Last night, I thought we were heading towards another Black Monday; it wasn't that bad, but it was bad. I'll post later, but wanted to post this first:
DJIA closes at -
10,917.51
-504.48 (-4.42%)
Monday, September 15, 2008
Stock Analysis: MERRILL LYNCH & CO INC - Should be an interesting week...
With Bank of America agreeing to buy out MER for 0.8595 BAC share per 1 MER share, one gets the price of ~22.992. (BAC 26.75*0.8595) Of course, BAC most likely will continue to fall, due to their lowered S&P rating from AA to AA-, which is because of this takeover. In a week, this analysis will be proven right or wrong... With the market the way it is today, and how it will be for the rest of the week, what happens today could be entirely different in two days. However, if you keep an eye on BAC stock, and multiply it by 0.8595, you should have a decent idea of how much MER stock is worth. If you're going to buy this right now, you need to be a day trader - there's no long term happy ending here.
Also note that while BAC and MER have agreed on the deal, the many troubles that have plagued MER will have to be taken over by BAC, meaning that BAC could drop, leading to a MER drop... Quote from MSN money -
"Bank of America will still need to resolve Merrill Lynch's risky assets, including its significant mortgage and commercial real estate portfolios.
Mayo also said the bank could lose revenue as clients look to diversify the location of their financial holdings. There is also the risk of culture clashes between the two firms, Mayo said."
If there was a "neutral" option for this, I'd have selected that, but my best advice is to keep a constant eye on BAC stock, and buy/sell MER accordingly.
Wednesday, September 10, 2008
Stock Analysis: ANHEUSER-BUSCH COMPANIES INC - The BUD Bubble Should Bust
As a strong supporter of BUD since the last dot com boom, where BUD was again one of the few companies that was able to maintain stability, I would normally fully endorse the purchasing of BUD stocks. However, there are far too many variables this time. 6 months ago, when BUD stock was at $46.77 per share, I understood (even though I didn't post an analysis) that BUD was a good buy. Bottom line is, as the economy goes down, people drink more. HOWEVER, the rocky roads ahead in the takeover by INBEV have too many variables to be taken lightly.
While BUD may enjoy an increase in share prices for a short while, the merger with INBEV creates far too many unknown variables, including, but not limited to, the current exchange rates, the hostility of certain BUD shareholders and their subsidiaries to a takeover by INBEV, and the wild speculations that concern BUD stock.
In short, I expect that BUD will enjoy a brief rise in share prices, but caution those who purchase to be wary of September 29th, when INBEV shareholders vote on the Anheuser-Busch takeover. Between the unpredictabilty of how INBEV investors feel about a $52 billion purchase (euro36.6 billion), and also the rapidly changing exchange rate between the US dollar and euro, I predict that in less than 3 months BUD stock will make a brief drop, while INBEV, regardless of their decision, will enjoy a share price increase regardless of the September 29th vote.
While BUD may enjoy an increase in share prices for a short while, the merger with INBEV creates far too many unknown variables, including, but not limited to, the current exchange rates, the hostility of certain BUD shareholders and their subsidiaries to a takeover by INBEV, and the wild speculations that concern BUD stock.
In short, I expect that BUD will enjoy a brief rise in share prices, but caution those who purchase to be wary of September 29th, when INBEV shareholders vote on the Anheuser-Busch takeover. Between the unpredictabilty of how INBEV investors feel about a $52 billion purchase (euro36.6 billion), and also the rapidly changing exchange rate between the US dollar and euro, I predict that in less than 3 months BUD stock will make a brief drop, while INBEV, regardless of their decision, will enjoy a share price increase regardless of the September 29th vote.
Friday, September 5, 2008
Stock Analysis: CLARK HOLDINGS INC - High Risk, Questionable Returns
Clark Holdings share prices have dropped from $7.86 on Feb. 6th 2008 to their current price of $1.60 a share. While there is considerable risk in their logistics services and transportation management, this could very well be an undervalued stock, due to the volatility of gas prices. While the future is not predictable, a new CEO can possibly push GLA forward for a slow rise back to their former position as a steady stock price of ~$6+ a share.
Their losses in last February ('08) can be accounted for the unstable economy at that time. While the economy has certainly not stabilized to a safe point, I think that it's a reasonable assumption that the new management (notably Gregory Burns) can adapt to the changing markets in the next few months.
I suggest setting a low selling limit order ($3.00) to assess the competence of the new CEO and to assess if GLA can adapt to sporadically rising (and falling) oil prices.
In 6 months, however, the variables are too hard to predict. Barring any major world event (invasion of Iran, embargo from China, various other slightly possible situations), GLA should be able to weather the current recession after this setback, and rise to their former prominence.
On a side note, don't get GLA confused with GLA.U, also trading on AMEX (Global Logistics Acquisition Corporation.)
Their losses in last February ('08) can be accounted for the unstable economy at that time. While the economy has certainly not stabilized to a safe point, I think that it's a reasonable assumption that the new management (notably Gregory Burns) can adapt to the changing markets in the next few months.
I suggest setting a low selling limit order ($3.00) to assess the competence of the new CEO and to assess if GLA can adapt to sporadically rising (and falling) oil prices.
In 6 months, however, the variables are too hard to predict. Barring any major world event (invasion of Iran, embargo from China, various other slightly possible situations), GLA should be able to weather the current recession after this setback, and rise to their former prominence.
On a side note, don't get GLA confused with GLA.U, also trading on AMEX (Global Logistics Acquisition Corporation.)
College Classroom Etiquette
Unfortunately, I think those who read this aren't part of the morons who I want to read this. However, for the sake of getting this out there, and for the sake of venting a little bit, I want to go over two vital rules for classroom etiquette in regards to college courses.
1) If you're going to be late for class, that's fine. Things happen - traffic, obligations, free food that you have to eat because it might go to waste, etc. However... If you're going to be over 15 minutes late to a course, you better have a damn good reason. For one, your lateness is a direct form of disrespect to the professor. Perhaps my view of this is skewed, but in my opinion, if you're going to be that late, the professor may just consider it more polite for you to abstain from attending class. Your late arrival can potentially disrupt the class, and regardless of your reasons, the first thing that occurs to me (and probably to the professor) is that you simply don't care that you're late. You don't think you'll miss anything important, and besides, it's a boring class anyways, right? Well if you think it's so god damn boring, then just don't come at all! Not only do you interrupt the lecture that is being taught, or the workshop taking place, but you have no idea what is going on, so you are tempted to ask questions... Unfortunately, many of you give in to that temptation, and ask questions that had been covered in the 15-45 minutes that you weren't there. Which leads me to my next point.
2) I don't mind stupidity. All right, maybe I do have a little bit of a bias... I hate stupid people. But it's not really stupid people that bother me; a stupid person can still have the sense to know that they lack some important piece of intellect. It is unforgivable, however, to flaunt your stupidity. Let's take an example from my Economics of Regulation class earlier today. As we were re-learning calculus in regards to profit maximization and monopolies, a red-haired, mid to late 20's gentleman had a slight spark in his head. He didn't know what we were doing, and he didn't have a clue as to what our lecture related to. In a 400 level Economics class, he didn't know what a tangent was. What's the problem there, you ask? I might have forgiven his stupidity, but he decided to let the whole class know. "Umm... What's a tangent?" ... So for the next ten minutes, our professor had to go over what tangents were, using such simplified imagery that I believe a 10 year old would have understood. Now, to relate this to classroom etiquette: I didn't know everything that was going on; I took Business Calculus four years ago, and Intermediate Microeconomics three and a half years ago. But - and this is what you need to understand - in this class, an upper-level Economics course - we are expected to know this. If the red-haired gentleman that I'm talking about had thought about this, he might have kept his stupidity to himself. He might have understood that by asking such a stupid question would delay the other 15 students who were trying to comprehend the symmetric cournot equilibrium. The correct course of action (and the polite/intelligent course) would be to either speak to the professor after class, therefore saving the majority of us from listening to his stupidity, and wasting our time, OR he could have done what I planned to do as we painstakingly pushed through summations and derivatives - he could have understood that he didn't understand the math because of his own faults, and purchased a calculus cliffnotes book.
The point of this is that no one likes their time wasted. I don't care if all I had to do was watch the grass grow in my free time. Because of his outspoken stupidity, he deprived me of my free time.
One final note, which I won't ramble on about too much, is the disrespect of leaving a class while the professor is still teaching. Yes, this professor does not count absences, nor does he take off points for tardiness, but what kind of symbol was this student giving when he merely walked out in the middle of a lecture? It might be excusable (and in my opinion, it would be; I've done it before) to leave in the middle of a 200+ student lecture, but in a 16 person class, his disregard for the class made me angry, for the sole reason that a class of this caliber is not something that you should callously snub.
In conclusion, please, who ever reads this, think about your appearance. Not clothing or grooming (though technically I guess that could be mentioned), but the perception that you give to others. Think ahead - while the old cliche is "There are no stupid questions", there are, indeed, many stupid questions. Stupid questions are defined by their relevency. If Monsieur Red-Head had been in a 100 level math course, it might not be as bad that he didn't know what a tangent is. However, when a course assumes that you have mastered these skills, and the majority of the class either knows they should know these things or they do in fact know these things, then try to control yourself. No one wants to hear the rambling of an idiot (d'oh! beware of hypocrite!), when they could be doing something productive.
"Tis better to be silent and be thought a fool, than to speak and remove all doubt." - Abraham Lincoln
1) If you're going to be late for class, that's fine. Things happen - traffic, obligations, free food that you have to eat because it might go to waste, etc. However... If you're going to be over 15 minutes late to a course, you better have a damn good reason. For one, your lateness is a direct form of disrespect to the professor. Perhaps my view of this is skewed, but in my opinion, if you're going to be that late, the professor may just consider it more polite for you to abstain from attending class. Your late arrival can potentially disrupt the class, and regardless of your reasons, the first thing that occurs to me (and probably to the professor) is that you simply don't care that you're late. You don't think you'll miss anything important, and besides, it's a boring class anyways, right? Well if you think it's so god damn boring, then just don't come at all! Not only do you interrupt the lecture that is being taught, or the workshop taking place, but you have no idea what is going on, so you are tempted to ask questions... Unfortunately, many of you give in to that temptation, and ask questions that had been covered in the 15-45 minutes that you weren't there. Which leads me to my next point.
2) I don't mind stupidity. All right, maybe I do have a little bit of a bias... I hate stupid people. But it's not really stupid people that bother me; a stupid person can still have the sense to know that they lack some important piece of intellect. It is unforgivable, however, to flaunt your stupidity. Let's take an example from my Economics of Regulation class earlier today. As we were re-learning calculus in regards to profit maximization and monopolies, a red-haired, mid to late 20's gentleman had a slight spark in his head. He didn't know what we were doing, and he didn't have a clue as to what our lecture related to. In a 400 level Economics class, he didn't know what a tangent was. What's the problem there, you ask? I might have forgiven his stupidity, but he decided to let the whole class know. "Umm... What's a tangent?" ... So for the next ten minutes, our professor had to go over what tangents were, using such simplified imagery that I believe a 10 year old would have understood. Now, to relate this to classroom etiquette: I didn't know everything that was going on; I took Business Calculus four years ago, and Intermediate Microeconomics three and a half years ago. But - and this is what you need to understand - in this class, an upper-level Economics course - we are expected to know this. If the red-haired gentleman that I'm talking about had thought about this, he might have kept his stupidity to himself. He might have understood that by asking such a stupid question would delay the other 15 students who were trying to comprehend the symmetric cournot equilibrium. The correct course of action (and the polite/intelligent course) would be to either speak to the professor after class, therefore saving the majority of us from listening to his stupidity, and wasting our time, OR he could have done what I planned to do as we painstakingly pushed through summations and derivatives - he could have understood that he didn't understand the math because of his own faults, and purchased a calculus cliffnotes book.
The point of this is that no one likes their time wasted. I don't care if all I had to do was watch the grass grow in my free time. Because of his outspoken stupidity, he deprived me of my free time.
One final note, which I won't ramble on about too much, is the disrespect of leaving a class while the professor is still teaching. Yes, this professor does not count absences, nor does he take off points for tardiness, but what kind of symbol was this student giving when he merely walked out in the middle of a lecture? It might be excusable (and in my opinion, it would be; I've done it before) to leave in the middle of a 200+ student lecture, but in a 16 person class, his disregard for the class made me angry, for the sole reason that a class of this caliber is not something that you should callously snub.
In conclusion, please, who ever reads this, think about your appearance. Not clothing or grooming (though technically I guess that could be mentioned), but the perception that you give to others. Think ahead - while the old cliche is "There are no stupid questions", there are, indeed, many stupid questions. Stupid questions are defined by their relevency. If Monsieur Red-Head had been in a 100 level math course, it might not be as bad that he didn't know what a tangent is. However, when a course assumes that you have mastered these skills, and the majority of the class either knows they should know these things or they do in fact know these things, then try to control yourself. No one wants to hear the rambling of an idiot (d'oh! beware of hypocrite!), when they could be doing something productive.
"Tis better to be silent and be thought a fool, than to speak and remove all doubt." - Abraham Lincoln
Thursday, September 4, 2008
Isaac Asimov's world is here!
Checking out fark.com, I stumbled upon an interesting article involving our future...
Apparently, soon enough we'll all be living in giant glass pyramids. The quick summary of the article is describing a fantastic 'Ziggurat' that is 2.3 kilometers and can house one million people. In this futuristic building, no cars are allowed - everyone is transported by monorails that move horizontally and vertically. Security is biometric - to enter your home you will go through a painless facial recognition program. The big thing with this is it's supposed to be entirely environmentally friendly. It will use steam power from the building itself and wind turbines... Sounds pretty crazy to me, but hey, it'd be cool if it works.
I'm sure a few (or many) others thought of this, but this seems to be rather eerily close to Asimov's Caves of Steel... Of course, if no cars are allowed, that's one difference, but otherwise, it seems like a pretty accurate depiction. If we start building these, will Asimov's future coincide with ours? In a century or so, will we all be agoraphobic, like Bailey in Asimov's series?
If it does happen in a century (or a couple), then I called it first!
Apparently, soon enough we'll all be living in giant glass pyramids. The quick summary of the article is describing a fantastic 'Ziggurat' that is 2.3 kilometers and can house one million people. In this futuristic building, no cars are allowed - everyone is transported by monorails that move horizontally and vertically. Security is biometric - to enter your home you will go through a painless facial recognition program. The big thing with this is it's supposed to be entirely environmentally friendly. It will use steam power from the building itself and wind turbines... Sounds pretty crazy to me, but hey, it'd be cool if it works.
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| From Blogger Pictures |
I'm sure a few (or many) others thought of this, but this seems to be rather eerily close to Asimov's Caves of Steel... Of course, if no cars are allowed, that's one difference, but otherwise, it seems like a pretty accurate depiction. If we start building these, will Asimov's future coincide with ours? In a century or so, will we all be agoraphobic, like Bailey in Asimov's series?
If it does happen in a century (or a couple), then I called it first!
Wednesday, September 3, 2008
Stock Analysis: CIENA CORP - Perfect Time To Buy
After a 59% drop in stock prices today (9/3/2008), Ciena Corp is an excellent stock that is undervalued. Despite statements regarding weak sales in the future, I feel confident that CIEN will rebound after a few rocky months. As predicted by others, it may be a few months until CIEN will be able to get back on their feet, so I predict that this is a more long term investment. I believe a target price of $25 per share in 6 months is not unreasonable, and would not be surprised if in 9-12 months CIEN will be able to rebound to a comfortable $32 per share as their related companies, such as CSCO and TLAB recover as well. While many aspects of the economy will continue to fall, with the USA's increasing reliance on digital communications, CIEN will be able to recoup their losses, and thrive in the long term. Their P/E of 11.87 is not spectacular, but their long track history will allow them to survive and move forward after today's loss.
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