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