Friday, July 31, 2009

Cash For Clunkers

Cash For Clunkers runs out of money in six days. Congress tops it up from $1 Billion to $3 Billion. Does that mean it will now last another twelve days? Ford (F) is up about 6% on the day. Many have criticised the program saying that it just accelerates the inevitable. Estimates of 12 million vehicles to be junked keep floating around the automotive world. That equates to just over $50 billion. We probably are not going there. But $3 billion is just a rounding error for the Obama administration. Then again think of all the pollution that will not happen. Is this an automotive story or a health care story? Methinks both.

Washington Post -- What Is The Future?

Washington Post (WPO) reported Q2 results. They made a slight profit and the stock went up. I think Berkshire Hathaway investors are richer today. But what about tomorrow? Washington Post paid for a lot of difficult restructuring. The print and television side did not do well. The educational side was very encouraging. The executives did not layout any plans for the future. My suspicion is that there are some closed door meetings as they cannot continue into the next business cycle without shifting some major gears.

Thursday, July 30, 2009

ExxonMobil Which Way Now?

ExxonMobil(XOM) announced results. Everyone knows the price of oil is down and therefore results are down dramatically. ExxonMobil gives the impression of a monolithic impermeable. But if you read the earnings release carefully you get the impression of a one armed paper hanger working overtime. For Q2 they report earnings of $4.1 Billion, cash flow of $3 Billion, share repurchase of $5 Billion which is only 1.5% of outstanding shares (pour quoi?) and in the first half they have increased the dividend by 9%.

Too many competing themes in the financial mix. Does the Board really know which way the boat is heading.

Wednesday, July 29, 2009

Does Bing Have Something?

Google vs Microsoft vs Yahoo. Today Microsoft (MSFT) announced a partnership with Yahoo (YHOO). Yahoo shareholders are annoyed that Bill Gates did not spend billions of dollars to save them. Go figure.

So the question of search engine dominance moves to the front burner. Google (GOOG) has approximately 65% of the global share. Bing and Yahoo share most of the rest.

What’s in it for me, most people will ask. The financial skeptic decided to do some ego-surfing and ran his name “George Gutowski”. This sometimes is also called self-Google. I also performed the acts of self-Yahoo and self-Bing.

The results were telling. Google delivered the great majority of hits. Yahoo delivered only approximately 50% of Google’s levels and Bing coughed up only 10% of Google. Bing did have the most compelling photography.

Google seemed proficient in mentioning this blog. The blog is written on a Google Tool namely BlogSpot. Yahoo and Bing strangely enough did not seem to think it important. Yahoo did not even cite it in the first 20. Bing the same, no top 20 citations.

I then tested “Financial Skeptic” my beloved brand. Google first and they found me on Twitter and the Blog. Yahoo interestingly enough had 20% more hits than Google and mentioned the blog twice in the first 20.

Then we go to the new guy “Bing” who did not find my blog but coughed up citations in the millions as one and many have chosen to quote me. The other guys where not even close. I could not check millions of citations but they sure did stroke my ego today.

Does Bing have something already?

Tuesday, July 28, 2009

Liberty Mutual Blows Their Brains Out

Liberty Mutual Group announced Q2 results and gives readers the impression that results are slightly worse than last year but not too bad. This company is a mutual company. The owners are frequently it’s owner customers. This is how they hid the bad news.

The headlines in their press release focuses on this line “Pre-tax operating income before private equity (loss) income for the three months ended June 30, 2009 was $427 million, an increase of $78 million or 22.3% over the same period in 2008”

When you start reading the income statement you realize that they are blowing their brains out in private equity transactions. In the first six months they lost $$393 million. This is a negative variance of $516 million from last year. They claim this is not meaningful.

The intellectual dishonesty is appalling. Given that bad news from financial markets and private equity investments is not new, the fact they are attempting to hide this in the bushes leads one to wonder about management’s and the boards mindset. Are they in denial about the results or do they need to hide because of other issues?

In any event the governance and transparency is inadequate.

Monday, July 27, 2009

China Sky One Medical Fails to Impress

Asensio is still on the tail of China Sky One Medical (CSKI) They are citing a blog that appeared in Motley Fool that cast China Sky One Medical in an unfavourable light. There seem to be irregular relationships between China Sky and someone who might be a brother or is close like a brother. The IR company representing them has not created clarity. For the whole story go to and follow the links. I usually find Asensio calls it right. Looks like Motley Fool independently is arriving at similar conclusions.

Hey China Sky. It’s about the investors. Investors have long term memory. Who regulates these guys and why is there no investigation? Who are they connected to in China?