Monday, August 31, 2015

Investing in Volatile Times

When you see this level of volatility,you don't get confident;you get nervous,said CNBC host and master investor Jim Cramer.I think oil's going to be lower longer.It isn't going to be positive.*
Do you like something more because billionaire activist investor Carl Icahn's in it?Yes,you do.He's taken a stake in miner Freeport-McMoran.Freeport's run more like a private company.*
One billion users logged into Facebook on Monday 24 August.Social media is the way to go.Who is social media?Google and Facebook.Link with someone who has a lot of followers,and your business goes up.It just works.I look at Facebook and I think,what an unbelievable business.Do thy have to pay the NBA for rights?What a marvelous business model.*
I'm a believer in Disney and its CEO Bob Iger.You do have "Star Wars,"which is very big.You do have theme parks.I'm still a believer in what Bob Iger's doing,Mr.Cramer repeated.*
Freeport-McMoRan (FPT),Facebook (FB),Google (GOOG),Walt Disney (DIS)

Monday, August 24, 2015

Leading Banking Analyst Cautions Investors During Downtrend

Unless buying materialises,says Richard X. Bove,vice president of equity research at Rafferty Capital,LLC in a note to investors,there is nothing to stop a massive move to the downside due to the lack of liquidity in the markets.At this moment,I would strongly caution to remain on the sidelines until a definable source of new funding is determined to maintain or bolster stock prices.
At its base,the key problem is that the historic protections that once existed in the markets to prevent massive downslides have been removed.This country's claim that it has deep and liquid markets is being put to the test.*
Mr.Bove is bitterly critical of the plethora of new regulations that have been imposed on the banking industry post-financial crisis.These include the US Congress passing the Dodd-Frank Act;Basel III,Supplementary Leverage Ratio;Liquidity Coverage Ratio;and the Orderly Liquidation Authority;and the Total Loss-Absorbing Capital Regulation.The impact of these regulations,rules and pieces of legislation has been the complete takeover of the banking industry by the government.In my view,the industry has been effectively nationalised,Dick Bove said in a December 2014 interview,in which he also predicted that banking industry regulations would limit the earnings of banks in the long term.It is these regulations that have also ultimately restricted the flow of funds to the point of making the markets vulnerable to collapse.

Richard X. Bove | Rafferty Capital Markets, LLC | Equity Research Analyst Profile

Richard X. Bove | Rafferty Capital Markets, LLC

Monday, August 17, 2015

Tesla Motors;Toyota Motors;Cambia Portland Classic

Morgan Stanley has raised the price target for Tesla Motors stock to 465.00 from 280.00.They believe Tesla may triple its revenue by 2029.*
I think that Morgan Stanley,did you need to be that excessive?asked CNBC host and master investor Jim Cramer.It's cynical to use these price targets,telling the shorts they need to cover like that.
The Empire State manufacturing report-it's terrible,Cramer noted.The factories are doing not that well.*
Meanwhile,Toyota Motors is taking a hit from the chemical blast tragedy in Tianjin,China,which killed at least 117 and injured untold others,including 50 Toyota workers.Three of Toyota's production lines will be idled through at least 19 August because of the Tianjin evacuation.
Tianjin is the company's biggest production hub in China,and more than a three-day delay could have a material affect on the business.*
Canadian Brooke Henderson,17,won her first LPGA tournament at the Cambia Portland Classic in Oregon Sunday.She mastered the Columbia Edgewater Country Club course with an eight-stroke victory,providing relief to fans disappointed by Canadian golfers' scarce wins in recent years.*
Tesla Motors (TSLA),Toyota Motors (TM)

Monday, August 10, 2015

21st Century Fox:A New Generation of Leaders

Media and entertainment titan 21st Century Fox has reported a mixed earnings picture for Q2 2015.The company earned 0.39 a share versus the 0.37 estimate,but missed on revenue,reporting 6.21 billion dollars versus the 6.46 billion estimate on currency fluctuations.21st Century Fox owns the most-watched Fox News,Fox Broadcasting and 20th Century Fox studios.The studios' revenue was down because they sold their pay-tv businesses in Italy and Germany to British Sky Broadcasting Group.Even minus that transaction,revenue was still down by 635 million.
Fox cable operating income rose 1% to 1.22 billion on higher affiliate and ad revenue,but the film division suffered when 2015's "Spy" and "Poltergeist" didn't do as well as 2014's "X-Men:Days of Future Past" and "Rio 2."The TV business dropped by 32 million down to 113 million on lower ad revenue as "American Idol" and "The Following" lost viewers.So the company lost some battles in the content wars.*
Lachlan Murdoch,son of Fox's Australian founder Rupert Murdoch,and now executive co-chairman of the firm along with his father,summed the situation up in the earnings conference call:
My brother James and I have been immersed in 21st Century Fox in all its iterations for at least the last 25 years,Mr.Murdoch said.This background and context will serve us well as we partner to lead 21st Century Fox through a time of accelerated industry change.Every aspect of our business is being affected by increasingly rapid change from how we develop content,to delivery,to consumer engagement,and of course,to how we monetise it all.The scale and speed of this change will,to some,be overwhelming.But a key underlying trend is important to all of them:More people are now watching more quality story telling than ever.They are just consuming it differently,given the growing array of options available to them.This is a key and positive trend.
Empowered by new technologies,our customers are demanding distinct and better ways to consume our content,personalised to them in a variety of new non-linear environments.One thing is very clear to us.In this environment,it is not enough to simply adapt to change.To succeed in this environment,we must lead change.*
The company,now under Lachlan's brother,CEO James Murdoch,is going ahead with its planned five billion-dollar buyback over 12 months and will pay investors a dividend of 0.15 a share.*
21st Century Fox (FOXA)

Monday, August 3, 2015

HSBC,Changing With the World

HSBC,Europe's largest bank,has reported first half pretax profits of 13.6 billion dollars on a strong Hong Kong performance,up from 12.3 billion a year ago.The bank was helped by its brokerage customers using the Stock Connect link to the Shanghai stock exchange earlier in the year,when Chinese shares were still hot.Indeed,HSBC may move its headquarters from London to Hong Kong,pending completion of a review of the matter by year's end.
By contrast,its businesses slowed in Europe,the US and other emerging markets apart from Hong Kong.HSBC is selling its underperforming Brazilian operations to Banco Bradesco SA for 5.2 billion.It is also considering selling its lagging Turkish business to the Netherlands' ING Group.
HSBC set aside 1.3 billion to cover legal costs stemming from regulatory investigations into the rigging of foreign exchange markets by banks worldwide.On the plus side,its investment bank saw a 21% rise in FX trading revenue.The British retail bank also did well.You should work on the assumption that it is a bank we would like to keep,said chief executive Stuart Thomson Gulliver,because it's got excellent returns from what we see going forward and the UK is a profitable banking market.*
HSBC is in the process of moving its UK retail operations headquarters to Birmingham within three years.This British bank will be renamed and have a staff of 22,000.*
We don't see anything alarming coming from what has happened recently in China,Mr.Gulliver added,but there will be some muted impact on our business both from the sell-off in the stock market and from the more reduced economic activity we have seen.Now it's less than two months since our investor update where we unveiled our actions to capture the value of our international network in the changed world.Executing these actions is our number one priority.Work is proceeding in all of these areas,in particular those aimed at reducing risk-weighted assets,cutting cost,and turning around or disposing of underperforming parts of the business.
In order to maintain broad-based growth and a diversified profile,we expect around half of incremental risk-weighted assets to be redeployed to Asia,with the rest spread across Europe,the Middle East,and North America including Mexico,Mr.Gulliver noted in a conference call following the earnings release.*
HSBC wants to boost its growth in Asia by expanding its insurance business in the Pearl River Delta region of China,and seeks to return its global banking and markets division to profitability.Overall,it wants to save 4.5-5 billion dollars annually by the end of 2017,shedding 8,000 jobs in the UK and 25,000 worldwide,although it has added 2,200 compliance staff.
HSBC has increased shareholder value by initiating a five billion dollar buyback and raising its dividend by 124% to 0.28 a share.*