There have been many complaints of a consumer credit crunch, especially coming from those in the market for a new home. While the money isn’t always easily found, there are more than a few opportunities for borrowers to get into the real estate market cheap.
The financial media is abuzz with stories about how LinkedIN’s IPO went sour. According to these stories, LinkedIN sold stock too cheaply to investment banks who would take it public the next day, selling its shares for only $45 just one day before the stock popped 100% to more than $90 per share.
Extrapolating out the sales price vs. the price on the open market during the IPO, it’s easy to see that LinkedIN lost millions of dollars in selling their shares cheaply, but did they really?
Medallion Financial Corp. (TAXI) might not have an exciting name, at least, not until you find out what exactly the Medallion is all about. Medallion Financial Corp (TAXI) makes loans to taxi drivers in metropolitan areas to secure a permit from the local government to operate a taxi service.
In a lot of places, New York especially, the cost of starting a taxi service is as high as $1 million. Yes, just for the right to drive people around the city for money, you’ve got to pony up $1 million. The car, on the other hand, might set you back only $15,000.
Retail stocks are traditionally highly-levered to the general economy; when the consumer is weak, real estate gets pummeled, but when the consumer comes on strong, retail stocks experience a revival.
This past week, one unlikely company reported smashing success.
Even though retail spending has been weaker, especially on the higher-end luxury and mid-to-high priced clothing category, Dilliards reported year-over-year growth in profits of 57%.
Wall street runs counter-intuitive to everything we’ve ever known. There isn’t much wisdom on Wall Street, save for the fact that Wall Street knows nothing, even when it knows everything.
That’s the difficulty with the modern Wall Street, in the short-term it is as much of a casino as it is a sound investment, but in the long-term, things usually clear up. We don’t know the fair value of a stock, bond, or commodity until well after we have invested, or until news is priced into the market.
Investors face a new reality that they have to prepare for their retirement by investing in the best possible investments with reasonable risk to reward ratios, but they’ll also need to be tax code savvy.
Few things change as much as the tax code, but one thing certainly hasn’t changed: the necessity of tax strategies and their relationship with your 401k and IRA. Read more…
Last year this blog profiled GameFly, a then small videogame rental service which worked very much like Netflix. That post, published last October, followed GameFly’s announcement that they would be going public to raise funds. As an investor, I couldn’t be happier. The model is great, the business is great, and it is certain that Wall Street would send it roaring during this current dotcom boom.
But where are we now?
There’s been plenty of talk about the future of credit in the United States and whether newly-created dollars are reaching Americans with the ease they’re reaching Wall Street. To put it simply, credit for everyday Average Joe American is easy to find—it’s just from the worst sources.
We covered this recently in a post about Lending Club, peer to peer lending, and how they are both great ways to have some fun and make some money at the same time. Unfortunately, a recent change to the P2P lending scene means that investors won’t be able to get as much information from borrowers as they had previously.
Yesterday we talked about how it’s time to refinance your mortgage. With rates sure to start moving upward in the US out of necessity, it’s time to start thinking about cutting your mortgage payment and your bond exposure.
Normally I’d never recommend buying any “For Dummies” books. They’re expensive, and often very, very simplistic. In the case of their “Investing for Dummies” book, I couldn’t recommend it more.
In fact, the simplicity of the topics I saw in my 5-minute thumbing of the book was perfect for every investor familiar and unfamiliar with the market.
Investors aren’t willing to risk a repeat of 2008-2009. But rather than pile into fixed-income assets or take risk off the table, it looks like investors are going for the noncorrelated assets to boost returns while minimizing their market exposure.
It looks to be a pretty good deal: investors get to buy into investments that haven’t always been so profitable, and they get to feel as though their investment is safe.
While not exactly a household name, its products surely are. Pfizer is the world’s largest pharmaceutical company, having bought out rival pharma company Wyeth, and small King Pharmaceuticals for a total price of more than $70 billion.
But where investors are starting to get concerned that Pfizer is growing too big, too fast, and simply won’t be able to continue its growth model, it’s starting to look like there is opportunity in investors’ fears. There is no better time to go all-in when other companies are getting cautious.
So it seems as though the disaster is almost over in Japan…er, not really, maybe Libya just took over the headlines. Regardless, it’s probably time to start thinking about how the world has been pricing in disaster, and whether fearful investors sold the Nikkei too low. The index, basically the Dow Jones of the Japanese stock markets, is still nearly 1,500 points, or roughly 15%, from where it began prior to the series of natural disasters.
I write plenty on the topic of mergers and acquisitions. While I tend to cover them as news stories, it’s also important to evaluate why mergers and acquisition activity is good for the stock market.
With all the talk of the Japanese Yen appreciating at what might best be described as an alarming rate, there’s plenty of interest in playing it against the dollar. But while the retail game may be new to ETFs, currency ETFs are an entirely different ballgame.
The Federal Reserve has agreed to allow banking companies to bring back their dividend policy, ending a provision that was intended to keep revenue in bank coffers until bailout money could be repaid.
In going forward, the nation’s largest banks, many of which were once some of the highest-yielding firms on Wall Street, may again become high-yielding.
You probably wouldn’t know that the reinsurance industry existed if you hadn’t gone looking for it. In fact, it is probably one of the few businesses with which so many rely but so few actually interface. You see, the reinsurance industry is made up of giant insurance companies that insure your insurance company.
Every day it seems I see a new headline about medical marijuana and the on-going political discussion going on in the United States. While last decade’s battleground was the West Coast, particularly California, the new battleground is right in the center of the country: Colorado. But I want to know how I can get in on this new goldmine with Medical Marijuana stocks.
There’s plenty of talk in investing circles about the attractive yields to be had in real estate investment trusts with what is a relatively low-risk (at least at these prices) investment. But while REITs may seem to be attractive at eye-level, you may be buying into one of the most toxic investment strategy ever.
Everyone seems to be baffled about how Twitter makes money; it seems a site with so few ads and virtually no space dedicated to anything other than tweets and profiles couldn’t be that profitable. And compare Twitter to its cousin, Facebook; they have very little in common, especially when we start dissecting how each company makes money.
It must be that time of the year again, my email box is loaded with people who think that they have found the next big Pink Sheets penny stocks, and they’re willing to share with me! While I appreciate their desire to help others, especially with a stock pick they think is going to the moon, I’m not so keen on taking advice from spammers.
While I’ve previously covered bond convexity and bond barbell’s on this blog, I think it is important to cover a very powerful savings strategy, the certificate of deposit (CD) ladder. At its core, the CD ladder is very much like the bond barbell; the number one goal is to reduce exposure to low interest rates and set your portfolio up for the best possible returns with the least amount of risk.
Read more…
Pre-paid tuition was set to become one of the most popular methods for “saving” for an eventual college education, but as state budgets turn red, new worries have emerged that those who have put so much into paying for a college education might not get everything they paid for. In fact, Illinois, admittedly a state with the worst budget crisis, sees a short-fall of 31% between paid-in capital and the total cost of tuition.
Yesterday we discussed counterparty risk, so it’s probably time to talk about credit default swaps, what they are, and how they work. During the financial crisis, credit default swaps were partially to blame, and you may have heard people refer to them as “CDS.”
