Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
[Deleted]
Well SGP went into damage control finally... made the warning official, at 10:45pm tonight.
What a fiasco. The news was obviously massively leaked earlier in the week, then we had the blatant Reg FD violation earlier today. CEO should be fired and the stock should go to $10 tomorrow.
===========
Reuters Company News
Schering-Plough warns of lower 2003 earnings
Thursday October 3, 11:06 pm ET
KENILWORTH, N.J., Oct 3 (Reuters) - Schering-Plough Corp. (NYSE:SGP - News) on Thursday warned that its 2003 earnings would be significantly below Wall Street expectations, on the loss of prescription sales on its drug Claritin.
The drugmaker said it now expects 2003 earnings to be in the range of $1.00 to $1.15 per share, sharply below the average analyst expectation of $1.42 per share for the year, which is based on data from research firm Thomson First Call.
The company said its 2002 earnings would be flat compared with 2001 earnings, before an item in the 2001 period. It said it would not return to earnings growth until 2004, when it expects earnings to rise 20 percent above the lowered 2003 guidance.
The company's Chief Executive Richard Kogan on Thursday told analysts in a closed-door meeting that his company's 2003 earnings would be "terrible," an analyst at the meeting told Reuters.
The company's share price has plunged 17 percent since Monday, with investors and analysts scratching their heads for reasons to explain the selloff -- which involved trading volumes three times the stock's typical daily amount.
http://biz.yahoo.com/rc/021003/health_scheringplough_profit_1.html
New Hussman Update
Wednesday Morning October 2, 2002 : Special Hotline Update
Copyright 2002, John P. Hussman, Ph.D., All rights reserved and actively enforced.
The Market Climate for stocks remains on a Warning condition, characterized by unfavorable valuations and unfavorable trend uniformity. Our favored stocks remain fully hedged against the impact of market fluctuations, with an offsetting short position of equal size divided between the S&P 100 and Russell 2000 indices.
In that context, Tuesday's rally had all the hallmarks of a standard bear market rally to clear a deeply oversold condition - fast, furious, and most likely prone to failure. Failure however, should not be expected immediately. After the brutal quarter the market just finished, it would not be surprising to see a rally that carries for a bit. With valuations and trend uniformity negative, there's not a chance that we would attempt to "play" the possibility of a rally, since it may not materialize, and we would have no way of knowing when to get out if it did. As always, our discipline is to align ourselves with the prevailing Climate we identify. We do not invest on opinion, and we do not attempt to "time" short term movements within a particular Climate.
Tuesday's advance was unusually ragged, with the S&P 100 Index rising by 4.54% while the Russell 2000 advanced by just 1.61%. This kind of one-day dispersion usually triggers some kind of tracking error in a hedged approach, since it's very unlikely that a portfolio of stocks, however well chosen, will turn in a one-day return tightly matching the average performance of the indices used to hedge. Fortunately, it's also quite unusual for such wide dispersions to persist more than a short period of time.
Having just weathered the worst quarterly stock market performance since the 1987 crash, it seems like a good time to review our own performance in the Strategic Growth Fund.
I am pleased to note that the Fund ended the third quarter with a gain of 1.95%. Given that the Fund does not take net short positions, and actually held a constructive position as much as 40% unhedged during a portion of the quarter, that positive return is very gratifying, if not large in an absolute sense. For the quarter, the Russell 2000 plunged by 21.40%, while the S&P 500 Index lost 17.28%.
For the first three quarters of 2002, the Hussman Strategic Growth Fund gained 13.90%, compared with a 25.09% loss in the Russell 2000 and a 28.16% loss in the S&P 500 Index. In effect, the Fund outperformed the major indices by about 40%. Again, since the Fund does not take net short positions, virtually this entire 40% lead resulted from the fact that our favored stocks strongly, and generally consistently outperformed the major indices.
I say "generally consistently" because our favored stocks certainly have not outperformed the market on a daily basis. Over the past few days, for example, panic about falling consumer confidence has placed unusual pressure on retail stocks, despite the fact that many of these stocks display some of the most favorable valuation and market action of the stocks we hold. This kind of short-term pressure can give us a pullback regardless of whether the market itself advances or declines. I point this out because investors can invite disappointment if they hold the Fund to an unrealistic standard that prohibits consecutive declines for a period of days or weeks. Such a standard is appropriate only for a money market fund.
For investors with an excruciatingly short-term perspective, I should point out that since mid-August, the Fund has declined by 4.42% from its highest peak. This pullback is attributable to two factors. First, the Fund held a constructive position as much as 40% unhedged during much of the market's decline from its August peak, and only recently reestablished a fully hedged position. Our approach always gives the benefit of the doubt to markets exhibiting favorable trend uniformity, but in this case, the market responded with a sorry and frail rebound which quickly failed. It happens. The second factor, as noted above, is the recent pressure on certain retail stocks that remain attractive on the basis of valuation and market action. As I regularly emphasize, we make no attempt to "correct" pullbacks that result from the disciplined application of our investment approach.
A few additional figures (required anytime we discuss performance). For the 12 months ended September 30, the Fund gained 20.28%, compared with a loss of 9.30% in the Russell 2000, and a loss of 20.49% in the S&P 500.
From the Fund's inception on July 24, 2000 through September 30, 2002, the Hussman Strategic Growth Fund has gained 52.03% (21.12% annualized), compared with losses of 27.32% in the Russell 2000, and a loss of 42.64% in the S&P 500. All figures include dividend income.
Again, the Hussman Strategic Growth Fund is, in fact, a growth fund (not a bear fund, not a hedge fund, and for goodness sake, not a money market fund) that has the flexibility to take unhedged, and even aggressive positions during favorable Market Climates. The fact that we have not seen a strongly favorable Climate since July 2000 should not lead shareholders to expect the Fund to maintain a fully hedged position indefinitely. Accordingly, the profile of return and risk in the Fund will vary depending on the Market Climate we identify. Though we will take greater risks in some Climates in anticipation of higher expected returns, these risks will certainly lead to occasional pullbacks significantly larger than the 4.42% dip we've experienced in recent weeks. As always, the best way to understand the Fund is to read the Prospectus. We spent a great deal of time trying to make the Prospectus to each of our Funds useful, interesting and informative to read, not simply boilerplate legal documents.
Moving on to the bond market, the level of yields remains too low to give long-term bonds investment merit, particularly with continued upward pressure on the inflation rate. That said, economic conditions have produced wide risk spreads (the difference between corporate bond yields and default free Treasury yields), weakness in consumer confidence, the Purchasing Managers Index, and a sluggish labor market (as measured by unemployment claims), among other factors. Combining this evidence with overall price and yield trends, the bond market has shifted back to at least modest speculative merit. Unlike the stock market, the bond market is not nearly as susceptible to valuation bubbles, so speculative merit alone is not as positive for bonds as it tends to be for stocks. Still, in addition to very short maturities, we're carrying a very modest position in Treasury bonds at the "hump" of the yield curve, near the 7-year maturity.
Finally, conditions for gold stocks have turned extremely positive, with valuations favorable as measured by the gold/XAU ratio, interest rates falling, inflation rising, and the Purchasing Managers Index below 50 (see our report Going for the Gold for more detail on why these specific criteria are effective). When all of these criteria have been favorable, gold stocks have historically advanced at an annualized rate of over 100%. There is certainly no assurance of what will occur in the current instance, and gold stocks are unusually volatile so positions should never be very large. Still, we hold precious metals shares in both of the Funds, and believe that a modest position is an appropriate diversification for both equity and fixed income investors.
Shippers: W. Coast Ports Stay Shut
By THE ASSOCIATED PRESS
Filed at 9:39 p.m. ET
SAN FRANCISCO (AP) -- A frail labor peace between shipping lines and West Coast longshoreman collapsed Sunday when workers were ordered off their jobs indefinitely.
http://www.nytimes.com/aponline/business/AP-Port-Labor.html
[Uhoh. This becomes bad for the economy really fast if it continues.]
Also... Alan Newman of CrossCurrents just took off his bull horns. Previously (since July) He'd been calling for a few-month bull run within the secular bear.
"We don't know how to say it other than this market sucks, and it sucks big time."
[
http://www.cross-currents.net/outlook.htm
Are you familiar with the success rate of the Fed model during the 1960's?
Hint: Interest rates rose steadily through the whole decade. What did the Dow do?
Ho hum, Nortel warns again...
http://biz.yahoo.com/djus/020925/2217000974_2.html
Oh and a reverse split. At least 1-for-20, if I calculate right.
BOJ - Japan "on brink of a full-blown crisis".
(Very strong words for a central banker, IMO.)
Financial Times
BoJ takes gamble to avert financial crisis
By David Pilling in Tokyo
Published: September 24 2002 21:59
Japan's central bank is trying to shock the government and banks into action in a last-ditch gamble to avert a crisis in the country's financial system, a senior Bank of Japan official said on Tuesday.
The bank's announcement last week that it would buy shares from financial institutions was a high-risk move driven by its increasing frustration at government inaction, the official added.
"This is our independent decision based on our serious concern about the state of the financial system," said the official. "We are well aware of the risks to our balance sheet. We never meant to do this. But unusual circumstances call for unusual measures."
Although the Japanese banking system has been battling for years under the weight of huge bad debts, the BoJ believes it is now on the brink of a full-blown crisis that could have a serious impact on the global economy.
"We think that now might be the last chance. We should have done this six months or a year ago," said the official.
Last week the BoJ stunned markets by announcing it would purchase shares from banks to allow them to accelerate the disposal of trillions of yen in bad loans. Share purchases, up to a total of about ¥3,000bn (€24.8bn), will start in the next few weeks and continue for up to two years. The BoJ is prepared for the possibility of losses deriving from a further fall in equity prices.
Banks have been told to unwind their cross-shareholdings, but their need to offload shares has helped drive stock markets towards 20-year lows.
There is no guarantee that banks will sell shares at depressed levels to the BoJ. "We are not 100 per cent sure that this approach will work. It's a big gamble," the official said.
Nor is it clear how the government will respond. Share prices fell last week when Junichiro Koizumi, prime minister, made it clear he did not have any specific measures to complement the BoJ's action. "The response by the government to [previous] warnings by the BoJ has been lukewarm," said the official.
(subscription required)
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=103...
Ah heck, why not take Germany out at the same time... seems a pity to waste all that effort of moving an army across the Atlantic.
New York Times
Moves by Germany to Mend Relations Rebuffed by Bush
By STEVEN ERLANGER
BERLIN, Sept. 23 — Chancellor Gerhard Schröder, who won narrow re-election on Sunday in part by opposing an American war in Iraq, tried today to patch up relations with Washington, but President Bush broke with protocol and refrained from making the customary congratulatory telephone call to the German leader.
In Warsaw for a meeting of NATO defense ministers, Secretary of Defense Donald H. Rumsfeld announced that he would not meet his German counterpart, Peter Struck. Mr. Rumsfeld was blunt about the Schröder campaign.
"The way it was conducted was notably unhelpful and, as the White House has indicated, had the effect of poisoning a relationship," he said, referring to criticism from the national security adviser, Condoleezza Rice, of the German justice minister, who reportedly compared President Bush's tactics to those of Hitler.
Aware of how angry the Bush administration is, Mr. Schröder announced today that the justice minister, Herta Däubler-Gmelin, would not be joining the new government.
But this gesture appeared unlikely to have any immediate impact. A senior administration official told reporters aboard Air Force One this morning, as Mr. Bush headed to a fund-raising event in New Jersey, that Mr. Schröder and his government "have a lot of work to do to repair the damage that he did by his excesses during the campaign."
http://www.nytimes.com/2002/09/24/international/europe/24GERM.html
Sssh! Don't respond to him. 90% of us have him on ignore and we're hoping he'll get bored and go away.
Couple of hedge fund links that might be interesting to you and drizzly.
http://www.vanhedge.com
http://www.accreditedinvestor.ws/
Why not explain what you're talking about. I see no evidence the Fed can realistically do much one way or the other right now. I have no idea why you might think they have some kind of conspiracy to influence commodity prices.
Sy Harding is having trouble recently with his TA-based market timing. His indicators are not working that well, and he has been mostly cash and/or been whipsawed out of those positions he does take.
I'm a subscriber and overall I've been very impressed with his market-timing accuracy the past 2 years. But right now I don't trust his signals or his medium-term projections. All gurus have their off-form periods, and I think Sy is off his game right now. Check back in 2-3 months.
** OT **
Let's see. Alex MG over on your old SI thread has been banned, and is still trying to clarify why. He's a valuable board participant IMO.
Lucretius was banned for annoying LG, as far as I can tell. Mythman is now banned, he states. LG has not been banned yet. da_cheif is still here.
Looks to me like Les Horowitz is unlikely to come over here because of the deletions and bans.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=17868363
I have to admit, I am confused why the IHub admin needs to pursue this aggressive deleting/banning policy. If the software permits, excluding people on a per-thread basis, by the moderator of that thread, seems more flexible and maybe creates less of a sense of censorship.
Hi Zeev. It sounds like you are having some really bad ISP problems, offline for 3+ days?
Can you describe what seems to be wrong? There are a lot of people here who are pretty techno-savvy. Maybe we can make some suggestions.
<<[Zeev] will be back after ISP cleared>>
I'm really confused why his ISP service should be bad enough to keep him offline for 4 days. Does he live that deep in the wilderness? Further from civilization than Bob Zumbrunnen?
whoo hoo, now there's an observation from the twilight zone :)
Please hit the "respond" button, not "post new", when replying to messages.
Yeah thanks for the update. So you usually spend your evenings watching infomercials on CNBC? <g>
I subscribed to TrendFunds for "waxie's commentaries" for exactly one month. What a rip off. The dude is so busy making infomercials he only writes 1-2 days a week.
Thank you, I have seen quite a few recommendations for IB for non-IRA active trading also. Will look into them.
NVDA has serious competitive issues looming versus ATI. Those issues haven't impacted revenues yet, but they most certainly will in late 2002 thru 2003.
I doubt the stock is going to roar back. PC graphics companies have a long history of rising like a rocket then burning out like a rocket.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=17821620
The high-end cards at issue here are a small percentage of the market, but they have a huge influence on sales because they give bragging rights which make or break the brand image in the lower-priced mass market. PC video is a branch of the toy industry, basically.
That isn't a complete sentence. I can't make any sense out of it. Can you translate?
Hi augie, which brokerage did you choose for trading options in your IRA? And why? I need some suggestions.
I had been using Dreyfus, but they just merged with Brown, who don't allow options in IRA's (except covered calls, whatever).
Actually I think I'll keep the Brown acct also, they are now owned by JPM and they allow access to Morgan's analyst reports. That can be useful at times.
"Well gosh darn, went to the bathroom and missed another rally. Guess we'll just have to stay short and keep raking in huge profits".
It's very hard to follow your messages because you always click on the "post new" button instead of "respond". So there's no way to know what you're replying to. Any chance you could work on your clicking technique?
Thanks!
The Force grows stronger in our Stephen. Ominous the future is.
tc: none of the XP hotfixes I have installed were available from Windows Update at the time I got them. I just re-checked a couple, and as far as I can tell they are still not available.
You are correct that a FEW of the hotfixes in the full list are now available on Windows Update, but far from all.
Yes I know about the standard Windows Update site. As I said, the updates available there mostly just fix security holes. Non-security related updates are mostly available only by calling Microsoft, or waiting for SP1. Here is a list of fixes you CANNOT get from Windows Update:
http://support.microsoft.com/default.aspx?scid=/support/servicepacks/windows/xp/pre-sp1_hotfixes.asp
I have called up and got the following which applied to my PC. Some of these fix pretty serious bugs. In particular, Q318159 and Q322097 have probably hit millions of people.
Q308219 Hard Disk Performance Is Slower Than You Expect
Q314634 Windows XP Does Not Detect Your New USB Device
Q317751 Explorer Process Uses Many CPU Cycles When Windows Is Idle
Q318159 Damaged Registry Repair and Recovery in Windows XP
Q322097 Slow Browsing to Windows 98 or Windows Me Client from Windows XP
I agree about AOL's accounting. I was simply stunned by one of their antics, about 3 years ago. They capitalized, then took a one-time write-off for, 4 years of marketing expenses. It was a huge charge, much greater than all of their supposed "profits" over the same time period.
Since when was mailing CD's to the entire population of the planet an "extraordinary event", or even something they should ever have been allowed to capitalize?
At the time that was announced, I just couldn't believe the SEC didn't jump all over them immediately.
AOL will eventually (say by next year) be seen as just a minor, money-losing internet subsidiary of Time Warner. The AOL subsidiary has certainly had some really dubious accounting in its past, and may well get penalized for that, but it's unlikely to capsize the main company.
The automatic Microsoft "Windows Updates" just plug security holes. All fixes which are not security-related are available only as "hotfixes". To get a "hotfix" you have to call Microsoft and request a download url and password from a human.
Of course, the catch is, to request a fix you first have to know the Knowledge Base Q-number identifying the bug and the hotfix.
WinXP Service Pack 1 will be out in Sept or so, and contains a cumulative bundle of all hotfixes to date.
It appears Europe is entering a serious crisis in its financial and insurance industry. Too many fixed obligations to customers (annuities, claims, guaranteed return insurance vehicles etc.) and the underlying investments are cratering. Profit warnings all over Europe from financial companies. Many UK insurers are in danger of falling below minimum capital levels and will need to raise new capital.
Also, several big companies like Siemens disappointing on earnings and guidance. Similar to the disappointment here at INTC, IBM, MSFT etc. Their economic recovery is faltering too.
All in all, European markets are NOT just knee-jerking after the US markets today. There are real problems over there.
1) Today's NY Times article makes more serious allegations against C than had previously surfaced. The new evidence points to C having actually stepped over the (thin) line into illegality one one of their Enron hedge deals. Admittedly a small one, only $125M. But just a small spot of blood is enough to bring the shark packs.
2) JPM's fall today was related as much to rumors of derivative problems as it was to the Enron thing. Widespread speculation that desperate shorting by JPM was responsible for driving gold down today, although I don't understand all the logic there. Gold market politics baffle me.
LOL. Try unplugging the power and see how long it lasts you. I bet you'll be unhappy.
You understand that 650VA is the same as 460W, right? You have to divide the VA number by 1.414. If you have a big monitor plugged in, you may not even be able to keep your machine running at all.
When you have time tonight Zeev, please let us know how the ongoing action is changing your market targets.
I don't believe that ANYBODY can be right on market direction better than 60% of the time or so, except for luck, but your record is right up there in that elite 60% category.
Actually, house prices in Silicon Valley and San Francisco have not pulled back yet. The median prices fell last year, then recovered. They hit new all-time highs last month all over the Bay Area.
I've read that both the 1929 bust and the Japanese 1989 bust were followed 2 years later by peaks in real estate prices. Perhaps its another of those timeless themes... equity bubble collapses, interest rates drop, people say "real estate is the place to be".
If the schedule continues to hold, this should be about the peak of the secondary bubble. However, I honestly see no sign of that around where I live. The number of For-Sale signs in my neighborhood is lower than it's been most of the last year.
For your entertainment, here are some of the completed-sales listings from last Saturday's paper, for Campbell where I live. Campbell is a decent but quite ordinary suburb of San Jose. The housing stock here has a lot of 40-year old tract homes and 1970's-80's townhouses, 20 years ago it was a lower-middle-to-blue-collar area.
164 North 3rd St: $620,000, 1,650 SF, 2 BR, W. and V. Zurn to E. and J. Manchester.
90 North Milton Ave: $580,000, 1,280 SF, 3 BR, C. Dunbar to R. Gowdy.
1471 Patio Drive: $695,000, 1,396 SF, 3 BR, Martinez Trust to S. Hagar-Biagini.
887 Steinway Ave: $565,000, 1,326 SF, 3 BR, M. and M. McLeod to P. and J. Weideling.
310 Sunberry Drive: $500,000, 1,025 SF, 3 BR, M. Hu to R. Hsu.
Nah, no bubble here. LOL.
One of MY problems with the Fed model is that it didn't work at all before 1982. It was 180 degrees wrong throughout the 1960's, the market and interest rates both went up by large amounts over the decade.
Another of my problems is that 2 years ago we got like 70% OVER-valued by that model.
All in all, It doesn't have the greatest long-term track record.
TXN, ALTR, NVLS up tonight... betcha at least 2 of the 3 will guide down. Long overnight may be wrong.