The recent news on the retail sales on the Black Friday, deemed by most analysts to be the most important indicator of the sector for the whole year, advanced by 0.5% versus last year (2008),according to ShopperTrak RCT Corp. Should this be enough to lift the retail stocks?
Archive for November 2009
The recent news that Dubai suspended the repayment of its $59 billion debt sent shockwaves through the markets. Some shockwaves were expected, others came completely out of the blue.
In the first category there are the news of the spreads widening. In the second enter the appreciation of the yen, completely unexpected. Nobody was thinking that the panic will make the yen become what it was once – a safe haven for the investors. Yet, the yen continues to trade higher and higher.
The main resource of Dubai was the oil. And the government from Dubai has to repay somehow their debts. Even in the case of default, they must repay at least partially those bonds. It means that the Dubai sovereign funds and the Dubai asset owners must pump more oil to sell on the global market. Read more
The truth is that is a really tricky question. Why is that? First of all GE is one of the largest companies in the world, and to foresee its direction with precision is slightly impossible (to use kind words). It is such a big company, that probably not even their own directors have an exact idea of where it is going to head for the next 6-12 months…
Yet, the analysts remain convinced that the current share price ($16.1/share) might go even upper in the incoming weeks. Some analysts mention $17 share, others even recommend entering long positions with GE since a recovery will come sometimes for GE.
The analysts point at its strong rating (AAA-), at its strong profit margin (9.54%) and its strong ROE (16.4%) for 2008. Impressive indeed. What those analysts ignore that those financial parameters went down substantially in 2009 and that no one knows when and how much will they turn around. It might seem logical, but my opinion is that most of the analysts are ignoring the simple truth that a crisis recovery takes 1.5 to 2 times longer than the plunge. And we have just seen the first signs of the recovery, but… Read more
One interesting question was asked by the Forbes panel yesterday:
“What does the recent jump in the unemployment rate (to 10,2%, as reported by the US Bureau of Statistics) mean for the recent college graduates and others entering the job market for the first time in this employment climate? What would you counsel them?”
It is a provocative question, since we live in a challenging economic environment. And it looks quite difficult to be optimistic when the US companies continue to reduce their payrolls by limiting the number of the new employees and reducing those with the lowest company service years.
Yet, the crisis would not last forever. Yes, this is my first advice, similar to the Bible adagio – “Be always ready.” The turnaround is closer than you might think. 6 months might look like an eternity when you are unemployed and have very slim chances to get your dream job, yet these months might pass very quickly. And the best you can do is to prepare yourself.
How? Read more