img src="http://photos1.blogger.com/img/43/5843/160/thinking.jpg"br /br /emfont color="#0000FF"(P.S: Sorry for any disturbances the advertisements above may have caused you)/font/embr /Let's review the various perspectives about the relationship between stock prices and "business fundamentals" as most people understand it. First, there is the advice given by the Sage of Omaha about Mr Market being manic-depressive and that the prices he/she/it quotes can have a disconnect with underlying fundamentals. Then there is the typical technician's/efficient market theorist's view that price reflects underlying fundamentals, even though it might not seem so at the time to the outsider. And then there is George Soros, who advocates that market prices can actually emactively influence/em fundamentals. The last view is known as reflexivity, a term coined by Soros.br /br /Despite Soros' celebrity fund manager status, reflexivity has never really caught on in popular investment literature, partly because it does not really have mathematical grounding. It is more of a ...

by Edward Hugh: Barcelona Yesterday, the Ukraine received a USD16.5bn loan from the IMF and the IMF at the same time said that it would agree with the Hungarian government on a rescue package in the coming days. Under normally circumstances this would be good news for CEE assets. However, it seems like the markets are totally giving up on CEE. This morning the Hungarian stock markets have dropped more than 10% despite the promise of an IMF package. ......it is worrying that the CEE markets continue to sell-off despite IMF’s clear commitment to support the region’s markets and economies. One might in fact see the lack of positive response to IMF’s rescue packages for Hungary and the Ukraine as an indication that these packages are in fact making the markets even more nervous that something “is seriously wrong in CEE”. Lars Christensen, Chief Analyst Danske Bank, CEE: Markets fail to respond ...

Rumors of a capital crisis due to overexposure to distressed U.S. securities drove shares of a Hong Kong bank sharply lower today (Wednesday), as concerned customers lined up outside retail branches to withdraw deposits.

One of the basic tenants of a free market economy is that it will find balance. It may find balance in a nice sooth way or it may find balance with a chain saw, a hammer and a guillotine. One way or another balance will be found. Profiting and preserving capital when the market decides to take few prisoners is a game of wits, played by those ready to win big or lose large. It is a game where nobody knows what the outcome will be. Play the game well and an investor will profit. Play the game wrong and an investor can go home with little or nothing.

Washington Mutual Inc., a Seattle based consumer and small business banking “thrift”, offers financial services to: retail customers, credit card customers, commercial customers and mortgage seekers. At the end of 2007, the company reported operating 2,257 retail banking outlets and 233

...

Entergy Corp. (ETR) is shifting towards becoming a fundamentally strong electric energy utility with the separation of its nuclear business. Its core business shows strong earnings growth and cash flow generation by higher production with fewer outage days and higher power prices.

Favorable regulatory rate hikes, higher contract and market energy pricing, increased generation from the Palisades nuclear plant acquisition, a reasonable valuation and steady recovery from the hurricane damage of September 2007 will continue to deliver strong earnings and cash flow growth.

Furthermore, the company’s share-repurchase program continues to boost EPS. Therefore, we reiterate our Buy recommendation on ETR with a six-month target price of $117. Price appreciation to our near-term valuation target, coupled with a quarterly cash dividend of $0.75 per share which appears sustainable and secure represents annualized total return potential of 24.7%.

Anticipated rate increases, a relatively strong balance sheet and decent earnings visibility at the

...

By Jennifer Yousfi Managing Editor ConocoPhillips (COP) is selling its remaining company-owned gas stations in the latest example of the changing face of the retail gas station business. According to unnamed sources, ConocoPhillips, the third-largest U.S. oil company and second largest U.S. refiner, plans to sell 600 company-owned gas stations to PetroSun West LLC for $800 million. The deal is expected to close today (Wednesday). "This transaction is designed to strengthen our branded wholesale business model and grow market share," said Clayton Reasor, President, U.S. Marketing of ConocoPhillips, MarketWatch reported. "We have worked with PetroSun before and believe that they will continue to enhance our brands and provide excellent service to our retail customers." ConocoPhillips operates domestic gas stations under the Phillips 66, Conoco, and 76 brands in the United States and JET brand in Europe. PetroSun plans to boost gas ...

Tim Hunter over at the Sunday Star Times was right on the money with his characterisation of the Electricity Commission’s report into competition in the market.

The electricity market and the structure of the industry is not working and the Electricity Commission’s report this month has dodged the hard questions.

Here’s Tim’s succinct and pungent view on this report:

The commission blots its copybook by dismissing the number one consumer complaint - soaring residential electricity prices.

Its detailed analysis breaks down power bills into component parts - the charge for networks to carry power to customers, the charge for the energy itself, and the charge for retailing which covers services such as billing.

Of the three, the energy charge has contributed the most to the inflation of power bills between 1999 and 2006, the commission said. This was of no concern though, because the rise was not higher

...

Colorado’s largest power utility, Xcel Energy Inc. (XEL), will launch one of the biggest energy-conservation efforts in the nation, costing well over $1 billion in the next 12 years — by order of the Colorado Public Utilities Commission (CPUC).

The CPUC, which regulates Xcel, announced its decision recently, outlining goals for the utility’s energy-efficiency programs between now and 2020. The decision is part of a multi-pronged case before the CPUC called the Colorado Resource Plan, which will decide the source of energy for most Coloradans in the next several years. Xcel serves power and natural gas to about 70 percent of Colorado’s population.

The CPUC ruled that Xcel should cut a rising percentage of its annual electricity sales to retail customers, with a goal of cutting 1.2 percent of annual sales in 2020, and eliminate between 886 megawatts and 994 megawatts of demand in that time. That’s triple the cuts currently achieved

...

Insurance is a durable business. No professional enterprise can do without it, in good times and bad. Insurance is also a vital form of security for stock investors. There are abundant and compelling reasons to favor stocks in the insurance business when markets are depressed, under cost pressures, or with uncertain demand trends.

Insurance spawns other enterprises, just like most industries. The entities from which retail customers buy insurance are reluctant to take full risks on their own shoulders. There are other financial benefits in reinsurance as well. However, the reinsurance industry is subject to the kinds of derivative risks from which the stock exchange world has suffered since September 2007.

The insurance business also requires the management of claims. This service, unlike reinsurance, costs little to run, is isolated from risk, and adds significant values. The business model of this small capital member of the Insurance (Miscellaneous) Industry from Atlanta, GA,

...

Clearly Canadian Brands (OTCBB: CCBEF) announced that the private label division of Organic Baby Food has taken the market by storm. The company is excited about the fast growth rate. Clearly Canadian expects to reach over 1,250 stores by the end of the year. The company has set high goals to dominate the Canadian organic baby food industry in Canada. Clearly Canadian is also currently working on breaking into the American market as well.

David Reingold, president of Clearly Canadian Brands, stated, “We are extremely proud to announce that several major retail customers have already chosen to private label our superior line of Organic Baby Food products. With highly influential accounts already signed to receive up to 30 of the available products now being offered by this fast growing division, we feel confident in the future prospects for growth especially as we begin to penetrate the massive U.S. market in the

...