Wall Street University Radio Episode 40: Greece, Cigarette Stocks and Bernanke

by: Nicholas Pardini

This episode of my investment education podcast will be the debut of the show on Seeking Alpha. Wall Street University is a weekly podcast where investing students Nick Pardini and Jeremy Saltzberg (with the occasional guest host) analyze current financial news to explain how it affects various equities, commodities, industries, and companies. Segments in the podcast include opening news stories and a "Bullish or Bearish" segment where the hosts hear a investment and give a quick take on it. Each show also includes a weekly book recommendation, investment tool, and a lesson teaching a specific concept of investing. This show also provides a variety of perspectives covering both fundamental and technical analysis.

For episode 40, guest host Paul Cwalina joins Nicholas Pardini as they discuss troubles in Greece, the new labels on cigarette packs, and Bernanke’s latest speech. They also go over the importance of the weighted average cost of capital when picking stocks.

Show Summary

Issues of Greece continue with vote of confidence:

Nick argues that Europe may be better off letting Greece default and to stay out of European stocks. Paul explains the potential of a domino effect with the PIIGS.

Will harsh smoking labels affect cigarette sales?

Nick and Paul agree that this has no real effect on reducing smoking, and that the negative reaction of tobacco stocks is short term.

Has bearish pullback in the market ended, or is this a respite before the next leg down?

Nick breaks down how food price hikes historically cause civil unrest and market risk. Paul talks about why its time to pull out of China.

Bernanke's comments bring down the market again:

Nick thinks that the market overvalues Bernanke's outlook as the inflationary damage has already been done. He also overviews how QE1 and QE2 have been a government default through inflation. Paul disagrees with Nick and argues that rates have needed to stay low.

Bullish or Bearish segment where stocks are listed and how we stand:

Stock: Nick/Paul

Bristol Myers Squibb (NYSE:BMY) Bullish/Bullish

Dominion Resources (NYSE:D) Bearish/Bullish

General Electric (NYSE:GE) Bearish/Bearish

The Euro Bearish/Bearish

German Economy Bearish/Bullish

VF Corporarion (NYSE:VFC) Bearish/Bullish

Paul comments on some of his recent picks Tahoe Resources (THOEF.PK) and AXT Inc. (NASDAQ:AXTI) while Nick is bullish on the semiconductor sector.

Investing Lesson: Using Weighted Average Cost of Capital for Investing

Nick explains how to calculate a companies WACC and why it is important factor when analyzing a stock. Remember to make sure ROIC>WACC.

Book of the Week: The Big Short by Michael Lewis

Disclosure: Nick is long PM.