BeachRider

Closing Update for Thursday, Sept. 17 - Narrow Losses

ORCL is an interesting stock for the next few months. It should be able to track other large-tech stocks, but people are gathering fear about the JAVA assimilation. You always had to have a certain sense-of-humor about Larry's bravado, but it seemed to help move the company.

My guess is that Sun assets won't generate anything-like $1Bn+ in the first year. Because of Belgium and the severe paring yet-to-be-done with Sun assets.

I will watch carefully, though.

This Advance Will Be Measured in Days, Not Months

Some of the SA articles show how companies (like IBM) are doing the math to post higher margins and profits, even if revenues are going down. IBM will be criticized for smiting costs (jobs!) with its corporate cudgel. The hardest part will be the churning of the workforce. Each company will need to adapt to survive.

As to investing, do the math carefully. If this author is advising that fundamental stats don't apply to stock pricing, then he is advising that sentiment about the stock is a bigger part of valuation than company performance. Both certainly affect security value, but company future & company performance will always be the biggest factors in setting the value of its securities. These hi-demand, low-demand squeezes give opportunities for trader-income, but they were also the biggest part of what put many of those hedge funds under water.

'Too Big to Fail' Should Not Exist

A lot of people are surprised by American Bankruptcy law.
Many are comfortable with 'Chapter 7' style bankruptcy where a company is liquidated and the assets are distributed according to a hierarchy. Bankruptcy courts can elect for 'Chapter 11' style instead (more below). Individual bankruptcy has 'Chapter 7' and 'Chapter 13' (comparable, but not the same as 7 & 11 for corporations).
Writers often cite company documents that show a proposal for a specific bankruptcy, but a court/judge inspects the entire proposal before either accepting, rejecting or modifying the proposal. During the court's arbitration of the bankruptcy, the state takes possession of all the assets to redistribute them. Bush & Obama took special steps with banks and auto-manufacturers. They made special investments, using special classifications that matter when bankruptcy is before the court. They make those investments for political reasons (usually jobs), but hopefully set the terms of the investments so that the investment is not lost.
Because both Bush & Obama made these investments, it is not possible to ascribe them to solely-Republican or solely-Democratic interests. It is certainly expected that Obama will get back the people's money, within a reasonable period of time.
It looks like Chrysler will get out of court soon, BAC never went into bankruptcy and GM is also headed out of court. Once these resume their status as non-bankruptcy companies, the investment will be sold. I don't know where the story got started the the USA never intends to see its share of a new-GM or of a revitalized BAC. Obama will never be re-elected if this has been badly botched and a substantial part of the investment is lost.

The New Dow Jones Industrial Average: Calculations and Individual Weightings

Marco,
Nice spreadsheet. I love spreadsheets. Thanks.

Wall Street Breakfast: Must-Know News

GM reorganizing Delphi. Not much of a surprise, they depend on Delphi. It is very important that the engagement rigidly follows the plan for rapid re-privatization of both companies, though.

How to Profit from Possible U.S. Credit Downgrade

Interesting scenario. Other than political alignment, the UK & USA don't have much similarity in their financial underpinnings, though. Credit is more than just measuring the amount of spending for this kind of technical analysis.

Wall Street Breakfast: Must-Know News

The market believes that Sun and IBM are not going to merge. The good news is that Sun lives to battle another day. The bad news is that they will give up most of the up-tick that they got from this discussion. Sun was at 4.97 on 3/17 before they went to 8.89 on 3/18.