See Ya 2011, On to 2012, Israeli Startups, Google's New Ad Format, and Issues at Sears!!!

The last week of 2011 has been a good microcosm of what much of the entire year looked like, a market undecided about what it believes. Going into the last day of the last week of 2011, US equity markets are slightly ahead of where they started 2011, like a rolller coaster which ends up where it started, and both have had their heart thumping drops and exciting climbs to the top. However, as usual, companies which had stocks that were egregiously priced eventually saw the froth taken out of their share price, be it Green Mountain by the always astute David Einhorn, Netflix, Molycorp, Human Genome Sciences, or any number of others which pop to mind (Salesforce, Opentable, etc). Many companies had good performance which was rewarded, and as usual, those which did not make money or had poor results were punished severely. As 2011 comes to a close, I find it interesting gold has not held up very well these last few weeks as I am sure many investors want to lock in their massive gains in the metal's price, especially if you had invested five or ten years ago when it was dirt cheap. The price of oil has hung in there pretty well, certainly helped by the saber rattling of the Iranians with respect to the Strait of Hormuz. Still, much of what I read about oil leads me to conclude the United States is gradually moving towards developing and our huge natural gas supplies through fracking based exploration, and combined with the development in the Canadian Tar Sands, and increased activity efforts in the Gulf of Mexico and other parts of South and Central America, OPEC's choke hold on mature countries may not last more than another decade, and hopefully sooner. The quicker we can not rely on lunatic countries for our oil supplies the better. Romney has taken a bit of a lead in Iowa, so with a few days left before the first primary, we will see what happens but the Republican nomination might be over pretty quick, especially if he takes Iowa, and then follows it up with a big romp in Massachusetts, after which he would head to South Carolina with a ton of momentum. Interesting situation developing in Israel with reduced funding for startups by their government- http://www.bloomberg.com/news/2011-12-29/google-backs-israeli-startups-as-local-financing-hits-12-year-low-tech.html Google is testing a new advertising format-http://techcrunch.com/2011/12/29/google-testing-new-email-subscription-ad-format/ The problems at Sears are instructive of a few good lessons. First, Eddie Lampert has been a great investor for a long time, and is a brilliant guy, but what did he know about big box retailing, especially considering the worthy competitors like Wal-Mart, Target, Home Depot, Lowes, Amazon.com, etc? Second, when companies do not reinvest in their basic business, in this case merchandising, product assortment and breadth, and human resources (among others), it is hard to break the cycle of losing customers and reduced sales. With the shares down 80% from their all time high, maybe Mr. Lampart will rethink his strategy-http://online.wsj.com/article/SB10001424052970204632204577129122795672382.html?mod=WSJ_hp_LEFTWhatsNewsCollection Finally, I hope everyone has a healthy and happy 2012! If you have any comments or questions about this blog, please post them, I love your feedback! Happy new year everyone! As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Good News From Europe (after 3 years?), Zynga vs Groupon, James Altucher's Secrets of Entrepreneurship, and Buying Low and Selling High!

So after almost three years, the market finally got some news from Europe that it liked. What was it? First, Spain held a bond auction which was well bought and their interest rate is far lower than what anyone previously thought. Next, the German economy showed stronger growth than anyone in the investment community imagined. As a result, risk was now back on and the market turned positive for the year. The best performing stock in the Dow Jones Industrial Average for 2011 has been McDonalds, which makes my skin crawl. McDonald's has all kinds of products, many of them tailored to the low cost consumer. They always seem to copy everything else which might be working somewhere else. The stock is up 30% for the year and has been hitting all time highs daily. I remember when the stock was sitting at 12 bucks a share about 10 years ago and thinking Ronald McDonald for 12 bucks. Did I buy it? No. Bad mistake by me as you would also own Chipolte as well. When things get cheap, look really hard as you can bet the only thing constant is change. Politically, we are getting to primary season as Iowa, New Hampshire, South Carolina, and Florida will be on us very soon. Ron Paul may win Iowa, but he will not win the Republican nomination. In watching Mitt Romney speak, he appears very confident, and does not even acknowledge the other Republican candidates. His focus is on Obama, which makes me think he knows he is going to be the nominee. I hope so, and then its on like Donkey Kong. Interesting article on the performance of Zynga vs Groupon in the public markets and how it is related to the float: http://dealbook.nytimes.com/2011/12/23/groupons-real-deals-trump-zyngas-virtual-sheep/?ref=business Always enjoy articles by James Altucher, this one on his secrets of entrepreneurship: http://techcrunch.com/2011/12/24/secrets-of-the-accidental-entrepreneur/ Trying to buy low and sell high and having a rough time? Here are some tips: http://www.businessinsider.com/the-psychology-of-buying-high-and-selling-low-2011-12 I hope everyone has a great holiday season and gets health and happiness for yours and your family. If you have any comments on the blog or posts, please share them!!!! As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Europe Hold's the Market Hostage, MF Global's Ignorance, Why Amazon Wins, Military I Phone Apps, and Zynga's IPO Bust!

December is usually the best month of the year for the stock market as the 'Santa Claus' rally coincides with a generally positive feeling when the holidays are here. In 2011, there has been no rally as the European debt crisis continues to hold equity markets hostage. France and Britain are beginning to point fingers, while Germany maintains there should be no debt monetization from the ECB. Meanwhile, the U.S. economy slowly continues to perform better than expected, even with the issues surrounding European governments and banks. Investors are scared, frustrated, upset, and taking money off the table at every opportunity. In addition, now is the time when tax loss selling is an issue for those who are trying to be tax efficient. If you put it all together, equity investors are finding it very difficult to outperform indexes as good performances from any stock are scarce, to say the least. Conversely, there is value in the market, in almost every sector, depending on what you are trying to find. Be patient, look at all kinds of things, and make sure you get what fits your budget, objective, risk profile, time horizon, and needs. Jon Corzine, the ex NJ Senator, Governor, and CEO of MF Global, gets in front of Congress and says he has no idea what happened to 1.2 billion dollars of customer money. Last I remember, when you go to traffic school, they tell you ignorance is not a valid defense for any violation. Just consider the audacity to tell people you have no idea where 1.2 billion dollars of customer money is and what happened to it. Congress's approval rate is 11-13%, and they continue to do business where the modus operandi is to wait until one or two days until they have to get something done, and then they start negotiating. There are lots of great things happening in the United States, but our leaders in the political and justice system are in serious need of shall we say, a closer look, at the very least. A great quote from Alan Abelson of Barron's is applicable to our politicians- "They couldn't run water." If you want to know why Amazon.com is such a dominant company, here is a great article on how they see things: http://www.nytimes.com/2011/12/17/business/at-amazon-jeff-bezos-talks-long-term-and-means-it.html?ref=business Apps for the I-phone are starting to gain traction in the military: http://www.bloomberg.com/news/2011-12-15/soldiers-iphones-guide-artillery-fire-as-pentagon-plans-app-store-tech.html Zynga's IPO value is less than half what pre-IPO investors thought it would be. The social networking bubble from last spring is being repriced, as have a lot of other stocks: http://seattletimes.nwsource.com/html/businesstechnology/2017034422_zyngaipo17.html I hope everyone has a great holidays, healthy and happy and enjoying your families. If you have any comments or thoughts about this blog post, please share them!!! As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Thoughts from the CFA Value Conference In New York (and more), Video Sharing on Facebook, J.C Penny's vs Macy's, and Living Social Raises More Cash

In thinking about the presentations from the CFA Value Investing Conference held last week in New York, some prevailing ideas come to mind. First, talking about finding value is easy, actually doing it successfully is much harder. As I stated in the December 2011 newsletter, (here is the link: http://www.y-hc.com/resources/newsletters/45-2011-newsletters/242-yale-bock.html, ) usually great investing requires the ability to take some pain. In an environment where high frequency traders buy and sell stocks every 10-20 seconds, taking pain (unrealized losses) for 6 months to more than 1 year is a whole different approach. However, a key point to recognize is value and growth are tied at the hip, as Mr. Buffett says. Ultimately, great investors have the ability to buy assets at great prices and hold them until the market recognizes the asset is mispriced. How long that takes, nobody knows. Sometimes it can happen in days, other instances may take multiple years. Another key point I think is critical is how people present has nothing to do with how substantive the points being made are. There was a presentation from a current high profile analyst which essentially was a regurgitation of his previous ten years worth of industry calls. He did it in a very flamboyant way, but the underlying material was just average. Another thought which was constantly echoed, as if we did not know, is that Wall Street is interested in fees and transactions. Yeah, really, no kidding. One only needed to go back to any kind of history of wall street, or read books from any great investing talent to know it has always been that way, probably always will be. The key point is Wall Street is there to be taken advantage of, when they misprice assets, which they do every day. It is a question of what assets do you want and what price are they being sold at, and even more important, what are you getting when you buy those assets. In looking at recent news from the market, the more you see from rating agencies like S&P, Moody's, and Fitch, it becomes self evident the only philosophy the ratings agencies believe in is "Kicking the dog when it is down." For example, it make no sense, nor is it analytically precise, to downgrade 15 European countries at the same time. Yes, the European countries are tied together with the same currency, but conditions in Germany are not the same as those in Greece or Spain. Piling on is what the rating agencies specialize in, and it is hard to imagine a group, other than politicians, with shall we say, a lower standard with respect to how it treats its constituency. Facebook will try and do for videos what it has done with music- http://techcrunch.com/2011/12/07/video-history-law-passes-houses-struggling-netflix-could-finally-stream-on-facebook-in-us/ Bill Ackman's J.C. Penny's takes a big piece of Martha Stewart, and it makes Macy's rethink their relationship with the cooking diva-http://dealbook.nytimes.com/2011/12/07/macys-to-review-martha-stewart-relationship/?ref=business Living Social, a rising star and very worthy competitor to Groupon, raises some more dough before it gets ready for an IPO-http://online.wsj.com/article/SB10001424052970203413304577084803856892004.html?mod=WSJ_hp_LEFTWhatsNewsCollection Hey- let me know your thoughts about the blog, these articles, what I have written about the market, or anything else regarding markets or business in general. I want to hear your thoughts so please post your timely comments or questions! Thanks so much for reading and hope you have a good week. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Last Week's Mess, Black Friday, CFA Value Conference, and Much More!!!

Last week was the worst weekly stock market performance for a Thanksgiving week since I think 1932. If you look at stock market performance all over the world, it is the same everywhere, down every single day. The FTSE was down 9 days in a row, and Israel 9 days in a row as well. US stock markets are down 7 days in a row. At the very least, we can agree at least it is consistent. However, if anyone does not believe investors are more than schizophrenic, which is why there is opportunity, just look at the last few months. Volatility reigns supreme, and the current problem is Europe. Next it will be the United States and our debt levels. After that, who knows what, but you can be sure shellshocked investors are looking for the next problem, be it China, India, or High Frequency Trading? Here in the United States, black friday got off to the best start ever as more people spent money both in stores and on line than ever before. Still, what is the problem, it is only one day and we have to see how the weekend turns out. Right now, without question, mister market definately has the blues, and then some. I am off to New York tomorrow for the CFA Value Investing Conference in New York. Some great investors are speaking, along with some not so great investors but cover your behind analysts, which are more par for the course. Still, one never knows what can be learned from people who have a history of doing well for their investors. Really good article about the love fest between two great investors, Carl Icahn and Bill Ackman, which just shows you the investment world is full of the most competitive people in the world. http://www.nytimes.com/2011/11/27/business/william-ackman-carl-icahn-and-the-seven-year-tiff.html?ref=business An interesting story on how Ronald Lauder uses the tax laws to minimize his tax liability, and has done so for a long time. One of the issues many people, including government regulators may not quite understand, is that no matter how you change tax law, corporations have enough money and manpower to do everything in their power to be tax efficient. If it involves sourcing materials from different countries, setting up plants in foreign jurisdictions, or creating elaborate corporate structures all over the world, nothing is beyond their means. The idea you are going to force multi-billion dollar enterprises to do anything is far reaching at best, fanciful at worst: http://www.nytimes.com/2011/11/27/business/estee-lauder-heirs-tax-strategies-typify-advantages-for-wealthy.html?ref=business Another good story on Oil in Canada and how there is no end in sight for the demand from China, as well as the effect on the United States-http://www.bloomberg.com/news/2011-11-22/oil-abundance-in-canada-sands-provoking-anxiety-over-lust-for-fossil-fuels.html Looks like the big banks are at it again, this time in manipulating LIBOR-http://www.bloomberg.com/news/2011-11-23/london-banks-seen-rigging-rates-for-decades-losing-credibility-in-markets.html Interesting story about Entrepreneurship and how it is not all some make it seem- which is usually the case-http://www.nytimes.com/2011/11/27/jobs/starting-a-business-the-romance-vs-the-reality.html?ref=business I hope everyone enjoys the articles and if you have any comments, or thoughts, please post them. Have a good week and more from New York in the next post. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Gloom Continues Unabated, Dysfunctional Politics, and Different Macroeconomic Thoughts-

Surprise, surprise, the supercommittee failed to accomplish its objectives, and the market sold off because of it, or maybe not, . it just wanted to sell off for some other crazy reason. The gloom casting a definitve overhang on global equity markets continues, led of course by the currency crisis in Europe. We are nearly three years into this thing and still no solutions are clear. What is evident is politicians all over the world are racing towards the bottom in an effort to show which are least able to get the job done. Here, the super committee displayed their lack of effectiveness by announcing they had failed after having nearly 6 months to find a deal. The political reality is when the Republicans took control of the House of Representatives in the mid term elections, Obama's Presidency was effectively neutered. Now he gets to run against the neuterers, although he may not get what he wishes. On the other side of the Atlantic, Germany refuses to pay for the rest of Europe, which is the bottom line. We are starting to look at the ECB, the IMF, etc to help twist Germany's arm, but it may be there is too little will and way too much blathering to actually solve the complex issue. My thought is if it is going to blow up, do it already, so markets can find something else to worry about. In all seriousness, this is a tough time to be an investor unless you are a buyer, when every day the merchandise gets cheaper. Good luck in looking through the rubble! Nice article on how nobody trusts the investment banks- in this case Jeffries- http://dealbook.nytimes.com/2011/11/21/trusting-transparency-will-work/?ref=business Some possible good news- a pickup in growth for the U.S. economy- http://www.bloomberg.com/news/2011-11-22/economy-in-u-s-expands-less-than-estimated-as-companies-cut-inventories.html An opinion from the Northwest part of the U.S on the super committee and the economy- http://seattletimes.nwsource.com/html/soundeconomywithjontalton/2016825131_super_committee_fail_and_the_e.html I hope everyone has a happy and healthy thanksgiving with their family and friends!!! As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder

More Volatility Probably In Store, Bob Johnson of BET, Mitt Romney at Bain, and Mobile Payments!!!!

Well, it was another topsy turvey roller coaster ride in the financial markets last week as the market ended the week up after one big down day. It is probably too much to expect to have a non eventful week, as between earnings reports and the daily events in Europe, investors are probably in for continued volatility. Many leading investors believe the market is still very cheap, and I agree. Getting the rest of the world to see the same thing is out of anyone’s control. You keep looking for lots of value, whatever you think that is, and go from there. I still continue to maintain a big issue is the leveraged ETF’s amd High Frequency Traders front running trades based on momentum, which is not investing. It is taking advantage of technology for a zero sum game trade, but ultimately, guys like Jim Rodgers, Warren Buffett, Charlie Munger, etc are not practicing this market behavior, or I would suspect not. Great interview with Black Entertainment Television Founder Bob Johnson, who sold out to Viacom and made a ton- http://www.nytimes.com/2011/11/13/business/robert-l-johnson-anger-has-no-place-in-business.html?_r=1&ref=business In my estimation, the best Republican candidate is Mitt Romney, and it is not even close. Here is some more background on his time at Bain Capital, with some shots taken, as usual, by the NY Times- http://www.nytimes.com/2011/11/13/us/politics/after-mitt-romney-deal-company-showed-profits-and-then-layoffs.html?ref=business Mobile payments are surging, and will continue to grow, so here is some more information about this market from Ebay, Google, and Paypal: http://techcrunch.com/2011/11/13/how-google-ebay-and-paypal-are-gearing-up-for-a-very-mobile-holiday-shopping-season/ I hope everyone has a great few weeks before Thanksgiving, and if you have any comments, questions, or thoughts, to share, please post!!!!! As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA

Caution Prevails About Europe, Reid Hoffman, Big Media's Nuclear Option, and A New Budget Proposal!

In the middle of an earnings season which has been generally pretty positive, the negativity on Wall Street still runs rampant. For I don't know how long, and it seems like forever, there is always something which can bring the market down. The European Currency Crisis, the Chinese Real Estate and Bank Lending Bubble, the Supercommittee on the Debt Ceiling, a double dip recession, and on and on it goes. If you are an investor of any kind, you throw in the impact of High Frequency Trading and Quantitative Investors, leveraged ETF's, and how cheap financing is, and you have a market environment which is far different than anything investors ever visualized or experienced even 3 years ago. Yet, at the end of the day, the same rules for valuing securities are still applicable. It is hard to remember that when every day is up or down 200 points, but the basics are still applicable with investing, at least in my opinion. A good article about Reid Hoffman, the founder of Linked In, and his current challenges: http://www.nytimes.com/2011/11/06/business/reid-hoffman-of-linkedin-has-become-the-go-to-guy-of-tech.html?_r=1&ref=business Big Media is scared to death about losing its current position so it is going with the nuclear option: http://techcrunch.com/2011/11/06/big-media-nuclear-dmca/ A new budget deal might be taking shape- don't hold your breath: http://www.bloomberg.com/news/2011-11-04/becerra-says-4-trillion-deficit-deal-possible-with-spending-tax-balance-.html I hope everyone has a good week and as always, if you have any comments, questions. or thoughts about these articles or anything in the blog, please post them! As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA

Earnings Season Hits Its Peak, High Frequency Trading, MF Global, and More

Earnings season rolls on and this one is a massive week for reporting companies. In nearly every industry in the economy, publicly traded enterprises will declare their results, either beating, meeting, or failing their guided estimates. The game of whisper number and buy the rumor, sell the news is long established and continues in full force. High frequency, momentum traders only make the problem worse. Many long time, great investors, like Barton Biggs of Traxis Global Partners and formerly the chief strategist of Morgan Stanley, believe high frequency traders are putting the future of the equity business in harm’s way. Certainly, the volatility in global stock markets over the last 3-5 years don’t make reasonable people want to invest in stocks. It is a shame, also an opportunity, but it certainly should draw more attention of regulators to investigate the HFT traders and their effect on markets. I know that Congress has been hearing testimony on the issue so we will see how it plays out. It is hard to believe that Jon Corzine, ex-New Jersey governor and Goldman Sachs investment banker, would be leading the firm that made every attempt to buy all the sovereign debt of the PIGS nations (Portugal, Italy, Greece, and Spain). Well, it does not look like it is going to turn out very well for MF Global-http://www.bloomberg.com/news/2011-10-29/mf-global-s-board-said-to-be-meeting-today-to-discuss-selling-the-company.html A great interview on enterpreneurship from the CEO of ACS, a subsidiary of Xerox- http://www.nytimes.com/2011/10/30/business/lynn-blodgett-of-acs-on-entrepreneurship-in-a-big-company.html?ref=business Dropbox is a heck of a service, and here is an interview from the founder-http://techcrunch.com/2011/10/30/founder-stories-drew-houston-dropbox-users-save-a-billion-files-every-three-days/ As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA

Earnings Season Ramps Up, Altucher on Connecting, Buffet's BYD, and Credit Default Swaps Causing More Trouble!

Last week began the start of the earnings parade and we have seen a few 'surprises', like Apple and IBM missing, and the money center banks using a "unique" accounting rule to post profits. Investors will see a flood of earnings reports this week, and last week the market rallied on the idea that the situation in Europe may get handled with less paid than originally thought. We will see about that, in time. Just as important, the macroeconomic statistics in the United States are making investors slowly come to the realization the economy is not going to go into a double dip recession. GDP growth is slow, 1-3% is the range we have been stuck in for the last few years, and I would imagine that continues. Profits are unique to each publicly held company and their industry and strategy, but they are generally very strong. The volatility in the commodities complex makes those industries which have cost structures tied to a spe cific commodity harder to manage, so hedging costs and interest rate risks (See the Dexia example below) becomes incredibly important to protect profitability. Should be an interesting week and if you have a comment, please chime in!!! James Altucher adds his opinion on connecting for success-http://techcrunch.com/2011/10/23/9-skills-super-connector/ Mr. Buffett's BYD opens in Los Angeles-http://www.bloomberg.com/news/2011-10-23/buffett-s-chinese-car-investment-fails-to-bring-los-angeles-promised-jobs.html Credit default swaps lead to Dexia's undoing- because of interest rates going down (imagine that)- http://www.nytimes.com/2011/10/23/business/dexias-collapse-in-europe-points-to-global-risks.html?_r=1&hp As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA

Preview of Next Week: Banks, Protesting Wall Street, and Examples of Innovation

It is a common refrain 'The more things change, the more they stay the same.' Last week, the investment world, a fickle bunch to say the least, decided maybe the Euro currency is going to be saved after all and decided it was "risk on". A month ago, and for the last five months, it has been "risk off" in stock markets all over the world. Does this mean the Euro will be saved? Maybe, and much depends on the next few weeks and the negotiations between large government leaders, institutions like the IMF, and large European investment banks- especially in Germany and France (think Deutsche Bank, Society Generale, etc). Time will tell, but we probably are getting down to the end game over the next few months- Greece either defaults or it doesn't, banks take a bigger haircut than 20% or they don't, and other countries decide to help the situation with capital or they don't. This week brings a big hurdle in that the investment and commercial banks report earnings. Wells Fargo, Bank of America, Goldman Sachs, and Morgan Stanley- over the last five to ten years these have been disasters- if they don't stink the investment landscape up with big write offs, trading losses, and warnings about exposure in Europe, maybe the market won't turn manic again. Not expecting too much from the financials- either is the whole world. I wonder if the protesters on wall street ever thought about how people get funding for new drugs, new companies, or hedge currency exposures- probably not, huh? Nice article on MRI's on Smartphones-http://www.nytimes.com/2011/10/16/business/medical-apps-to-assist-with-diagnoses-cleared-by-fda.html?_r=1&ref=business More innovation- taking notes just became much easier- http://www.bloomberg.com/news/2011-10-14/livescribe-s-jim-marggraff-pushes-a-pen-based-computing-revival.html I don't necessarily agree with the entire article, but here is an editoriial saying now is a great time to buy a house- hard to argue financing is as cheap as it will ever be-http://online.wsj.com/article/SB10001424052970204774604576629443313035736.html?mod=WSJ_hpp_MIDDLE_Video_Top As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA

The Problems in Europe Come to A Head, and Morgan Stanley's Bet on Russian Farms

In my October newsletter, I wrote that Germany and France have a huge incentive to not let the Euro blow up. Today, two large European banks warned investors of problems, Deutsche Bank and Dexia, a large French and Belgian bank. The French and Belgian governments or going to support Dexia with capital, and Deutsche Bank is massive with lots of capital. However, as I have stated repeatedly, the Eurozone issue will get resolved one way or another, and market participants are driving the issue. In the meantime, the stock market in the US keeps getting cheaper, but ultimately once the Europe issue gets resolved, and it is taking forever because of somnambulent politicians and a poorly thought out regulatory structure, a big overhang will be taken away. The other issue is thecollateral damage in the global economy because of the problems in Euroland. In the meantime, for stock investors, the prices keep getting more attractive, at least for some of us. Nice story on Morgan Stanley and how hard it is to invest in Russia and things you don't know much about-http://www.bloomberg.com/news/2011-10-04/morgan-stanley-bet-the-farm-in-ukraine-before-fed-bailout-by-u-s-taxpayer.html More information on the issues in Europe-http://online.wsj.com/article/SB10001424052970204524604576610972814688198.html?mod=WSJ_hp_LEFTWhatsNewsCollection And even more information-http://dealbook.nytimes.com/2011/10/04/banks-in-europe-face-huge-losses-from-greece/?ref=business As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA President, Y H & C Investments

Mr. Market Sees Nothing But Gloom- Treasuries Outperform, Paypal's Dominance, and Saturday Night Live's Ha Ha!!!

Well, last week certainly was a tough one in the market as the major averages fell about 6% for the week. Tomorrow's front page of the Wall St Journal discusses how investors are running away from stocks. The 10 year treasury bond yield's below 2%. One can refinance their home using 15 year loans at below 3.5%. If this is not the scenario Ben Graham talks about when he says all Mr. Market sees is gloom, I don't know what is. Yes, stocks can get cheaper, it is amazing sometimes how cheap stocks can get, however, the idea they are going to keep getting pounded 6% in a week is mathmatically not going to hold up. Stocks have been down for 5 straight months, and are down at least 25% from August, and many much more than that. Do your own homework and use your own judgement about what you think is a good buy, or not a good buy, and certainly keep in mind anybody who is on a financial program is going to talk their own book. If they say the market is going down more, you better believe they are short. Here is the Bloomberg article on the outperformance of Treasuries-http://www.bloomberg.com/news/2011-09-25/betting-on-bernanke-returns-28-for-treasuries-as-twist-divides-investors.html Doom and Gloom Leads the WSJ-http://online.wsj.com/article/SB10001424052970204831304576592822485984958.html?mod=WSJ_hp_LEFTTopStories Paypal is just so dominant in tranactions-http://techcrunch.com/2011/09/25/paypal-now-processing-315-million-in-payments-per-day/ A hysterical look at the Republican debate by Saturday Night Live-http://www.realclearpolitics.com/video/2011/09/25/snl_mocks_latest_fox_news_republican_debate.html As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA President, Y H & C Investments

For Now, Europe Headlines Scare the Market, Google vs Facebook, Growth in A Japanese Retailer, and The Ultimate Mess at Full Tilt (Ponzi Scheme?)

Stock markets around the world continued to be petrified by the European sovereign debt situation, especially with events coming to a head in Greece. Traders just love the headlines and resulting volatility, as they say, buy the dips and sell the rips, which is what is happening. However, more and more I am beginning to notice the market starting to differentiate between performance and lack therof. As a result, the 100% correlations across all asset classes are starting to dissolve, and as earnings season approaches, if the market starts to become unafraid of the Europe situation, profitability, growth, and results will matter, as they always do. Ultimately the European currency issue will get resolved, one way or the other, and stock markets around the world can resume whatever path the companies which comprise them deserve. A battle which may last a long time: Google vs Facebook-http://online.wsj.com/article/SB10001424053111904194604576582803071402090.html?mod=WSJ_hp_LEFTWhatsNewsCollection Interesting that a Japanese retailer can serve up growth: http://www.bloomberg.com/news/2011-09-20/underwear-model-shows-an-economy-how-to-grow-commentary-by-william-pesek.html What a mess in the internet poker space- Full Tilt Poker A Ponzi Scheme?-http://online.wsj.com/article/SB10001424053111904106704576582741398633386.html?mod=WSJ_hp_LEFTTopStories As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder. Yale Bock, CFA President, Y H & C Investments

The Challenge of Digital Health Records, 3 Manufacturers Making It, Fundraising.com, and A Tale of Two Countries-

This week in business brings the debt limit negotiations to a climax, and the dog and pony show probably will result in a deal. As I reiterate, the work product on everything government does follows the same format. Wait until the last minute and throw something against the wall to cut a deal. Is it any wonder why government's are so inefficient, especially the bigger they get? The problem with the debt issue is they are messing around with defaulting on government debt, and the ramifications are just incredibly bad for every financial market.

Another really bad situation is the whole News Corp. scandal in England. If ever the rule don't beat yourself applies, this one is it. Why would an executive of an 168 year old popular newspaper engage in something this dumb, and criminal? You have to wonder is the newspaper business that competitive, do readers and ratings matter that much a top newspaper has to engage in criminal behavior on the highest scale and in a completely unethical manner? Is digital competition forcing these competitive pressures all over the world, or just in this circumstance? Interesting questions, but I say, the leadership was just incredibly dumb.

Interesting story on the issues of digital health records- http://www.nytimes.com/2011/07/17/technology/assessing-the-effect-of-standards-in-digital-health-records-on-innovation.html?pagewanted=2&ref=business

A feel good look at three manufacturers in different industries surviving and thriving by being smart, productive, and innovative: http://seattletimes.nwsource.com/html/businesstechnology/2015614315_manufacturing17.html

A startup called fundraising.com has success in the non-profit space- big opportunities there-http://www.bloomberg.com/news/2011-07-15/fundraise-com-to-streamline-giving-sign-presidential-campaigns.html

Looking at a tale of two countries raises very interesting questions about society going forward: http://techcrunch.com/2011/07/16/tale-of-two-countries-silicon-valley-unemployed/

This will be an interesting week as one would expect a debt deal to get done, and earnings from large corporations stream in- as always, some surprise, some disappoint, and the market will react, and then some, to all of it.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Managing Your Credit Score, Cable Outfits Fight Back Against the Net, Advice For Startups, and Wynn and Adelson Make Peace

I think credit issues are always important for people to consider, so here is a nice article on how to improve your credit profile:

http://online.wsj.com/article/SB10001424052702304451504576394093505289846.html?mod=WSJ_hpp_MIDDLE_Video_second

Cable outfits are trying to battle against subscriber losses by adapting their interfaces and making them more user friendly:

http://www.bloomberg.com/news/2011-06-18/u-s-cable-operators-fight-online-competition-by-mimicking-web-interface.html

Excellent advice for people who are involved with startups:

http://techcrunch.com/2011/06/18/mark-suster-raise-money-now-so-when-the-partys-over-youre-sitting-pretty/

Nice to see the two biggest elephants in gaming, especially Las Vegas Gaming, make peace. About time.

http://www.lvrj.com/business/gaming-alliance-to-boggle-the-mind-124151138.html

The summer is usually a time to chill out and relax. In that light, on this site you will see fewer posts but with a bit more information. If you have any comments, thoughts on the blog, or questions, please post them!

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA

A Business Out of Cowdung, All About Apps, and Protecting Online Reputations

Would not say this is my kind of business, but it is certainly based on efficiency- using cowdung to make manure, fertilizer, and other products. More ingenuity like this, especially in energy, and maybe the U.S. could be energy independant by 2050.

http://seattletimes.nwsource.com/html/businesstechnology/2015236170_inpersonmaas06.html

All about apps- there are only going to be thousands more- nice article in the local paper today:

http://www.lvbusinesspress.com/articles/2011/06/06/news/iq_44479658.txt

Interesting article in the NY Times about protecting an online reputation and how it has become much more complex:

http://www.nytimes.com/2011/06/11/your-money/11wealth.html?ref=technology

If you have any comments or thoughts about any of these articles, please share them. Hope everyone has a good weekend.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Ways to Improve The Economy, Online TV Has More Ads, and Learning From Blogging

The news is loaded with stories about the economy and how to fix it, whose fault the current state is, and plenty of other opinions. As a person who engages in different businesses, here are some simple thoughts.

First, with an economy of 300 million people and 10 trillion dollars, the private sector has to do the heavy lifting. All businsses are interested in making more profits. Most of the businesses in the U.S. are small businesses, and you can bet small businesses are always interested in making more money.

Businesses make more money by growing revenues and cutting costs, growing revenues and keeping costs flat, or keeping revenues the same and cutting costs. So, whatever policies can be enacted to help business do any of these things would help a business make more money, and possibly look to expand.

One issue to consider is many businesses now can expand without hiring people- especially in the digital domain. Also, if a business is looking to expand, they are going to try and do it as efficiently as possible, probably in a place where they can keep the most money so they can further grow the business. If a government wants to improve the economy and put people back to work, help companies access new markets (increase revenues), lower costs (reduce bureaucratic costs, hiring costs, etc), or some combination thereof.

Hey, please give us your thoughts on what you would do to help the economy?

Nice article on Online TV and Ads- Surprise- More of Them:

http://seattletimes.nwsource.com/html/businesstechnology/2015269003_onlineads09.html

Liked this article on learning from blogging in small business:

http://boss.blogs.nytimes.com/2011/06/09/what-ive-learned-from-blogging/?ref=business

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Skeptics Out in Full Force On U.S. Economy, Moshi Masters Growth and Apple's Astounding User Numbers, and A Great Example of Why People Have No Faith

Well, with last weeks disappointing job number, 5 weeks of a falling stock market, and corporate america continuing to rake in the profits, there is plenty of divergence in how to look at the current economic situation in the U.S. Certainly, the doomsdayers are out in force with the last jobs number being awful (only 54K jobs created, we need well north of 200K per month), housing still in the tank, and plenty of industries struggling with regulatory uncertainty. However, usually, the summer does slow down so I wouldn't think we will have another recession just yet- although you would not know if from the schizophrenics on Wall Street, just my opinion so take it with a grain of salt, here is the summary of the jobs report:

http://www.bloomberg.com/news/2011-06-05/slowing-u-s-growth-prompts-optimists-to-question-durability-of-recovery.html

Great stories on the growth of social gaming company Moshi Masters (yes, I said growth) and the unbelievable numbers of Apple users, across all spectrums:

http://techcrunch.com/2011/06/05/moshi-monsters-the-social-networking-game-for-kids-passes-the-50-million-users-mark/

http://techcrunch.com/2011/06/06/apple-15-billion-songs-sold-130-million-books-14-billion-apps-downloaded/

Here is a great example of why citizens in the U.S. have no faith in our politicians- so difficult to trust government about anything:

http://www.nytimes.com/2011/06/07/business/07derivatives.html?_r=1&hp

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Groupon Files To Go Public, Debt Agencies At It Again, Innovation From A Familiar Leader, and Y H & C Investments on the Radio-

Groupon files to go public- they should go public with their astounding revenue growth (profits are a different story)- take a look: http://techcrunch.com/2011/06/02/groupon-growth-2-6-billion-revenue-run-rate-charts/

Rating agencies at it again, this time with the U.S. Government- something makes me think it would only be appropriate when the lawsuits for all the bond rating problems get settled the agencies will have to pay through the nose: http://www.bloomberg.com/news/2011-06-02/moody-s-says-u-s-may-be-cut-if-no-debt-limit-progres.html

Innovation from a company which has been doing it for many years- swoosh: http://www.nytimes.com/2011/06/02/business/media/02adco.html?_r=1&ref=business

Remember, best show on tv- the food revolution, is on ABC Thursday at 8 pm pst. Had a radio interview regarding my Covestor model last week- here is the link if you are interested:

http://www.y-hc.com/resources/in-the-news.html

(Would love any feedback on any of these topics, including the interview- feel free to share your thoughts!)

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Getting Into Top Colleges, LinkedIn Learning From Netscape, Startups In Europe, and The Best Show on TV

It should be said it seems like the credit agencies like S & P, Moody's, and Fitch make tough situations even tougher- downgrades at the worst times- after every0ne knows things are bad- way to help the cause.

Interesting article on how far some chinese students are willing to go to get in to top colleges- I say, very astute and makes one think how serious students are going to have to be to achieve their goals-

http://www.nytimes.com/2011/05/30/business/global/30college.html?ref=business

Some advice for the social networking winners about learning from Netscape-

http://seattletimes.nwsource.com/html/businesstechnology/2015160107_linkedin29.html

The current status of startups in Europe:
http://eu.techcrunch.com/2011/05/30/breakfast-with-butcher-in-berlin-come-meet-techcrunch-europe/

If you want to see a great show, and as someone very familiar with the joy of the L.A. Unified School District it strikes near the heart, watch the "Food Revolution" on ABC Thursday or Friday at 8 and 9 pm- worth your time: http://abc.go.com/shows/jamie-olivers-food-revolution?cid=showsitelinks_search

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Google's New Mobile Payment System, Ashton Kutcher as a VC, Tivo for Radio?, and Amazon's Sales Tax Issue

Google's new mobile payment system, using NFC technology, was unveiled today- many analysts believe the mobile wallet using NFC will replace debit and credit cards- we shall see:

http://techcrunch.com/2011/05/26/google-wallet-offers/

Who knew Ashton Kutcher was a VC, and a pretty good one as well?

http://www.nytimes.com/2011/05/26/technology/26ashton.html?ref=business

New service being dubbed as the TiVo for radio- interesting idea:

http://www.nytimes.com/2011/05/26/technology/personaltech/26pogue.html?ref=business

Looks like Amazon is going to eventually have to pay sales taxes, especially if the fed's regulate out of state sales. There are two parts of running an efficient operation, increasing revenues and decreasing costs. Government always has problems with the second issue- finding more revenue sources makes sense, but the second part matters too. In my opinion, from a cost point of view, every level of government should have every service possible on line, especially for cell phones. Most people, including lower socio-economic areas, have access to cell phones and the proliferation of services using mobile devices via the government would help government find revenue faster- a big if as government is the least efficient sector ever. Hope everyone has a great long weekend- here is the amazon link:

http://seattletimes.nwsource.com/html/localnews/2015116166_amazon22m.html

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

The Wisdom Of Charlie Munger, More LinkedIn IPO Controversy, Meredith Whitney and Her Municipal Bond Predictions, and SNL Roasts the IMF Chief

For those of you not familiar with Charlie Munger, he is the right hand man of Warren Buffett, Chairman of Berkshire Hathaway. Mr. Munger is incredibly wise and has experienced all kinds of ups and downs in life, a bad marriage, the loss of an eye, was Summa Cum Laude at Harvard, started the best law firm (still to this day) in California, made money in real estate and was a great investment manager on his own before he joined Mr. Buffett- it is worth your ten minutes to get some of his wisdom because one does not know how long legends like him will be around:

http://www.ipolitics360.com/videos/CharlieMungerInterviewflv-alsaYAEiWjs.htm

Great piece on the LinkedIn IPO Controversy- critics claim too little of the company was released to the public and the moonshot result will hurt the market. There are always two sides to the story:

http://epicureandealmaker.blogspot.com/2011/05/jane-you-ignorant-slut.html

One of the reasons I am skeptical of analysts is they are always trying to make headlines with outrageous opinions- more proof with the Meredith Whitney Municipal Bond situation:

http://www.bloomberg.com/news/2011-05-19/meredith-whitney-trips-over-her-muni-default-tale-joe-mysak.html

A hysterical parody of the IMF chief by SNL:

http://www.nbc.com/saturday-night-live/video/dominique-strauss-kahn-cold-open/1329159/

Had to get a copy of a police report the other day from City Hall in Las Vegas, NV. Dealing with the City of Las Vegas government is like dealing with a third world country- 6 booths, 2 open, 1 officer who did not help anybody and was on the computer the whole time- took an hour- could have taken 2 seconds on line- State does not allow it- no regard at all for the public's time. Now they want to raise taxes on business services- wake up! Hopefully one day things will change. Have a great week.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Linked In Goes Public, Is The Private Placement Market A Bubble?, and is AIG Selling Tainted Goods?

LinkedIn goes pubic this week and I have to say I think they have a great service. As for the IPO, I will only reiterate what Ben Graham and Warren Buffett say about IPO's- anytime investment banks take something public, you can be pretty much assured a buyer is not getting a bargain. The real important issue for LinkedIn is can they go from 200-250 million and 20-30 million in profits today to 1 billion and 150 million in profits 5 years from now? Should be interesting to observe- here is a nice article on LinkedIn founder Reid Hoffman-

http://techcrunch.com/2011/05/18/attn-entrepreneurs-mark-zuckerberg-isnt-the-role-model-reid-hoffman-is/

Is there another bubble in the making- the private placement market?

http://online.wsj.com/article/SB10001424052748703509104576329540363889356.html?mod=WSJ_hps_sections_tech

Could AIG be selling investors a bill of goods- sure looks like the government wants out:

http://www.bloomberg.com/news/2011-05-18/government-prays-a-bigger-sucker-is-out-there-commentary-by-jonathan-weil.html

Anyone ever notice that during the course of a week, markets go down X, up 1/2X, down 1/2X, up X, and flat and the net of it is nothing happens most of the time, except middlemen make lots of money.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Trump and Cramer, Patience As A Strategy in Markets, New York Is the Next Silicon Valley, and An Unloved Way to Hedge Real Estate

Does any one else find it interesting the New York Times runs articles on the business ethics of Donald Trump and the popularity of Jim Cramer on the same day? Birds of a feather maybe, or maybe just typical NY Times journalism (used loosely)?

Always have thought Trump was hard to believe, and looks as though the real estate boom proved it. Cramer is a different animal, but I do believe he tries to help people get interested in and learn more about finance.

http://www.cnbc.com/id/43021608/

http://www.nytimes.com/2011/05/15/magazine/jim-cramer-hits-an-all-time-high.html?_r=1&ref=business

Nice article by Noah Kass on patience as a strategy-

http://www.thestreet.com/story/11117400/4/the-dangers-of-market-multitasking--ask-noah.html

Looks like New York City is really an attractive place for startups and venture capital- look out Silicon Valley:

http://www.bloomberg.com/news/2011-05-09/new-york-startups-rise-with-wall-street-talent-bondage-earrings.html

A way to hedge real estate values goes unused-

http://online.wsj.com/article/SB10001424052748704681904576321550230318740.html?mod=sf2tw

I hope everyone had a good weekend.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Going Public Ain't So Great, How Accounting Rules Affect Acquisitions, and the Pros and Cons of Groupon

Nice article in CFO magazine about the difficulties of going public for companies and how investment banks (naturally) affect the process-

http://www.cfo.com/article.cfm/14570187/c_14570395?f=magazine_alsoinside

Same magazine, different story about how accounting rules affect acquisition timing, especially when buying undervalued assets-

http://www.cfo.com/article.cfm/14570170/c_14570395?f=magazine_alsoinside

A very good pro and con debate on the business model merits of Groupon:

Pro-http://blogs.reuters.com/felix-salmon/2011/05/04/grouponomics/

Con-http://www.theatlantic.com/business/archive/2011/05/why-does-groupon-work/238706

Finally, doesn't the whole commodity complex seem like deja vu of a few years of when we saw 150 dollar oil, then it collapsed to 30 bucks- my take is the hedge fund and investment bank worlds just love the volatility and low financing rates- the margin increases by the commodity exchanges seem like they are having an effect. Commodities are very volatile due to the leverage used- be careful when investing in something like that.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA

U.S. Presses China on Yuan, U.S. Retail Sales in April, SEC Looks at High Frequency Trading, How Regulation Affects Poker Players, and How Hoops Resem

Great article on a legendary Stanford class that built facebooks apps- who says education is not profitable

http://www.cnbc.com/id/42948537

The U.S. wants the yuan to appreciate faster (same story for the last 10 years)- http://online.wsj.com/article/SB10001424052748704681904576311093851810736.html?mod=WSJ_hp_LEFTWhatsNewsCollection

A look at U.S. Retail Sales in April- http://www.bloomberg.com/news/2011-05-08/retail-sales-probably-rose-showing-u-s-consumers-bearing-higher-prices.html

The SEC is going to take a hard look at high frequency trading-

http://www.bloomberg.com/news/2011-05-07/high-frequency-traders-to-face-more-sec-scrutiny-chairman-schapiro-says.html

How government regulation affects poker players- http://www.lvrj.com/business/shutdown-of-internet-poker-hurts-players-121460779.html

The Dallas Mavericks, in a completely unexpected outcome, sweep the 2 time defending champion Los Angeles Lakers 4-0 in the Western Conference Semifinals. Many predicted the Lakers would win the title this year and those predictions are now proving incredibly inaccurate. Markets are similar in that it seems the more obvious a prediction is, many times the end results is completely opposite, which is why one has to stay away from predictions.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Osama vs the U.S., the U.S Military and Technology, Apple and the Apps Market, and Facebook Leads the Way for Small Businesses

The United States government, through its special operations Navy Seals division, killed Osama Bin Ladin on Sunday. There is an old saying in betting, when it is time to place your money, you bet on the biggest, strongest and deepest group. In the war on terror, my money is on the country with the best technology, the most resources, and the best military. Comparing 18th century courier messaging versus an integrated hi tech system with GPS, and satellites, wiretapping, databases, etc is absurd. It was only a matter of time before we got the bastard, and lets hope the military uses all the intelligence they gathered to get all their top leadership (murderers).

Here is a great article on the U.S. military starting to explore the use of smartphones and more video games for increased simulations on the battlefield-http://www.nytimes.com/2011/05/02/technology/02wargames.html?scp=1&sq=May%202,%202011%20Edition,%20Military%20using%20video%20games%20&st=cse

Another stunner- Apple leads the way in the app market-http://www.bloomberg.com/news/2011-05-03/apple-google-nokia-rim-may-generate-3-8-billion-in-app-sales.html

Facebook leads the way for small business in social networking:

http://blogs.wsj.com/in-charge/2011/05/03/facebook-is-tops-for-small-business/

Finally, we are in the meat of earnings season- results are all over the map, as always. One quarter does not make a good investment, or a poor investments. Keep that in mind if a company of yours misses its earnings estimate.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Small Businesses and Profits, Wall Street Has Lost It's Reputation, and High End Vegas Housing Troubles.

An interesting article at the NY Times on the loss of Wall Street firms reputations. If one has read any history on Wall Street firms, you would know they have always been knee deep in all kinds of shenanigans. The article mentions the good ol boy network, which exists in almost every field. The one thing which is not mentioned is how the creme usually rises to the top. Jaimie Dimon endured plenty of humiliation by being fired at Citi, for really no reason other than the nepotism of Sandy Weill, and had to wait a year to get the head job at Bank One, which was in the dumps. He then turned it around, JP Morgan bought it and made him head honcho, and a few years later, he is now the king of Wall Street. Patience, brains, toughness and doing your homework paid off for Mr. Dimon, as it usually does for those with those unique traits.

Here is the article: http://dealbook.nytimes.com/2011/04/26/as-wall-st-firms-grow-their-reputations-are-dying/

Nice summary by a business owner on the psychology of making a profit when you are a small business. Most businesses, contrary to what many people believe, are small businesses. Just a thought- no huge company became that way without first evolving froma startup, to a small business, and then a medium sized business, and then a monster.

http://boss.blogs.nytimes.com/2011/04/26/what-it-means-to-make-a-profit/?ref=business

Finally, as a Las Vegas born and raised here, it makes me a bit sad to see the state of our housing environment. I can recall for 15 years in a row, you could buy a house really cheap. Now you can again, and probably will be able to for a few more years. The only other pertinent comment is when you see markets going up 50% or so in a year, it might be a good time to wonder is this sustainable, or at least ask somebody else the question. If more people would have done that, well, they didn't and we are where we are.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

The Amazon Cloud Has a Rainstorm, Germany Benefits from the Euro. and Obama Talks Deficits

Amazon's Cloud computing services went down for a few days, and already critics are taking shots about how the whole movement to cloud services needs to be rethought. I don't think so. I believe it will only accelerate even more as the cost factor is too great:

http://seattletimes.nwsource.com/html/businesstechnology/2014851693_amazoncloud23.html

Germany is the big beneficiary of the movement to the Euro, according to the NY Times. What needs to be thought about is if Germany says 'Bye Bye' to the Euro, which is not out of the realm of possibilities:

http://www.nytimes.com/2011/04/23/business/global/23charts.html?_r=1&ref=business

Obama says the country's finances are unsustainable. It is like the D student saying he should study for tests. Don't tell me, show me. Actions speak louder than words Mr. President:

http://www.bloomberg.com/news/2011-04-20/obama-tells-facebook-audience-that-nation-s-finances-are-unsustainable-.html

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Ebay Goes Shopping Again, FastCompany's Most Innovative Companies, Major League Baseball and Debt, and The Prices of Las Vegas Housing:

Well, the events over the last week might put to rest the idea earnings are punk. Corporations just keep hauling in the dough.

Ebay goes shopping again, looking for more advertising growth:

http://online.wsj.com/article/SB10001424052748704570704576275273798500878.html?mod=WSJ_hpp_sections_tech

Always love the most innovative companies lists:

http://www.fastcompany.com/most-innovative-companies/2011/

Major League Baseball is like Greece:

http://blogs.forbes.com/monteburke/2011/03/23/special-report-inside-baseballs-debt-disaster/

Las Vegas Housing Prices Go Back In Time:

http://www.vegasinc.com/news/2011/apr/19/report-las-vegas-home-prices-1990-levels-sales-get/

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Elmo and Finance, Corporations and Apps, Republicans Deal on Debt, and Tom Brady

Hope everyone is having a great weekend. As a interested observer, I find it amazing the federal government is so concerned with telling people what they cannot do with their own money by shutting down on line gaming, yet the same government which is in debt to the tune of 50 trillion dollars (medicare and social security unfunded liabilities) cannot figure out to wean the country off of foreign oil- they can start by passing the Pickens plan. I don't necessarily always agree with Alan Abelson of Barron's on his consistently negative opinon on financial markets, but I do agree on his belief the politicians are the worst ever, especially our brainchildren.

On a positive side, for all parents, here is a nice article on Elmo and teaching kids finance:

http://www.nytimes.com/2011/04/16/your-money/16money.html?_r=1&ref=business

Think the digital revolution is not in full swing- here is a nice article in CFO magazine about companies starting to create their own portfolio of applications:

http://www.cfo.com/article.cfm/14564889/c_14565154?f=magazine_alsoinside

Love the spine guys- the Republicans will cut a deal on raising the debt sealing- big surprise-

http://online.wsj.com/article/SB10001424052748704204604576268881682315782.html?mod=WSJ_hp_MIDDLETopStories

For those of you who missed it, if you want to see why having belief in yourself, working hard, and taking advantage of your opportunities in a big way when you get them matter, watch the 1 hour show on Tom Brady. Charlie Munger says real opportunities don't come along that often, so when you get them, take a huge swing. Brady proves it- well worth watching.

http://search.espn.go.com/the-brady-6/videos/6

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

New Y H & C Investments Web Site

Just wanted to let people know Y H & C Investments has a new web site. I would be delighted if you would go to www.y-hc.com and take a look. Lots of old newsletters, blog posts, stock research, and everything one might be curious to find out about with regards to Y H & C Investments. Thanks.



Yale Bock, CFA

President, Y H & C Investments

Steinhardt vs Buffett, Why Demeanor Matters, Education in India vs US, and U.S. Retail Remains Strong

Another interesting week is coming to a close, and the first part of the week was noteworthy in that a couple of legendary investors were the topic when one took some real shots at the greatest

investor of our time, Warren Buffett. Michael Steinhardt is a ex-hedge fund legend turned philanthropist. He outperformed the S & P 500 for many years and made millions of dollars for investors. He absolutely

trashed Warren Buffett on monday during his time on CNBC:

http://video.cnbc.com/gallery/?video=3000014942

http://video.cnbc.com/gallery/?video=3000014541

My comment on the matter is while Steinhardt has some valid points, his demeanor during the interview undermines his arguments about Buffett. Steinhardt comes off as a bitter, jealous man when he has no need to be. There are inconsistencies with Buffett which Steinhardt accuratley points out. However, his questioning of Buffett's investment results vs the S & P 500 is stupid as everything can be verified. Buffett's demeanor is part of why so many admire the man. In the height of the 2008 downturn, Buffett was investing huge sums, and encouraging others to do so as well, and at this point, well the result speaks for itself. One can have very valid, logical arguments, but if it is couched in dourness, the arguments lose effectiveness.

Many people have bemoaned the lack of U.S. competitiveness in education, however, the facts don't necessarily indicate the U.S. is a lost cause. Very good article in the journal on India's education issues:

http://online.wsj.com/article/SB10001424052748703515504576142092863219826.html?KEYWORDS=education+in+India

Retail sales surprised today- hard to see things not getting better, though 110$ oil and higher food prices don't help the cause:

http://www.nytimes.com/2011/04/08/business/08shop.html?_r=1&ref=business

Hope everyone has a good and safe weekend.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Buffett vs the SEC, The World's Assets are Currently Highly Correlated, Hating the Dollar, and Patience-

Final four weekend was interesting as Butler continues to win with good defense, good shot selection and not turning the ball over. When you don't mistakes, good things can and usually do happen. The whole world will be rooting for them tomorrow night vs UCONN.

The SEC takes on Warren Buffett over stocks he has not sold- I think I know who will be right on this one- thanks to Ajit Vakil of the Value Investing Congress for posting this: http://www.linkedin.com/news?viewArticle=&articleID=459040493&gid=2217082&type=member&item=49198963&articleURL=http%3A%2F%2Fwww%2Einvestingdaily%2Ecom%2Fid%2F18490%2Fsec-to-warren-buffett-we-know-how-to-value-stocks-better-than-you%2Ehtml%3Fcigx%3Dd%2Ekac%2Cstid%2E4475%2Csid%2E242881%2Clid%2E7%2Cmid%2E2663&urlhash=bJej&goback=%2Egde_2217082_member_49198963

Nice article in the NY Times about the current high correlation of world assets:

http://www.nytimes.com/2011/04/03/your-money/03stra.html?_r=1&ref=business

Finally, the world continues to hate the dollar, imagine that:

http://online.wsj.com/article/SB10001424052748703712504576237110549117704.html?mod=WSJ_hp_LEFTWhatsNewsCollection

One thing to finally remember, things always change, it may take time, but they always change. Hope everyone has a great week- waiting on getting the new Y H & C Investments web site up and running. As always, be patient.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Great Hoops, Buffett Gives Investment Advice, Watching Even More Video On Line, Longer Too, and the Battle for Online Poker in Nevada.

Well, it was a great weekend of college basketball as Butler vs Florida, Kentucky and Carolina, and Arizona vs Connecticut were all great games- hope everyone enjoyed them.

It should be an interesting week as the markets are recovering from the kitchen sink- nuclear issues in Japan, Mideast craziness (it seems like it never ends- the problem is the cure may be worse than the disease in Egypt, certainly), price of oil, commodity pressure, a tapped out consumer (wonder about that one). Anyway, here are some interesting stories which took place over the weekend.

Seems like Warren has some investment thoughts to consider:

http://www.bloomberg.com/news/2011-03-25/buffett-says-avoid-long-term-bonds-tied-to-eroding-dollar-value.html

People are watching even more video on line, just slightly, but a lot longer:

http://www.nytimes.com/2011/03/28/business/media/28drill.html?_r=1&ref=business

Finally, the battle in Nevada over regulating on line poker gets even fiercer- just wonder how it plays out:

http://www.lvrj.com/business/who-has-big-stack-in-online-poker-118731549.html

Finally, the last week of the quarter always brings some interesting surprises, hopefully all good. Have a great week everyone.



As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Companies Must Have A Digital Strategy, Bank of America Disappoints Investors (as always), Nuclear Heroes in Japan, and Las Vegas Home Prices:

I hope everyone is having a great week. Listened to a shareholder meeting today and my feeling about today's business environment, especially for consumer based companies, is without a comprehensive digital strategy which can be implemented in a variety of channels, an enterprise is destined to struggle for growth. Not to state the obvious, but anyone who believes smartphones, and tablets and companies like Twitter, Facebook, LinkedIn, Google, YouTube, etc are not going to influence consumer behavior in a more profound way as time goes on are kidding themselves. The number of people who are connected, and a business can have access to, or communicate with, through the internet and digital methods is just so overwhelming and the velocity of communication is so quick, billions if dollars and market share in so many markets depends on how well a company can integrate their digital strategies into day to day operations and execute their plans. Yes, Twitter may not be a 10 billion dollar revenue company, but the affect it has on people and perceptions make it incredibly powerfu. Facebook is value at 50-65 billion dollars, which from an operational standpoint is excessive, but considering there are 500 million people using the platform, well, there is a ton of value there, maybe not 50 billion worth, but you can be sure it is a whole lot- here is Bill Miller from Legg Mason talking about Facebook on CNBC:

Investing in the Next Big Thing

In what seems like the 100th time in a row, Bank of America lets investors down. Just my opinion, but they might have set a record for the worst decade for a company ever. Here you go: http://finance.yahoo.com/news/In-blow-for-BofA-Fed-rejects-apf-2538718906.html?x=0&sec=topStories&pos=7&asset=&ccode=

An uplifting story about real heroes, the boys in Japan trying to prevent a real nuclear disaster: http://www.bloomberg.com/news/2011-03-24/nuclear-warriors-recuperate-on-japanese-vessel-in-fight-to-avert-meltdown.html

The hits just keep on coming with Las Vegas housing prices- check back in a few years as things don't like they will change much (let me know if you think I am wrong!): http://www.lvrj.com/business/las-vegas-home-prices-down-5-2-percent-from-last-year-118443994.html

Please share your opinion on any companies you think have a great digitial strategy, and execution. Be well.



As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

ATT & T Mobile Wed, Blurring Lines of Web and TV, Tech Wants Lower Taxes, NY Times Pay Model Flexible, and Investing Lessons in Hoops-

Well, I hope everyone had a nice weekend. Great college basketball helped people endure the news about Libya, and the ongoing situation in Japan. I must say, I think the workers and engineers who are laboring to solve the issue at those nuclear facilities deserve all the salaries of the NBA, NFL, and MLB players combined. Those people are real heroes. ATT and T-Mobile combine in the US, and judging from customer responses, many are disappointed- http://online.wsj.com/article/SB10001424052748704433904576212810008230654.html?mod=WSJ_hp_LEFTTopStories

Entertainment on the net and tv continue to merge as the lines get even blurrier:http://online.wsj.com/article/SB10001424052748703292304576212372568499988.html?mod=WSJ_hp_LEFTWhatsNewsCollection

What a shock, execs want lower corporate taxes, this time the tech guys- understandable, and if they don't get them, well-http://www.bloomberg.com/news/2011-03-18/technology-companies-lobby-u-s-lawmakers-for-lower-corporate-taxe-rates.html

Let me know what you think- should corporations pay lower corporate taxes to help US competitiveness regarding tax rates with other countries?

The stodgy NY Times adopts a flexible pay model for the internet version:http://www.nytimes.com/2011/03/21/business/media/21times.html?pagewanted=2&_r=1&ref=business

Finallly, in watching the Butler-Pittsburgh NCAA game (well played), and the North Carolina-Washington game (also pretty well played), it struck me how similar hoops and investing are very similar. In baskeball, teams which are smart and don't make mistakes, yet are opportunistic when they can be, typically win and win big. When you make dumb mistakes, you lose. Butler played well and had one stupid mistake, and Pittsburgh made an even dumber mistake and cost them the game. With investing, avoiding dumb mistakes regarding capital allocation usually helps returns as you minimize major losses. Oh yes, with the time tested caveat that past performance is not indicative of future results- imagine that. Ok, hope everyone has a great week.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Serious Stuff in Japan, 48$ And You Can Meet Buffett, Nasdaq Bids for NYSE, and Facebook Takes on Groupon

Well I hope everyone had a good weekend because the start of the week looks like this ones going to be a doozy, and not in a good way. A look at Asia on Monday sees the Nikkei down 11%, and the futures for the US Markets are uuuuuugly, with serious red dotting the landscape-like Dow down 250, NDAQ down 50- you get the drift. The situation in Japan is not good, with the loss of life probably over 50K, no power, food, or gas for 1.5 million people, and to put the cherry on top, the nuclear reactors looking like they are going to blow- lovely. Here is a little more from Bloomberg:

http://www.bloomberg.com/news/2011-03-15/debt-tsunami-fights-radiation-for-bigger-risk-commentary-by-william-pesek.html

Here is Buffett being Buffett, how else could you meet the world's greatest investor, probably ever? Pay 48 bucks for a auto policy- not kidding:

http://www.bloomberg.com/news/2011-03-14/berkshire-dangles-48-auto-policies-to-meet-buffett-in-india.html

The Nasdaq is going to give it a whirl- making a bid for the NYSE:

http://online.wsj.com/article/SB10001424052748704893604576200832791522972.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Finally, the big boys are starting to heat up- FB vs Groupon- interesting tussle in the coupon wars-

http://online.wsj.com/article/SB10001424052748704893604576200780657056862.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Let's hope and prey things get better in Japan, especially for families who are missing loved ones.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

John Malone and Land, Zynga Insight, Vegas Gaming Revenues, and Schizo’s on Wall Street-

Thursday was an interesting day as the Republicans in Wisconsin finally did the deed, which the Governor will sign soon. The failure of the turnip truck politicians in Congress that still have not come up with an energy plan, so the public and the financial markets have to endure the current situation, an 11 Trillion dollar economy importing 40-50% of our energy sources from people who hate democracy and free market principles. What will it take for our “elected representatives (I use the world very loosely)” to wake up- start with passing the Pickens plan on natural gas, even though Boone is talking his book.

Anyway, John Malone becomes the nations largest private land owner- the smart stay smart, and get smarter, and in this case, and others, get wealthier. Very dignified man.

http://blogs.forbes.com/monteburke/2011/03/10/john-malone-overtakes-ted-turner-as-largest-individual-landowner-in-the-u-s/

Next, some insight into the world of Zynga, the Facebook game with millions of users:

http://professional.wsj.com/article/TPST00000020110220e72k000ia.html?mod=wsjpro_searchfree_manualcollection

Gaming revenues in Nevada are down a bit in January- is Vegas recovering? Really? I would say yes, but I am biased.

http://www.lvrj.com/business/nevada-gaming-revenue-down-in-january-117733658.html

And another about a Nevada assembly official moving to pass I-gaming in Nevada:

http://www.lvrj.com/business/las-vegas-assemblyman-introduces-bill-to-legalize-internet-poker-117761138.html

Finally, how about the schizophrenics on Wall Street, one day the economy is recovering, next day, China exports too little, imports too much, jobs number not as good, sell baby sell. Maybe the issue is the emotional stability of the big money, not the general public. Reminds me of my daughter- call her Superstar- smiling one second, screaming the next. One would expect more from well educated adults, but, presents good buying opportunities from time to time. Hope everyone has a great weekend.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Internet Gaming in States, USAT Has a Big Month, Kessler’s New Book, ‘Eat People’, and A Cool Startup

Well, today is an interesting day as business information just rolls in. First, NJ Governor Christie vetoes the internet gaming bill the legislature passed. I predict it gets revised and passes again. Also, another few states like Iowa, Florida, and California looking at internet gaming passage as well. I think these states have such large deficits the moral reservations and federal ban are going to get overturned by financial necessity. Here are the links:

http://www.lvrj.com/business/new-jersey-governor-vetoes-online-gaming-bill-117339943.html

http://www.lvrj.com/business/iowa-politicians-start-debating-measure-to-legalize-net-poker-117304103.html

Next, here is a small company which I kept an eye on, no I did not invest in it. but it has a bright future, and naturally the stock popped today, pretty big too.

http://finance.yahoo.com/news/USA-Technologies-Achieves-bw-1812770867.html?x=0&.v=1

Read Andy Kessler's new book, Eat People, and it is good, like all of Kessler's stuff. If you are an entreprenuer, recommend it highly.

Finally, if you want to look at what I think is a very cool startup, take a look at this company-http://www.smartpayinfo.com


If you have any opinions about these articles, or would like to list a cool startup, please post. Hope all is great and have a good day.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

US Economic & Financial Markets Outlook: The Private Sector vs. the Public Sector, and the Digital Decade Changes Operations and Growth Rates for All

February 2011 was an interesting month in U.S. financial markets as continuing optimism about an improving U.S. economy led to 3 weeks of gains on the three major indexes of U.S. stock markets. Concerns about a supply shock in oil because of unrest in the Middle East led to a 2-3% correction during the last week of February.

The most publicized event currently gripping the U.S. economy is the dispute taking place in Wisconsin which revolves around the government’s desire to cancel collective bargaining rights with public unions. The fight is center stage for the same principle in 17 other states across the country. I think the central issue facing the country, which these arguments are a byproduct of, are the massive deficits local, state, and federal governments have burdened the public with, and more importantly, how to rectify them. For more information on the deficits, look at this article in the Wall St Journal-

http://online.wsj.com/article/SB10001424052748703408604576164441153633876.html?mod=WSJ_Election_LEFTSecondStories#project%3Dstates_110224%26articleTabs%3Dinteractive

Many states have budget deficits of 20% or more of their total revenues. If one compares private enterprise in the U.S. to public entities, it is an exercise any junior high student can understand. Private businesses (small non public companies, public companies, and large private companies) currently have balance sheets full of cash, are generating more operating and net income than ever before, and are run with greater efficiently than maybe any other time in our country’s history.

Conversely, the public sector is loaded with debt, unfunded pension liabilities, and enormous health care costs at every level-local, state, and federally. What is disconcerting for many private workers is public sector employees make more money than comparable jobs in the private sector, and in many cases for doing less productive work. This is why the battle in Wisconsin and other states across the country regarding the collective bargaining status of public unions is critical. It represents an opportunity for government to reduce costs to a more manageable level in order to balance budgets. The bottom line is governments at all levels need to look at the private sector, and work with all businesses, to help get the public sector’s fiscal house in order.

In looking at private enterprise, I see the ‘Digital Decade’ as massively changing how businesses can operate more efficiently and grow at much quicker rates than ever before. With the rise of social networking, smart phones, tablet computing and connected sites like Facebook, Twitter, LinkedIn, and many others, connected tools help businesses improve all areas of their enterprises. Companies make their supply chains more efficient, customer acquisition costs are far lower, sales productivity through customer relationship management is much more productive, and customers and businesses maintain much closer contact. As a result, investors see much higher growth rates for both old and new businesses.

Moreover, many pre public companies grow at enormous rates, making investment in these situations potentially very profitable, but also with large risks. An investor must consider the new digital reality when thinking about placing capital. One only has to look at a company like Groupon, which started in 2008 and has achieved nearly 1 billion in sales, or Zynga, a software game developer based on Facebook, generating 800 million in sales and 400 million in profit, to understand how quickly it is possible for a business to reach scale using the current digital tools.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Stock Exchanges Withering, Group Dating in India, and Value Investing by Tillman Fertitta-

Hi All,

Hope everyone is having a good long President’s day weekend. With the events in Wisconsin and the Middle east, I thought I would mention a few interesting videos and articles. First, here is video discussing the lack of relevance of stock exchanges because of the rise of private party exchanges and black box trading-

http://video.nytimes.com/video/2011/02/17/business/100000000648543/viewpoints-wall-street-s-dead-end.html

Next, a very nice article in the New York Times about the rise of a group dating site which has had success in India but originated in the U.S, where it has struggled.

http://www.nytimes.com/2011/02/20/business/20ignite.html?_r=1&ref=business

Finally, Golden Nugget and Landry’s owner Tillman Fertitta practices value investing by buying into Atlantic City, which may put pressure on the MGM’s sale price of the Borgata-http://www.lvrj.com/business/recent-deals-may-mar-mgm-s-borgata-sale-116557203.html

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

The Cell Phone Market in India, and Mr. Buffett gets an award and gives an Investment Lesson:

So, I was reading a really good McKinsey report on the Cell Phone Market in India (possible investment thesis). The gist of the matter is India is underpenetrated in cell phone usage relative to other BRIC countries, especially China. Wonder why Google, Facebook, and others are so intetested in cell phones- read the article: https://www.mckinseyquarterly.com/Marketing/Digital_Marketing/Can_India_lead_the_mobile-Internet_revolution_2746

In another interesting development, Warren Buffett gets the Presidential Medal of Freedom from the White House. The article has a few interesting investment stories:

http://www.cnbc.com/id/41604412

I hope everyone is having a good week and I would love to hear any thoughts about these articles.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Lady Gaga Cracks Up (Literally), Busting Up Big Pharma, and Las Vegas Housing

So, I have a little variety going tonight- saw the headline and cannot believe it, Lady Gaga, after her appearance on 60 minutes, literally makes an appearance in an egg- gotta give it to her, she knows hot to market herself (bigtime):

http://awards.music.yahoo.com/blog/95-shoulder-horns-add-shock-to-lady-gagas-otherwise-bland-grammy-performance

Next, a really good article in this week Barron’s on busting up Big Pharma in order to increase shareholder value- I definately agree with that approach:

http://online.barrons.com/article/SB50001424052970204098404576130374232056878.html?mod=BOL_hps_mag#articleTabs_panel_article%3D1

Finally, if you are interested in the eye of the inferno in the housing market, today’s Review Journal has a nice article on the current state of housing in Vegas:

http://www.lvrj.com/business/parts-of-valley-see-improvements-in-home-prices-in-2010-116105684.html

Please give us your opinion about any of these articles-

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Wonder What Mr. Buffett Would Think of This?

I wonder what Mr. Buffett would think of this:

http://bucks.blogs.nytimes.com/2011/02/07/the-odds-of-picking-the-next-apple/#more-39191

So don't even try for the next Apple- Garbage- What do others think of this- Please Share your thoughts.

As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments

Jobs Report Tomorrow

Interesting jobs report coming tomorrow-146K new jobs expected- seems like forever since the economy had a large beat- any predictions?


As always, on any company mentioned here, past performance is not a guarantee of future returns. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.

Yale Bock, CFA
President, Y H & C Investments