Friday Finance Weekly 85th Edition

Greetings folks and a warm welcome to the 85TH Edition of Friday Finance Weekly. We have finally transitioned to a new system so I hope you like it. After having a month of sunshine it looks like the rains are back, but at least you won’t have to water the garden over the long weekend.

The biggest retail news this week was that Saks is going to be purchased by the Hudson Bay Company. Yes, a Canadian retailer is purchasing an American one. The offer is for a total of $2.4B. The Bay had to do something to fend off Nordstrom’s launch into Canada and what better brand than Saks. In Canada, a total of 6 – 7 Saks stores will be opening by way of new construction and conversions of existing stores. In addition, twenty five Saks Off 5TH stores are planned as well. The brands will operate as two entities and as a result, the management of Saks will remain in New York. In general Saks hasn’t performed well compared with Neiman Marcus and Nordstrom as it has been burdened by underperforming stores. The company has gone through some cost cutting and now runs 41 stores compared with 54 in early 2007. Overall good move, especially for the Bay, but I think Nordstrom is going to come out on top. In my opinion there is a real gap in friendly, high-end fashion retailers and this is a clear differentiator for Nordstrom. Saks is more of the same, maybe a little more traditional than Holt Renfrew. The markets have reacted well to the HBC take over and the shares are up 6.12% for the week. All things considered, I don’t think the selection in Canada was the issue, it was always price. Hey at least it will boost up Canada’s employment figures. (Source: Bloomberg)

Alternative currencies are all the rage and if you need help understanding some of the major ones a recent TED talk provided a good perspective. Please find the top 5 biggest/most interesting (in my opinion) below:

  •  Bitcoin: The world’s best-performing currency, according to Kemp-Robertson, Bitcoin’s value is tied to the performance of a computer network. It’s “completely decentralized—that’s the sort of scary thing about this—which is why it’s so popular,” Kemp-Robertson says. “It’s private, it’s anonymous, it’s fast, and it’s cheap.” Bitcoin is a case study in the increasing desire to place trust in technology over traditional institutions like banks.
  • Litecoins: A virtual currency based on the Bitcoin model, Litecoins have a higher limit: “The number of coins that can be mined is capped at 21 million Bitcoins and 84 million Litecoins,” explained a recent Wall Street Journal post, which also noted that Bitcoins are worth more and currently accepted more widely.
  • Tide detergent: This is a barter system that’s about as far from government-backed as you could get: in 2011, it was discovered that across the US, thieves had been stealing 150-ounce bottles of Tide detergent to trade for $5 cash or $10 worth of weed or crack cocaine. An article in New York Magazine from earlier this year details the fascinating story and what it says about Tide’s super-successful branding. Link to the article: http://nym.ag/Uzhrb6
  • Linden Dollars: Linden Dollars, usable within the online community Second Life, can be bought with traditional currency or earned by selling goods or offering services to other Second Life residents. Many people earn actual Linden salaries—some to the tune of a million Linden Dollars. Don’t get too excited though 1M Linden Dollars is around $3,950 USD at the moment.
  • Starbucks Stars: Use of Starbucks’ Stars is limited not to a particular geographic locality, but to the corporate ecosystem that is Starbucks. Once you get a Starbucks Card, you can earn Stars—which buy drinks and food—by paying with the card, using the Starbucks app, or entering Star codes from various grocery store products. According to Kemp-Robertson, 30 percent of transactions at Starbucks are made using Stars.

If you have time over the long weekend and wanted to explore the other currencies please refer to the original article: http://bit.ly/16ed4CZ To be honest all these alternative currencies are a bit of a blur to me and now when someone says, “I am a millionaire”, you actually have to ask, “what kind”? Imagine a complication of filling out a personal net worth statement at a bank? (Source: TED Talks)

America is still the world’s biggest source of capital, but a tightening of their immigration system is making it harder and harder for entrepreneurs to set up shop. So what’s the solution? A company in the US has come up with a novel way of approaching this issue. They are building a cruise ship 12 nautical miles from the coast of San Francisco (international waters) that will house 380 startups. Companies will have to give up equity in addition to $1,200 – $3,000 a month. There will be a ferry that goes directly into San Francisco and work permits won’t be required. Residents on the boat will only require visitor visas that are considerably cheaper to obtain. Great idea, but the company is still in fundraise mode. Also, small matters such as policing need to be considered. In my opinion this seems too much like a modern day version of Alcatraz. (Source: Blueseed.co)

The low-price air carrier GoAir of New Delhi announced in June that in the future it would hire only females for the cabin crew — because they weigh less than men (and expects eventually to save the equivalent of $4 million annually in fuel based on average weights). I am sure saving fuel was the only reason. (Source: The Times of India)

Have a fantastic long weekend folks and please don’t hesitate to forward this newsletter. Many thanks,

Sam

Friday Finance Weekly 83RD Edition

Greetings folks and a warm welcome to the 83RD Edition of Friday Finance Weekly. My apologies for tardy state of this newsletter. I am switching to a new system over the next several weeks and this will ensure timely delivery of spicy finance news.

Zero Hedge recently wrote an article on 19 reasons to be deeply concerned about the Global Economy. Here is my top five:

  • Velocity of money in the US has plunged to an all-time low. Basically money is not flowing through the system and banks aren’t lending. If the velocity has slowed down due to increased credit standards that makes sense, but I think banks are hoarding cash to improve balance sheets. Both factors aren’t necessarily bad, but nothing will happen if both the chicken and the egg are stagnant. That being said, I hope the government doesn’t try to kick start things.
  • Fall of the Egyptian government will result in increased instability and a spike in oil prices. This is especially problematic as summer travel results in increased oil consumption. One has to wonder if oil traders are secretly funding instability movements in the Middle East. Okay that was my one Snowden moment of the day.
  • The European debt crisis is going to come in our radar again. The Portuguese Finance and Foreign Ministers quit within two days. Also it is expected that Italy will need another bailout within six months. Hey at least Berlusconi won’t party with the extra dough.
  • PIMCO the bond trading heavy weight is starting to see massive capital pullouts. In June, investors pulled out $9.6B in capital. It is the largest single outflow since 1993. That being said, it could be that more capital is flowing from debt to the equity market, which is considered to be a good sign. This is a ‘meh’ sign at best.
  • Perhaps the most troubling sign is that the percentage of companies providing negative earnings guidance for this quarter is at a level never seen before. Even Samsung was on this boat.

To sum up, all is not well, but summer is here and the beer is cold. I wouldn’t bother with the rest of the list as it’s a bit repetitive. (Source: Zero Hedge)

Six years in the making, Adidas is launching a radically new running shoe, the “Springblade,” on August 1.  The shoe has 16 “blades” extending from the sole, each one composed of a transparent, highly elastic polymer that is intended to return energy forward with each step. Springblade is aimed at those who don’t identify themselves as runners, specifically high school and college athletes who run as a means of conditioning for sport. Adidas themselves is in a much-needed boost in the running department. According to SportsOneSource, Adidas suffered a decline in running sales in the month of May while five other companies, including category leader Nike, recorded gains of at least 20 percent. If you are interested in check it out please click the following: http://bit.ly/1a8pLVy  While this shoe is revolutionary in every way, it has a small problem. Mud has a tendency of getting stuck in it. Thought that would have been a design requirement. (Source: USA Today)

In 2011, Nordstrom’s spent $270 million to buy HauteLook, which sells clothes to members in “flash sales,” online offers that expire within hours. Now, the Company is expanding its online presence through its investment in online specialty gift retailer, Wantful. The companies recently launched a joint platform, which works like this: after users enter some information about who they are buying for and how much they would like to spend, the company sends the gift recipient a customized catalogue of up to 12 potential items to select from. Nordstrom’s investment essentially functions as an inexpensive means for research and development, as the retailer strives to further grow its e-commerce business, which currently represents 11% of total revenue. Nordstrom has always been smart and continues to innovate. That being said this is a company that thrives on providing superior customer service. I am not sure how this will translate in the online space. (Source: Business Week)

Congress established the Interagency Working Group in 2009 to set guidelines on advertising healthy foods to children, and public comments on the guidelines are now being posted. General Mills appeared among the most alarmed by the IWG proposals, according to its comments on the Federal Trade Commission website (as disclosed by Scientific American in May). Of the 100 most commonly consumed foods and beverages in America, GM asserted, 88 would fail the IWG standards, and if everyone in America started following the health recommendations, General Mills asserts that the cost of feeding the entire nation would increase $503 billion per year. No worries, let’s just add it to the national debt. I wonder however if health care costs would decrease in such a case. (Source: Scientific America)

Have a fantastic weekend and please don’t hesitate to forward this newsletter. Many thanks,

Sam

Friday Finance Weekly 74TH Edition

Greetings folks and a warm welcome to the 74TH Edition of Friday Finance Weekly. Hope you didn’t miss me too much. My apologies for the 2 week absence as I was travelling a fair bit.

Let’s get the party started:

  • There is a lot of Google related news and I think I can dedicate the entire posting to these guys. I’ll keep it short though. This week Google officially launched their own internet services called Google Fiber. No big deal right, but wait its 1Gbps. Let’s put that into perspective it is 5x – 10x faster than your home internet. You think they would launch in a large urban area but instead they picked Kansas Also there are reports that Google is planning to provide wireless services to the rest of the US by partnering with the Dish Network. And if that wasn’t enough, Google has completely sold out of their phone the Nexus 4. Even with all this positive news Google is down 2.2% for the week and is trading at $647.67/share. That being said the market in general has been very unstable. In my opinion the biggest boost in terms of value will probably be with the Dish Network. Their shares are down 1.39% for the week and presently trade at $35.36/share. If an official announcement is made, Dish Network will get a boost. In case you are wondering big brother is already watching and it’s too late to stop now. I for one don’t care as long as my Netflix speeds increases. (Source: CNN, Techcrunch, Boy Genius Report, Google Finance)
  • Nokia has lost about half of its market value since the beginning of the year. Presently it is trading at $2.77/share. Most analysts are convinced that they are following Nortel to extinction, but I think they may become a force in the future. Windows 8 phones are only now coming into the market and Nokia did a good job of aligning themselves with Microsoft. This had the added benefit of automatically making them an acquisition target. On top of that, they are looking to capitalize on the Apple’s map debacle by launching a new mapping service called Here. You can try it out at www.here.net. After playing with for a bit, I am excited about its future prospects. This isn’t well publicized, but Nokia purchased a mapping company called Navteq. No big deal right? Except that they supply over 80% of the data for all in-car mapping systems. Cars are becoming increasingly connected and I see a future for Nokia. That being said this fantasy may end if Apple produces the iCar. (Source: Gizmodo, Google Finance)
  • Priceline.com Inc., the most valuable online-travel agency, is buying Kayak Software Corp. for $1.8 billion, adding profitable search tools to its services that helps consumers book flights and hotels online.  Shareholders of Kayak, which held an initial public offering in July, will receive $40 a share, the companies said in a statement. That represents a 29 percent premium over Nov. 8th’s closing price at $31.04 in New York, and includes about $500 million in cash as well as $1.3 billion in equity and assumed stock options. The deal is the biggest to date for Priceline, which has been using acquisitions to add customers as it works to increase sales and fend off competition.  Kayak, which raised $91 million in the July IPO by selling 3.5 million shares at $26 apiece, processed 302 million queries across its Web and mobile products in the third quarter, up 31 percent from a year earlier. William Shatner will need a new tagline for Kayak and maybe it will be ‘beaming you up for less than you think’. Not my best joke. (Source: Bloomberg)
  • Amazon launched a wine marketplace on its website, with more than 1,000 domestic brands available.  For now, wines will be shipped only to a dozen states, including California, and to Washington, D.C. Bottle prices range from less than $10 to more than $100; shipping costs $9.99 for up to six bottles of the same wine. Amazon has been making moves on several fronts lately to expand its dominance as the country’s largest online retailer and has been interested in getting into the wine business for years, analysts said. Winemakers and industry groups cheered the news, saying Amazon’s reputation and scale would help get the word out about buying wine online. Currently, only about 2% of wine purchases are made via the Internet, said Rich Bergsund, Chief Executive of wine e-tailer, Wine.com.  Because the wines will be shipped from individual wineries, consumers won’t be able to combine bottles from different labels to save on delivery costs. Wonder if an increase to online liquor sales will translate to an increase in underage drinking? Hey at least they will be getting the best deal. (Source: LA Times)

Retail news (don’t worry I will keep this section short):

  • An eventual bid for Best Buy by founder Richard Schulze could come below his initial proposal of around $8 billion and is now not expected to be made before December, sources familiar with the matter said, in a new twist to the months-long saga at the struggling electronics retailer.  At least three private equity firms – Apollo Global Management, TPG Capital and Leonard Green & Partners – are considering joining Schulze in the bid, the sources said. This news didn’t help the company’s stock price which was down 10% for the week and is trading at $13.75. Based on the level of interest this may be a good time to get into the stock. I don’t get it, the company isn’t mismanaged, it’s in a dying industry; I am not sure how much value a private equity firm can add.  (Source: CNBC)
  • We are officially in the era of pop-up stores. Luxury department store chain Nordstrom Inc. will open six pop-up shops in February stocked with wares from up-and-coming designers.  The shops, including one at the Grove shopping mall in Los Angeles and another in San Francisco, will feature 10 designers who are finalists for the CFDA/Vogue Fashion Fund, which awards $300,000 every year to the winner and is intended to nurture young design talent. Nordstrom has obviously got through the rocky trading week and is up a marginal 0.15%. I really get the sense that Nordstrom has a good pulse on the market place. (Source: LA Times)

America now has about 700 pet “aftercare” facilities, providing funeral services to the nation’s companion animals, according to a September NBC News report. Oakey’s, in Roanoke, Va., performs 800 to 900 pet cremations annually and provides about 20 customers a year with pet caskets, part of the estimated $53 billion America spends on pets (higher than the Gross National Products of more than 100 countries). The basic charge of Heartland Pet Cremation of St Louis is $275 for a private cremation, including a “basic” urn and memorial video slideshow. (For the more upscale, other facilities offer deluxe urns, taxidermy, freeze-drying pets and creating a synthetic diamond out of pet ashes.) Did you read that? Nothing says romance like a diamond ring made from your dead cat.(Source: NBC)

Have a fantastic weekend and please don’t hesitate to forward this newsletter. Many thanks,

Sam

Friday Finance Weekly 65TH Edition

Greetings folks and a warm welcome to 65TH Edition of Friday Finance Weekly.

Let’s start with some real technology news as it seems like the only thing newspapers cared about this week was the fact that the new CEO of Yahoo is pregnant:

  • Microsoft declared their first quarterly loss in over 20 years…relax, it isn’t the end of the technology giant. In fact this is a fantastic strategy. The search space just isn’t working for Microsoft and they took a $6.19B one-time charge that translated to a quarterly loss of $492M. This week they also announced that Windows 8 will be coming out on Oct 26th which will boost sales. Translation, we are using the oldest accounting trick in the book, ‘taking a bath’. Shares are up 2.47% for the week and are presently trading at $30.11/share. The market is skeptical about the Surface tablet, as significant capital and marketing is required for a successful launch. All things considered I don’t think there is a real competitor to the iPad so they should be fine. Let’s just hope that the Surface fares better with consumers than it did on its launch date, where Microsoft Explorer crashed on the demo. They should have used Chrome. Sorry this is super geeky humor. (Source: Wall Street Journal).
  • While Microsoft can’t find its groove in the search engine industry, Google has delivered yet another stellar quarter. Motorola added $1.25B in revenue and for Q2 Google’s total revenues were $12.21B. Alas, Motorola itself generated a loss of $233M, but Google has said that they are still doing ‘homework’ on the acquisition. Net income increased to 11% and for the week Google shares are up 5.95%, presently trading at $610.82/share. Total headcount including the newly acquired Motorola staff has increased to 54,600. (Source: Information Week)
  • This actually went under the radar a little, but Palo Alto Networks and Kayak both went public today. Palo Alto Networks is a network-security company and they jumped 26% today. Kayak is probably a service everyone is familiar with. The site is basically an aggregator of other travel search sites. Kayak jumped 27.62% today. With total profits at the $4M mark, the company isn’t huge, but is primed from a takeover. That being said, they use airfare search engine software from ITA Software Inc. and the license is set to expire in Oct 2016. Not a huge deal right, except for the fact that ITA is owned by Google, who themselves are developing a travel search engine. Basically Kayak will have to show profits to Google and pray that they get acquired. Let’s hope that Kayak doesn’t pull a Groupon if it comes to that. (Source: Wall Street Journal)

Retails news is up next because the economic news wasn’t very exciting:

  • High end retailer Neiman Marcus is partnering with Target to launch a limited edition 50 product holiday offering. It is going to feature 24 designers included Marc Jacobs and Oscar de la Renta. Adriana Estrata, senior retail strategist for Siegel+Gale was asked to comment and she said “If luxury brands are going to dip into the mainstream pool, they have to remember that people buy luxury because its luxury and they want the luxury experience, whether it’s in person or online.” Okay so is it a good idea or a bad idea? I think it will work out…H&M’s collaboration with Jimmy Choo was very successful. Neiman is privately held, but Target shares barely budged as they were down 0.94% for the week. (Source: Luxury Daily)
  • Nordstrom has finally announced official plans to enter Canada. They will open stores in Toronto, Vancouver, Calgary and Ottawa. I won’t elaborate as this has already been talked to death on my blog. Shares are up a marginal 1.06% for the week and are presently trading at $52.44. Not to be out done, Bloomingdales is supposedly partnering with the Bay to move into Toronto, Vancouver and Calgary. (Source: CTV)
  • GE showed solid growth with revenue up 2.5% and shares increasing by 0.51% for the week. Currently shares are trading at $19.87/share and the market cap is $210.37B. In addition GE announced that its energy would be broken up into three divisions, to cut cost and increase efficiency. Transportation reported the strongest growth with a revenue increase of 27% to $1.6B. GE Capital had a revenue decline of 8%, but profits are up 31%. This is despite a concerted effort by GE to reduce GE Capital’s operations. Let’s face it; the only way customers can afford to do business with GE is if GE itself finances their operations. Wonder how much GE has extended to European countries such as Greece. It’s going to be interesting to see how they absorb a potential break of the Euro. (Source: Reuters)

Japanese Scientists, Over-performing: (1) Researchers at the University of Tokyo’s Graduate School of Information Science and Technology have developed goggles that can enlarge the image of a bite of food so that the eater might fool himself into thinking he has consumed more than he has (and thus, his hunger might dissipate sooner). The software is so sophisticated, they said, that the food carrier (a fork, or the eater’s hand) is not transformed and appears at normal size. In basic tests, according to a June Agence France-Presse report, a 50 percent increase in imagined cookie size reduced actual consumption by 9 percent. (2) Prolific inventor Nobuhiro Takahashi announced in May that he had created a silicone-and-foam “buttocks robot” that can clench, twitch or protrude when probed (primarily for training proctology students to deal with patient anxiety). There is only one thing I am anxiously awaiting…the IPO of these two fine products. How about we just eat less and, I am not even going to comment on the robot. (Source: Daily Telegraph)

Have a fantastic weekend folks.

Please don’t hesitate to forward this newsletter. Many thanks,

 

Sam