The San Francisco 49ers were a 1980s-'90s powerhouse that spent most of the past two decades wandering through that NFL wilderness known as bad quarterbacking and misguided coaching. They play the Baltimore Ravens, a team once known as the Cleveland Browns which now plays in a city where the old Johnny-Unitas-led Colts still loom over the citizenry's football psyche.
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Close ReutersSan Francisco 49ers head coach Jim Harbaugh
Related VideoBelow is the fourth of eight new articles by Olivia Mellan and Sherry Christie that continue the discussion on Your Client’s Brain that began with Investment Advisor’s February 2013 cover story—Double Think: Getting Past the Conflict in Your Clients’ Two Brains—and a feature article—Second Thoughts: Making Better Decisions—in the March 2013 issue of IA.
Clearer thinking is a wonderful facilitator of better, wiser decision-making. Now if we could only train our brains to generate insight!
David Rock, author of four books including the 2009 business bestseller “Your Brain at Work: Strategies for Overcoming Distraction, Regaining Focus, and Working Smarter All Day Long,” believes that’s possible. In fact, he has developed a technique to foster insight that uses our understanding of brain functions. He calls this model ARIA, short for Awareness, Reflection, Insight and Action. As he explains:
In the Awareness state, you focus lightly on a problem or impasse, quieting the mind and simplifying the problem as much as possible (perhaps by describing it in as simple a sentence as you can find).
In the Reflection phase, you hold the impasse in mind, but reflect on your thinking processes rather than on the content of your thoughts. This helps you see your impasse from a high level, activating the right-hemisphere regions that are important for insight and allowing loose connections to form.
In the Insight stage, there is a burst of gamma-band brainwaves (a group of neurons firing in unison). People in deep meditation have a lot of gamma waves, which are the fastest brain waves.
In the Action phase, you can harness the energy released in the emergence of an insight.
Rock has worked with business leaders who practiced these steps together and arrived at a useful insight in five minutes. He noted that the ARIA model can be used by individuals or groups to solve all kinds of problems, from word games to challenges in the workplace. “Mostly it’s about allowing deeper signals to be heard,” he said. “Our brains love an insight.”
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We invite you to visit the Your Client’s Brain landing page on AdvisorOne for additional archived and ongoing coverage of this important topic.
(gigaom.com) -- It’s not a huge surprise that Google is dropping Google Reader, the blog reader it operated since 2005. After all, they’d let it go for some time now (not that I’m complaining – it was after all, a free service, a fine product, and a boon for the overall ecosystem of blogging, podcasts and RSS).
The reality, though, is that Google operates at vast scale, and a niche consumer product like Reader just doesn’t move the needle. As crazy as it may sound, today even a billion-dollar business is simply a distraction to Google (unless, of course, it’s well on the way to becoming a five-billion-dollar business).
More from gigaom.comSo all those who are signing petitions to Google (and even one to The White House!) are missing the bigger point: that this is a victim of the company’s DNA, one that’s accelerated under Larry Page’s management. Some companies specialize in keeping the status quo, others specialize in moving forward. Google is the latter. If the company maintained every niche product with N thousand fans, even paying ones, it’d become the very bungling bureaucracy we love to hate. For a company with Google’s ethos and standing, any such dead-end, non-revenue-producing product that’s retained is holding others back, and prevents the company from moving forward and making true innovations instead of incremental improvements.
While Google is giving up on Reader, I believe the company will still embrace subscriptions in a big way, just without RSS (by which I mean RSS, Atom, PubSubHubbub, etc.) Sure, they may continue to lean on RSS as part of their technical infrastructure – e.g. Googlebot will still be crawling external RSS feeds to identify fresh content – but users won’t see those three letters or the shiny feed icon that accompanies them.
To understand why Google’s walking away from RSS, look at Google’s relationship with open standards over the past decade. Google has experimented with various open technologies and found it difficult to win over Google-scale audiences and developers. The list of casualties would include OpenSocial (present in Orkut but not Plus), Activity Streams (present in Buzz, but not Plus, though certainly an inspiration), Social Graph API (no longer available) and RSS (not just Reader, but Feedburner is fading out and podcast app Listen was killed months ago).
Furthermore, Android has been a stonking success for the company, and while it may be open source, with a relatively open store policy, it’s not particularly based on open standards in the way that ChromeOS, WebOS, and now Firefox OS are.
So overall, Google’s lesson has been to lead with a compelling user experience first and then build an API from there, an API which may be based on open standards, but only if it’s a means to an end. Developers are much more attracted to a big market than a glorious proclamation of Open. It’s this philosophy that explains why Google has been so cautious with the Google Plus API.
Google isn’t giving up on blogs and media. Far from it. They already have Google News, Google Currents, and Google Now. And on Plus, they have vibrant product pages and communities. The Economist, Time, and ESPN all have over 2 million followers, for example.
This comes at a time when Facebook has been facing a backlash from journalists, with people saying that unless you’re paying for sponsored posts, it doesn’t show up in streams. Facebook’s recent design aims to fix this with a separate Subscriptions area, but as discussed on this week’s TWIT, it’s looking more like they experimented with subscriptions, that it wasn’t core to their business of connecting individuals, and now it’s off to the side.
So Google has an opportunity to win over media brands right now, and I believe they’ll be placing an emphasis on this in their own apps like Currents, as well as on Google Plus proper. In many respects, Currents is exactly what you’d expect from Google in 2013. It’s pretty, mobile-native, and “just works” without anyone having to learn the details of RSS.
Looking further ahead, Google has a vision heavily influenced by machine learning. The company has long known that the best search is the one you didn’t have to make, and this always-on attitude is now coming to fruition with Google Now. Google Now anticipates what users might be interested in at any time, and that includes the kind of articles people might presently be discovering on Google Plus.
Reader’s demise is understandably a sad moment for many, but I believe in time, it will be a positive for the overall ecosystem. Google simply wasn’t innovating on Reader, and as people shift over to services like Feedly or Newsblur (and new ones are popping up as I write), those companies will have extra incentive to innovate and extra resources to do so. Meanwhile, Google will continue to work on what it does best: boiling oceans and shooting for the moon.
Michael Mahemoff previously worked at Google and is founder of cloud podcasting service player.fm. Follow him on Twitter @mahemoff.
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A two-dollar bill taped over Bear Stearns' logo at its Madison Avenue headquarters just about said it all. On March 16, 2008, after a profound loss of confidence by Bear Stearns' lenders, circumstances -- and the federal government -- pushed the venerable investment bank into the arms of�JPMorgan Chase� (NYSE: JPM ) for a mere $2 per share.
Though the deal was later recut to $10 per share, it was cold comfort to employees and major Bear investors. The week prior, shares changed hands at $70. In January 2007, the stock had fetched more than $170.
Ask why Bear fell, and perhaps the best answer is the easiest: leverage. At the end of the last quarter before its fire-sale, the bank was levered at nearly 34-to-1. At that nosebleed level, a mere 3% drop in the value of its assets was all it would take to wipe out its entire equity base.�
In essence, Bear was betting the house on its traders, bankers, and managers being right... all the time... or else.
But while some versions of the pre-crisis Wall Street narrative suggest that banks -- and investment banks in particular -- got�risky in the period just preceding the crisis, this penchant for balance-sheet risk-taking wasn't new at Bear. Look back over the decade preceding its collapse: Bear almost continually kept an end-of-year leverage ratio approaching, or above, 30. And at many Wall Street firms, the end-of-period leverage ratio is considerably lower than what they're running around with mid-quarter.
A Dangerous Addiction to Leverage | Create infographics.
It'd also be a mistake to say this was an infection of the late 1990s and early 2000s. Though many -- including past Bear leadership -- point fingers at former CEO Jimmy Cayne, Bear was a swashbuckling outfit. The bank was full of high-octane financiers making a name for Bear by taking on trades and business lines that competitors often wouldn't. They were voracious card players. They were gamblers.
Bear Stearns had a long and successful history. But in many ways, it was a powder keg of risk, just waiting for the right crisis to blow the entire edifice to bits.
The leverage ratio, of course, no more tells the whole story of Bear's collapse than the Battle of Yorktown tells the whole story of the Revolutionary War. The nature of Bear's financing -- and that of its competitors -- played a significant role. With roughly a quarter to a third of its liabilities coming from short-term repurchase agreements, there was little guaranteed stability in the ground on which the firm stood.
The bank was likewise at the very heart of the structured-security business that suffered the most during the crisis. In 2006, $5 billion of Bear's $9 billion in total revenue came from principal trading -- nearly three-quarters of which came from fixed-income products like mortgage-backed securities, leveraged loans, and credit derivatives. Again, that wasn't a completely new development. In 1998, roughly a quarter of Bear's total revenue came from fixed-income principal trading.
There were also the personalities at Bear Stearns. A colorful crowd led by former scrap-iron salesman Jimmy Cayne, many at Bear relished the view of firm as rough-and-tumble "street fighters." While perhaps skilled traders, the leaders of Bear weren't always the best politicians -- Cayne's refusal to join the syndicate of major Wall Street firms bailing out Long-Term Capital Management in 1998 was likely not forgotten by others on The Street.
But the reason Bear Stearns' imploded -- even as close competitors Goldman Sachs� (NYSE: GS ) and Morgan Stanley� (NYSE: MS ) managed to navigate the storm -- can't be found in any one of these things. In the end, it was�all�of the above, and more. And even that caustic concoction didn't cause the collapse on its own. Those ingredients simply put Bear on the train tracks -- it took the screaming freight train of the once-in-a-generation financial panic to bring it all together into tragedy.
In the articles that follow, we take a look back at some of the specifics of Bear and its failure, as well as a look forward to the legacy that it's left and what we can learn from it.
The bank that swallowed the Bear
In Bear's darkest hour, JPMorgan swooped in to take over the investment bank. While widely seen as a savvy deal on JPMorgan's part, does this mean�JPMorgan is a buy today? To dig in, I invite you to read our premium research report on the bank. Click here now for instant access.
Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ: SIRI ) moved lower this week, closing 3% lower to hit $3.11. The general market moved higher, so Sirius XM was bucking the positive trend.
Let's take a closer look.
Don't Frear the reaping
CFO David Frear was a presenter at this week's Piper Jaffray Technology, Media, and Telecommunications Conference. He offered up some upbeat insight into the media giant's business, occasionally debunking conventional wisdom.
For starters, he said buyers of used cars with Sirius XM receivers convert at the same rate as new-car buyers. That's surprising, since one could have easily assumed that drivers turning to secondhand cars in a move to milk more value out of their purchasing dollars would seem less likely to be able to afford satellite radio.
One can always argue that older cars don't have the same kind of high-tech toys that new cars do that make it easy to stream online radio in lieu of premium radio, but Frear had an even bigger surprise there. The conversion rate for Sirius XM has clocked in higher in cars with Bluetooth dashboard integration for seamless online streaming.
Frear was surprised at the data himself, concluding that car buyers seeking out connected cars are early adopters who are already consuming audio across different options. In other words, they'll stream Pandora, but they still crave their Howard Stern.
Wall Street love
Lazard Capital Markets doesn't stand still in assessing Sirius XM. The analyst firm lowered its price target on the shares from $2.90 to $2.70 this past summer, only to eventually move up from $3.25 to $3.50 a few months later.
Lazard's new price target is $4. A note on Forbes indicates that the boost is tied to expectations that the company will convert some of its debt to equity. Such a move would be dilutive to a company with more than 6.6 billion shares fully diluted outstanding, but cleaning up its balance sheet would lower its interest expense exposure, which clocked in at $265.3 million last year alone.
Jumping through hoops
Sirius XM is making an interesting March Madness wager, activating dormant receivers from March 19 to March 24 for access to every game during those first six days of the NCAA men's basketball championship.
Hoops fans know that March Madness continues well beyond March 24, so the hope here is that basketball fans that aren't subscribers will pay up to continue receiving the service through the Final Four in early April. Since a little more than half of the 50 million cars out there with satellite receivers are inactive, this move that opens up the service to a large audience with little effort on its end.
Sure, one can argue that terrestrial radio also offers thorough March Madness coverage. But you still can't blame Sirius XM for tyring.
Premium streaming
Pandora has found it a challenge to get its 67.7 million active listeners to pay up for the leading music streaming service, but Spotify isn't having a problem getting people to crack open their pocketbooks. Spotify revealed this week that 6 million of its 24 million users are now premium accounts, paying $4.99 a month for ad-free PC streaming or $9.99 a month for access across mobile and all other devices.
Pandora must be jealous, while Sirius XM should be encouraged by the appetite for premium streaming. Pandora did post strong quarterly results earlier this month, but just 13% of its revenue is coming from subscriptions.
In the meantime, Pandora's CEO stepped down earlier this month, and a name that keeps coming up for a possible replacement is none other than former Sirius XM chief Mel Karmazin. That would be an interesting choice, though it's hard to fathom that Pandora would be able to afford him.
Beyond this week
Even though Sirius XM is one of the market's biggest winners since bottoming out three years ago, there's still some healthy upside to be had if things go right for it -- and plenty of room for it to fall if things don't. Read all about Sirius in The Motley Fool's�brand-new premium report. To get started, just click here now.
There's never a dull week on Wall Street. Let's go over some of the news that will shape the week to come.
Monday
The market kicks off with Celsion (NASDAQ: CLSN ) reporting its latest quarterly results on Monday morning. The oncology specialist is targeting cancer tumor-targeting treatments through focused heat energy in combination with heat-activated liposomal drug technology. Analysts see Celsion posting a deficit in line with what it did a year earlier, and that's natural for upstart biotechs.
Tuesday
Gramercy Capital (NYSE: GKK ) reports on Tuesday. Investors are hoping the REIT will reinstate its dividend later this year. Gramercy owns or has stakes in 116 office and industrial buildings totaling nearly 5 million square feet.
Wednesday
Jabil Circuit (NYSE: JBL ) checks in on Wednesday. The contract manufacturer for electronics has been meandering lately. Analysts see Jabil posting a slight uptick in revenue but a slight dip in profitability.
Thursday
Vringo (NYSEMKT: VRNG ) will be an interesting name to watch on Thursday. This was an obscure app developer at the start of last year, but acquiring some old Lycos search patents has given the small company ammo to go after dot-com giants over the past year.
The quarterly financials will be welcome, but investors will be more interested on how things are going on the patent litigation front.
Friday
Friday is usually quiet on the earnings front, so let's turn our attention to BlackBerry (NASDAQ: BBRY ) . The smartphone pioneer's Z10 -- the first smartphone with the ballyhooed BlackBerry 10 mobile operating system -- will be available in the U.S. for the first time on Friday.
Skeptics think it's too late for BlackBerry, but the shares have been beaten down so badly over the years that even a whiff of success can send the shares moving higher.
Now let's look at the year ahead
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.
The Dow Jones Industrial Average has hit an all-time high. The Standard & Poor's 500-stock index is close behind. Stock prices remain reasonably priced based on many measures, individual investors are shifting back to stocks and corporate profits have been strong.
So what are a group of hedge funds and other investors doing? Selling.
Bearish-minded traders point to a variety of concerns, including the market's reliance on the Federal Reserve's help, signs of excesses in corners of the bond market and froth in speculative shares. Some, like James Litinsky, even predict a recession over the next year because the recovery from the 2008 downturn is getting long in the tooth and the Fed won't juice markets forever.
"The rally is built on unprecedented government intervention," said Mr. Litinsky, who runs the $1.3 billion hedge fund JHL Capital Group. He is betting against a number of stocks and wagering on climbing Treasury rates. "The economy is fine right now, but there could be a trigger moment," such as the Fed reining in its bond buying, that could cause interest rates to go higher and stocks to tumble.
There is always a seller for every buyer, of course, and it is never hard to find a Wall Street pro with a glass-half-empty perspective. But as investors cheer the market's impressive gains, it can be instructive to pay some attention to the party poopers of the stock-market celebration.
Betting against the stock market, or just holding substantial amounts of cash, hasn't been a wise move over the past four years. Just ask so-called long-short hedge-fund managers, or those who wager both on and against shares.
The average fund specializing in this kind of investing has scored gains of 4% this year through March 4, according to industry tracker HFR Inc. Other stock-focused strategies were up 5%. Over the past year, the average stock hedge fund has gained 4.5% versus a rise of 11.4% for the S&P 500.
Skeptics argue that stocks only look attractive relative to both risky and safer bonds and because investors are frustrated with the puny rates on their savings. This will end when central banks take the punch bowl away and reduce their activity, sending rates higher, bears say.
A cautious stance has cost John Brynjolfsson, who runs the $800 million hedge fund Armored Wolf LLC, which is up about 1% his year. He isn't turning into a bull, though. Mr. Brynjolfsson is focused on the continuing stalemate in Washington over controlling the nation's debt as well as long-term worries about the ability of the global economy to grow. European markets have stabilized, but he points to continuing economic weakness in the region. Mr. Brynjolfsson's fund has purchased derivative positions that will rise if the S&P 500 falls.
On Wednesday, stocks were mixed, giving hope to both sides. The Dow rose 42.47 points to a record 14296.24, the S&P 500 gained 1.67 to 1541.46, but the Nasdaq Composite Index fell 1.77 to 3222.37.
Bulls scoff at the bear argument, noting that stocks aren't expensive based on many earnings, dividend-yield and cash-flow measures. Until bonds begin to weaken and rates rise, many see little reason for concern.
Achur A. Iskounen, who runs hedge-fund firm Iskounen & Co., LLC, is worried about bonds, though. In 2007, when the stock market was last nearing a peak, investors ignored signs of trouble in riskier debt markets. Now, Mr. Iskounen noted that lower-rated companies are finding it easy to sell debt to investors. That is among the signs that investors are ignoring risks just to get their hands on investments with higher interest rates than safe debt, Mr. Iskounen said.
"The equity market is very detached from potential risks stemming from credit markets," said Mr. Iskounen, who calls himself "constructively bearish," or negative on the market but willing to buy a few stocks. His fund is up about 4.5% this year.
Some investors see a troubling divergence between the U.S., which is enjoying a rebirth in energy, manufacturing and housing sectors, and limp growth and looming troubles abroad. Shares of Yum! Brands Inc. which has a huge presence in China, are up just more than 4% over the past year, while U.S.-focused Home Depot Inc. has soared more than 48%.
Sahm Adrangi, chief investment officer of Kerrisdale Capital, which has made money betting against Chinese and other stocks, worries about soaring shares of some smaller, more speculative stocks, which he said are a sign of the market's froth. One stock he is shorting: Opko Health Inc., a pharmaceutical and diagnostic-product company that is up 52% this year.
"The overall market doesn't seem overvalued," Mr. Adrangi said. "But we're seeing irrationality in a lot of speculative names."
Meanwhile, margin debt, or the amount of money that investors have borrowed to invest in stocks, is climbing. When this borrowing rises, it can suggest that individual investors are becoming too comfortable with risk, a sign the market is overheated.
Some heavily shorted stocks have been soaring, as these traders close out short positions by buying shares. That's not a reason to get excited about these stocks, some traders say.
For all their conviction, the bears realize it may be awhile before their dark predictions come true.
"Unfortunately, I am bearish and I have been wrong," said Samer Nsouli, chief investment officer at Lyford Group International, a hedge fund, who argues that recent weakness in copper and oil is a portent of a global slowdown. "Make no mistake, it will end in tears. The eternal question is when."
Write to Gregory Zuckerman at gregory.zuckerman@wsj.com
Printed in The Wall Street Journal, page C1Birner Dental Mgmt. Services (NASDAQ:BDMS) witnessed volume of 11,773.00 shares during last trade however it holds an average trading capacity of 1,174.00 shares. BDMS last trade opened at $19.46 reached intraday low of $18.77 and no change for the day to close at $19.75.
BDMS has a market capitalization $36.66 million and an enterprise value at $39.80 million. Trailing twelve months price to sales ratio of the stock was 0.57 while price to book ratio in most recent quarter was 4.56. In profitability ratios, net profit margin in past twelve months appeared at 2.00% whereas operating profit margin for the same period at 4.08%.
The company made a return on asset of 7.25% in past twelve months and return on equity of 19.10% for similar period. In the period of trailing 12 months it generated revenue amounted to $64.62 million gaining $34.87 revenue per share. Its year over year, quarterly growth of revenue was 3.80% holding -27.70% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $924.58K cash in hand making cash per share at 0.50. The total of $4.06 million debt was there putting a total debt to equity ratio 50.64. Moreover its current ratio according to same quarter results was 0.71 and book value per share was 4.33.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 6.99% where the stock current price exhibited down beat from its 50 day moving average price of $20.06 and remained above from its 200 Day Moving Average price of $19.64.
BDMS holds 1.86 million outstanding shares with 662.20K floating shares where insider possessed 64.47% and institutions kept 2.80%.
Ford (NYSE: F ) CEO Alan Mulally took a 29% pay cut for 2012, according to a SEC proxy statement�filed today. The executive pulled in $21 million in overall compensation, but felt the squeeze due to Ford's failure to achieve three-quarters of its performance targets.
Source: SEC PRE 14A�
| � | 2011 ($) | 2012 ($M) |
|---|---|---|
Salary | $2 | $2 |
Bonus | $5.5 | $4 |
Stock Options and Addtl. Compensation | $22 | $15 |
Total: | $29.5 | $21 |
Source: Bloomberg�
Although market approval for 2012 is evident from the corporations' 16.4% stock price increase (the S&P 500 bumped up 11.7%),�the blue oval missed on goals for profit, cash flow, and market share.�
Previously CEO of Boeing Commercial, Mulally joined Ford in 2006�to pull the automaker through the Great Recession and beyond. According to CNNMoney, Mulally has accumulated more than $300 million of Ford shares over his career.�
Ford has been performing incredibly well as a company over the past few years -- it's making good vehicles, is consistently profitable, recently reinstated its dividend, and has done a remarkable job paying down its debt. The stock has recently taken off, and it appears that investors have begun to notice what Ford is doing right. Does this create an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? For in-depth analysis on whether Ford is a buy right now, and why, you're invited to check out The Motley Fool's premium research report on the company, authored by one of our top equity analysts. Simply click here now to claim your copy today.
Global Hunter Corp. (TSX.V: BOB) (FSE:G5D) currently operates an 18,000 + hectare land package in the coastal belt of Chile�s Andean Cordillera the �Chilean Iron-Copper Belt.
The Andes rose to fame for its mineral wealth during the Spanish conquest of South America; Although the Andean Amerindian people crafted ceremonial jewelry of gold and other metals the mineralization of the Andes were first mined in large scale after the Spanish arrival. Potos� in present-day Bolivia was one of the principal mines of the Spanish Empire in the New World. R�o de la Plata and Argentina derive their names from the silver of Potos�.
Currently, mining in the Andes of Chile and Peru, place these countries as the 1st and 3rd major producers of copper in the world. The Bolivian Andes produce principally tin although historically silver mining had a large impact on the economy of 17th century Europe.
There is a long history of mining in the Andes, from the Spanish silver mines in Potos� in the 16th century to the vast current porphyry copper deposits of Chuquicamata and Escondida in Chile and Toquepala in Peru. Other metals including iron, gold and tin in addition to non-metallic resources are also important.
For More Information Go To: www.globalhunter.ca
American Video Teleconferencing Corp. (Pink Sheets:AVOT) has hired a French speaking geologist to help search for rare earth claims in the Mekinac Township, province of Quebec, east central Canada. The documentation of the Quebec Department of Mines for Rare Earths is still not available in computers.
American Video believes that this industry; rare earth minerals is at the stage where it will require a great deal of attention, and the company is looking to expand its holdings. The Government of Quebec hasn’t conducted any real survey of this area from many years. American Video is searching also for a service provider who helps in an air borne survey, and this survey is in search of future acquisitions. American Video said that the area is still untouched and has been inactive since 1955 when high grade rare earth samples were taken.
These claims are 120 miles east of Montreal QC and 50 miles north of Three Rivers QC. For mining exploration the Province of Quebec is rated number one in the world and the property is accessible all year round with roads, power and water nearby.
China has been one of the main supplier to the US of the Earth’s rare mineral supplies, with these rare minerals American manufacturers are able to make high-tech products such as cell phones, wind turbines, and guided missiles, but all that might come to a screeching halt now that China has stopped supplying the material, the New York Times has reported.
In the wake of China’s decision, America now must look for other sources, that will be more reliable for our future needs, and American Video Teleconferencing Corp. may just be the new source.
The Board of Directors of Nicor Inc. (NYSE:GAS) declared a quarterly common stock dividend of 46.5 cents per share, payable February 1, 2011, to stockholders of record on December 31, 2010. This payment continues the annual rate of $1.86 per share and represents the 228th consecutive quarterly dividend payment by the company. A dividend of 62.5 cents per share of 5.00% convertible preferred stock was also declared payable February 1, 2011.
Nicor Inc., through its subsidiaries, engages in natural gas distribution business in the United States. The company distributes natural gas to approximately 2.2 million residential, commercial, and industrial customers in northern Illinois. It also provides natural gas storage and transmission-related services to marketers and other gas distribution companies.
Thomas & Betts Corp. (NYSE:TNB) announced on November 22, 2010 that it had completed the divestiture of its non-strategic communications products business to Belden Inc. for cash consideration of $78 million. The communications products offering includes coaxial cable drop connectors, pole line hardware and telecom enclosures sold under the Snap-N-Seal�, LRC�, Diamond� and Kold-N-Klose� brand names. The business, which is included in the company�s global Electrical segment, generated approximately $45 million in sales and approximately $0.09 earnings per diluted share for the first nine months of 2010.
Thomas & Betts Corporation designs, manufactures, and markets electrical components for industrial, construction, utility, and communications markets in the United States, Canada, and Europe. It operates in three segments: Electrical; Steel Structures; and Heating, Ventilation, and Air-Conditioning (HVAC). The Electrical segment offers connectors, components, and other products for industrial, construction, utility, and communications applications.
Saul Centers Inc. (NYSE:BFS) announced its operating results for the quarter ended September 30, 2010. Total revenue for the three months ended September 30, 2010 (�2010 Quarter�) decreased 1.7% to $39,551,000 compared to $40,235,000 for the three months ended September 30, 2009. Operating income, which is net income available to common stockholders before loss on early extinguishment of debt, gains on property dispositions, acquisition related costs, income attributable to the no controlling interest and preferred stock dividends, decreased 8.2% to $10,411,000 for the 2010 Quarter compared to $11,344,000 for the 2009 Quarter, primarily due to a single-location office tenant default. Net income increased 36.6% to $15,503,000 for the 2010 Quarter compared to $11,349,000 for the 2009 Quarter primarily due to a $3,591,000 gain on the sale of the Company�s Lexington property and a gain on casualty settlement of $1,700,000 arising from the excess of estimated insurance proceeds over the carrying value of assets damaged during a severe hail storm at French Market. All of the insurance proceeds will be used to restore the damaged assets. Net income available to common stockholders was $9,046,000, or $0.49 per diluted share, for the 2010 Quarter compared to $5,822,000, or $0.32 per diluted share, for the 2009 Quarter.
Saul Centers, Inc. operates as a real estate investment trust in the United States. The company, through its subsidiaries, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development, and financing of community and neighborhood shopping centers and office properties, primarily in the Washington, DC/Baltimore metropolitan area.
Don't you wish more companies would dream big? I don't mean "big" as in, let's make some more money next year, or adding a new feature to your flagship product. I'm talking BIG, like changing the world for the better. You know, the way Google (NASDAQ: GOOG ) dreams.
Big G just took steps to make sure that the crazy dreams keep coming. CEO Larry Page just reassigned two of his top dreamers to the division that's supposed to think up bigger, crazier, and more disruptive ideas without worrying too much about the business side of it all.
I thought Rubin was basically fired?
At first glance, these moves might look like demotions. Andy Rubin was part of the Danger/Sidekick team that arguably invented the first proto-smartphone, and his Android platform is now the biggest mobile computing beast in the world. He's been replaced by the more even-keeled Sundar Pichai, who already oversees the Google Chrome web browser, Chrome OS, and the Google Drive storage product.
This frees Rubin up to "start a new chapter at Google," in Page's words. And what might that new chapter look like? "Andy, more moonshots please!"
The original moonshot on July 16, 1969. Image source: NASA.
Google defines a moonshot this way: "Moonshots live in the gray area between audacious technology and pure science fiction. Instead of a mere 10% gain, a moonshot aims for a 10x improvement over what currently exists. The combination of a huge problem, a radical solution to that problem, and the breakthrough technology that just might make that solution possible, is the essence of a moonshot."
Keep that far-reaching goal and the CEO's gleeful order in mind as you read on.
That's the first big innovation booster Page launched this week. The second came when mapping and commerce services leader Jeff Huber was told to report for work at Google X Lab, according to a Wall Street Journal report. Huber was champing at the bit "to work in more of a start-up-like environment," a Google spokeswoman confirmed to the Journal.
On the organizational level, these changes simplify Google from seven core product groups to five, which is a good idea in itself. Fewer divisions means more operational unity, and managers should be able to direct resources more efficiently in a simpler structure.
But that's not really the goal here. Like I said, it's all about driving more innovation and more insane moonshot projects.
What is this wacky lab all about?
Huber will definitely land at the X Lab and if the facility is a refrigerator, you can think of Rubin as a giant magnet. They just belong together.
When you hear about silly or outlandish Google projects, you can assume that it started at X Labs. The Google Glass augmented-reality specs that look set to launch at retail this year? An X Lab project.
The most talked-about X Lab project to date. Image source: Wikimedia user Antonio Zugaldia.
Driverless cars, designed to take people from point A to point B without the risk of human error? Another X Lab deal. Johnny Chung Lee helped Microsoft (NASDAQ: MSFT ) revolutionize video games with the Xbox Kinect controller-less gaming system. Now he's at Google X, working on "the Web of things," where machines talk to each other to make daily life safer, easier, and more fun.
These are just the best-known X Lab projects. Most of what happens there is kept tightly under wraps. Part of that is because Google wants to get a jump on the competition in case any of these ideas become commercial hits, but that's not all. The world might just not be ready for some of these crazy stunts yet.
Straight from the Captain's mouth
The Lab even has an official Captain of Moonshots. Dr. Astro Teller holds a Ph.D. In artificial intelligence and develops "seemingly impossible ideas that through science and technology can be brought to reality." You get one guess at where he works. Hint: I believe he'll work closely with �Rubin and Huber in the near future.
Teller spoke on audacity and innovation at this week's South by Southwest festival. He's a big fan of Tesla Motors (NASDAQ: TSLA ) founder Elon Musk -- not because he's achieved success in electric cars and space travel, but because he dared to attack those seemingly unreachable goals at all. "He's like a walking moonshot. He's so audacious, it seems limitless."
He also underscored one of the foundational concepts of Google itself: Make something great and the money follows naturally. "If you're adding huge amounts of value to the world, the money will come back and find you," Teller said. Read that statement with Google's stated 10-point philosophy in mind: "We take great care to ensure that they will ultimately serve you, rather than our own internal goal or bottom line. ... You can make money without doing evil. ... Ultimately, our constant dissatisfaction with the way things are becomes the driving force behind everything we do."
If you don't believe these things, you're a pretty poor job candidate at Google. Not only that, but you probably shouldn't even own the stock. Personally, I find this mind-set incredibly bold, valuable, and inspirational.
I can think of a few so-called inventors who focus more on the short-term bottom line, where your money might sleep more comfortably right now. Just don't complain a decade or two down the road, when Google's "impossible" inventions have changed the world and today's money-making wonders will be forgotten.
What's next?
That's the environment into which Larry Page is pushing two of his most innovative lieutenants this week -- reporting directly to his fellow founder, Sergey Brin. Their work will likely be classified, top-secret, leak-this-and-you're-fired, but I can't wait to see what they cook up in the long run.
As a human being, this stuff renews my faith in a better future. As a Google shareholder, I'm beyond excited about the lifelong value the company is building in that strange lab.
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Following the resignation of Local.com‘s (LOCM) chief financial officer Brenda Agius last week for personal reasons, TheStreetSweeper.com today ponders asks why the CFO seems never to have actually taken up residence in California, despite the fact her move back to the East Coast is listed as the reason for her departure.
StreetSweeper’s Melissa Davis lists as curious the fact that public records show Agius with a car and a home registered in Florida, with the home listed as her primary residence. And despite relocation expenses fronted by Local, it appears Agius never purchased a home in California nor obtained a California driver’s license. Agius’s LinkedIn profile, moreover, has no trace of her work for Local.com.
Whether all of this means Agius never went to Florida is not clear, of course. Davis writes that the company would not comment on the matters she raised.
Davis also digs into Local’s 8-K filing from last week detailing Agius’s departure, and notes that the language says Local “terminated” Agius. Whether this is a minor legalese quibble, or whether Agius was actually asked to leave, rather than requesting leave, isn’t clear — at least not to me.
Local.com shares are up 6 cents, or 1.4%, at $4.48.
Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating ones I read this week.
Fundamentals
Value investing is back in fashion, writes the Financial Times:
As the broader US equities market nears an all-time high, value has come back into fashion. The value side of the mutual fund world boasts the best performing funds of last year and is now ahead of its growth focused rivals for the first time in five years, according to Lipper, a research group.
In part that reflects the impact of one stock,�Apple, which accounts for more than 5 per cent of the S&P growth index and has tumbled by almost two-fifths from its September high. Technology also ranks as the worst-performing industry group on the S&P 500 this year, up just 3.7 per cent.
A fundamental shift may also be under way though, as the wider market rally encourages investors to change strategy.
Charge away
Daniel Gross writes on the health and sustainability of American's latest spending spree:
Retail sales have bounced back smartly since their spring 2009 lows. Every month, in effect, they set a new record. Sales of big-ticket items like cars and homes are up sharply as well. But consumers are shopping till they drop without dropping their plastic. The level of revolving debt -- i.e., credit cards -- was about $851 billion in January 2013. That's�below�the outstanding total in January 2006. The upshot is that American consumers are supporting a significantly higher level of retail spending with a much lower level of credit card debt. And to the extent they are financing purchases with debt, they are doing a much, much better job staying current on their payments.
Mind the gap
This chart, from the Economic Policy Institute, shows the gap between productivity of workers and those workers' average incomes:
Buy and hold
Josh Brown shares some context on the stock rally:
Today marks four years since that amazing bottom -- according to�Bespoke Investment Group�we're at 1,460 days, making this current bull market the eighth longest of all time! Further, in terms of the strength of the rally: "Since the closing low on 3/9/09, the S&P 500 has rallied 129.3%, which ranks sixth all time. If the S&P 500 can manage to rally another 17 points, the current bull will move up the ladder to fifth strongest all time." Wilshire Associates estimates that $11 trillion in investor wealth has been regained as a result of the rally's run.
To which I say Happy Fourth Birthday to the Impossible Rally -- the most hated, doubted, fretted over, denied and despised bull market we may�ever�see as long as we live and trade. The amount I've learned -- about both stocks and myself -- just from trading and investing in this trend has been absolutely staggering, the kind of education that you truly cannot put a price on.
Sour Apples
Business Insider quotes writer John Gruber on what really should worry Apple (NASDAQ: AAPL ) investors:
Instead, Gruber says, "the single biggest problem that Apple faces, and almost nobody is talking about," is the threat of Apple losing its really talented employees.
He says some people that he knows have already left, but he also cautions that some people have come back. He's also careful to note that not a lot of people have left.
"The problem isn't that Apple is bleeding talent, the problem is that they could," says Gruber. "It would be devastating to the company."
Gloom
Stocks are at an all-time high, but small businesses aren't cheering, as this chart from Calculated Risk shows:
Post-mortems
Ben Popper writes on the downfall of Groupon (NASDAQ: GRPN ) CEO Andrew Mason:
The history of Lefkofsky and Mason highlights the need for a new CEO who can stand up to his chairman. "I was talking with Andrew about his regrets," says Sennett, recalling a rare occasion where the rapid-fire Mason paused before speaking his mind. "He told me that he should have questioned the accounting metrics the company was using. But he relied on Lefkofsky to handle the finances. After the SEC began investigating this, I think he realized he should not have passed the buck."
Optimism
Jack Lew, the new secretary of the Treasury, says we have a resilient economy. Watch the video here.
Enjoy your weekend.�
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Bill Gross, co-chief investment officer of PIMCO, the world's biggest bond fund manager, on Thursday urged lawmakers to cut the massive federal deficit, but not so swiftly as to choke off the nascent economic recovery.
"Let's cut the deficit, but let's do it gradually" so that real economic growth can take hold, Gross (left) told Reuters in an interview after his testimony.
The news service notes lawmakers struck a deal on Wednesday that delays for two weeks a showdown over the current year's spending plan. Republicans are seeking some $61 billion of cuts to help reduce the deficit, estimated to hit $1.65 trillion this year, but Senate Democrats are preparing a measure that would keep funding essentially flat.
The first negotiations on the budget are expected to take place on Thursday, according to congressional aides. Wednesday's deal averted a government shutdown as funding for daily operations had been due to expire on Friday, March 4.
Gross, who oversees $1.2 trillion of assets at the Newport Beach, Calif.-based, investment management firm, said he does not expect a credible deficit reduction plan until after the 2012 elections, Reuters reports.
Addressing the risk to markets from the mushrooming budget deficit, Gross said treasuries are moving toward being "less of a triple-A credit," echoing a concern many bond investors have over how long the United States can retain the highest possible rating designated by credit rating agencies.
Gross, who has been avoiding U.S. government debt securities recently, said he suspects the yield on treasuries will move higher this summer after the Federal Reserve brings an end to its $600 billion treasury purchasing program.
In a more normal environment, the yield on benchmark U.S. 10-year notes would more closely track the nominal rate of gross domestic product growth, which Gross estimates to be roughly 5%, Reuters says.
A yield that high is not likely in this environment, but a 4% yield for 10-year notes is a "rational expectation" if the Fed "disappears as the buyer of last resort," Gross said. The note currently yields 3.56%, the news service notes.
Still, Gross said sufficient headwinds remain in the euro zone recovery to prevent any near-term rate increase from becoming a trend any time soon.
While the market is up and enjoying its ride this afternoon (despite the overhang of looming threats related to sequester), we�ve got our eyes on three of the lesser than stellar performers.
First up is health product and vitamin retailer Vitamin Shoppe (VSI) which skidded a whopping 19% after the company said that it will miss its comparable-store sales estimates in the fourth quarter.
Vitamin Shoppe noted that the results would show its weakest quarter in comparable-store sales growth since 2010, with comps rising 5.2% in the quarter compared to the 6.3% analysts polled by FactSet. Vitamin Shoppe cited tepid sales in the wake of Hurricane Sandy for some of its woes.
Alongside the IKEA horse meatball disaster currently making headlines, more bad news in the world of meat came from Tyson Foods (TSN) and shares slumped 3.3% in trading Tuesday.
The company warned that its fourth quarter would be weaker-than-expected related to margin pressure in its beef and pork segments. Despite that, Tyson Foods remained positive on its full year but failed to impress Stephens analyst Farha Aslam, who downgraded the company to Equal Weight from Overweight and cut the price target to $26 from $28 in a note today.
Aslam didn�t mince words:
Tyson Foods shares are up 53% over the past six months and now more adequately reflect the opportunities and challenges for the Company, particularly given uncertainty regarding consumer confidence and the availability of cattle over the next six months.
Last but never least, private education provider Apollo Group (APOL) also saw its stock hit, falling 3.5% after it reduced its fiscal 2013 net revenue estimate to $3.65-$3.75 billion, down from its previous forecast of $3.65-$3.80 billion. The company fell to a 53-week low in the wake of its bad news and cited disappointing enrollment in December as a source for its woes.
Worse still for Apollo, news broke that on Feb. 22, the University of Phoenix and Western International University were given notices that the Higher Learning Commission is pursuing a proposal to place them on probation over �governance� concerns.
Credit Suisse analyst K. Flynn weighed in on this issue in a research note earlier today.
These governance concerns are less concerning than academic concerns would have been, and we suspect Apollo can address these Higher Learning Commission concerns with measures that will not significantly hurt earnings power. However, given the Higher Learning Commission�s other concerns, we worry Apollo may need to make additional program and recruiting practice changes that could raise expenses, weigh on starts/ enrollments and increase downside earnings risks; in addition, Probation could hurt the University Of Phoenix’s reputation, which could further pressure enrollment and earnings.
Among recent enforcement actions by the SEC and FINRA were charges against a private equity firm, a former executive and an unregistered broker over some $500 million in improper investment solicitations; a $2.8 million settlement over misleading investors about fund performance; censure of a firm for not reporting its involvement in civil litigation related to securities; and censure of another firm for failure to execute short sales properly.
Ranieri Partners Charged by SEC Over Unregistered Broker
Ranieri Partners, a New York-based private equity firm, together with a former executive and an unregistered broker, were charged by the SEC for improperly soliciting more than $500 million for the private funds it managed.
The unregistered broker, William Stephens of Hinsdale, Ill., was hired by former senior managing director Donald Phillips; Phillips, who lives in Barrington, Ill., was a longtime friend of Stephens and was in charge of efforts to raise capital. He was also responsible for overseeing Stephens’ activities; Stephens was supposed to be a “finder” and simply introduce prospective investors.
The finder, however, went far beyond that role, staying in constant contact with investors and providing them with important documentation on investments supplied to him by the firm. He also shared confidential information about other investors and their commitments to the funds, and brought about investments.
Instead of curtailing Stephens’ activities, Phillips not only ignored the signs that his friend was exceeding his supposed role, but provided him with the data he needed to bring about investments for the firm. According to the SEC, Phillips aided and abetted Stephens in his illegal actions.
While neither admitting nor denying the SEC’s findings, all three agreed to settle the charges. Ranieri Partners agreed to pay a penalty of $375,000 and Phillips $75,000, in addition to other actions, and Stephens agreed to be barred from the securities industry.
SEC Charges Oppenheimer & Co. Advisors With Misrepresentation
Two investment advisors at Oppenheimer & Co. (not affiliated with OppenheimerFunds) were charged by the SEC with misrepresenting to investors the valuation policies and performance of a private equity fund that they manage.
Oppenheimer Asset Management and Oppenheimer Alternative Investment Management were found by the SEC to distribute misleading quarterly reports and marketing materials stating that the fund’s holdings of other private equity funds were valued “based on the underlying managers’ estimated values.” In fact, that was not the case at all, and the difference in valuations was substantial.
Oppenheimer Global Resource Private Equity Fund I (OGR), which invests in other private equity funds, was marketed primarily to pensions, foundations, and endowments, as well as wealthy individuals and families, from around October 2009 to June 2010.
OGR’s single largest investment, Cartesian Investors-A, was valued not by its underlying manager, but by OGR’s portfolio manager, who bumped up the value and improved the appearance of OGR’s performance considerably. For the quarter ended June 30, 2009, the internal rate of return for OGR jumped from approximately 3.8% to 38.3%. But the increase was credited to overall performance, and not, as was the case, to the change in valuation methods.
Other misrepresentations included a claim that Cartesian’s value was written up by a third-party valuation firm and that OGR’s underlying funds were audited by third-party auditors. Neither was true.
Without admitting or denying the charges, Oppenheimer has agreed to pay more than $2.8 million to settle. The sum includes a penalty of $617,579 and the return of $2,269,098 to those who invested in OGR during the time period when the misrepresentations were made. In addition, it will pay a penalty of penalty of $132,421 to the commonwealth of Massachusetts in a related action taken by the Massachusetts attorney general.
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FINRA Censures, Fines UBS Securities over Civil Litigation Case
UBS Securities LLC was censured and fined $100,000 by FINRA for failing to report its involvement in a civil litigation case. The firm was named as a defendant in a securities-related case, but failed to provide copies of any of the filings to NASD/FINRA at the time. Instead, some time later it self-reported its failure to FINRA, but even then did not report all of them until a month later.
FINRA came down on the firm for its reporting failures and also for supervisory and WSP failures that were inadequate to keep the firm compliant with NASD reporting obligations.
UBS neither admitted nor denied the findings.
Tejas Securities Group Censured, Fined by FINRA on Short Sales
A fine of $91,000 and censure were waiting for Tejas Securities Group of Austin, Texas, after FINRA found that it had failed to correctly mark short sales as short, and had accepted and/or executed short sales when it neither borrowed nor arranged to borrow the security in question.
FINRA also found that Tejas’ ledger had recorded numerous short sales as long; the firm also failed to report short sales correctly to the FNTRF or the OTCRF, and failed to provide accurate reports to OATS. In addition, customer confirmations were inaccurate, with errors ranging from trade price to execution capacity to commission/commission equivalent charges. There were also supervisory and WSP failures, as well as recordkeeping inaccuracies.
Tejas consented to the censure and fine without admitting or denying FINRA’s findings.
LONDON -- Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI ) may open down by a nominal five points this morning. The index has closed higher for the last 10 trading days -- a streak it hasn't matched since 1996. Meanwhile, the S&P 500 (SNPINDEX: ^GSPC ) may open a single point lower after closing within two points of its all-time closing high yesterday.
After jobless claims came in lower than expected yesterday, will today's data provide another boost to the markets? First up, at 8:30 a.m. EDT, is February's consumer price index, which is expected to be up 0.6% after remaining unchanged in January. Also due at 8:30 a.m. EDT is the Empire State index for March, which is expected to remain unchanged at 10. At 9:15 a.m. EDT, industrial-production data is expected to show that output rose by 0.6% in February after falling by 0.1% in January. Finally, at 9:55 a.m. EDT, the University of Michigan Consumer Sentiment Index for March is expected to edge higher to 78, up from 77.6 in February.
Cruise ship giant Carnival is due to report earnings before the markets open this morning, but investors' attention may also be focused on U.S. banks, which have recently completed a round of stress tests. Bank of America and Morgan Stanley were both higher in premarket trading after the Federal Reserve approved their capital plans. However, JPMorgan Chase and Goldman Sachs were lower after the Fed provided only conditional approval for their plans.
European markets
In Europe, markets were mixed this morning as investors waited for news from the EU leaders' summit after preliminary comments yesterday suggested deficit targets might be relaxed in an effort to increase growth and reduce unemployment in the eurozone.
At 7:20 a.m. EDT, the DAX was down 0.12%, the CAC 40 was down 0.76%, the FTSE MIB was down 0.11%, and the IBEX 35 was down 0.61%. In London, the FTSE 100 (FTSEINDICES: ^FTSE ) was down 0.45%, dragged lower by the two largest companies in the index, HSBC Holdings and Royal Dutch Shell -- both companies fell by around 1.4%, outweighing gains on broker upgrades for International Consolidated Airlines and ARM Holdings.
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On this day in economic and financial history...
The rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. ...
The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit. ...
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.
Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.
--Inaugural address of President Franklin Delano Roosevelt, March 4, 1933.
Roosevelt's first major executive action took place less than 24 hours into his presidency when he declared a nationwide banking holiday on Sunday, March 5, 1933. This was done to stem the flow of panicked withdrawals that had begun three weeks earlier after Michigan Governor William A. Comstock declared the first statewide banking holiday in the country. Roosevelt proclaimed that all banks would remain closed until March 10. No banking institution would conduct any business during this time, particularly as it pertained to gold and silver, which the people where prohibited from withdrawing to hoard or export. In place of specie payments, banks were authorized to issue certificates and other forms of paper fiat currency.
More than 5,000 banks with more than $3 billion in deposits had failed by this point in the Great Depression, an amount equal to more than 40% of the currency then in circulation -- which was itself a sum greatly swollen by the national rush to withdraw. Roosevelt bought himself four days in which to lay out a more permanent plan. On the final day, emergency banking legislation raced through Congress and reached the President's desk. It validated and expanded the sweeping power Roosevelt exercised in enacting the bank holiday and implicitly took the United States off the gold standard by authorizing the Federal Reserve to print great amounts of paper currency that would not be redeemable in gold.
The New York Times repeatedly called the President's broad new currency powers "dictatorial" in its analysis of the act -- and with penalties for holding any gold set at a maximum fine of $10,000 (more than $175,000 today) and up to 10 years in jail, the paper did have a point. However, despite the President's enhanced powers over the national currency, Roosevelt decided not to reopen the banks. The holiday was extended, and Roosevelt prepared to explain himself in his first radio fireside chat, which took place on March 12. During this chat, Roosevelt laid out his plans for the banks, which would reopen on a limited basis beginning the following day.
It is possible that when the banks resume a very few people who have not recovered from their fear may again begin withdrawals. Let me make it clear to you that the banks will take care of all needs except of course the hysterical demands of hoarders -- and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime in every part of our nation. It needs no prophet to tell you that when the people find that they can get their money -- that they can get it when they want it for all legitimate purposes -- the phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you, my friends, that it is safer to keep your money in a reopened bank than it is to keep it under the mattress. ...
After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people themselves. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; and it is up to you to support and make it work.
It is your problem, my friends, your problem no less than it is mine. Together we cannot fail.
Roosevelt's assurance of bank soundness and government support worked. The following day, Americans began to pull money out from under the mattress and stick it back in the banks. Within two weeks, half the money withdrawn in the initial panic was back in the banks. Within two months, 20% less currency circulated in the hands of Americans as they continued to reopen or replenish their checking and savings accounts.
When the markets reopened on March 15 (it's a bit difficult to run a stock exchange without banks), investors offered an incredible show of support. The 15.3% increase of the Dow Jones Industrial Average (DJINDICES: ^DJI ) remains its all-time best single-day performance eight decades later. This was only the first day of the greatest turnaround in Dow history. From the first day of the bank holiday to the end of the year, the Dow gained 83% on its way to one of the sharpest bull-market rallies in history. Roosevelt had been right: The confidence of the American people turned out to be more important than gold. The confidence recovery presaged a dramatic economic recovery, which saw faster real GDP growth than the Roaring '20s as unemployment plunged (though it remained high) and corporations found their profit groove again.
The government's action during our most recent financial crisis was different in tone and more diffident to the whims of the bankers. Today, the phrase "too big to fail" is used both as a defense and as an epithet when discussing big banks, many of which absorbed their weaker peers with the help of massive infusions of federal funds. In 1933, the only business too big to fail was the American enterprise. Today, we hope the banking system rests on sturdier foundations than it did before the Great Depression. If it does not, will American leaders take guidance from Roosevelt's actions, or will we be doomed to repeat this bleak cycle of history all over again?
Shares of Digital Realty Trust (DLR) are down 93 cents, or 1.4%, at $64.44 after the company this morning reported Q4 revenue and funds from operations that slightly missed analysts’ estimates The company projected funds from operations this year slightly below what analysts have been estimating.
Revenue in the three months ended in December rose 29%, year over year, to $349.7 million, yielding funds from opeations of $1.16 per share.
Analysts had been modeling $450.5 million and $1.17 per share.
CEO Michael Foust remarked that the company was “very pleased” with “another solid year of earnings growth for our shareholders,” adding “We are very encouraged by the $31.4 million in annualized GAAP rental revenue that we have signed to date in 2013 which already represents our strongest first quarter for lease signings ever.”
The company during the quarter raised its dividend to 78 cents from 73 cents per share per quarter.
For this year, the company projected funds from operations per share of $4.70 to $4.85 per share. Analysts are currently modeling $4.85 per share.
Citigroup’s Michael Bilerman, who has a Neutral rating on the stock, writes that he’s surprised the shares sold off on the report, given the company reiterated the year view it had already given at its analyst day last month, which is a positive in as much as that forecast is probably “conservative.”
However, he does express concern about the cost of improving facilities to drive leasing:
While 4Q leasing activity was solid, we are concerned with the very high Tenant Improvements (TI�s) and Leasing Commissions that DLR was forced to pay on renewal leases in their portfolio � at $130/psf versus just $0.22-$18.08/psf in 1Q-3Q and if amortized into the new rent imply a roll-down. We look for details on whether this is space or tenant specific, or if it could suggest a more expensive cost of doing leasing. TI�s/Commissions on new leases were ~$56/psf and more or less inline with prior quarters, though the numbers tend to bounce around.
Shares of other data center REITs are under pressure, with CoreSite Realty (COR) down 70 cents, or 2%, at $30.32, Dupont Fabros Technology (DFT) down 13 cents, or half a percent, at $23.21, and the U.K.-based Telecity Group PLC (TCY) up 19 cents, or 2%, at $9.15.
Vivek Sharma has left Yahoo! (NASDAQ: YHOO ) , according to Kara Swisher at AllThingsD, who cites "numerous sources."
Sharma joined Yahoo! in 2009 after eight years as a McKinsey & Co. consultant. For the past year, he's been general manager of Yahoo! Mail and Messenger, leading a team of 300 product managers, designers, and engineers, according to his LinkedIn profile. Mail and Messenger are two of Yahoo!'s more popular products. Mail, in particular, served some 281 million accounts as of December.
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LOS ANGELES (AP) -- AEG, the company that owns the NHL's Los Angeles Kings and the Staples Center, is no longer for sale, its billionaire owner, Philip Anschutz, said Thursday.
The announcement came amid efforts by the company to build a downtown stadium to lure an NFL team back to Los Angeles.
Anschutz said in a statement that he had made it clear that he wouldn't sell the AEG sports and entertainment company unless the right buyer came forward.
It wasn't clear how far along the company had been in the sale process or how the move might affect its plans to build the proposed 72,000-seat Farmer's Field football stadium.
Anschutz said he will resume a more active role in AEG. Tim Leiweke, who has served as president and CEO and been the face of the company for more than 15 years, is leaving, Anschutz said.
The sale of the sports and entertainment company had been expected to fetch billions of dollars.
The Los Angeles Times reported that interested buyers included Mark Cuban, owner of the NBA's Dallas Mavericks, billionaire Patrick Soon-Shiong, and Guggenheim Partners, which recently led a consortium that bought the Los Angeles Dodgers.
Last week, Mayor Antonio Villaraigosa said in a television interview that Anschutz had to find a buyer for AEG first before moving forward with what he termed as "uphill climb" involving the stadium effort.
Villaraigosa stressed, however, that he believes the NFL would return to Los Angeles. The city has been without an NFL team since the Rams moved to St. Louis and the Raiders departed for Oakland in 1995.
NFL spokesman Brian McCarthy said the league will continue to monitor the developments with the stadium proposal and "remain interested in multiple sites in the Los Angeles area."
An email message left for AEG spokesman Michael Roth was not immediately returned.
AEG transformed the Los Angeles landscape with the opening of Staples Center in 1999. Its later addition of the LA Live entertainment complex helped revitalize the city's long-neglected downtown.
AEG holdings also include the Los Angeles Galaxy, part-ownership of the NBA's Los Angeles Lakers, and major entertainment and real estate holdings in Los Angeles.
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Last week, the Federal Reserve delivered results from the Dodd-Frank stress tests, which showed that all but one of the 18 banks tested have balance sheets that are battle-ready for a severe economic downturn. Today, the Fed released the results from the Comprehensive Capital Analysis and Review -- better known as the CCAR.
What does this mean for the nation's biggest banks? It means the difference between whether or not they'll be able to raise dividends and spend money on share buybacks.
For specifics on�what�the capital plans were, we'll have to wait for the individual banks to let us know. But for now, we do know which plans the Fed approved, and which got a thumbs-down.
Source: The Federal Reserve.
While it's not all that surprising that Ally Financial was shot down,�BB&T's (NYSE: BBT ) rejection is a bit of a shocker. On the approval side, Wells Fargo� (NYSE: WFC ) got a thumbs-up, as did�Citigroup� (NYSE: C ) -- which revealed last week that it was only asking for a small-ish share buyback and no dividend increase.�
Bank of America� (NYSE: BAC ) was approved as well. Given that both Wells Fargo and B of A's minimum tier 1 common ratio was lower�with�capital actions versus what we saw from the Dodd-Frank tests last week, it's reasonable to assume that they both asked for -- and were given the go-ahead for -- capital distribution plans.
Keep your eyes peeled for news from these banks, Fools; there may be some capital coming your way.
Is B of A a buy?
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The Motley Fool recently released its list of�The 25 Best Companies in America, naming the best businesses the nation has to offer. Yet even among companies that�didn't�make the final cut, some stocks distinguished themselves with their high quality and promise.�Microsoft (NASDAQ: MSFT ) is one of those companies, and it definitely deserves at least an honorable mention for its achievements.
The case for Microsoft
Hacking�has multiple meanings in the tech world. Most famously, it means to break into a secure system. But for Bill Gates and Paul Allen, hacking was just what they did. The pair, friends since childhood, were looking for a way to cash in�on their programming skills when, in 1975, they pitched Micro Instrumentation and Telemetry Systems, or MITS, on a tool for helping its new Altair computer interpret commands written in the BASIC programming language.
The resulting deal introduced the world to Altair BASIC. Microsoft�would later develop Windows and grow to dominate the market for personal computer operating systems so completely that, in 1998, the Justice Department sued to stop the company from what they asserted were abuses of monopoly power. The business hasn't been the same since, which turns out to be good news for most of Microsoft's stakeholders. Indeed, Mr. Softy garners an honorable mention for its commitment to investors, employees, and the world at large.
Employees
While Microsoft has lost its share of high-profile executives in recent years -- former chief software architect Ray Ozzie, product marketing veteran Don Dodge, and one-time Windows chief Steven Sinofsky, to name three -- workers tend to give the company high marks as a place to work. More than 77% would recommend Microsoft to a friend, according to Glassdoor.
But that's also half the story. Workers are far less enthused by CEO Steve Ballmer. Only 48% approved of his performance as of this writing. "If there was a good performance measurement system then a forced stack ranking wouldn't be necessary. Poor performers would be fired and good performers wouldn't be forced out of their jobs," wrote one employee identified as a "curriculum manager." Another's advice was simply to "fire" current CEO Steve Ballmer. Investors tend to agree.
And yet with so many executives gone, there appears little chance Microsoft will seek to replace Ballmer. Nevertheless, it's troubling to see otherwise satisfied employees join a growing chorus of detractors.
Customers
Seeing once-hobbled competitors rise from the ashes can't be helping improve Ballmer's image. He famously derided Apple's�iPhone, only to see it become one of the world's most popular handheld devices. Google's Chrome browser has unseated Internet Explorer as top dog in certain regions.
Smartphones are more important than browsers to Microsoft's fortunes -- for now at least -- which is why the company has teamed with Nokia (NYSE: NOK ) for creating a compelling iPhone alternative. Trouble is, Samsung already has that position locked up thanks to the success of its Galaxy S series. Meanwhile, BlackBerry�has introduced a reimagined BlackBerry that could steal some Windows Phone sales.
Microsoft hasn't done enough to win customers to Windows Phone, and the new Surface -- which looked like a hit initially -- is beginning to look like an also-ran. Which brings us back to Microsoft's core business (i.e., Windows and productivity software) and the Xbox. The former tends to comprise the vast majority of operating profits�while gaming ekes out a meager gain�despite wide enthusiasm for the Halo series and the Xbox 360 console.
Shareholders
Some investors are understandably tired of seeing Microsoft's stock barely budge over the past decade. They've watched Apple and Google soar as Mr.Softy's share price took a turn for the worse in the years after the dot-com bubble burst.
And yet that may be the minority. So prolific was Microsoft's rise in the years following a 1986 initial public offering that it created a whole class of workers called, quite literally, "Microsoft millionaires." More than 12,000�are said to exist, and that includes three of the world's richest men: co-founders Gates and Allen plus Ballmer.
Meanwhile, those who invested in Microsoft's darkest days of spring 1998 -- when the Justice Department announced plans to go after the company -- have seen their shares rise five-fold, easily beating�the broader market.
World
While the Bill and Melinda Gates Foundation is an entity unto itself, there's no mistaking the Microsoft co-founder's influence�when it comes to philanthropy. Not only is Gates putting his own billions to use, he's persuaded Warren Buffett to join his cause and the pair have since convinced 11 other billionaires to sign a pledge promising to give away substantial fortunes for the good of all.
The case against Microsoft
Influence matters in investing, no doubt. But so does focus, and few companies have proven as aimless as Microsoft over the past decade. A half-hearted try at the cloud led Ozzie out the door even as Mr. Softy's fixation on features led to Zune and Vista -- functional but unintuitive products that couldn't stand up against simpler alternatives. Sales slumped as a result, and we don't yet know enough about Windows 8 to judge if Microsoft has learned its lesson.
Can Mr. Softy still make you a mint?
Even though Microsoft didn't end up making the Best 25 list,�its market position, loyal workforce, and (mostly) good history of delivering for shareholders -- a position that, today, is ensured by a dividend that yields more than 3% as of this writing -- strongly suggest the company deserved the distinction of being one of our 40 or so finalists.�
But is the stock worth buying if you don't own it? Is it one of the best for the next decade? With the prevailing winds blowing in the direction of cloud computing, �Microsoft has much work to do before minting more millionaires. In this brand-new premium report, our analyst explains the risks and opportunities facing Microsoft investors to help you decide whether the stock is a fit for your portfolio. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.
There is much debate about the effect of currency wars on gold and its future direction. Currently, the fundamentals of gold are muddled. On the one hand, central banks continue to print lots of money, and some believe currency wars are imminent. On the other hand, inflation is stable, and the metals are under the control of the momentum crowd, which represents weak hands. Under such circumstances, it makes sense to turn to the long-term technical analysis for gold for guidance.
A picture is worth a thousand words. The chart linked to below shows the long-term technical analysis of gold.
Please click here for the chart.
But before delving into the technical analysis, it is important to understand the background.
Currency skirmishes, not war
My subscribers often forward me investment-related emails that they receive from other outfits that they deem worthy of consideration. Lately, the subject of many such emails has been currency wars. The most commonly asked question is, "Why are you not recommending gold ETF SPDR Gold Shares GLD and silver ETF iShares Silver Trust SLV to protect us from the currency wars that are occurring?"
I have never been a forex daytrader, but relationships between currencies play a big role in our allocation models. We often take medium- and long-term positions in currencies as a means of diversification from stocks, bonds and commodities.
My answer to the question of currency wars has been consistent for the last two years. There are no currency wars, just currency skirmishes. My forecast has been that we will see skirmishes for the foreseeable future, but no currency wars.
G7 statement
Monday morning when the gold pit opened for futures trading in the United States, gold fell out of bed. There were reports that the selling was from European and Asian investors, but the data shows that such reports were clearly wrong. China was on a holiday due to the start of the Lunar New Year. Prior to the opening of pit trading in the United States, the London gold fix was much higher.
There is no denying that gold is a solid means of protection against the devaluation of fiat currencies. A fundamental issue gold faces is that QE3, when properly analyzed, was not supportive of gold. However, the momentum crowd rushed into gold without fully understanding QE3.
The momo crowd that bought gold on QE3 represents weak hands. These weak hands panic every time there is short-term adverse news. The news Monday morning was that G7 officials were considering issuing a statement that G7 nations were committed to market determined exchange rates and not using government policies to devalue currencies.
What do you expect governments to say?
Does any person with even a few working brain cells expect governments to say anything different? Currency devaluations are real. Gold is a natural protection. The obvious question is why I have not been recommending gold. Ever since recommending scaling back gold positions, I have not recommended a long-term investment in gold, but simply have given a number of short-term trading signals. The same is true for silver; after allocating 20% of assets to silver for a long-term investment at $17.73, silver was sold between $45-$50. Subsequently I have given only short-term trading signals on silver.
As I have written in this space, gold and silver have been under the control of the momo crowd. They have run gold and silver up much further than their fair value. The Quantitative Screen of the ZYX Change Method calculates the fair value of gold at $1250 to $1400 and silver at around $24.00.
Gold technicals
With the foregoing background, it will be easier to understand the technicals of gold shown on the chart.
On this day in economic and financial history...
Eli Whitney received a patent for his cotton gin on March 14, 1794. For the first time, American plantation owners would be able to harvest large amounts of cotton profitably. This invention -- which was copied an astounding number of times before Whitney gained any measure of patent compensation -- is perhaps more responsible for America as we know it than any other invention in the nation's history.
Historian Gene Dattel, writing in The New York Times some material from his book Cotton and Race in the Making of America, paints a stark picture of profound change:
In 1787, there was virtually no cotton grown in America. Two things, however, quickly changed that. Eli Whitney's cotton gin allowed cotton production to go from a process limited by manual labor to an industrial machine, allowing a person to "clean" 50 pounds, rather than one pound, of cotton a day. And of course, the cotton gin didn't remove manual labor from the process; it just shifted it. In fact, this labor-saving device extended slavery by creating a labor shortage in the cotton fields.
The mass production of cotton was accompanied by a dramatic 90% drop in the price of a cotton textile garment. This in turn led to a consumer revolution whose raw material was slave-produced cotton -- 80% of which was produced in the South. As a result, American cotton production exploded from almost nothing in 1787 to over 4.5 million bales, at 500 pounds a bale, by 1860. On the eve of the war, cotton comprised almost 60% of America's exports.
Slavery expanded accordingly. The number of slaves increased from 700,000 in 1787 to over 4 million on the eve of the American Civil War; approximately 70 percent were involved in some way with cotton production. Indeed, so closely tied were cotton and slavery that the price of a slave directly correlated to the price of cotton (except during years of excessive speculation).
Economists Samuel Williamson of the University of Illinois and Louis Cain of Loyola attempted in 2011 to quantify the value of slavery to the South in modern monetary terms:
The average slave price in 1850 was roughly equal to the average price of a house, so the purchase of even one slave would have given the purchaser some status. Comparisons based on economic status are measured by the relative ratio of GDP per capita. Consequently $400 [the average price of a slave] in those days corresponds to nearly $175,000 in economic status today. ... Total slave wealth was immense. ... While it varies with the price of slaves over the period [1805 to 1860], it is never less that seven trillion 2011 dollars and, at the time of Emancipation, was close to ten trillion 2011 dollars.
By comparison, the American Petroleum Institute estimated in 2007 that the oil and gas industry's total annual impact on the U.S. economy was between $10 trillion and $11 trillion. Considering the far greater population and the more global nature of the oil and gas industry, it is truly staggering that it barely exceeds the aggregate value of the slave economy in antebellum America.
Whitney, the man who had almost single-handedly perpetuated this economic system, saw little benefit from his transformative invention. His gin business was bankrupt three years after he earned the patent, as high fees for use and a relatively straightforward mechanical design pushed many tinkerers to simply copy Whitney, rather than obtain licenses. Whitney spent much of the rest of his life as a gunsmith for the federal government.
A prewar collapse of epic proportions
The Dow Jones Industrial Average (DJINDICES: ^DJI ) suffered an 8.3% decline -- the second-worst of the pre-Depression era -- on March 14, 1907. The Chicago Daily Tribune reported:
Stocks closed in a panic on the exchange today and the last 15 minutes of the session left all Wall Street in a "brain storm" it will not forget for many a day. Not since the wild Northern Pacific swirl of 1901 has there been such a scene. Brokers were driven to the point of frenzy by the avalanche of selling orders, while the street teemed with excitement. Prices dropped from 10 to 20 points and the battering of values still was going on as the day's business finished.
Chief among the causes cited for the panic was a rumor that the U.S. Attorney General was preparing to indict railroad tycoon E. H. Harriman on antitrust charges. At the time, Harriman controlled a number of major railroad and transport companies, including both the former Dow component Pacific Mail Steamship and Wells Fargo (NYSE: WFC ) , which had maintained both express delivery services and banking operations under the same corporate umbrella (why do you think their logo is a stagecoach?) until just two years prior to this crash. Union Pacific (NYSE: UNP ) , one of Harriman's largest holdings, was one of the hardest-hit stocks on the market, posting a drop of roughly 15%. The railroad had lost a third of its value from the start of 1907 to March 14's close.
Harriman was asked his opinion after the close, but the executive passive-aggressively demurred to questions as to what had happened. "I would hate to tell you to whom I think you ought to go for the explanation of all this." When pressed, Harriman flatly denied rumors that he had been behind the sales of Union Pacific and Southern Pacific, another of his large railroad concerns.
The day's crash occurred halfway into a two-year bear market that would wipe out nearly half of the Dow's value. During this time, a combination of President Theodore Roosevelt's trust-busting efforts and a string of shocks to the financial markets ultimately led to the Panic of 1907, a series of devastating bank failures that were directly responsible for the creation of the Federal Reserve. Harriman lost a great deal of his wealth during this period, but after the crash ended, he recovered to a net worth of approximately $100 million. His good fortune was short-lived, as Harriman died only two years later. Union Pacific, which controlled Southern Pacific at the time of Harriman's death, was forced to divest itself of Southern in 1913. The two railroads came together again in 1996, and they remain together to this day.
Learn more about Wells Fargo
Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.
