Posted April 16th, 2010 by Sidd | 2 Comments
Two stocks to watch today are Google and Intuitive Surgical (other than Goldman Sachs after the fraud accusation).
Intuitive Surgical reported spectacular results today far ahead of analyst expectations with earnings coming in at $2.12 per share compared to the expected $1.69. Intuitive has beaten expectations in 6 out of the last 8 quarters and more than tripled in a year. In spite of that it continues to remain a good investment as it continues to surpass expectations. The stock price was driven up a lot in anticipation of great earnings over the last couple of days. Suddenly after the report today the stock price has fallen nearly 5%.
Google also dropped over 6% in spite of beating analyst expectations because they plan to spend more aggressively to maintain their search lead. Google has also beaten analyst estimates in the past 7 quarters.
So what makes people drive down the stocks of companies that show repeated excellent performance. Why do investors question decisions form companies that have consistently done things right? The answer is because they can. Well, not really. The answer is that the stock prices are needlessly driven way up before earnings and that leads some investors to sell to take profits as soon as results are announced.
I put both these stocks at a buy and today with the negative tone that the market has taken might be a good time to get into either one.
Disclaimer: I own both stocks.
Posted April 15th, 2010 by Sidd | No Comments
Yesterday was the second time I got a call from a “US government” department. This time the department had something to do with finance and they actually got my name correct possibly from a directory listing. Last time I got the call – a few days ago at my work number – they didn’t even know who they were calling. Just “Your Name and Number has been picked to get $7000 from the US Government Department of Krauss” (that’s what it sounded like, I made the person repeat the name of the department 3 times but I couldn’t tell what it was).
Who exactly are the people that fall for this crap? I’m sure someone somewhere believes this shit and hands over financial info. After all there are some people who buy V1@grA from email spammers and send money to Nigeria with the hopes of getting more money from a random prince.
The first call it was somebody with an Indian accent. The second one sounded more like an eastern European one. People who fall for this stuff probably deserve it. If you are someone who would fall for this, here is a warning that it is not true. The US government gives people money quite often but they do make you file taxes to get it.
Taxes reminds me, don’t forget to get your $800 by filling out Schedule M.
Update: After some hunting around online, I couldn’t find many instances of people reporting this. Here is one that I found, which is in Oct. 2009. This led to a phone number – 202-684-6582 – and a search for that phone number revealed at least one idiot who fell for the scam.
Posted in category: Scams | Tags:
Posted April 12th, 2010 by Sidd | No Comments
Every so often we see merger, takeover and failure rumors floating around. Then the CEO of the company says that the rumors are all false. Before the Wachovia collapse that happened on a Sunday, the CEO went on TV on Friday to let investors know that his bank was not in bad shape. Jim Cramer apologized for being duped.
Palm’s CEO also indirectly squashed takeover rumors by saying “We’ve said we have a plan that takes us to profitability.” However takeover rumors continued and finally Bloomberg seems to have confirmed the rumors making Palm’s stock surge.
It is sad to see Palm go and hopefully the new buyer will be someone who will continue WebOS, which is widely regarded to be the best of the smartphone Operating Systems with real multitasking, easy development and great features from ease of use to great looks.
I’m keeping my fingers crossed that it is HTC and they will put WebOS on something like Evo hardware. My HTC Touch Pro is now aging but I think I can wait a while to see how 4G pans out before upgrading. I was seriously considering a Palm Pre Plus until PALM’s latest earnings report.
Posted April 7th, 2010 by Sidd | 2 Comments
A few months back I got a spam call at home asking me if I would like to support clean coal. I just hung up but I really should have asked the person at the other end if she really believed the crap about clean coal. All these clean coal nutcases think that just capturing the output from coal energy plants will make coal greener. They claim that coal is local and cheap and reduces dependency on foreign oil.
As far as the output from coal energy plants goes, that seems to be a major contributor to climate change (euphemism for global warming). Anyway foreign oil or any oil for that matter is not a major contributor to electricity generation in the US. The top sources are coal, nuclear, natural gas and hydroelectric. The big foreign source here is Canada for natural gas.
Clean coal supporters fail to mention that coal is cheap because the conditions in mines suck, as proven often by the regular deaths in coal mines in West Virginia including the deaths on Monday at a mine with a history of violations run by a company with a history of violations. They would rather kill miners, cause them cancer and other health problems and destroy the local environment by mining than import some natural gas from Canada or support more really clean energy like nuclear, wind, solar etc.
Also often cited concerns of nuclear plants are radioactive waste. Well, what about the radioactive waste from coal that is more dangerous and pumped directly into the atmosphere as compared to the safely stored and hopefully reusable waste from nuclear.
Make mines safer, force bad mining companies to cease operations while violations are not fixed and coal may no longer be competitive in any way.
Posted March 23rd, 2010 by Sidd | No Comments
I’m still going through all the details but on the surface the healthcare bill looks pretty decent. It is not everything Obama promised (no public option) but a step towards getting everybody covered. Also initial reports said that the bill will reduce deficits by over a 100 billion in the next ten years. I am skeptical, more on that later. Now down to the things that affect us now:
- Insurance companies cannot revoke policies
- Children under 26 can be under parent policies
- Children with pre-existing conditions must be covered
- Insurers must pay out 85% of group policy premiums and 80% of individual policy premiums (would that make insurance not very profitable?)
- 3:1 limit on what older adults can be charged vs youngsters
- Elimination of lifetime dollar limits on policies
- High risk pool offers coverage to uninsured with medical problems
- Expanded Medicaid coverage upto 133% of poverty line.
- Close the donut hole gradually by 2020. Starts with rebates this year, discounts in 2011.
- Premium subsidies – Premiums capped for low income families at 6% of income and gradually phased out for higher income.
- Increased payments to PCPs under Medicaid (probably to get more providers to accept it)
Also the bill has larger changes coming in 2014
- Nobody can be denied coverage or charged more for preexisting conditions
- All Americans must be insured or individuals and employers with more than 50 employees both will face penalties. $695 for individual and $2000/employee for employer.
- Healthcare exchanges must be made available by states to offer a choice of plans
- Childless adults covered under Medicaid
Now for the part that covers costs and might reduce deficit
- Increased Medicare taxes for high income individuals (over $200,000 single, $250,000 couple)
- Tax on high cost insurance plans (plans costing >10,200 for individuals and 27,500 for families) starting 2018
- Cuts on annual increases to Medicare reimbursement rates
- Cuts on funding to disproportionate share hospitals (that treat high numbers of poor/uninsured) starting 2014 (but everybody should be covered by then right?)
- Cuts to government subsidies on Medicare advantage plans
- Drug companies will contribute 80 something billion (no idea how) but they get 12 year protection against generics
- Drug companies pay a tax on drug sales (maybe thats where the money above comes from?)
- Medical device makes pay a tax on certain products
I’m not exactly sure how all the above and anything that I missed will make more than the government is spending. But the CBO says so.
What do I expect out of this for myself? Steeper premium increases until 2014.
Posted March 8th, 2010 by Sidd | No Comments
10:07 am: Looks like Scottrade systems are down and refusing to let me login. Calling them results in some message about unusually high call volume and both local and national lines are busy. So everybody seems to be calling to complain.
Update 10:17: Scottrade really is down – http://twitter.com/Scottrade – “We apologize for the inconvenience. We are aware of the issue, at this time please call us to place trades. 800-619-7283 ^AT”. However calling is of no use because the national lines are down and there is no concept of hold at Scottrade. The system just hangs up on you and says call back later.
Posted January 27th, 2010 by Sidd | No Comments
As soon as the event started the stock started dropping but picked up steam as the event went on, especially after the pricing was announced. As a stockholder I am happy with this device. It is everything that was expected at a cheaper price than expected. The most expensive version is $829, well under $1000 and the cheapest starts at $499.
However I’m slightly disappointed that there were no announcements other than the iPad. No new iPhone. No news about ending iPhone exclusivity. The good part was that the iPad is unlocked so you can use it with any provider, not just AT&T and the web browsing deal with AT&T is good.
As a consumer, I would wait for the iPad 2.0 because this version has no webcam, no real connectivity except wireless (aka not so hot for presentations, connecting to TV etc.) and no integrated memory slot.
I’m not sure how serious a competitor this is to the kindle because I’m not sure how many people use the Kindle’s data connection to download books. If the data connection is not that often used, then the $499 version is a serious threat to the Kindle because it is full color, has a bookstore and much more than the Kindle or other book readers can possibly offer. However I’m not sure how the display does while reading (it is 1024*768 = blah) as compared to the eInk display on most book readers.
Overall I’m happy with the pricing and options and I think the stock is headed up. But not up as much as if Apple would end exclusivity with AT&T and bring in Verizon (or Sprint, or even T-Mobile if they want to stick with GSM) on board for the iPhone and the iPad.
Oh and the device uses Apples brand new 1GHz A4 processor, a result of their acquisition of PA Semi. From the demo it seems like this is a perfectly capable processor maybe more so than the other 1GHz processor out there – Qualcomm’s Snapdragon. Maybe the next iPhone will run on one of these? If they can make this processor maybe they can switch Macs to their own processors in the far future?
Posted January 25th, 2010 by Sidd | No Comments
Apple adopted new accounting standards so it took some back of the hand math to come up with expectations etc.
Computed Avg Expectation with new accounting: $2.45/share
Actual: $3.67/share
My eyes popped out of my head (almost) when I saw the number. Luckily I added a few more shares just before trading was halted at $204. Trading resumes at 4:55pm. I would expect atleast a $10 jump if not a jump to $250.
Apple reported 15.6 billion in revenue way over the 12 billion expected. So Apple beat in both revenue and earnings and by a wide margin.
Posted January 19th, 2010 by Sidd | No Comments
Apple Stock is up over 4% today after the company sent out official invites to an event on Jan 27. The invite only said “Come See Our Latest Creation”.
Speculation is that Apple plans to release a tablet PC, possibly called iSlate. However rumors are that Apple is also planning to sell eBooks on the device and is in talks with Harper Collins. Also rumors state that Apple’s terms will be better than the terms offered by Amazon on the Kindle.
Analysts already have predictions on the earnings potential of a so far not announced device at $1/share.
Apple is probably the only company that can create so much hype about an unknown future product. For all you know it could simply be an ebook reader. It is also expected that Apple will announce a new iPhone OS and a new version of iLife.
Should you buy Apple stock now? Maybe you should wait to see how revolutionary the new device is.
Disclaimer: AAPL stockholder here. But no Apple products.
Posted January 13th, 2010 by Sidd | 1 Comment
Google (GOOG) announced yesterday that they may shut down their Chinese operations completely and the feeling amongst analysts is that this is more likely than not to happen. The Chinese search engine market is dominated by Baidu (BIDU) with Google a distant second. The announcement has caused Google’s stock to drop and Baidu’s stock to rise significantly because if Google drops out of China, Baidu will have nearly 95% of the Chinese search market. Yahoo operations in China are completely run by Alibaba, which is 39% owned by Yahoo and is a very small player in the search market.
In the long run this might hamper Google’s growth over the long term because China is the largest market in the world with significant growth potential for Google. However in the short term the effect on Google is minimal – a loss of somewhere between 300-600 million in revenue.
With their current position Google has really established their “Do No Evil” policy. Their reason for leaving is a connection between successful hacking attempts to steal intellectual property, censorship and targeting of human rights activists by the hackers.
Most multinationals don’t want to ignore the Chinese market inspite of rampant theft of intellectual property, blatant cloning of popular items and tight government control on everything because China is where the growth is. Maybe others will follow suit but it is unlikely.
As an investor, buy Google (I own 2 measly shares), buy Baidu.
