New CEO In Tow, The Worst Is Over for Merrill Lynch

MER is preparing to announce that John Thain, the CEO of the New York Stock Exchange, will become the next CEO of Merrill Lynch.

The first step to recovery is hiring the CEO. The second step will be cleaning up the books, which we have discussed earlier. 

In the midst of this, I believe the worst is over for MER and I am a buyer.

Disclosure: As of publication I am long MER. I am not a professional, but I am trying this at home. It is highly recommended that you consult a licensed financial advisor or broker before making any and all investment decisions.

Tags: Business And Life by HJ
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It’s ok to make your children obese, but do it to a potbelly pig, and…

So a woman in Minnesota fell ill, and had a friend take care of her pet pig… um, for those of you who aren’t aware… there are whole sects of the population who consider pigs a pet (and for you self-righteous northeasterners, alot of these people live in NY and PA, so chill out).

While in the care of the friend, the pig’s weight tripled. Now the woman had left the pig with the friend for 9 months. You’d think she’d feel lucky she got the thing back in one piece, rather than in a series of freezer bags. She wasn’t feeling it.

She called the law. And now the friend is up on criminal charges.

What a great value system we have… Make a pig fat, get a criminal charge. Make a child fat, no problem… after all, it’s not your fault. It’s the fault of TV and video games and McDonald’s and the evil corporations who conspire to keep your children fat and slow.

In a time when child obesity is at record levels, the time is right for a stand. When someone takes one, I’ll let you know.

Tags: Business And Life by HJ
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Mark Cuban’s Facebook Data Ideas, and My Reply

Recently on his blog, Mark Cuban (internet and HD TV entrepreneur and owner of the Dallas Mavericks) wrote about his efforts to uncover intelligent uses for the profile data compiled by Facebook.com. 

The post is here. You will tell right away that Mark is really a super-sharp guy.

Herein is my reply to it. I also left the reply on his page. Let me know your thoughts.

Mark,  

Very smart, and companies like Acxiom often use self-reported data in their data aggregation models. They often compare this data against other sources for validity.  

Two concerns. One is unfounded and misguided, the other very founded, and both are very real:  

UNFOUNDED and MISGUIDED: Regulation. Privacy wonks in the government would likely quash this if it were added to additional ‘offline’ data sources… which is what is needed to make it really powerful data. Yet the government is so misguided, because most people want marketers to target messages better. 

People never complain about the signal, just the tons of noise. If a marketer gets to people fewer, better offers, they love it… they would doubly love it if a marketer gave them something for the initial access to the data… just a recognition of its value. You see this every day at your favorite lunch time spot: “drop in your business card and win a free lunch.”  

What is ironic about the privacy advocates is that they turn to the government for protection, and yet the government is the worst place to look.  

Here is the perfect truth: Marketers build databases to sell you more stuff you want to buy, to the benefit of the marketer and the consumer. Governments build databases for one purpose only: enforcement action.  

Need proof? In 1992, as a starving college student, I made $8,000 that year. Did I get a note from the government saying ‘hey H.J., you made so little money, here are all the benefits you are eligible for. Just come down to the office.’ Ah, no, I didn’t.  

Now that I am successful, if I am literally five minutes late with my tax return, they will impose substantial penalties on me. If I am six months late, they’ll be siezing bank accounts. See my point?  

FOUNDED CONCERN: The real concern with Facebook is the data integrity being compromised by fraudsters… this is especially true with Facebook. I read recently in Forbes that Lending Club, the peer-to-peer lending company, had built a software ‘widget’ to shuttle money around Facebook from lender to borrower and back again. As of publication, the default rates are 1% (not clear of total loans or total dollars, but I am guessing loans because that would be the less of the two most likely).  

The point is, this whole Lending Club/ Facebook thing is setting itself up to be a hotbed for internet fraud. That means the data held within will likely be compromised.  

One possible solution: extract all deadbeat borrowers from any marketing database aggregation. But even then, fraudsters might set up lender and borrower and make successful transactions just to see if that will yield better opportunities.  

 

So therein is the quandry: use the data by itself, it could be risk-laden. Validate it with other sources, and the Feds come knocking.  

 

Whatever you decide, good luck with this. 

 

Tags: Business And Life by HJ
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Another kind of spam that you can’t stop

In the last several years there have been several convictions for sending spam… guys getting actual time in gladiator academy for the crime of what? Sending unsolicited email.

Frankly, I think it’s a little frightening to live in a country where a spammer is more likely to see jail time than a paedophile, but that’s for another day.

Today is for me to complain about another type of spam. One that is unstoppable. One that is sanctioned by the government.

Every day, I go to my mailbox, and along with the one or two meaningful pieces of mail I get, I also get sale flyers from the grocery store, little mailers selling burial insurance, and coupons for shit I don’t and won’t ever want. But the post office wants it there because they collect a fee for each one they deliver.

About a year ago, in between houses, I rented an apartment. As you know apartment complexes have a commmunity mail center with those puny mailboxes. If I didn’t pick up mail, even for just a few days, the box would be overstuffed, and literally 90% would spam from Albertson’s and crappy insurance companies. 

I asked my mailman how to stop this trash from being put in my box… was there a form I could fill out at the post office? He said that there wasn’t. I said to him “if someone filled my email account with trash the way you fill my mailbox, they would be put in prison for it.”

His reply. A blank stare. Sorry for harshing your mellow, oh man of the mail. Go forth and spam away.

Tags: Business And Life by HJ
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Hillary Plays the Fragile Woman Card

In last week’s Democrat debate, Hillary Clinton got hammered by the field –like any frontrunner would. The difference here: Hillary whined about how she was being picked on because she is a woman.  

30 points up and closer to the primaries, strategically Hillary had to know going into this debate that the opposition would come out swinging. Knowing this going in, and then still collapsing under pressure is a massive blunder on her part.

Or was it? According to the article, this might be part of a larger, long-term campaign strategy. Money quote: “Clinton’s advisers, speaking on condition of anonymity because they are not authorized to discuss internal matters, said there is a clear and long-planned strategy to fend off attacks by accusing her male rivals of gathering against her. The idea is to change the subject while making Clinton a sympathetic figure, especially among female voters who often feel outnumbered and bullied on the job.”

Strategy aside, as an average voter, I can tell you this: if she can’t take the heat from cream puffs like John Edwards (who was a one-term Senator, ran for President because he wasn’t going to win Senate again, and ceaselessly combs his hair to look pretty), Barack Obama (who cakewalked to the US Senate, spent two years hanging out, and then suddenly thinks he’s qualified to lead the free world), and especially that idiot from Delaware Joe Biden (he is just another Washington lifer from an irrelevant state), then how is she going to stand up to rogue leaders in the middle east, Putin in Russia, the boys in China and India, that psycho in Iran, and that other psycho in North Korea? What is she going to do when things get tough? Complain how it’s not fair? Break down and cry?

And who knows this better than anyone? Women voters. They don’t want another terrorist attack on our soil. They don’t want psychopaths getting hold of nuclear bombs. The very group Hillary thinks she is courting will be the first to say that we cannot have a candyass of any gender in the White House. Proof positive: Why does W do so well with women voters? Because they know if someone attacks us that he will hunt them to the ends of the earth and drive a cruise missile up their ass. They know he doesn’t mess around when it comes to this kind of thing. He won’t cry, and he won’t complain about how unfairly he is being treated. And people sleep better at night because of it.

You know who also knows this? Big business. They know that if we cannot protect our cities and our citizens, then taxes, trade policy, regulation, and every other issue becomes irrelevant. Business cannot thrive if the basic safety of the nation is not guaranteed.

And who else knows this? The rest of Democrat field. Money quote from Obama: “I am assuming and I hope that Sen. Clinton wants to be treated like everybody else. And I think that that’s why she is running for president. You know, when we had a debate in Iowa a while back, we spent the first 15 minutes of the debate hitting me on various foreign policy issues. And I didn’t come out and say ‘look, I’m being hit on because I look different from the rest of the folks on the stage.’ . . . We’re not running for the president of the city council. We’re running for the president of the United States of America.”

While Obama takes advantage of Hillary’s blunder to say that he will not play the race card, and perhaps handily dismiss the race issue altogether from the campaign, it becomes apparent that Hillary just might have had her Howard Dean moment. Now that they know they have her on the run, expect the pounding to continue, especially from Obama, who has a sizable war chest in his own right. And expect this race to finally tighten.

Tags: Business And Life by HJ
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The Dow Got Clobbered. What’s next?

The Dow was down 362, and 29 of the 30 industrials were down today (MSFT was the only one up on the day).

The CIBC report on Citi, and the somewhat disappointing earnings from Exxon were cited as the big culprits.  

In the rest of the market, there were some downside earnings surprises. All this combined to make a sell off.

Financials were very clobbered, down 7%. The financial stocks are just terrible right now. Forget bottom fishing. These guys don’t even know where the bottom is… and until they do, I am staying away.

Watching the pundits on TV now, who are blaming Bernanke’s comments after yesterday’s rate cut. Bernanke basically said that this was it for rate cuts for now.

To the list of contributing factors I would like to add a theory: For many mutual funds, the last day of the fiscal year was yesterday, October 31. Alot of times, mutual funds will add positions in big winners that they missed on during the year just so they list them in their annual report as being among their holdings this year. Then, once, the fiscal year closes, the mutual funds close out the positions. There was alot of momentum in momentum stocks this week, and then suddenly, all the air was gone today. Makes me wonder.

What’s next? Financials will be a long time recovering. But everything else looks pretty good. Some look downright oversold. Some perspective: Exxon got caught in the squeeze between strong global demand for barrels of oil and weak domestic demand for gasoline. Their refining margins were crimped and they took a hit. But think about it: they reported over $9 billion in earnings this quarter. In 2002, their earnings for the whole year were only $11 billion. This is one of the greatest companies on the planet. And this refining issue is a short-term phase. Once it works through, and especially if demand for natural gas improves (the December contract is up over 20% in the last week), Exxon will be a high flier again.  

Where Exxon got slapped, Crocs got shot, set on fire, and thrown off a building. Crocs, the plastic shoe company, had not-great inventory numbers and just average earnings, and for this got a 35% haircut today (down over $26 a share). They announced they will start selling at Foot Locker soon, so I would expect alot of bottom fishing here… but long term, it’s kaput… it is the beginning of the end for the Crocs fad. Hopefully the bounce will be just enough to get out of my call options and into some attractively priced puts.

The rest of the market should do ok over the next month or so. There is alot of worry right now, which tells me sanity is driving… and with that the market is heading higher in the short term.

Disclosure: As of publication I am long options in CROX, and long XOM. I am not a professional, but I am trying this at home. It is highly recommended that you consult a licensed financial advisor or broker before making any and all investment decisions.

 

 

Tags: Business And Life by HJ
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True Earth, Cab Blend, Rebel Wine, Ukiah CA

Very unusual wine for a few reasons. For one, the bottle has no year on it. Not that it matters, because its a screw-cap, so you can’t age it anyway. It’s certified organic… which is meaningless to me… if you can make a good Cab by peeing on the vines, I would probably drink it, so I don’t really care if there were no pesticides used. It’s a blend, 55% Cab sauv, 40% merlot, 5% petite sirah, but does not carry the “Meritage” designation, nor the price tag. For those who haven’t Google-mapped it, Ukiah is on the coast north of Sonoma in Mendocino County. Not big or bold or smoky; instead warm, incredibly even fruit. Vanilla, cherry coke, and the slightest hint of cotton candy… know that certain sugar flavor cotton candy has? That, but ever so slightly. And the finish is dry and not sweet. This is an excellent bottle for the price.  $11.

Tags: The Wine List by HJ
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