Benchmarks are measurements used for comparison purposes, often to track the performance of a certain set of securities. A benchmark may be a published securities index or a customized one that serves a particular investment strategy. A popular benchmark used as a reference point for comparing stock performance is Standard & Poor’s 500 Composite Index.
Archive for the ‘Other Grow’ Category
Benchmarks are…
Wednesday, July 14th, 2010BP May Have Something To Be Optimistic About
Wednesday, July 14th, 2010BP originally planned to cap the oil leak in the Gulf of Mexico in mid-August, but they now plan to do so by the end of July.
- BP claims that the clean-up efforts are ahead of schedule.
- July 27 – the target cap date – is also the day 2nd quarter earnings are reported.
- BP states that they have several back up plans in case primary capping efforts fail.
- BP was encouraged by the Environmental Protection Agency to create a new device – an “autonomous subsea dispersant system”– to monitor and measure chemicals used underwater to break up the oil.
Facts and Figures
- BP has lost almost half of its market capitalization since the spill in April.
- BP is currently drilling 2 relief wells.
- Hurricane season – which directly affects the Gulf – is imminent and worrisome.
Best Quote
“Force yourself to think each one will fail. We’re in new territory full of perils, and nothing is a slam dunk.” – Steve Chu, United States Secretary of Energy
Drunken Broker Single-Handedly Alters Global Oil Price
Friday, July 9th, 2010Bet your parents never warned you about this potential side effect of drinking…
- Last year, Steve Perkins – a broker for PVM Oil Futures – got “blackout drunk” and decided to buy 7 million barrels of crude oil with his firm’s money, driving up the global price of oil.
- After realizing what he’d done, the 34 year old broker texted his managing director saying that he wouldn’t be coming into work the next day due to an ill family member.
- As PVM challenged his story, Perkins confessed to spending the firm’s money.
- Perkins seems to have had no motive for buying the oil, and he claims that he has a blurry memory of the entire night.
Facts and Figures
- Perkins spent $520 million of PVM’s money, but his job title only allows him to place trades on behalf of his clients.
- He bought 7 million barrels of crude oil at 2am.
- Perkins’s purchase raised the global oil price up more than $1.50 a barrel to an 8-month high.
- Mr. Perkins has been fired, banned from trading for 5 years, and fined £72,000 (about $110,000).
Best Quote
“Mr. Perkins poses an extreme risk to the market when drunk.” – Financial Services Authority
Businesses Hesitate To Hire, Stall Economic Recovery
Tuesday, July 6th, 2010Concerns about the stalled U.S. economic recovery continue to grow.
- Last week, state unemployment aid claims increased unexpectedly, which may indicate that the economic recovery is stalling.
- Although the number of layoffs has decreased in the past year, businesses are hesitant to hire.
- New jobless claims rose to the highest level since the beginning of March.
- Obama’s approval ratings have plummeted due to concerns about the economic recovery.
Facts and Figures
- Claims for state unemployment benefits rose 13,000 last month.
- Employers announced 39,358 job cuts in June, up 1.4% from May.
- Private employers added just 13,000 jobs in May.
- Announced layoffs hit a 4-year low in April.
Best Quote
“It’s looking more and more like the job market is treading water. Layoffs are down from 2009, but hiring hasn’t really picked up and this is disappointing. There is a lot of uncertainty on the hiring side that’s causing things to remain sluggish. In order for the recovery to give people confidence it needs to cut across different sectors of the economy.” – Stephen Bronars, Senior Economist at Welch Consulting
Motivating Children Of Wealthy Families To Work
Tuesday, June 22nd, 2010Affluent parents struggle to maintain a balance between helping their children financially and teaching them how to become self-sufficient.
- While parents mean well by providing financial help, they may be hampering their child’s productivity and preventing them from learning the value of work.
- Affluent or not, parents are concerned how to raise productive children. Setting financial limits and sticking to them can help ensure that their children don’t depend on what they see as an endless supply of money.
- Banks like Gibraltar and J.P. Morgan have begun to offer classes and seminars focusing on understanding and managing finances and preparing for the future.
Best Quote
“You have to help a kid understand what it means out there. You can’t expect kids to go out in the world and be self-sufficient if they don’t know what a utility bill is.” – Joline Godfrey, Chief Executive of Independent Means
Best Buy Not So Hot First Quarter
Monday, June 21st, 2010Best Buy quarterly results show that Best Buy sales fell short of predictions.
- Best Buy’s stock fell 6% after disappointing quarterly results were released on Tuesday.
- While sales of notebook computers, cell phones, and appliances were strong, sales of games, music, movies, and televisions fell short.
- Executives are optimistic that customers will continue spending, though, and pull the company out of this rut.
Facts and Figures
- First quarter net earnings were 36 cents per share (less than predicted 50 cents per share)
- Reported sales for this quarter were $10.8 billion (less than predicted $10.9 billion)
- Retail sales fell by 1.2% in May 2010 (they were expected to rise 0.2%)
LIBOR is…
Friday, June 18th, 2010LIBOR is an acronym for the London Interbank Offered Rate, a short-term interest rate that top-quality banks offer each other for loans. The rate changes all the time, and is usually expressed as a 1, 3, or 6-month rate for U.S. dollars.
An Oil Company Actually Benefits From The Oil Spill
Wednesday, June 16th, 2010While most oil companies are suffering in the wake of the big spill, investors are becoming more confident in Brazil’s Petrobras because it doesn’t operate in the Gulf of Mexico.
- As BP shares continue to fall, shares of Brazilian oil company Petrobras have remained stable for weeks.
- Petrobras plans to make more stock available for sale later this summer, indicating that it’s doing well despite other oil companies suffering from the oil spill.
- While the oil spill is hurting stocks associated with the Gulf, investors are confident that oil companies elsewhere (like Petrobras) could actually benefit.
Facts and Figures
- Petrobras plans to offer $25 billion in equity this summer
- If they do sell all of their offered stock, it would be the second largest equity offering ever
- Petrobras operates worldwide – from Turkey to New Zealand to, of course, Brazil
Best Quote
“Petrobras does not have the headline risk that BP does right now. Investors are unlikely to move away completely from the oil sector but substitute from one company to another.” – Gerry Sparrow, Chief Investment Officer, Sparrow Capital
Two-Thirds of 1,010 Americans Resent Wall-Streeters: Cause For Concern?
Thursday, April 8th, 2010New poll shows that most Americans have a… complicated relationship with Wall Street bigwigs.
- A Harris telephone survey conducted February 16-21 seems to indicate that 82% of Americans want the government to “clamp down” on Wall Street.
- The desired regulation is mostly about the exorbitant executive pay at large, underperforming Wall Street firms.
- Most Americans believe that Wall Street does offer some value to America overall, but that many of the companies are run by a bunch of depraved, money-grubbing misers who would just as soon slight their fellow man in the name of an extra buck as they would pick up a loose quarter on the side of the street.
Facts & Figures
- The poll surveyed 1,010 adults via telephone.
- Of those 1,010 adults, 82% want tighter regulations, 67% view people who work on Wall Street negatively, 66% think that the Wall Street workers would engage in illicit activity if it provided a satisfactory payoff, and a similar percentage believe that most people who work on Wall Street are unscrupulous liars.
- Approximately 60% of the polled people think Wall Street benefits the US.
Best Quote
“[Americans agree that] most people on Wall Street would be willing to break the law if they believed that they could make a lot of money and get away with it.” – Anonymous Harris Pollster
All Eyes On McCann
Friday, March 12th, 2010After an agonizing descent, UBS pins all its brokerage hopes on Robert McCann. But only for so long…
- Thrust into a toxic environment teeming with huge credit losses and allegations of illicit banking practices, many industry insiders believe that McCann, the man tasked with the job of salvaging UBS’s debased U.S. brokerage unit, has a short amount of time to accomplish the tremendous task at hand.
- Industry executives believe that the magnitude of the meltdown will force UBS to sell its U.S. brokerage division, while others argue that it should be cut out of UBS and rebranded.
- McCann, former leader of Merrill Lynch’s renowned “Thundering Herd” of brokers, left Merrill Lynch while Bank of America was in the process of acquiring the firm and is said to be a capable leader and intelligent man.
Facts & Fiugres
- In 2008 and 2009, UBS revealed an astonishing $52 billion in credit losses, and was forced by regulators to redeem $22 billion in auction-rate securities (cash-like investments that become untradeable when markets seize up).
- Last summer, U.S. authorities accused UBS bankers of helping rich Americans hide money in Switzerland.
- UBS customers withdrew 20 billion Swiss francs in 2009, while the bank retained only 737 billion francs in client assets by the end of the year.
- About 1,100 brokers left the bank in 2009, leaving it with approximately 7,000 brokers on staff.
Best Quote
“The problem is not whether he can do it, but can he do it quickly enough to keep people in Zurich happy.” – Brad Hintz, Analyst at Sanford C. Bernstein