Posts filed under “Analysts”

Mystery Writer

In today’s Baron’s, Mike Santoli discusses “A forecaster worth listening to sees more gains ahead.” He has penned missives such as “A Bear Is in Sight” and “Why This Rally Is Really Different”

Santoli adds:

This guy, though, is the one whose dispatches I saw as the very uncertain market trajectory took shape, illuminating the real-time contrast between his high levels of conviction and clarity and the deep ambivalence and confusion enfolding most of us.

He doesn’t claim any magic formulas or proprietary systems. His approach is eclectic and inclusive, ranging among economic, technical, historical, valuation and sentiment inputs. He’s in the business, as a broker, and shares his missives with clients. And he still doesn’t want to be identified. But his current thinking isn’t less valuable for being presented without attribution.

Two questions:

1) Most compliance departments go beserk over this stuff. Do many retail brokers do these sorts of emails without their firms knowing? Any insights?

2) I am curious if anyone knows who this broker/manager is. You can contact me directly, rather than post his name in comments.

>

Source:
A Really Different Rally, Again
MICHAEL SANTOLI
barrons, December 12, 2009

http://online.barrons.com/article/SB126057496212588073.html

Category: Analysts

The Folly Of Economic Forecasts

> Interesting discussion on one of my favorite subjects — The Folly Of Forecasts — on NPR with Chicago/Austrian economist Russ Roberts, now at George Mason University. click here for audio > Previously: Apprenticed Investor: The Folly of Forecasting Barry Ritholtz TheStreet.com, June 07, 2005 http://www.thestreet.com/story/10226887/apprenticed-investor-the-folly-of-forecasting.html Source: The Folly Of Economic Forecasts NPR, December 7,…Read More

Category: Analysts, Economy, Really, really bad calls

When Economists Collide – Part II

Invictus is a street insider, a long-suffering “lifer” whose close work with Wall Street research teams gives him unique insight into the current strategist spat. Enjoy: ~~~ It was noted back in October that a feud seemed to be simmering between the former Merrill Lynch Chief North American Economist David Rosenberg (now at Gluskin Sheff)…Read More

Category: Analysts

Modern Market Myths

Barron’s Mike Santoli points out a short list of market myths that currently seem to have currency amongst the investing and chattering classes. The five are: • “The dollar is collapsing.” • “Portfolio managers are trailing the market and might need to rush into stocks.” • “The hoopla over Dow 10,000 shows that Wall Street…Read More

Category: Analysts, Markets, Psychology

King Report: Goldman’s First Call ?

> Citigroup and BAC jump on Friday afternoon; JPM and then the S&P 500 followed: > > Stocks tanked on Friday with the ugly employment report. But stocks rebounded, led by a big rally in major banks stocks. Yesterday Goldie touted the big bank stocks. Did you get a Friday afternoon call? The S&P 500…Read More

Category: Analysts, Technical Analysis, Think Tank

Goldman Sachs: The “Smart” Money?!

U.S. stocks rebounded today, aided by a rally in financials. Why was the group strong? Because a team of analysts at a well-known Wall Street firm upgraded the large banks sector. And why did they do that? Bloomberg gives us the lowdown in “Wells Fargo, Biggest U.S. Banks Raised by Goldman”:

Wells Fargo & Co., JPMorgan Chase & Co. and the biggest U.S. banks were raised to “attractive” from “neutral” by Goldman Sachs Group Inc., which said share prices don’t reflect prospects for earnings growth.

“We believe this difference in earnings power hasn’t been fully reflected in share prices,” New York-based analysts led by Richard Ramsden wrote in a note to clients today. “We estimate that normalized earnings for large banks are 39 percent higher than in 2007 despite the 36 percent decline in share prices.”

Wells Fargo, based in San Francisco, was upgraded by Goldman to “buy” from “neutral” after its tangible assets per share increased 70 percent in the second quarter. “The reason is simple: Wells bought Wachovia at a depressed price,” Ramsden said. Banks have increased earnings with acquisitions that will add to earnings over the “long term,” he said.

Wow, pretty powerful stuff, eh? Then again, maybe not. You see, if you go back and look at what Goldman said in late-January, when most bank stocks were trading at far lower levels than they are now, the firm wasn’t exactly upbeat on the group. Again, Bloomberg had the details in “U.S. Banks May Be the ‘New Utilities,’ Goldman Says”:

Large U.S. banks risk becoming the “new utilities” as governments introduce greater regulation and force lenders to increase capital ratios, Goldman Sachs Group Inc. analysts said.

Return on equity at the biggest U.S. banks will be limited by higher capital requirements and greater regulatory controls, analysts led by Richard Ramsden in New York said in a report to clients today. The measure of how effectively banks invest earnings may shrink to between 10 percent and 12 percent, from the 15 percent banks generated between 1990 and 2006, they said.

U.S. Bancorp was cut to “sell” because the Minneapolis- based company, while “a good bank,” is already highly valued, the analysts wrote. Goldman also re-instated its sell rating on Citigroup Inc., saying “investors should avoid the stock given no core earnings power clarity.”

Bank of America Corp. was cut to “neutral,” the same rating given Morgan Stanley, Wells Fargo & Co. and PNC Financial Services Group Inc. The analysts recommend buying JPMorgan Chase & Co., which they said may show earnings improvement as the economic cycle turns.

Large banks, particularly Citigroup, U.S. Bancorp and Bank of America, have “thin” capital cushions compared with Goldman’s estimates for losses in the industry, the note said.

Read More

Category: Analysts, Contrary Indicators, Think Tank