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Monthly Archives: June 2009

Why do we like small cap (most of the time).

When it comes to holding equity in client portfolios, I have almost always favored small cap (& micro cap) versus mid cap or large cap. Despite the global economic recession, this remains true. Here’s why: Small cap companies are some of the best innovators and developers of technology. They are frequently more efficient and flexible. Few layers of management etc. They do not cut […] Read the rest of this entry »

1Q 2009 Earnings Summary

As of late-May, we’ve seen 99.4% of the companies in the S&P500 index report their 1Q 2009 earnings. The results are: Earnings are about 24% lower than analyst estimates. (analysts continue to over-estimate earnings and thus stock prices) Earnings are 44% lower than 1Q 2008 The gap between operating earnings (earnings before bad stuff) vs real earnings (aka as-reported earnings) is canyon-like. This shows […] Read the rest of this entry »

The not-so-stressful tests

Early last month the Treasury released results of the famous stress tests of the 19 largest US banks. This – more than anything else – likely is responsible for contributing to the huge bear market rally we’ve seen. If there is such thing as financial opera, this is it. The conductor – Treasury Secretary Timothy Geithner – did a masterful job at orchestrating this […] Read the rest of this entry »