Friday, July 16, 2010

Schwab Declares Economy Finds Footing

Schwab (SCHW) declared the economy has stabilized. In the latest earnings release Chairman Charles Schwab has declared “The economy is starting to find its footing, and short term interest rates have either stabilized or improved.” That’s good news Chuck. Have you looked at any of the macro’s lately. Solid footing is not the signal anyone else is reading.

CEO Walt Bettinger said, We also reduced the management fees on our proprietary ETFs so that clients can utilize their unique combination of professional management, diversification and transparent pricing with both the lowest expense ratios in the industry and commission-free online trading.

ETF’s are measured by efficiency and correlation to an underlying index. It sounds like Walt is making the point that Schwab’s stuff is special. If it’s special why do you have to lower management fees. The answer is to be competitive with similar product offerings.

Hard to have confidence with the two senior guys talking through their hat.

Disclosure: No position in any stocks mentioned in this post.

Thursday, July 15, 2010

JP Morgan Politically Correct Earnings

JP Morgan (JPM) played some politics with the latest earnings release. The second lead off bullet point puffs up a supposed economic support program resulting in some $700 Billion in new and renewed credit for well almost everyone.

This of course includes capital raised on behalf of large corporations. That’s more than 4X JP Morgan's market cap. Looking at it from a balance sheet perspective that’s about 33% of total assets. Huge Numbers.

But there is very little information on the break outs. Some consumers were allowed to continue using their credit cards and JP Morgan wants you to think they are supporting the economy.

In the politically sensitive area of small business JP Morgan claims a 37% increase in originations. The term origination can be bent, folded, spindled and mutilated. If someone wanted an increase of a few dollars or a change in their term loan you can just see the corporate culture driving those changes as originations.

Sounds good for Jamie Dimon, Chairman and Chief Executive Officer when he is currying favour at the Obama White House. But just in case Obama was real busy with Warren Buffet Jamie Dimon put it into the press release for all to see.

Transparency has many shades.

Disclosure: No position in any stocks mentioned in this post.

Obama & Buffet Freudian Slip?

President Obama met with Billionaire Warren Buffet (BRK.A) at the White House. Warren who has more money than God, shows up in a frayed tie. He clearly does not care. He clearly does not need to care. He is a true value investor who can look through the packaging.

President Obama cares about appearances and offers him another tie. A red one if unnamed White House sources are to be believed.

On a certain level you have to wonder about President Obama's focus. Here comes the best financial advice available and your first reaction is to change it's tie.

Did he just forecast his future approach to economics.

Disclosure: I have no position in any stocks mentioned in this post.

Additional Disclosure: I am prepared to buy some new ties if it will help the economy. This metric may be replacing the Alan Greenspan men's underwear consideration.

Tuesday, July 13, 2010

Infosys Troubled Business Model

Infosys (INFY) disappointed investors and watched the stock sell off on an up market day. Management spent no time explaining markets, costs or any other metric that a business might measure itself by. Local wages rates in various jurisdictions were ignored. Foreign exchange fluctuations or currency alignments were not considered.

Is management asleep as the business model changes? They do not communicate well with shareholders. Transparency seems to be a big problem. How do they create value going forward?

Disclosure: No position in any stocks mentioned in this post.

Monday, July 12, 2010

Playboy Worth More Without Hef

Playboy (PLA) announced that Hefner wants to take it private. For a company with a habit of showing women in very public ways that’s just too cute. I think Hef wants to manage the brand. What has he been doing for the past little while? It’s an obvious sell. Hefner is not the guy to lead in the future. He is 84 and you need to worry about a succession plan. The offer is a gambit to force another hand and get more money for Christine. Playboy without Hefner is worth more than Playboy with Hefner.

Disclosure: No position in any stocks mentioned in this post.