Wednesday, September 17
My Unusual Suspects Watch List, through Wednesday, September 17
Abnormal Characters, (not an end of day summary), Wednesday, September 17
People often ask how I determine the Unusual Suspects, and the simple answer is I look for unusual activity.
Finisar (FNSR), which is tomorrow's Trading for Dummies lesson,
did nearly 13,000 trades today, which is a huge number for that stock.
If you prefer to look at volume,
FNSR did about nine times as much volume in the first 30 minutes as it normally does. If you have sophisticated screening
software, you can discover this anomalous trading activity in real-time and draw up your Watch Lists accordingly. Old Timers used to watch
the ticker tape for abnormal action, but now we all use computers to monitor the "tape."
Philip Morris, er, Altria is jumping nicely today. I surveyed my classmates here, and of the ones who
smoke I am happy to report that 100% are addicted to Marlboros. Nothing could please this shareholder more!
A pack of smokes
costs around $8 here in London, probably $6 of that is taxes. The most active street market in my ghetto is the smuggled cigarette trade.
I can't go out the door
without some swarthy guy sidling up to me and hissing "hey meester, sseeegaret? toback? sseeegaret?"
Extortionate tax rates on tobacco probably helps explain why so many people smoke pot here: it's cheaper!
From a Reuters story this morning on QFII dollar inflows into
China's debt and equity markets:
Regulators have granted $875 million in quotas under QFII alone, which is due to flow into a stock market with 1,200 listed companies and into treasury and corporate debt markets over the next few months.
The United States and Japan say they would like a firmer yuan, saying its value now gives China an unfair trade advantage. China has said it favours a stable foreign exchange regime, afraid of retarding exports that are powering its strong growth.
"A influx of QFII investment is likely to add upward pressure on the currency in the near term. That's why regulators are tightening supervision over the quotas," analyst Simon Wang of Xiangcai Securities told Reuters.
"They're also trying to protect the fledging Chinese stock markets from purely speculative buying."
It's nice to see oil prices on the decline....
In a recent interview Milton Friedman said:
"I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. The reason I
am is because I believe the big problem is not taxes, the big problem is spending. The question is, 'How do you hold down
government spending?' Government spending now amounts to close to 40% of national income not counting indirect spending
through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number
will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the
government has. The way to do that is to cut taxes."
I agree wholeheartedly. Let the bond market vigilantes sort the deficits out.
Later he said another thing I agree with:
"You know, it's a mystery as to why people think Roosevelt's policies pulled us out of the Depression. The problem was that you
had unemployed machines and unemployed people. How do you get them together by forming industrial cartels and keeping prices
and wages up? That's what Roosevelt's policies in the New Deal amounted to. Essentially, increasing the role of government,
enhancing the monopolistic position of labor, and creating as I said before the equivalent of price fixing cartels made things
worse. So most of his policies were counterproductive."
If you like piano jazz, check out Helen Sung. I just heard a track off her new album PUSH, and liked it. (There are four
mp3s available at her website for free.) She's playing later this month with bassist Lonnie Plaxico at Ronnie Scott's here in London if you want to catch her live.
From a Bloomberg news article this morning:
"China's 12-month forward contract, which traders can use to place bets on the yuan because it is freely traded, fell to 1,990 at
1:12 p.m. in Hong Kong, after rising to a record 2,075, from 2,060 yesterday, according to Bloomberg data. The rate implies the
yuan, valued at around 8.3 per dollar since 1995, would strengthen to 8.078 per dollar in a year's time if not pegged, from as
high as 8.0695."
David Brooks writes in yesterday's column titled "Republicans for Dean":
"...there still are many truly independent voters, with estimates ranging from 10 to 33 percent of the electorate...
true independents do have a coherent approach to politics... Anti-ideological, the true independents do not even listen to
candidates who are partisan, strident and negative. They are what the pollster David Winston calls 'solutionists'...
By this line of thinking, Dean is a terrible candidate. His partisan style drives off the persuadable folks who rarely
bother to vote in primaries but who do show up once every four years for general elections."
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