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Spencer Knight  

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  • U.S. weighing ending truck tariff [View news story]
    End the tariffs and let the markets decide. If a business can't get customers to buy the product they deserve to shut down... Or get puffed back up with taxpayer dollars. Either way, let the markets decide.
    Aug 5, 2013. 04:34 PM | Likes Like |Link to Comment
  • What sequester? Handily beating the S&P 500 this year are two aerospace and defense ETFs, ITA and PPA. Both have added to gains the last few sessions as top holdings Boeing (BA), Lockheed Martin (LMT), Northrop Grumman (NOC), and General Dynamics (GD) all posted earnings beats even as defense spending has been slashed. International and commercial orders are helping, but so are long-term contracts. "We are not out of the woods at all," says Boeing CEO Jim McNerney on the earnings call (transcript). "We are entering the woods." [View news story]
    ETFs have zero intrinsic value. ETFs have the potential to go to moon regardless of what the underlying investments are doing so long as everybody wants to buy that specific ETF.
    Jul 24, 2013. 04:04 PM | Likes Like |Link to Comment
  • Some sell side notes rolling in on Apple (AAPL): JPMorgan reiterates its Buy and $545 PT, expecting shares to exhibit a relief rally in the near-term. Goldman ups its PT to $530 from $515, but expects the stock to remain rangebound until a new product cycle begins. Morgan Stanley's Katy Huberty sees a tradable rally headed into new product cycles. CFO Oppenheimer on the CC (transcript): "We are on track to have a very busy fall. I would like to leave it there and go into more detail in October." Shares +3.8% premarket. [View news story]
    Apple's drop was overdone. $700 was way too high, $400 was too low. Somewhere in the middle is right. I don't know or care where. I do know that the two extremes are wrong. Apple is a value stock now. Expect less share price movement. Don't expect q/q or y/y sales declines for many years. Expect higher dividends in the coming years with continued solid growth.

    There's some buy side advice for you.
    Jul 24, 2013. 12:51 PM | Likes Like |Link to Comment
  • Microsoft (MSFT): FQ4 EPS of $0.66 misses by $0.09. Revenue of $19.9B (+10% Y/Y) misses by $830M. Shares -4.2% AH. CC at 5:30PM ET (webcast). (PR[View news story]
    Hey MSFT, instead of wasting your money by "investing" in other companies and their worthless products, just buy back even more shares to at least make your EPS number look good. All the big boys are doing it and people fall for that trick everyday.
    Jul 19, 2013. 11:33 AM | 1 Like Like |Link to Comment
  • It's still too early to reduce asset purchases, says San Francisco Fed chief Williams. More evidence is needed of the recovery's momentum and that the drop in inflation is a temporary one. His personal forecast is for unemployment to still be over 7% at year's end and for inflation to remain well under 2% into 2015. [View news story]
    Wages have to increase to help inflation increase, and this will not happen. Employers already over pay their employees. QE won't cause inflation either. The money is locked up in bank reserves and will never hit the "system."
    Jun 28, 2013. 03:54 PM | Likes Like |Link to Comment
  • Slovenia's economy shrinks 4.8% in Q1, badly missing economists' estimates of a 2.9% contraction. The figure underscores the sense of urgency recently expressed by the European Commission regarding the sale of state-owned assets and the transfer of bad loans to a so-called "bad bank" (I, II). "The question now is how [the depth of the recession] impacts official growth projections [and] what it means for the cost of cleaning up the banks," one economist tells Bloomberg. [View news story]
    Look for Slovenia to need around 3-5 billion euros in the near future.
    May 31, 2013. 04:05 PM | Likes Like |Link to Comment
  • Halliburton (HAL) and Baker Hughes (BHI) are downgraded to Underweight at Morgan Stanley, part of the firm's dim view of the oil services drilling and equipment sector (OIH) due to concerns about revenue growth seen slowing to 5% from 16% for the rest of the decade. HAL -1.6%, BHI -1% premarket. [View news story]
    It makes reasonable sense. If MS thinks oil prices will stabilize (i.e. not continue to perpetually climb higher) then revenues will not grow at the same rates we have seen. Until Nat Gas is used more widely it's simply a drip in the ocean. All this trickles back down to the drillers and equipment suppliers. I for one believe more useful and reasonably priced electric cars will be created over the next decade and hopefully stop the increasing demand for oil. If demand decreases for oil what happens to the price? Think trickle down effect after you answer that...
    May 30, 2013. 03:11 PM | Likes Like |Link to Comment
  • Initial Jobless Claims: -4K to 323K vs. 335K consensus, 327K prior (revised). Continuing claims -27K to 3.00M. [View news story]
    I like when the initial claims numbers are much worse because all the doomers and gloomers come out of the woodshed to cry the world is ending. They fill my day with laughs.
    May 9, 2013. 02:31 PM | Likes Like |Link to Comment
  • Microsoft Offers Investors An Annualized Gross Return Of Up To 25% Over The Next 5 Years [View article]
    In my mind, Microsoft trades at a correct multiple for a company approaching an inflection point. Microsoft has two options: 1) innovate and succeed, or 2) continue what its doing and stagnate, or slowly move backwards. It's the life cycle of businesses. Microsoft has the resources to innovate, but will they do it correctly? That's the big question in my mind, because it appears MSFT is simply going at it willy nilly in an attempt to make something work by pure chance.

    I also find it hard to even value MSFT because the share buybacks inflate the earnings per share value. EPS is a good metric to use, but you must take into consideration the anti-dilutive effect of the buybacks and how that can make the company appear more profitable than it really is. Margins, on the other hand, as you can see in the chart above, are low; which should be expected for a company approaching an inflection point in its life cycle.
    Apr 10, 2013. 03:54 PM | 6 Likes Like |Link to Comment
  • The Singapore Story: No Longer A Sure Thing For Investors? [View article]
    When thinking of Singapore it may be a great idea to consider that we will likely see a considerable contraction in Q1. And the possibility that the MAS decides to lower the appreciation target of the SGD below it's current 2.5% target to combat the near continuous headline inflation and a weaker economy than what was expected late last year. This probably will not happen as long as the exchange rate stays away from the upper target, but it is something to keep in mind.
    Apr 9, 2013. 11:32 AM | 1 Like Like |Link to Comment
  • Futures give up a few ticks, SPY now flat after the big miss in the ADP jobs report. February's gain, however, was revised higher by 39K to 237K, making the whole thing kind of a wash. At 158K in March, the job gain is the slowest in the last 5 months, but well above most every print of 2012. (full report[View news story]
    QE is ending. Wait for the announcement of a slow decrease in buying in May/Juneish...
    Apr 3, 2013. 12:55 PM | Likes Like |Link to Comment
  • General Motors (GM) March U.S. sales: +6.4% to 245,950, short of the mark of analysts but the automaker's best March tally in five years. Sales gains were led by crossover (+31%) and truck (+2%) models while car sales dipped 3% during the month compared to a year ago. Total sales by brand: Cadillac +50%; Buick +37%; GMC +11.6%; Chevrolet +0.5%. The Cadillac ATS put in its best sales month ever with deliveries of 3,587 units. (PR[View news story]
    People must be working if they can buy cars. Expansion continues!
    Apr 2, 2013. 12:35 PM | 1 Like Like |Link to Comment
  • February Nonfarm Payrolls: +236K vs. consensus +160K, 119K previous (revised from +157K). Unemployment rate 7.7% vs. consensus 7.9%, 7.9% previous. [View news story]
    Those are both overly ambitious numbers (1.2m house starts and 6% UE in about 20 months) but you have the right idea. The economy is improving as a whole. But don't forget there will always be market corrections during expansionary periods...
    Mar 9, 2013. 01:26 AM | Likes Like |Link to Comment
  • California gets its first upgrade from S&P since 2006, the agency hiking the rating on the state's general-obligation bonds to A from A-. "The economic expansion is gaining positive momentum," and the approval of higher sales and income tax rates "positions the state to capitalize on burgeoning economic activity." S&P should ask Phil Mickelson about that one. [View news story]
    The better answer is still Phil's living location does not create jobs. He can live in Mexico and Callaway will still sell his drivers. How many drivers say "used by Phil Mickelson only when he is living in CA."
    Jan 31, 2013. 11:28 PM | Likes Like |Link to Comment
  • Despite beating profit expectations on the back of strong results in North America, Ford (F) could see some share price weakness after warning once again on sales in Europe, notes Douglas Kass. In early trading he's looking to be correct, Ford -1.7% premarket. [View news story]
    Ford has been forecasting weak Euro sales for a year now, coupled with strong NA sales. It is a good stock to buy. Europe will eventually strengthen. The difficult part is when will Europe turnaround and will NA still be growing at that time.
    Jan 29, 2013. 03:25 PM | Likes Like |Link to Comment