Archive for February 9th, 2008
Filed under: Products and services, Management, Television, Rants and raves, Personal finance, Politics, Presidential elections
Health care is a very serious matter, and polling indicates that Americans consider it of the utmost importance, rating it right after the economy in general, and above the Iraq war and homeland security.
It is strange to me then that ‘television,’ while not showing up in national polls, ranks higher then health care as a priority when it comes to household spending. If you believe the numbers in the news, 99% of households own televisions but only 84% have health insurance in any form.
Certainly cost and availability are the screaming issues of the day. However, value judgments also play a roll and I believe that whatever solutions are proposed, individual choice and responsibility should remain of paramount importance and that maintaining competition in the market place remain a principal goal.
Continue reading Big Screen TV or Health Care Insurance?
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Filed under: Bad news, Recession
Consumer confidence in the economy dropped even lower in February 2008, on concerns that job growth will slow and that the U.S. economy may fall into a recession, RBC Bank announced Friday, in its monthly survey.
The RBC Cash Index dropped to 48.5 in February 2008 from 56.3 in January 2008. The February 2008 stat was the index’s lowest reading since the bank started the index in 2002, the bank said.
RBC (NYSE: RY) said the February 2008 reading continues a downward trend that has persisted through the last year, with consumer sentiment fell across the board - - with concerns about the U.S. economies health and worries about job security and investing weighing on Americans.
Economist Glen Langan told BloggingStocks Friday this month’s RBC survey is consistent with other polled data on the current economic mood of Americans.
Continue reading RBC consumer confidence index drops to lowest level since 2002
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Filed under: China, Altria Group (MO), Anadarko Petroleum (APC), Serious Money, Oil
One of our readers commented recently that I had earned his respect because I always tracked and posted my bad picks not just the good picks. I have been told this often but it is not so uncommon in better publications. Barron’s weekly and Fortune Magazine both do the same. It’s only fair, and should be standard operating procedure. I have not seen James Cramer do it but then he makes thousands of recommendations so how can he track anything?
I also think that in a blog you have the opportunity to establish a dialogue with readers and might even learn something. I have learned plenty from readers and colleagues alike. So having exposed some of my failings in the past month I thought I would look back and and review some of my successful picks.
When I posted Chasing value: Aluminum Corporation of China ADS eleven months ago in March, ACH was $22.98. It closed yesterday at $39.03 for a 70% gain. It had reached a 52-week high of $90.95 in between. We took some money off the table at $88 and are now playing with the ‘house money’. This one has worked out great.
Continue reading Serious Money: great picks: Aluminum Co. of China & Anadarko
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Filed under: Chasing Value
Leucadia National (NYSE: LUK) is a holding company that has been compared favorably to a young Berkshire Hathaway (NYSE: BRK.A), and BloggingStocks’ Aaron Katsman has suggested that company as a good alternative to Berkshire for investors.
Apparently Leucadia has also taken Buffett mentor Benjamin Graham’s mantra to heart: “Be fearful when others are greedy and greedy when other are fearful.”
Leucadia has boosted its stake in AmeriCredit (NYSE: ACF) all the way up to 22.4%. It’s hard to think of a more contrarian investment in light of the consumer credit crunch: AmeriCredit buys auto loans from dealerships and makes its own loans through its dealership network — 80% of the loans are for used cars.
Fears of a continuing rise in defaults have sent shares of the company down big over the past year. The stock is currently trading at a low P/E and a discount to book value. The big question is whether all the bad news is priced — it’s possible that the company will have to take additional losses on bad loans, just as many subprime housing lenders have.
To see what else Leucadia has in its portfolio, check out this page from StockPickr.
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Filed under: Bad news, Products and services, Consumer experience
Billboard reported Wednesday that Warner Music Group (NYSE: WMG) suffered a $16 million loss during the first fiscal quarter of this year, which ended on December 31, 2007. This is the result of shutting down a concert promotion company, and the loss also contrasts with the $18 million income the company enjoyed in the same period a year ago.
Despite this loss, the music giant still managed to increase domestic sales up 10.5% in the face of album sales dropping 14.6%, and international sales also increased by 2.7%. The company told Billboard that the growth was due to labels Warner Bros. Records and Atlantic Records “capturing the No. 1 and No.2 rankings in U.S. market share and to a strong showing in digital revenue.” According to the same piece, the revenue from digital sales was 14% of all revenue, but still not a significant increase over past figures.
Continue reading Warner Music sales growth fails to hide quarterly losses
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Filed under: Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Bargain stocks, Chasing Value, Stocks to Buy, Best Stocks for 2008
After years of ranting and raving that Google Inc. (NASDAQ: GOOG) was over priced and that investors and speculators alike were at risk I finally did an about face this week. The big GOOG made my Chasing Value column earlier in the week Chasing Value: Is it Google time? when it dropped below $500 per share. Contrarian that I am, when everyone else is losing heart I think perhaps reality takes hold. One tenet of contrarian investing is that nothing is ever priced right!
So this week I sensed an opportunity was at hand and could not resist blurting it out. In a down week and down day Google is up, so far so good. Microsofts (NASDAQ: MSFT) offer to buy Yahoo Inc. (NASDAQ: YHOO) in a hostile bid Microsoft attacks: going after Google not Yahoo did not faze Google. There are many that think MSFT is making a mistake by overpaying and will not see the return on investment that shareholders should expect.
Continue reading Chasing Value: Google looks to end the week higher
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Filed under: Microsoft (MSFT), Apple Inc (AAPL), Newsletters, Oracle Corp (ORCL), Stocks to Buy
“This is still a psychologically damaged market; take for example, what happened with VMware (NYSE: VMW) after its latest earnings announcement,” notes Toby Smith in ChangeWave Investing.
“VMware recently reported that its fourth-quarter net income more than doubled on an 80% increase in revenue. Despite these excellent results, after-hours selling has plunged the shares lower by 25% to around $61.
“The culprit appears to be analysts’ forecasts for an 82% increase in revenues. The buzz on the Street is that this miss signals stiffer competition in the virtualization space from Microsoft (NASDAQ: MSFT) and Oracle (NASDAQ: ORCL).
“However, during the conference call VMW management said customers have tried some competitors’ products and told them that they see no reason to switch.
“This sell-off is similar to what recently happened to Apple (NASDAQ: AAPL) — blowout performance followed by a hatchet job on the shares. As with Apple, we see this price drop in VMW as a great opportunity to establish a low cost-basis in the stock.
Continue reading A vote for virtualization: Toby Smith buys VMware (VMW)
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Filed under: Products and services, Circuit City Stores (CC)
 Although consumer electronics retailer Circuit City Stores, Inc. (NYSE: CC) is teetering on the brink of a buyout or doomed to failure, at least some areas of it appear promising. This time around, the company has announced that it will get involved with the used video game industry. You heard that right.
Instead of focusing efforts on trying to improve its retail competitive position and somehow out-maneuver competitor Best Buy, Inc. (NYSE: BBY), Circuit City will position itself as a sort of flea market. It’s true that the used video game industry is chalked up at a $1.5 billion-a-year industry, that’s a niche currently being filled by game specialty retailers like GameStop Corp. (NYSE: GME) and eBay. But this move is a sign that Circuit City is willing to do something — anything — to revitalize any product category that it can.
If Circuit City can really make this effort stick, then it may succeed in actually getting more shoppers in the doors. But video game buyers and traders are a fickle lot and will instantly sense if the retailer’s pricing, availability and breadth of titles are going to give the competition a run for the used-video-game money, or if this is just another ploy to improve traffic numbers (as some of these customers will invariably shop for more than video games).
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Filed under: Products and services, Consumer experience, Competitive strategy, Starbucks (SBUX), McDonald’s (MCD)
 It seems to me that my aversion to McDonald’s Corp. (NYSE: MCD)’s burgers and the company’s success are inversely related; the more I dislike the greasy food, the more the fast-food chain succeeds. It was only today that the world’s largest restaurant company said sales at locations open more than 13 months, commonly know as same-store sales, increased 5.7% in January, spurred by growth in Europe and Asia.
While comparable-store sales in the US grew 1.9% (better than the 1.5% the company had guided), sales in Europe — McDonald’s largest region by revenue — advanced 8.2% and 7.8% in Asia, the Middle East and Africa.
The main culprits to the chain’s growth? In Europe — it was burgers and chicken sandwiches, in China — longer hours, and in the US — it was breakfast. Apparently, the new $2.49 McSkillet breakfast burrito boosted breakfast sales.
Continue reading McDonald’s (MCD) January sales boosted by dollar; led by Europe
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