Archive: March, 2010

To experience the growth of $700,000, we spent trillions. According to the President’s budget forecast of 2011, we will borrow much more than we produce. The time when health care reform will be implemented, in 2014, the interest we pay on debt will grow from $188 billion to about half trillion. And around a trillion in 2020. It is still an optimistic view, if we don’t witness any more downturns, no devaluation of currency, or no hike in interest rate in the following years. The figures are purely based on the assumption that we witness a stable growth. Recovery is almost impossible because we have crossed the stage of no return. According to Congressional hearings few weeks ago, it seems there isn’t any way to tax out or grow. Furthermore, cutting down spending will worsen the situation. And we can’t overlook the ever increasing interest rate on debt, which will consume major  [...]

Since May 2009, there has been a steady fall in euro level; it’s being traded as low as 133.01. The sovereign debt of Portugal has downgraded from AA to AA- by most rating firms. New weaknesses for eurozone currencies are emerging every day and the Greek crisis still seems subtle. The Swedish Krona, the Swiss Franc, and the British Pound are all traded down one percent. Not only the eurozone, many economies in Europe are gradually flowing out since early Dec 2009. This, however, has helped US dollar and US stock to gain value. The surge in stock value since Mar 2009 can be categorized under two different phases; this, however, wouldn’t be visible by glancing through charts as it’s closely connected to variation in currency rates. Between Mar and Dec 2009, US stock’s value augmented radically, a trend observed since early 2000s. And it perfectly makes sense. When a currency depreciates,  [...]

House of Representatives finally passed the health care bill (219/212 votes) and I am sure this news will occupy most pages of our newspapers for next few days. Honestly, I didn’t have much idea about the bill nor did I bother to think about it until this morning. It, however, needed president’s signature. Hence, I thought it’s something I should know about. At least the particulars of the bill. According to Medicaid, this bill will revolutionize health care system in US as it promises to cover the uninsured population of the country, majority of them denied to be covered by insurance companies due to their health problems and diseases. And the number of such uninsured people extends up to 32 million. It sound great until you read a companion bill that includes dozens of loopholes. I didn’t really feel the urge to read it. The cost to execute this bill for next ten years  [...]

Though not much movement was seen in the morning, most stocks jostled during the close and ended positive. NYSE closed at 7,474.02, gaining 47 points or 0.6% on previous close. DIJA closed 47.6 points up at 10,734. 0.5% surge in Nasdaq helped to gain 11. 1 points, closing at 2,389. PLCM gained mainly due to its recent tie up with an Indian based corporation. FUQI, however, witnessed a fall as it failed to maintain or exceed its previous Q4 statistics. Experts believe BBI may file for Bankruptcy, hence a plunge was expected. Though HIG was low throughout the day, it observed re-bounce quite immediately after share sales were announced. More than fundamentals, a major reason in sudden rise of the market was the Wednesday evening announcement of Japanese Federal Bank and the Federal Reserve that promised to maintain interest rates at lower figures, which they say, will drive the economic  [...]

A sudden plunge in a stock price, these days, doesn’t really surprise any investor as, we all are quite aware about this, the market isn’t run by fundamentalism. If it does, it depends on quarterly revenue data like EBITDA, EBIT, margins, and EPS. In short, all the data used by market to gauge the performance can be found in the income statement. It, therefore, is the most significant financial statement. The cash flow statement, however, is something that really drives the value in the market. It includes dividends as well. Many companies this week furnished shareholders with a higher dividend. A significant player, Myers Industries (MYE) is involved in production of polymer products for agricultural, industrial, commercial, consumer, and automotive markets. It provided a steady dividend. On March 5th, however, the company raised quarterly dividend by 8%, which totals $0.065 per  [...]

Around a year ago, world markets witnessed all time low figures (after global crisis). On March 9, 2009, MSCI all-economy world index exhibited numbers that are rarely seen throughout the world. In less than 16 months, value of stocks fell by around 60%, which is a considerable fall in any market. This year, however, the stocks rallied back and recovered around 80% till January 2010. And people started becoming optimistic about the fundamentals that drove the market. With worries about Euro debt, equity markets are definitely not optimistic today, which now questions the recovery of the US economy and futility of several stimulus packages. Post January, we have seen a gradual fall in the market. It seems that MSCI index is going through tough times. Probably it needs few more stimulus packages. Few experts, on Tuesday, commented about current market instability. From Odey Asset Management,  [...]

Toyota Motors had recently repaired recalled cars that risked flaw of accelerating suddenly. However, the repaired cars have started malfunctioning again, to which Department of Transportation (DoT) has started investigating. DoT officials are generating reports based on consumers’ views and complaints. Finally, Morgan Stanley finds a buyer for its stake of 34.3% in China based China International Capital Corporation. However, buyer’s identity is not disclosed yet. General Growth Properties has been given a five-month extension to develop and present a plan to escape bankruptcy Vikram Pundit of Citibank has returned to Capitol Hill on Thursday. Meanwhile the financial institution still owns $25 billion provided by treasury and 27% stake is still owned by the government. Hundreds of people had invested and lost all the money in Ponzi scheme introduced by UBS, which was followed  [...]

Every individual is talking about the new buzzword, ‘Cloud Computing’, but I wonder if anyone understands it. If you are one of them, fret not, because you will be uttering these words by the end of this post. Let’s have a look at it from the investor’s point of view. Usually, maintenance cost or overheads are quite huge in IT companies, or that’s what every manager says. However, many harsh measures are taken to keep this cost under control. Some companies prefer rightsizing the number of employees, some buy the software instead of developing them, and few outsource the whole spectrum of operations. Due to these measures, or may be some other reasons, these companies have continued to grow, mainly for two reasons: More work is done by them every year; and managers increase the cost, a counterproductive result. However, this cloud computing, although saves lots of money and  [...]

Being frugal isn’t easy. It takes efforts and smartness to save a little amount every month. Here is a list of 15 practical money saving tips for people who intend to save real money. Don’t wait for an opportunity to invest. Let it operate automatically. Ask your bank to invest a fixed amount every month for 401(k) or other investment plans. Keep adding money in your saving account. This will earn you good amount as interest every month. Aviod paying banking fees. Use your bank services for free to pay bills, checks, auto deposits, etc. Don’t get simple credit cards. Pick the one that offers cash back facility. Over a period of time, you get a good return. Keep searching for hot deals that can save you some money. Don’t buy any items without proper homework. Use ceiling fans and table fans instead of air conditioners. They consume much less electricity than the latter. Replace  [...]