Biotech stocks are loaded with high PE and the gamble of a big win.
Then there is the new phenomenon of finding new uses for already approved drugs.
With less capital requirements, they can do less testing with lower liability. Inspired by previous amazing findings from the blue pill to hair restoration, it seemed promising. But a small company hoping to find that rare accident is more of a gamble than a full FDA cycle with a known purpose.
But they are a niche for speculation having valuations swinging widely on short successes. Their almost random uptick makes them the perfect partner for a portfolio looking for short term not correlated assets in a correlated world.
Monday, April 2, 2012
Sunday, March 25, 2012
Libor and the Circle
The manipulation of the Libor interest exchange rate, rings of "non-insider" insider trading, rings of cell phone hacking, an established Quattrone syndrome in the Valley of Silicone, gentlemen agreements in engineering circles overriding quality controls, and just out, puerto rican tax refunds going through an organized interception on the week of the NFL draft. Poor Griffin the Third, it is hard to go against those odds.
It was noise and incoherent appearances until now, but it is a noise that is starting to become a whistle. Once unknown to the many, it is becoming a symphony with each passing year: the voice of the wisdom of the crowds in an interconnected world.
Meanwhile corporations look desperately for innovation. Motor companies are opening labs in Silicon Valley hoping to harness creativity. Dell wakes up in the middle of the night with cold sweats. Japanese companies are slowly vanishing. Sony is seeing its previous aura in Apple while institutional investors want to cash out from Apple to avoid re-investments they never intended. Panasonic refocus its business to dishwashers. The circle in the financial industry ends up overriding the core businesses and the banker's reputation.
There are no tools to categorize and easily reference* the power of the circles. It seems the only defense businesses have is the esoteric solution of corporate culture and values. It is esoteric at the present time, but it becomes very palpable with every passing year. In this new world, only the ones who managed to keep the old ways, private, and established cultures might have a true chance to last.
The other true solution is accommodating global minds. Higher management is more and more: more international. The inherent value that can bring global minds together is the business, not the circle. A person Art is the hot sale. With the new wave of people who abstained from online interactions, I wonder if the new Art has to be conceived in an old fashion, archaic, unconnected brick and mortar mind.
*Delightful X Files Reference
It was noise and incoherent appearances until now, but it is a noise that is starting to become a whistle. Once unknown to the many, it is becoming a symphony with each passing year: the voice of the wisdom of the crowds in an interconnected world.
Meanwhile corporations look desperately for innovation. Motor companies are opening labs in Silicon Valley hoping to harness creativity. Dell wakes up in the middle of the night with cold sweats. Japanese companies are slowly vanishing. Sony is seeing its previous aura in Apple while institutional investors want to cash out from Apple to avoid re-investments they never intended. Panasonic refocus its business to dishwashers. The circle in the financial industry ends up overriding the core businesses and the banker's reputation.
There are no tools to categorize and easily reference* the power of the circles. It seems the only defense businesses have is the esoteric solution of corporate culture and values. It is esoteric at the present time, but it becomes very palpable with every passing year. In this new world, only the ones who managed to keep the old ways, private, and established cultures might have a true chance to last.
The other true solution is accommodating global minds. Higher management is more and more: more international. The inherent value that can bring global minds together is the business, not the circle. A person Art is the hot sale. With the new wave of people who abstained from online interactions, I wonder if the new Art has to be conceived in an old fashion, archaic, unconnected brick and mortar mind.
*Delightful X Files Reference
Monday, March 19, 2012
Cash in the bank: 98 billion
OAAPL to pay dividend and to do a buyback. 100% return on the investment in the last 52 weeks is just not enough. The 52 week low was 300. Today's trading price: 600.
Microsoft found itself in the same junction back in 2004. With 50 billion in cash in the bank but a stale stock price, investors were screaming for some sort of return. Microsoft paid a one time dividend of 32 billion. This was probably the beginning of the split between Bill Gates and Microsoft. Bill Gates donated all his dividend to charity, and it probably led him to discover the impact he could have with charity instead of with Microsoft products.
AAPL has already been singled out as a tremendous anomaly requiring fund manager to exclude the stock from market analysis. With a growing stock price, a large dividend, increasing sales, and a buyback, it is hard to tell where it is going.
It is always the question of whether its product pipeline can continue propelling the momentum. The newest iPad seems to suffer from overheating. And even though the WSJ reports 55% of iPad users look to buy a second one to avoid sharing it within the family, it might be too soon for most users to replace their older model.
Then there are the other revenue streams which are too long to list. There is even 238 million from the profit sharing (18%) in the AppStore.
On the other hand, a curious fact surfaced this week. Sharp was delayed in the delivery of components bringing light to the fact that Apple is forced to rely solely on Samsung which is a direct competitor. While Apple rearranges the marketplace, there is a stream of suppliers and competitors who are not standing still and are reshaping themselves at the same speed.
When we add all this, we get 98 billions in cash, and a string of future market changers to follow.
Microsoft found itself in the same junction back in 2004. With 50 billion in cash in the bank but a stale stock price, investors were screaming for some sort of return. Microsoft paid a one time dividend of 32 billion. This was probably the beginning of the split between Bill Gates and Microsoft. Bill Gates donated all his dividend to charity, and it probably led him to discover the impact he could have with charity instead of with Microsoft products.
AAPL has already been singled out as a tremendous anomaly requiring fund manager to exclude the stock from market analysis. With a growing stock price, a large dividend, increasing sales, and a buyback, it is hard to tell where it is going.
It is always the question of whether its product pipeline can continue propelling the momentum. The newest iPad seems to suffer from overheating. And even though the WSJ reports 55% of iPad users look to buy a second one to avoid sharing it within the family, it might be too soon for most users to replace their older model.
Then there are the other revenue streams which are too long to list. There is even 238 million from the profit sharing (18%) in the AppStore.
On the other hand, a curious fact surfaced this week. Sharp was delayed in the delivery of components bringing light to the fact that Apple is forced to rely solely on Samsung which is a direct competitor. While Apple rearranges the marketplace, there is a stream of suppliers and competitors who are not standing still and are reshaping themselves at the same speed.
When we add all this, we get 98 billions in cash, and a string of future market changers to follow.
Saturday, February 25, 2012
Buy Miami sell Beijing
Undo the big short and take risk on mortgage bonds.
Bet on emergent currencies, and wait for a weaker euro just to accommodate smaller euro economies.
Bankruptcy is the best place for investments because the increased transparency. AA, MF Global, etc.
Soros, still the greatest macro guy in modern times.
Watch for a real slow down in China to track the ramifications.
Bet on emergent currencies, and wait for a weaker euro just to accommodate smaller euro economies.
Bankruptcy is the best place for investments because the increased transparency. AA, MF Global, etc.
Soros, still the greatest macro guy in modern times.
Watch for a real slow down in China to track the ramifications.
Thursday, February 23, 2012
What was the journey of the mortgage industry was our journey
Best put together list of the possible reasons of why the system failed to respond and react. Why in the world Economists and Finance gurus removed from the front line of trading failed to warn.
Traditional institutions failed.
IMF
From the center of the international monetary system, the IMF was sent to a peripheral position. Third world countries accumulated more reserves than the IMF budget. Commodities raised, so what need was there for the infamous IMF. They are trying to come back - the trillion dollar lady.
Traditional measures of market volatility should have registered some uptick as the aberrations began multiplying.
There was a reduction of volatility. Given the belief of the great moderation which a belief that the world's economies had entered a period of reduced fluctuations in economic and financial indicators.
VIX is wall street fear index, now covered daily by Melissa Lee's Fast Money - I wondered if it happened after this book was published-. It is the Chicago board options exchange volatility index. Measure of implied volatility based on the weighted average of prices for various options on a diversified basket of stocks.
Sustained moves in the vix carries important information about the extend of the uncertainty in the markets. A decline in vix would be accompanied by an increase in many investors willingness to assume risk.
VIX kept declining in an impressive fashion until the summer 2007. In other words, investors preferred to take more risks at a time of growing and simultaneous inconsistencies in the marketplace.
The same occurred for volatility in the fixed income and foreign exchange markets.
There another more general sign:
A notable increase in correlations among different asset classes in different geographies and different fundamental drivers.
And others.
Inspired by scribbles and notes from:
When markets collide
Even if Greenspan called it a statistical aberration, It had to take an Asperger's person in Michael Burry and a removed statistician working for Paulson to look beyond the indicators followed by the crowd.
Nothing a Carnegie Mellon process wouldn't catch.
Traditional institutions failed.
IMF
From the center of the international monetary system, the IMF was sent to a peripheral position. Third world countries accumulated more reserves than the IMF budget. Commodities raised, so what need was there for the infamous IMF. They are trying to come back - the trillion dollar lady.
Traditional measures of market volatility should have registered some uptick as the aberrations began multiplying.
There was a reduction of volatility. Given the belief of the great moderation which a belief that the world's economies had entered a period of reduced fluctuations in economic and financial indicators.
VIX is wall street fear index, now covered daily by Melissa Lee's Fast Money - I wondered if it happened after this book was published-. It is the Chicago board options exchange volatility index. Measure of implied volatility based on the weighted average of prices for various options on a diversified basket of stocks.
Sustained moves in the vix carries important information about the extend of the uncertainty in the markets. A decline in vix would be accompanied by an increase in many investors willingness to assume risk.
VIX kept declining in an impressive fashion until the summer 2007. In other words, investors preferred to take more risks at a time of growing and simultaneous inconsistencies in the marketplace.
The same occurred for volatility in the fixed income and foreign exchange markets.
There another more general sign:
A notable increase in correlations among different asset classes in different geographies and different fundamental drivers.
And others.
Inspired by scribbles and notes from:
When markets collide
Even if Greenspan called it a statistical aberration, It had to take an Asperger's person in Michael Burry and a removed statistician working for Paulson to look beyond the indicators followed by the crowd.
Nothing a Carnegie Mellon process wouldn't catch.
Saturday, February 18, 2012
Neuf Règles générales du marché
China owns 45% of the world supply of polysilicon used in the solar industry.
With prices for end products falling rapidly, a raise on demand, consolidation , or a technological breakthrough would bring some stability to the sector.
But that was the world of yesterday. The Chicago free market dogma woud have dictate a foreseen equilibrium, but it is today.
China largest producer will withhold production until prices raise 60%. The market forces are just indicators.
With prices for end products falling rapidly, a raise on demand, consolidation , or a technological breakthrough would bring some stability to the sector.
But that was the world of yesterday. The Chicago free market dogma woud have dictate a foreseen equilibrium, but it is today.
China largest producer will withhold production until prices raise 60%. The market forces are just indicators.
Friday, February 10, 2012
The old fashion banker is still priceless in today's world
There is no more clear sign that shows the old banker prestige hasn't been forgotten. Their nod is not like any other nod. Trained in the art of valuation and risk for generations, their nod is still the ACCURATE factoring of information in one instance.
And the markets haven't forgotten their role no matter how powerful conglomerates are.
Investors May Rethink Plan to Oust Rothschild at Bumi http://on.wsj.com/znLjiV #WSJ #iPhone
And the markets haven't forgotten their role no matter how powerful conglomerates are.
Investors May Rethink Plan to Oust Rothschild at Bumi http://on.wsj.com/znLjiV #WSJ #iPhone
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