The creative genius Charlie Chaplin said that an understanding of psychology is the basis for almost all success.
Chaplin was a gifted actor of course, but also a musician (he wrote and performed the musical score for most of his films) a producer/director and a very shrewd businessman. He understood the business value of the emerging film industry, and was one of the first independent filmmakers to own the rights to his intellectual property.
Charlie famously sold his large stock holdings in 1928, shortly before the crash. He understood the herd mentality of the bubble, and that if something seems too good to be true it probably is. So if you want to have success investing in the stock market, don’t forget psychology.
Specifically abnormal psychology. The diagnosis is in; this stock market is certifiably bipolar and schizophrenic.
Schizophrenic in hearing voices in its head. Whispering into its left ear is “I’ll give you free money forever” and in the right “I’ll cut you off, the people will realize that their paper money is worthless, they’ll riot in the streets and storm your mansion and chop your head off.”
Fortunately, for people with long stock positions anyway, the market is usually happy, like a maniac, listening to the whispers coming in from the left.
When the other voice gets attention however, it gets sad and depressed and sells-off quickly.
You treat a human with these mental illnesses with a cocktail of heavy psychotropic drugs. Right now the drug keeping the market happy, and the source of the voice from the left, is the Quantitative Easing by the Federal Reserve.
You get a positive report but is it too positive? Paranoia sinks in. Good news might mean a decrease in the amount of drugs you get. For a drug addict, bad news can be good, if what they are angling for is to stay on their meds.
It’s a little scary thinking about how much power and control the Federal Reserve has over our economy and the stock market right now. “When will the Fed start ‘tapering’ their Quantitative Easing?” That’s almost all anybody really wants to talk about.
I’m afraid Janet Yellen might let loose a big wet fart staining her undies and then immediately step into range of a camera. The grimace on her face captured in the photo might be misinterpreted as the start of a hawkish turn, causing a drop in the dollar in the Forex market, followed by a selloff in the stock market.
That’s about how precarious our situation is. A fart from Janet Yellen could result in a worldwide recession.
That’s a good environment for hedging. Don’t forget your short positions. If you ignore the short side, you leave a significant percentage of your potential profit on the table. The difference between betting on a long vs. short stock position is the difference between betting on a black flush, spades or clubs, vs. a red flush, hearts or diamonds.
The short sell, the put option, etc., they are there for a reason. The chances of an eventual sell-off are about as good as the chances that a bi-polar maniac will crash eventually, after a three day bender of mixing prescription drugs with alcohol and other self medication.
We have lots of friends in the environmental community. We value a vibrant natural world and we have and will continue to work toward such a world through various means. We are fans of solar power, and wind, and so called “alternative” energy technologies. But within the parameters of the market. If alternative energy sources can not operate within the marketplace such energies are by definition not sustainable.
The truth is that much of the money which went to “green” energy efforts during the first Obama administration went to connected friends and political rainmakers in the Democratic Party. The green stimulus money was a vehicle for people to get paid while they justified the largess bestowed upon them by taxpayers by thinking they were doing the “right thing” for the environment. So long as one does the “right thing” crony capitalism is OK.
The billionare who poured $8 million into my home state of Virginia from California in an effort to win the election for Clinton operative Terry McAuliffe, did not as far as I can see directly benefit from any Soyndra like deals. I could be wrong on this, but we are willing to give him the benefit of the doubt. But make no mistake, Tom Styer is a crony with deep ties to both the Clinton and the Obama political machines.
He’s kind of a poor man’s George Soros in that regard.
In the attached article (and general love fest) Politico examines in depth how Tom Steyer manipulated (entirely legally it must be noted) the Virginia gubernatorial race in 2013.
In my opinion it’s one thing for super rich guys to advocate for smaller government like the Kochs do. The Kochs are by no means perfect and have benefited from big government on occasion by their own admission, but they generally call for a shrinking state. This believe it or not is not in any industrialist’s best interest. Big government and big business are good friends.
It is far scarier when a super rich guys advocate for bigger government. They (think Soros, Warren Buffett, Bill Gates) can sell themselves as advocates of the greater good through larger government, while at the same time expanding their wealth. It’s the “I’m doing good so I deserve to get rich even if the taxpayers have to pay for it” mentality. Al Gore comes to mind. So does Tom Steyer.
A third, unstated goal has run through all of Steyer’s political activities: turning a hedge fund investor from the Bay Area into a national political figure. Most megadonors prize their privacy. But before Steyer’s team jumped into the Virginia race, it approached POLITICO about providing exclusive access to NextGen’s activities for a feature story after the election. In 2013, the towheaded, all-smiles Democratic financier has participated in major profiles in both The New Yorker and Bloomberg BusinessWeek.
The US post office was contemplating stopping Saturday delivery to reduce costs. Instead, the post office has gone the other way, at least for packages.
The LA Times reports U.S. Postal Service to deliver Amazon packages on Sundays.
Giant online retailer Amazon.com Inc. is turning up the heat on rivals this holiday season and beyond under a new deal with the U.S. Postal Service for delivering packages on Sundays.
Starting this week, the postal service will bring Amazon packages on Sundays to shoppers' doors in the Los Angeles and New York metropolitan areas at no extra charge. Next year, it plans to roll out year-round Sunday delivery to Dallas, New Orleans, Phoenix and other cities.
To pull off Sunday delivery for Amazon, the postal service plans to use its flexible scheduling of employees, Brennan said. It doesn't plan to add employees, she said.
Members of Amazon's Prime program have free two-day shipping and, under the new deal, can order items Friday and receive them Sunday. Customers without Prime will pay the standard shipping costs associated with business day delivery.
As consumers increasingly move online to shop, retailers are finding that their shipping policies can be a bellwether of customer loyalty. Though not necessarily offering Sunday delivery, many are testing same-day service.
Wal-Mart Stores Inc. is testing same-day delivery service in northern Virginia, Philadelphia, Minneapolis, Denver and the San Francisco and San Jose region. Last month, EBay Inc. agreed to acquire Shutl, a London start-up that uses a network of same-day couriers to deliver goods ordered online in hours, even minutes.
In March, Google Inc. said it would test a same-day delivery service called Google Shopping Express for online purchases in the Bay Area. Specialty sporting goods store Sport Chalet Inc. began offering a similar service in April.
But adding Sunday service takes the competition to a new level.
Why Go to the Mall?
Competition favors those with a vast array of merchandise and a way to deliver it quickly. Amazon and Walmart are in that class.
If you know what you want, or find what you want online, why go to the mall?
The answer seems to be tradition, or perhaps just to get out of the house. And for some, the walk in the mall is about the only exercise they get.
Same-Day Delivery Options
Why wait two days when you can get it in one?
SEJ reports Google and 6 Other Same-Day Delivery Services.
If you live in the Bay Area, you might be relaxing at home in your pajamas ordering all sorts of goodies and waiting until Google drops it off within the same day. If you haven’t heard, the tech giant is making life all that more instantly gratifying by expanding its same-day delivery service. Google is by no means the only company offering this kind of service, but it’s Google, so this makes it kind of a big deal.
For now, people in the Bay Area can order products from businesses like Walgreens, Nob Hill Foods, Staples, Blue Bottle Coffee, Target and Palo Alto Sport Shop and Toy World and have everything shipped by Google for $5. If this works out for Google, expect the following 6 companies to expand their same-day delivery service.
The behemoth launched its own same-day delivery service just in time to the holiday season in 2012. Costumers can order products from Wal-Mart and have them delivered to their home for between $7 and $10. The service is available in northern Virginia, Philadelphia, Minneapolis, Denver and the San Jose-San Francisco-area.
Shutl was a startup that originated in the UK and is similar to Google’s service, meaning you shop online and Shutl handles the delivery. The company claims that they’re “the world’s fastest, most convenient and best-loved same-day and same-hour delivery service.” Shutl is only available in Manhatten, but there are plans to expand to San Francisco, Atlanta, Boston, Denver, Detroit, Houston, Los Angeles, Miami, Minneapolis, Philadelphia, Phoenix, San Diego, Seattle, Washington, Montreal and Toronto.
The auction giant launched its delivery service, eBay Now, last year and charges $5 per store. What makes eBay’s service standout, besides the one-hour delivery time, is that the company focuses on local stores, however, you can still get stuff from major retailers. eBay Now is available in San Francisco and New York.
TaskRabbit was designed specifically for people who don’t have the time, or capability, to do their shopping. But, this service offers so much more than just having your groceries brought home. Businesses can use TaskRabbit to order and have supplies delivered to the office. There’s also the ability to find house-cleaners or handymen to do those things around the house that you just can’t get to.
Amazon are no strangers to same-day delivery service. The online shopping titan has offered Local Express Delivery Option since 2009 and can be found in Baltimore, Boston, Chicago, Indianapolis, Las Vegas, New York, Philadelphia, Phoenix, San Bernardino Area, Seattle and Washington, D.C. The service costs $8.99 plus plus 99 cents an item.
This startup takes the same-day delivery service to a whole new level. For example, after placing an order, you’re sent a photo and bio of your delivery person, aka you ‘Postmate’. Postmates also will inform you if a product is right around the corner, because that would be pointless for everyone, and they’ll also hook you up with all kinds of stores and restaurants in your neighborhood via Foursquare.
Is Same-Day Delivery What People Want?
In most cases it's not same-day delivery that people want, but rather, free-delivery and lower prices.
According to a study conducted by Boston Consulting Group, only 9% of the 1,500 U.S. consumers surveyed “cited same-day delivery as a top factor that would improve their online shopping experience, while 74% cited free delivery and 50% cited lower prices.” With the exception of some city dwellers with a little extra cash, same-day service isn’t a priority.
Who Is the Winner?
Competition is here, on multiple levels. Companies that offer the fastest deliveries at the lowest cost will have a huge advantage over their competition.
The winner is the consumer who gets faster service at cheaper prices. The loser is big-box retailers with huge shopping areas with little traffic.
Mike "Mish" Shedlock
Read more at http://globaleconomicanalysis.blogspot.com/#IeVDEWEa7AfpUFXM.99
Welcome to stocks in the news where the headline meets the trendline.
Stock Number One: ViroPharma Inc. (SYMBOL: VPHM)
And the headline says: Shire to pay $4.2 billion for rare disease firm ViroPharma– Reuters
“London-listed Shire is buying ViroPharma for $4.2 billion,” reports Reuters, “its biggest deal yet to strengthen its portfolio of lucrative drugs to treat rare diseases, which are attracting increasing attention from drugs companies as patents expire on their older treatments. Several companies including France's Sanofi, according to reports, were interested in ViroPharma, which makes Cinryze for the treatment of immune disorder hereditary angioedema.”
And right on time our friends, attorneys Levi & Korsinsky, Faruqi & Faruqi, Brower Piven will be investigating the deal to see if they can sue their way into some sort of the settlement.
We talked about this phenomenon before where as soon as a buyout occurs the attorneys step up and automatically investigate to see if they can troll for some dollars.
This is one of the reasons why Wall Street doesn’t work. This is one of the reasons why we need tort reform in this country.
Our Ransom Notes Trendline says: Sell ViroPharma
Stock number two: Apple (SYMBOL: AAPL)
And the headline says: Apple's Big iPhone Is a Big Deal– Motley Fool
“Despite the fact that Apple's new iPhone 5s has just been released to the world,” writes the Fool, “the rumor mill (Bloomberg) is already buzzing with claims that Apple is planning to launch two larger iPhones -- one with a 4.7" screen and one with a 5.5" screen. While Apple's move to larger iPhone models is inevitable, the company must be extremely careful about how it manages its suite of smartphone models going forward. Releasing a new, larger iPhone will help address more of the market, but there's a risk that if Apple simply kills the smaller iPhone, it may alienate a substantial number of its customers.”
Apple is currently trading 11 times it’s forward or earnings with an annual dividend of about 2.3%.
Analysts have been revising estimates upwards over the last month or so. In the next five years and also expecting the company will grow what your earnings by 14 to 15% average annually.
From a valuation perspective that means that Apple is a good prospect for growth and income investors.
Our Ransom Note Trendline says: Buy Apple
Stock Number Three: GoGo (SYMBOL: GOGO)
And the headline says: Gogo CEO: 'We're in the Very Early Innings' – Street.com
“Gogo (shares surged 25.8% to $23.59 in trading on Monday after the in-flight Internet company posted results that blew past Wall Street expectations,” says the Street.com. “Gogo posted a third-quarter loss of 22 cents a share as revenue rose 48% from last year to $85.4 million. Service revenue ticked up 52%, led by a 24% increase in the number of airplanes using Gogo's services, and a 21% increase in the average revenue per aircraft (ARPA).”
Here’s another IPO in the technology sector that needs to be avoided.
I love this company, I use this company, but I don’t look at this company as an investment.
Investments have to have some sort of profit, some sort of history, and some sort of discernible future.
That’s missing here.
Our Ransom Note Trendline says: Avoid GoGo
The President was either flat out ignorant of how the new health care program would impact people’s insurance premiums, or he flat out lied over and over to the American people. Take your pick. There aren’t too many other possibilities, and it’s hard to figure which is worse.
I take that back. Calculated deception is worse that bone headed ignorance. And I don’t think ignorance is what were are dealing with here.
The President knew that Obamacare would be repealed if the American people knew they were going to lose their health coverage and that premiums would skyrocket. Sebelius knew this. The whole White House team knew. Pelosi knew. A good part of the media knew.
But Obamacare was such an opportunity for the government to take over a large swathe of the economy (in partnership with the large health insurance companies – at least initially) that the president’s crew in the White House and beyond felt ,”The truth be damned. One way or another, we are doing this.”
At least that’s what I think they probably thought.
The ends justify the means. “One has to break a a few eggs to make an omelet.” Lie. Cheat. Steal. All in the name of “social justice.”
That’s not to say that the United States won’t make repayment arrangement s that are a virtual default.
In the age of virtual reality, a virtual default makes sense.
What would a virtual default look like? Pretty much like it does on the individual level, when you owe someone money, and you can’t pay it back so you convince them to accept something else. If you have something your creditor values as much or even more than the money you owe, then that can be a perfectly fine payment and no default at all. But if what you have to offer really isn’t worth as much as you owe, that’s a virtual default.
For the United States, the wild idea of having the Treasury mint a trillion dollar coin, that would be a virtual default.
That’s not the wildest idea out there however. We have some economic geniuses who say to themselves ‘Hey, if we can make a one trillion dollar coin, why not a 20 trillion dollar coin, or a sixty trillion dollar coin?’
This is the idea being proposed by our strange fellow-citizens over at MoveOn.
The last time I checked, they had 213 signatures for their petition demanding that “The President should immediately mint a $60 trillion coin, and use the proceeds to pay off the national debt completely, cover all likely deficit spending by Congress over the next 15 years, and take the issue of spending cuts in programs that benefit the 99% off the table!”
According to the site, they now have a “new goal” which is 300 signatures. So if you act fast, you might be able to join the MoveOn dream-team and get you signature affixed to this important petition.
You can’t argue with their logic. You might be able to if they actually used logic.
According to petition signer #206, Pamela Rees, it “isn't crazy, it's a tool and an opportunity to entirely reframe and alter the national conversation. The danger of Federal debt of a myth from which banks benefit and because of which people are, literally, dying. “
Signer #181 Jeffrey Kurland, spies a partisan opportunity in the scheme; ” Take down the Republicans and save the people from paying again for the vile financiers. Save our social democratic support programs.”
Frances Walker, proud petition signer #174, sees the coin as perhaps a kind of silver- bullet that can tame the Tea Party, “Please mint the coin to end the anti-government insanity “he writes in his comment field.
There is more, but let me conclude these examples by passing along the wisdom of John McDonald, petition signer #160, who solemnly states “This will end the foolish discussion on debt that has been going on endlessly for what seems like years now.”
In McDonald’s defense, I have to admit that this idea makes me also a little concerned about foolish discussions and debates that go on endlessly for what seems like years.
Unfortunately, our well-intentioned but misguided MoveOn-ers don’t really understand the concept behind the idea for a trillion dollar coin. It was a real idea, but it was never intended as real money paid to real people for real debt.
It was proposed as accounting trick between the Treasury and The Federal Reserve.The Treasury would mint the coin and with a wink give it to the Fed, who with a nod would hold it and give another trillion in credit, thus bypassing congress and avoiding the debt ceiling debate.
But they already have plenty of accounting tricks, and they don’t need or want a physical symbol of their wink and nod covert relationship. Plus, the Democrats always emerge from the debt ceiling-crisis-muck basking in the public’s adoration and shaking their head at the Republicans who seem bent on taking a Cruz to nowhere, impotently making threats they know that the Democrats know they can never follow up on.
And there you have the real answer. The coin trick could actually work as a technicality, a way for the government to keep borrowing and spending endlessly without having to worry about the bad publicity that comes with breaching the debt ceiling.
But they don’t need it. A gifted propagandist never fears bad publicity. For them, bad publicity is a weapon to spin back on your opponents. Which is why Republican can expect to take another beating early next year when they try to slow things down after the debt quickly climbs above 20 trillion.
Welcome to stocks in the news where the headline meets the trendline.
Stock Number One: Salix. (SYMBOL: SLPX)
And the headline says: Deal Creates Gastrointestinal Leader – OptionsMonster
“Santarus agreed to be purchased by Salix Pharmaceuticals for $2.6 billion, or $32 a share,’ says OptionsMonster. “SNTS, which closed at $23.22 yesterday, is ripping 38 percent before the opening bell on [the] tradeMONSTER platform. SLXP gains more than 11 percent as well”
So you want to know what’s wrong with the stock market these days? With America in general? I counted four law firms that are already threatening to sue Santarus Pharmaceutical over this deal because they’re sniffing more money.
They want Salix pay more.
Analyst from Cantor says Salix is paying too much for the deal.
What Salix is looking for is the existing distribution network that Santarus offers them further gastrointestinal products.
The company currently trades about five times sales, which is a little rich for any biotech.
Our Ransom Notes Trendline says: Avoid Santarus and Salix
Stock number two: Toll Brothers Inc. (SYMBOL: TOL)
And the headline says: Toll Brothers Floats New Stock Issue – Motley Fool
“Toll Brothers is hoping to strengthen its capital foundation with a fresh offering of common stock. The company announced it is floating 6.25 million shares in an underwritten public flotation priced at $32.00 per share. Additionally, the issue's underwriters have been granted a 30-day purchase option for up to an additional 937,500 million shares.”
Toll Brothers will use their $1.7 billion in cash to finance the purchase of a California-based homebuilder, as was announced earlier this week.
The company is trading about 21 times earnings, with forward projections for the next five years coming in about 19% average annual growth. Earning estimates in the short run have been paired back a little bit recently, however.
With interest rates expected to stay at current levels --if maybe just a little bit higher-- Toll Brothers should continue to be a leader in the industry. However it’s probably fairly priced as of now.
Our Ransom Note Trendline says: Hold Toll Brothers
Stock Number Three: J. C. Penney Company (SYMBOL: JCP)
And the headline says: J.C.Penney's October Results Signals Turnaround Taking Hold – JC Penny
“J.C.Penney’s sales release for October 2013 is very promising,” writes Walter Loeb of Forbes. “Sales increased 0.9% over the previous year.As I have written about in past blogs, it is what I thought would happen for several reasons including very easy comparisons and better management,” says Loeb.
The problem with JC Penny isn’t sales. It’s that they’re burning about $1 billion in cash every six months. They have about one $1.6 billion in the bank and are expected to lose $3.50 pre share in 2014 and over $6.00 per share 2015.
Same-store sales increases are great, but it doesn’t solve the problem that they’re not profitable. Much more likely that this company will going to bankruptcy even though we seen the stock price rally since mid-October
Our Ransom Note Trendline says: Sell JC Penny
Currency madness has spread to the Czech Republic. Central bank intervention triggered a record plunge in the Koruna vs. the Euro.
Bloomberg reports Czechs Play Koruna Hardball as Intervention Triggers Record Drop
The Czech central bank’s return to currency interventions after 11 years heralds a push for a weaker koruna to ward off deflation and kick-start the economy.
The koruna plunged 4.4 percent to 26.982 against the euro yesterday, its biggest-ever drop and the most in the world on the day, after the central bank sold the currency in the foreign-exchange market. Governor Miroslav Singer pledged to keep intervening “for as long as needed” to spur inflation, setting a target of “near” 27 per euro, a level the koruna last traded at in 2009.
“The central bank signaled willingness to play hardball in its foreign-exchange policy,” Luis Costa, an emerging-market strategist at Citigroup Inc., said by e-mail from London. “For the moment, I believe the ‘ideal level of 27’ will be met.”
Unlike interventions aimed at strengthening the exchange rate, which require sales of foreign currencies that can deplete foreign reserves, the Czech central bank is printing more koruna to drive down its value. The money supply increase may lead to the higher inflation rates that Singer is pursuing.
“The power is unlimited,” Guillaume Tresca, a Paris-based strategist at Credit Agricole SA, wrote by e-mail yesterday. “They can theoretically print as much koruna as they want.”
Hardball in Pictures - Koruna vs. Euro
It seems the "ideal" level of 27 was reached in a day. Of course it is preposterous to propose that anyone, especially central banks have any notion of what the "ideal" level is.
From a consumer standpoint, the more European goods Czech citizens can buy with the Koruna the better. But central banks will have none of that.
About That Eurozone Entry
Wikipedia comments on the Czech Republic Plans to Join the Eurozone.
The Czech Republic planned to adopt the euro in 2012, but its government suspended that plan in 2007. Although the country is economically well positioned to adopt the euro, there is considerable opposition to the move within the Czech Republic. According to a survey conducted in January 2011, only 22% of the Czech population was in favour of replacing the koruna with euro.
One alleged disadvantage of joining the eurozone is giving up the ability to do what the Czech Republic just did.
Of course the ECB is on its own currency debasement mission vs. the US dollar and Japanese Yen as noted in ECB Unexpectedly Cuts Rate to .25%; Draghi Promises Loose Policy for "Extended Period", "Ready to Consider All Instruments"; What Debasement is Next?
Where Does It End?
For years, I have been asking supporters of these competitive currency debasement schemes "where does it end"?
Recently, Ambrose Evans-Pritchard at the Telegraph proposed the ECB devalue the Euro to support growth and end deflation.
For further details, please consider Lunatic Howls for Competitive QE Debasement; Another Swan Dive Into Cesspool of Economic Silliness; Following Lemmings Over The Cliff; It's Madness!
How the hell can competitive devaluation work, when every country can "theoretically print as much currency as it wants" and every country wants a declining currency vs. every other currency to support growth?
Ambrose, I am still waiting for the answer to that question.
Given that Ambrose (and every other misguided monetarist on the planet) proposes a mathematical impossibility, I may be waiting for a long time.
Mike "Mish" Shedlock
Read more at http://globaleconomicanalysis.blogspot.com/#ghWDTwsYrlILTtTw.99
We congratulate Governor Elect McAuliffe on his win. It was a slugfest and he emerged from the brawl. He should enjoy the moment.
However the win was anything but a mandate. McAuliffe nearly lost the race he had been leading by double digits just a couple of weeks before. People remember his role as the chief money guy for the DLC Democrats and so many on the “Left” don’t trust him. This is a big reason why “Mac” was nearly knocked out last night. His supporter pool is very shallow. He is not liked. But the pool was just deep enough to win last night, and that’s what counts this morning.
Going forward however it is likely to be a different story.
Check out this article from from the progressive Mother Jones.
(From Mother Jones)
Allow me to explain. McAuliffe represents an unseemly slice of Washington. His primary role in politics for the past two decades or more has been raising money—most notably, for the Clintons. He cooked up the idea of essentially renting out the Lincoln bedroom during the Clinton administration as a fundraising vehicle, and he smashed all previous presidential fundraising records in the process. When McAuliffe was the Dems’ top fundraiser, a campaign finance scandal besieged the Clinton White House. Coincidence? No. McAuliffe was all about pushing the envelope when it came to the political money chase.
Welcome to stocks in the news where the headline meets the trendline.
Stock Number One: Twitter. (SYMBOL: TWTR)
And the headline says: Twitter surges 74% in market debut after pricing at $26 a share– CNBC
“Twitter opened at $45.10 a share, more than 70 percent above its IPO price of $26 a share. The stock is trading under the ticker symbol TWTR,” says CNBC. “On an interview on CNBC, Twitter CEO Dick Costolo said investors should not be concerned about the company's current lack of profits, because it's part of a plan to invest for the long term. He also said employees had agreed to an 180-day lockup.”
Anyone who would tell you not to worry about losses because it’s a part of a broader plan isn’t being quite candid with you. Ultimately stock valuations come down to whether a company can monetize their product.
Twitter has not shown an ability to do that yet. Until they do, Twitter is not an investment.
It’s a reality show disguised as an investment.
I can’t predict the future, but I would expect a pullback from these were trading ranges once reality sets in.
Our Ransom Notes Trendline says: Avoid Twitter
Stock number two: Suntech (SYMBOL: STP)
And the headline says: Sun Sets on Suntech’s U.S. Listing– Wall Street Journal
“China’s one-time solar champion is about to be delisted from the New York Stock Exchange,” reports the Wall Street Journal. “The move caps a dramatic reversal of fortune for Suntech Power Holdings Co. %, which raised $400 million in an initial public offering in 2005. Suntech’s IPO was the largest in the U.S. for a China-based company that year, and it was so successful that Suntech’s founder, Zhengrong Shi, was later asked to join a NYSE advisory committee.”
Take Suntech as a cautionary tale that even the full faith and credit-- and the dollars-- provided by the United States government cannot guarantee a company will be successful.
In fact, Suntech demise was probably a direct result of Obama’s huge government-sponsored investment in solar.
The company is a mess and it’s likely that it won’t even be able to complete its annual report.
It also can serve as a cautionary tale for China companies. Despite being powered by the sun, it apparently isn’t that transparent, having stopped releasing financial reports.
Our Ransom Note Trendline says: Suntech is Dead to Me
Stock Number Three: HomeAway, Inc. (SYMBOL: AWAY)
And the headline says: HomeAway Reports Strong Q3 Earnings– Zacks
“HomeAway, Inc. reported adjusted third-quarter 2013 earnings of 12 cents per share, exceeding the Zacks Consensus Estimate of 10 cents,” says Zack Investment Research. “The adjusted earnings per share exclude one-time items but include stock-based compensation expense. Investors responded to the reported numbers, sending shares up 13.1% in after-hours trading.”
With the news Home Away moved past some resistance. It will be interesting to see where closes today. If it closes above $34 that’s good. It could climb higher.
The problem is that the valuations are skewed quite a bit. It’s currently trading about 142 times it’s trailing earnings and 45 times it’s forward earnings
Our Ransom Note Trendline says: Avoid Home Away
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