October has arrived and it should be a very eventful month. The presidential election has three more debates duringg the month, and then the end game arrives during the first week of November. Earnings season begins in a few weeks, and many investors believe the third quarter results will not be impressive at all. Certainly, much depends on the specific company, what industry it is in, the specific business model, and how they are executing. One can expect lots of volatility, although it is not necessarily reflected in the market. Time can change things, as we have seen.
I find if very interesting the political discourse has been elevated to such an extent that big bird has become a key issue. One side, anyway, is focusing on the injustice being done to the big, yellow, loveable birds parent company. The horror of cutting public funding for Elmo!!!! However, when you run trillion dollar deficits and owe over 15 trillion dollars to creditors, you do have to cut spending. So, instead of focusing on what the pertinent issue is, by all means, lets concentrate on Big Bird. It does give people an indication of why we are where we are. It also should make the public really think about what leader is better for trying to improve the situation in the United States. Whether it will happen is the heart of why we have elections.
So the biggest computer company in the world warned its profits will not be up to par in 2013. Hewlett Packard is a massive company, with over 100 billion in revenue. The market has punished it severely because of its poor performance in services, as well as being tied to the pc industry. However, for those with the patience, and the willingness to hang in there if the stock continues to decline, it is definately a company to look at. Meg Whitman is a very capable executive, and the printing division is still the market leader and very profitable. Of course, I thought the same thing a year ago as well, so take it for what it is worth. Here is a link to the story- http://www.marketwatch.com/story/h-p-missed-the-boat-whitman-cant-change-that-2012-10-05?pagenumber=2
Zynga has been a disaster. It is the perfect example of why Mr. Buffett does not invest in technology companies. When you have a ton of fluctuation in your business, it does not lend to stability, certainly not for investors. Nobody ever said Warren was an idiot- far from it-http://techcrunch.com/2012/10/05/more-competitors-smarter-gamers-expensive-ads-less-virality-mobile/
Speakin of idiots, what a shame, the Iranian currency is causing massive problems-http://www.nytimes.com/2012/10/05/world/middleeast/as-irans-currency-keeps-tumbling-anxiety-is-rising.html?hp
I hope everyone has enjoyed reading the blog, and has a good week. If you have any comments or questions about the blog, please post them.
Y H & C Investments, Yale Bock, and the family of Yale Bock own positions in securities mentioned in the blog post. Investing in stocks can lead to the complete loss of your capital. As always, on any company mentioned here, past performance is not a guarantee of future returns. Investing involves risk of losses on invested capital. One should research any investment and make sure it is suitable with your objectives, risk tolerance, risk profile liquidity considerations, tax situation, and anything else pertinent to your financial situation. Also, the CFA credential in no way implies investment returns will be superior for any charterholder.
Here are some Seeking Alpha articles Yale Bock has written about specific companies.