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