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Most have issued significant amounts of new shares to raise their capital levels since stock markets plunged in the fall of 2008. A major player in the business, Manulife hadn't hedged its segregated funds. That exposure created a capital risk that attracted the attention -- and intervention -- of the Office of the Superintendent of Financial Institutions (OSFI), Canada's financial services regulator." More articles on the same topic . . . Value Workshop: Indigo 08/15/10 Permlink Report Broken Link | Stingy Investing Stocks "We're putting Indigo Books & Music (IDG on the TSX) under the microscope today." Turning Japanese 07/21/10 Permlink Report Broken Link | Stocks "I have maintained throughout this blog that I thought that zero interest rates in America would have a different outcome to zero interest rates in Japan because Japanese banks are predominantly deposit franchises and zero interest rates are very bad for them - but that American banks - especially larger American banks - are fundamentally lending franchises and zero interest rates would not impair their ability to make a spread on the loan book." A perfect predator 07/21/10 Permlink Report Broken Link | Stocks "Flatt seems to go out of his way to paint Brookfield as boring. 'We own 129 office buildings. Some are a little taller, some are a bit shorter,' he says laconically. The strategy? 'We're in the business of buying assets of great quality at less than replacement cost.' The company's remarkably consistent objective over the years simply has been to earn a 12% to 15% compound annual return per share. 'We have no goal to be large or significant,' says Flatt. 'If [reaching our objective] meant we should shrink in size, we'd do that.' Even Brookfield's logo is understated, and its 2009 annual report looks like something thrown together at Kinko's. Move along, everyone, nothing to see here. The reality is that this slender 45-year-old executive runs a conglomerate that manages $108-billion worth of real estate, utilities and infrastructure across the planet." Bank of America comes clean 07/14/10 Permlink Report Broken Link | Stocks "Bank of America has finally admitted that it understated the quarter end assets and liabilities for the years 2007 to 2009. It does not (yet) admit that similar transactions took place in many other years and it does not spell out the effect of these transactions on BofA.s need to carry capital." Short First Solar 04/09/10 Permlink Report Broken Link | Stocks "A technology, to be a really great investment, must do two things. It must change part of the world in a useful way - a big part of the world is better of course - but you can be surprisingly profitable in small niches. And it must keep the competition out. " The restaurant-failure myth 01/27/10 Permlink Report Broken Link | Stocks "His research - consistent with similar studies - found that about one in four restaurants close or change ownership within their first year of business. Over three years, that number rises to three in five." How Visa dominates a market 01/11/10 Permlink Report Broken Link | Stocks "Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name. It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake." 'D' is for death 12/29/09 Permlink Report Broken Link | McGugan Stocks "One day you will die. This is sad. It is also an investment opportunity. Funeral homes are one of the few businesses that are guaranteed a growing audience for their services, not only over the next decade, but over the next several decades. As Boomers age, the industry made famous in the television series Six Feet Under is emerging from the low-mortality period that a funeral home expert calls "death valley" and entering a period in which customers will become more and more common." When an annual report speaks volumes 12/20/09 Permlink Report Broken Link | Stocks "Want to find a great long-term investment? Look for an annual report that treats you like a human being. Most don't. The standard-issue annual report features heroic photos of the CEO, staged snapshots of maniacally grinning workers, and vague assurances that, despite enormous challenges being faced by the stalwart management team, the future looks just fine. Only a handful of annual reports talk to you like a partner. These reports don't spend a fortune on glamour shots of smokestacks basking in the sunset. They avoid canned promises to "respect all our stakeholders." Instead, they deliver a blunt assessment of both the firm's successes and its failures. In a high proportion of cases, these exceptionally honest reports come from companies that are also exceptionally good at making you money." Ten years after 12/20/09 Permlink Report Broken Link | Stocks "I've been working on a year-end piece - this is my last day at the office in 2009 - and I came across an article from Feb. 20, 2000, in which 10 money managers each chose one stock to buy then and hold until 2010. It's almost 2010, so I checked to see how they had done. For most, not well." and yet "Here is more good news. Thanks largely to Henry Schlein, an investor who bought $1,000 of each of those 10 companies, and held on, would now have more than $13,000, even with losses on eight of the holdings. That performance is much better than that of the overall market." Murdoch to Google: search this 11/10/09 Permlink Report Broken Link | Stocks "As unlikely as it sounds, Rupert Murdoch may end up being our last best hope for a peaceful solution to the Internet's war on professional journalism. A man who many blame for commodifying, globalizing, sensationalizing, and cheapening news is considering taking a stand against a force even bigger than himself: the Web link." Why banks stay big 10/26/09 Permlink Report Broken Link | Stocks "Maybe megabanks are what we need. Certainly most developed nations have banking systems even more concentrated than ours. The trouble is that the 'market' for banking is so distorted - by switching costs, by government subsidies and guarantees, and by the banks' market power - that it's hard to know whether big banks are adding value or are simply exploiting their oligopolistic positions." The return of the Why-P.O. 10/23/09 Permlink Report Broken Link | Stocks "What in tarnation is a Why-P.O. you ask? It's an IPO so pointless for investors to be involved with that you can only scratch your head after reading the prospectus and ask 'Why?'." The pyramid principle 10/22/09 Permlink Report Broken Link | Stocks "Right now America.s banking system resembles a pyramid. At the top, two or three firms are doing well. But beneath them are a handful of giant conglomerates that are struggling towards profits, a tier of middling banks with overexposure to risky assets, and a vast base of small banks in deep, deep trouble." Toxic loans topping 5% 08/16/09 Permlink Report Broken Link | Stocks "More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank.s equity and threaten its survival." Amazon's troubling reach 07/29/09 Permlink Report Broken Link | Stocks "Last week, in a stunning display of public irony, Amazon.com remotely deleted digital copies of George Orwell's novels "1984" and "Animal Farm" from customers' Kindles after learning that the electronic publisher of these works, MobileReference, did not have the rights to them. For a couple of days, observers in print and on the Web outdid themselves, noting that in "1984," government censors rewrite history by consigning offending news items to an incinerator chute known as the memory hole. Orwell's technological vision might have been primitive, but he seems to have predicted something fundamental about the dangers of information systems." GICs are safe, but don't expect much 06/27/09 Permlink Report Broken Link | Indexing Bonds Thrift Stocks "So what's the lesson? First, fees matter a great deal. Second, while a stock-filled portfolio may provide higher returns, that comes with risk. A GIC-only portfolio may not be exciting, but investors sleep well at night. " Philip Morris gets its tobacco bill 06/15/09 Permlink Report Broken Link | Government Stocks "The Family Smoking Prevention and Tobacco Control Act is revealed as yet another Beltway deal for Big Government and Big Business. Those who proclaim it a victory for public health and the public good are blowing smoke." Why you should be long the NYT 06/14/09 Permlink Report Broken Link | Stocks "The Times is the greatest journalism brand in the world. Journalism is going through a period of intense, painful consolidation, at the end of which there will be many fewer competitors, leaving the ones who survive with extraordinary market power and more cultural influence than they have today. The Times will unquestionably survive because it is the best, which will make it an incredibly profitable enterprise. In fact, I'd wager to say that the worse things get for the media industry generally, the better things get for the Times." Investor exits and leaves puzzlement 06/01/09 Permlink Report Broken Link | Stocks "I've seen my share of odd moments during annual meetings, but until Thursday I'd never seen a grown man cry during one. O.K., maybe 'cry' is a bit of an overstatement for what happened. Still, it was pretty startling when, in the middle of his speech to Target Corporation shareholders, William A. Ackman, the hedge fund manager who had waged an expensive, high-profile proxy fight against the company, suddenly choked up and stopped speaking. He wiped away a tear." Chrysler's sorry state revealed 05/11/09 Permlink Report Broken Link | Stocks "Among the thousands of pages of documents filed in connection with Chrysler's Chapter 11 bankruptcy are affidavits from Chrysler executives that open up a window on the auto business previously closed to outsiders in this intensely competitive business. They reveal an almost unimaginable complexity in the design, manufacturing, and distribution of new cars. But what's more revealing is that the affidavits expose Chrysler's inability to successfully compete and the dangers facing the company in a prolonged bankruptcy." Identifying overvalued equity 05/01/09 Permlink Report Broken Link | Academia Stocks "An overvaluation score (O-Score) that combines proxies for earnings overstatement, prior merger activity, excessive stock issuance, and the manipulation of real operating activities, identifies firms with one-year-ahead abnormal price declines averaging -27%. Finally, we propose a model that integrates various attributes of managers' behavior and predicts accounting restatements associated with fraud." Why capital structure matters 04/21/09 Permlink Report Broken Link | Bonds Stocks "My belief -- first stated 40 years ago in a graduate thesis and later confirmed by experience -- is that capital structure significantly affects both value and risk. The optimal capital structure evolves constantly, and successful corporate leaders must constantly consider six factors -- the company and its management, industry dynamics, the state of capital markets, the economy, government regulation and social trends. When these six factors indicate rising business risk, even a dollar of debt may be too much for some companies." Paper money 04/02/09 Permlink Report Broken Link | Stocks "In other words, the newspaper companies that have failed wholesale were essentially set up to fail by inexperienced managers who believed piling huge amounts of debt on businesses whose revenues were shrinking even when the economy was growing was a shrewd means of value creation." Cash-rich firms 04/02/09 Permlink Report Broken Link | Stocks "One way to look at stocks is to view each share as a claim on a company's future earnings. But another way is to view each share as a claim on a company's assets. During times like these where markets for many assets are either frozen or slow-moving, liquid assets deserve a premium. So companies with high levels of cash and little or no long-term debt are well worth a look." The next AIG scandal? 03/19/09 Permlink Report Broken Link | Stocks "Thomas Gober, a former Mississippi state insurance examiner who has tracked fraud in the industry for 23 years and served previously as a consultant to the FBI and the Department of Justice, says he believes AIG's supposedly solvent insurance business may be at least as troubled as its reckless financial-products unit. Far from being "healthy," as state insurance regulators, ratings agencies and other experts have repeatedly described the insurance side, Gober calls it "a house of cards." Citing numerous documents he has obtained from state insurance regulators and obscure data buried in AIG's own 300-page annual reports, Gober argues that AIG's 71 interlocking domestic U.S. insurance subsidiaries are in hock to each other to an astonishing degree." Content, once king, becomes a pauper 02/11/09 Permlink Report Broken Link | Stocks "The value of content has never been ethereal. It has always been directly tied to what owners could "get" for it, either through advertisers or subscribers. For content to have a value, it could never be free. Its position as royalty depended on that. Content is rapidly being devalued." Life at Wal-Mart 02/03/09 Permlink Report Broken Link | Stocks "The picture above is of me, finishing my shift at the world.s largest retailer. How did I move from being a senior writer at Wired magazine to an entry-level position in a company that is reviled by almost all living journalists? It started when I read Nickel and Dimed, in which Atlantic contributor Barbara Ehrenreich denounces the exploitation of minimum-wage workers in America. Somehow her book didn.t ring true to me, and I wondered to what extent a preconceived agenda might have biased her reporting. Hence my application for a job at the nearest Wal-Mart." I see dead bankers! 01/29/09 Permlink Report Broken Link | Stocks "In The Sixth Sense, Haley Joel Osment's character is terrified because he sees dead people walking the streets, working, going to school, playing, seeing patients, oblivious to the fact that they are no longer alive. I get the same feeling today watching CNBC, reading the newspapers, walking through midtown Manhattan and counting the Town Cars idling outside the headquarters of investment banks. Like John Thain, there are lots of people who continue to act as if they are living, breathing, Wall Street players, oblivious to the fact they've been reduced to nicely dressed corpses." Will Exxon Get Googled? 01/14/09 Permlink Report Broken Link | Stocks "And while nothing in our current energy infrastructure operates at the theoretical limits, pretty much everything is within spitting distance of Mother Nature's hard stop in terms of energy density and efficiency. Of course, there's room for progress. A 20 to 30 percent gain in efficiency in our national energy bill translates into serious money. Airlines, as well as most businesses, do back handsprings for such efficiency gains. But compared to the efficiency-created disruptions in the digital-info world, 30 percent is chump change. The reality is that we are stuck with limitations imposed by things like, well, Earth's rotation and distance from the sun, which determine the maximum energy possible from solar power. Or the biochemistry of photosynthesis, which ultimately determines biofuel economics, or the physical chemistry that dictates potential energy per pound of oil, ethanol, or lithium. " Too big to succeed 01/14/09 Permlink Report Broken Link | Stocks "Indeed, when it comes to conglomerates, we tend to see a two-part cycle. During the first part, acquisitions, mergers, big combinations are all the rage. Its a giant ego stroke for the CEOs, and it generates lots of fees for the iBankers. The second half of the equation comes when the awful handiwork of the M&A binge needs to be unassembled. That generates criticism of the CEOs, and lots of fees for the iBankers." What's in a name? 12/24/08 Permlink Report Broken Link | Stocks "Underlying the best brands are usually sales pitches of great stuff. Macs don't crash. The iPhone 3G is fast. FedEx gets there every time. The Lexus parks itself. Canon is the professional's camera. Even Pepsi - the company that more or less created modern branding with the slogan "The Taste of a New Generation" - decided in the end that, actually, it was easier to sell soda with the Pepsi Challenge taste test. At the very top of the Interbrand list you will find Coca-Cola, the great outlier of the brand world. Far from the model of how brands work, Coke is the great exception. The vast majority of great brandmakers knows that you cannot sell products by telling people about your brand - you can sell your brand only by telling them about the product." News you can lose 12/21/08 Permlink Report Broken Link | Stocks "The peculiar fact about the current crisis is that even as big papers have become less profitable they've arguably become more popular. The blogosphere, much of which piggybacks on traditional journalism's content, has magnified the reach of newspapers, and although papers now face far more scrutiny, this is a kind of backhanded compliment to their continued relevance. Usually, when an industry runs into the kind of trouble that Levitt was talking about, it's because people are abandoning its products. But people don't use the Times less than they did a decade ago. They use it more. The difference is that today they don't have to pay for it. The real problem for newspapers, in other words, isn't the Internet; it's us. We want access to everything, we want it now, and we want it for free. That's a consumer's dream, but eventually it's going to collide with reality: if newspapers. profits vanish, so will their product." 'Already bankrupt' GM won't be rescued by loan 12/13/08 Permlink Report Broken Link | Stocks "For General Motors Corp., the question is no longer whether it will get a government loan or if Chief Executive Officer Rick Wagoner will be replaced. It's whether anything can prevent the largest U.S. automaker from sliding into bankruptcy. " $73 an hour: adding it up 12/11/08 Permlink Report Broken Link | Stocks "That figure - repeated on television and in newspapers as the average pay of a Big Three autoworker - has become a big symbol in the fight over what should happen to Detroit. To critics, it is a neat encapsulation of everything that's wrong with bloated car companies and their entitled workers. To the Big Three's defenders, meanwhile, the number has become proof positive that autoworkers are being unfairly blamed for Detroit's decline." BCE fails key test 11/27/08 Permlink Report Broken Link | Stocks "Shortly after markets closed on Tuesday, a team of auditors in KPMG's Toronto offices ushered a trio of BCE Inc. executives into a meeting room to advise them that the world's largest leveraged takeover had effectively been killed. The culprit? A five-line clause that virtually no one had noticed in the company's much-scrutinized $35-billion sale agreement. Over the course of more than two hours, the solemn auditors explained to BCE's stunned chief executive officer George Cope and two of his senior executives that the communications company had not passed a so-called solvency test, one of the last hurdles standing in the way of a Dec. 11 deadline to close the sale of the company to a group lead by the Ontario Teachers' Pension Fund. Now, baring a financial miracle, there is little hope that the deal will survive." Landmark BCE takeover in doubt 11/26/08 Permlink Report Broken Link | Stocks "The massive planned privatization of telecommunications giant BCE Inc. is in jeopardy after the company failed a preliminary solvency test conducted for the would-be purchasers, led by the Ontario Teachers' Pension Plan Board. BCE said Wednesday it received a 'preliminary view' from auditing firm KPMG that 'based on current market conditions, its analysis to date and the amount of indebtedness involved,' it does not expect to be able to deliver an opinion on the closing date of Dec. 11 that BCE 'would meet the solvency tests as defined in the definitive agreement.'" How AIG got Uncle Sam over a barrel 11/14/08 Permlink Report Broken Link | Government Stocks "The Treasury has secured crowd-pleasing concessions; for example limits on executives. bonus payments. But the real question is whether the preference shares are safe. AIG has a trillion-dollar balance-sheet. There is now a thin buffer of core equity between the taxpayer.s preference shares and any further losses. The hope is still that as markets recover, AIG can sell the crown jewels of its insurance business at a premium to book value. That may well take years. Plenty of time to reflect on how an offer of a temporary loan, to a company that barely made the list of systemically vital firms, spiralled into one of the biggest corporate bail-outs ever." How AIG failed 11/03/08 Permlink Report Broken Link | Stocks "The lesson, of course, is simple, but hard to learn: it's not the risks you measure which bring you down, it's the risks you don't measure. But protecting against those risks is very, very hard." Next likely bank failures 10/20/08 Permlink Report Broken Link | Stocks "U.S. banks large and small are buckling under the pressure of the credit crisis. The Federal Deposit Insurance Corp. has seized 13 institutions this year, most recently Washington Mutual. The regulator, which maintains a list of "problem" banks, doesn't disclose which others raise red flags. But one measure, the so-called Texas Ratio, may offer a clue." Profit from panic 10/09/08 Permlink Report Broken Link | Watsa Stocks "The "other Berkshire" is Fairfax Financial a P&C insurer headed by brilliant capital allocator Prem Watsa. Fairfax is about as close as you can get to investing in a company that does great in good markets and exceptionally well in disastrous ones." Lehman bankruptcy gets ugly 10/02/08 Permlink Report Broken Link | Stocks "It's looking like Lehman, contrary to the conventional wisdom, may have been too big to fail after all. And the fallout from the bankruptcy may further undermine investors. confidence in the financial system." Citigroup to buy Wachovia banking assets 09/29/08 Permlink Report Broken Link | Markets Stocks "Citigroup will acquire Wachovia's massive deposit network, as well as over $300 billion worth of Wachovia's loan portfolio and the company's debt. Citigroup said it will absorb up to $42 billion of losses on those loans, while the Federal Deposit Insurance Corporation will be on the hook for anything beyond that." JPMorgan buys WaMu's deposits as thrift is seized 09/25/08 Permlink Report Broken Link | Government Stocks "The U.S. government closed Seattle-based Washington Mutual amid customer withdrawals of $16.7 billion since Sept. 15, the Office of Thrift Supervision said in a statement. WaMu had 'insufficient liquidity' and was in an 'unsound' condition, the OTS said." AIG booted out of the Dow 09/18/08 Permlink Report Broken Link | Markets Stocks "Dow Jones & Company, which oversees the 30-stock index, said that Kraft Foods (KFT) will take AIG's place." AIG gets up to $85 Billion Fed loan 09/16/08 Permlink Report Broken Link | Government Stocks "The U.S. government agreed to lend as much as $85 billion to American International Group Inc. in exchange for a 79.9 percent stake to save the country's biggest insurer from collapse." AIG falls 09/15/08 Permlink Report Broken Link | Buffett Stocks "AIG, seeking to raise $20 billion in capital and sell $20 billion of assets, rejected investments from buyout firms KKR & Co., TPG Inc. and J.C. Flowers & Co., people familiar with the talks said. AIG instead sought a $40 billion bridge loan from the Federal Reserve, the New York Times reported, citing an unnamed person. The shares plunged $6.25 to $5.89 at 9:42 a.m. in New York Stock Exchange composite trading. Warrren Buffett, chairman of Berkshire Hathaway Inc., 'is thought to be in talks' with AIG about a possible investment, the Insurance Insider reported today, citing unidentified sources." [It seems likely that Buffett would take a pass on the firm but be willing to buy some of its assets at fire-sale prices.] Lehman files biggest bankruptcy case 09/15/08 Permlink Report Broken Link | Stocks "Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history. The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, dwarfs WorldCom Inc.'s insolvency in 2002 and Drexel Burnham Lambert's failure in 1990." [So much for the too big to fail idea] Wall Street banks teeter 09/15/08 Permlink Report Broken Link | Stocks "In one of the most dramatic days in Wall Street.s history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, hurtled toward liquidation after it failed to find a buyer. The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments. But even as the fates of Lehman and Merrill hung in the balance Sunday night, another crisis loomed as the insurance giant American International Group appeared to teeter. A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive." Bank of America said to buy Merrill 09/14/08 Permlink Report Broken Link | Stocks "Bank of America Corp. reached a deal to acquire Merrill Lynch & Co. for about $44 billion, the Wall Street Journal reported, after shares of the third-biggest U.S. securities firm fell by more than 35 percent last week and smaller rival Lehman Brothers Holdings Inc. neared bankruptcy." Lehman said to prepare bankruptcy filing 09/14/08 Permlink Report Broken Link | Stocks "Lehman Brothers Holdings Inc. prepared to file for bankruptcy after Barclays Plc and Bank of America Corp. abandoned talks to buy the U.S. securities firm and Wall Street prepared for its possible liquidation. Lehman and its lawyers are getting ready to file the documents for bankruptcy protection tonight, said a person with direct knowledge of the firm's plans. A final decision still wasn't made, though none of the other options being considered appeared to have much standing, the person said, declining to be identified because the discussions haven't been made public." U.S. takeover of Fannie, Freddie 09/07/08 Permlink Report Broken Link | Markets Stocks "Under the plan, the Treasury will receive $1 billion of senior preferred stock in coming days, with warrants representing ownership stakes of 79.9 percent of Fannie and Freddie. The government will receive annual interest of 10 percent on the initial investments. As a condition for the assistance, Fannie and Freddie will have to reduce their holdings of mortgages and securities backed by home loans. The portfolios 'shall not exceed $850 billion as of December 31, 2009, and shall decline by 10 percent per year until it reaches $250 billion,' the Treasury said." The 65 mpg Ford the U.S. can't have 09/05/08 Permlink Report Broken Link | World Stocks "If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system, and gets a whopping 65 miles to the gallon. Oh yes, and the car is made by Ford Motor (F), known widely for lumbering gas hogs." Bankrupt retailers: pushed to the brink 08/11/08 Permlink Report Broken Link | Law Stocks "All filers are covered by the new bankruptcy law, but the changes were particularly harsh on retailers. For companies that already are short of cash - and, in the current environment, unlikely to find new financing - these new provisions in the law can amount to a death sentence. "Liquidity is sucked out of the debtor in a way that it becomes hard to survive," says Lawrence Gottlieb, chair of the bankruptcy and restructuring practice at New York law firm Cooley Godward Kronish, who has represented creditors' committees in the bankruptcies of Sharper Image and Linens 'n Things." CanWest woes may force Fairfax's hand 08/09/08 Permlink Report Broken Link | Watsa Value Investing Stocks "Fairfax Financial Holdings Ltd. has made a name as a patient, deep-value investor in the mould of Warren Buffett's Berkshire Hathaway Inc., so the company has been surprised to find itself cast lately in the role of an activist player." From good to great ... to below average 07/31/08 Permlink Report Broken Link | Management Stocks "Nine of the eleven companies remain more or less intact. Of these, Nucor is the only one that has dramatically outperformed the stock market since the book came out. Abbott Labs and Wells Fargo have done okay. Overall, a portfolio of the 'good to great' companies looks like it would have underperformed the S&P 500." How can the New York Times be worth so little? 07/30/08 Permlink Report Broken Link | Stocks "At its current $12.48 stock price - down 46.3% from a year ago - Times Co. has a $1.79 billion market cap. To put this in perspective, CBS recently acquired tech publisher CNET, a much weaker media brand, for $1.8 billion. Add in the company's $1.1 billion of debt, subtract $42 million for its cash on hand, and the company's total enterprise value - a valuation measure that totals up those items in such a fashion - is just $2.85 billion." Selling the family jewels 07/30/08 Permlink Report Broken Link | Stocks "Selling heirloom assets is frequently a last-ditch alternative. In instances in which assets have appreciated massively (such as SunTrust's Coca-Cola stock or Merrill's stake in Bloomberg), the sales can generate hefty tax bills. Such moves are also recognitions that management has screwed things up so royally in the core business that it has no alternative but to sell the remaining assets that the market still likes. But in this climate, many banks may find they don't have a choice." IndyMac seized by U.S. regulators 07/12/08 Permlink Report Broken Link | Real Estate Government Stocks "IndyMac Bancorp Inc. became the second- biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash." Superstar CEOs 07/03/08 Permlink Report Broken Link | Academia Management Stocks "Compensation, status, and press coverage of managers in the U.S. follow a highly skewed distribution: a small number of .superstars. enjoy the bulk of the rewards. We evaluate the impact of CEOs achieving superstar status on the performance of their firms, using prestigious business awards to measure shocks to CEO status. We find that award-winning CEOs subsequently underperform, both relative to their prior performance and relative to a matched sample of non-winning CEOs. At the same time, they extract more compensation following the award, both in absolute amounts and relative to other top executives in their firms. They also spend more time on public and private activities outside their companies, such as assuming board seats or writing books. The incidence of earnings management increases after winning awards. The effects are strongest in firms with weak governance, even though the frequency of obtaining superstar status is independent of corporate governance. Our results suggest that the ex-post consequences of media-induced superstar status for shareholders are negative." Bank failures to surge in coming years 06/23/08 Permlink Report Broken Link | Stocks "Only three banks have failed so far in 2008. But that number is set to surge as the credit crunch slows economic growth and hammers some lenders that grew too fast during the recent real-estate boom, experts say. The roots of today's banking crisis grew out of the boom and bust in the real estate market." The Texas ratio and Canada's big banks 06/23/08 Permlink Report Broken Link | Stocks "Back in the recession of the 1980s, when the oil market was in the tank and banks in Houston and Dallas were dropping like rain in April, Gerard Cassidy and his team of bank analysts at RBC Dominion Securities came up with a way to predict the likelihood of any given bank failing. They took the total of a lender's non-performing loans and divided it by the sum of its tangible equity capital plus its loan-loss reserves, yielding the Texas ratio. It's a nifty idea. What Mr. Cassidy and his team discovered was that when a bank's Texas ratio got to 100 per cent, or one to one, it was likely to become toast. The ratio was an accurate predictor of Texas bank failures and also worked a treat with troubled New England banks in the next recession in the early 1990s. Applying it to today's U.S. banking scene, MarketWatch says Mr. Cassidy and his colleagues predict that at least 150 U.S. banks will go bust in the next two or three years, and if the current economic slump morphs into a recession as deep as the ones in the 1980s and 1990s, that number may get as high as 300." Is Royal getting risky? 05/26/08 Permlink Report Broken Link | Stocks "I was most interested to learn that Royal Bank had an Assets-to-Capital ratio of 22.05 as of the 1Q08 filing. It is my understanding that the general maximum allowed by OSFI for this ratio is 20.0, which may be increased to 23.0 upon prior application to the Superintendant. Is this correct? If so, then: (a) When did Royal Bank apply to have the maximum increased? (b) On what grounds did the Superintendant allow the increase? (c) Were any terms, conditions, or time limits attached to the approval?" [You'll be rewarded if you take some time to more fully explore Mr. Hymas' PrefBlog.] Banks keep $35 billion markdown off income statements 05/19/08 Permlink Report Broken Link | Markets Accounting Stocks "Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets, regulatory filings show." Overplaying their hand 05/12/08 Permlink Report Broken Link | Miller Stocks "There are different kinds of investors in the world. One kind is a long-term patient type who runs mutual funds for the average Joe. A second is a risk arbitrageur - known on Wall Street as an "arb" - who speculates on pending deals. When a proposed takeover surfaces and the target's stock price runs up, Mr. Patience tends to sell to the arbs, happy to take his profit and letting the arbs bear the risk of whether the deal gets done and at what price. Recently, however, two of the biggest and best-known mutual fund investors - Gordon Crawford of Capital Research Global Investors and Bill Miller of the Legg Mason Value Trust (LMVRX) blurred the distinction between the investment and arb worlds, and their shareholders paid the price." Doubts raised on big backers of mortgages 05/06/08 Permlink Report Broken Link | Real Estate Stocks "As home prices continue their free fall and banks shy away from lending, Washington officials have increasingly relied on two giant mortgage companies - Fannie Mae and Freddie Mac - to keep the housing market afloat. But with mortgage defaults and foreclosures rising, Bush administration officials, regulators and lawmakers are nervously asking whether these two companies, would-be saviors of the housing market, will soon need saving themselves." Bear Stearns second brush with bankruptcy 05/05/08 Permlink Report Broken Link | Markets Derivatives Stocks "Bear believed that if it failed to get a new agreement that reaffirmed JPMorgan's guarantee of Bear Stearns' obligations, Bear could have been cut off from JPMorgan's Fed-backed funding and forced into bankruptcy - an outcome that many investors assumed had been forestalled by the March 16 merger agreement. The dispute that nearly brought Bear down a second time turned on whether JPMorgan would stand behind Bear Stearns' massive credit default swap book and other liabilities. The firm's lack of access to other funding had Bear lawyers preparing for a possible bankruptcy the weekend before the revised merger agreement was unveiled." New Bear Stearns bid 03/24/08 Permlink Report Broken Link | Stocks "JPMorgan and Bear were prompted to renegotiate after shareholders began threatening to block the deal and it emerged that several 'mistakes' were included in the original, hastily written contract, according to people involved in the talks. One sentence was 'inadvertently included,' according to a person briefed on the talks, which requires JPMorgan to guarantee Bear's trades even if shareholders voted down the deal. That provision could allow Bear's shareholders to seek a higher bid while still forcing JPMorgan to honor its guarantee, these people said. When the error was discovered, James Dimon, JPMorgan's chief executive, who was described by one participant as 'apoplectic,' began calling his lawyers at Wachtell, Lipton, Rosen & Katz to seek a way to have the sentence modified, these people said. Finger pointing over the mistakes in the contracts began as bankers blamed the lawyers and vice versa. As it began to look more possible late last week that the deal might be struck down, JPMorgan approached Bear in earnest on Friday about renegotiating the sale price to guarantee its completion and brought the Federal Reserve into the talks as well, people involved in the negotiations said." JPMorgan buys Bear Stearns for $2 a share 03/16/08 Permlink Report Broken Link | Markets Stocks "JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for about $2 a share after a run on the company ended 85 years of independence for Wall Street's fifth- largest securities firm and prompted a bailout by the Federal Reserve." What Citigroup says isn't what it does 03/15/08 Permlink Report Broken Link | Bonds Stocks "Real estate developer John Wimmer paid Citigroup Global Markets Realty Corp. almost $1 million last year to lock in a 5.6 percent mortgage rate on the refinancing of six commercial properties. At the November closings, Citigroup, citing plummeting demand for mortgage bonds, boosted the rate to 7.123 percent." F.D.R.'s safety net gets a big stretch 03/15/08 Permlink Report Broken Link | Government Stocks "It was an old-fashioned bank run that forced Bear Stearns to turn to the government for salvation on Friday. The difference is that Bear Stearns is not a commercial bank, and is therefore not eligible for the protections those banks received 75 years ago when Franklin D. Roosevelt halted bank runs with government guarantees. Bear was, instead, emblematic of a financial system that grew up over the last two decades, one that largely marginalized traditional banking and that enabled lenders to evade much of the regulatory framework that had also begun during the Roosevelt administration." Bear Stearns gets emergency funds 03/14/08 Permlink Report Broken Link | Government Stocks "Bear Stearns Cos., teetering on the brink of collapse from a lack of cash, got emergency funding from the Federal Reserve and JPMorgan Chase & Co. in the largest government bailout of a U.S. securities firm. After denying earlier this week that access to capital was at risk, Bear Stearns Chief Executive Officer Alan Schwartz said today that the 85-year-old company's cash position had 'significantly deteriorated' in the past 24 hours. The central bank agreed to provide financing through JPMorgan for up to 28 days, the bank said in a statement today." Loophole lets bank rewrite the calendar 03/11/08 Permlink Report Broken Link | Accounting Stocks "In its financial statements for 2007, the French bank takes the loss in that year, offsetting it against 1.5 billion euros in profit that it says was earned by a trader, Jerome Kerviel, who concealed from management the fact he was making huge bets in financial futures markets." The complete guide to free stock screen tools 02/21/08 Permlink Report Broken Link | Stocks "There are a growing number of free stock screen tools on the Web, but trying to decide among the many available could be the cause of a headache or two. It would help to have a guide. Hence, the following survey: It describes some of the better packages with the help of reviews and experienced users." Wall Street losses partners never imagined 02/12/08 Permlink Report Broken Link | Stocks "Less than a decade after Wall Street's last major partnership went public, stockholders are paying the price for bankrolling the industry's expanding risk appetite. Four of the five biggest U.S. securities firms lost about $83 billion of market value last year, almost 90 percent of their net income since 1999, data compiled by Bloomberg show. That cut the annual average return for Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. during those nine years to 9.7 percent from 16.8 percent. The private partnerships that once dominated Wall Street guarded their capital, used less leverage and limited their risk to trading blocks of stock for clients and shares of companies in mergers, said Roy Smith, a finance professor at New York University's Stern School of Business and a former partner at Goldman Sachs Group Inc. Since raising money from the public, many of the biggest firms have abandoned that caution." The Top 500 U.S. Stocks for 2008 12/14/07 Permlink Report Broken Link | Value Investing Growth Investing Stingy Investing Stocks "Some extraordinary qualities are needed to make our list of top stocks. On the value front, all our chosen stocks pay a dividend and sell for modest price-to-sales and price-to-book-value ratios. On the growth side, they demonstrate strong increases in sales per share and earnings per share. In addition, most generate healthy returns on equity, carry relatively little debt, and enjoy rising share prices. Keep in mind, though, that these stocks are controversial. After all, strong growth is rarely to be had at rock-bottom prices without some risk." Ever more fleeting? 12/03/07 Permlink Report Broken Link | Stocks "There are still way too many analysts who expect too many companies to generate annual long-term earnings growth of 20% to 25% or more. Analysts pay too little attention to how easily such a rapid rate of growth can fade after just a few years. Research departments aren't shy about putting out lists of companies they expect to generate annual earnings increases of 15% or more for at least five years. One value of Leuthold's work is the reminder it provides that such high sustained earnings growth is truly rare." Freddie and Fannie's Achilles' heel 11/26/07 Permlink Report Broken Link | Stocks "Mortgage giants Freddie Mac and Fannie Mae need capital - in today's credit crisis, there's no doubt about that. Freddie even said last week that it was "seriously considering" cutting its $2 annual dividend by half, a radical step indicating how strapped the company is. Freddie also reported it had hired two Wall Street firms to explore "capital-raising alternatives." And Freddie and Fannie are going to need some especially creative alternatives. Why? When either Freddie or Fannie attempt to build capital, they are handicapped by a peculiarity that very few investors know about: They cannot sell the most popular kind of preferred stock, the "cumulative" variety, because their regulator will not let these securities count toward capital." Citigroup: 'Gimme shelter' 10/29/07 Permlink Report Broken Link | Stocks "This may sound silly, but let me ask you a question. Let's say that I maxed out my credit at Citigroup to speculate on a house whose market price is now less than what I paid. Citi wants its money, but instead I say, "Sorry, the house is selling for less than its true value. As soon as it sells for what it should, I'll send you a check." What do you think Citi's reaction would be? How about "Sir, where should I send the repo man?" Well, folks, Citi seems to have put itself in just such a fix by borrowing lots of money to buy assets that have dropped in market value. But instead of summoning the repo (as in repossession) man, some of the world's biggest hitters are trying to set up a huge fund to buy time for Citi and some other institutions with similar problems. " A beautiful mind 10/26/07 Permlink Report Broken Link | Stocks "If you believe that thinkers never accomplish much in the real world, you should meet Rob Morrison. He's a quiet, analytical man who started out as a competitive chess player before becoming fascinated by the world of money. Over the past 25 years, while working from his computer in his comfortable Toronto home, he has thought long and hard about how to invest well. By putting his ideas into practice, he has grown his personal portfolio from a few hundred thousand dollars to more than $10 million." Bear Stearns' bad bet 10/14/07 Permlink Report Broken Link | Stocks "The revelations shed new light on the murky dealings inside the booming $1.3 trillion hedge fund industry, which now accounts for up to a third of all daily trading on Wall Street. They seem to underscore critics' biggest complaint: that many hedge funds use astonishing amounts of leverage, or borrowed money, in sometimes reckless ways. The risks of "fair value" accounting, the practice that allows money managers to estimate the values of securities for which they can't find true market prices, are thrown into sharper focus as well. Coming soon, for better or worse: louder calls in Washington for more oversight of the largely unregulated hedge fund industry." Crisis at Northern Rock 09/14/07 Permlink Report Broken Link | Stocks "Northern Rock, a former Newcastle building society taken public in 1997, thrived and then was brought down by its innovative business model. With a relatively small deposit base, it used securitization of mortgages and other capital-markets funding to grow rapidly to a nearly 19% share of the British mortgage market by the first half of 2007. But a few weeks ago, Northern Rock suddenly found that its various funding strategies were all shutting down simultaneously. In a crisis of confidence, the business model that had looked so good turned out to be no model at all." Robot stock portfolio rides high again 07/10/07 Permlink Report Broken Link | Value Investing Dorfman Stocks "Our picks by the data machine for 2007 each had a market value of more than $500 million, more than a penny of profit per share in the latest four quarters reported, more shareholder equity than debt and the lowest share price on the market relative to recent earnings." Coal? Yes, Coal 06/15/07 Permlink Report Broken Link | Stocks "Little known outside the energy industry, Peabody is well respected within it. The company is often referred to as the "Exxon of Coal" for its strategic judgment and its immense energy resources. Peabody's 10.2 billion-ton coal pile has nearly twice the energy content of Exxon's petroleum reserves. Its massive mines in Wyoming's Powder River Basin are among the most productive and technologically sophisticated in the world. And its well-timed acquisitions of properties in Australia have proved rewarding, forging a valuable path into fast-growing markets such as India and China. International business now contributes 30% of profits, up from under 1% in 2001." The darker side of shareholder democracy 05/19/07 Permlink Report Broken Link | Stocks "In truth, shareholder democracy still isn't remotely like democracy as most people think of it. New research shows how twisted it really is and suggests why it could even be the source of the next big business scandal. The research comes from Yair Listokin, an associate professor at Yale Law School, who studied shareholder voting on proposals put forward by management. Those are critical votes, concerning mostly executive compensation but also merger approvals and other large matters. A majority vote is generally required, and much is riding on the outcome. When Listokin collected data on thousands of such votes, he discovered an amazing thing: On hard-fought issues with significant shareholder opposition, management frequently wins by tiny margins - just a couple of percentage points or even less - but almost never loses by tiny margins. " Feds investigating homebuilder Beazer 03/27/07 Permlink Report Broken Link | Stocks "Amid the meltdown of the subprime housing sector, mortgage lenders and brokers have come under fire from state and federal officials for predatory lending practices with those risky borrowers. Now one national homebuilder is feeling the heat. BusinessWeek has learned that federal investigators have opened a broad criminal probe into lending practices, some financial transactions, and other dealings at Beazer Homes USA (BZH)." Five breakup possibilities 03/26/07 Permlink Report Broken Link | Stocks "A company's various businesses can be worth much more than Wall Street's appraisal of the entire enterprise. In this installment of our Beyond the Balance Sheet series we examine five breakup possibilities." Every bite you take 02/22/07 Permlink Report Broken Link | Stocks "It comes as little surprise that institutions like hospitals, universities, and military bases flock to Sysco's pre-cooked foods. But well-regarded bistros and pubs have also begun to offer such items to save time and money. Recently, New York magazine reported that Thomas Keller uses frozen Sysco fries at his Bouchon bistros. (While a company spokeswoman wouldn't confirm the brand, she confirmed the use of frozen fries.) Mickey Mantle's Restaurant, an upscale sports bar, serves Sysco's pre-made soups, like Manhattan clam chowder and vegetarian black bean. And then there's Edgar's restaurant at Belhurst Castle, which has won numerous awards of excellence from Wine Spectator magazine. There, the kitchen takes Sysco's Imperial Towering Chocolate Cake out of the box, lets it defrost, and then sprinkles it with fresh raspberries before serving it to diners. "We've had a lot of success with that cake," executive chef Casey Belile says. The Edgar's menu, of course, does not list the dessert as a Sysco pre-made cake, but it does charge $8.95 for the experience." Now that's rich 02/21/07 Permlink Report Broken Link | Stocks "On April 3, 2006, the first day of post-CCAA trading, Stelco's stock closed at $19.49. The next day, the price was $24. Today, after posting its latest string of losses, the shares are pretty much worth what they were trading at during Mott's first week on the job. But his million-plus options are worth about 15 million bucks. Mott.who was also allowed to buy a million shares at $5.50, netting him more instant millions - insists it's common to offer strike prices equal to the value of shares on the day options are granted. He's right. But Stelco has a reputation for handing out unjust executive rewards, so my question is: why didn't it wait a few days and let the market set a fair price?" Costco: The 'anti-Wal-Mart' 02/16/07 Permlink Report Broken Link | Stocks ""Retailing isn't rocket science. Costco has figured out the big, simple things and executed with total fanaticism," says Charles Munger, a Costco director for the past 10 years. The outspoken Munger, 82, is better known as Warren Buffett's longtime partner at Berkshire Hathaway, where he serves as vice chairman." The number of free stock screeners is dwindling 02/04/07 Permlink Report Broken Link | Stocks "A few weeks ago, BusinessWeek magazine shut down its free Quick Stock Search and Advanced Stock Search screeners. That's unfortunate, because BusinessWeek's screeners were easier to use than others with similar capabilities. If you're not familiar with the term, a screener is a program that allows you to search the entire market for stocks or mutual funds meeting your selection requirements. For instance, you could use a screener to list stocks with price/earnings ratios between 15 and 20, and annual sales greater than $20 billion. The demise of BusinessWeek's screeners leaves only two full-feature screeners that we can use for free, MSN Money's Deluxe Screener and Reuters' PowerScreener Lite. Both offer more screening choices than BusinessWeek's screeners did, but both take some time to learn. It's time well spent, however, and once you get the hang of using them, they'll become your best friends." Top NYSE stocks under $5 01/16/07 Permlink Report Broken Link | Tweedy Stocks "In 2003, Tim Melvin, the co-author of recent bestseller The Little Book of Value Investing with Christopher Browne from Tweedy Browne, told me about a system he tested for 2002. At the beginning of every month, buy every stock below $3 on the NYSE. Sell at the end of the month and begin again." Bad for GM, bad for America 04/11/06 Permlink Report Broken Link | Stocks "General Motors has launched a time bomb that could push the company into Chapter 11 -- and take down the financial markets with it." Last tango in Detroit? 04/07/06 Permlink Report Broken Link | Stocks "The reason is that GM's cash mountain is not so much an asset, but something for the UAW to fight over. Selling the stake in GMAC adds to the available cash. That is likely only to postpone the day of reckoning and may thus prove a huge and costly mistake, says Dale Oesterle, a law professor at Ohio State University. Far better, he thinks, would be for GM to seize the day by handing its cash mountain back to shareholders in the form of a special dividend, and filing for Chapter 11 right away." Chicken Run: Value manager's dream? 03/22/06 Permlink Report Broken Link | Stocks "On the surface, chicken stocks like Sanderson Farms, Gold Kist, and Pilgrim's Pride are a value manager's dream. Most of them are not very leveraged, they generate a decent return on capital, and best of all, they trade at single-digit P/E based on last year's earnings.So, are chicken stocks the value manager's dream, or are they a value trap in the making?" A sleeping giant 03/15/06 Permlink Report Broken Link | Stocks "Want to buy a stock that trades at close to its five-year lows despite posting 13% annual earnings-per-share growth over that period? What if the stock also traded at a discount to the market on a price-to-earnings basis? Furthermore, what if Berkshire Hathaway (led by the legendary Warren Buffett) had initiated a sizable position during 2005? And lastly, what if the company stood to benefit greatly from a potential stabilization in energy prices?" Was death of newspapers greatly exaggerated? 03/15/06 Permlink Report Broken Link | Stocks "If Bruce S. Sherman wanted to persuade Wall Street that investors were undervaluing newspaper stocks, he failed." The tragedy of General Motors 02/07/06 Permlink Report Broken Link | Stocks "The Detroit giant is a weird, scarred combination: a carmaker doing poorly, and an insurance company engulfed by its obligations. It's heading for a wreck -- which is why CEO Rick Wagoner has the toughest job in business." The dirty little secret about buybacks 01/13/06 Permlink Report Broken Link | Stocks "The problem, says Thomas M. Doerflinger, an equity strategist at UBS, is that you can't easily tell how much of what companies say they're spending actually gets to investors. In a recent report on what he calls "vanishing buybacks," Doerflinger found that the number of shares in the S&P 500 has continued to increase despite the bigger share-repurchase outlays by companies. In 2004, when companies reported spending some $197 billion on buybacks -- nearly 2% of the market value of the index -- the number of shares outstanding increased by 1.8%. In the 12 months through June 2005, shares increased 0.7%, and only a third of the companies actually shrank their share counts by at least 1%." The wit and wisdom of Peter Lynch 01/05/06 Permlink Report Broken Link | Stocks "Peter shared his rules/observations on investing (8 of them) and proceeded to share some thoughts on each point and then talked about 10 wrong-headed and dangerous things that people say (often to themselves) about investing. It never hurts to review the fundamentals and glean insights from superstars like Peter so we took the time to share the essense of his message below." Bargain-hunting time 01/03/06 Permlink Report Broken Link | Stocks "Lots of top-quality stocks are trading near 52-week lows, so investors have plenty of opportunities." Newspapers: buys among the battered 12/16/05 Permlink Report Broken Link | Stocks "If newsboys still stood on corners trying to hawk papers, this could be one of their pitches: "Extra, Extra, Read All About It! Pundits Ring Death Knell for Newspaper Biz!" The demise of the newspaper industry has become a favorite topic on both Wall Street and Main Street. Doomsayers point to perceived fundamental weaknesses as circulation figures weaken and advertisers shift spending away from newspapers and toward other media." Philip Morris wins 12/16/05 Permlink Report Broken Link | Stocks "'This win is very helpful on the litigation scene,' said David Dreman, who oversees $15 billion at Dreman Value Management in Jersey City, New Jersey, including 14.6 million Altria shares and 3.1 Reynolds American shares as of Sept. 30. 'This is a case that a lot of other states were watching.'" 10 rock-solid stocks 12/16/05 Permlink Report Broken Link | Stocks "After reviewing the latest research and interviewing dozens of analysts and money managers, we trained our sights on 10 moderate-P/E stocks positioned to benefit from secular -- not cyclical -- trends." Clicks, bricks and bargains 12/02/05 Permlink Report Broken Link | Stocks "The internet was supposed to batter traditional retailers. Instead they are coming to dominate it" Ben Bernanke's favorite stock 11/23/05 Permlink Report Broken Link | Stocks "If you found out that Warren Buffett, Peter Lynch, or Alan Greenspan held only one stock in their personal portfolio, chances are you'd want to know what it was. So when I learned that Ben Bernanke, who is likely to succeed Alan Greenspan in the world's most powerful economic policymaking post, held only one stock, I found that newsworthy. Bernanke held stock of a company that evokes strong feelings -- both pro and con -- among investors. That company is Altria Group, formerly Philip Morris, one the world's largest manufacturers of cigarettes." Value investors value newspapers 11/03/05 Permlink Report Broken Link | Stocks "Despite obituaries detailing their demise, newspaper companies still hold intrigue for some contrarians. Here's why they haven't written off old media yet." Six feet under 10/21/05 Permlink Report Broken Link | Stocks "Is Batesville Casket deviously fixing prices and gouging the bereaved? Or is it just a tough company protecting the channel?" Now for the reckoning 10/14/05 Permlink Report Broken Link | Stocks "Wilbur Ross, a financier who made an impasse-breaking deal with the USW that enabled the bankrupt steel industry to consolidate and leave Chapter 11 in good shape, notes two important lessons from that experience that the UAW - and others, too - might do well to heed. First, American firms need to be globally competitive and can no longer afford to award pay and fringe benefits solely according to American norms. Secondly, "at the end of the day, the only job worth having is one at a solvent company. What's the point of a gold-plated contract with a firm that is going bust?"" Which side are you on? 10/14/05 Permlink Report Broken Link | Stocks "Delphi's Mr Miller would have us focus on one: the clash between the interests of young workers and those of their predecessors. As he put it stirringly in an interview with the Financial Times, inter-generational warfare looms "as young people increasingly resent having their wages reduced and taxed away to support social programmes for their grandparents' income and health-care concerns". Short of flinging the oldsters to the sharks, there is no escaping the demographic trend that has fewer workers supporting more baby-boom retirees in most of the developed world (and part of the developing world). The question is whether the burden should fall on workers in specific firms, on all workers, or on taxpayers in general." Beyond bling 09/25/05 Permlink Report Broken Link | Stocks "Claire's Stores meets five of those six criteria and has two other points of note. It has increased its dividends by at least 10% a year, on average, over the past 12 years, and it has no long-term debt. It has certainly made money for its shareholders. But should we care particularly about one smallish company, whose main stock in trade is selling flash fake jewellery?" The taming of the screw 09/15/05 Permlink Report Broken Link | Stocks "For centuries now the screw has held things together, and for almost as long it has been frustratingly inept at its central purpose. Concrete cracks when it is punctured by a screw. Plastic creeps away from the pressure, sliding down the threads so that even a tightened screw loosens almost instantly. Carmakers have to mold brass inserts into plastic parts to accept screws; otherwise they might loosen and cause a dreaded rattle. Kenneth LeVey has a better idea. A product development director at Illinois Tool Works, the nation's biggest screwmaker, he has reinvented what the company dubs the threaded fastener in a way that lets it grip tight where it used to let loose--and compete with cheaper screws made by offshore rivals." America's airlines, flying on empty 09/15/05 Permlink Report Broken Link | Stocks "The benefits of Chapter 11 are supposed to be avoiding the unnecessary liquidation of businesses, and the job destruction and total loss to creditors this can involve. But in the airline industry this emergency ward for stricken companies has turned into long-term intensive care, inadvertently wreaking further damage on rivals. In mid-October tougher new rules for Chapter 11 will come into force, so troubled airlines have an incentive to go bankrupt soon, to benefit from today's more benign regime." When to sell a stock? 09/14/05 Permlink Report Broken Link | Stocks "So when should you sell? The best answer was provided by the elegant Philip A. Fisher, who died in 2003 at the age of 96 after a 74-year career as a money manager. In his important book, "Common Stocks and Uncommon Profits," published in 1958 and currently available in a paperback edition, he wrote, "It is only occasionally," he wrote, "that there is any reason for selling at all."" Extinction of the predator 09/11/05 Permlink Report Broken Link | Stocks "How merger mania has been a disaster for the world's great car manufacturers" Bic sells 100 billionth pen 09/08/05 Permlink Report Broken Link | Stocks "It was also one of the first examples of globalization. You can find these pens everywhere because Bich had a modern concept of low-cost, global marketing. They invented or adopted many of the principles we talk about now, but at a very early stage." Wal-Mart becomes a lifeline 09/07/05 Permlink Report Broken Link | Stocks " When the hungry man threatened to get his gun if Wal-Mart's doors didn't open the day after Hurricane Katrina smashed through town, store manager Ray Mathews knew he had trouble. The storm had shattered skylights and flooded the west end of his Wal-Mart Supercenter in Columbia, Miss., 20 miles north of the Louisiana border. The lobsters had died, and the meat and the vegatables were spoiling as the power was out. Mathews couldn't reach most of his 400 workers, either. They were largely stranded when the storm ripped open their homes, knocked down trees, and shut down area gasoline stations. Now, desperate local residents who depend on the Wal-Mart in this remote town were knocking loudly on locked doors." Google's stock sale mystery is simply solved 08/26/05 Permlink Report Broken Link | Stocks "There is no mystery here, folks. When companies think their stock is undervalued, they buy it back. The Googlers are in the opposite fix. Their stock is overvalued, so what do they do? Sell more. Quickly. Before sanity returns to the marketplace." Beat the S&P with strong consumer brands 08/25/05 Permlink Report Broken Link | Stocks "Peter Lynch, in the book One Up on Wall Street, refers to these companies as "The Stalwarts." Jeremy Siegel, in one of the great investment books of the year, The Future for Investors, calls them "corporate El Dorados." Warren Buffett has long preached the virtues of these types of companies having "economic castles protected by unbreachable moats."" Google's new shares: are they worth the price? 08/18/05 Permlink Report Broken Link | Stocks "In the end, Damodaran's analysis produced a value that's far less than the current stock price. He figures Google is currently worth just $110 per share. And this assumes that the company will grow like gangbusters, taking in $49 billion in sales by mid-2015, compared with just $3.2 billion last yearan increase of some 1,400%." Six 5-star stock ideas from master investors 08/18/05 Permlink Report Broken Link | Stocks "Investment companies can themselves make great investments. These businesses often benefit from significant managerial ownership and much longer investment horizons than mutual funds subject to quarterly evaluation by "consultants" dare pursue." Harry Potter and the all-too-rare windfall 07/18/05 Permlink Report Broken Link | Stocks "The latest volume in the Harry Potter series is set to break all publishing records, to the delight of booksellers. The success of the Potter books has also made its author vastly wealthy and provided a windfall for its publisher. But it is an oddity in an industry that is growing slowly and rarely sees bumper profits" Fortune's best stocks 07/10/05 Permlink Report Broken Link | Stocks "Famed value investor Benjamin Graham developed a number of techniques to uncover cheap and financially stable stocks. We based our screen on Graham's recommendations for the "defensive investor." As he explains in his 1949 classic The Intelligent Investor, this is someone who's looking for "safety and freedom from bother." We adhered to virtually all of Graham's many strict investing guidelines, but we did make a few exceptions. For instance, we dropped the requirement that current assets be greater than total debt, because a well-managed business should be generating enough cash to meet its obligations. We also loosened Graham's rule that stocks sell for less than 1.5 times book value." Pensions that bear mention 07/07/05 Permlink Report Broken Link | Stocks "Altria Group is on fire. The company responsible for Marlboro cigarettes and Oscar Meyer wieners has returned 37% to shareholders over the past year. But if investors bothered to read the company's financial statements, they might be less sanguine: Altria is $2 billion in the hole on its pension obligations--quadruple the deficit from three years ago." Something wicker this way comes? 03/14/05 Permlink Report Broken Link | Stocks "Chukumba suspects that a primary reason Pier 1's stock isn't yet trading even lower in the mid-single digits is because of Buffett's interest in the company. "Wall Street is not as bothered as it should be because of Buffett. He's legendary for investing in undervalued companies for the long haul. Absent Buffett and Pier 1 would be in more trouble," Chukumba said, although he did admit to Pier 1's low-debt, significant free cash-flow generation and consistent dividend returns as a few other positives cushioning the stock." AGF investors have reasons to hang in there 03/03/05 Permlink Report Broken Link | Stocks "In other words, the worst-case scenario is largely priced into the stock. If the rescue plan doesn't work, there's not a lot of downside here. If it succeeds, the Goldrings have just made a very shrewd investment, and Randy Ambrosie will be allowed to eat red meat again." How to recognize wide-moat firms 02/19/05 Permlink Report Broken Link | Stocks "People often think that analyzing moats is as simple as looking for strong historical profitability. Ah, if only it were that easy. In truth, history is an imperfect guide, since the value a company will create for shareholders is dependent on how well it fends off competition in the future. High returns on capital attract competitors, and those great historical numbers will fade fast if a firm doesn't have a strong competitive advantage. Oftentimes, that competitive advantage isn't obvious--you have to do some digging into the firm's business model to figure it out." Food porn 02/01/05 Permlink Report Broken Link | Stocks "Whole Foods founder John Mackey built a retail powerhouse peddling food as sensual, succulent succor. His stores preach organic virtue and profit from culinary vice." Is Wal-Mart good for America? 11/20/04 Permlink Report Broken Link | Stocks "I was trying to make the same point that the great economist Joseph Schumpeter made about the Industrial Revolution. In his book, "Capitalism, Socialism and Democracy," he said, "The capitalist achievement does not typically consist in providing more silk stockings for queens, but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort."" What's going on behind Nortel's closed doors? 11/12/04 Permlink Report Broken Link | Stocks "Of all of the accounting tricks in the book, revenue games are probably the sleaziest. The principles of revenue recognition are fairly straightforward. In simple terms: If you've done the work, the customer accepts ownership of your product and is likely to pay the bill, you can count it as revenue. If not, you can't. No points for shipping your products to your own warehouses, or sending out phony invoices, or selling stuff to customers who don't have the money to pay. So let's look at what Nortel did. It booked revenue "before legal title . . . had passed to customers," and before the company had done anything to earn the money (i.e., it hadn't delivered on the contract). It booked revenue when it knew it probably couldn't collect. And the company played these tricks during the go-go years, when people were paying $100 or more for the stock on the basis of -- you guessed it -- unprecedented growth in revenue, while Mr. Roth and other insiders gorged on their stock option gains." Some shoppers find fewer happy returns 11/10/04 Permlink Report Broken Link | Stocks "As the holiday shopping season gets into full swing, a number of major retailers -- including KB Toys and Sports Authority, according to store personnel -- are rolling out electronic systems that weigh the number of returns and exchanges a person has made, the dollar value of the items, and the dates of the transactions to decide whether a consumer should be granted another. The systems are designed to catch shoplifters and those who "wardrobe," wearing clothes and then returning them for a full refund." Best Buy hopes to exorcize devil patrons 11/10/04 Permlink Report Broken Link | Stocks "As far as the old adage "the customer is always right" goes, Best Buy doesn't buy it. The massive retailer is being vocal about something that at first might sound a little uncouth: frankly, they'd rather not have 20% of their customers as customers. In an age where it seems like everyone casts their nets as wide as possible to bring in more eyes, feet, and wallets, Best Buy is doing the opposite. They believe that a small portion of their customers are bad for business, and they're looking to shut them out." Customer service saved Xerox 10/29/04 Permlink Report Broken Link | Stocks "Salvation for Xerox Corp. started with a steak dinner in Nebraska four years ago. As Xerox's newly named president and chief operating officer, Anne Mulcahy faced many tasks, including resuscitating a company burdened with debt, a free-falling stock and a dwindling customer base. Who was she gonna call? Famed financier Warren Buffett, who invited her for dinner at one of his favorite restaurants and told her she had been "drafted into a war" she didn't start and to focus on customers." Market realities can't sustain TransAlta's dividend 10/21/04 Permlink Report Broken Link | Stocks "We note that the dividend yield, at 6.1 per cent, is only modestly higher than the yield on the company's 2011 bonds (about 5.5 per cent). (The gap is larger than it appears because of the dividend tax credit.) Still, to the conservative investor who's looking for TransAlta for income, what's better to own: a high-yield stock that's likely to cut its payout, or a slightly lower-yielding bond that, by comparison, looks pretty secure?" Big Mac's makeover 10/16/04 Permlink Report Broken Link | Stocks "The world's biggest fast-food company has pulled off a remarkable comeback" Taking advantage of the terminally stupid 10/04/04 Permlink Report Broken Link | Stocks "After years of miserable performance, Concord Communications management came up with a novel approach to ensure that the stock options it granted during the bubble didn't expire worthless. In a public filing last week, Concord unveiled a plan to buy back employee options at prices up to $4. The trouble is, with a $9 share price, options granted at $40 are worth basically nothing." Costco has its own formula for success 09/26/04 Permlink Report Broken Link | Stocks "Munger considers Sinegal one of the 10 best retailers of the past century. He'll need all his smarts to keep Sam's at bay. For seven of the first eight months of this year, Costco's U.S. same-store sales, a key measure of retail growth, have outpaced Sam's, says retail consultant Management Ventures." Welcome to the bankruptcy economy 09/21/04 Permlink Report Broken Link | Stocks "The final costs of a bankruptcy economy aren't simply measured in cash, however. Workers who don't trust management at many private companies will believe even less in management promises. Workers in the public sectors who thought their pensions were guaranteed will go through a rude and bitter awakening. Social Security recipients will get less back just as current workers are asked to put more in. And taxpayers will get socked with the bill and be left with more anger and cynicism." Buffett of the North 09/16/04 Permlink Report Broken Link | Stocks "Insurer Fairfax Financial has been able to compound its book value at 31% annually since 1986 because of the exceptional investing abilities of its managers. Unfortunately, some recent questionable acquisitions have weakened its balance sheet significantly. Now Fairfax is priced at a huge discount to its sector, making it a high-risk, high-reward investment." Grey Goose Billionaire's second act 09/12/04 Permlink Report Broken Link | Stocks "Frank can certainly afford to indulge in his fairway fantasies. The Grey Goose sale--the largest in liquor business history for a single brand--solidified his spot in the booze business pantheon. It also will land him on the Forbes 400. His personal proceeds from the deal, plus a 75% stake in Sidney Frank Importing, make him worth at least $1.6 billion." Flight into the red 08/30/04 Permlink Report Broken Link | Stocks "It's a basic problem of supply and demand: too many seats and too few passengers willing to pay full-fare prices. During the last downturn a decade ago, carriers lost more than $13-billion. Since the Sept. 11 terrorist attacks, airlines have lost $18-billion and project a loss of $10.7-billion more this year, counting the effects of a war with Iraq. That's enough to wipe out the industry's cumulative profits since commercial aviation took wing at the end of World War II." Pensions on a precipice 08/26/04 Permlink Report Broken Link | Stocks "The threat by UAL, parent of struggling United Airlines, to walk away from its four pension plans has set off shock waves throughout the airline industry." Giant slayer 08/24/04 Permlink Report Broken Link | Stocks "Albert Norman has made a minicareer out of blocking Wal-Mart. He has evidently had some success." The sorry saga of KHI 08/15/04 Permlink Report Broken Link | Stocks "The infamous fiascos at Bre-X Minerals Ltd., YBM Magnex Inc. and Nortel Networks Corp. have some new company. The rise and fall of a little-known Halifax company, Knowledge House Inc., is turning into one the largest, messiest morasses of securities litigation in recent memory." The coming pension crisis 08/12/04 Permlink Report Broken Link | Stocks "Allegheny Technologies is on a roll. Thanks to rocketing prices for its specialty steel and some cost-cutting moves, the Pittsburgh-based company has seen its stock climb 172% in a year. But those expecting nothing but blue skies ought to consider this sobering fact: What it owes its workers in pension payments exceeds what the whole company would be worth in liquidation." The benefits trap 07/12/04 Permlink Report Broken Link | Stocks "Workers bear the brunt of it. Bill Luoma, head of the Mahoning Valley Steelworkers Retirees Council, which counts bankrupt LTV retirees among its members, says that with their health insurance gone, many have stopped visiting doctors other than for emergencies. For companies struggling to compete in the global economy, carrying those burdens themselves is like strapping on a 200-pound weight to run a 40-yard dash. But to shed them is to leave decades of workers devastated. In the end, someone will have to pay. The only question is who." Biggest leveraged buyout ending as a costly fizzle 07/10/04 Permlink Report Broken Link | Stocks "The greatest leveraged buyout ever is ending, not with a bang but with a whimper of loss. After 15 years of scrambling and pain, Kohlberg Kravis Roberts is through with its investment in RJR Nabisco and its afterlife of ownership of Borden Chemical." The next wave of airline bankruptcies 07/09/04 Permlink Report Broken Link | Stocks "The five characteristics that I used to define the dynamics of the European low-cost air travel market apply to the future of other industries that sell commodity products as well. In an industry like that, companies must run as fast as they can just to stay in place. Price pressure from new entrants to the industry with lower costs are a constant threat. Since part of those lower costs is simply a result of newness, investors in these sectors need to reverse the conventional wisdom that gives the edge to the established companies in that market." Internet Explorer is just too risky 06/29/04 Permlink Report Broken Link | Stocks "Until Microsoft proves it can fix IE's security bugs, you're better off using one of a few good alternatives as much as possible" Super-duper shares yield super-duper pay 05/16/04 Permlink Report Broken Link | Stocks "Or maybe I should be thinking of him as a consultant, a very valuable and highly paid consultant whose hourly rate deserves to surpass almost any other professional in Europe. Let's see -- at eight hours a day, seven days a week, 52 weeks a year, what would Mr. Stronach's hourly rate come to? Hmm, I get over $13,000 an hour. And I thought my lawyer was expensive!" Take lid off inside sales before IPOs 05/14/04 Permlink Report Broken Link | Stocks "But one loophole still remains, and it is being used by Salesforce.com, a software company that will soon go public. One indicator that investors look at in initial public offerings is whether the insiders are cashing out. The fact they are selling their shares does not prove the offering is overpriced, but it is not a good sign." Presto stays its course 05/12/04 Permlink Report Broken Link | Stocks "Presto's an interesting story. In the 1960s and 1970s, both Benjamin Graham and Warren Buffett heaped praise on the company and its management, with Buffett calling Melvin Cohen one of his "home run hitters" at a time when Buffett's partnership held Presto stock." Dump dual-class share structures 05/06/04 Permlink Report Broken Link | Stocks "The SHARE report, called "Second-Class Investors," recommends that the TSX prohibit new dual-class share structures and introduce a "sunset" clause for companies with the structure, giving them three years to end the practice. The report also suggests limiting the voting strength of multiple shares to a maximum of 51% of total outstanding votes and no more than 10 votes per share." How big can it grow? 04/15/04 Permlink Report Broken Link | Stocks "The world's biggest retailer is defying its critics by continuing to grow vigorously" Analyzing the "Sins" of Wal-Mart 04/15/04 Permlink Report Broken Link | Stocks "At a California conference, a diverse crowd, from academics to union workers, explored the growing backlash against the giant" Microsoft Starts to draw 'value investors' 04/06/04 Permlink Report Broken Link | Stocks "Microsoft Corp., whose earnings growth and surging share price in the 1990s made Chairman Bill Gates the richest man in the world, is attracting the attention of investors who favor bargain-priced stocks." Hopping 04/04/04 Permlink Report Broken Link | Stocks "A big brewing merger prompts a rethinking of shareholders' rights" Size still doesn't matter 03/31/04 Permlink Report Broken Link | Stocks "Several alert readers argue that our BofA-bashing size-vs-efficiency analysis, posted on Monday, missed an important point. Rather than compare banks' size with their efficiency at a given point in time, they say, it's more relevant to see whether there's a systematic improvement (or erosion) in efficiency over time, as banks gets bigger." Self-delusion down in Charlotte 03/30/04 Permlink Report Broken Link | Stocks "Only one problem! In financial services, there's no connection between an institution's size and its efficiency--or its profitability, or growth, or any other number investors care about." Bombardier's bank 03/30/04 Permlink Report Broken Link | Stocks "Observers have often discounted export financing's importance to Bombardier, waved it off as a reality of aerospace, or simply assumed that government support will continue. That could prove a serious oversight. Tellier has put employees, investors and government officials on notice that his company's prospects very much depend on Ottawa's appetite for risk. Should that appetite be lost any time soon, Tellier's axe may fall again--this time on the heads of Canadian aerospace workers." Banks' use of client cash probed 03/26/04 Permlink Report Broken Link | Stocks "Banks are deliberately hanging on to overpayments worth hundreds of millions of dollars made by customers, the Financial Times has found. In one case, the Financial Services Authority, the financial watchdog, launched a probe into Royal Bank of Canada after warnings that managers were withholding money from customers that had overpaid on foreign exchange transactions." Insiders are bailing on specialty retailers 03/24/04 Permlink Report Broken Link | Stocks "With valuations high and the chances of beating last year's stellar numbers low, execs at stores Chico's, Starbucks and Quiksilver are taking their profits now." I'd like to buy the world a Coke 03/20/04 Permlink Report Broken Link | Stocks "Rome, a hamlet an hour up the road from Coca-Cola's Atlanta headquarters, is known -- at least among Coca-Cola executives -- as the place that consumes more Coke per capita than anyplace else on earth" Once again, Nortel is covered in question marks 03/12/04 Permlink Report Broken Link | Stocks "In cases like this, perhaps it's better to take the advice of Dr. Elitzur, who teaches accounting at the Rotman School of Management, and look at the cash flow. But at Nortel, you won't find much. The company used $347-million in cash in its operations last year, and you have to go back to 1999 to find a year when it actually produced free cash flow." Power to the shareholder? 03/09/04 Permlink Report Broken Link | Stocks "Michael Eisner of Disney and Sir Philip Watts of Shell have both been forced to relinquish their roles as chairman. These changes have been chalked up as victories for shareholders. But have investors really got the better of the imperial boss?" Why are shareholders so powerless? 03/09/04 Permlink Report Broken Link | Stocks "Investors staged a stunning protest at Disney's annual meeting -- and changed virtually nothing. In fact, their hollow victory could help kill any reform." Legal weapon 02/16/04 Permlink Report Broken Link | Stocks "Trizec's defamation lawsuit could have a chilling effect on brokerage research" The trouble with mergers 02/16/04 Permlink Report Broken Link | Stocks "An exclusive study of 10 years of M&A action shows megadeals can be bad news for shareholders" Requiem for the record store 02/07/04 Permlink Report Broken Link | Stocks "Now a new threat looms. The market for legally downloadable music is tiny today, but the success of Apple's iTunes online music store and the rush of rival services to the marketplace is expected to gobble up an ever-larger share of the pop music pie. A recent study by Forrester Research, which examines technology trends, predicts that in five years fully one-third of all music will be delivered through modems, and the CD itself will be passe, if not obsolete, in the years after. This isn't necessarily bad news for the record labels, but it could be lethal for brick-and-mortar stores." Finding money in banks 01/31/04 Permlink Report Broken Link | Stocks "Year in and year out, financial stocks make remarkably stable and productive investments. In fact, it's kind of a mystery. If they're so good, why are they so consistently cheap?" Out of control 01/29/04 Permlink Report Broken Link | Stocks "The poison pill is one of the most egregious creatures of American corporate law. It exists to stop shareholders enjoying their full ownership rights by threatening, if triggered, to dilute the value of those shares in certain circumstances specified by a firm's board. They first caught on in the 1980s, when boards used them to deter hostile takeover bidshostile, at least, to the board, though not necessarily to shareholders." Black crossed the line and now he will pay 01/19/04 Permlink Report Broken Link | Stocks "Conrad Black has always been a corporate executive of exceptional talent -- not so much at running businesses but at buying and selling them. Over the years, his deal-making savvy has contributed enormously to his wealth, if not always that of his shareholders. But above all else, Lord Black has been a master at exploiting the grey area between what is acceptable to shareholders and what is legal, and he has taken full advantage of his skill and flexible approach to extract as much money and privilege as he felt he could." Only cheap stocks will make you money 01/16/04 Permlink Report Broken Link | Stocks "The easy money is going fast. In 2004, success will come only if you're able to separate cheap stocks from the pricey. Here's how." Liquidator: 6,500 tech firms among 'walking dead' 01/08/04 Permlink Report Broken Link | Stocks "Amid rising hopes for a high-tech turnaround, there's this sobering sign: Martin Pichinson -- a man who has buried nearly 150 failed startups since 1999 -- has swooped into Silicon Valley like a vulture lurking over a pack of wounded animals." Apple debuts lower-priced iPod 01/06/04 Permlink Report Broken Link | Stocks "Apple Computer Inc. Tuesday introduced a new lower-priced version of its popular iPod, just weeks after the portable music players flew off the shelves, one of the holiday's season's hottest sellers." Layoffs coming at Kraft? 01/06/04 Permlink Report Broken Link | Stocks "Kraft Foods Inc. plans to lay off 10 percent of its salaried work force as the company tries to revamp its slow-growing North American business, a person familiar with the situation said this week." The year of the car 01/04/04 Permlink Report Broken Link | Stocks "But now that the Japanese, South Koreans and Germans have unleashed an assault on the light-truck market, Detroit has to respond aggressively. Do the Big Three have what it takes to fight back this time? Their new cars must win customers and do so profitably. This looks like the only way Detroit can stay on the road." Banks feel the heat in Parmalat scandal 01/03/04 Permlink Report Broken Link | Stocks "International banks felt the heat from the multi-billion-euro Parmalat scandal Saturday as the Securities Exchange Commission in Washington said it was investigating whether they were negligent or reckless by selling the food firm's bonds." Milking lessons 12/29/03 Permlink Report Broken Link | Stocks "On the face of it, a financial-holding company seems to have been used to grab cash from the operating company, before losing that money through the silly use of derivatives and other speculative financial dealings. As the losses mounted, instead of coming clean, it seems that the stakes were raised in a desperate and ultimately futile effort to keep the scam going. If such a picture is broadly accurate, then Parmalat will look much like other corporate scandals. Until then, the worry is that fresh horrors may yet emerge." Self-Destruction, mother of invention 12/24/03 Permlink Report Broken Link | Stocks "But what does the joy of destruction mean for investors? A lot. Peters cites a study by Richard Foster and Sarah Kaplan of McKinsey & Co., who examined the first list of the biggest U.S. companies published by a magazine, the Forbes 100 of 1917, and compared it with a similar list 70 years later. Of the 100, only 39 managed to survive, and only 18 of those were among the top 100 in 1987." Corporate scandals 12/23/03 Permlink Report Broken Link | Stocks "The near failure of Parmalat is raising questions about how well Europe is reforming its corporate governance." Parmalat admits $5bn black hole 12/22/03 Permlink Report Broken Link | Stocks "Many of Italy's biggest banks are exposed to Parmalat, leading to fears of a system-wide meltdown if the company were to collapse." Merck isn't converting the skeptics 12/12/03 Permlink Report Broken Link | Stocks "Though the drug giant keeps trying, analysts and investors still don't think its go-it-alone strategy will work in the long run." Big trouble for Big Pharma 12/05/03 Permlink Report Broken Link | Stocks "The industry's bloated overheads appear to be driving its decisions on the sort of drugs it seeks to develop. Like a supermodel who will not get out of bed for less than $10,000 a day, Big Pharma has decided that it is simply not worth investing in anything but a blockbuster. This means that lesser, albeit interesting, compounds fall by the wayside. An oft-quoted figure from the Tufts Centre for the Study of Drug Development puts the average cost of bringing a new drug to market at $897m. But as F.M. Scherer, an economist, points out, this is an average cost for big firms producing drugs for chronic diseases. Other firms can bring drugs for other complaintsinfectious diseases or rare conditions, sayto the market for around $100m-200m." Trustmark, Walgreens join 'clean stocks' list 11/30/03 Permlink Report Broken Link | Stocks "The bad guys get all the headlines, but don't let them scare you into putting your money in the mattress. So far, the "Clean Stocks" project I launched last July has identified six stocks that are clean enough for investors who worry about the never-ending round of financial scandals, yet know they must stay in the markets to stand any chance of reaching their own financial goals." Take your medicine 11/20/03 Permlink Report Broken Link | Stocks "Somebody pass the antidepressants. We have an aging population clamouring for life-saving drugs, we are up to our deteriorating eyeballs in medical breakthroughs, and yet, in these days of generic knock-offs and cut-rate Internet pharmacies, there isn't a major manufacturer in the pharmaceutical business that hasn't had the solid biological waste kicked out of its market cap at some point in the past two years." A shot in the arm for drug makers 11/18/03 Permlink Report Broken Link | Stocks "The latest version of the Medicare prescription benefit bill is just what the pharmaceutical sector ordered. Here's why drug makers may finally be on the road to recovery." The skinny on weight watchers 11/17/03 Permlink Report Broken Link | Stocks "Popular low-carb diets have dented its stock, but stout fundamentals and a solid long-term outlook may make this a buying opportunity" The only company Wal-Mart fears 11/12/03 Permlink Report Broken Link | Stocks "The nimble first mover can outrun the powerful colossus; the innovator can stay a jump ahead of the imitator; the quality of leadership can trump the quantity of resources. "Here's the difference between Sam's and Costco," says Charlie Munger. "We have a live Sam Walton who's still there, and Wal-Mart doesn't."" Hey, shoppers: ads on aisle 7! 11/11/03 Permlink Report Broken Link | Stocks "Forget the Big Three. Wal-Mart's TV network is cleaning up." The big candyman 10/31/03 Permlink Report Broken Link | Stocks "'Trick or treat?', once an American question, is now a feature of Halloween celebrations everywhere. As a result, October 31st has become the global high point of the confectionery year, as millions of children dress up as ghosts, goblins or Britney Spears to be rewarded with vast amounts of teeth-rotting goodies. This year, confectioners expect to generate Halloween sales of $2 billion in America alone. Last year, the country's total confectionery sales were $24 billion - the highest anywhere." What you don't know about Dell 10/29/03 Permlink Report Broken Link | Stocks "A look at the management secrets of the best-run company in technology." Wal-Mart keeps the change 10/27/03 Permlink Report Broken Link | Stocks "Suppliers pay for new technology, but Bentonville really benefits." Is Wal-Mart too powerful? 09/28/03 Permlink Report Broken Link | Stocks "Low prices are great. But Wal-Mart's dominance creates problems -- for suppliers, workers, communities, and even American culture." Is Blockbuster doomed? 09/17/03 Permlink Report Broken Link | Stocks "Video rental chains are cash cows today. But thanks to developments in technology and marketing, they could become dinosaurs more quickly than many investors believe." Haggling 09/06/03 Permlink Report Broken Link | Stocks "During a three-year investigation by America's Department of Justice into Executive Life, a Californian insurer that collapsed in 1991 and was bought by Cr dit Lyonnais, a big French bank, it sometimes seemed that the affair was about little more than transatlantic regulatory nit-picking. This week proved how much bigger the scandal really is." Whistleblower says he just wanted Coke to listen 08/30/03 Permlink Report Broken Link | Stocks "Eleven years after getting his dream job, Whitley is just drinking water. His wife sold the Coke plates, glasses and memorabilia at a garage sale. He is out of his $140,000-a-year job after accusing officials of the world's largest soft drink maker of shady accounting and fraudulent marketing practices." Apple picking 08/29/03 Permlink Report Broken Link | Stocks "Wall Street analysts have missed the boat on Apple's big stock move. So why listen to them now?" A showdown at the checkout for Costco 08/27/03 Permlink Report Broken Link | Stocks "It's under fresh assault from a revived Sam's Club, which is tapping parent Wal-Mart's buying power to slash prices. Can Costco stay ahead?" Five undiscovered picks from small-cap managers 08/26/03 Permlink Report Broken Link | Stocks "By and large, small-cap stocks aren't household names. There are exceptions, of course. Home decorators, party planners, and cooks (not to mention followers of the criminal justice system) are no doubt familiar with small-cap Martha Stewart Living Omnimedia. But few small caps get anywhere near as much analyst coverage or ink in The Wall Street Journal as giant companies like General Electric and Microsoft. With fewer analysts and investors closely following smaller companies, the odds are better that you'll find stocks whose virtues aren't appreciated by Wall Street in small-cap land than in large-cap territory." Don't buy these 10 stocks! 08/13/03 Permlink Report Broken Link | Stocks "With the S&P 500 up about 12% and the Nasdaq up more than 23% this year, many investors have decided it's safe to jump back into the pool. Human nature being what it is, the majority of investors naturally will sell stocks when the market is going down, and do the opposite when the market is going up. Although this is a recipe for poor long-term returns, it's also a fact of life." Gillette nicked by Schick 08/09/03 Permlink Report Broken Link | Stocks "Tensions escalate in the shaving wars as the world awaits the arrival of the four-blade razor." Tough sell for Noranda 08/09/03 Permlink Report Broken Link | Stocks "Noranda's decision to slash its quarterly dividend rate to 12 cents a share from 20 cents was a surprise as most analysts were caught looking for a cyclical recovery." Amazon's search for a river of growth 08/09/03 Permlink Report Broken Link | Stocks "Despite some standout quarters, the giant online retailer needs to keep expanding to justify its lofty p-e, and that won't be easy." Brands in an age of anti-Americanism 07/25/03 Permlink Report Broken Link | Stocks "BusinessWeek/Interbrand's annual ranking of the world's most valuable brands shows that American labels are still potent." Watch out, investors, Tarzan's back! 07/20/03 Permlink Report Broken Link | Stocks "Chest-pounding CEOs are once again hungry for takeover targets. That's never good news." Will Icahn be forced to eat his shorts? 07/17/03 Permlink Report Broken Link | Stocks "Icahn's beef? Trinity, the largest U.S. railcar manufacturer with about 50% of the market, has too much debt and too many internal problems to cope with consolidation and shrinking profit margins. More nimble manufacturers--like Icahn's ARI, of course--can close plants and move production to inexpensive locales like Arkansas, he says." That heartbeat you hear is Xerox 07/16/03 Permlink Report Broken Link | Stocks "The copier king seems firmly on the road to recovery. Now it needs to keep impressing investors with solid growth, and that's no small challenge." Enron will be outed 07/15/03 Permlink Report Broken Link | Stocks "When Enron filed for bankruptcy in December 2001, it claimed assets worth $62 billion. That estimate in retrospect turns out to have been off by about $50 billion as the company will, in a filing expected today, say that it has something like $12 billion with which to pay creditors." Can Dunkin' KO Krispy? 07/03/03 Permlink Report Broken Link | Stocks "In the war of the doughnuts, the reigning champ has been getting bopped by the upstart. Now, Dunkin' Donuts is plotting a new offensive." The $0.99 Empire 07/03/03 Permlink Report Broken Link | Stocks "Houseplants, hair gel, and the best deal on wine you'll ever find. How one entrepreneur is rewriting the rules of retail." Shareholders are no fools - anymore 06/29/03 Permlink Report Broken Link | Stocks "Investors have long been seen as too dumb to have a say in how a firm is governed. That's changing." Fannie's future is still bright 06/26/03 Permlink Report Broken Link | Stocks "A storm of controversy at sibling rival Freddie Mac has dragged down shares of Fannie Mae. Now investors have a chance to profit." 3 Best Buy rivals look like better buys 06/25/03 Permlink Report Broken Link | Stocks "The electronics giant dwarfs its competitors. But its stock sells at a premium, while competitors Tweeter, Ultimate Electronics and particularly Circuit City look like deals in comparison." Tech trouble ahead 06/19/03 Permlink Report Broken Link | Stocks "Technology stocks have been cruising ahead of the market lately. But watch out. We found four to dump--before the happy trails end." The accidental CEO 06/12/03 Permlink Report Broken Link | Stocks "She was never groomed to be the boss. But Anne Mulcahy is bringing Xerox back from the dead." Stronach has most votes, least shares 06/11/03 Permlink Report Broken Link | Stocks "Power of multiple votes: Financial Post study ranks voting control against equity stakes" Old raiders never die--they just get even 06/11/03 Permlink Report Broken Link | Stocks "Oscar Wyatt lost a ton of money on El Paso. Now he's trying to throw the bums out. And he just may succeed." Sour dough 06/11/03 Permlink Report Broken Link | Stocks "Great Canadian Bagel was once the hottest chain in the country. But its business plan went stale fast--and many franchisees were left holding the bag." 10 stocks the insiders are still buying 06/04/03 Permlink Report Broken Link | Stocks "The people who know their companies best are mostly selling into the rally, but those who follow insider trades say some are still snapping up shares." The Martha mess becomes a monster 06/04/03 Permlink Report Broken Link | Stocks "With Stewart's indictment, the big question hanging over her company and investors is: Will they have to get along without her?" Pension plans face $225-billion shortfall 05/24/03 Permlink Report Broken Link | Stocks "Canada's public and private pen-sion plans are facing a collective funding shortfall of $225-billion - an amount roughly equal to 20 per cent of the nation's gross domestic product - new estimates com-piled by three major benefit con-sulting firms show. Closing that funding gap will require billions of additional dollars from plan sponsors and perhaps employees, the research warns. It puts the extra funding demands at 2 per cent of GDP annually over the next 15 years, provided there are no further gains or losses." It pays to inspect annual reports 05/23/03 Permlink Report Broken Link | Stocks "Next, we come to the real guts of the annual report -- the consolidated balance sheet, statement of earnings and cash flows, plus the all-important notes to the financial statements. Here's a brief explanation of each" Tobacco stocks live to fight again 05/21/03 Permlink Report Broken Link | Stocks "Shares of "Big Mo" surged from January 2000 through mid-2002, while the rest of the market was tanking. On Wednesday they were back in the limelight, leaping almost 10 percent to $38.30 after a Florida appeals court threw out a record $145 billion punitive damages award against the industry." Tripping over pension shortfalls 05/15/03 Permlink Report Broken Link | Stocks "Underfunded plans have led companies like US Airways into bankruptcy and will compromise others' credit ratings and spending plans." Tear up the earnings rule book 05/04/03 Permlink Report Broken Link | Stocks "Forget apples to apples. Earnings reports now compare mangos to mandarins, making this quarter's numbers more confusing for investors than ever. Let's look at Nortel and Qualcomm to see why." How to thrive when prices fall 05/01/03 Permlink Report Broken Link | Stocks "Deflation has hit certain industries hard. But some companies are turning falling prices into a chance at reinvention." eBay's scary stock-option specter 04/30/03 Permlink Report Broken Link | Stocks "First, consider the $127 million "error" in its earlier reports. Then consider what its earnings would be if it has to expense options." Shortchanged 04/25/03 Permlink Report Broken Link | Stocks "The Baby Bells may have bilked consumers out of billions by inflating the cost of their networks. Regulators seem content to overlook the matter." Shoddy building in the housing boom? 04/24/03 Permlink Report Broken Link | Stocks "Millions of new homes have gone up over recent years -- and so have complaints and class actions charging defective workmanship." Steve, steer clear of Universal Music 04/22/03 Permlink Report Broken Link | Stocks "Talk of Apple buying the giant music company has been enough to sink Jobs & Co.'s stock. Going through with it would be even worse." Why AOL's accounting problems keep popping up 04/17/03 Permlink Report Broken Link | Stocks "The online giant created ad 'revenues' out of thin air. Now, it's got scandals!" Credit bureaus exposed 04/16/03 Permlink Report Broken Link | Stocks "The companies that determine your ability to get a loan have dabbled in everything from handbags to animal husbandry. Scared yet?" Insurance sector should emulate Fairfax 04/15/03 Permlink Report Broken Link | Stocks "Not as many people know Prem Watsa, which is just fine with the publicity-shy CEO at Fairfax Financial. But those who have heard of Mr. Watsa would also think of him as a pretty darned good stock picker." From scrap to Slinky 04/09/03 Permlink Report Broken Link | Stocks "The making of an old-fashioned toy from scrap metal offers a lesson in how technological advances have helped revolutionize business. It also illustrates some shortcomings." Tender trap 04/03/03 Permlink Report Broken Link | Stocks "Lorne Albaum's TRC Capital gives companies and shareholders a run for their money." The limits of bankruptcy 04/02/03 Permlink Report Broken Link | Stocks "Some say the most efficient way to bring down capacity is to allow the industry to consolidate. With two or three giant airlines competing to fly just about everywhere, each might be able to make a consistent profit, they say." Humm, see Air Canada... McDonald's: Back to basics? 03/28/03 Permlink Report Broken Link | Stocks "The fast-food giant may go back to burgers and fries -- why didn't it think of that before?" Model behavior 03/27/03 Permlink Report Broken Link | Stocks "He said his strategy is not so much to pick winners out of the S&P 500 -- his universe -- as it was avoid losers. He owns 50 stocks at a time in sector weights that are the same as the benchmark. In sectors in which he doesn't like any stocks, such as utilities, he owns preferred convertibles instead of straight equity. That's pretty clever, and unusual among the large-cap stock funds." The Wal-Mart of consumer finance? 03/20/03 Permlink Report Broken Link | Stocks "Kerry Killinger is trying to make Washington Mutual the "category killer" of retail banking. The competition, however, is heating up." Hay day 03/18/03 Permlink Report Broken Link | Stocks "That's good news for Buhler, which has been profitable for much of the past three decades since millionaire John Buhler took over the company in 1969. CNH and Deere are still the giants of tractor manufacturing, but Buhler has plowed ahead by making high-powered, stripped-down tractors that lack bells and whistles (like global positioning systems or heated leather seats). While those snazzy features turn the cranks of some younger farmers, most crop growers just want solid equipment that will stand up to heavy use." It's time to shed light on insider equity monetization 03/13/03 Permlink Report Broken Link | Stocks "When members of the Bombardier family quietly monetized some of their stock five years ago, they did so by issuing exchangeable debt. And who bought $52.4-million of the $327.5-million issue? Teachers of Ontario. Like every other buyer, the pension plan would have learned of the deal through the banks hired to handle the sale, in this case Midland Walwyn (now owned by Merrill Lynch) and RBC Dominion, Royal Bank's investment bank. The first paragraph of the Bombardier offering memorandum says: "Under no circumstances are its contents to be reproduced or distributed to the public or the press. Securities legislation in all provinces prohibits such distribution." The minimum investment is $150,000. Do you get the feeling that small investors are out of the loop?" GE discloses $5.25 Billion pension loss 03/11/03 Permlink Report Broken Link | Stocks "General Electric Co. said Friday in its annual report that its post- retirement benefit plans contributed $806 million pretax to earnings in 2002. Investors had to read a footnote 37 pages later to learn that GE's pension plan actually lost $5.25 billion, equal to 29 percent of the company's pretax earnings." Don't shoot the messenger 03/02/03 Permlink Report Broken Link | Stocks "Although it is under fire, short-selling should be encouraged." The cable industry's costly profits 02/25/03 Permlink Report Broken Link | Stocks "After borrowing to build their systems, the industry is tantalizingly close to the black. The catch? Massive debts will hobble any stock surge." The Linux uprising 02/20/03 Permlink Report Broken Link | Stocks "How a ragtag band of software geeks is threatening Sun and Microsoft--and turning the computer world upside down." Cisco's juicy margins: too rich? 02/20/03 Permlink Report Broken Link | Stocks "Vendors such as Nortel have recently stabilized their businesses, despite gross margins that are less than 40%, nearly half Cisco's. And they've recently come out with new products that work as well -- or better -- than Cisco's but cost a lot less. Most important, thanks to advancements in interoperability, rivals are gearing up to make their products run seamlessly on networks originally built with Cisco parts." Smokin' 02/14/03 Permlink Report Broken Link | Stocks "Why Britain's big cigarette companies are on a roll." Day of the Jaekel 02/10/03 Permlink Report Broken Link | Stocks "Look out, Frank Stronach. One of your former Magna executives is now the competition. And he has ambitious plans to beat you at your own game." Time to end "friends-and-family" shares 02/05/03 Permlink Report Broken Link | Stocks "IPO shares earmarked for a favored few hurt their issuers and other stockholders. Washington can make sure this doesn't happen." Can electronics retailers reconnect? 01/22/03 Permlink Report Broken Link | Stocks "A wave of hot products should lure shoppers, but with prices falling fast, big payoffs -- and rising stocks -- depend on a hefty surge in demand." We're buying 8 companies that buy themselves 01/21/03 Permlink Report Broken Link | Stocks "We asked David L. Ikenberry, who knows as much or more than anyone about the subject. As an assistant professor at Rice University, he co-authored a widely cited 1995 Journal of Financial Economics study with Joseph Lakonishok and Theo Vermaelen. The study showed that buyback companies outperformed the averages by 3 to 3.5 percentage points a year in the 1980s. An update for the 1990s showed even better results, with a difference of about 4.5 percentage points a year." When you can't sell the goods, sell the shop 01/18/03 Permlink Report Broken Link | Stocks "But experience shows that retail mergers are tough to pull off and frequently end up destroying value-partly because local customs and tastes still vary greatly, and partly because global synergies in purchasing and the sharing of best business practice have been slow to materialise. Ahold of the Netherlands, for example, has come spectacularly unstuck after a three-year buying spree, and Carrefour is still licking its wounds after difficulties in integrating Promodes, which it bought in 1999. Strategic deals, like the bid for Safeway, are often the biggest failures of all." The bear facts about pensions 01/17/03 Permlink Report Broken Link | Stocks "The three-year bear market has left many companies with big pension shortfalls, which may weigh heavily on share prices for years to come." Buy, Sell and Hold On! 01/15/03 Permlink Report Broken Link | Stocks "If you thought stock research was simple and transparent in the wake of Eliot Spitzer's crusade, you haven't looked closely at Wall Street's new rating systems." Tools of the trade 01/13/03 Permlink Report Broken Link | Stocks "There's a wealth of research online for do-it-yourself investors, but as usual, you get what you pay for." Always a bigger fish 01/07/03 Permlink Report Broken Link | Stocks "Investors are forgiven if they feel a strange sense of deja vu these days. With all the hostile takeover activity of late, it seems like the boom-boom days of the mid-'80s when masters of the universe like Michael Milken and T. Boone Pickens ruled Wall Street." It's time to clear out the deadwood 01/03/03 Permlink Report Broken Link | Stocks "The key to a better market in 2003 will be how fast business can rid itself of too much stuff: unneeded plants, expensive pension plans, even whole companies." Amazon: heading for a hangover? 12/16/02 Permlink Report Broken Link | Stocks "Holiday shoppers are flocking to the online retailer in record numbers. Its lofty stock price, however, looks way overvalued." The KREMEY warning for Krispy Kreme 12/09/02 Permlink Report Broken Link | Stocks "For this reason, many stock-pickers are proceeding with caution: "It probably would be a little bit safer to buy Krispy Kreme if the price declined and provided a decent entry point," says investment manager Robert Burgoyne, of Burgoyne Investment Services. Likewise, critics and shortsellers are again declaring the stock full of hot air. The skeptics quieted after seeing Krispy Kreme fall to a temporary low point of $27.40 this past summer. But short interest, a measure of how many traders are betting that the stock will decline, remains high." Will Wal-Mart take over the world? 11/27/02 Permlink Report Broken Link | Stocks "First it gobbled the mom-and-pops, then mauled discount department stores. What's the insatiable chain's next target?" Location, location, location? 11/25/02 Permlink Report Broken Link | Stocks "Few of the Rankin Inlet families buzzing by on their quads bother to look over at the gaggle of outsiders-mostly executives and upper managers of the North West Co. Inc. (TSX: NWF.U)-climbing out of the store manager's crew-cab pickup. Despite the extreme isolation of this community of 2,200-there are no roads to the outside world, and the nearest major city, Winnipeg, is nearly 1,500 kilometres to the south-the heavy hand of government and the resurgence of mining in the region have resulted in a stream of visitors to the remote town on the windy western shore of Hudson's Bay. Besides, there are plenty of familiar faces among the group, thanks to their past visits. Moments after they step inside the store, a squat Inuit woman hustles over from behind the KFC fried-chicken counter located near the entrance. "My nine-year-old daughter harpooned her first seal the other day," she tells them with a wide, toothy grin. No, Toto, we're not in Toronto anymore." Growth can be bad for investors 11/15/02 Permlink Report Broken Link | Stocks "Companies often pursue expansion long after their golden opportunities have passed, when they should be paying dividends. McDonald's and The Gap illustrate just how costly this can be." Bankruptcies: investors do have a hope 11/14/02 Permlink Report Broken Link | Stocks "It's conventional wisdom for investors unfortunate enough to own a stock in a company that files for bankruptcy: Just get out. Even if you have to sell for pennies a share, that probably will be more than you'd get when the company emerges from bankruptcy, since shareholder equity is usually wiped out in the reorganization." The paradox of corporate democracy 11/08/02 Permlink Report Broken Link | Stocks "Here's a job for an aspiring philosophy student: Give us a pithy thesis on the tyranny of corporate democracy. It sounds ambitious but you won't have to look far for a case study. The tale of a little ice cream shop called CoolBrands International is perfect." The long shadow of Big Blue 11/08/02 Permlink Report Broken Link | Stocks "Can Microsoft now hold on to its dominant position-or might it go the way of IBM in the 1980s?" From EDS, some scary silence 11/04/02 Permlink Report Broken Link | Stocks "EDS, which has hit investors with a barrage of bad news this year, left unresolved a host of issues, from the timing of a recovery to its ability to win important new contracts and the future of its withering cash flow. And hovering like a Halloween ghost: a Securities & Exchange Commission inquiry started in the wake of a Sept. 24 revelation that EDS sold put options on its own shares that wound up costing it $225 million. "A lot of question marks are still out there," says UBS Warburg analyst Adam Frisch, who has been bearish on EDS since early 2001." Pedal to the metal 10/30/02 Permlink Report Broken Link | Stocks "Metal Supermarkets is one of Canada's top retail chains. You'll never guess what they sell." Ticking sound may be your pension fund 10/27/02 Permlink Report Broken Link | Stocks "Wall Street is waiting for the next shoe to drop. The next smackdown may come from the big hole the stock market's crash has punched in corporate pension funds." Apple's sweet-and-sour season 10/23/02 Permlink Report Broken Link | Stocks "Which brings me to the good news in Apple's fourth-quarter numbers. With $4.3 billion in cash, the company has the wherewithal to ride out the tough times. Better yet, signs of a turnaround are on the horizon. For starters, the advertising industry is starting to revive, especially in the higher end. TV experienced one of its strongest upfront ad-buying seasons in memory. Much TV advertising -- especially animation -- is done on Macs. Hopefully, this resurgence will prompt ad agencies to start upgrading their equipment." The stupid loan bubble 10/22/02 Permlink Report Broken Link | Stocks "The case of Motorola and Nokia vs. the Uzans may read like a gangster novel. But it also opens a window onto an unexamined chapter of Internet mania, one with urgent relevance for the ongoing crisis in the telecom industry. Motorola and Nokia agree with the Uzans on only one thing: that the loans looked sensible from the dizzying heights of the bubble, when dozens of telecom start-ups vied to rule the coming Internet world. Many of the world's most famous banks are now in trouble because of bad loans they extended to telecom start-ups. But at least JPMorgan and Commerzbank have some expertise in the business of lending money. The two biggest mobile-phone makers in the world could hardly make the same claim. And it was not only Motorola and Nokia but Lucent, Cisco, Nortel and others that started acting as reckless creditors, vying with one another in a race to extend millions, even billions, in financing to-telecom-bubble start-ups, often after those companies were refused loans by real banks." Lights out for Lucent 10/21/02 Permlink Report Broken Link | Stocks "How all this happened - one of the most damning chronicles of failure in the whole sweep of American enterprise - is not the story of lazy, over-indulged workers (the excuse of the 1970s). Nor is it the story of those scheming Japanese and their unfair trade in the American market a decade later (the excuse of the '80s). At the end of the 1990s, we confront the excuse none dare utter - the total, complete, and abject failure of the one group that plotted and maneuvered to seize the reigns of power for 30 straight years; then, having gotten them, went giddy-up at the gate and in no time at all fell flat on its face: The management class of American business." Predator or prey? 10/17/02 Permlink Report Broken Link | Stocks "Amid a flurry of lawsuits and countersuits, the murky world of death-spiral financings-one in which Toronto financier Mark Valentine loomed large-is coming to light." Sultans of schtick 10/17/02 Permlink Report Broken Link | Stocks "While Buck A Day's commercials (which are created in-house, by the way) may not be considered high art in advertising circles, you can't argue with success. Since the company's start in the fall of 1999, Dennis says about half a million Canadians have dialed Buck A Day's 1-800 number in response to the radio and TV ads (including the "Knock-knock-knockin'" and "Do you really really want a clone?" spots), which in a typical 24-hour period air every five minutes somewhere in Canada." Pay up! 10/10/02 Permlink Report Broken Link | Stocks "Hey Microsoft, Cisco, Oracle and Dell! Give us some money! None of these technology giants offers investors a dividend. But all of them, despite massive drops in their stock prices, are still stable market leaders with healthy balance sheets. As a result, some money managers think it's time for them to suck it up and start doling out some of their earnings to shareholders." Revenue up 2.2%! Hype up 500%! 10/07/02 Permlink Report Broken Link | Stocks "It's bad enough that Dell and hundreds of other companies spend as much time promoting their stock as they do running their business. What's worse is that investors still fall for it." Flood warning 10/05/02 Permlink Report Broken Link | Stocks "Insurance companies almost everywhere are being squeezed between falling stockmarkets, record claims and worsening economies. Unless share prices stage an unexpected revival, expect an increasing number to merge or fold." The breakdown in banking 09/30/02 Permlink Report Broken Link | Stocks "Meanwhile, the resale of loans created moral hazard: a temptation for banks to scrutinize borrowers less carefully than when their own money was at stake. "The banks abdicated credit judgment, and the people to whom they sold the paper had no credit judgment," says Martin Mayer, a guest scholar at the Brookings Institution and author of The Bankers." This tobacco war could smoke RJR 09/23/02 Permlink Report Broken Link | Stocks "It and Philip Morris are in a costly battle against discount cigarette brands, but its much bigger rival has lots more firepower." The long and short of short-selling 09/23/02 Permlink Report Broken Link | Stocks "This isn't a sport for amateurs. The downside is limitless, the subtleties complex. If you have the time to do the homework, here are some of the lessons I've learned the hard way." Rising empire 09/18/02 Permlink Report Broken Link | Stocks "L.A. chef Nancy Silverton sold her ultra-trendy bread-baking business for millions. So how'd she pull that off without selling out?" An immigrant's tale 09/17/02 Permlink Report Broken Link | Stocks "It's the kind of business nobody wants to run: selling PCs to price-conscious customers. But Edy Bedoya has spent a lifetime preparing for it." Are Value Stocks Riskier than Growth Stocks? 09/13/02 Permlink Report Broken Link | Stocks "And so, without mangling syllogistic logic, must it not follow that because they have higher returns, a portfolio of value stocks must indeed have higher risk? The problem is that this risk is not readily apparent." A poolful of risk 09/06/02 Permlink Report Broken Link | Stocks "Watch out-junior capital pools are headed for Ontario" Home wrecker 09/05/02 Permlink Report Broken Link | Stocks "William Aldinger says he built one of the few successful lenders to bad credit risks by managing smarter. People suckered into his mortgages cite other tactics: lies and deceit." Planet Starbucks 08/31/02 Permlink Report Broken Link | Stocks "The story of how Schultz & Co. transformed a pedestrian commodity into an upscale consumer accessory has a fairy-tale quality. Starbucks has grown from 17 coffee shops in Seattle 15 years ago to 5,689 outlets in 28 countries." Lights, camera, cash burn 08/31/02 Permlink Report Broken Link | Stocks "The first secret to running a business that does nothing but burn cash is location: You're better off in the Great White North, where the rules are firmly on your side." A good time to pick Apple's stock? 08/26/02 Permlink Report Broken Link | Stocks "While several factors are weighing down the company's financial performance these days, many others could provide a nice lift." Tyco, others face $60B in payments 08/17/02 Permlink Report Broken Link | Stocks "Tyco International Ltd., Vivendi Universal SA and more than 50 other companies around the world may have at least $60 billion in unexpected cash payments due by the end of next year." Smart Boomers haven't sold off 07/26/02 Permlink Report Broken Link | Stocks "Norm Rothery, publisher of Toronto-based The Rothery Report quips that he hopes Boomers will flee the markets more quickly. 'I hope to spend another 50 years or so on this rock and I'd like to see low low prices.'" The power of WorldCom's puff 07/24/02 Permlink Report Broken Link | Stocks "Internet traffic, went the industry's favourite statistic, doubles every 100 days. The claim assumed unimpeachable status when it appeared in a report published by America's Department of Commerce in April 1998. Unfortunately for the telecoms firms that rushed to build networks to carry the reported surge in traffic, it wasn't true." The great stock illusion 07/17/02 Permlink Report Broken Link | Stocks "Over long periods stocks greatly outperform bonds, right? Maybe not. A new study raises the disturbing possibility that this conclusion derives from a misreading of history." Intel proves there's no such thing as a safe tech 06/17/02 Permlink Report Broken Link | Stocks "The bottom line is that here we are, two years after the peak, and people still don't seem to realize that "it's the price, stupid," to paraphrase a former president. Price is the single biggest determinate of the ultimate rate of return on your investment. Price quantifies how much risk you're taking. Price has some relationship to the underlying business, earnings, dividends, book values, revenues, etc." Revisiting Graham and Dodd 06/07/02 Permlink Report Broken Link | Stocks "Originally published in 1934, Security Analysis by Benjamin Graham and David Dodd could have been written yesterday. The players have changed but the conceptual framework is as fresh as ever. The introduction and the first chapter of this opus are especially chilling. Intended as an indictment of the excesses of the roaring Twenties, these first 15 pages of a more than 700-page book are equally applicable to our bubble -- and, by inference, to much that is now unfolding in its aftermath." Putting "dis" in full disclosure 06/06/02 Permlink Report Broken Link | Stocks "'Most public companies go out of their way to please Wall Street analysts. Then there's Expeditors International of Washington Inc.', writes Robert McGough in today's Wall Street Journal." The AOL TW black hole 04/30/02 Permlink Report Broken Link | Stocks "The verdict is finally in: The AOL Time Warner merger should not have happened. That's the message from last week's latest balance sheet convulsion to shake what was once known reverentially in certain parts as the House Of Luce." Meet your new neighborhood grocer 04/29/02 Permlink Report Broken Link | Stocks "Wal-Mart has muscled its way into the food business. Now competitors are scrambling to keep up." The blue-chip penny stocks 04/15/02 Permlink Report Broken Link | Stocks "The reality is that a company's share price tells you absolutely nothing about its valuation or market capitalization. That can be a little hard to remember these days, though, with so many well-known companies sporting stock prices that would seem to be screaming "buy me." The problem is, that isn't what they're really saying." Tech stocks: keep your shirt on 04/06/02 Permlink Report Broken Link | Stocks "Technology changes constantly. That is what makes it so fascinating. Investment speculation in technology, on the other hand, almost never changes - as Templeton, the mutual-fund guru, knew better than most. Whether based on steel, silicon or pulses of light, the great innovations since the start of the Industrial Revolution have lured in the suckers, capturing their imagination and then their money." Efficient Frontier Spring 2002 04/04/02 Permlink Report Broken Link | Stocks Articles include: Only Two Centuries of Data, When Risk and Return Become the Same,Efficiency Rationality and Arbitrage, Of Markets Economies and Populations,Links of the Month. Shares do not a shelter make 03/25/02 Permlink Report Broken Link | Stocks "On one level, popular capitalism has been successful. Socialism has been seen off. Industry has been privatised in the UK and elsewhere in Europe, with a fair proportion of the equity ending up in the hands of the public. Share options and profit-sharing schemes are now widely used to motivate the workforce. But part of this approach has been muddle-headed. Too little consideration has been given to the long-term economic interests of those involved. Investors have been steered in the wrong direction, at great cost to many." Fool me twice, shame on me 03/13/02 Permlink Report Broken Link | Stocks "On this scale (as of December 31, 2001), the P/E of the S&P 500 is the highest in all of recorded U.S. history back to 1871. Stocks cheap? I think not." Confidence lost 02/20/02 Permlink Report Broken Link | Stocks "Following the go-go era of the late 1960s, after the shares of a group of popular but speculative technology stocks collapsed, investors fled from companies with confusing balance sheets. They shifted their funds to dependable companies such as Xerox, Avon Products, and McDonald's, whose business models were so simple to understand at the time that investors referred to them as "one decision" stocks. The end result: the creation of yet another bubble, this one in the stocks of what would later be dubbed the Nifty Fifty." Stocks: are you expecting too much? 02/18/02 Permlink Report Broken Link | Stocks "Investors often accuse Wall Street analysts of inflating earnings estimates to hype stocks. But guess what? Investors are guilty of outrageous expectations, too. Just look at Vitesse Semiconductor (VTSS ), the telecom-chip maker: Analysts estimate a 33.1% annual growth rate for the company's earnings for the next five years. But if you run the stock through a complex valuation model that incorporates earnings, stock prices, volatility, and interest rates, Vitesse's current share price of $12.47 assumes that earnings will grow at a hefty 56.1% a year over the same period." The betrayed investor 02/18/02 Permlink Report Broken Link | Stocks "Today, the Investor Class is angry and disillusioned because it feels betrayed. On the heels of Enron Corp.'s Dec. 2 bankruptcy filing--America's biggest ever--they are questioning the very integrity of the financial system. And they won't be ignored. They are a powerful group." Enron losses 'off the scale' 01/31/02 Permlink Report Broken Link | Stocks "And the emerging shape of the Enron scandal was almost identical to one of 70 years ago, which prompted the setting up of the first regulators to govern the way companies report their performance, he said. That regulation has been chipped away to the point where it is no better than it was in the 1920s, Mr McCullough said." Pricey stocks risk a fall into the GAAP 01/29/02 Permlink Report Broken Link | Stocks "The gulf between what corporate America would like people to think it earns and what it has actually been earning, according to the rules of accounting, has never been so wide. Perhaps that's because if investors started looking at actual bottom lines, rather than their jazzed-up ones, stocks might be significantly lower." - Check out the keen P/E graph. Shakespeare's preferreds 01/19/02 Permlink Report Broken Link | Stocks "Nevertheless, because of the attractiveness of dividend investing for those in the bottom tax bracket, and because of inefficiencies in the preferred share market, careful investors can be well rewarded as long as they pay attention to detail." Show me the earnings! 01/14/02 Permlink Report Broken Link | Stocks "In this surreal bubble-era in which we curiously find ourselves still languishing in the United States, the average stock investor seems to have totally forgotten that the only ultimate reason to own a given company is earnings!" Of risk and myopia 01/12/02 Permlink Report Broken Link | Stocks "To repeat: the risk tolerance of an investor is determined largely by how often he checks his portfolio. This is nothing new. Benjamin Graham commented in The Intelligent Investor that holders of obscure mortgage bonds happily held onto them through the depths of the Depression until they eventually recovered their value because they were highly illiquid and not often quoted. On the other hand, holders of frequently-quoted corporate bonds (far less risky but priced daily in the papers) panicked and sold after their initial drop." Bubbles, Human Judgment, and Expert Opinion 12/22/01 Permlink Report Broken Link | Stocks "The widespread public disagreement about whether the stock market has been undergoing a speculative bubble in the past few years reflects an underlying disagreement about how to view human judgment and intellect." [PDF] The stock market level in historical perspective 12/04/01 Permlink Report Broken Link | Stocks "By historical standards, the U.S. stock market has soared to ex-tremely high levels in recent years. These results have created a sense among the investing public that such high valuations, and even higher ones, will be maintained in the foreseeable future. Yet if the history of high market valuations is any guide, the public may be very disappointed with the performance of the stock market in com-ing years." [PDF File] One Nobel laureate's view 11/26/01 Permlink Report Broken Link | Stocks "The problem is that the people with high-quality products are at risk of leaving the market because the price reflects the average product and the buyers can't distinguish." Risk and expected return 11/21/01 Permlink Report Broken Link | Stocks "There is only one way to achieve spectacularly high returns like those achieved by US investors in the latter half of the last century-you must start out with the price of assets at very distressed levels, and end up with them at very elevated levels." Don't sell 'em short 11/12/01 Permlink Report Broken Link | Stocks "Economists used to think investors were always coldly rational. Now they know that's wrong. And research is shedding light on how strangely markets can behave. In what follows, I'll explain several fascinating studies that turn conventional ideas about short selling upside down." The Stingy News Weekly Article Archive Submit a Story
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