12/14/02 My Sigma Nu Experience
The Trent Lott furor brought up a memory. In my college sophomore year I joined Sigma Nu. I was foolishly unaware that the national charter prohibited allowing blacks into our chapter. Many weeks later this fact was brought out. I immediately called a meeting of all our brothers. It was late in the evening. I discussed my feelings on this discrimination, and pointed out that, had I known of this policy, I would not have joined in the first place. I said my alternatives were to resign or to implore the others here in the room to vote to have our chapter go local and leave the national Sigma Nu organization. The meeting went on for some time. Each person had the opportunity to voice his views. A vote was taken. We withdrew from the national organization. From that point onward our local fraternity( no longer called Sigma Nu) invited all minorities to join, and they did.
Michigan Governor-elect Jennifer Granholm said the state's financial picture is more bleak than she had thought, and deep budget cuts will be required. A $1.8 budget deficit looms in the coming fiscal year. Only school funding will be frozen. Caifornia's Davis would do well to learn from Granholm.
As N.YC. moves closer to a transit strike, a judge barred the transit workers from striking.
China has 8 million new urban job-seekers each year. It's a good thing China's economy is growing 7-8%. Their unemployment rate is 4%.
U.S. producer prices declined 0.4% in November. This was the largest drop since a similar decline in May. Deflation is not a rumor.
Friday, December 13, 2002
12/13/02 A Weak Dollar and New Highs For Gold And Natural Gas
Yesterday the dollar dropped to its lowest level vs the Euro since January 2000. If you have been reading this blog, you know I believe this weakness will persist.
Gold is approaching a 3 year high. It is exactly 2 1/2 years since I turned bearish on the stock market and bullish on gold.
Natural Gas is at a 19 month high with the lowest supplies since June 2001. This too has been forecast by me.
Jobless claims in the latest week rose 83,000 to 441,000, and represents a return to April layoff levels. That's quite a "soft spot".
AOL is laying off 300. You can expect more to come.
At the end of November GM, Ford, and Chrysler had an unsold inventory of 2 1/2 million cars. I feel confident that this figure can reach 3 million. We just have to be believers in their inept management. The Mojave desert awaits autos. The planes parked there need some company.
Western European car sales declined 6.2% in November.
The ECB lowered its forecast for growth in the dozen nations sharing the Euro to about 1% in 2003. That is a downward revision of 50%! Nexans, the world's largest maker of cables, had lower sales and will idle factories and layoff workers. Alcatel to do the same. Gemplus Int'l, the world's largest maker of smart cards. to layoff about 500 workers in France. Speaking of France, their industrial production dropped 0.6%, the most in a year.
Our money supply is growing but assets are falling(due to lower stock market values and rising personal and corporate bankruptcies). The adjusted monetary base has grown rapidly over the past two years. Upon further analysis, almost all of that growth is in cash! What has happened to those dollars- about 100 billion of them? They have for the most part left the U.S. and reside where the dollar is king. Even though the money supply has risen, the money has been exported and therefore inflation was not created. Should the Fed either monetize the U.S. debt and/or change bank reserve requirements, I suggest it would be a last resort move and not a solution.
I keep wondering. How many of those aforementioned dollars have gone to fund terrorist organizations?
Yesterday the dollar dropped to its lowest level vs the Euro since January 2000. If you have been reading this blog, you know I believe this weakness will persist.
Gold is approaching a 3 year high. It is exactly 2 1/2 years since I turned bearish on the stock market and bullish on gold.
Natural Gas is at a 19 month high with the lowest supplies since June 2001. This too has been forecast by me.
Jobless claims in the latest week rose 83,000 to 441,000, and represents a return to April layoff levels. That's quite a "soft spot".
AOL is laying off 300. You can expect more to come.
At the end of November GM, Ford, and Chrysler had an unsold inventory of 2 1/2 million cars. I feel confident that this figure can reach 3 million. We just have to be believers in their inept management. The Mojave desert awaits autos. The planes parked there need some company.
Western European car sales declined 6.2% in November.
The ECB lowered its forecast for growth in the dozen nations sharing the Euro to about 1% in 2003. That is a downward revision of 50%! Nexans, the world's largest maker of cables, had lower sales and will idle factories and layoff workers. Alcatel to do the same. Gemplus Int'l, the world's largest maker of smart cards. to layoff about 500 workers in France. Speaking of France, their industrial production dropped 0.6%, the most in a year.
Our money supply is growing but assets are falling(due to lower stock market values and rising personal and corporate bankruptcies). The adjusted monetary base has grown rapidly over the past two years. Upon further analysis, almost all of that growth is in cash! What has happened to those dollars- about 100 billion of them? They have for the most part left the U.S. and reside where the dollar is king. Even though the money supply has risen, the money has been exported and therefore inflation was not created. Should the Fed either monetize the U.S. debt and/or change bank reserve requirements, I suggest it would be a last resort move and not a solution.
I keep wondering. How many of those aforementioned dollars have gone to fund terrorist organizations?
Thursday, December 12, 2002
12/12/02 The Trojan
I believe the LA Times had a poor choice of words when characterizing USC's history of sometimes alienating Jews. It was entitled "Day of the Jewish Trojan." As a Jew, I find that an insult. I've never been a party to a trojan.
The LA Times also reports that CSX, of which John Snow has been chairman, didn't pay taxes in 2 out of the last 4 years. If I were a CSX stockholder, I'd be complaining about the 2 years where they did pay taxes.
The state of Washington complains that their tax structure wasn't designed for today's economy because the state doesn't tax groceries, medicine, airplane tickets, legal services, and electronic commerce. The state lawmakers are considering taxing legal, accounting, and engineering services. The Washington constitution bars all but a 1% flat income tax.
More layoffs on the way: Sarah Lee, Aetna Health, Charter Communications,Sprint, Netscape, Yahoo, Inhale Therapeutic, and the University of Illinois.
KMart to close 200-300 stores in January.
Intel's Andy Grove said it would be too optimistic to forecast a semiconductor rebound. What does he know? He only has been running the company for about 35 years!
Kimberly-Clark issued a 4th quarter profit warning due to diaper price wars. The company plans to cut costs by $175-200 million in 2003. Layoffs coming?
There are about 100 million individuals in North America who require cholesterol-lowering products. A recently published study in the British Journal of Nutrition stated that individuals who consume foods containing plant phytosterols enriched with chocolate had their LDL cholesterol reduced by 10%. Sounds good to me. Make mine Lindt orange chocolate.
The foreclosure rate in Northern California is rising.
In 1979 Paul Volcker, the new Fed chairman, decided on a different policy- no longer having the Fed target interest rates, but rather target a level of money supply growth consistent with price stability. The markets would determine the interest rates. As I have said so often, I believe the market does determine interest rates and not the Fed. Greenspan would not agree. In my view, with inflation and deflation in current balance, it would serve the economy well to focus on the optimum level of money supply growth and that focus could jumpstart our dismal economy.
The wagons are circling Trent Lott because he backed Bob Jones University despite its racial policy. Our problems are much bigger than that. Asa Hutchinson, the number 2 person behind Governor Ridge in our Homeland Security department, GRADUATED from Bob Jones University. I know about that university's policies thru the experience my son, Edward, had there. He didn't stay but a day or two.
I believe the LA Times had a poor choice of words when characterizing USC's history of sometimes alienating Jews. It was entitled "Day of the Jewish Trojan." As a Jew, I find that an insult. I've never been a party to a trojan.
The LA Times also reports that CSX, of which John Snow has been chairman, didn't pay taxes in 2 out of the last 4 years. If I were a CSX stockholder, I'd be complaining about the 2 years where they did pay taxes.
The state of Washington complains that their tax structure wasn't designed for today's economy because the state doesn't tax groceries, medicine, airplane tickets, legal services, and electronic commerce. The state lawmakers are considering taxing legal, accounting, and engineering services. The Washington constitution bars all but a 1% flat income tax.
More layoffs on the way: Sarah Lee, Aetna Health, Charter Communications,Sprint, Netscape, Yahoo, Inhale Therapeutic, and the University of Illinois.
KMart to close 200-300 stores in January.
Intel's Andy Grove said it would be too optimistic to forecast a semiconductor rebound. What does he know? He only has been running the company for about 35 years!
Kimberly-Clark issued a 4th quarter profit warning due to diaper price wars. The company plans to cut costs by $175-200 million in 2003. Layoffs coming?
There are about 100 million individuals in North America who require cholesterol-lowering products. A recently published study in the British Journal of Nutrition stated that individuals who consume foods containing plant phytosterols enriched with chocolate had their LDL cholesterol reduced by 10%. Sounds good to me. Make mine Lindt orange chocolate.
The foreclosure rate in Northern California is rising.
In 1979 Paul Volcker, the new Fed chairman, decided on a different policy- no longer having the Fed target interest rates, but rather target a level of money supply growth consistent with price stability. The markets would determine the interest rates. As I have said so often, I believe the market does determine interest rates and not the Fed. Greenspan would not agree. In my view, with inflation and deflation in current balance, it would serve the economy well to focus on the optimum level of money supply growth and that focus could jumpstart our dismal economy.
The wagons are circling Trent Lott because he backed Bob Jones University despite its racial policy. Our problems are much bigger than that. Asa Hutchinson, the number 2 person behind Governor Ridge in our Homeland Security department, GRADUATED from Bob Jones University. I know about that university's policies thru the experience my son, Edward, had there. He didn't stay but a day or two.
Wednesday, December 11, 2002
12/11/02 77% Of Americans Expect Unemployment To Rise In 2003
A quarterly survey by Philadelphia -based Right Management Consultants says one in five employees beleives there is a chance he or she will be laid off in 2003. In addition, laid-off workers believe it shall be difficult to find similar paying jobs.
Snow and ice are blamed for the 2.3% decline in retail sales last week. I always thought where there's a will there's a way. Maybe the will to shop is not overwhelming this holiday season.
Britain posted their biggest ever trade deficit. Falling exports created a deficit for October which was 30% larger than had been forecast.
According to a poll taken by the world's largest organization of CEOs, this country's small business CEOs say the economic forecast is unclear.
Kroger warns of a flat 2003. Schlumberger to lay off 3300 workers.
After more than 7 years of charging some of its customers $3 to talk to a human teller, Bank One Corp. is getting rid of this fee. Maybe the tellers are tongue-tied.
On the same day Jimmy Carter received the Nobel Peace Prize, scud missiles were found on a North Korean ship.
A quarterly survey by Philadelphia -based Right Management Consultants says one in five employees beleives there is a chance he or she will be laid off in 2003. In addition, laid-off workers believe it shall be difficult to find similar paying jobs.
Snow and ice are blamed for the 2.3% decline in retail sales last week. I always thought where there's a will there's a way. Maybe the will to shop is not overwhelming this holiday season.
Britain posted their biggest ever trade deficit. Falling exports created a deficit for October which was 30% larger than had been forecast.
According to a poll taken by the world's largest organization of CEOs, this country's small business CEOs say the economic forecast is unclear.
Kroger warns of a flat 2003. Schlumberger to lay off 3300 workers.
After more than 7 years of charging some of its customers $3 to talk to a human teller, Bank One Corp. is getting rid of this fee. Maybe the tellers are tongue-tied.
On the same day Jimmy Carter received the Nobel Peace Prize, scud missiles were found on a North Korean ship.
Tuesday, December 10, 2002
12/10/02 In November Insiders Sold $14 Worth Of Stock For Every $1 Purchased
This season is turning ugly and certainly not green. As expected, the market has topped out and there are few buyers for stocks at these overvalued levels. However, there are plenty of insiders selling. That selling is at a six month high. You can listen to the pundits who tell you to buy buy buy. Should you pay attention to the trend you will see lower highs and lower lows. This tells the story for the past 3 years. Stand in the way and blood will appear amongst your portfolio. Occasionally, opportunities will appear, and I will attempt to point out their potential for your review. Such was the case not so long ago with Merck at 39. It's now at 59. It is necessary to be patient and to pick your spots.
So far this month consumer sentiment has slumped to its lowest level of the year.
Nokia has lowered its sales forecast for the 4th quarter.
There are loudmouths who have stated that Paul O'Neill stayed in the way of economic growth. Those remarks reflect stupidity and irrationality. O'Neill is a capitalist and the vast proportion of his wealth was found in shares of Alcoa, the company he ran.
John Snow in 1995: "The budget deficit puts a hole in the pocket of every American, every day of our lives." Today the budget deficit resembles the size in 1995 but now Snow has elected to focus on tax cuts and job creation- in true salesman fashion. You get what you pay for.
More layoffs: at MCI, KPMG, Ashford.com, and Service Corp. The explanation for Service Corp is that they used to do the work in-house but now outsource it. The company is in the funeral business and operates cemetaries! Terminations take on a whole other meaning at Service Corp.
This season is turning ugly and certainly not green. As expected, the market has topped out and there are few buyers for stocks at these overvalued levels. However, there are plenty of insiders selling. That selling is at a six month high. You can listen to the pundits who tell you to buy buy buy. Should you pay attention to the trend you will see lower highs and lower lows. This tells the story for the past 3 years. Stand in the way and blood will appear amongst your portfolio. Occasionally, opportunities will appear, and I will attempt to point out their potential for your review. Such was the case not so long ago with Merck at 39. It's now at 59. It is necessary to be patient and to pick your spots.
So far this month consumer sentiment has slumped to its lowest level of the year.
Nokia has lowered its sales forecast for the 4th quarter.
There are loudmouths who have stated that Paul O'Neill stayed in the way of economic growth. Those remarks reflect stupidity and irrationality. O'Neill is a capitalist and the vast proportion of his wealth was found in shares of Alcoa, the company he ran.
John Snow in 1995: "The budget deficit puts a hole in the pocket of every American, every day of our lives." Today the budget deficit resembles the size in 1995 but now Snow has elected to focus on tax cuts and job creation- in true salesman fashion. You get what you pay for.
More layoffs: at MCI, KPMG, Ashford.com, and Service Corp. The explanation for Service Corp is that they used to do the work in-house but now outsource it. The company is in the funeral business and operates cemetaries! Terminations take on a whole other meaning at Service Corp.
Monday, December 09, 2002
12/9/02 John Snow
He was named the new Secretary of the Treasury. His background: Ph.D in economics; lawyer; Chairman of CSX; former Chairman of the Business Roundtable; and Ass't Secretary of Transportation in the Ford Administration when VP Cheney was chief of staff. Paul O'Neill may not have gotten along with the press and possibly he shot his mouth off when he shouldn't, but he is a straight shooter and not a politician. In addition, he was a very successful businessman. I hardly see where Mr. Snow is in Mr. O'Neill's league.
He was named the new Secretary of the Treasury. His background: Ph.D in economics; lawyer; Chairman of CSX; former Chairman of the Business Roundtable; and Ass't Secretary of Transportation in the Ford Administration when VP Cheney was chief of staff. Paul O'Neill may not have gotten along with the press and possibly he shot his mouth off when he shouldn't, but he is a straight shooter and not a politician. In addition, he was a very successful businessman. I hardly see where Mr. Snow is in Mr. O'Neill's league.
Sunday, December 08, 2002
12/8/02 Tis The Season To Cut Costs
Starting Monday for 20 business days HP is laying off contractors in its internal computer systems dept.
American Air asks employees for pay freeze and to cancel pay raises amounting to $130 million.
SunTrust Banks will freeze the salaries of, and won't pay annual bonuses to 130 senior executives. Additionally, a bonus program for 11,000 non-management employees will be permanently eliminated.
Microsoft VP Jim Allchin says that sharing information with competitors could damage national security. He should be a stand-up comic.
Used car prices continue to drop due to a glut of previously owned vehicles.
Will all this talk about further tax cuts make the cut or will it fail to materialize?
Landrieu wins Senate runoff in Louisiana.
Starting Monday for 20 business days HP is laying off contractors in its internal computer systems dept.
American Air asks employees for pay freeze and to cancel pay raises amounting to $130 million.
SunTrust Banks will freeze the salaries of, and won't pay annual bonuses to 130 senior executives. Additionally, a bonus program for 11,000 non-management employees will be permanently eliminated.
Microsoft VP Jim Allchin says that sharing information with competitors could damage national security. He should be a stand-up comic.
Used car prices continue to drop due to a glut of previously owned vehicles.
Will all this talk about further tax cuts make the cut or will it fail to materialize?
Landrieu wins Senate runoff in Louisiana.
Saturday, December 07, 2002
12/7/02 There Are Times For Cheer And Times To Cheer From The Sidelines
The jobless rate for November rose to 6% as non-farm payrolls declined by 40,000 workers. I have written often on this subject and shown statistically how the jobless number is understated. Only 62% of the U.S. population hold jobs. Total manufacturing employment is lower than any time since November 1961.
Even though Americans are paying off debt rather than taking on more debt, the ratio of household debt to the GDP is 77%.
November sales for retailers declined for the first time since 1970. Retailers are faced with deflation.
In Chicago's Cook County visits to food pantries over the past 11 months are up 18.6% over the same period a year ago and total 2 1/4 million visits to food-providing agencies.
Mexico has 100 million people, and more than half are considered impoverished. Only 15% can qualify for credit cards, car loans, and home loans.
Cessna to layoff 1500 workers.
McDonald's Japan expects over a 60% drop in pre-tax profits for 2002.
Paul O'Neill and Larry Lindsey resigned. They didn't create the current economic malaise.
Traditionally the holiday season is a cheery one for the market. Since Oct 9 we have had a terrific rally. That's the present for the holidays. Unfortunately, the times for cheer have ended, and now is the time to cheer from the sidelines. I suggest once again to lighten up on stock positions, and thereby reduce your risk exposure. With limited business investment, consumer spending being harnessed, the jobless rate increasing, a murky economic horizon, and declining prices for goods, it is rational to expect an economy with few bright spots. As investors, the risk reward ratio is not in your favor.
The jobless rate for November rose to 6% as non-farm payrolls declined by 40,000 workers. I have written often on this subject and shown statistically how the jobless number is understated. Only 62% of the U.S. population hold jobs. Total manufacturing employment is lower than any time since November 1961.
Even though Americans are paying off debt rather than taking on more debt, the ratio of household debt to the GDP is 77%.
November sales for retailers declined for the first time since 1970. Retailers are faced with deflation.
In Chicago's Cook County visits to food pantries over the past 11 months are up 18.6% over the same period a year ago and total 2 1/4 million visits to food-providing agencies.
Mexico has 100 million people, and more than half are considered impoverished. Only 15% can qualify for credit cards, car loans, and home loans.
Cessna to layoff 1500 workers.
McDonald's Japan expects over a 60% drop in pre-tax profits for 2002.
Paul O'Neill and Larry Lindsey resigned. They didn't create the current economic malaise.
Traditionally the holiday season is a cheery one for the market. Since Oct 9 we have had a terrific rally. That's the present for the holidays. Unfortunately, the times for cheer have ended, and now is the time to cheer from the sidelines. I suggest once again to lighten up on stock positions, and thereby reduce your risk exposure. With limited business investment, consumer spending being harnessed, the jobless rate increasing, a murky economic horizon, and declining prices for goods, it is rational to expect an economy with few bright spots. As investors, the risk reward ratio is not in your favor.
Friday, December 06, 2002
12/6/02 Soft Retail Results And More Holiday Layoffs
Target's November same-store sales down 6.7%; Kohl's drops 3.4%; and Sears plummets 10.9%.
Humana to cut 2300 jobs. Convergys to layoff 950. Investment Technology Group to reduce workforce by 10%. We are still waiting for AOL to say what their layoff number shall be.
Gateway Computer said weaker than expected holiday season results puts the 4th quarter expectations at risk.
GM is increasing discounts on SUVs and trucks in an attempt to get rid of excess inventory. Cutting production would help.
In the third quarter household debt increased at a 9.6% rate and was the fastest since the 4th quarter of 1989. This is one of the reasons I have stated consumer spending will slow down from an unsustainable level.
The ECB cut rates by a 1/2 point to 2 3/4%. It was the first cut in one year. Within the 12 countries comprising the EU, unemployment hovers around 8 1/2% and retail sales remain on a downward slope. Business investment remains weak. Consumer conffidence is at a 5 year low. Bankruptcies are on the rise. It sounds similar to conditions in the U.S.
Target's November same-store sales down 6.7%; Kohl's drops 3.4%; and Sears plummets 10.9%.
Humana to cut 2300 jobs. Convergys to layoff 950. Investment Technology Group to reduce workforce by 10%. We are still waiting for AOL to say what their layoff number shall be.
Gateway Computer said weaker than expected holiday season results puts the 4th quarter expectations at risk.
GM is increasing discounts on SUVs and trucks in an attempt to get rid of excess inventory. Cutting production would help.
In the third quarter household debt increased at a 9.6% rate and was the fastest since the 4th quarter of 1989. This is one of the reasons I have stated consumer spending will slow down from an unsustainable level.
The ECB cut rates by a 1/2 point to 2 3/4%. It was the first cut in one year. Within the 12 countries comprising the EU, unemployment hovers around 8 1/2% and retail sales remain on a downward slope. Business investment remains weak. Consumer conffidence is at a 5 year low. Bankruptcies are on the rise. It sounds similar to conditions in the U.S.
Thursday, December 05, 2002
12/5/02 The Market Is Long On Soot And Short On Growth
Cisco to continue job cuts. The company is expected to report flat or slightly lower revenue for the quarter ending in January and possibly a further drop in the April quarter.
AOL will announce job cuts and says their rebound not likely until 2004.
Bankruptcy looms for UAL and American Air cuts 1100 flight attendants.
Federated Dept Stores November same-store sales fell 7.4% and December now looks down about 2%.
RJ Reynolds to reduce its workforce by 8% and earnings to be below estimates.
Full-time jobs in private businesses are down 279,000 so far this year. Since January 2001 corporations have slashed about 3 1/2 million jobs. Payroll cuts this year have averaged 121,000 per month. Job openings are down about 7 1/2% from one year ago. Businesses remain reluctant to hire permanent workers.
The ECB will cut rates today. Everyone in Europe is excited and downing a brew at the local pub. Before anyone gets too drunk with joy they might consider that the jobless rate in Germany rose in November to 10%, and that's the highest rate in more than 4 years. There are almost 4 1/4 million Germans out of work.
A further reality check reveals that the EU says the GDP of European economies may fall in the first quarter. The only other contraction since the 1993 recession was in the last quarter of 2001. In addition, it was stated that 2002 would end negatively. The 12 countries making up the EU have a combined GDP of $7 trillion.
Life is a compilation of choices, and that goes for investing. I feel strongly that during this holiday season my readers would be best served by having an eggnog latte and laying off stocks. The big sucking noise you hear is not the foam from the expresso machine. It's the followers buying stocks who are about to be sucked down the chimney. Those individuals will be long on soot and short on capital.
Cisco to continue job cuts. The company is expected to report flat or slightly lower revenue for the quarter ending in January and possibly a further drop in the April quarter.
AOL will announce job cuts and says their rebound not likely until 2004.
Bankruptcy looms for UAL and American Air cuts 1100 flight attendants.
Federated Dept Stores November same-store sales fell 7.4% and December now looks down about 2%.
RJ Reynolds to reduce its workforce by 8% and earnings to be below estimates.
Full-time jobs in private businesses are down 279,000 so far this year. Since January 2001 corporations have slashed about 3 1/2 million jobs. Payroll cuts this year have averaged 121,000 per month. Job openings are down about 7 1/2% from one year ago. Businesses remain reluctant to hire permanent workers.
The ECB will cut rates today. Everyone in Europe is excited and downing a brew at the local pub. Before anyone gets too drunk with joy they might consider that the jobless rate in Germany rose in November to 10%, and that's the highest rate in more than 4 years. There are almost 4 1/4 million Germans out of work.
A further reality check reveals that the EU says the GDP of European economies may fall in the first quarter. The only other contraction since the 1993 recession was in the last quarter of 2001. In addition, it was stated that 2002 would end negatively. The 12 countries making up the EU have a combined GDP of $7 trillion.
Life is a compilation of choices, and that goes for investing. I feel strongly that during this holiday season my readers would be best served by having an eggnog latte and laying off stocks. The big sucking noise you hear is not the foam from the expresso machine. It's the followers buying stocks who are about to be sucked down the chimney. Those individuals will be long on soot and short on capital.
Wednesday, December 04, 2002
12/4/02 Posting #2 Closing The Crown Jewel, A Personal Blog
As readers of this daily blog, you aware that I successfully ran the Holly Sugar Company from December, 1981 until its sale in the Spring of 1988 to the Imperial Sugar Company. During that timeframe our stockholders received the 7th largest annual return of all the thousands of publically traded stocks in the U.S. Today it was announced that Imperial Sugar will be shutting down its crown jewel Houston sugar refinery and laying off 326 people. The plant has been running continuously since 1843, and has been the oldest continuing business in the Houston area and possibly the entire state of Texas. Pointing fingers will not make the company profitable and will not reopen all the plants which have been closed. Jobs have been lost forever and farmers have turned to other crops or sold their land. Only winners provide progress.
As readers of this daily blog, you aware that I successfully ran the Holly Sugar Company from December, 1981 until its sale in the Spring of 1988 to the Imperial Sugar Company. During that timeframe our stockholders received the 7th largest annual return of all the thousands of publically traded stocks in the U.S. Today it was announced that Imperial Sugar will be shutting down its crown jewel Houston sugar refinery and laying off 326 people. The plant has been running continuously since 1843, and has been the oldest continuing business in the Houston area and possibly the entire state of Texas. Pointing fingers will not make the company profitable and will not reopen all the plants which have been closed. Jobs have been lost forever and farmers have turned to other crops or sold their land. Only winners provide progress.
12/4/02 Corporate Bad News
Ford's U.S. vehicle sales fell 20% in November, and they announced production cuts (which my blog predicted 2 weeks ago). HP trimmed their revenue forecast for next year and said technology spending remains tepid (like we needed them to tell us that). Walt Disney issued another profit warning. Tenet Healthcare issued a profit warning for the next two years. Bridgestone cut their profit forecast by a mere 43%.
Now for the good news. Home prices in the UK rose 24% and 25 1/2% on an annualized basis for October and November respectively. As in the U.S., their inflated housing prices have provided a foundation for consumer spending.
Ann Abraham, the Bbritish parliamentary ombudsman, ruled the ministry had "withheld three documents related to reported sightings of unexplained areial phenomena in 1980- the Rendlesham Forest UFO incident." Ms Abraham didn't reveal that the UFO's ultimate goal was the delivery of double digit inflation and 20% interest rates to the U.S. during Carter's presidency.
Ford's U.S. vehicle sales fell 20% in November, and they announced production cuts (which my blog predicted 2 weeks ago). HP trimmed their revenue forecast for next year and said technology spending remains tepid (like we needed them to tell us that). Walt Disney issued another profit warning. Tenet Healthcare issued a profit warning for the next two years. Bridgestone cut their profit forecast by a mere 43%.
Now for the good news. Home prices in the UK rose 24% and 25 1/2% on an annualized basis for October and November respectively. As in the U.S., their inflated housing prices have provided a foundation for consumer spending.
Ann Abraham, the Bbritish parliamentary ombudsman, ruled the ministry had "withheld three documents related to reported sightings of unexplained areial phenomena in 1980- the Rendlesham Forest UFO incident." Ms Abraham didn't reveal that the UFO's ultimate goal was the delivery of double digit inflation and 20% interest rates to the U.S. during Carter's presidency.
Tuesday, December 03, 2002
12/3/02 Merrill Lynch Suggests Investors Reduce Their Equity Exposure
Merrill Lynch believes "the market still appears speculative...such speculation is typically indicative of the end of a market cycle, and not the beginning of a major bull market." They go on to say that it is extremely difficult to forecast corporate growth, and therefore, equities should have lower valuations. These comments should certainly be familiar to anyone who has been reading this blog.
Retailers must make up in volume what they lose in smaller profit margins. Consumers respond to advertised promotions. Talking about promotions, why not do away with rebates and just lower the price? A real sale should not have strings attached to it. When you go bargain hunting, it's wise to feel certain that you are receiving value. With stocks the idea is to buy a dollar of value for no more than 50 cents. Please avoid the fool's gold.
Merrill Lynch believes "the market still appears speculative...such speculation is typically indicative of the end of a market cycle, and not the beginning of a major bull market." They go on to say that it is extremely difficult to forecast corporate growth, and therefore, equities should have lower valuations. These comments should certainly be familiar to anyone who has been reading this blog.
Retailers must make up in volume what they lose in smaller profit margins. Consumers respond to advertised promotions. Talking about promotions, why not do away with rebates and just lower the price? A real sale should not have strings attached to it. When you go bargain hunting, it's wise to feel certain that you are receiving value. With stocks the idea is to buy a dollar of value for no more than 50 cents. Please avoid the fool's gold.
Monday, December 02, 2002
Sunday, December 01, 2002
12/1/02 Download This
Originally the main function of the internet was to share and disseminate information. That still remains true but with an added feature- the downloading of shareware and/or freeware. The latter has had a significant impact on cash flow for many industries. Consider the music industry with CDs and other entertainment arenas. Recently, I learned of download.com and its freeware for games, such as, a game named drugwars. The point is simple. More and more revenue avenues are being closed via free access on the internet. This will, in my view, grow in importance over the years and impact profits.
Originally the main function of the internet was to share and disseminate information. That still remains true but with an added feature- the downloading of shareware and/or freeware. The latter has had a significant impact on cash flow for many industries. Consider the music industry with CDs and other entertainment arenas. Recently, I learned of download.com and its freeware for games, such as, a game named drugwars. The point is simple. More and more revenue avenues are being closed via free access on the internet. This will, in my view, grow in importance over the years and impact profits.
Saturday, November 30, 2002
11/30/02 Benefit This
With lengthier life expectancy the IRA madatory minimum withdrawal rule should be extended from the present 70 1/2 to at least 75, and tax payments on that income should not begin until at least 75 too.
More employees are extending their working lives past 65 simply to pay for health coverage because fewer and fewer companies provide retiree health benefits. When combined with social security benefits, the additional income can place the individual in a catch 22 of a higher tax bracket.
With lengthier life expectancy the IRA madatory minimum withdrawal rule should be extended from the present 70 1/2 to at least 75, and tax payments on that income should not begin until at least 75 too.
More employees are extending their working lives past 65 simply to pay for health coverage because fewer and fewer companies provide retiree health benefits. When combined with social security benefits, the additional income can place the individual in a catch 22 of a higher tax bracket.
Friday, November 29, 2002
11/29/02 Eight Weeks
After today's close the Dow will have risen for 8 consecutive weeks. This is the first time the Dow has done this in the past three years. A good deal of money could have been made during this period which started on Oct. 9. I wrote at that time the market was moving into the most favorable timeframe of the year- late October thru January. I envisioned a bounce but not of this proportions. I have not changed my opinion- the smart move is to sell into this rally and reduce your exposure in companies with serious difficulties. There are few bargains in this market. You might do better shopping at WalMart special sales.
After today's close the Dow will have risen for 8 consecutive weeks. This is the first time the Dow has done this in the past three years. A good deal of money could have been made during this period which started on Oct. 9. I wrote at that time the market was moving into the most favorable timeframe of the year- late October thru January. I envisioned a bounce but not of this proportions. I have not changed my opinion- the smart move is to sell into this rally and reduce your exposure in companies with serious difficulties. There are few bargains in this market. You might do better shopping at WalMart special sales.
Thursday, November 28, 2002
Wednesday, November 27, 2002
11/27/02 Final Demand
The Fed said yesterday that final demand remains vulnerable to weak hiring and a war with Iraq.
Now for the good news. Over the years the market has risen 75% of the time the day before Thanksgiving. So we should look forward to a positive tone today. It would be great if every day of the year were like today.
Forecasters at the NABE cut their estimates for 4th quarter GDP growth to 1.4% from 2.7%. We should be thankful. It could have been negative growth. I'm already in the holiday spirit!
Even I was amazed to read that in 1999 out of 6000 analyst stock recommendations only 8 were labeled to sell. It just goes to prove that in the case of Wall Street analysts even a busted clock is not right twice a day. They are one big train wreck.
The Fed said yesterday that final demand remains vulnerable to weak hiring and a war with Iraq.
Now for the good news. Over the years the market has risen 75% of the time the day before Thanksgiving. So we should look forward to a positive tone today. It would be great if every day of the year were like today.
Forecasters at the NABE cut their estimates for 4th quarter GDP growth to 1.4% from 2.7%. We should be thankful. It could have been negative growth. I'm already in the holiday spirit!
Even I was amazed to read that in 1999 out of 6000 analyst stock recommendations only 8 were labeled to sell. It just goes to prove that in the case of Wall Street analysts even a busted clock is not right twice a day. They are one big train wreck.
Tuesday, November 26, 2002
11/26/02 The Unemployed
The percentage of the unemployed without work for 27 weeks or more rose to 20.3% in October, and in October the average length of unemployment was 17 1/2 weeks. Those unemployed for 6 months or more amounted to 1.66 million Americans.
For the six months ended September 30 Americans filed for over 800,000 bankruptcies, a record number.
Business confidence in Germany fell to a 10 month low.
Last week U.S. chain store sales were on or below plan.
The percentage of the unemployed without work for 27 weeks or more rose to 20.3% in October, and in October the average length of unemployment was 17 1/2 weeks. Those unemployed for 6 months or more amounted to 1.66 million Americans.
For the six months ended September 30 Americans filed for over 800,000 bankruptcies, a record number.
Business confidence in Germany fell to a 10 month low.
Last week U.S. chain store sales were on or below plan.
Subscribe to:
Posts (Atom)