Posts filed under “Analysts”

Weekend Miscellany

Invictus here. I have been reviewing a variety of assorted miscellaneous items:

Likely flat-earther/creationist Peter Wallison continues to believe that if he blames Fannie, Freddie, and CRA enough times, eventually it will be true that they — and they alone — were the sole causes of the financial crisis.  His inability to back down in the face of overwhelming evidence is, frankly, quite remarkable (in a what-sort-of-psychological-disorder-is-that kind of way).

Jerry “Bush Boom” Bowyer has a new book out, thereby proving conclusively that some people have no shame.

Henry Blodget took a personal interest in the Vanity Fair article by Michael Lewis about a Merrill analyst — Philip Ingram — who was allegedly terminated for a spot-on report about trouble at the Irish banks.  Henry, who I’d swear once said or wrote that he’d never again discuss his banishment from the securities industry and/or the fines he paid, can’t help but once again proclaim his innocence:

(For example, in an email, I once referred to a stock that Merrill rated “Buy” as a “piece of junk.” Spitzer said this proved that I did not think investors should buy the stock. In my week of testimony at Spitzer’s office, I explained my side of this story–that when I wrote the email I was reacting to inaccurate negative information that I had just been given about the company, that the stock had already fallen 90% from its high and therefore was probably fairly described as a piece of junk regardless of what one thought the stock might do in the future, that stock ratings are an opinion about a stock’s “appreciation potential over the next 12 months,” not assessments of a company’s quality, a summary of past performance, or an action recommendation for all investors, and, perhaps most persuasively, at least to me, that I wasn’t actually covering the stock at the time. But these explanations had fallen on deaf ears.)

Here’s the SEC’s side of the story (Spitzer’s complaint apparently not available on the web).  They saw things a wee bit differently.

I listened to the first 45 minutes of two hours worth of a Stan O’Neal interview by the FCIC before I had to puke.  Although of course it was only audio, I got a very good sense of Stan’s looks:

(Source:  Merrill Lynch Photo Archives)

Finally, a word about the battering that David Rosenberg is taking of late for having “missed” an almost 100% move in the stock market.  If only.  While no one would ever confuse Dave with a bull, the fact is that stocks are not the only asset class and that even as it relates to equities, Dave has long advocated what he called Safety and Income at a Reasonable Price (SIRP) — you can find it in many of his daily missives.  For the sake of discussion (and based on his writings), let’s call SIRP a focus on larger cap, stronger-balance-sheet, dividend paying companies.  That said, let’s look at some investments that Dave has recommended over the past couple of years:

Gold and Silver — Dave has been bullish gold — and even more so silver — for quite some time.  Anyone who committed some capital to this space has done well; I was buying SLV — on Dave’s call — since it was a pre-teen.  (At one point DR wrote that he felt silver had — relative to gold — more upside.  Enough said.)

Bonds — If you bought most any bonds, you’ve done okay (though you’ve clearly given some gains back of late).  Not many were calling for rates — especially 10-years and out — to fall as low as they did and, if you were lucky enough to sell at or near the top, you had a very nice trade.

Stocks (SIRP) — As a proxy for Dave’s SIRP strategy, let’s take a look at an index many might not even know exists — the S&P500 Dividend Aristocrats which, according to S&P:

The S&P 500® Dividend Aristocrats index measures the performance of large cap, blue chip companies within the S&P 500 that have followed a policy of increasing dividends every year for at least 25 consecutive years.

Mind you, only about 40 stocks make the grade — it’s a very elite little club, but exactly the types of companies Rosie’s been recommending for quite some time.

Here’s what that index — including dividends — looks like over the past five years (which is what the file S&P sent me contained; looks very much like a fresh five-year high):

(Source:  Standard & Poors)

So if you’d allocated assets based on Dave’s recommendations over the past couple of years, the fact of the matter is you’ve done okay, which is why I don’t understand all the hyperbole over his “missed” call:  Stocks are not the only asset class and he’s never suggested being out of the market entirely.  And please, no need to weigh in if you don’t read his reports on a daily basis — be mindful of BR’s comment caveat.  (Awaiting commentary from those who bought at the 666 intraday low on March 6, 2009; kudos to you.)

For those who want the Dividend Aristocrats constituent list (and are too lazy to click through to the link I provided), here it is:

Category: Analysts, Current Affairs, Investing, Markets

Conformism and Public News

Get your geek on: We study a model where investment decisions are based on investors’ information about the unknown and endogenous return of the investment. The information of investors consists of endogenously determined messages sold by financial analysts who have access to both public and private information on the return of the investment. We assume…Read More

Category: Analysts, Investing

Dopey Cowboy’s Broker Wars

This might be a little “inside baseball” for readers who don’t work on a trading desk, but the Dopey Cowboy has a great take on Institutional trading at Broker Wars. Here are my favorite riffs on > > The full run of amusing logos can be found at the Dopey Cowboy

Category: Analysts, Humor, Trading

Surprisingly Strong Q4 2010 Revenues

One of the knocks on last year’s earnings was that it was cost cutting was driving profitibility — not organic revenue growth. The recovery could not turn into an expansion, we were told, without solid revenue gains. Earnings may have surpassed Wall Street expectations for seven straight quarters, but sales have trailed forecasts since 2008….Read More

Category: Analysts, Cycles, Data Analysis, Economy

Merrill Lynch’s Horrific Irish Bank Adventures

In Friday’s reading, I mentioned Michael Lewis’s piece in Vanity Fair: When Irish Eyes Are Crying. It is your must read of the weekend. The problems in Ireland makes the woes in Greece look merely like a bounced check. And Ireland’s eejit politicians, FOLLOWING THE ADVICE OF MERRILL LYNCH, turned the entire population of the…Read More

Category: Analysts, Bailouts, Really, really bad calls

Time to Defang Moody’s and S&P

“Fundamental Analysts: You don’t need them in a Bull market, and you don’t want them in a Bear market.” > I started out in this business on a trading desk. The head of trading who trained me was a crusty no bullshit former Marine Jungle Combat Instructor. He was not keen on Fundamental Analysts, and…Read More

Category: Analysts, Bailouts, Regulation

It appears that the web editors at the AEI have been busy. Peter Wallison, currently a member of the Financial Crisis Inquiry Commission, was also the co-director of AEI’s Financial Deregulation Project, along with his co-director, Columbia professor Charles Calomoris. Over at Calomoris’s bio, his status as co-director of AEI’s Financial Deregulation Project is the…Read More

Category: Analysts, Bailouts, Credit, Politics, Real Estate

Yahoo Finance + StockTwits = Message Boards 2.0

Two firms I have more than a passing relationship — Yahoo Finance and StockTwits — have formally announced a deal to place the curated StockTwit content directly onto Yahoo Finance. (I am a regular on Yahoo Finance, and FusionIQ offers several products in the stock twits marketplace). Lets use Google as an example of what…Read More

Category: Analysts, Trading, Web/Tech

Top Economic Forcasters

Here are Bloomberg’s run of Wall Street’s top economic prognosticators. Click to open PDFs • Top Personal Spending Forecasters • Top Unemployment Forecasters • Top GDP Forecasters • Top CPI Forecasters • Top Overall Forecasters Yes, I know that calling someone a top Wall Street’s top economist is like saying they are the skinniest guy…Read More

Category: Analysts

WSJ: Expert Networks = Insider Trading

The WSJ occasionally buries huge stories in its much less read weekend edition; recall the option backdating investigation in 2006. This past weekend was a classic example of this: “Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation, according…Read More

Category: Analysts, Legal, M&A