Filed under: Major movement, Rants and raves, Google (GOOG), Apple Inc (AAPL), Berkshire Hathaway (BRK.A), Market matters, Intuitive Surgical Inc (ISRG)

Towards the end of 2007 when the overall stock market was softening, Google Inc. (NASDAQ: GOOG) and Apple Inc. (NASDAQ: AAPL) were still soaring to new highs, and the optimism most assuredly reached euphoria and beyond. What is the next level beyond euphoria — madness — and that’s the kiss of death!

When the notorious Henry Bloggett proclaimed that GOOG was destined to reach $2,000 I do not think there was a dry eye in the house, either laughing at this ridiculous comment, which by the way offered no time frame or reference point, or crying for the shame of it all — that was the kiss of death.

When I read about this I could not resist tempering the madness and posted Serious Money: Google (GOOG) $2,000? No way, it’s too high now! The madness produced many interesting metrics to prove a point, including that you could have traded Google for both Berkshire Hathaway (NYSE: BRK.A) and Intuitive Surgical (NASDAQ: ISRG), two of my favorites, as an even swap (in capitalization only). That would be a heck of deal don’t you think?!

My colleague Georges Yared was overly optimistic about Apple’s growth potential, but I give more credence to his commentary because he had called it right for several years. However, I did part ways on his call for Apple to reach $300 (another kiss of death) and stand by my own comments (back of the napkin again) that Apple might reach the $150 to $160 range this summer. It just seemed to me that piling on another 50% growth on top of the already high metrics was not attainable. This did not stop some folks from frothing at the mouth and ranting about Apple reaching even higher to as much as $400 — the madness was palpable.

Most of the time I try to temper what I see as over zealous commentary as I did last Friday posting Dow below 12,000 — do I hear 11,000? Yes I do! This may not seem so moderate to those suffering 40% drops from AAPL and GOOG highs but it is within a tighter range than many are discussing. Still, some readers I received comments from grabbed the baton from me and proclaimed that the DJIA could sink to 10,000 or even as low as 8,000. I think not.

There are entire industries that are so essential and so active that there is a limit to their theoretical demise. These include healthcare, agriculture, energy, defense, transportation, education, utilities, and, largest of all, government.

When the market was raging on it was difficult for many to imagine that things could fall so fast. Now when things look rather pessimistic it is hard to imagine that things will improve any time soon. I am here to say they can get better. They will stabilize. All the ranting and raving creating euphoria and gloom, is just that, ranting and raving. I have shared the back of the napkin approach as a metaphor for basic investing principals.

When Apple and Google were flying high most stories were biased toward the upside. James Cramer is a leading example of that. Now that both companies have been cut down to size, writers are piling on biased toward the downside. I would advise my readers to ignore the noise in both cases. From my perspective both companies have more long term upside than down, although I personally am a much bigger fan of the diversified Apple Inc. and would not venture very deep into the Google Inc. one trick pony.

I doubt whether ‘my pal Warren’ used much more in any of his analysis as he leaped to the top of the investment world and would be shocked to find any of my long distance mentors using super computers to support their decisions. When you hear things like GOOG will be $2,000 or Apple will be $300 you should interpret these comments the same way you would any get rich quick scheme, and back away from the madness.

One more thing, if you do not have a napkin handy, the back of an envelope or business card is a suitable alternative.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I currently own shares in BRK.B and ISRG.

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Filed under: Market matters, Merrill Lynch (MER), Amer Intl Group (AIG), Politics

New York Gov. Eliot Spitzer, who crusaded against corporate malfeasance, apparently lived in a glass house. He should immediately resign in the wake of his admission that he was caught up in a prostitution scandal.

Spitzer made the prefunctory televised mea culpa, saying, “I apologize first and most importantly to my family. I apologize to the public, to whom I promised better…I am disappointed that I failed to live up to the standard I expected of myself.”

That’s just not good enough.

Spitzer, AKA Client 9, was captured on a federal wiretap, “confirming plans to have a woman travel from New York to Washington, where he had reserved a room,” according to the New York Times, which broke the story. He was no passive victim here.

The irony here is inescapable. Spitzer made a national name for himself crusading against the evils of Wall Street. He had a knack for getting some of the biggest companies in the world including Merrill Lynch & Co. (NYSE: MER), American International Group Inc. (NYSE: AIG) to knuckle under to his demands without having to try his case in court.

Continue reading Eliot Spitzer should resign immediately

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Filed under: Market matters, Merrill Lynch (MER), Amer Intl Group (AIG), Politics

New York Gov. Eliot Spitzer, who crusaded against corporate malfeasance, apparently lived in a glass house. He should immediately resign in the wake of his admission that he was caught up in a prostitution scandal.

Spitzer made the prefunctory televised mea culpa, saying, “I apologize first and most importantly to my family. I apologize to the public, to whom I promised better…I am disappointed that I failed to live up to the standard I expected of myself.”

That’s just not good enough.

Spitzer, AKA Client 9, was captured on a federal wiretap, “confirming plans to have a woman travel from New York to Washington, where he had reserved a room,” according to the New York Times, which broke the story. He was no passive victim here.

The irony here is inescapable. Spitzer made a national name for himself crusading against the evils of Wall Street. He had a knack for getting some of the biggest companies in the world including Merrill Lynch & Co. (NYSE: MER), American International Group Inc. (NYSE: AIG) to knuckle under to his demands without having to try his case in court.

Continue reading Eliot Spitzer should resign immediately

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Filed under: Rumors, Bear Stearns Cos (BSC)

On CNBC today, Alan “Ace” Greenberg scoffed at the notion that Bear Stearns (NYSE:BSC)was on the brink of a liquidity crisis. But the protestation wasn’t enough to stem the fall of the stock price to $62.21, its lowest level since March 2003, according to Bloomberg.

Despite the denial, there were two negative developments: Bear’s put options were unusually active on Monday, and the cost to insure Bear’s debt against default climbed, according to Dealbook.

“Totally ridiculous” is Greenberg’s assessment of the rumors, but someone’s betting that it’s not.

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Filed under: Rumors, Bear Stearns Cos (BSC)

On CNBC today, Alan “Ace” Greenberg scoffed at the notion that Bear Stearns (NYSE:BSC)was on the brink of a liquidity crisis. But the protestation wasn’t enough to stem the fall of the stock price to $62.21, its lowest level since March 2003, according to Bloomberg.

Despite the denial, there were two negative developments: Bear’s put options were unusually active on Monday, and the cost to insure Bear’s debt against default climbed, according to Dealbook.

“Totally ridiculous” is Greenberg’s assessment of the rumors, but someone’s betting that it’s not.

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Filed under: Rants and raves, Scandals, Media World, Politics, Headline news

Pushing aside many other news worthy stories today is one more very sad tale about a do-gooder gone bad. Today it was learned that New York Governor Eliot Spitzer (and former Attorney General) has displayed the ultimate in hypocrisy that will leave a stench so thick it will tarnish not just his reputation but that of every public official. An already cynical public can only become ever more now.

It is being reported that Governor Spitzer engaged the services of a New York prostitution ring in advance of a trip to Washington DC. I will not get on my own moralist high horse about the subject of prostitution, although, I could probably understand the arguments in favor of it being legalized. However, this is much greater than that. This is a question of hypocrisy, illegal activity, betraying a public trust, lying, cheating and stealing.

If the facts play out as initially reported than he has betrayed his family, friends, business associates and the public. This made all the worse by his self aggrandizing and many would argue over zealous approach to chasing Wall Street executives up a tree and leveraging the chase to build a platform for his now shamed office of Governor.

If Mr. Spitzer were single and a private citizen we could debate a whole range of other issues but given his history, and moralizing and de-moralizing others…to state the obvious…this stinks to the high heavens.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

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Filed under: Rants and raves, Scandals, Media World, Politics, Headline news

Pushing aside many other news worthy stories today is one more very sad tale about a do-gooder gone bad. Today it was learned that New York Governor Eliot Spitzer (and former Attorney General) has displayed the ultimate in hypocrisy that will leave a stench so thick it will tarnish not just his reputation but that of every public official. An already cynical public can only become ever more now.

It is being reported that Governor Spitzer engaged the services of a New York prostitution ring in advance of a trip to Washington DC. I will not get on my own moralist high horse about the subject of prostitution, although, I could probably understand the arguments in favor of it being legalized. However, this is much greater than that. This is a question of hypocrisy, illegal activity, betraying a public trust, lying, cheating and stealing.

If the facts play out as initially reported than he has betrayed his family, friends, business associates and the public. This made all the worse by his self aggrandizing and many would argue over zealous approach to chasing Wall Street executives up a tree and leveraging the chase to build a platform for his now shamed office of Governor.

If Mr. Spitzer were single and a private citizen we could debate a whole range of other issues but given his history, and moralizing and de-moralizing others…to state the obvious…this stinks to the high heavens.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

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Filed under: International markets, Federal Reserve

European Central Bank President Jean-Claude Trichet said he’s “concerned” about the euro’s appreciation - - his most direct comments since the euro’s rise to record levels above $1.50 versus the dollar, Bloomberg News reported Monday.

The euro rose about one-half cent to $1.5407 versus the dollar before retreating to $1.5351 in Monday afternoon trading.

“We’re concerned about excessive exchange-rate moves in the present circumstances,” Trichet told Bloomberg News in Basel, Switzerland Monday. It’s the first time Trichet has specifically expressed worry about the currency since November 2007, when he said he opposed “brutal” moves.

Amid a U.S. economic slowdown and U.S. Federal Reserve efforts to stimulate the world’s largest economy with interest rate cuts, the ECB has maintained a status-quo monetary policy, keeping its benchmark refinance rate a 4%. That sand-pat policy has contributed to a flight out of the dollar and into the euro, which increases the cost of euro-zone exports to the U.S., if European companies raise prices to compensate for the dollar’s depreciation. The euro has risen more than 5% versus the dollar this year, and is up more than 90% since 2001.

Forex Analysis: Trichet’s comments came as a surprise. A hawk, Trichet has heretofore underscored the need for monetary policy discipline to contain euro-zone inflation. Further, Trichet has sided with the monetarists’ school that argues that foreign exchange rate changes should be market-determined, so long as they are gradual. In addition, the ECB has never intervened in the currency markets to weaken the euro, and last intervened to strengthen it in 2000. No change is expected in that policy given Monday’s comments, barring a sudden, large fall in the dollar / rise in the euro.

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Filed under: International markets, Federal Reserve

European Central Bank President Jean-Claude Trichet said he’s “concerned” about the euro’s appreciation - - his most direct comments since the euro’s rise to record levels above $1.50 versus the dollar, Bloomberg News reported Monday.

The euro rose about one-half cent to $1.5407 versus the dollar before retreating to $1.5351 in Monday afternoon trading.

“We’re concerned about excessive exchange-rate moves in the present circumstances,” Trichet told Bloomberg News in Basel, Switzerland Monday. It’s the first time Trichet has specifically expressed worry about the currency since November 2007, when he said he opposed “brutal” moves.

Amid a U.S. economic slowdown and U.S. Federal Reserve efforts to stimulate the world’s largest economy with interest rate cuts, the ECB has maintained a status-quo monetary policy, keeping its benchmark refinance rate a 4%. That sand-pat policy has contributed to a flight out of the dollar and into the euro, which increases the cost of euro-zone exports to the U.S., if European companies raise prices to compensate for the dollar’s depreciation. The euro has risen more than 5% versus the dollar this year, and is up more than 90% since 2001.

Forex Analysis: Trichet’s comments came as a surprise. A hawk, Trichet has heretofore underscored the need for monetary policy discipline to contain euro-zone inflation. Further, Trichet has sided with the monetarists’ school that argues that foreign exchange rate changes should be market-determined, so long as they are gradual. In addition, the ECB has never intervened in the currency markets to weaken the euro, and last intervened to strengthen it in 2000. No change is expected in that policy given Monday’s comments, barring a sudden, large fall in the dollar / rise in the euro.

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Filed under: Rumors, Products and services, Consumer experience, Internet, Competitive strategy, eBay (EBAY), Marketing and advertising

If nothing else… eBay Inc. (NASDAQ: EBAY) users are a feisty bunch. After just coming off a multi-week sellers strike, they are already planning their next revolt, tentatively set to launch May 1.

The most recent strike was orchestrated in reaction to recent changes made on the site and lasted from the week of Feb. 18 through last night. While eBay is steadfast that the recent site boycott had no effect on its business, not everyone is buying that, and are anticipating hitting the site again come May.

Some statistics have shown that eBay witnessed a 13% drop in its online listings, but eBay denies any impact. The site claims that the statistics out there are not taking into account a 20-cent listings promotion that it had launched just prior to the boycott that temporarily inflated its auction listings.

Continue reading eBay (EBAY) sellers already planning next boycott

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