New Money
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Richard Paul Evans: When it Comes to Money, 'Men Are From Mars and Women Are From Venus'
Continue reading… 1 CommentRichard Paul Evans, author of the new book The 5 Lessons a Millionaire Taught Me for Women, was on the Glen Beck Program today, and what he had to say was somewhat condescending. When asked why the lessons are different for women (The book is a new take on his previously published The 5 Lessons a Millionaire Taught Me), Evans said he realized that the vast majority of expenditures are now made by women, and yet "women have never been taught because they grow up with these mixed messages that, you know, good girls don't worry their pretty little heads about money."
I'm all for a book of financial tips aimed at women--in fact, one of my favorites is Janet Bodnar's Money Smart Women: Everything You Need to Know to Achieve a Lifetime of Financial Security (disclosure: she is a former editor of mine.) But Evans' assertion that women in general (or "good girls") are taught not to worry about money is way off base (and "pretty little heads"? Come on.) Women are making expenditures because women are more independent these days. And often, independence means they're making their own money. Plus, a lot of those women, like me, actually learned about money growing up.
In this recent interview, Evans explains why he thinks Men are from Mars and Women are from Venus when it comes to money. He says women are vulnerable to "the burnt-toast syndrome:"
You're having breakfast, and a slice gets burned--who gets it? Women do that with money, too," he says. "They trade their needs for somebody else's wants."
Doesn't everyone at one time or another trade their needs for somebody else's wants? It's called a relationship. I'm not quite sure what he means: he wants a monster truck, she wants a convertible? Please. Evans appears to be the king of overgeneralization.
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Pfizer and Wyeth: How Shareholders Might Fare
Continue reading… 1 CommentIf it turns out that pharmaceutical giant Pfizer buys its rival, Wyeth, Pfizer could profit in a big way from an expanded lineup of products that could help offset expiring patents and diversify its offerings.
But the deal might not be so great for shareholders. According to Harvard Business School professor Gary Pisano (via the WSJ): “The record of big mergers and acquisitions in Big Pharma has just not been good. There’s just been an enormous amount of shareholder wealth destroyed.”
However, the Journal notes that shareholders "haven’t exactly prospered in the absence of deals."
But according to this Boston Consulting Group study of acquisitions completed between 1992 and 2006, nearly 60 percent of the acquisitions reduced shareholder returns. The average deal produced a net gain to shareholders of 1.8 percent.
So far today, Wyeth shares are trading up 8 percent, and Pfizer's stock is down 2 percent.
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In the Midst of Recession, U.S. Mint Releases $1,000 Coin
Continue reading… 4 CommentsAdmittedly, I don't know much about coins. But it seems odd that the U.S. Mint today released a 24-karat, one-ounce gold coin that's currently selling for more than $1,000 in its online catalogue.
This Sacramento Bee story claims that's affordable. It is gold, after all, and in collectors' eyes, it may be a steal. One commenter writes: "That's a pretty low price since most are expecting the spot price of gold +40%."
Here are the details: The 2009 Ultra High Relief Double Eagle Gold Coin is a digitally reproduced version of an original piece minted in 1907. It features lady Liberty on one side, and a flying eagle on the other. According to the U.S. Mint, "it's considered by many to be the most beautiful coin ever produced in the United States."
It turns out that buying coins is becoming a popular way to invest in gold these days. According to this story, the demand for gold coins has been so high that in 2008, the Mint announced that all 2008 bullion coins--with the exception of two varieties--had been depleted.
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Oscars 2009: Cheaper Ads, Steeper Accolades
Continue reading… 6 CommentsWith the announcement of nominations today and the kick-off of Oscars season, I couldn't help but wonder about the cost. Do the Oscars exist in a bubble, shielded from the recession?
Maybe not. According to Advertising Age, ABC is cutting the price of an advertisement during the Academy Awards to a low, low $1.4 million--down from $1.7 million--to lure more advertisers. And for the first time, the network will run movie ads, which were previously banned. The idea is to fill gaps left by big advertisers that dropped out last year (and presumably may not return), according to Ad Age. It might be hard to lure advertisers, though, considering that the number of viewers fell to 32 million last year, down from 40 million in 2007.
On another note, the price of the gold-plated Oscar statuettes hit a record $500 last year as gold prices skyrocketed to $950 an ounce. Gold isn't quite as high this year--it's traded between $800 and $890 since the beginning of the year--but those little statues will still be pretty steep.
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Will the Obama Girls' Fashions Boost J. Crew's Sales?
Continue reading… 0 CommentsToday, J. Crew today is milking the exposure it received yesterday when the first daughters wore its coats (periwinkle! guava pink!) to the swearing-in ceremony. The company Web site's front page today features not clothes, but gigantic, front-and-center type that reads "CONGRATULATIONS TO THE FIRST FAMILY" and "*Yes, the wore crewcuts! Find out more..." J. Crew even rushed out a press release yesterday.
The company pulled a similar move--and a lucrative one--when Michelle Obama appeared on Jay Leno's show and said she purchased the yellow outfit she was wearing online at J. Crew. The next day, the site's online traffic as a whole surged 64 percent, according to New York magazine.
It's most definitely a short-term boost, but every little bit helps. Especially given the bleak outlook for retailers. J. Crew's shares, which have slid from $50 in May 2008 to $9 yesterday, look like they'll close at $10 today.
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Time to Invest in China?
Continue reading… 1 CommentSo far this year, China stocks have taken a beating: According to Morningstar, the best-performing fund year-to-date is a China ultra-short fund. And that's on the heels of 2008's record 53 percent loss in the MSCI China index.
That aside, Money Morning is taking a contrarian stance with 11 reasons why it's actually a good time to buy China. Those reasons include: smart investors--including Mark Mobius--are loading up on Chinese stocks; the country's stocks are ridiculously cheap, as the average is trading at less than eight times earnings; earnings are growing; and the country has massive foreign reserves.
I recently spoke with ETF expert Jim Wiandt of IndexUniverse, who also favors China [see 9 ETFs for 2009].
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2009: Hedge Funds and Treasuries Are Out, Munis and Money Markets Are In
Continue reading… 3 CommentsHedge funds are, like, totally 2006. Looks like millionaires are waking up to the fact that ridiculous fees and zero transparency just aren't worth it--especially when the average hedge fund lost 19 percent in 2008.
Meanwhile, a growing chorus on analysts and market watchers say Treasuries are so 2008. Marketwatch is advising investors to take their gains and "run for the hills." But Munis are still in.
At the same time, more investors are moving their 401(k) assets into money markets and missing out on a historic stock-buying opportunity.
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Circuit City Liquidation: Shareholders Out of Luck
Continue reading… 4 CommentsUnfortunately for investors in Circuit City, which is going after approval to liquidate the company, there doesn't look to be any remaining value for common-stock shareholders.
Circuit City's stock, which traded around $20 in January 2007 and $4 in January 2008, is worth virtually nothing today. If you're interested in background, check out The Consumerist's posting of "The Decline and Fall of Circuit City" graph.
Mutual-fund investors shouldn't worry. According to Morningstar, as of September 30, the few mutual funds that still held the stock had a small number of shares.
Wednesday, TCW, the company's largest shareholder, shed 18 million shares of the company yesterday, dropping its stake from nearly 11 percent to 0.2 percent.
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Do Apple Shareholders Deserve to Know More About Steve Jobs' Health?
Continue reading… 3 CommentsFrom the start, Apple's PR machine has been vague about Steve Jobs' health, first dismissing rumors, then releasing a letter from Jobs about a "hormonal imbalance" that even doctors are having a hard time deciphering. Now even after Jobs announced that his health problems are more complex than he originally thought--and that he's taking himself out of the limelight--Apple fans, bloggers, and shareholders are still hungry for information. Should they (we) lay off?
Mitch Wagner of the thoughtful Apple Unvarnished blog thinks so. He disagrees with this NYT blogger who says Jobs doesn't have the same right to privacy as regular people, being that he's "the most important person at one of the most high-profile companies in America."
Says Wagner: "Apple and Jobs have already done the right thing by investors...certainly, free speech permits journalists and bloggers to write about celebrities' private lives...but the celebrities are under no obligation to cooperate." (He asserts that Jobs became a celebrity when "he told busybodies to buzz off when they wanted to pry into his medical condition.")
I would argue that Steve Jobs was already a celebrity. That aside, Jobs is Apple. Obviously, many shareholders and company analysts believe Apple's future hangs in the balance, so the prying isn't going to let up anytime soon.
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Kellogg Pulls Peanut Butter Crackers: How Recalls Affect Stocks
Continue reading… 12 CommentsKellogg told snackers today that they should back away from its Austin- and Keebler-branded toasted peanut butter sandwich crackers because of salmonella concerns.
Investors didn't seem to care, as the stock (symbol K) is down less than 1 percent today. (Kellogg's shares were actually pretty appetizing for most of 2008, until the stock dropped from $57 to $40 in October and November along with most stocks.)
So do recalls of specific products belonging to giant corporations ever affect their stocks? In the case of Mattel's massive recall of toys made in Chinese factories, the company's stock barely budged. But when Bridgestone/Firestone had to replace millions of tires early this decade, its stock took a nosedive. It took several years for the stock to return to pre-recall levels. Ford shares also suffered, and scandal fallout plagued the company for years.
A 1995 study on the impact of such a catastrophe on a stock found that the shareholder value for those that recovered was 5 percent more than their original stock price. Stocks of the companies that didn't recover were virtually unchanged during the first few months, but they suffered a cumulative impact of 15 percent up to a year afterward. Essentially, the study concluded that it was all about having a quick, well-managed crisis response.
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If Steve Jobs Doesn't Return to Work, is Apple in Trouble?
Continue reading… 0 CommentsThe New York Times is reporting that Steve Jobs doesn't have cancer, but it's not far-fetched to think he might not return to his post. Although he claims he'll still be making key decisions while he's out, the Times imagines a world without Jobs, "the obsessive visionary who involves himself in the smallest details of Apple's products and advertising":
It’s almost impossible to imagine the next chief executive of Apple having the same sort of autocratic and impulsive personality. That’s not the style of the people who work there. (There’s only one queen in the hive.) And what outsider coming into the top job of a company doing as well as Apple would have the guts to be so strong-willed and independent?
Silicon Alley Insider's weigh-in is that Apple is in good shape for now, but will eventually lose its lead if it doesn't swiftly put a plan together to move forward without Jobs (my take: it probably already has.)
Pundits will argue all day that Apple is more than Steve Jobs. Fine. But Steve Jobs is Apple. He might not write code or sit in chip fabs. But he makes the big, important decisions that make Apple products Apple products. New decision-makers will make choices Steve wouldn't make. Talent will leave. Etc.
It's always possible that there are some geniuses working at Apple that Steve Jobs is holding back -- that Apple could be better without Steve. But we -- and Apple shareholders, who sent the stock down 6% in after-hours trading following Apple's announcement -- are sticking with the idea that Apple without Steve is not as good as Apple with Steve.
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Steve Jobs' Leave of Absence: The Plot Thickens
Continue reading… 10 CommentsSteve Jobs told Apple employees today that he's taking a leave of absence through June to focus on his health issues. Here's the full text.
In his Apple Unvarnished column, Mitch Wagner compares Apple's handling of Jobs' health problems to the Clinton administration's handling of the Monica Lewinsky scandal. Apple has been making statements that were "literally true," Wagner says, "but ultimately misleading. That's going to have Apple watchers taking a microscope to every statement and action by Apple to find out what the company really means."
You can pretty much count on that. Bloggers haven't been buying what Apple's been selling. Heck, even endocronologists are skeptical. It seems that investors are, too: Apple's stock dropped 10 percent after the news broke.
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Tiffany's Rings are Shiny, but its Stock...Not so Much
Continue reading… 0 CommentsAs Clusterstock points out today, Tiffany's fourth-quarter report is super important because it reflects the company's business in November and December--typically prime time for jewelry purchases (85 percent of its business comes from these two months.)
It seems like a given that the luxury market wouldn't fare well during the recession (even millionaires are getting the blues.) But analysts and executives were slow to adjust their expectations for that all-important fourth quarter, Clusterstock says. But here's something worth noting: the blogger perused a store in October and found that prices were up and sales were nowhere to be found.
After lowering its earnings guidance in November, Tif just lowered its annual forecast and reported that holiday sales were down 21 percent. The stock is down 2.7 percent so far today (trading around $21). That's a long way from the $48 it was trading at last summer.
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S&P: 4 Internet-Stock Predictions for 2009
Continue reading… 0 CommentsStandard & Poor's just-released The Outlook newsletter contains a few interesting predictions about the market for Internet stocks in 2009:
1. Google will outperform the S&P in 2009.
Google's relationship with Apple will, due to growing competition between the companies, become increasingly uneasy...Nonetheless, even though we believe Apple is working on some kind of search technology that could help enhance iTunes, we don't see the company as a likely near-term entrant in the search wars. We believe Google will continue its successful push into the mobile segment, as a number of Android-enabled phones are released by the likes of Motorola, Sony Ericsson, and Samsung...although the precise impact will be unclear, we expect Google's financials to benefit significantly from the mid-2008 addition of CFO Patrick Pichette...As a result, we expect the stock to notably outperform the S&P in 2009.
2. Microsoft and Yahoo will finally bury the hatchet.
The companies..."will decide to join forces to better compete against Google, in our view. We don't expect Microsoft to try to buy Yahoo outright, and have mixed views about whether Microsoft will attempt to purchase Yahoo's search business, but at the least we see some kind of significant joint venture related to search. We think its development will help Yahoo shares, on which we have a buy recommendation, outperform the S&P in 2009.
3. A flight to quality in Internet advertising.
We foresee a flight to quality in Internet advertising and an associated consolidation of online advertising networks. Our strong sell opinion on ValueClick reflects the related challenges we see. Specific to ValueClick, we also have concerns about other offerings from its media units, and its e-commerce-related affiliate marketing and comparison shopping segments.
4. A lack of mult-billion-dollar transactions.
[But we] expect a number of sub-billion-dollar deals, as companies look to better focus and raise cash. We would not be surprised to see activity associated with Akamai Technologies, Infospace, Move, and RealNetworks.
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BlackRock's Bob Doll: Higher Oil Prices Could Signal Recovery
Continue reading… 4 CommentsInteresting take on oil prices from BlackRock's global CIO of equities, Bob Doll:
As a broader measure, we can also look to oil prices. After falling to a low in the mid $30 a barrel range in December, oil prices recently climbed back above $40 a barrel. While rising oil prices are generally regarded as a negative for stocks, we would argue that in the current environment, higher oil prices could be a sign of possible economic recovery. While the recent upturn is no doubt at least somewhat associated with tensions in the Middle East, oil prices do not bear close watching as a gague of overall economic health. On the same front, a renewed upturn in gold prices would present evidence of improving global economic health.
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Bill Miller's Legg Mason Opportunity Off to a Fast Start
Continue reading… 2 CommentsAccording to Morningstar, Bill Miller's Legg Mason Opportunity fund is the second-best performing diversified stock fund so far in 2009, with a 12 percent gain (the No. 1 fund is Foresight Value.)
That's significant because the Opportunity fund was the worst-performing fund in that category in 2008, suffering a horrifying 65 percent loss. Miller's famous Legg Mason Value Trust was the No. 3 worst performer for the year, with a 60 percent loss [click here for background on the fund's fall from grace.]
Stocks in Opportunity's portfolio are off to a fast start this year, with big gains in holdings like Red Hat, Expedia, Eastman Kodak, and NII Holdings. Legg Mason Value's first week and a half hasn't been too shabby either, with a 3 percent gain.
Perhaps 2009 is Miller's comeback year.
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Slumdog Millionaire: Does it Really Qualify as Low Budget?
Continue reading… 7 CommentsThe headlines today are touting "Slumdog Millionaire," which won four honors at the Golden Globes last night, as a "low budget" movie. Sure, the film's $15 million budget--bankrolled by Warner Independent--is tiny in comparison to blockbuster productions like Titanic, which cost north of $280 million to make. But it's a lot more than the movies on this list of 25 indie movies made for less than $1 million. Here are a few:
El Mariachi, budget $7,000: Director Robert Rodriguez reportedly slashed costs by using a wheelchair instead of a dolly, using actors to do odd jobs on the set, and using desk lamps for lighting.
Clerks, budget $27,000: Kevin Smith is said to have financed this indie gem by selling part of his comic-book collection, credit cards, and filming the movie at a convenience store where he worked at the time.
The Blair Witch Project, budget: $22,000: We've all heard this story. The filmmakers used viral and Internet marketing and went on to gross a whopping $248 million worldwide.
Swingers, budget $250,000: Pretty impressive production at that cost.
Welcome to the Dollhouse, budget $800,000. This is one of my favorites.
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Mark Cuban Proclaims 3D Movies 'The LSD of 2009'
Continue reading… 0 CommentsGadget blog Crunchgear interviewed Mark Cuban yesterday. Subject: 3D entertainment. Cuban, who co-owns Landmark Theaters and recently bought 9.4 percent of Carmike Theaters stock, talked up the future of 3D in cinema, in colorful terms:
"No matter what demographic you’re in, there’s a reason to go try something new, whether it’s 3D, whether it’s live broadcasts — it’s all interactive. Whether you’re sitting in front of a PC screen or a laptop or a digital projection in a theater, you’re still going to be able to text, you’re still going to have real-time discussion groups, you’re still going to be able to e-mail back and forth and interact. It’s just a different out-of-home experience...We’re not going to all just turn into little hermits and hibernate, it’s just more of an issue of giving people the right reason to get out of the house...You know, we did a live Mavs game this past March in 3D and I can just tell you, it’s crazy. It is crazy. It’s the LSD of 2009!"
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Burton and the Case of the Steamy Snowboards
Continue reading… 3 CommentsDespite the fact that it's headquartered in a progressive community in a liberal state, Vermont's Burton Snowboards has been taking a lot of heat lately for an exceptionally edgy line of snowboard designs.
A couple of Vermont ski resorts have banned employees from riding on the boards, which feature naked women. I can see that. The Girl Scouts Council of Vermont is in a tizzy, which also isn't surprising. But what is surprising to me is that the Burlington City Council considered asking Burton to withdraw the designs (they've since toned down the proposed resolution.)
I visited Burton's headquarters last summer for a profile on the company [read it here], along with the folks at Green Mountain Coffee Roasters for a separate story. Apart from an extremely laid-back work environment (flip-flop wearing employees bring their dogs to work and can head to the slopes instead of the office when it snows more than two feet), what struck me was how hard the Burton team strives to promote self expression. No two boards they produce are exactly alike, and to keep it fresh, the design department contracts with a lot of artists.
Some residents, like this woman quoted in a UPI story filed under "odd news," find the boards offensive because they say the designs objectify women: "When you really think about it, it's a young man standing on top of a naked woman's body."
Here's a response from Jake Carpenter, Burton's founder (courtesy of The Stowe Reporter):
"We...make boards for 18-year-old guys...The fact that these boards don’t appeal to some people is not a surprise. The important thing is that the vast majority of young, core riders appreciates the graphics and does not take them so seriously or perceive them as a threat to society...While I do understand that some people’s feelings are heartfelt, the local reaction to these graphics has been hurtful and out of line."
He concludes with:
"Honestly, I would rather relocate the company to another state than compromise our commitment to listen to core snowboarders."
Several days later, the Burlington Free Press ran a response from Jake's wife, Donna Burton:
"I’ll admit that when I was first told about the ‘Love’ board about a year ago, I was ready to go off. Pornographic images of women on a snowboard? I don’t think so. But then I saw them. Like the people walking into my kitchen, the images I saw were not what I expected. These are not X-rated images. These are vintage Playboy images from as far back as the 1970s. They are beautiful, kitschy, well-fed models; nothing obscene is revealed. These board graphics are retro, tongue-in-cheek and, in my opinion, harmless. They certainly have what real pornography always lacks - a sense of humor."
This Boston Globe story features a slideshow of the boards, but I'm not brave enough to view it at work.
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Macy's Store Closings, Walmart's Ho-Hum Sales
Continue reading… 3 CommentsThe worst holiday shopping season in four decades has retailers in quite a bind.
Macy's lowered its earnings outlook this morning and reported that same-store sales in November and December dropped 7.5 percent. It also announced that it's closing 11 underperforming stores (here's the list). The good news is massive clearance sales, but if you live in certain areas of Nashville, Colorado Springs, and St. Louis, you'll have to find a new department store. The company says the closings are part of a "normal pruning process."
Investors took the news well, as the company's stock was up more than 2 percent at mid-morning.
Meanwhile, market watchers expected Wal-Mart to fare relatively well in December, as consumers traded down. The company posted a 1 percent sales gain, but that was less than the 2.8 increase expected by analysts. It also cut its fourth-quarter outlook.
Here's a list of more dismal retail-sales data, courtesy of The Big Picture.
In related news, Family Dollar's sees a growth opportunity in--get ready for this--food stamps. Nearly all of the company's 6,600 stores will accept them by the end of the year.
