Monday, May 31, 2010

Weekend wrap-up

Tons of interesting data out over the long weekend....

1) Great data point out of Barron's this weekend - "What leads us to talk about PowerShares QQQ (you thought we'd never get around to telling you) was Alan Newman's CrossCurrents advisory letter, published a fortnight ago. More particularly, his survey of insider transactions in the top eight issues in the ETF. He performed the exercise on May 10 and what he discovered was rather astounding.

There were 231 sellers and three buyers, which works out to a somewhat lopsided ratio of 77 to 1. All told, the insiders sold 59.8 million shares and purchased 15,200 shares, a sell/buy ratio of 3,933 to l. Not exactly a resounding vote of confidence in the prospects for their companies.

Moreover, Alan notes, analysts are just as positive on the QQQ leaders as they were back in March 2008 before a 37% fall in price. At that time, 74.1% of the recommendations were Buys and 2.9% were Sells. As of May 10, 2010, 77.7% were Buys and 3.6% Sells. The more things change, we guess, the more things stay the same, especially on Wall Street.

Insiders are hardly infallible investors and, as Alan observes, their investment habits are not a timing indicator. Still, they do tend to know a bit more about the company and its outlook than the analysts or the folks buying the stocks they're so determinedly selling."

2) Despite the growth rates in India, 50 degrees Celsius means they are probably off my "move to list".

"Record temperatures in northern India have claimed hundreds of lives in what is believed to be the hottest summer in the country since records began in the late 1800s.

The death toll is expected to rise with experts forecasting temperatures approaching 50C (122F) in coming weeks. More than 100 people are reported to have died in the state of Gujarat where the mercury topped at 48.5C last week. At least 90 died in Maharashtra, 35 in Rajasthan and 34 in Bihar." But, remember that because Matt Drudge linked to a story about a freak snowstorm in May in the mountains of California there is no global warming. Tell that to the people in India right now...

3) More European issues - French Budget Minister Warns On Credit Rating....

"France admitted on Sunday that keeping its top-notch credit rating would be "a stretch" without some tough budget decisions, following German hints that Berlin may resort to raising taxes to help bring down its deficit."

Spain was already cut a notch by Fitch on Friday afternoon.

Things to watch this week - Geopolitical flare ups over the Israeli - Gaza Aid ship incident; tracking the oil spill (the next attempt is more a diversion - the relief well or wells is really the only fix for this spill. We're going to end up talking about this thing in terms of millions of barrels spilled.).


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