Jake Berzon's blog
Whoever says that the dollar doesn't buy what it used to, obviously has not shopped JC Penney this quarter. JC Penney ran multiple and often stackable simultaneous promotions through December and early January. Judging by their holiday season sales results, all the efforts paid off in the form of higher top-line numbers. Revenue at stores open at least a year rose 3.7 percent in December, beating the 3.3 percent consensus analysts expectations. Customers who don't normally shop JC Penney came to snatch up some rather amazing deals.
We all know by now that a very political compromise has been reahced between members of Congress and the White House on the extension of unemployment benefits for an additional 13 months and of the so called Bush Tax cuts. The compromise includes additional tax cuts for the lower and middle income tax payers, some of which will come in the form of a reduction in a payroll tax.
The time has come for me to admit that buying EWJ (an exchange traded index fund of large Japanese stocks) three years ago was a mistake. Much of the rise in EWJ over the past six months was the function of the appreciating Yen, which hit a 15 year high against the $US about a month ago. It was not, however, due to underlying stocks rallying in Yen terms.
Knowing your every move has long been on big Brother's agenda. One step in this direction was the development of RFID technology and its voluntary use for identifying pets. (RFID is a little chip that can be embedded under the skin.) The next step is to require RFIDs in all the animals that enter our food supply. This is the purpose of Senate bill S.510, strongly supported by the Obama administration. It is hiding under the guise of FDA Food Safety Modernization Act, a piece of food chain protection legislation, but safety is not what this Senate bill is about.
Both Texas Instruments (TXN) and du Pont (DD) appear to have reached their fair values recently. I sold both this morning. DD was sold at $48.35/share and TXN at $31.17/share. Even though it is at fair value, it is possible that TXN has further to run up from here; it is much less likely for DD. I purchased DD on March 8, 2006 at $40.31/share and have held it through thick and thin until now for a total return including dividends and excluding commissions of 35.8%.
Currently $US is plumbing the lows of the up-trending channel it has carved out for itself over the past 3 years. vs. a basket of currencies (the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc) tracked by the Deutsche Bank Long US Dollar Futures Index. Cycles have been getting progressively shorter, so it looks like the next leg up should take three to six months, in which time the $US should appreciate as much as 20%.
Yesterday, I called Fidelity Investments with what I thought was going to be a simple request: to sell a bond from my taxable portfolio and concurrently buy it back into my IRA account. You would think that such a transaction would be a nobrainer for the mighty giant that Fidelity is. The answer I got was simply mind boggling.
Let me start this short note with a little theorem that I offer without a proof. For the most part and under steady state economic conditions: 1)Short-term commodity prices (within a span of a several months) are driven by expectations of supply and demand for that commodity. 2) Mid-term commodity prices are driven by the actual supply and demand for that commodity and to some extent inflationary expectations. 3) Long-term commodity prices (several years or more) are for the most part a function of inflation.
Today's blog entry was going to be about soft commodities - that's the ones you can chew. Unfortunately, it will have to be about drunk driving, instead. But don't you worry, it's nothing really horrific, every human will live through the end of the story and, of course, I wasn't the one driving drunk.