Archive for October 2012

Hurricane Sandy Good for Wall Street… For Now

Recently I was reading the media coverage about the impact of the hurricane Sandy on the Wall Street shares. They all (Wall Street Journal, Reuters, Bloomberg etc) seem to converge on the same point – that Sandy was actually good for the Wall Street shares. Despite the fact that NYSE and Nasdaq shut down their operations for two days, the DJIA increased 59.10 points (0.45%) at 13,166.31. The Standard & Poor’s 500 Index increased 4.62 points (0.33%) at 1,416.56. The Nasdaq Composite Index rose 1.45 points (less than 0.1%) at 2,989.4. As in the case of Japan earlier this year, industrial shares were the highest gainers, on a Wall Street anticipation that re-building the coast area after Sandy will will actually increase the demand for their production.
The problem with these forecasts is that they are, well, just forecasts. And investors should be wary about these. Before they can reach to the market, the investment banks’ algorithms have already traded the shares increasing the prices. On the other hand, it all depends on who and how much will finance the re-building after Sandy – insurance companies have clauses in their policies against the so-called Acts of God, whilst the US deficit is bloated…

Pumpkins Photo Anticipating Halloween

image

More yellow and green pumpkins from my smartphone’s camera. A HTC Sensation photo with a nice seasonal vintage effect.

One More Autumn Photo

image

Here attached a Gingko tree’s photo shot in the nearby botanical garden with my HTC Sensation 8 mp camera. Again a warm vintage Android effect was applied during the photo shooting. Golden leaves, autumn is here…

HTC Sensation Photo with Vintage Effect

image

Lately I was playing a bit with my mobile phone’s camera capabilities. My HTC’s 8 MP camera was a hidden treasure. Here you can see a vintage style photo with lots of autumn pumpkins, maybe an anticipation of the Halloween. Despite being a phone camera, HTC delivers nice colors and a seasonal feeling. So why don’t we use our smartphones’ photo cameras more often?

Light Financial Books – “A Beginner’s Guide to Investing: How to Grow Your Money the Smart and Easy Way” – A Book Review

“A Beginner’s Guide to Investing: How to Grow Your Money the Smart and Easy Way” seems like a long title for a book that pretends to be simple and quick to understand. Yet, the title of this investment book might just reflect the reality. Have a look at the financial investments books that are on the market – most of them are either too complicated (take for example Tirole’s “Theory of Corporate Finance“, where lots of financial maths are involved), either too vague (for example Fisher’s “The Only Three Questions You Need to Ask“). Starting from this point, the authors of “Beginner’s Guide to Investing” (Alex Frey and Ivy Bites) thought to create an accessible investing guide, without many frills and with essential data within. Continue reading “Light Financial Books – “A Beginner’s Guide to Investing: How to Grow Your Money the Smart and Easy Way” – A Book Review” »

Why I Left Goldman Sachs: A Wall Street Story by Greg Smith – A Book Review

A search on Google for Goldman Sachs returns 328 million results. Created in 1869, Goldman Sachs rose quickly to be a favorite banks in the US for IPO’s and later for investment banking. Its history was always tied to acquisitions of trading funds and various financial instruments. And of course, during the sub-prime crisis in 2007, Goldman Sachs became even more famous for short-selling mortgage backed securities right before the market for those instruments collapsed. A close competitor of Lehman Brothers, Goldman Sachs allegedly partly maneuvered its sibling into bankruptcy, thus securing an even better position in the investment banking industry. With $29 billion in assets and a surprising repurchase of the government injection of cash into its share, Goldman Sachs remains one of the most mysterious investment banks on Earth.

No wonder that Greg Smith’s financial book (“Why I Left Goldman Sachs: A Wall Street Story”) was expected with so much interest. As an ex-employee of the bank’s New York HQ, Smith was always critical of Goldman Sachs failing its own standards and the bank’s reference of customers such as “muppets” – after he left the bank in 2006. Thus, it comes as no surprise that this account of an investment banker’s life in Sachs is … well… critical of it. It is also not surprising that the book made the no.1 spot for most book retailers, including Amazon. Continue reading “Why I Left Goldman Sachs: A Wall Street Story by Greg Smith – A Book Review” »

Apple Stock Should Rise with the Ipad Mini – But How Much?

Yes, this is the question. At every new product launch, the Apple stock rises almost automatically in anticipation to the future earnings. In this respect, Apple exhibits something quite close to the perfect market hypothesis – data about future earnings should be incorporated into the stock price at the time of the announcement.
The question is thus not how much will the apple stock rise in the incoming weeks, but how much. In fact, if you make it right, you could do a fortune. Most of the equity analysts are battling and scratching their heads for this question – what will be the impact of the Ipad mini launch into the stock price?
Let us try to do a small calculation here:
Between the launch announcement of the first Ipad (January 27, 2010) and the first sales hitting the stores (typically first two weeks of sales, starting with April 3rd, 2010) the Apple shares rose from $208 to $259 (24.5%). At 4 million units as the first Ipad was to be sold, the impact of each IPad into the 904 million shares was at the time $15 billion (assuming a 1/3rd impact of Ipad from the total results).
The Ipad 2 story is somehow different, in a sense that the market has anticipated the launch of the second Ipad in March and the Apple share price has increased in advance with approximately 30 USD.Following the same logic of calculation, Apple had an IPad 2 impact in its share growth of around 10 billion USD. Again, Ipad 3rd generation had again a stock impact of $15 billion USD. Calculations are shown below: Continue reading “Apple Stock Should Rise with the Ipad Mini – But How Much?” »