Strong like bull...
Rising from the Depths - Jeff Macke - 3:07 PM
Minyan Lump O' Coal writes: "Being the top notch retail analyst that you are, what do you think of Bed Bath & Beyond (BBBY) here?"
Lump, my brother, what I think is that you don't wanna be baiting me today, by calling me an "analyst" of any sort then asking me what I think. I think I caught whatever Nicole Kidman had in Moulin Rouge from my daughter, "Typhoid" Lou's pre-school. I know her tuition is more than I paid to go to college but I think so far all she's learned is how to say "Yeah" instead of "yes" and how to be an asymptomatic carrier of every flu-bug in the barnyard.
Tis' an ill-headwind for the retailers with the howling weather and transit strikes in the last week. I think the numbers generally need to come down. I also think you get diminishing returns (and really strange dreams) from chain-dosing cold medication.
I think I would avoid BBBY here, but might get interested on the long side if it gets sucked deeper down the drains of tax-loss selling in the next week (not advice). I think it odd that Cap'n Kirk announced his *intent* to buy stock in the 30's but announced that he'd sold, after the fact. I think I need a nap.
Happy holidays! - Herb Greenberg - 2:23 PM
Minyans, just stopping by to pet the critters before I take off for the holidays. In my RealityCheck today, I mentioned Ev3 (EVVV), comparing it with Foxhollow (FOXH). Both have similar revenues and both are profitless. That's where the similarities end.
EVVV, which competes with a stent-alternative to Foxhollow in the peripheral-cardio world -- a stent that sells for about half the price of the Foxhollow prodcedure of roto-rootering out plaque from leg arteries -- has a dozen or so products for a dozen different procedures and product categories. That compares with FoxHollow's focus on a single market with a single product. Yet EVVV trades at a discount to FOXH. It will definitely be one to watch, especially going into January when a takeover-related arbitrage with MicroTherapeutics (MTIX) closes.
...And a Happy New Year!
Mini-Minyan Mailbag - John Succo - 2:19 PM
When you say the S&P has traded at a 7% volatility, is that a VIX reading? I'm unclear on how that is measured.
Thanks and have a great holiday! I spent 34 minutes in Cincinnati last week - really enjoyed it.
It is taking the SP500 index and measuring the actual standard deviation of returns over the last periods mentioned.
The dilemma of the short seller - Phil Erlanger - 2:04 PM
To short or not short a heavily shorted stock? That is the question. We are of the belief that the risk of shorting heavily shorted names far outweighs the reward. Meanwhile, the risk of shorting names with low short interest is a much greater proposition. An even greater proposition is to short a stock with weak technicals that are just breaking and no shorts- the long squeeze.
Flashback! - Bill Meehan - 2:02 PM
This day in market history...
- Closing levels this day a year ago found:
- DJIA: 10815.89
- S&P 500: 1209.57
- Naz: 2157.03
- Crude: 44.05
- Gold: 440.00
This day in Minyanville history...
- Prof. Reynolds summed up the impact of the end of Franklin's Reign in Gone
In other News...
- In 1894, the USGA was formed, in New York City, where we have the nicest fairways and greens in the country.
Some quick thoughts on a few topics, with lots of links - Vitaliy Katsenelson - 1:45 PM
As I have mentioned many times before, I believe the dollar will be declining in the long run due to twin deficits. How do you play a weakening dollar without getting into messy currency contracts? ADRs are probably the easiest way, actually second easiest, the first one is to buy foreign denominated debt.
Some ADR ideas that I shared with readers this year were : Lloyds TSB (LYG), Telecom New Zealand (NZT), Diageo (DEO).
And yesterday I wrote about another idea National Grid (NGG) - though its time has not come yet, the stock needs to go down a little in my opinion, but it is a worthy company to keep on your watch list.
Also, I have to agree with Toddo, Mr. President is one talented media guy. For what it is worth, here is my five cents on Sirius (SIRI) where I compare the Sirius-Howard Stern deal to Dr. Coop - AOL deal from the late 90s.
Positions in LYG, NZT, DEO
Where it's at - Sanjay Somaney - 12:10 PM
The Indian markets were volatile all day but closed higher on a strong note. The Sensex ended the day up 33 points ending at 9372 and the Nifty closed higher by 12 points to finish at 2835.
Foreign Institutional Investors (FII) have been very active this year and I think they will continue to be active in the Indian markets next year as well. Local gurus are expecting the markets to end the year at all-time highs. HDFC Bank (HDB), Infosys Technologies (INFY), Tata Motors (TTM) made fresh 52 week highs on the day.
In other news Wipro (WIT) has acquired mPower Inc., a New Jersey based company which is nicely profitable, and will add about $5 million/year to WIT's bottom-line.
Meanwhile, the Cisco (CSCO) Kid has also announced that they are looking at small medium business (SMB) acquisitions in India. Chambers likes to call it the SMB strategy. CSCO has already taken a stake in IndiaGames, a mobile games publisher based in Bombay, making it the first acquisition in India for CSCO. CSCO has $2 billion earmarked for SMB acqusitions in India.
Said it many times before, and saying it again: India is the place to be and becoming more so every day.
Positions in HDB, INFY, TTM, WIT
Mini-Minyan Mailbag - Todd Harrison - 10:36 AM
"Toddo- I do not have a problem with professors speaking their mind and stating their opinions on the investment world as they see things. What I have a problem with is when some are not willing to adapt to changing circumstances.
For example,I have a hard time with Snoop Dwyer because he is bullish ALL THE TIME. As a true well wisher of the Ville, I want to let you know that you have to ensure that your professors do not lose their importance by becoming one dimensional and not adapting. Thanks, Minyan Arun"
You know I call it as I see it--sometimes right, sometimes wrong but always honest. I respectfully disagree with your "take" on Snoop. I've known (and read) him for over six years and have seen him rootin' tootin' bearish at times. Brian Reynolds as well--he dabbled in Red Dye immediately prior to the 2000 meltage and has revisited Boo on occasions since.
Neither are one-sided or one dimensional--that's simply not a fair statement and doesn't do them--or their work--justice. I continue to have massive amounts of respect for any approach that has produced consistent returns and I'll continue to read them for as long as they share their spirit. Thanks kindly, and have a fantastic holiday.
Perspective - Scott Reamer - 9:39 AM
The 2's to 10's spread is now 3.7 bps. Recall, however, that the spread went negative in 2000 in Feb., and the absolute price peak in the SPX was March 22nd, about 50 days later.
In 2000, the SPX didn't collapse until September when the yield curve began to STEEPEN. Meanwhile, the NDX and the other bubble sectors got creamed right away in March so it is interesting to consider some sort of analog.
This is by no means a prediction, I'm just offering it as a perspective marker for how, in 2000, the declining "real liquidity" in a bubble behaved. It is possible the dynamcs will not be too different this time around.
Here is the relevant chart.
Say what? - Kevin Depew - 8:43 AM
A look at commentary, opinion and analysis from around the world:
Paul Ingrassia asks in the Wall Street Journal if GM should not just bite the bullet and file bankruptcy.
Bloomberg Fed Watcher John Berry says things couldn't be better for incoming Fed Chairman Ben Bernanke: "The economy is growing, inflation is tame, unemployment is low."
At Mises.org, Jack Maturin asks if Commander Spock of Star Trek was an Austro-libertarian. At Minyanville.com, Kevin Depew is freaked out by both the question and the answer.
What Are My Options? - John Succo - 7:50 AM
Although I have pointed out the weaknesses of the VIX and VXB volatility futures, they do capture the general direction of relative option prices.
When we look at option prices more closely, they show the same degree of complacency that Ben points out.
Option sellers are using the sale of premium as "income" earned. Their risk is that the underlying stock moves; and at these low prices, that movement does not have to be much to experience capital losses. The margin for error is slim.
There is a complete dearth of put buyers. In these days of slim returns, hedgers cannot even afford spending small insurance premiums.
Compression is high.
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