Press reports from both the NY Times and Wall Street Journal indicate ex Goldman Sachs CEO and former New Jersey Governor Jon Corzine authorized the use of client money to pay back credit owed to JP Morgan Chase. So we should be shocked Corzine tried to use other people's money to save his firm when their risky bets went bad? Uh, no. What I find interesting is the hallmark of good investing is to not use debt, and when there is great value apparent, to load up the boat. Here, the opposite strategy was used. Load up the firm with leverage, and make big bets on questionable credits. It only proves in the investment world, people definately see what they want to see, which is also true in all aspects of life.
Mitt Romney moved closer to securing the Republican nomination with his win last week in the Illinois Primary. Romney will probably lose today in the Louisiana Primary, but pick up more delegates. What I find incredible is the reaction by the second and third place candidates, Rick Santorum and Newt Gingrich, to the increasingly inevitable reality that Romney will be the nominee. Both Santorum and Gingrich siezed on the Etch A Sketch comment by a Romney aide that Romney has no consistency as a right wing Republican. Ok, great, so the party should forget the guy who has the most money, more than double the votes of the closest competitor, and a moderate position which could unseat a vulnerable sitting President of the United States? Instead, Republicans should opt for a brokered convention, and choose a guy who wants to put a space colony on the moon and an ex senator who lost his own state by 20 points in the last election? Wake up and smell the coffee and pack it in so the party can put its resources behind someone who has a chance. Will they do it? Nope, because self interest trumps reality almost every time.
Here is a great article showing why determination is so important in business. It details many major successes of companies which stuck it out when it got tough and are now prospering. Not an easy lesson to remember, especially when you are in the forest- make sure you read this-http://techcrunch.com/2012/03/24/get-rich-or-die-trying/
The United States is seeing a rapid change in the energy future of the country, thanks in large part to abundant natural gas and fracking technology. Take a look at this NY Times story-http://www.nytimes.com/2012/03/23/business/energy-environment/inching-toward-energy-independence-in-america.html?_r=1&src=me&ref=business
If you did not think the stock market was crazy enough, how about what took place on friday the 23 of March? BATS was supposed to go public, the stock opens at 15 bucks a share, and then the price drops to 1 cent a share. Then, the stock gets halted, the company says all trades during a two minute time frame are cancelled, and then withdraws the IPO. Prior to that, shares in Apple get hammered by 50 bucks a share and the stock gets halted. Mr. Market is all about volatility, now more than ever, regardless of what the VIX index says. Take a look- http://www.bloomberg.com/video/88905022/
Another interesting tidbit is the SEC is examining High Frequency Traders and their effect on the market. My thought is the greatest investor ever, Warren Buffett, says inactivity strikes him as an intelligent when it comes to investing. High Frequency Traders are all about rapid fire trading based on algorithms written by humans, who make mistakes. HFT trading has an effect on market making activity, which effect stock prices. Who says one cannot use other market participants "activity" against them?
If you forgot the Covestor Next Invest conference, here is a link as it is available through April 21, 2012-presentations.inxpo.com/Shows/Covestor/R...
I hope everyone is enjoying the spring. Here in Las Vegas, it was 88 yesterday with not a cloud in the sky. I hope you are a tad bit envious, but getting equally great weather as well. If you have a comment or question, do post them, please! Have a great week.
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