Investing Blog

The long term trend is definite. The big bankers are largely dependent on central banks to back up their own poor investments with bailouts and other solutions such as liquidity loans and collateral for treasury transactions. While these decisions ultimately hurt the taxpayer, this kind of benefit has been particularly beneficial to the big bankers. Small and regional banks are unlikely to receive any credit or help from the Federal Reserve though large banks readily get huge handouts for the greater good of the people. Continue Reading »

Coca-Cola enterprises works alongside The Coca-Cola company to wholesale its products. It buys the product from Coca-Cola (KO) and resells it. Rather than the original company controlling from top to bottom, CCE is able to profit from emerging markets and sell at a discount to the larger manufacturer.

In my opinion, Coca-Cola Enterprises (the distributor) has plenty of exposure to emerging markets which makes Coca-Cola so profitable. While I do like the original manufacturer, I believe that CCE provides a better investment and exposure to the markets around the world. Better yet, CCE is selling at a huge discount from just this January when it topped $27 per share. Though the company is limited in its horizons, particularly due to the fact it must buy from KO to resell to other markets, it maintains hope for growing markets through its wholesale distribution. Continue Reading »

Bill Gates came out today to say that Microsoft will develop its own search engine marketing program. Google and Yahoo operate their own, but Microsoft has been falling behind its competitors. Google leads the way, nearly all of its profit is derived from its search engine marketing program. Yahoo has a similar program, still in beta, that produces some revenue but has very little marketshare in the Google monopoly.

This represents a much better deal for Microsoft shareholders and customers. Yahoo wanted a nearly 100% premium over their pre-bid price, far too much to pay for a company slowly losing marketshare. Not to mention that Yahoo’s own search engine program is still years behind Google’s which works with millions of webmasters around the world. (Yahoo’s is restricted to US residents) Continue Reading »

Scott’s Miracle Grow was in the mid $50s in 2007 and now its trading down at $30 per share. Though the company recently announced that it would be recalling four of its products, the long term credentials look no worse today than when the stock traded at $56 a share.

Today the company announced that four products are under recall. Two of which are improperly labeled and the other two weren’t yet registered with the EPA. While this does cause some short term troubles, the best time to buy in a good investment is when its cheap. The stock lost 10% on news that hardly affects the long term prospects, at this price, SMG is a great investment. Continue Reading »

Now that the dollar is its cheapest in quite some time, 50% discount to the Euro in just 5 years, there is some great room for foreign companies to start the buying spree. The market slowdown and minor correction is likely to start off the investment from foreign investors. Stocks, by price earnings multiple are the cheapest in years, a lower dollar makes that proposition even better for overseas investment.

Iran finally stopped selling oil in dollars, which will further lower the demand for greenbacks and as a result, their value on the open markets. The Japanese buy a considerable amount of their oil from Iran, and are now contracting to buy oil in yen rather than USD. While Japan has been buying up a large portion of US debt and dollars, the buying will likely slow or stop as they have no need outside the realm of oil. This leads me to think that Japanese buying in the US markets will explode. The US dollar reserves of Japan will likely turn to US securities, as the dollar buys little else around the world. Continue Reading »

The mainstream media has drawn a rather interesting correlation between the price of spot bullion and the price of oil. Not a day goes by that the price of oil is directly correlated between gold and silver prices. In fact, this scenario could not be further from the truth.

While bullion and oil are very speculative investments and do correspond in price with the levels of inflation, they are not directly linked. Oil has a much smaller supply than that of bullion. The daily supplies of oil and other commodities are based on the amount produced on a day to day basis, as no real reserve of ready to use oil is traded. Remember, oil is traded with futures, bullion can be traded by means of a futures platform or a spot market. Continue Reading »

Poor timing, too low price points? No, it appears that Yahoo might be avoiding a Microsoft buyout solely for sentimental reasons. Now that Jerry Yang is the CEO, it appears he’s wanting to hold onto the company he worked so hard to start back in his own college years at Stanford.

Yang owns about 4% of the company that is currently worth $1.5 Billion, his stakes are huge and he’s still drawing the infamous $1 salary that is common with many tech giants. His wealth has been derived in its entirety from the growth and capital gains he’s received as a huge shareholder in Yahoo. As CEO and a founder, it seems that his own unwillingness to sell might lay in a dislike for Microsoft and sentimental views of Microsoft rather than what shareholders want. Continue Reading »

The Federal Reserve Board meets again tomorrow to discuss the economy, inflationary factors and assess the current interest rate policy. Many analysts are undecided on which way the Fed will turn, will it continue to lower rates amid high inflation or pull back and let the market work itself out. Either action is likely to worry investors, high inflation eats away at returns while less credit means a stagnating economy and likely recession.

From here on out, each decision remains critical. Since the Fed opened its window and the auction block to institutional borrowers it has lent over $360 Billion. Keep in mind that this program was started in December of 2007, it has only been roughly 4 months for an average of $90 Billion per month. This kind of inflate and lend system is troubling many investors. Continue Reading »

Not just but 2 years ago was Kirk Kerkorian (the Las Vegas real estate billionaire) heavily entangled in the General Motors corporation. Now after Ford’s profitability, the investor is chasing a serious stake in Ford. Kerkorian dumped GM in favor of more investment into his Las Vegas properties, neither of which have proven to be a good investment. GM is still suffering from large pension payments and Las Vegas has cooled with the economy. Continue Reading »

You wouldn’t believe it but Ford has posted a quarterly profit of $100 Million for the first quarter of 2008. While the automaker has struggled with keeping up on pension programs and the weight they put on the price of automobiles finally good news and profits are coming out of the company. Ford still expects to lose money for the full year but spouts that it should return to profitability in 2009.

Strong profits in Europe and South America followed a weakening dollar and improved the overseas division. Back at home though, Ford struggled to sell its extensive line of “gas-guzzlers” and large trucks to consumers as sales were down 9% year over year. The weakening US sales were easily overwritten by foreign sales however. Continue Reading »

Starbucks released a very critical piece of information today. The economic slowdown in the US is affecting the premium coffee market and hard. Higher prices for coffee from a weakening dollar and slowing demand for a $4 cup of coffee has the luxury item in a headspin. Many Americans are finding that the daily latte proves too much for their pocketbook. Continue Reading »