Wednesday, October 29
Abnormal Characters, nearly end of day, Wednesday, October 29
LLP joked after listening to the gazillionth conference call this season that 1) all companies must mention their operations in China, and
2) their China business must be growing wildly. If the company fails on either point, they're gonna get smacked.
She also made the point that trade imbalances are meaningless... people have to begin to wrap their minds around the fact that
we live in a global economy now.
The Chairman discusses a long play in one of those crazy Chinese internet stocks in today's Trading for Dummies lesson. Enthusiastic
Chinese internet stock players should reflect on the fact that chinadotcom hit $78 a share (split-adjusted) on March 6, 2000. Investors who paid
that price are part of the buy and hold... and hold and hold crowd.
It never ceases to amaze me how dumb people who trade
on inside information can be.
"The SEC accused the defendants of buying FleetBoston securities late on Friday, before Monday's announcement that Bank of America
would buy the Boston-based bank in what would be the second-biggest U.S. bank merger ... Garcia Simon, his wife and his brother
purchased $11,000 of Fleet call options during the last hours of trading on Friday, giving them the right to buy Fleet stock
at $35 per share, the SEC said. At the time, Fleet stock was trading at about $31 per share. FleetBoston's shares surged
more than 20 percent to $39.20 on the New York Stock Exchange following the announcement of the deal on Monday."
When I read stuff like this it makes me happy we hold Vanguard funds exclusively.
"Between them, NASD and the Securities and Exchange Commission have demanded information from nearly 250 mutual fund companies
and broker-dealers about after-hours trading, which is illegal, and market timing, a short-term trading strategy that exploits
time differences and stale prices, particularly in international funds."
"Yesterday, the SEC filed civil actions alleging that two former Putnam portfolio managers had committed securities fraud by
timing the funds they managed. The SEC also alleged that the firm committed fraud by failing to disclose the trading by insiders.
The trading started in 1998 and continued through this year, according to the complaints."
Paul Krugman skewers the Bush administration
(intelligently and entertainingly) in this appearance on his book tour (RealMedia 75 min).
"Paul Krugman discusses his book, 'The Great Unraveling,' at Harry W. Schwartz Bookshops in Shorewood, Wisconsin. Mr. Krugman
explains how he came to be an op-ed writer and comments on some of the pieces included in his book. Specifically, he talks about
President Bush's tax cuts, the war in Iraq, the environment, Americans for Tax Reform president Grover Norquist, and House
Majority Leader Tom Delay. Mr. Krugman takes questions following his remarks."
During the Q&A session he mentioned Jeremy Stein's classic article
from the Journal of Finance, "Herd on the Street: Informational Inefficiencies in a Market with Short-Term Speculation," which pleasantly surprised me.
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