Filed under: Blogs, Rants and raves, Google (GOOG), Market matters, Columns, Media World

Question for Henry Blodget’s many detractors: Are you mad that Michael Milken has become respectable?

Blodget and Milken symbolized the excesses of their internet bubble and 1980s respectively. Both were punished for their misdeeds. Milken, who went to prison, now devotes his time to his philanthropic work and an economic think tank. Blodget received a lifetime ban from the securities industry, a punishment he deserved.

Now pundits including MarketWatch’s David Weidner and my colleague Zac Bissonnette say they are outraged that Blodget’s writing is published in leading news outlets including the New York Times. What about Milken? Bloomberg News just interviewed him about the housing crisis. Should my former employer have killed the story given Milken’s notorious past? Of course not.

Milken did his time and paid his fines. He’s a brilliant man who still has plenty of interesting things to say. Same goes for Blodget. To be clear, investors shouldn’t forgive or forget them for what they did. As far as I know Blodget has stayed out of legal trouble since he was banned from the securities industry. In 1998, Milken agreed to pay a $47 million fine to settle an SEC complaint that he violated his lifetime ban.

Is Blodget occasionally disingenuous about his past? Of course. But Milken doesn’t seem to like much about the good old days either. His biography on his foundation’s Web site has one paragraph about his legal problems, which includes this sentence: “Although such conduct had never before (or since) been prosecuted criminally — a fact rarely mentioned in sensationalized press reports — he resolved the case without a trial to prevent further impact on his family.”

Does the good Milken has done through his philanthropy make up for the bad? That’s tough to say. Blodget is the same boat as the former junk bond king. No matter what he says or does, he’ll still be known as THAT Henry Blodget from the internet bubble. Maybe as the memory of the late 1990s fades, people will shrug off his notoriety. That day, though, has yet to arrive.

American likes to build people up, knock them down, and watch them rebuild. In his post-bubble life, Blodget has managed to become an entertaining blogger, regularly needling Jim Cramer and the high-tech establishment.. He shoots from the hip and sometimes misses, like when he wrote that my colleague Peter Cohan was “presumably a Time Warner employee,” which he’s not. Nonetheless, his pieces on valuations such as how Google Inc. (NASDAQ: GOOG) may reach $2,000 is a must read for anyone interested in tech stocks.

Anyone who wants Blodget to go away should ignore him. By continually harping on his past, in fact, they are adding to his notoriety. That makes the media even more interested in what he has to say. Plus, Blodget is a great writer. He was a journalist before becoming an analyst, and no doubt wishes at times he would have stuck with his old career.

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Filed under: Blogs, Competitive strategy, Entrepreneurs

It’s been three weeks since our Money Face-Off feature ran here at BloggingStocks and on AOL, offering you the opportunity to share who you though had the financial edge in a series of twenty head-to-head match-ups. So I thought I’d take another look and see how things have worked out.

It’s hard to pick just one big winner. In terms of the largest lead over a rival, Ivanka Trump easily beats Paris Hilton with 89% of the vote. Others holding big leads over their opponents include Tiger Woods, Warren Buffett, Steven Spielberg, and Rupert Murdoch.

In terms of receiving the most votes, the clear leader is the Oprah Winfrey vs. Martha Stewart match-up, with just short of 150,000 votes. Other big vote getters were Tiger Woods vs. David Beckham, Rudy Giuliani vs. Michael Bloomberg, and Bill Gates vs. Steve Jobs. In terms of the liveliest discussions in the comments, the winners are Oprah Winfrey vs. Martha Stewart, Erin Burnett vs. Maria Bartiromo, and Bono vs. Angelina Jolie. Also check out the comments for the J.K. Rowling vs. J.R.R Tolkien, Tiger Woods vs. David Beckham, and Ivanka Trump vs. Paris Hilton posts.

As for the face-off posts here that got the most attention, the clear winner is Erin Burnett vs. Maria Bartiromo, with more than 13,000 hits. Lindsay Lohan vs. Britney Spears and Oprah Winfrey vs. Martha Stewart also attracted lots of readers.

Results for all the face-offs follow below, but keep in mind that the voting is still open. It’s not too late to add your vote or let us know what you think.

Continue reading Money Face-Off Big Winners: Oprah, Tiger Woods, Ivanka Trump, Erin Burnett

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Filed under: Google (GOOG), Genentech Inc (DNA)

It’s still kind of mysterious - but startup 23andMe is getting traction. This week, the company announced a round of venture capital from Genentech, Inc. (NYSE: DNA) and Google, Inc. (Nasdaq: GOOG).

Something else: the cofounder of 23andMe is Anne Wojcicki, who is married to Google zillionaire, Sergey Brin.

Even though 23andMe is focused on the biotech market, there’s still synergy with Google. That is, the company is developing cool technologies to decipher the genome. And to do this, you actually need to provide some of your own DNA (but, if you watch CSI, you know this is pretty easy).

So, if many people store personal information on websites (like credit cards), why not your genome?

Besides, it can be a great platform for researchers to devise innovative medical treatments.

As the website states: “Even though your body contains trillions of copies of your genome, you’ve likely never read any of it. Our goal is to connect you to the 23 paired volumes of your own genetic blueprint (plus your mitochondrial DNA), bringing you personal insight into ancestry, genealogy, and inherited traits. By connecting you to others, we can also help put your genome into the larger context of human commonality and diversity.”

Yes, it’s a brave new world after all.

And, if you want to check out more venture fundings, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

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Filed under: Morgan Stanley (MS), Initial public offerings

Lately, the tech IPO market has been heating up. Oh, and Chinese IPOs have also been particularly strong. So when China Digital TV Holding (NYSE: STV) went public this week, it was inevitable it would do well. The company develops technologies and solutions for the Chinese digital television market.

On its first day of trading, China Digital’s stock soared 75%. The underwriters included Morgan Stanley (NYSE: MS) and Credit Suisse (NYSE: CS).

Basically, China Digital develops things like smart cards (for set-top boxes) and sophisticated software for digital submissions. The company’s market share is a whopping 44%.

Interestingly enough, the Chinese government is requiring that television operators move to digital systems by 2015. In other words, the growth should continue for China Digital.

From 2004 to 2006, the company’s revenues spiked from $3.6 million to $30.4 million. In fact, the company posted a profit last year of $13 million.

However, China Digital’s valuation is frothy, trading at more than 50 times trailing revenues. But, as seen with other Chinese IPOs, this actually seems kind of normal.

Also, if you want to check out other IPOs, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

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Filed under: Competitive strategy, Google (GOOG)

Baidu.com (NASDAQ: BIDU) has fended off Google, Inc.’s (NASDAQ: GOOG) advances in the Chinese search market for quite some time, and very successfully. But Google is never one to give up, and the global search leader has gained some significant market share gains in China after the Sina partnership in addition to the new partnership with Tianya.com — both of which are heavily-trafficked Chinese internet portals.

Google’s strategy with both of these partnerships was to put the heat on Baidu.com, no doubt. Google’s head of business and sales for Taiwan and Hong Kong said this week that “We are closing up the gap with them (Baidu),” which is code for we are dead set on catching and surpassing Baidu as China’s pre-eminent search and portal destination.

China is the world’s second-largest internet market (after the U.S.) with 162 million web users. Don’t think for a second that Google won’t pull some cash from its war chest to crush Baidu.com with every ounce of strength it can muster.

Right now, Baidu leads China with a 58.1% share of the internet market (as in, a destination), compared with Google’s 22.8% share for the second quarter of 2007. What’s striking here is that Google’s share is up over 4% from the prior quarter. 4% in a single quarter — nah, that’s not aggressive at all, right?

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Filed under: Getting started, Comfort Zone Investing

Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he’ll offer advice to investors who are just getting started.

Try this exercise: The next time the stock market rockets higher, look at your portfolio and sell part of a position in a stock where you have a profit, a stock you know is overvalued. This action takes only a few minutes to do and allows you to put money in the bank. Done on a regular basis, this is a sure way to lock up gains, have money for investing in stocks that are underpriced, and make yourself feel great.

This is an excellent exercise for investors. It puts discipline into investing. Just like regular exercising, discipline is the key to success. Trading is not the goal here. Rather, you’re looking to take advantage of “irrational exuberance” in a stock that has gone well beyond a decent valuation, such as a P/E (price to earnings) ratio that is much higher than the growth rate. Also, you’re not looking to sell all your position. In fact, you may want to buy your full position back when a more rational valuation returns. If the stock continues on its irrational way, you still own shares and can sell those at an even higher price.

Continue reading Comfort Zone Investing: Two stock exercises to try…for better wealth

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Filed under: Google (GOOG), Apple Inc (AAPL), McDonald’s (MCD), Caterpillar (CAT), 25 Stocks for Next 25 Years, Stocks to Buy

I had the pleasure of writing a series this spring on the Top 25 Stocks for the NEXT 25 years. I researched over 300 companies to come up with the list of what I thought were the best 25 stocks to own for the next 25 years. But something was missing that I now want to address in a new series.

The very nature of picking 25 stocks which hopefully would perform magnificently for 25 years excluded many great companies that were already executing well but could not be included because of their high current market capitalization. Some examples were “game changing” companies like Apple (NASDAQ: AAPL). Back in May, Apple had a market capitalization of about $90 billion. But I couldn’t include it in my top 25 unless I expected Apple’s market cap to reach several trillion dollars. I love Apple, but that’s probably not in the cards. By the way, Apple today is worth $130 billion.

Another example of a game-changing company is McDonald’s (NYSE: MCD). This once staid, stuck-in-the-mayonnaise company has re-invigorated itself in the past couple of years and has seen its market value more than double to $66 billion. I’d also throw in that camp Caterpillar (NYSE: CAT), which since January 2004 has seen its own market capitalization double to $51 billion. Caterpillar changed and fortified its business model starting back in late 2003. By the way, Apple,Caterpillar and McDonald’s are still game changers—meaning the shares are a buy.

So what is a game changer? A game changer is a company that has a newer, better mousetrap to entice its customers. It’s also a company that has the products to create a new market altogether. Google (NASDAQ: GOOG) is the best example there.

A game changer defines or re-defines the sector where it competes. A game changer sets the pricing and margin model in its sector. A game changer explores new geographies for its products, and in many cases betters mankind. One might argue that a McDonald’s Big Mac does not better mankind, but McDonald’s has made a powerful effort to offer healthier items on its menu. A game changer, regardless of current size, grows its revenues and earnings at the highest levels within its respective sector.

Many of the top 25 stocks for the NEXT 25 years are game changers in their own right. Electro-Optical Sciences (NASDAQ: MELA) could be a mega game changer in the diagnosis and treatment of the most common cancer — skin cancer. Opsware, now part of Hewlett-Packard (NYSE: HPQ) was a game changer in the information technology (IT) world, radically lowering the cost of servicing and implementing new programs to large organizations’ server farms. Typically, the most expensive IT function was dramatically enhanced in quality yet accomplished more quickly and cheaply. Indeed a major game changer.

Can a large blue-chip company be a game changer? Absolutely. Many stodgy companies re-invent themselves with better products and services. The fun part is to catch the Caterpillars and the McDonald’s early in their “revamped” cycles. Game changers can come from any industry and at almost any valuation. If they “change the game,” their market valuation will invariably change as well — for the better.

So begins this series. My next Game Changer article will feature two companies that are compelling buys … stay tuned!

Georges Yared is the CIO of Yared Investment Research and the author of Baby Boomer Investing…Where do we go from here?

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Filed under: Products and services, Stocks to Buy

Its location among the mid Atlantic states has made New Jersey a transportation hub, a manufacturing and commerce center, and a source of plenty of investment opportunities. Twenty-four Fortune 500 companies are headquartered there. And four companies from New Jersey made Fortune’s 2007 list of the fastest growing companies in the U.S.: Cognizant Technology Solutions (NASDAQ: CTSH), Celgene Corp. (NASDAQ: CELG), inVentiv Health Inc. (NASDAQ: VTIV), and Jackson Hewitt Tax Service Inc. (NYSE: JTX).

Cognizant has been on Fortune’s list of fastest growing companies for the past five years. This Teaneck-based member of the S&P 500 is a global IT services firm with clients in the health care, financial services, and manufacturing industries. Cognizant’s three-year annual revenue growth rate was 56 percent; its three-year annual earnings per share growth rate was 55 percent. The consensus of analysts surveyed by Thomson Financial is that Cognizant is a buy, and the company has beat Wall Street expectations for the past four quarters. The share price of $85.79 at close on Friday is up from the 52-week low of $67.60 in September. The price has risen since Cognizant announced a stock split and share repurchase program in September, and the Motley Fool has since dubbed Cognizant a hypergrowth stock.

Summit-based Celgene is a biopharmaceuticals firm involved in cancer treatment and stem cell research. Its three-year annual revenue growth rate was 48 percent; its three-year annual earnings per share growth rate was 33 percent. The consensus of analysts surveyed by Thomson Financial is that Celgene is a buy. The share price reached a 52-week high of $72.91 on Friday. The Motley Fool recognized Celgene for its sustainable competitive advantage over its rivals, and Jim Cramer also likes Celgene.

Continue reading Investing in New Jersey: Jackson Hewett (JTX), Cognizant (CTSH) and others

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Filed under: Major movement, Earnings reports, Analyst reports, Forecasts, Google (GOOG), Yahoo! (YHOO)

No one seems satisfied with the plans that Sue Decker and Jerry Yang, Yahoo!’s (NASDAQ: YHOO) new management, have made for the company. Concerns about slow growth of display ads and a mediocre launch of the Panama search product have caused more grumbling among investors. No one thinks Q3 numbers are going to be impressive.

Yahoo! is up 3.5% this morning. 24/7 Wall St. published a summary of a report from Bernstein Research which shows that if the portal were broken into three pieces, the company would be worth $39 a share. The stock has been trading below $27.

The break-up document shows that Yahoo! should be cut into three pieces. The first is the display ad business. The second is the search business. And, the third is Yahoo!’s subscription operation. Bernstein is convinced that the three operations would do better with new owners For example, Google (NASDAQ: GOOG) would do a better job of getting money from the Yahoo! search operation.

Bernstein earlier offered another option for Yahoo!. Out-source search to Google and cut 25% of total staff. The research house says that operating income would rise 206% next year compared to consensus numbers.

It is unlikely that Yahoo! management will take any of this advice, but the analysis does make one thing clear. The company is worth more than it stock price says.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Law, Newspapers, Scandals

The Wall Street Journal is reporting (subscription required) that federal prosecutors have started a criminal investigation into the collapse of two Bear Stearns (NYSE: BSC) hedge funds.

The investigation is reportedly in the early stages, with the FBI and Brooklyn U.S. Attorney involved. Experts say that it will be difficult to build a case against the funds because, unless there was clear fraud, hedge funds are regulated very lightly. The wealthy investors who qualify to invest are generally assumed to be able to take care of themselves.

Shares of Bear Stearns shrugged off the report, climbing 3.11% to close at $131.58.

Bear is also being looked at by the SEC. The company recently reported large write-downs on subprime losses and some believe that Bear, and other banks, may be using the write-downs to create “cookie jar” reserves that can be used to boost earnings in future periods, when the securities in question rebound.

There’s a lot of scandal enveloping these banks right now — starting with the fact their earnings are often nearly impossible to really understand. Unless you really think you can understand them, it may be be best to stay away.

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