such a breaktout. That is what we call fundamental supportive breaking out, which is really healthy to the market. Tech sector continue to show strength especially we have seen the performance in INTC/TXN/BRCM/NVDA/SIMO/RIMM/AAPL,all derseve enough attention in coming weeks. With the healthy market condition, ( in our market monitor, short are covering), we would expect another confirmation day will show in the next 7~9 days. What we really need to look at will be the coming OE volatility. However, nothing could stop the market from going higher at this monment.
I don't wanna add too much comments on those promising stuffs, just buy at any dip if you can.
Being ready and being aggressive will be the tone for the next several weeks.
No surprised at all, we saw Market closed strong on thursday with a amazing 283 points gain which clearly clean out most of the shorts . Folks are all happy but can you really answer why we see such a big rally? How will the market perform in the coming weeks? Good, if you have thought about those questions, better you have got some ideas about why market can rally 283 points a day.
Inside the market, we have found constructive buildings of fundamental. During the time of market break out, we monitored the leading sectors also breakout, especially in Tech sector and Energy Sector. The gas price approachs to the new high, in another sense, supports such a breaktout. That is what we call fundamental supportive breaking out, which is really healthy to the market. Tech sector continue to show strength especially we have seen the performance in INTC/TXN/BRCM/NVDA/SIMO/RIMM/AAPL,all derseve enough attention in coming weeks. With the healthy market condition, ( in our market monitor, short are covering), we would expect another confirmation day will show in the next 7~9 days. What we really need to look at will be the coming OE volatility. However, nothing could stop the market from going higher at this monment.
I don't wanna add too much comments on those promising stuffs, just buy at any dip if you can.
Being ready and being aggressive will be the tone for the next several weeks.
Thursday, July 12, 2007
Our view of big market is further confirmed
Any correction will be short and any correction will lead to higher high of the market!:)
Let's drive the last run!!
Let's drive the last run!!
Tuesday, July 10, 2007
Today could mark the first day of distrbution
Today will mark the first day of distribution. Our concerns last weekend has come out. And you may see that those Tech sectors: AAPL,TXN, SNDK, MRVL,BRCM hold well. When those guys hold well, we could expect another rally after this possible run of correction. This will market the last run of correction which could extend to 3% down of the market. However, any correction will , in our eyes, be short term. Just try to switch your postions to those sectors who could rally after that.
Friday, July 6, 2007
Market Short Recap
As we have continously pointed out, we are in bull market. After window dressing, we apparently see that market is under strong accumulation. RIMM, BIDU, BTJ, GOOG, AAPL all lead the market high , also creating NAZ 6 years high. But here you may wanna think about another question, do we reach the top?
Before answering this question, it would be more sense to ask which sector could outperform next better than asking whether the market top. If you watch market closely, will be able to find that Tech sector step out 9% in the second quarter, only 2% behind the energy sector 11%. Therefore we have enough reason to believe that these two sector s will continue to outperform in this coming quarter.
In term of next week, market has pulled out from the oversold region in Window dressing period. Also Our market indicators still point to rally though have been weaken a little bit after NAZ reaches new high.
More to come during this weekend.
To be continued.
Normally we want those leader sectors to confirm each other. However it doesn't show this time, signing a weakness of the market. Based on our experience and projection, another run of correction is possible but not highly possible as we pointed out last time. To avoid any unexpected catch up, in our opinions, focusing on sector in energy, tech and financials could lower the probability of failure in trade. And Not as aggressive as we were since the end of last month.
Several stocks could deserve speculation:
DNDN: this was a old flyers previously, however its recent booming call options and limited downside space may lead to another huge and short rally move.
VSEA: a fundamental solid corp who has been dropping after its sounding er last qt could possibly get another 20% run starting from here.
We recommend to be defensive trading last week , which mean we don't really recommend to get your account exposure more than 70% in the next trading week. Staying away from a risky week will be the best way for general purpose.
Before answering this question, it would be more sense to ask which sector could outperform next better than asking whether the market top. If you watch market closely, will be able to find that Tech sector step out 9% in the second quarter, only 2% behind the energy sector 11%. Therefore we have enough reason to believe that these two sector s will continue to outperform in this coming quarter.
In term of next week, market has pulled out from the oversold region in Window dressing period. Also Our market indicators still point to rally though have been weaken a little bit after NAZ reaches new high.
More to come during this weekend.
To be continued.
Normally we want those leader sectors to confirm each other. However it doesn't show this time, signing a weakness of the market. Based on our experience and projection, another run of correction is possible but not highly possible as we pointed out last time. To avoid any unexpected catch up, in our opinions, focusing on sector in energy, tech and financials could lower the probability of failure in trade. And Not as aggressive as we were since the end of last month.
Several stocks could deserve speculation:
DNDN: this was a old flyers previously, however its recent booming call options and limited downside space may lead to another huge and short rally move.
VSEA: a fundamental solid corp who has been dropping after its sounding er last qt could possibly get another 20% run starting from here.
We recommend to be defensive trading last week , which mean we don't really recommend to get your account exposure more than 70% in the next trading week. Staying away from a risky week will be the best way for general purpose.
Thursday, July 5, 2007
Marvell is doomed to rally ?
Mrvl has steadily corrected its problem with SEC, and with his production line and sale of iphone, this guy should be able to catch the late run of market.
Marvell Tech late Monday filed its fiscal 2007 annual report and several other quarterly securities reports that had been delayed as the chipmaker restated its historical financial results. The company still must file its 10-Q for the first quarter ended April 28 with the Securities and Exchange Commission. It said it plans to do that as soon as possible.
As expected, Marvell Tech (MRVL :
marvell technology group ltd ord
N booked a noncash stock compensation charge of $327.4 million.
The filings helped eased the concerns of investors. Marvell Tech shares rose 1% to $18.32 in trading Tuesday. The stock is down 4% so far this year.
"We believe the much-delayed financial restatement is a big step toward helping investors finally move on," wrote Stifel Nicolaus analyst Cody Acree, who rates the stock a buy.
Based in Santa Clara, Calif., Marvell Tech designs chips used in hard disk drives, mobile phones, Wi-Fi functional electronics and Internet networking gear.
Its largest customers are Western Digital Corp. (WDC :
Western Digital Corporation
Toshiba Corp. , and Samsung Electronics Co. (SSNGY :
SSNGY
which account for 39% of Marvell Tech's total revenue.
The restated financial statements did raise some concerns.
Craig Berger, analyst at Wedbush Morgan Securities, said Marvell Tech's annual results were "a bit worse" than he had estimated in terms of gross margin and operating expenses, excluding stock-based compensation costs. He reiterated his hold rating on the stock.
Marvell Tech is one of the chipmakers tapped by Apple Inc. for its new iPhone. The company is contributing the Wi-Fi chip that costs $6. End of Story
Marvell Tech late Monday filed its fiscal 2007 annual report and several other quarterly securities reports that had been delayed as the chipmaker restated its historical financial results. The company still must file its 10-Q for the first quarter ended April 28 with the Securities and Exchange Commission. It said it plans to do that as soon as possible.
As expected, Marvell Tech (MRVL :
marvell technology group ltd ord
N booked a noncash stock compensation charge of $327.4 million.
The filings helped eased the concerns of investors. Marvell Tech shares rose 1% to $18.32 in trading Tuesday. The stock is down 4% so far this year.
"We believe the much-delayed financial restatement is a big step toward helping investors finally move on," wrote Stifel Nicolaus analyst Cody Acree, who rates the stock a buy.
Based in Santa Clara, Calif., Marvell Tech designs chips used in hard disk drives, mobile phones, Wi-Fi functional electronics and Internet networking gear.
Its largest customers are Western Digital Corp. (WDC :
Western Digital Corporation
Toshiba Corp. , and Samsung Electronics Co. (SSNGY :
SSNGY
which account for 39% of Marvell Tech's total revenue.
The restated financial statements did raise some concerns.
Craig Berger, analyst at Wedbush Morgan Securities, said Marvell Tech's annual results were "a bit worse" than he had estimated in terms of gross margin and operating expenses, excluding stock-based compensation costs. He reiterated his hold rating on the stock.
Marvell Tech is one of the chipmakers tapped by Apple Inc. for its new iPhone. The company is contributing the Wi-Fi chip that costs $6. End of Story
Tuesday, July 3, 2007
The Close of today will determine sth
Now the window dressing is over, and as we pointed out before, those fund managers need to sell their holding and bought it back yesterday, the first trading day. Today will be a second day for confirmation of rally yesterday. More important , today 's close will further assure that they will buy back the share they sell. We need to be more courageous to hold and buy into this trend.
Monday, July 2, 2007
Saturday, June 30, 2007
Bandwidth-Hungry Internet Renews Demand For Fiber-Optic Cable
(Copyright by IBD)
A lot of the credit goes to YouTube.
The wildly popular Internet video-sharing site and other bandwidth-thirty applications are driving massive investments in Internet infrastructure.
That makes equipment makers such as Ciena (CIEN) very happy.
The Linthicum, Md.-based company is helping telecom giants such as Verizon, (VZ) AT&T (T) and BT Group (BT) expand capacity, converting old voice networks into wide data pipelines.
The demand has put Ciena back in the black in 2006 after four money-losing years. Halfway through this year, it's on track to deliver 270% earnings growth.
"The underlying demand drivers for optical networking equipment have never appeared to be more robust," Piper Jaffray analyst Troy Jensen wrote in a client note.
Ciena makes equipment used in citywide networks and long-haul data lines. It also makes switches that get data to its destination and access components that help customers deliver telephone and high-def TV over the Internet.
Its customers are telecom giants, cable companies, large enterprises and governments.
Collectively, those markets were worth $8.2 billion last year, Ciena said. It expects them to grow by about 18% per year through 2009.
Fiber networks transmit data rapidly over strands of light-transmitting glass or plastic. It was the hot thing seven years ago.
Telecom companies and service providers laid vast networks of fiber that were to be the backbone of the New Economy. Then came the dot-com bust.
Now, much of that dark fiber is being lit, thanks to video and a slew of other information-dense applications. Service providers are updating the switches in the system. And they're stringing fiber straight into homes to deliver even more services.
"If you don't get the core network updated, there's no way you can accommodate all the capacity that's required," said Stephane Teral, principal analyst with the research firm Infonetics.
For instance, Internet video uses 1,000 times as much bandwidth as a single e-mail, he said.
And then there's YouTube. The Google-owned video-sharing site now uses the same amount of bandwidth as the entire Internet consumed in 2000, computer pioneer Michael Dell said in January.
High-def TV, streaming videos on mobile phones, and other services will require still more broadband plumbing, analysts say.
Teral said the telecom industry's latest infrastructure spending spree began in 2004. But unlike previous binges, this one is more controlled and stable.
The company expects worldwide investments to hit $240 billion in 2008, growing at a single-digit rate through 2009 or 2010.
But carriers must also must maintain their existing networks.
Tom Mock, Ciena's senior vice president of strategic planning, likened that duel challenge to changing out a car engine, with the vehicle running. And the driver shouldn't notice, he said.
That's where Ciena's systems come in.
During the Internet meltdown a few years ago, Ciena placed its bet that fiber-optic networks and ethernet systems would converge to become the dominant Internet architecture. Ciena developed systems to help carriers lower costs by linking those two technologies together.
"We think we've got a good solution that takes into account not only where the service providers need to be, but also where they're coming from," Mock said.
Goldman Sachs analyst Brantley Thompson said Ciena has the right product mix. He sees solid demand from wired, wireless and cable service providers.
"The contract pipeline continues to improve with new opportunities at Tier 1 carriers in the U.S. and Europe," he wrote.
But it has been a bumpy road.
Ciena grew with the technology boom in the 1990s. It went public in 1997. By October 2000, its shares traded around 150.
With the collapse that followed, the company went from $4.20 earnings per share in 2001 to a $7.98 loss in fiscal 2002. Those losses gradually shrank as the market recovered. But by 2005, Ciena's shares traded under 2.
Over that time, though, the company was reinventing itself.
Once a solely fiber pure-play, it went on a buying spree, picking up six companies since 2001. That expanded its product and customer base, turning it into a broader-based network services firm.
The losses eased.
By 2006, Ciena posted a 30-cents-per-share profit.
The company initiated a 1-for-7 reverse stock split in September. Today it trades around 36.
Analysts surveyed by Thomson Financial expect $1.11 earnings per share this year, which ends in January, and $1.54 next year.
The company posted 26 cents per share earnings in its fiscal second quarter, up from 7 cents the year before. Revenue in the quarter was up 48% from a year earlier, to $193.5 million.
With the company back on track, Ciena's chief financial officer plans to step down at the end of the year. Joseph Chinnici has been CFO since 1995. The company has not yet named a replacement.
There are still risks.
Ciena typically relies on several customers for almost half of its revenues — four customers each contributed more than 10% last quarter. But because of various project cycles, that revenue is lumpy. And it faces fierce competition from giants such as Alcatel-Lucent, (ALU) Cisco Systems (CSCO) and Nortel. (NT)
Morgan Keegan analyst Simon Leopold wrote in a research note that some of those giants have head starts in some technology areas because of past Ciena cuts in research and development.
But he thinks the company has filled in some of the gaps through partnering with other firms.
And Piper Jaffray's Jensen isn't expecting broadband demand to ease anytime soon.
"The optical transport market has finally shown signs of life, and we believe the fundamentals are in place for several years of solid growth," he wrote in a research note.
A lot of the credit goes to YouTube.
The wildly popular Internet video-sharing site and other bandwidth-thirty applications are driving massive investments in Internet infrastructure.
That makes equipment makers such as Ciena (CIEN) very happy.
The Linthicum, Md.-based company is helping telecom giants such as Verizon, (VZ) AT&T (T) and BT Group (BT) expand capacity, converting old voice networks into wide data pipelines.
The demand has put Ciena back in the black in 2006 after four money-losing years. Halfway through this year, it's on track to deliver 270% earnings growth.
"The underlying demand drivers for optical networking equipment have never appeared to be more robust," Piper Jaffray analyst Troy Jensen wrote in a client note.
Ciena makes equipment used in citywide networks and long-haul data lines. It also makes switches that get data to its destination and access components that help customers deliver telephone and high-def TV over the Internet.
Its customers are telecom giants, cable companies, large enterprises and governments.
Collectively, those markets were worth $8.2 billion last year, Ciena said. It expects them to grow by about 18% per year through 2009.
Fiber networks transmit data rapidly over strands of light-transmitting glass or plastic. It was the hot thing seven years ago.
Telecom companies and service providers laid vast networks of fiber that were to be the backbone of the New Economy. Then came the dot-com bust.
Now, much of that dark fiber is being lit, thanks to video and a slew of other information-dense applications. Service providers are updating the switches in the system. And they're stringing fiber straight into homes to deliver even more services.
"If you don't get the core network updated, there's no way you can accommodate all the capacity that's required," said Stephane Teral, principal analyst with the research firm Infonetics.
For instance, Internet video uses 1,000 times as much bandwidth as a single e-mail, he said.
And then there's YouTube. The Google-owned video-sharing site now uses the same amount of bandwidth as the entire Internet consumed in 2000, computer pioneer Michael Dell said in January.
High-def TV, streaming videos on mobile phones, and other services will require still more broadband plumbing, analysts say.
Teral said the telecom industry's latest infrastructure spending spree began in 2004. But unlike previous binges, this one is more controlled and stable.
The company expects worldwide investments to hit $240 billion in 2008, growing at a single-digit rate through 2009 or 2010.
But carriers must also must maintain their existing networks.
Tom Mock, Ciena's senior vice president of strategic planning, likened that duel challenge to changing out a car engine, with the vehicle running. And the driver shouldn't notice, he said.
That's where Ciena's systems come in.
During the Internet meltdown a few years ago, Ciena placed its bet that fiber-optic networks and ethernet systems would converge to become the dominant Internet architecture. Ciena developed systems to help carriers lower costs by linking those two technologies together.
"We think we've got a good solution that takes into account not only where the service providers need to be, but also where they're coming from," Mock said.
Goldman Sachs analyst Brantley Thompson said Ciena has the right product mix. He sees solid demand from wired, wireless and cable service providers.
"The contract pipeline continues to improve with new opportunities at Tier 1 carriers in the U.S. and Europe," he wrote.
But it has been a bumpy road.
Ciena grew with the technology boom in the 1990s. It went public in 1997. By October 2000, its shares traded around 150.
With the collapse that followed, the company went from $4.20 earnings per share in 2001 to a $7.98 loss in fiscal 2002. Those losses gradually shrank as the market recovered. But by 2005, Ciena's shares traded under 2.
Over that time, though, the company was reinventing itself.
Once a solely fiber pure-play, it went on a buying spree, picking up six companies since 2001. That expanded its product and customer base, turning it into a broader-based network services firm.
The losses eased.
By 2006, Ciena posted a 30-cents-per-share profit.
The company initiated a 1-for-7 reverse stock split in September. Today it trades around 36.
Analysts surveyed by Thomson Financial expect $1.11 earnings per share this year, which ends in January, and $1.54 next year.
The company posted 26 cents per share earnings in its fiscal second quarter, up from 7 cents the year before. Revenue in the quarter was up 48% from a year earlier, to $193.5 million.
With the company back on track, Ciena's chief financial officer plans to step down at the end of the year. Joseph Chinnici has been CFO since 1995. The company has not yet named a replacement.
There are still risks.
Ciena typically relies on several customers for almost half of its revenues — four customers each contributed more than 10% last quarter. But because of various project cycles, that revenue is lumpy. And it faces fierce competition from giants such as Alcatel-Lucent, (ALU) Cisco Systems (CSCO) and Nortel. (NT)
Morgan Keegan analyst Simon Leopold wrote in a research note that some of those giants have head starts in some technology areas because of past Ciena cuts in research and development.
But he thinks the company has filled in some of the gaps through partnering with other firms.
And Piper Jaffray's Jensen isn't expecting broadband demand to ease anytime soon.
"The optical transport market has finally shown signs of life, and we believe the fundamentals are in place for several years of solid growth," he wrote in a research note.
Thursday, June 28, 2007
Tomorrow Iphone debut, today RIMM rock
It has been quite exciting for market to wait for the show off of Iphone quite a while. Before that we have already heard so many rumors about iphone's performance , drawback, etc. Whether it would change the way of people's phone call life in short time? According to what we have seen in IPOD, fancy yet more streamline following on, similar in its macbook and mac book pro. If such pattern is followed, AAPL should have another improved version stuff under research before their release of iphone. This is not our hoping, it is our trust of AAPL's management, trust of steve jobs.
RIMM, also report blowing out ER after market close. Though many analysts have pointed that they are suitable for different customers, however, today's chart really interesting for us to look at. Any thinking? We will see tomorrow:)
Wednesday, June 27, 2007
What we need to look at AOB?
Recently a claim by barron really slam down the price of AOB which even true, should not be a big problem of AOB. What we really need to focus on is the action taken by AOB after its offering of $140 m last two weeks. Its acquisition only spend $30 m, compared to $140m, what does that mean , huh? Yes, more plan is going on. Well by so far, with little information about acquisition, I would suggest we start to load partial of AOB by taking some risk while watching carefully any buyout it may have in the future. If the buyout is not good , then get out quickly.
======================
Part One
An Exchange on a China Stock
To the Editor:
On June 25, Barron's published a negative column by Leslie P. Norton entitled "Chinese Medicine Show" about American Oriental Bioengineering (ticker: AOB). My firm is a shareholder of AOB. I have traveled to Harbin and Hezhou in China to visit AOB's offices, factories, managers, and distributors. The picture that has emerged is diametrically opposed to the portrayal in the column. I have found the company has quality products, fast growth, known brands, savvy management, and hardworking employees.
I believe that the issues raised by the article are immaterial to the fundamentals of the company. However, I would like to address them:
• Peptide products inhibit tumor growth.
AOB has never claimed inhibition of human tumors. A press release in 2004 stated that AOB researchers had shown inhibition of tumor cell growth in mice. Studies done by American researchers (including at UC, Davis) have shown similar results.
• AOB recently said that China will be its main market, whereas earlier filings mentioned international opportunities.
There is no inconsistency between AOB's past and current statements. In 2003 and 2004, AOB had two major products. A significant percentage of sales came from Korea and Japan, and expanding those products into foreign markets was a major objective. AOB has since acquired or introduced new products with sales in China that are much larger than the sales of legacy products. As a result, the company's current statement that China is its main market is not contradictory to past statements.
• Director Wang Xianmin aided the IPO of Daqing Lianyi, whose executives bribed officials.
Wang was a government official in Heilongjiang Province and not an employee of Daqing Lianyi. There is no evidence of anything improper by him. A background check on Wang run by AOB revealed nothing. This is a classic case of guilt by association based on speculation.
• Packaging for soy peptide claims use of technology from UC, Berkeley.
The company does not use technology from UC, Berkeley. AOB had been in past negotiations with UC, Berkeley, to license patents. During this negotiation, one of AOB's local marketing agents inadvertently put this claim on its packaging for the Hong Kong market only (less than 1% of sales). The company is correcting this problem.
Continue
• AOB was involved with CEOCast and MidContinental Securities. Controlling owners of these firms have questionable histories.
The fact that Michael Wachs controlled CEOCast was only discovered a year after AOB stopped doing business with the firm. AOB no longer has any relationship with either CEOCast or MidContinental and was not aware of either company's history at the time of involvement. There is no allegation of any wrongdoing occurring from AOB's involvement with either firm.
More important than whom AOB was peripherally involved with in the past is the people it is directly involved with today. AOB Board Member Lawrence Wizel was a partner with Deloitte and Touche for 26 years. Director Cosimo Patti was an arbiter for the NASD and NYSE for 18 years. It is unlikely that these people would serve as Directors if integrity or accounting problems existed.
AOB is a fast-growing company at an extremely cheap valuation with a phenomenal track record of creating shareholder value. Excluding cash, AOB trades at 9x forward (2008) earnings. EPS has grown at a 43% CAGR over the last four years, and consensus projections are for 37% growth in the next 2 years.
Most importantly, AOB possesses a unique opportunity to acquire at extremely attractive prices. This opportunity is illustrated by recent history. In 2004, AOB acquired HSPL for $7MM. Today that company generates an estimated $6MM in net income. AOB paid a little over 1x current earnings. In April 2006, AOB paid 2-3x year-end 2007 run rate earnings for GLP.
The case for AOB is simple. How many other NYSE companies trade at 9x earnings, are growing 30%+, and have the opportunity to acquire at 2-5x earnings?
My work in China has confirmed this story. I've seen AOB products on the shelves, toured their factories, and confirmed that its brands are known and demand for the products is real.
Sincerely,
Shaumo Sadhukhan
Managing Partner,
Lotus Partners
New York City
======================
Part One
An Exchange on a China Stock
To the Editor:
On June 25, Barron's published a negative column by Leslie P. Norton entitled "Chinese Medicine Show" about American Oriental Bioengineering (ticker: AOB). My firm is a shareholder of AOB. I have traveled to Harbin and Hezhou in China to visit AOB's offices, factories, managers, and distributors. The picture that has emerged is diametrically opposed to the portrayal in the column. I have found the company has quality products, fast growth, known brands, savvy management, and hardworking employees.
I believe that the issues raised by the article are immaterial to the fundamentals of the company. However, I would like to address them:
• Peptide products inhibit tumor growth.
AOB has never claimed inhibition of human tumors. A press release in 2004 stated that AOB researchers had shown inhibition of tumor cell growth in mice. Studies done by American researchers (including at UC, Davis) have shown similar results.
• AOB recently said that China will be its main market, whereas earlier filings mentioned international opportunities.
There is no inconsistency between AOB's past and current statements. In 2003 and 2004, AOB had two major products. A significant percentage of sales came from Korea and Japan, and expanding those products into foreign markets was a major objective. AOB has since acquired or introduced new products with sales in China that are much larger than the sales of legacy products. As a result, the company's current statement that China is its main market is not contradictory to past statements.
• Director Wang Xianmin aided the IPO of Daqing Lianyi, whose executives bribed officials.
Wang was a government official in Heilongjiang Province and not an employee of Daqing Lianyi. There is no evidence of anything improper by him. A background check on Wang run by AOB revealed nothing. This is a classic case of guilt by association based on speculation.
• Packaging for soy peptide claims use of technology from UC, Berkeley.
The company does not use technology from UC, Berkeley. AOB had been in past negotiations with UC, Berkeley, to license patents. During this negotiation, one of AOB's local marketing agents inadvertently put this claim on its packaging for the Hong Kong market only (less than 1% of sales). The company is correcting this problem.
Continue
• AOB was involved with CEOCast and MidContinental Securities. Controlling owners of these firms have questionable histories.
The fact that Michael Wachs controlled CEOCast was only discovered a year after AOB stopped doing business with the firm. AOB no longer has any relationship with either CEOCast or MidContinental and was not aware of either company's history at the time of involvement. There is no allegation of any wrongdoing occurring from AOB's involvement with either firm.
More important than whom AOB was peripherally involved with in the past is the people it is directly involved with today. AOB Board Member Lawrence Wizel was a partner with Deloitte and Touche for 26 years. Director Cosimo Patti was an arbiter for the NASD and NYSE for 18 years. It is unlikely that these people would serve as Directors if integrity or accounting problems existed.
AOB is a fast-growing company at an extremely cheap valuation with a phenomenal track record of creating shareholder value. Excluding cash, AOB trades at 9x forward (2008) earnings. EPS has grown at a 43% CAGR over the last four years, and consensus projections are for 37% growth in the next 2 years.
Most importantly, AOB possesses a unique opportunity to acquire at extremely attractive prices. This opportunity is illustrated by recent history. In 2004, AOB acquired HSPL for $7MM. Today that company generates an estimated $6MM in net income. AOB paid a little over 1x current earnings. In April 2006, AOB paid 2-3x year-end 2007 run rate earnings for GLP.
The case for AOB is simple. How many other NYSE companies trade at 9x earnings, are growing 30%+, and have the opportunity to acquire at 2-5x earnings?
My work in China has confirmed this story. I've seen AOB products on the shelves, toured their factories, and confirmed that its brands are known and demand for the products is real.
Sincerely,
Shaumo Sadhukhan
Managing Partner,
Lotus Partners
New York City
Sunday, June 24, 2007
Thursday, June 21, 2007
The key difference between June this year and Last year
We entered different market situation. Last year we have a big correction followed by a huge rally, this year we have a tiny 4% correction which doomed to follow by a rally later after this month.
If you have paid attention enough, each year's June won't be a good time to buy. It is not our fault, it is some mutual fund and managers' mistaken thinking that causing the sell off most of the time at the second half on June. This year, the same pattern.
You may wanna know why? Jim Crammer 's show one time clarified my question too. At the end of June, time for semi annual performance's count. What those mf and hedge fund's managers do or have to do are to sell and realize their account performance. Not kidding. but for a little bit longer term, no doubt, we are in bull market, and market will make new high in early or middle July. Any correction in June will lead to higher high in July.
If you have paid attention enough, each year's June won't be a good time to buy. It is not our fault, it is some mutual fund and managers' mistaken thinking that causing the sell off most of the time at the second half on June. This year, the same pattern.
You may wanna know why? Jim Crammer 's show one time clarified my question too. At the end of June, time for semi annual performance's count. What those mf and hedge fund's managers do or have to do are to sell and realize their account performance. Not kidding. but for a little bit longer term, no doubt, we are in bull market, and market will make new high in early or middle July. Any correction in June will lead to higher high in July.
Tuesday, June 19, 2007
Lighting up the skyscraper ---CLRK
This company got a decent move recently due to is fudmental change. It offers LED for decorating Skyscraper, seattle, nyx and sanfranscio have used its product. And It could easily expand their product line to other metropolitan and Asia.
Strongly recommend.
=====
Philips Offers $688M for Color Kinetics
Tuesday June 19, 9:10 am ET
By Toby Sterling, AP Business Writer
Philips Offers About $688M for the U.S. Lighting Company Color Kinetics
AMSTERDAM, Netherlands (AP) -- Royal Philips Electronics NV said Tuesday it is offering about $688 million for Color Kinetics Inc. and the Boston-based lighting company's management supports the deal.
ADVERTISEMENT
Amsterdam-based Philips is the world's largest lighting company, while Color Kinetics makes Light Emitting Diode lighting systems for professionals.
LEDs are relatively expensive, but have the ability to produce light in any color, and are both energy-efficient and long-lasting. They are expected to win market share as their cost falls in comparison with incandescent, halogen, and compact fluorescent lights.
Philips is offering $34 per share for Color Kinetics, a 14 percent premium over its closing price Monday of $29.79. Color Kinetics shares had risen by about 50 percent since April 1.
"There was quite a run-up during the process" of negotiating the deal, Philips Lighting CEO Theo van Deursen said in a telephone interview. He said the discussions were confidential as far as the companies knew.
Van Deursen said the offer for Color Kinetics in part reflects important patents it holds on how LED lighting is controlled, specifically the software and hardware that makes it possible to adjust color and brightness. These will become more important in the future as other companies -- including Philips -- have licensed the technology.
Color Kinetics had sales of $65 million in 2006.
"We believe that joining Philips ... is in the best interest of our shareholders, customers, partners, and employees," Color Kinetics CEO Bill Sims said in a statement.
Van Deursen said he expected the deal to win shareholder and regulatory approval and close before the end of the year.
Philips shares dipped 0.3 percent to 31.34 euros ($41.76) in Amsterdam trading.
Philips uses Color Kinetic's controls in its own "Living Colors" color-adjustable LED lamps for the home market. They were introduced in the Netherlands earlier this year and will be sold in five more European countries in September.
Van Deursen said the company does not yet have a date for when the product, which has drawn both praise and some skepticism from technology and design enthusiasts, will be introduced in the United States. He said sales are outperforming expectations so far in the Netherlands but declined to give figures.
Tuesday's acquisition is Philips' third targeting the LED market, as the company continues to bet heavily on the future of the technology.
In 2005, it bought Agilent Technologies Inc. out of their Lumileds LED components joint venture for $950 million.
In March, Philips completed a 53 million euro ($71 million) purchase of Canada's TIR Systems Ltd., which specializes in white light-producing LED modules.
Van Deursen said Philips expects the market for LEDs to grow at more than 20 percent per year and reach $20-30 billion in 2025. The company now has first-place positions in the entire LED supply chain from components and modules to complete systems.
Among major lighting rivals, Siemens AG is the second-largest LED components maker after Philips' Lumileds, but does not have a strong presence in other areas, Van Deursen said.
General Electric Co. does not appear to be pursuing the LED market outside of niche areas such as movie screens, as part of a larger reduced emphasis on its lighting operations, Van Deursen said.
"I don't know what our competitors are missing but we are convinced we're not missing anything," he said.
Strongly recommend.
=====
Philips Offers $688M for Color Kinetics
Tuesday June 19, 9:10 am ET
By Toby Sterling, AP Business Writer
Philips Offers About $688M for the U.S. Lighting Company Color Kinetics
AMSTERDAM, Netherlands (AP) -- Royal Philips Electronics NV said Tuesday it is offering about $688 million for Color Kinetics Inc. and the Boston-based lighting company's management supports the deal.
ADVERTISEMENT
Amsterdam-based Philips is the world's largest lighting company, while Color Kinetics makes Light Emitting Diode lighting systems for professionals.
LEDs are relatively expensive, but have the ability to produce light in any color, and are both energy-efficient and long-lasting. They are expected to win market share as their cost falls in comparison with incandescent, halogen, and compact fluorescent lights.
Philips is offering $34 per share for Color Kinetics, a 14 percent premium over its closing price Monday of $29.79. Color Kinetics shares had risen by about 50 percent since April 1.
"There was quite a run-up during the process" of negotiating the deal, Philips Lighting CEO Theo van Deursen said in a telephone interview. He said the discussions were confidential as far as the companies knew.
Van Deursen said the offer for Color Kinetics in part reflects important patents it holds on how LED lighting is controlled, specifically the software and hardware that makes it possible to adjust color and brightness. These will become more important in the future as other companies -- including Philips -- have licensed the technology.
Color Kinetics had sales of $65 million in 2006.
"We believe that joining Philips ... is in the best interest of our shareholders, customers, partners, and employees," Color Kinetics CEO Bill Sims said in a statement.
Van Deursen said he expected the deal to win shareholder and regulatory approval and close before the end of the year.
Philips shares dipped 0.3 percent to 31.34 euros ($41.76) in Amsterdam trading.
Philips uses Color Kinetic's controls in its own "Living Colors" color-adjustable LED lamps for the home market. They were introduced in the Netherlands earlier this year and will be sold in five more European countries in September.
Van Deursen said the company does not yet have a date for when the product, which has drawn both praise and some skepticism from technology and design enthusiasts, will be introduced in the United States. He said sales are outperforming expectations so far in the Netherlands but declined to give figures.
Tuesday's acquisition is Philips' third targeting the LED market, as the company continues to bet heavily on the future of the technology.
In 2005, it bought Agilent Technologies Inc. out of their Lumileds LED components joint venture for $950 million.
In March, Philips completed a 53 million euro ($71 million) purchase of Canada's TIR Systems Ltd., which specializes in white light-producing LED modules.
Van Deursen said Philips expects the market for LEDs to grow at more than 20 percent per year and reach $20-30 billion in 2025. The company now has first-place positions in the entire LED supply chain from components and modules to complete systems.
Among major lighting rivals, Siemens AG is the second-largest LED components maker after Philips' Lumileds, but does not have a strong presence in other areas, Van Deursen said.
General Electric Co. does not appear to be pursuing the LED market outside of niche areas such as movie screens, as part of a larger reduced emphasis on its lighting operations, Van Deursen said.
"I don't know what our competitors are missing but we are convinced we're not missing anything," he said.
Sunday, June 17, 2007
I don't expect any big thing happen next week
The market recovered so strongly, fully taking back all those 3% correction . And the reading on my radar are market neutral. Also because this weekend I start to learn Option now, that is why I haven't got time to write any market review. If any big issues happen, I will let you know.
Good luck , folks!:)
congratulation to Seth's goog Call.
Good luck , folks!:)
congratulation to Seth's goog Call.
Friday, June 15, 2007
Several observations about this OE
This OE is very very typical I think , flirting with big volatility. But as what I mentioned before, its intrinsic features are mostly expo expressed this OE. For example, the timing issue, the volume issues, the leader sectors issue, the leader stocks issues. Most of them are typical pattern matched with my statistics. Today is my first day to fully review all the option chain and you have found out those intrinsic relationship among each price and price movement. Double check with the option play by bobobobob on NMX, the option play on MA, get your own idea and thinking. Value will come for those people who get ready for it.
Thursday, June 14, 2007
Advanced Tech to play in High Volatile Market
Please note that this tech is based on statistics but can't guarantee certain thing. The description inside such a tech is for experienced trader or speculators because it requires dedicated judgement and cool mindset. Also such a method involves big risk if you are not familar with TA anlysis. Moreover it incorporates my strong personal bias or thinking which you may not agree , that is why it will look controversial but indeed a very powerful trick.
And for specific reason, I won't like to get this idea public ( could be searched by goog or other search engine ) therefore all my friends here, please leave with your email address.
Below is first part of this article.
=======================
Old technique to be thrown away 1
After watching NMX today and HMIN several days ago, I have realized that one technique that has been used for quite a while should be thrown away. The technique, here I mean, is the waiting for confirmation. My successfully catching bottom of AAPL and DXPE really assure me an era is coming for quick response, -- buying in panic while others are watching or selling. My own subjectivity with a quick and formative mind works much better without confirmation. We have learned from many books that you will be buying stocks or the market as they are going down, or shorting/selling them as they are going up. In other words, buying low and selling high when you see confirmation. Can they get lower? That is no doubt about that. Most of the time they will go lower than what you think to be, something similar to what people has consistently warned you “don’t catch a falling knife”, “don’t try to get into the bottom until you really see a bottom”. And most of the books sold in bookstore told you an approach: wait until you see a stock hit the bottom and then start to move up. Sounds genius, we reduce the chance of catching a falling knife, we raise our chance to follow the money trend, fabulous? It seems it is too true to be rejected. Let’s get a little bit deeper into this concept to find out whether this statement is true or not.
And for specific reason, I won't like to get this idea public ( could be searched by goog or other search engine ) therefore all my friends here, please leave with your email address.
Below is first part of this article.
=======================
Old technique to be thrown away 1
After watching NMX today and HMIN several days ago, I have realized that one technique that has been used for quite a while should be thrown away. The technique, here I mean, is the waiting for confirmation. My successfully catching bottom of AAPL and DXPE really assure me an era is coming for quick response, -- buying in panic while others are watching or selling. My own subjectivity with a quick and formative mind works much better without confirmation. We have learned from many books that you will be buying stocks or the market as they are going down, or shorting/selling them as they are going up. In other words, buying low and selling high when you see confirmation. Can they get lower? That is no doubt about that. Most of the time they will go lower than what you think to be, something similar to what people has consistently warned you “don’t catch a falling knife”, “don’t try to get into the bottom until you really see a bottom”. And most of the books sold in bookstore told you an approach: wait until you see a stock hit the bottom and then start to move up. Sounds genius, we reduce the chance of catching a falling knife, we raise our chance to follow the money trend, fabulous? It seems it is too true to be rejected. Let’s get a little bit deeper into this concept to find out whether this statement is true or not.
Reiterate my Rating on NMX
It has reached the 12 months FA target today, I wouldn't rec a buy or a short position to this guy. From FA perspective, its value has been fully appreciated at this point for its TTM earning.
Metronic
Metronic
Wednesday, June 13, 2007
What I learn from today's market
The market rebounces quite remarkable, and in a fast move. More than 11 stocks out of top 100 gains more than 2% with increasing volume. Can you tell that market has changed its direction? hehe,market has not changed its bull trend. More important, you should learn sth that is above superficial appearance of market rally. It basically states two things which normally won't be disclosed by any book or any market makers. First, the pattern of OE game. Second, the timing of OE game. As we pointed out yesterday, OE could produce potential great opportunity for us if this pattern and timing has been mastered.
I am a newbie to option, but from what I saw today, OE does create big chance for those who are ready for it. :)
I am a newbie to option, but from what I saw today, OE does create big chance for those who are ready for it. :)
Tuesday, June 12, 2007
When is the best time to play OE?
Many people may be confused that how to play with OE week?
Even though I seldom trade in OE, but according to my observation, the best time to play with OE is thursday, one day before Friday. And more surprising, you need to reverse trade the direction of what happen on Wednesday and Thursday , let 's check whether it is still true this OE.
But let's try to find out the logistics behind this. What move the OE? market maker?
Where does the market volatility come from? You bet. It comes from the battle between option writer and option buyers. Most likely the institution and hedge fund who use either the leverage to protect their position or just wanna maximize their profit. What would be most important day during such a process? Friday you may say?
Actually Thursday would be the best time , to be more specific, the last few hours during normal trading hours will be the best time to control everything. Institution won't be defeated by small investors, they normally defeat themselves. That is why they would allow volatility to flow while getting control in the last 100 m run during a 1 km race.
Just stay cool and build up our own thinking.
Even though I seldom trade in OE, but according to my observation, the best time to play with OE is thursday, one day before Friday. And more surprising, you need to reverse trade the direction of what happen on Wednesday and Thursday , let 's check whether it is still true this OE.
But let's try to find out the logistics behind this. What move the OE? market maker?
Where does the market volatility come from? You bet. It comes from the battle between option writer and option buyers. Most likely the institution and hedge fund who use either the leverage to protect their position or just wanna maximize their profit. What would be most important day during such a process? Friday you may say?
Actually Thursday would be the best time , to be more specific, the last few hours during normal trading hours will be the best time to control everything. Institution won't be defeated by small investors, they normally defeat themselves. That is why they would allow volatility to flow while getting control in the last 100 m run during a 1 km race.
Just stay cool and build up our own thinking.
Monday, June 11, 2007
What is special today?
My AAPL is stop out together with GOOG turns south. And only one stock out of top 100 increases more than 2% with increasing volume. To be frankly, this is not a good beginning for this week. But this week is OE week, and high volatility is expected. We should stay cool, don't get in or get out easily while keeping a clear mind with what may happen in the market.
I am thinking about the strategy and got some new ideas now:)
also news released today about HSC, which has received a lot of big contracts recently and indicated that they are growing faster into the global business. I maintain my buy recommendation in this stock. Target price hasn't changed.
===============
Harsco Receives Three International Formwork Contracts Totaling More Than $4.5
Million HARRISBURG, Pa., June 11, 2007 (PRIME NEWSWIRE) -- Worldwide industrial
services company Harsco Corporation (NYSE:HSC) announced today that its Huennebeck access services division has received three new contracts totaling more than $4.5 million to supply rental concrete-forming equipment systems for major construction projects in Germany and the Middle East.
Huennebeck has been selected to handle the pre-installation engineering as well as coordination of rental formwork supplies and materials for a new 675 megawatt power plant being built for Vattenfall Europe at Boxberg, in the Saxony region of eastern Germany. The project, Huennebeck's largest construction site in Germany at the present time, will result in a new lignite-fired plant equipped with state-of-the-art environmental systems to support Germany's growing energy requirements. Approximately one-third of the required electricityin Germany is generated from lignite. Huennebeck's wall and floor-shaping forms and shoring supports will be used throughout the pouring and curing of the plant's cast-in-place concrete joists, walls, and columns. The first construction phase is scheduled through 2008 and also includes the use of Huennebeck's highly versatile modular climbing scaffold during the erection of walls and columns.
Huennebeck's subsidiary in the United Arab Emirates has secured two formwork rental contracts in Dubai, including the new H.H. Sheikh Hamdan Awards Building Complex, a prestigious multi-story structure that will become the centerpiece for Dubai's internationally recognized academic and medical sciences awards program similar to the Nobel Prize program. The new complex will comprise three semi-circular structures totaling nearly 125,000 sq. ft. (116,000 square meters) . Huennebeck will supply a range of concrete form systems for the walls, floors and columns as well as shoring to support high beams and slabs during construction.
Huennebeck will also supply rental forms and shoring supports to the construction of the new IBIS Hotel Dubai-Al Barsha, a new 480-room mid-rise hotel scheduled to open to the public in 2008.
These latest contract wins are further examples of Harsco Access Services' expanding presence in the fast-growing global infrastructure markets, where independent estimates of the global investment needed over the next 25 years in such areas as transportation infrastructure, education and healthcare facilities, energy and utilities, and communications infrastructure are as high as $30 trillion.
I am thinking about the strategy and got some new ideas now:)
also news released today about HSC, which has received a lot of big contracts recently and indicated that they are growing faster into the global business. I maintain my buy recommendation in this stock. Target price hasn't changed.
===============
Harsco Receives Three International Formwork Contracts Totaling More Than $4.5
Million HARRISBURG, Pa., June 11, 2007 (PRIME NEWSWIRE) -- Worldwide industrial
services company Harsco Corporation (NYSE:HSC) announced today that its Huennebeck access services division has received three new contracts totaling more than $4.5 million to supply rental concrete-forming equipment systems for major construction projects in Germany and the Middle East.
Huennebeck has been selected to handle the pre-installation engineering as well as coordination of rental formwork supplies and materials for a new 675 megawatt power plant being built for Vattenfall Europe at Boxberg, in the Saxony region of eastern Germany. The project, Huennebeck's largest construction site in Germany at the present time, will result in a new lignite-fired plant equipped with state-of-the-art environmental systems to support Germany's growing energy requirements. Approximately one-third of the required electricityin Germany is generated from lignite. Huennebeck's wall and floor-shaping forms and shoring supports will be used throughout the pouring and curing of the plant's cast-in-place concrete joists, walls, and columns. The first construction phase is scheduled through 2008 and also includes the use of Huennebeck's highly versatile modular climbing scaffold during the erection of walls and columns.
Huennebeck's subsidiary in the United Arab Emirates has secured two formwork rental contracts in Dubai, including the new H.H. Sheikh Hamdan Awards Building Complex, a prestigious multi-story structure that will become the centerpiece for Dubai's internationally recognized academic and medical sciences awards program similar to the Nobel Prize program. The new complex will comprise three semi-circular structures totaling nearly 125,000 sq. ft. (116,000 square meters) . Huennebeck will supply a range of concrete form systems for the walls, floors and columns as well as shoring to support high beams and slabs during construction.
Huennebeck will also supply rental forms and shoring supports to the construction of the new IBIS Hotel Dubai-Al Barsha, a new 480-room mid-rise hotel scheduled to open to the public in 2008.
These latest contract wins are further examples of Harsco Access Services' expanding presence in the fast-growing global infrastructure markets, where independent estimates of the global investment needed over the next 25 years in such areas as transportation infrastructure, education and healthcare facilities, energy and utilities, and communications infrastructure are as high as $30 trillion.
Saturday, June 9, 2007
Comments on Short by bobobobo
关于short
--------------------------------------------------------------------------------
我很久没玩short了， 因为我不会再一个uptrend 的market去short/put, 也不会在一个downtrend 的market 去long/call.
这样的好处是不累。而且，当我确定去做一个方向后，我总是想方设法去推翻我的论据，如果推翻不了，那么我可以确定我是对的。
老实说我觉得mit stock board 上很多人对short的理解很好笑。一年前我和千户探讨过这个问题。 short 的依据在一句话，行情在犹豫中发展，但是下跌可是多半不会在犹豫中进行， 一般直接到支撑位。
理解了这句话，你就可以知道何时应当place short position 了。mit stock board 一个不好的地方是track不了record. 记得去年夏天，我常在大盘上升逾百点时放short. 我的第一个100%多半就里来的。
放short的两个好位置是， 1， 在downtrend的stock, 反弹到中期趋势线下时。
2， overbot 的stock，高位放量，又或有重要趋势线压制，或者接近布林通道顶端，rsi, 威廉系数高位钝化。
--------------------------------------------------------------------------------
我很久没玩short了， 因为我不会再一个uptrend 的market去short/put, 也不会在一个downtrend 的market 去long/call.
这样的好处是不累。而且，当我确定去做一个方向后，我总是想方设法去推翻我的论据，如果推翻不了，那么我可以确定我是对的。
老实说我觉得mit stock board 上很多人对short的理解很好笑。一年前我和千户探讨过这个问题。 short 的依据在一句话，行情在犹豫中发展，但是下跌可是多半不会在犹豫中进行， 一般直接到支撑位。
理解了这句话，你就可以知道何时应当place short position 了。mit stock board 一个不好的地方是track不了record. 记得去年夏天，我常在大盘上升逾百点时放short. 我的第一个100%多半就里来的。
放short的两个好位置是， 1， 在downtrend的stock, 反弹到中期趋势线下时。
2， overbot 的stock，高位放量，又或有重要趋势线压制，或者接近布林通道顶端，rsi, 威廉系数高位钝化。
Yield Curve Impact (by AUV)
Last week, we had a class discussion on yield-curve and perspectives on the interest rate. It started by reading a NY times article on 12/28/05 - Shares Plunge as Shift in Treasury Market Stirs Concern. That was when the yield curve first inverted (technically). We talked about the difference on the interest rate perspective (if any) between now and then. Here is the comment I made:
One main function of the FED is to adjust economy activity through adjusting over night interest rate. The higher is the interest rate, the higher is the borrowing cost, and less capital is flow into the economy. Yield curve reflects the supply and demand of bond at different mature terms. Rising interest hurts long term bonds, therefore when expect further interest raise, the long term bond yields raise, results larger yield different between long term bonds and short term bonds. When investors anticipate FED to cut interest which is beneficial to long term bonds, the demand on long term bonds drive the yield down, the yield difference between long term bond and short term bond diminished. When the long term bond yield is so low that it is less than short bond, the curve becomes inverted. Since banks profit from the positive interest difference between short term(loan) and long term(deposit), inverted curve will make it hard to get loan. Therefore, inverted curve result contraction in economic activities, and often see as a forecast of recession.
The low interest rate of 2001-2004 has been main factor that pull the US economy from the last recession, The low interest rate also results the latest housing boom market which many see as a bubble. After 13 consecutive interest rate, at the end of the 2005 when interest rate is at 4.25%. At that time, as indicated in the reference articles, many saw the interest rate raising phase is about to end and FED would cut the interest rate in the near future. That was the first time when the yield curve first became inverted. However, contrary to many people’s expectation, FED increased interest four more times instead of once, brought interest rate to 5.25% by mid of 2006, and left the rate at the level for a whole without indicating an interest rate cut is expected in the near future. Since the article published, the yield curve has been generally flat with some period of inversion. It indicated that the investors were continue to expect interest rate cut. It was until recently when the interest rate return flat but generally normal, which indicate investors are less expecting interest rate cut in the near future, even expecting an rise interest.
That is a truly surprise, and many people are worrying the high interest rate is hurting the economy, especially the housing market, which has been main driven force for the economy. The reason of such change in expectation lies in the other main function of the FED, which might be more important than the first one, that is maintain the value the US currency at a reasonable level, and control inflation. Since the US economy has been running on large deficit at country level, government level (and at individual level), it largely relies on borrowing from foreign investors and countries through new bond issues. The borrowing has been accumulated to such a high level that further issues of bond might not be absorb as before, which put more pressure on the US dollar. Also major US debtors such as China and Japan also have very low interest rate and are expecting to raise their interest rate. Such interest raise could draw capital out of the US economy if the US is to cut its interest rate. Comparing protecting the economy from a slow down, maintaining the US currency definitely has higher priority, therefore interest rate cut is not likely in the foreseeable future and it wouldn’t be a surprise to see interest rate continue to rise.
One main function of the FED is to adjust economy activity through adjusting over night interest rate. The higher is the interest rate, the higher is the borrowing cost, and less capital is flow into the economy. Yield curve reflects the supply and demand of bond at different mature terms. Rising interest hurts long term bonds, therefore when expect further interest raise, the long term bond yields raise, results larger yield different between long term bonds and short term bonds. When investors anticipate FED to cut interest which is beneficial to long term bonds, the demand on long term bonds drive the yield down, the yield difference between long term bond and short term bond diminished. When the long term bond yield is so low that it is less than short bond, the curve becomes inverted. Since banks profit from the positive interest difference between short term(loan) and long term(deposit), inverted curve will make it hard to get loan. Therefore, inverted curve result contraction in economic activities, and often see as a forecast of recession.
The low interest rate of 2001-2004 has been main factor that pull the US economy from the last recession, The low interest rate also results the latest housing boom market which many see as a bubble. After 13 consecutive interest rate, at the end of the 2005 when interest rate is at 4.25%. At that time, as indicated in the reference articles, many saw the interest rate raising phase is about to end and FED would cut the interest rate in the near future. That was the first time when the yield curve first became inverted. However, contrary to many people’s expectation, FED increased interest four more times instead of once, brought interest rate to 5.25% by mid of 2006, and left the rate at the level for a whole without indicating an interest rate cut is expected in the near future. Since the article published, the yield curve has been generally flat with some period of inversion. It indicated that the investors were continue to expect interest rate cut. It was until recently when the interest rate return flat but generally normal, which indicate investors are less expecting interest rate cut in the near future, even expecting an rise interest.
That is a truly surprise, and many people are worrying the high interest rate is hurting the economy, especially the housing market, which has been main driven force for the economy. The reason of such change in expectation lies in the other main function of the FED, which might be more important than the first one, that is maintain the value the US currency at a reasonable level, and control inflation. Since the US economy has been running on large deficit at country level, government level (and at individual level), it largely relies on borrowing from foreign investors and countries through new bond issues. The borrowing has been accumulated to such a high level that further issues of bond might not be absorb as before, which put more pressure on the US dollar. Also major US debtors such as China and Japan also have very low interest rate and are expecting to raise their interest rate. Such interest raise could draw capital out of the US economy if the US is to cut its interest rate. Comparing protecting the economy from a slow down, maintaining the US currency definitely has higher priority, therefore interest rate cut is not likely in the foreseeable future and it wouldn’t be a surprise to see interest rate continue to rise.
Subscribe to:
Posts (Atom)