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WEEKY MARKET DIGEST: A DEEPER LOOK INTO BAD EMPLOYMENT HEADLINE NUMBER AND IMPACT ON OUR INVESTMENTS

April 6, 2012

(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.) A DEEPER LOOK INTO BAD EMPLOYMENT HEADLINE NUMBER AND IMPACT ON OUR INVESTMENTS April 6, 2012 Today is one of those rare days when the U.S. stock market is closed and monthly employment data is released. Monthly employment data is known as mother of all numbers, this name underscores its importance. Futures market was open when the data was released. Stock futures fell sharply and bond futures rose as investors focused on the headline number of creation of

MORE ON PNSN

April 4, 2012

Even though PNSN is not being official held in the portfolio any longer, we will continue to provide information on PNSN at least for the time being. The key question is if the present price discounts the dilution. The other key question is if there is more information that the company has not released. Here is a quote from the company’s response: Book value after dilution? Under the plan, we would eliminate approximately $176 million of debt and $30 million of annual cash interest expense, increase equity at our parent company, and potentially realize a significant one-time gain as a

MORE INFORMATION ON PNSN

April 4, 2012

The stop hit on PNSN and the position is no longer being held. However, we recognize that some subscribers are still holding PNSN. We asked PNSN a number of questions and also requested them to verify the authenticity of the following letter: March 28, 2012Dear Valued Correspondent As you have no doubt noticed, the price of our common shares has declined over the last week. We believe this is due to the potential share dilution that is part of Penson Worldwide, Inc.’s recently announced debt exchange offer plan, and is a sign of confidence in the ultimate success of that

NO QE3: GOLD, SILVER, BONDS GET CREAMED

April 4, 2012

At 11:26 a.m. today, I received an email from a well-known market guru who is an expert at technical analysis. The email declared that the pattern in gold was like a coil ready to start a new rally. At 2:00 p.m. the Federal Reserve Board and the Federal Open Market Committee (FOMC) released the minutes of the Committee meeting held on March 13, 2012. In response to the minutes, gold fell about $35, with silver, oil, bonds and stocks all falling as well. As of this writing, the SPDR Gold Trust ETF GLD -1.29% is down $3.25, iShares Silver Trust ETF SLV -3.01% is down $0.40,

IT’S DEATH BY APPLE FOR BEST BUY

April 3, 2012

“Best Buy has simply become a show room for Amazon,” I wrote about two years ago. At that time, Best Buy stock was trading at $45. As of this writing, the stock is just above $24. After Best Buy (BBY) reported earnings on Thursday, there has been a barrage of negative articles on Best Buy and how Amazon.comis beating Best Buy. There was a similar barrage after the earnings report in the previous quarter. Kudos to Forbes reporter Halah Touryalai for writing,“Amazon Is Not A Threat To Best Buy, Markets Overreacting, Analyst Says. ” It takes guts to write contrary to prevailing wisdom especially when the

GOOGLE’S BRAND NEW CHALLENGE TO APPLE’S IPAD

April 3, 2012

The iPad has been a big success for Apple (AAPL). Apple bulls dream of iPad gaining and maintaining a market share similar to iPod. As a matter of fact, this is one of the propositions underlying some of the very high targets by analysts on Apple stock. Until now, there has been some justification for such a proposition. Tablets based on Google (GOOG) Android have not met with much success, even though Android phones are a huge success. Playbook from Research In Motion (RIMM) has been a flop. Kindle from Amazon (AMZN) and the Nook from Barnes & Noble (BKS)

WEEKY MARKET DIGEST: INCREASE IN PERSONAL SPENDING 400% OF PERSONAL INCOME INCREASE

March 31, 2012

(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.) INCREASE IN PERSONAL SPENDING 400% OF PERSONAL INCOME INCREASE March 30, 2012 February personal spending came at 0.8% and personal income came at 0.2%. In the short-term, in a consumer driven economy like the U.S., increase in personal spending is great for the stock market. However, in the long run, without commensurate increase in personal income, personal spending will fall off. This is a red flag. If personal spending increase continues to far exceed personal income

APPLE INSIDERS DUMP STOCK

March 29, 2012

In the month of March, Apple (AAPL) insiders have been dumping their stock. It is said a picture is worth a thousand words. There is no picture here, so the table below will have to do. I am purposely not regurgitating in one thousand words the contents of the table. The words are better used to describe what this selling means. Gauging sentiment is an important part of my investing method. For the purpose of analysis, these days we gather sentiment data from individual investors in four classes in addition to the data from institutional investors. For an astute investor,