Today, the Bureau of Economic Analysis in the Commerce Department released their first estimate (advanced estimate) of the Gross Domestic Product for the 2nd Quarter 2008, at 1.9%. This number was lower than the consensus estimate, which had predicted 2.3% growth for the quarter.The media talking points for the GDP release were that the number was...
Monday, July 28, 2008
The bond market rules the world . . .
When it comes to earning money through investment, there are really only three broad categories of instrument: those that are based on ownership of an asset (such as stock in a business, or investments that are tied to ownership in real estate), those that are based on lending money to an institution in return for interest payments on the loan (such...
Friday, July 25, 2008
Beautiful Growth Companies, part II
Back in April, we published a post entitled "Beautiful Growth Companies," in which we highlighted some of the quantitative indicators of the kind of well-run growing companies that our discipline builds upon as the foundation of a long-term wealth management plan.While noting that "no mathematical formula alone can be relied upon to aid in identifying...
Wednesday, July 23, 2008
Earnings season so far: beating analyst expectations
As of the end of the day on Wednesday, July 23rd, one hundred eighty-six of the five hundred companies which make up the S&P 500 have reported earnings (37.2% of the total companies in the S&P 500).Of that number, 71% have beaten analyst expectations, 9% have reported earnings that were in-line with analyst expectations, and 20% missed analyst...
Friday, July 18, 2008
Don't fear the current recession drumbeat, Revisited
Back in November, we wrote a post entitled "Don't fear the current recession drumbeat," in which we argued that the chorus of predictions that the consumer would drive the economy into a recession because he could no longer borrow as much against home equity was misguided.Since then, we have seen oil rise to record highs, and the major stock market...
Wednesday, July 16, 2008
The Wages of Socializing
Our perspective on the current Fannie Mae and Freddie Mac debacle is a portfolio manager's perspective: do not commit capital to companies whose business is deeply entwined with the government*.It is hard enough to predict the business performance of a company even when it isn't subject to the whims of elected officials.Beyond that simple dictum,...
Monday, July 14, 2008
The dark side of "making hay while the sun shines"
This will be a revealing week on Wall Street, with earnings reports due out from some of the big brokerage firms and major money-center banks.As we have said previously, even the CEOs and CFOs of the biggest investment banks don't seem to be able to gain a clear picture of their own balance sheets right now. The reason, as we explained in that post,...
Friday, July 11, 2008
Just Say "No" to Net Neutrality
Yesterday, Chairman of the Federal Communications Commission Kevin Martin came down hard on the side of "network neutrality" by recommending punishment against Comcast Corporation*.According to the Associated Press (see the report here), Mr. Martin said "The commission has adopted a set of principles that protects consumers access to the Internet....
Thursday, July 10, 2008
The Investment Climate: July, 2008
We recently published "The Investment Climate: July, 2008" in the commentaries section of the Taylor Frigon Capital Management website.We have written before (such as this post, from March of this year) that much of the turbulence in the financial sector stems from accounting issues, including mark-to-market regulation. We have also noted that, because...
Tuesday, July 08, 2008
Big changes coming, part II
Several months ago, we wrote a post called "Video games and the future of computing," in which we noted that the general computing experience (including the internet) is still two-dimensional, whereas video games have been three-dimensional for many years. We linked to an article by Peter Huber, which begins: "For a preview of the computer that's...
Thursday, July 03, 2008
Liberty and Property
On July 4th we celebrate the Declaration of Independence, signed on July 4, 1776. Its second paragraph contains the famous words, "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness. -- That...
Tuesday, July 01, 2008
The bears are out
The major stock market averages managed to post mild gains today after bouncing back from significant lows during the day.By closing up for the day, the markets again avoided a close that would be officially 20% lower than their closing highs, which were set on October 9, 2007 for the DJIA and the S&P 500. On that day, the Dow closed at 14,164.53...
