I hate the ratings agencies. I have been short Moody's (MCO) in CAPS for a long time now, much to my detriment after the recent run up in its share price and I will remain short it out of principle until the day I die. [more]
I was thinking about commodities this morning and I decided that now is the time to buy natural gas. Here is how I came to this conclusion. [more]
As some of you may know, Merril Lynch's excellent chief economist David Rosenberg recently left the company for a Canadian firm named Gluskin Sheff. [more]
I have not found any stories that really caught my eye this morning, yeah weekly jobless claims stunk, yeah states have no money and they're raising taxes, blah, blah, blah tell me something that I don't know. Perhaps all of this stuff seems so repetitive to me because I follow the news and current events so closely. [more]
The following is a list of the random things that I have learned over the past 24 hours. Some of them useful, some of them not so much: [more]
The following is a reprint of a post that I made back in April followed by an update that includes the name of this mystery company. [more]
This morning I wrote up a huge post on one of the major banks that I own and its portfolio of legacy assets. I went into the post with the intention of justifying my purchase of this company's preferred stock at the height of the stock market panic several months ago. [more]
There are a number of reasons why I believe that U.S. economic growth will be slower than we had become accustomed to over the past two decades going forward. One of those reasons is the government's underfunded entitlement programs. Social Security and Medicare do not have enough money in them and one way or another someone is going to have to pay. Either taxpayers will have to pay higher rates or beneficiaries will receive lower benefits...or a combination of both. Either one would act as a drag upon economic growth. This issue has been talked about a little in the media lately because of the new government reports on these programs, but this is an issue that I strongly believe does not get the attention that it deserves. [more]
The other day I blogged about how I strongly believe that the people who state that the vast majority of corporations will file for bankruptcy in the near future are way off base. The evidence that I cited is that corporations still have a tremendous amount of cash on their balance sheets. Despite the recent economic weakness, according to Compustat the percentage of cash on companies' balance sheets still sits at 22% a solid of companies' total assets (excluding banks and utilities which have cash requirements set by regulators). [more]
I just came across the following article on the April CPI numbers that were published today in this morning's Wall Street Journal: Prices Suggest Little Deflation Risk . I think that this headline is very misleading and is drawing incorrect conclusions from the data. [more]
The number of people, institutions, etc... that got themselves into big trouble by levering up their portfolios on margin or whatever on over the past decade is truly amazing. I just found perhaps the most disturbing example of this yet yesterday...the State of New Jersey. [more]
One of the biggest reasons that we are in the economic mess that we find ourselves in today is the passage of the Gramm-Leach-Bliley Act in late 1999. This act, co-sponsored by the idiotic Mr. "America is a nation of whiners and we're only in a mental recession" Phil Gramm essentially repealed the provision in the Glass-Steagall Act that kept bank holding companies from becoming too large by prohibiting them from engaging in other financial operations, like investment banking, etc... [more]
I had a quick thought this morning as I was making breakfast for my kids. [more]
If you visit CAPS regularly like I do, chances are you have a huge "Watchlist" of stocks to serve as replacements when you make room in your portfolio (for the fun of it I always keep mine pinned at the 200 pick limit...why not). [more]
I have mentioned several times that I was somewhat surprised by the current rally in the market. Despite being caught off guard by it, my personal and CAPS portfolios were positioned fairly well to tolerate extreme moves in either direction, up or down. [more]
I was discussing how the markets keep moving up in the face of all of the data that's still fairly bad via e-mail with my father today and he had one of the most interesting quotes on the subject that I've heard in a while. I'm not sure if he made it up, it's entirely possible that he didn't (I'm going to pretend that he did), but it's a good one: [more]
For what it's worth, I decided to end my successful year-long CAPS short of the Mexican airport operators this morning. Yes, the traffic numbers for the immediate future will indeed be terrible and yes I do anticipate another move downward by the market in the not so distant future...but I think that I have squeezed most of the blood out of my shorts of these stocks at this point.
I have been making an effort to be even more forward-looking with my picks of late. The economy is terrible and likely will not improve any time soon, airlines are hurting, to the best of my knowledge the violence in Mexico has not gone away, and the swine flu is preventing any travelers who could afford to vacation in Mexico and were not afraid of the violence from going there for now...but I don't envision these companies going away and outside of an attack by aliens I don't see how things can get much worse for them.
As has been mentioned millions of times, they have huge moats and pay solid dividends, two traits that I like very much. I am sticking by my forecast that the swine flu will amount to a whole lot of nothing and believe that there's not much more downside left in OMAB, PAC, and ASR.
That's my $0.02.
Ahhhhh it's almost the weekend. Madcow, I'll see your beer and raise you a nice cold Mint Julip during the Kentuky Derby tomorrow. Come on "I Want Revenge."!
Have a great weekend CAPS friends. I'll talk to you all next week.
Anyone who reads my posts from time to time probably knows that I jumped into the bond market with both feet during the second half of 2008 and early 2009. The credit markets were so fouled up that I hadn't seen opportunities like the ones that were out there in years. There were tons of bonds out there for major, blue chip that were in relatively decent financial shape and had tons of assets that sported reasonably short maturity dates (around 7 years or less) and double digit yields at a time when the rates on Treasuries, savings accounts, and CDs were as low as I have ever seen them. [more]