Hashemian Blog
Web, Finance, Technology, Running

Google Stock Drop

by @ 11:13 pm
Filed under: financial,google

Google LogoGoogle earns $2 billion in its last quarter and investors reward it with a 7.5% drop in share? Here's my list of why it dropped:

  • People like to sell into the earnings news. With not much more to expect until the next earnings report, the money is best invested elsewhere.
  • Some companies just can't get away with meeting or slightly beating the estimates. They must blow out even the whisper numbers to get a rise. Google is one such company.
  • Google is reaching or has reached maturity. This is just a bit of a storm before the calm.
  • Many competitors are nipping at Google's heels. Never mind Facebook and Twitter, even Bing seems to be gaining market share at the expense of Google's traffic, albeit slowly.
  • Google did just abandon (and rightly so, but that's another discussion) the world's most populous country with the most browsers online.
  • Of course the bet's on Google taking the fall in stride and going on being an enviable company. But one must admit this kind of volatility is music to options traders ears. That is if they're on the right side of the bet.

    ,,,

    Apple Stock Run-up

    by @ 10:17 pm
    Filed under: financial

    Apple LogoWhich tech company currently holds the highest market capitalization amongst its peers? That would be Microsoft of course, but Apple is second behind by a mere $50 billion. With a market cap of $220 billion, Apple is worth more than just about any other venerable tech company name you can think of. It's worth more than Google, more than Intel, more than HP, IBM, Oracle, or Cisco. That's no small feat, but something tells me the stock is due for a breather.

    Yes, I know iPad just rolled off the assembly line with screaming enthusiasts waiting for days to get their hands on them. iPhone continues to roll along and MacBooks and other platforms are doing well too. Apple will be announcing its quaterly results on Apr 20th and it will undoubtedly contain blowout figures.

    Things are all looking positive for Apple, but the contrarian in me thinks that everything looks too perfect with Apple and that's when things usually start to go wrong. Case in point: Toyota.

    So my expectation is for Apple's stock to fall after their earnings announcement. If not immediately, then in the immediate days following the release. Of course this is just a guess. If I were that sure, I'd short Apple or buy a few Put contracts, and I'm not. But is Apple really worth its $220 billion market cap or more? Obviously some investors out there believe that. I just don't think so.

    ,,,,,

    The Chinese Yuan Dilemma

    by @ 9:35 pm
    Filed under: financial

    China FlagThe senator from New York, Chuck Schumer, is right. The Chinese government has pegged its currency, Yuan, artificially low against the US Dollar and that gives the country an unfair trading advantage. Branding China as a currency manipulator, isn't far from the truth at all.

    The cheap Yuan gives China the power of pricing where the cost of labor and material is so low that other trading countries such as those in north America or Europe can't compete.

    The point is that China should float its currency and let market forces dictate the price. Of course such a move by the paranoid and controlling Chinese is unlikely. Can you even imagine the Chinese trusting their currency to the whims of the world markets and currency traders?

    But even if the Chinese wanted to float their currency, it won't be easy, as evident today. Even the hint of effecting a tiny appreciation in the Yuan sent the currency market into a frenzy today. The nervous traders couldn't quite figure out which currency would benefit the most and currencies saw big fluctuations as a result. I can only fathom the turbulence that would grip the markets if China were ever to outright suggest floating the Yuan.

    That the Chinese should unshackle the Yuan is a given, if not by choice, then through high tariffs put on their exports. The big question is how would they go about doing that without triggering a meltdown in the financial markets?

    ,,,,,

    Oracle and Sun

    by @ 12:27 am
    Filed under: computers,financial,technology

    Oracle reported stellar earnings tonight that promises to send the stock up to a 9-year high tomorrow, at least judging by the after-hours activity. The company's latest acquisition of Sun Microsystems, announced back in August, is still pending EU regulatory approval, but the latest signs appear to indicate that it will clear that hurdle soon and complete the take-over. It has already been cleared by the US regulatory bodies.

    EU has reasons to be worried about Sun's acquisition by Oracle and it has valid points. I and many others happen to share the same concerns. At the center of this debate is the future of open-source and mostly free products currently offered by Sun and used by millions of users and businesses worldwide. Chief among those products is MySQL, the database engine that powers the majority of Web sites operating on the Internet today. Java, the popular programming language created and maintained by Sun, is another product that's facing an unknown future under Oracle's ownership.

    What will happen to MySQL and Java once Oracle takes control of these products? Oracle is playing nice promising innovation and continued support, but can that claim be trusted?

    The situation is quite different from a couple of years ago when Sun itself acquired MySQL. Sun didn't have a competing database product and it had a track record of commitment to open-source and free products, namely Java. But Oracle is a different kind of company. Sure, it has solid products, chiefly the Oracle database and it has a proven history of successfully absorbing other companies' products into their mix. But it charges exorbitant prices for its products and its expensive maintenance contracts are legendary in the business. Oracle offers very little, if any, in terms of open-source and free products, and there is no reason to believe it will do so in the future.

    What that means is that most likely Oracle will kill MySQL and Java in their current forms and integrate them with the rest of their expensive products. Once it has removed the potential threat, what's the incentive to continue with the free format? At best it may offer watered-down, crippled versions of MySQL or Java that will be useless to most, except perhaps for hobbyists and students.

    In the end Larry Ellison will get his wish and Sun will be rolled into the Oracle's collective. The Sun's take-over challenges harken back to 2003 and Oracle's take-over of PeopleSoft. Back then Ellison came out swinging, steamrolling PeopleSoft's board and the regulatory agencies and eventually got his wish. This time around the damage to the industry will be worse, and the only beneficiary will be none other than Oracle itself.

    ,,,,,,

    Credit Card Interest Rate Games

    by @ 11:55 pm
    Filed under: financial,money

    Credit CardsCitibank MasterCard - for me it started years ago like many others. The 0% offer in the mail and the 1% cashback, and I was in the game. Fast-forward a few years and the cashback is still there but I just received a notice that the interest rate on the card will soon be 23.99%. It hasn't happened abruptly. First it was 5%, then 9%, then 13%, then 17%, then 20%, and now 24%. What is it with the 0.99%? Do they think that consumers are stupid?

    Ok, I'm not exactly a profitable customer for these guys. I never carry a balance. Yes, they make a marginal profit from merchant charges, of which they return 1% back to me, and who knows how long that's going to last. But with new consumer protection laws looming the banks have just gone wild, hiking fees and charges and interests all over the map. Why stop at 24%? Why not 50% or 100% or even 10,000%?

    But wait, it gets even better. The letter states that if the account is in good standing and there are $1,500 or more in monthly charges, they'll credit 10% of the total interest for the given month. "This can offset the increase in your purchase APR.", the letter states. How kind of the bank to make this generous offer.

    First of all, the naïve customer may think that the bank will drop the interest rate from 24% to 14% - hardly. That's 10% of the 24%, for the grand total of 2.4% in credits. In other words the interest rate will be 21.6%. Second, who has the time to spread out the charges every month in a precise manner to take advantage of the credit? Third, who is going to make certain that the bank is actually abiding by this rule? I'm sure the rules are so complex that the bank will never have to honor the credit. And last, as stated in the letter, "We reserve the right to change or end this program with 30 days' prior written notice." In other words, good luck getting a dime back.

    There are some who advocate ditching credit cards altogether and paying everything with cash instead. It's a great idea on the surface, but hardly practical. The banks have rigged the system so well that a cash-only lifestyle in the modern world is all but impossible. Try to book a flight, rent a car, reserve a hotel room, or shop online and you'll be running back to the credit card with your tail between your legs. Use a debit card? Good luck getting your money back when a hacker empties your bank account and vanishes into the ether.

    For now the only thing you can do is to use the credit card sparingly, pay off your balances every month, and just try to stay one step ahead of the banks as they continue to change the rules of the game in the hopes of tripping you up.

    ,,,

    Madoff's Programmers

    by @ 11:55 pm
    Filed under: computers,financial

    Bad reputation. Lawyers have it, used-car salesmen have it, priests and clerics have it. And now computer programmers? That's what I thought when I read about the two programmers working for Bernard Madoff's Ponzi investment firm being arrested and charged with fraud.

    It seems that their skills were put to good use by fabricating reports and statements for clients and the SEC, making them look legitimate. According to the story, they both knew that they were engaged in shady work, and they both had complained about it. But in return for a mediocre bonus from the company they'd stopped complaining and had silently continued manipulating the numbers and generating phantom reports.

    As a programmer myself this story gave me a pause. What would I have done? I'm not the blackmailing type, but would I have just drawn a salary and turned a blind eye? Would I have raised my concerns, not to extort, but out of moral obligation or at least out of concern for my own complicity and the possible punishment? Or would I have left the company without leaking a word, just to save my own skin?

    Businesses ask many things of their employees. Some are blatant violations of ethics, but some others fall into gray areas. I wonder if these two programmers could have avoided the hot water if they had kept their mouths shut and just did what they were asked. The fact that they raised concerns only to bury them after payoffs has certainly been a factor in what they're facing now.

    At any rate, I have a good feeling that if Madoff's scheme hadn't turned into a high profile case that it is today, these programmers would have never been implicated. There's just too much public fury and too few targets to go after. I mean how many programmers at Enron have suffered the same fate? As far as I know, none.

    ,,,,

    Madoff's Programmers

    by @ 11:55 pm
    Filed under: computers,financial

    Bad reputation. Lawyers have it, used-car salesmen have it, priests and clerics have it. And now computer programmers? That's what I thought when I read about the two programmers working for Bernard Madoff's Ponzi investment firm being arrested and charged with fraud.

    It seems that their skills were put to good use by fabricating reports and statements for clients and the SEC, making them look legitimate. According to the story, they both knew that they were engaged in shady work, and they both had complained about it. But in return for a mediocre bonus from the company they'd stopped complaining and had silently continued manipulating the numbers and generating phantom reports.

    As a programmer myself this story gave me a pause. What would I have done? I'm not the blackmailing type, but would I have just drawn a salary and turned a blind eye? Would I have raised my concerns, not to extort, but out of moral obligation or at least out of concern for my own complicity and the possible punishment? Or would I have left the company without leaking a word, just to save my own skin?

    Businesses ask many things of their employees. Some are blatant violations of ethics, but some others fall into gray areas. I wonder if these two programmers could have avoided the hot water if they had kept their mouths shut and just did what they were asked. The fact that they raised concerns only to bury them after payoffs has certainly been a factor in what they're facing now.

    At any rate, I have a good feeling that if Madoff's scheme hadn't turned into a high profile case that it is today, these programmers would have never been implicated. There's just too much public fury and too few targets to go after. I mean how many programmers at Enron have suffered the same fate? As far as I know, none.

    ,,,,

    Iran Kidney Trade

    by @ 9:47 pm
    Filed under: financial,social

    KidneyI already knew that Iran is the only country in the world where the sale of the kidney is not only legal, but government sanctioned and subsidized. When I sat behind my desk to watch the documentary, Iranian Kidney Bargain Sale, I already knew what to expect - sort of.

    There were 2 things that affected me quite deeply:
    1- The human faces and stories behind the kidney trades.
    2- The tough ethical and moral questions that creep up on the viewer.

    Here you have two desperate and nearly hopeless people, each clinging to the hope that the other party can resolve their devastating problem. One gripped with such destitute that has decided to sell a vital organ, the other in urgent need of a kidney to regain a semblance of a normal life.

    As I watched the movie, I kept wavering between siding with the donor and the recipient. I would condemn the Iranian government for allowing the kidney trade, only to condone it a few moments later.

    This is not a simple black and white matter. It's one big gray area. Is it fair for people to sell their kidneys for as little as $3,000? Is it fair that potential recipients continue to haggle over price, as if buying a car? And yet, is it fair that some of the lives saved could have been lost without this trade? Or perhaps barring the legal trade, unscrupulous black market operators abuse and intimidate potential donors at their most vulnerable times, the way it's done in India or Pakistan?

    To be fair, the government does seem to have strict policies in regards to who can donate and who can receive a kidney. Among the rules, they must both be Iranian citizens (eliminating potential abuse by wealthy foreigners) and they must pass rigorous medical exams to qualify for the procedure.

    I would imagine that the little money the donors receive could hardly resolve their problems. In most cases they would be back at their original financial position, minus a healthy kidney. The recipients seem to benefit the most from the trade, that is if the transplants are successful.

    In the end I still couldn't make up my mind on whether allowing this practice was ethical. Given all the parameters, I think the kidney trade in Iran is somewhat beneficial to the society, because it does assist in saving lives. Not just the lives of the recipients, but also the lives of the donors who would otherwise be at the mercy of the black market operators.

    Then again my opinion couldn't possibly carry that much weight, since I haven't walked in the shoes of the people on either side of the kidney trade.

    ,,

    Stock Market – Back to Greed?

    by @ 9:28 am
    Filed under: financial

    For those of us who held on to our 401(k) investments and stuck to our contributions even as the market was plummeting, the rewards are nearly at hand. Looking at my 401(k) balance I was pleased to see a bit of life back in it.

    The stock market is still off its highs (for NASDAQ you’d have to go back a decade to the tech bubble era), but it has made sizeable gains in a rather short time and that is cause for a bit of concern.

    Many, including bank and insurance stocks, have quadrupled or quintupled in a short few months. Look are Citibank, Bank of America, or AIG. Ford is going for $8 per share now; it was barely over $1 in March. That is just not normal.

    Now one could argue that the market is just correcting an extreme oversold condition that occurred a few months ago as a result of extreme fear. Maybe so, but a pendulum swings both ways and we may now be looking at extreme greed and we know where that leads to.

    Cell Phone Tax

    by @ 9:29 am
    Filed under: financial,money

    Saw this article the other day that makes one wonder how desperate the government must be. Seems like if you have a company-issued cell phone and you use it for anything personal, the value of that use should be reported as income to be taxed.

    So guess if I'm in the office and scribble a personal note on a piece of paper, check email, get water from the cooler or coffee from the pot, or have lunch at my desk while surfing the Web, I should pay taxes on the value of all these.

    I wonder if Google employees pay taxes on all the extra benefits they receive from the company, like free food and gym.

    Anyways, I don't need to worry about the cell phone tax. I don't have a cell phone nor do I want one.

    ,,

    « Newer PostsOlder Posts »

    Powered by


    Read Financial Markets  |   Home  |   Blog  |   Web Tools  |   News  |   Articles  |   FAQ  |   About  |   Privacy  |   Contact
    Donate Bitcoin: 1K9TzBvQ2oaEb4tX9t2vKDtZouMcpfV6QF
    © 2001-2018 Robert Hashemian   Powered by Hashemian.com