Buzz Bits: Dow, Nasdaq Climb
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Bell Buzz - Todd Harrison - 3:40 PM
And so it is, as we edge to the end of a rather long short week, I'm gonna jump into our weekly editorial meeting. Wait--who has an editorial meeting into a holiday weekend? We do. We're Minyans, we go the extra yard and we're constantly working to improve our vibe. You'll see that in spades when we roll out the red carpet on Tuesday.
There's not much to say that hasn't been said as my content synapses are tapped out. I didn't trade much today, which leaves me with a risk profile that is skewed slightly short, loaded with gamma and long individual situations vs. "tape hedges." Old school Minyans know that I'll put it out there when I'm feeling it directionally. I'm sorta feeling it, but respect the animal spirits and the potential for the last bubble bastion.
Either way, we'll pick it up fresh on Monday. After the edit meeting, I've got an RP meeting (if you "failed to win" the Minyan March Madness and are in a position to help Ruby's kids, we'd be much obliged) before heading downtown to support Charlie and his Rolling Bones. The first 10 Minyans will get a free critter tee so swing down and bottoms up. It is, after all, a holiday weekend.
Fare ye well into the bell and enjoy the Sunday omelets!
Quiet Storm - Kevin Depew - 2:04 PM
- Interesting currency movements today: the Swedish Krona Trust (FXS) has broken a double top forming a bullish catapult on a point and figure chart.
- A number of Minyans have asked me what book I recommend for point and figure charts. Take a look at The Definitive Guide to Point and Figure by Jeremy Du Plessis. It has a modern, updated overview of point and figure analysis, including additions of moving averages, market breadth analysis, optimization and Bollinger bands.
- Kentucky apparently has a new basketball coach.
- Bono's Edun clothing line is really helping people, but not in the way he seems to think, according to Mises blog contributor Vedran Vuk. "To say that Bono's factory is something special would not be truthful. The Edun clothing line is doing well, and is employing hundreds of people. That's great. It's called capitalism."
- Australian researchers have discovered that "powerpoint death" is an actual, real biological phenomenon! I made a powerpoint presentation to illustrate their findings. Seriously!
Housing continues to stabilize...ex-losses and lies. - Fil Zucchi - 11:28 AM
Last night, Ryland (RYL) added yet another chapter to the "greatest slow motion implosion never told" when it warned of a nice fat loss for the coming quarter, thanks to $80 mln worth of charges and write-offs. This particular round of problems came from Fort Myers, FL, Washington D.C., SoCal, and Phoenix. For those now desensitized to this kind of news, please note the following:
- This quarter's $80 mln worth of charges follows last quarter's $56 mln ding. To put it in perspective, in two quarters RYL wiped out 30% of what it made during the entire bubblicious 2005 fiscal year, or 56% of what it made in 2003 (you choose).
- Not to worry of course, because excluding all the money the company lost this quarter, it made way more than it had guided to. Which brings me to the next bone to chew on: while this quarter's guidance was for $0.40-0.50ish and RYL now claims that ex-losses it made $0.63-0.73/sh, 1Q consensus prior to issuing guidance was $0.79ish. Cute, very cute.
- Third, management actually had the courage to talk up the drop in cancellations from a ridiculous 49% in 4Q to a merely laughable 28% this quarter. Of course cancellation rates are, and will likely continue, coming down. The few people actually buying homes these days are those who really want it, and they will close on it market notwithstanding. If we were to continue seeing cancellation rates in the high 20% to low 30% range in 2Q, 3Q, and 4Q of this year, the whole homie debacle will exceed even my lofty expectations.
I don't mean to pick specifically on RYL, because almost all homies have been playing these kinds of "word games." But it is no less annoying when it comes from folks who for three years confused a "bubble market" for brains and now lack the stones to tell it the way it is: the housing market "sucks."
The Art of the Deal - Jason Goepfert - 10:46 AM
I have a comment on the article posted earlier by Prof. Shedlock (welcome!). We just bought a new home, so I've become intimately re-acquainted with the process.
My wife and I investigated close to 300 listings online, weeding out the ones we didn't want to bother with seeing physically. Over the past six months, we've actually visited about 120 of them, setting up the appointments ourselves.
We finally found the one we wanted, in a private area where the builder is also the selling agent. The CEO of the building firm lives about 100 yards away from our new place, which we think is a nice sign of confidence in their product and neighborhood.
We were ready to sign the paperwork, but I decided to check with the agent who helped us buy our last house seven years ago. I figured she didn't "have" to do anything, since we already found the house, were pre-approved for financing, and knew the right price points.
I was wrong, and this is why:
- She was able to find a half-dozen comparables that I was not able to find from any other source, which allowed us to present an offer quite a bit lower than I originally thought, with solid backup documentation.
- She referred us to a lender with whom she had a long-standing relationship, and that lender saved us a huge sum compared to our original pre-approval.
- She referred us to an incredibly anal inspector who, even though the house is a new construction, found several details about the house that we had missed, and that the builder will fix prior to our move-in.
- Perhaps most importantly, she served as the negotiator between us and the builder, so we can now be neighbors with the CEO and have no ill will between us because of a tense round of negotiation.
There is room for a service that can serve informed buyers like those Prof. Shedlock did a great job of describing. But I just wanted to throw out the idea that a realtor can more than earn their commission, too…you just need to do a little work to find a good one.
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