Archive for February, 2010

Google news and how it will impact its stock

By: ispeculatornew | Date posted: 02.16.2010 (5:00 am)

I’m not quite certain how Google executives and public relations are able to get some sleep as it seems like every day they are moving 100 miles/hour in an attempt to compete with all of its enemies. First up:

Google Buzz!

Launched as yet another attempt to better compete with Facebook & Twitter, Google Buzz launched amid a lot of turmoil and criticism because of many flaws. Most criticism around Google Buzz is geared towards its potential to help Google better compete in social media but also its flaws in regards to privacy protection. Stunningly, Google had made the default options very flawed. Google did not lose much time to answer back but damage had been done. Two things can be concluded in my opinion:

Google did not do much testing on Google Buzz – Google has generally been a strong defender of privacy and I would assume that the mistakes made here were made not by choice but simply because Buzz was not tested enough to notice such flaws. Google does seem in a hurry to generate something to compete with Facebook/Twitter.
Google Buzz is being talked about – To everyone that said Google Buzz had not shot, I would suggest looking at every technology media in the past few days. Turns out that Google Buzz is being talked about quite a bit and it is certainly good news for a company that to this day has been unable to generate anywhere near that word of mouth for its previous social attempt, Google Wave.

Google Docs

Interesting release from Google as they launched a series of template documents aimed to help brides and grooms to-be. You can take a look at their blog post explaining everything here. You can easily see how such tool kits can help Google Docs be more useful. Anyone who has planned a wedding knows how much planning is involved and having template for budgets, invitations, tables planning, timetables, and more can provide a huge help. With many people involved, having documents online for family members to view, modify and update saves many emails. Can you imagine sending an email to everyone involved each time someone new confirms their presence to the wedding?

Is it a major launch? No, of course not. But I expect that such launches provide the opportunity to showcase why users would gain by using cloud computing and more specifically, Google Docs. Long term, this is very positive.

Google Youtube

Did you hear about the tragic luge accident on the opening day of the Vancouver Winter Olympics? It is tragic, sad and spread all over the world in a matter of minutes thanks to social media. And where did everyone tune in to get the news & images? Youtube of course. It is gaining more and more power as the first source of news and for that reason, Youtube looks like an increasingly valuable property.

Google Aardvark

As Google continues its desperate search to become a major player in the social web, it just bought another small part of the puzzle, buying social search company Aardvark for $50 million. It is a cheap price of course but I continue to feel like Google is not taking the time to get this right and has instead been spending left and right trying to find an easy way into the market. Still too early to say if this will be a winner, but having Google Wave, Google Buzz, Google Aardvark as well as many other local and international initiatives certainly raises questions about Google’s strategy regarding social.

Overall conclusion

Overall a decent week for Google and generally positive because of all the attention that Google Buzz received but I will be anxious to see if Google can keep its momentum in the coming weeks… as for impacts on its stock, not much to report from the past few days, I remain comfortable being long the stock.

Greece… the next Lehman??… what to do next?

By: ispeculatornew | Date posted: 02.15.2010 (5:00 am)

I wrote about it briefly in my financial ramblings on Friday, but it does look like there is a lot of risk of seeing a sovereign nation going down the road of a debt default in the next few months as quite a few countries (including the US) are seeing deficits spiraling out of control. The problem of course is that even one  such case, especially if it happened in a high profile country such as Greece could have effects throughout the world. Read any book that describes the recent financial crisis and you will usually hear that everything started getting out of control when Lehman Brothers went bankrupt. Is Greece going to be the start of a devastating domino effect??

Lehman and Greece both hid the truth for some time

Lehman Brothers said almost until the end that it was fine and there was no real issue or liquidity problem. Of course, Greece has been saying the same all along. For years, it used clever tricks from Investment Banks such as Goldman Sachs to “hide” how bad its financial situation truly was.  As the New York Times puts it:

“In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.”

Greece has a major ally

Of course, Greek is fortunate to have a major friend as the European Union has a lot riding on its member and that means having nations as powerful as Germany and France have an important stake in Greece. It is far from a given though that European countries will bail out Greece but you could easily make the case that without the EU, sovreign debt default risk (as measured by CDS spreads), Greece would be #1, and it is only at #10:

#10-Greece
#9-Lebanon
#8-Romania
#7-Lithuania
#6-Dubai/United Arab Emirates
#5-Iceland
#4-Latvia
#3-Argentina
#2-Venezuela
#1-Ukraine

Major impacts already

Remember how Lehman Brothers started hearing about market rumors of liquidity issues? This caused most counterparts to start lending to Lehman which in turn created more liquidity issues, and so on. Of course, even with Greece months away from these possible problems, things are already getting much tougher. Foreign institutions and banks have started charging higher rates to Greek banks and cutting off funds. This will of course not help the financial situation of the country. Could all of these talks of a possible default become self-fulfilling?

The Greek government might soon be helpless but for now it is doing its best to get an intervention from the EU: Greek Prime Minister George Papandreou – “There was lack of coordination among the various bodies of the EU — the Commission, the member states, the ECB — and even differences of opinion within these bodies,” he said. “All this has undermined our credibility even within the European Union … all this has not helped our position in the markets.”

Major Impacts in Europe and abroad

And these changes are already making things difficult for Europeans banks. The magazine The Economist puts it best:

“Steep downgrades of the sovereign-debt ratings of countries such as Portugal, Greece and Ireland would probably translate into immediate rating cuts for their banks, as well as higher capital charges on banks’ debt holdings and bigger haircuts when using this debt as collateral.

The consequences of even small changes in a bank’s borrowing costs can be extreme. JPMorgan, an investment bank, reckons that an increase of just 0.2 percentage points in the borrowing costs of British banks such as Lloyds Banking Group and Royal Bank of Scotland would trim their earnings by 8-11% next year”

So imagine if things got much worse and these banks saw capital costs rise by a few percentage points?

How to trade a possible Greek collapse?

Of course, the logical question now would be: “How do I profit from this situation”?

There are many different ways, although it is not as easy for individual investors:

#1-Trade sovereign debt of Greece, Italy, etc (this is much more difficult for individuals)
#2-Short the Euro through an FX trade
#3-ETF plays

As I wrote last week, it is not entirely clear if trading an FX or equity ETF is the best way to do this but here are a few ideas:

Vanguard European ETF (VGK)
CurrencyShares Euro Trust (FXE)

#4-Individual names

The best way to do this would be playing the scenario described by the economist, and trading individual European banks. Some of them such as Royal Bank of Scotland (RBS) are also traded on US markets which makes it an easier trade.

Financial Ramblings

By: ispeculatornew | Date posted: 02.12.2010 (5:00 am)

Greece has been front and center in the past few weeks as it struggles to stay afloat with rumors of a possible bankruptcy becoming louder and louder. It is still unclear how the government will be able to get out of this mess especially with governments such as the Germans unwilling to “bail out” Greece. I have not posted about this because it is such a complex issue and while I have read a lot about it, it is still difficult to get a clear vision. I posted a video that speaks briefly about Greece and its main problems regarding its debt. Would be curious to get your views on this.

The 10,000 wall @ AllFinancialMatters
Just how ugly is sovereign default truth @ ZeroHedge
Canadian Income Trusts: Last round is up @ TheFinancialBlogger
SalesForce.com shocks market @ ZachStocks
Six Common myths about stock market return @ MillionDollarJourney
S&P500 Chart @ MyTradersJournal
What will you do with your tax refunds? @ GatherLittlebyLittle
Top 10 hottest ETF’s for February @ StockTradingToGo
Target Date Mutual Funds @ MyInvestingBlog
ProShares launches 8 new trip leveraged ETF’s @ ETFDB

ETF creations/redemptions – investors being careful and looking for smaller fees

By: ispeculatornew | Date posted: 02.12.2010 (5:00 am)

January was a very volatile month in the markets and it looks like many investors were trying to get out of large caps and since SPY is by far the biggest ETF, it is not shocking to see it at the top of the redemptions table. But to see it so far ahead certainly raises some questions. There are many things at play of course and institutional investors end of year movements probably played for a lot. For example, many investors do not want to hold too much cash at year-end since they need to report their holding so holding an ETF like SPY “alters reality” slightly to avoid looking under invested. But when January comes along, it becomes very easy to simply get out of the position.

Here are the most redeemed ETF’s in January:

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
AAPLApple Inc587.9914.1512.426.89.24.22139.460.89184.741.2353.24
RAXRackspace Hosting Inc26.6544.8529.7-31.2317.233.767.481.0211.0823.4526.1

But one thing I found very interesting was the fact that EEM was the 2nd most redeemed. Why so? Because if you look at the table of the most created ETF’s, VWO, the EEM equivalent from Vanguard is actually the most created, which would tend to indicate the fact that investors are finally catching on to the fact that I discussed last month when I compared the two emerging market ETF’s. This will eventually lead to IShares/Blackrock diminishing the fees on EEM but in the meantime, why would you buy or hold EEM?

And as we saw, with investors being fearful of risk and getting out of large caps (SPY), they have been moving towards bond ETF’s and seeing investors looking for ETF solutions to hedge inflation. Vanguard actually has 4 of the top 10 spots including the REIT ETF VNQ that I discussed last week.

Without further wait, here are the 10 most “created” ETF’s in January:

XOMExxon Mobil CorpDividend increase from $0.63 to $0.69, a 9.5% increase
BAXBaxter InternationalDividend increase from $0.49 to $0.52, a 6.1% increase
IVZInvesco LtdDividend increase from $0.225 to $0.25, a 11.1% increase

Any thoughts? Do any of you still hold EEM?

Google’s war taking the company in many new directions

By: ispeculatornew | Date posted: 02.11.2010 (5:00 am)

Wow, Google is not getting anything easily these days and with its stock down close to 15% so far this year, you would think that Google might be looking for alliances. But it continues on its quest to gain more ground no matter who stands in front of the company. The company is now waging war on tens of different opponents with few alliances to count on. Here are a few of the current opponents of Google.

Search: Microsoft & Yahoo

This is the ultimate battle for Google obviously as it defends its ground. Search is the core of Google and a battle it will give its all to win. The problem of course is that it is facing a very determined Microsoft in this battle. The Seattle based company is spending over 2 billion per year on marketing its search engine, recently renamed Bing. Is the operation profitable? No, as you can see in the chart below. But all this money is starting to show results as Bing continues to gain ground on Google. Bing had 11.3% of search market share in January compared with 10.7% in December with other search engines including Google losing market share. How long can Microsoft keep up the spending? Too long if you are Google.

Social Search: Twitter & Facebook

We have discussed the importance of social for Google and it is attempting once again to enter the market, this time through the launch of “Google Buzz”, a social network integrated with Gmail that tries to compete especially with Twitter. Critics have not been impressed much more than they were a few months ago when Google launched “Google Wave”.  It remains  unclear what Google’s strategy is and there remains many analysts who think the only way Google can get in the game is by purchasing “Twitter” although that alternative continues to become more expensive as months go by… Facebook, which is partially backed by Microsoft, also has been gaining ground on Google in several key measures such as users and time spent on its properties.

International: China & Iran

As if Google did not have enough enemies in the corporate world, Google is also battling it out with Chinese authorities because of hacking attempts that were supported or done by the Chinese government according to Google as well as the company’s refusal to filter search results. This could give enemy Baidu major help as it could concentrate on other markets if Google pulled out of China.

And today, the Iranian government officially banned the use of Gmail, Google’s email website. Of course, Iran is a not a very big market for Google but this does create more legal and logistical complications for a company that already has a lot on its plate.

Mobile: Apple, Research in Motion, Microsoft

The launch of Nexus One a few weeks ago is a clear signal that Google does not consider its operating system “Android” to be gaining market share fast enough and in the critical mobile space, it is important for companies to gain market share right now. Hence, Google launching its own phone (built by HTC) and entering the retail space for the first time.

Software: Microsoft, Sun, etc

It is no secret. Google has been trying to push its lower cost alternatives to Microsoft Office but also offering cloud computing solutions and despite very slow growth, it continues to place a lot of energy in these solutions in the hopes of being the leader in cloud computing.

Print media: Book publishers

Through its agreement to scan an incredible number of books and allow them to be scanned, Google placed itself in a position where many publishers & authors disagree with the principle and refuse to be part of the agreement. So far, Google has been tied up in many legal issues regarding these agreements. The justice department is now involved and it is very unclear how this issue will end.

High speed networks: Verizon, AT&T & Comcast

And finally, as if Google did not have enough on its plate, Google announced today plans to build a high-speed fiber-optic network to provide a faster and better internet, thus entering in competition with other high speed internet providers. “If Google went out and started delivering a gigabit per subscriber, it would show that anybody with fiber can do the same thing.” I’m certain opponents will love to hear this.

So the question clear is: Does Google have too much on its plate? Which battles are key and which ones will require the most energy?

Single Country Investing – Equity or Currency??? Surprising conclusion

By: ispeculatornew | Date posted: 02.10.2010 (5:00 am)

Increasingly, ETF’s are being offered to get exposure on single countries. You can of course buy exposure into countries like the US, Canada or France but also BRIC countries (Brazil, Russia, India & China). Often, investors such as me want to invest in a country because of its economic performance, its growth. The problem of course is that you do not necessarily make money when the GDP does well. So what are the best ways to profit from such a situation?

Equity or Currency???

There is of course no easy answer to such a question as economists even to this day do not agree and of course there are many different ways to look at the problem. In my case, I was wondering if you would be better off investing in the currency of a country (through a currency ETF) or in its stock market (through an equity ETF). The method is far from perfect but I thought it would make an interesting comparison and could lead to a good analysis.

So what I did was look for countries that have both equity and an FX ETF. In the case of Europe, I had to group them together since the Euro is used for most countries. I also needed at least 1 year of historical data for both set of ETF’s and in general I stayed away from leveraged ETF’s. I did try to look at leveraged ETF’s for Japan but you will see how that went.

Obviously, every country is different and a country like Japan would benefit much more from a weak yen economically then most countries given the importance of exports to its country. But the goal here was simply to look at some data and then discuss. So I would appreciate getting your input on the results obtained.

Also, for a few countries, there were several ETF’s that fit the criteria. I usually selected one or two based on popularity and objectives and then took the average when comparing

Without further delay, here are the results by Country/Region:

Results for the past year

Japan


TickerNameSharesFeb 18 2014 PriceFeb 18 2014 Values
OMCOmnicom Group Inc30$76.16$2,284.80
MSFTMicrosoft Corp73$37.42$2,731.66
JCIJohnson Controls Inc40$49.27$1,970.80
PEPPepsiCo Inc/NC28$78.18$2,189.04
ETNEaton Corp31$72.47$2,246.57
DOVDover Corp24$87.10$2,090.40
ITWIllinois Tool Works Inc28$79.92$2,237.76
XLNXXilinx Inc38$50.32$1,911.97
SJMJM Smucker Co/The20$95.31$1,906.20
BLKBlackRock Inc11$305.96$3,365.56
TROWT Rowe Price Group Inc29$80.66$2,339.14
OXYOccidental Petroleum Corp22$96.28$2,118.16
COPConocoPhillips26$65.37$1,699.62
XOMExxon Mobil Corp20$94.07$1,881.40
ADIAnalog Devices Inc44$51.23$2,254.12
HASHasbro Inc31$52.96$1,641.76
MATMattel Inc44$35.47$1,560.68
INTCIntel Corp54$24.76$1,337.04
AFLAflac30$63.03$1,890.90
BAXBaxter International24$69.29$1,662.96
IVZInvesco Ltd68$34.14$2,321.52
VWOVanguard FTSE Emerging Markets43$38.77$1,667.11
BNDVanguard Total Bond Market24$81.17$1,948.08
Cash$801.41
USDP$48,058.66
SPX14.72205005$3,310.89$48,743.06

Not much of a difference here with both currency and equity ETF’s being close to flat in the past year. (1.36% equity over performance)

United Kingdom

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
PCLNpriceline.com Inc1315.6535.9520.8113.1829.134.68133.021.24133.430.757
NILEBlue Nile Inc34.941.0627.03-25.8912.493.733.171.0735.8911.5513.14

Same conclusion as Japan with equities very slightly overperfoming currencies. (.73% equity over performance)

Australia


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
EXPEExpedia Inc78.5337.5717.6912.7318.383.6416.541.1535.3713.3711.1816.23
TZOOTravelzoo Inc23.6221.4717.8310.794.673.672.090.6410.3614.214.2N/A

Australia was one of the performing currencies in the past year and the equity markets did not match the performance (14.76% FX over performance)

Canada


TickerNamePriceDividend YieldPayout RatioEx-Dvd Date
WINWindstream Holdings Inc7.9512.59250.773/27/2014
FTRFrontier Communications Corp4.98.16362.423/5/2014
DODiamond Offshore Drilling Inc46.927.4688.694/30/2014
CTLCenturyLink Inc31.116.94231.483/6/2014
TAT&T Inc31.865.7753.134/8/2014
ESVEnsco PLC52.165.7536.93/6/2014
HCPHCP Inc38.695.63106.925/8/2014
HCNHealth Care REIT Inc58.865.43110.775/8/2014
RIGTransocean Ltd41.675.3863.795/28/2014
POMPepco Holdings Inc20.25.3587.023/6/2014
TETECO Energy Inc16.65.395.655/12/2014
MOAltria Group Inc36.455.2781.433/12/2014
ETREntergy Corp63.285.2583.115/12/2014
KMIKinder Morgan Inc/DE31.645.18138.484/25/2014
RAIReynolds American Inc53.295.0378.663/6/2014
SOSouthern Co/The42.054.83106.715/1/2014
NENoble Corp plc31.044.8324.315/1/2014
TEGIntegrys Energy Group Inc56.494.8261.885/28/2014
FEFirstEnergy Corp30.524.72119.435/5/2014
PMPhilip Morris International Inc80.454.6767.713/25/2014
PPLPPL Corp32.014.6579.363/6/2014
VTRVentas Inc62.794.62164.063/5/2014
PBCTPeople's United Financial Inc14.124.686.944/29/2014
LOLorillard Inc53.614.5969.925/28/2014
DRIDarden Restaurants Inc48.334.5564.094/8/2014
EDConsolidated Edison Inc55.464.5467.895/12/2014
VZVerizon Communications Inc47.314.4851.734/8/2014
DUKDuke Energy Corp70.054.4582.385/15/2014
EQREquity Residential58.524.44#VALUE!3/20/2014
SCGSCANA Corp49.214.2760.33/6/2014
GASAGL Resources Inc46.894.1870.935/14/2014
PCGPG&E Corp43.634.17100.613/27/2014
COPConocoPhillips66.314.1641.665/15/2014
EXCExelon Corp30.034.1373.555/13/2014
MACMacerich Co/The60.124.13253.125/9/2014
PNWPinnacle West Capital Corp55.074.1275.484/29/2014
MATMattel Inc36.94.1254.715/19/2014
PEGPublic Service Enterprise Group Inc36.144.158.613/5/2014
PCLPlum Creek Timber Co Inc43.014.09135.515/14/2014
CNPCenterPoint Energy Inc23.484.05114.155/14/2014
KIMKimco Realty Corp22.254.0445.924/1/2014
AEPAmerican Electric Power Co Inc49.724.0264.465/9/2014
XELXcel Energy Inc30.01458.433/18/2014
AEEAmeren Corp40.363.9675.813/10/2014
IRMIron Mountain Inc27.453.93213.913/19/2014
WMBWilliams Cos Inc/The41.643.872243/12/2014
CMSCMS Energy Corp28.263.8259.695/7/2014
KRFTKraft Foods Group Inc55.13.8145.053/27/2014
FCXFreeport-McMoRan Copper & Gold Inc32.833.8184.824/11/2014
CINFCincinnati Financial Corp46.463.7952.953/17/2014
LEGLeggett & Platt Inc31.713.7889.993/12/2014
DTEDTE Energy Co70.93.768.533/13/2014
INTCIntel Corp24.53.6746.565/7/2014
WMWaste Management Inc41.283.63696.943/6/2014
SESpectra Energy Corp373.62795/7/2014
AVBAvalonBay Communities Inc129.013.6932.943/27/2014
WECWisconsin Energy Corp43.463.5956.965/14/2014
GRMNGarmin Ltd53.63.5860.313/13/2014
SPLSStaples Inc13.463.57#VALUE!3/26/2014
NUNortheast Utilities43.953.5758.975/30/2014
CAGConAgra Foods Inc28.383.5252.554/30/2014
CSCOCisco Systems Inc21.573.5233.164/1/2014
GEGeneral Electric Co25.123.553.116/26/2014
DDominion Resources Inc/VA68.593.572.885/28/2014
CVXChevron Corp114.843.4834.895/14/2014
MCDMcDonald's Corp94.323.4355.55/30/2014
AIVApartment Investment & Management Co30.43.4231414.275/14/2014
PAYXPaychex Inc41.183.483.785/8/2014
CVCCablevision Systems Corp17.643.4483.893/12/2014
ABBVAbbVie Inc50.093.3576.994/11/2014
LLYEli Lilly & Co59.033.3244.895/13/2014
PSAPublic Storage168.693.32104.673/12/2014
GMGeneral Motors Co36.213.3103/14/2014
FFord Motor Co15.23.29224/28/2014
STXSeagate Technology PLC52.293.2928.185/12/2014
CLXClorox Co/The86.663.2860.064/21/2014
PFEPfizer Inc31.983.2557.685/7/2014
LMTLockheed Martin Corp163.553.25525/29/2014
PLDPrologis Inc40.933.23288.823/10/2014
SYYSysco Corp363.2265.994/2/2014
NEENextEra Energy Inc90.283.2165.546/4/2014
KOCoca-Cola Co/The38.123.257.853/12/2014
DPSDr Pepper Snapple Group Inc51.683.1749.423/13/2014
MCHPMicrochip Technology Inc44.953.16214.955/20/2014
HASHasbro Inc54.653.1572.784/29/2014
MRKMerck & Co Inc56.423.12116.533/13/2014
PGProcter & Gamble Co/The77.483.1156.754/23/2014
SPGSimon Property Group Inc161.943.09112.095/12/2014
KMBKimberly-Clark Corp109.043.0858.083/5/2014
CLFCliffs Natural Resources Inc19.553.0725.095/13/2014
DOWDow Chemical Co/The48.443.0634.443/27/2014
RSGRepublic Services Inc34.043.0660.873/28/2014
GISGeneral Mills Inc49.863.0546.794/10/2014
VNOVornado Realty Trust96.483.03265.315/7/2014
KKellogg Co60.673.0336.163/4/2014
CACA Inc33.143.0248.486/9/2014
WYWeyerhaeuser Co29.283.0184.955/7/2014
WUWestern Union Co/The16.593.0134.723/13/2014
OXYOccidental Petroleum Corp96.05334.763/6/2014
IGTInternational Game Technology14.712.9932.743/18/2014

Solid returns in both but FX wins it (3.78% FX over performance)

Switzerland


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
MSFTMicrosoft Corp37.913.4213.062.745.63.5810.250.99.38.19138.1913
AOLAOL Inc44.0424.5816.82-4.445.853.928.620.5829.9N/AN/AN/AN/A

Good returns in both but FX wins it barely (1.17% FX over performance)

Mexico

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaEarningsRevenue/Share
PPandora Media Inc35.27N/A73.2530.53132.523.782.621.65N/A3.54
LNKDLinkedIn Corp196.32860.1773.49-8.7657.214.1921.850.9805-02-201413.45

Equity markets have had an amazing run in Mexico and even the strong peso did not account for close to that (8.71% equity over performance)

Sweden


TickerNameSharesMar 17 2014 PriceMar 17 2014 Values
OMCOmnicom Group Inc31$72.80$2,256.80
MSFTMicrosoft Corp73$38.05$2,777.65
JCIJohnson Controls Inc41$46.58$1,909.78
PEPPepsiCo Inc/NC29$82.05$2,379.45
ETNEaton Corp32$72.40$2,316.80
DOVDover Corp25$81.43$2,035.75
ITWIllinois Tool Works Inc28$81.78$2,289.84
XLNXXilinx Inc38$52.91$2,010.58
SJMJM Smucker Co/The20$96.12$1,922.40
BLKBlackRock Inc12$298.71$3,584.52
TROWT Rowe Price Group Inc30$81.58$2,447.40
OXYOccidental Petroleum Corp23$96.85$2,227.55
COPConocoPhillips26$67.29$1,749.54
XOMExxon Mobil Corp20$94.32$1,886.40
ADIAnalog Devices Inc45$50.68$2,280.60
HASHasbro Inc31$54.96$1,703.76
MATMattel Inc44$37.66$1,657.04
INTCIntel Corp54$24.70$1,333.80
AFLAflac30$63.82$1,914.60
BAXBaxter International25$66.50$1,662.50
IVZInvesco Ltd68$34.90$2,373.20
VWOVanguard FTSE Emerging Markets43$38.42$1,652.06
BNDVanguard Total Bond Market25$81.18$2,029.50
Cash$790.67
USDP$49,192.19
SPX15.02058773$3,349.66$50,313.88

The Krona ruled… (3.71% FX over performance)

Europe


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaEarningsRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
IACIIAC/InterActiveCorp72.7622.5315.847.157.933.9520.521.034/30/201436.2116.67N/A
EBAYeBay Inc56.9626.8116.924.1114.034.418.2714/29/201412.3917.7582.52

This one is a bit difficult to evaluate because Europe is so broad and not all countries in Europe are part of the Euro currency zone. But it was worth looking at (6.53% equity over performance)

Brazil


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
IACIIAC/InterActiveCorp72.7622.5315.847.157.933.9520.521.0336.2116.67N/A
EBAYeBay Inc56.9626.8116.924.1114.034.418.27112.3917.7582.52

When a stock market returns 30% or so…you could not possibly expect the FX to match that return (23.24% Equity over performance)

Russia


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg Growth     
LNKDLinkedIn Corp190.59832.6171.11-11.6857.214.1621.851.0113.45N/A
CRMSalesforce.com Inc55.75N/A80.282.4133.474.365.021.056.8131.78

Another BRIC stock and another equity win (13.59% equity over performance)

India


TickerNamePriceDividend YieldPayout RatioEx-DVD Date
WINWindstream Holdings Inc8.2412.14250.776/26/2014
DODiamond Offshore Drilling Inc48.767.1888.694/30/2014
FTRFrontier Communications Corp5.77.02362.426/11/2014
CTLCenturyLink Inc32.846.58N/A5/30/2014
ESVEnsco PLC52.785.6836.96/12/2014
HCPHCP Inc38.795.62106.925/8/2014
RIGTransocean Ltd41.345.4263.795/28/2014
HCNHealth Care REIT Inc59.65.343110.775/8/2014
POMPepco Holdings Inc20.485.27245.456/10/2014
TAT&T Inc35.075.2553.134/8/2014
TETECO Energy Inc17.155.1396.665/12/2014
MOAltria Group Inc37.435.1381.436/13/2014
KMIKinder Morgan Inc/DE32.495.05138.484/25/2014
RAIReynolds American Inc53.425.0278.666/11/2014
ETREntergy Corp66.854.9783.115/12/2014
VTRVentas Inc60.574.79164.066/6/2014
EDConsolidated Edison Inc53.654.767.895/12/2014
SOSouthern Co/The43.944.62107.365/1/2014
PMPhilip Morris International Inc81.874.5967.716/24/2014
TEGIntegrys Energy Group Inc59.654.5661.885/28/2014
LOLorillard Inc54.084.5569.925/28/2014
PPLPPL Corp33.144.579.796/10/2014
VZVerizon Communications Inc47.574.4651.734/8/2014
DUKDuke Energy Corp71.224.3882.385/15/2014
PBCTPeople's United Financial Inc14.874.3787.674/29/2014
DRIDarden Restaurants Inc50.764.3364.094/8/2014
SPLSStaples Inc11.344.2344.266/25/2014
FEFirstEnergy Corp34.034.23245.235/5/2014
PCGPG&E Corp43.24.21100.616/30/2014
PCLPlum Creek Timber Co Inc42.044.19135.515/14/2014
PNWPinnacle West Capital Corp54.664.1560.314/29/2014
KIMKimco Realty Corp21.884.11174.484/1/2014
SCGSCANA Corp51.324.0960.36/11/2014
CNPCenterPoint Energy Inc23.694.01114.155/14/2014
GASAGL Resources Inc48.96470.935/14/2014
MACMacerich Co/The62.333.98208.325/9/2014
WMBWilliams Cos Inc/The40.583.97222.626/4/2014
AEPAmerican Electric Power Co Inc50.663.9564.465/9/2014
XELXcel Energy Inc30.363.9558.436/17/2014
COPConocoPhillips70.353.9241.665/15/2014
IRMIron Mountain Inc27.573.92213.916/18/2014
PEGPublic Service Enterprise Group Inc38.143.8858.576/6/2014
AEEAmeren Corp41.23.8875.816/9/2014
MATMattel Inc40.113.7955.25/19/2014
FCXFreeport-McMoRan Copper & Gold Inc33.073.7884.824/11/2014
KRFTKraft Foods Group Inc56.13.7445.054/9/2014
CMSCMS Energy Corp29.283.6959.695/7/2014
EXCExelon Corp33.563.6973.555/13/2014
LEGLeggett & Platt Inc32.643.6887.716/18/2014
SESpectra Energy Corp36.943.63795/7/2014
CINFCincinnati Financial Corp48.663.6252.226/16/2014
WMWaste Management Inc42.073.56696.946/10/2014
CVCCablevision Systems Corp16.873.56122.865/13/2014
DTEDTE Energy Co74.293.5368.536/19/2014
AVBAvalonBay Communities Inc131.323.53932.946/30/2014
INTCIntel Corp25.813.4946.565/5/2014
GRMNGarmin Ltd55.263.4760.316/13/2014
NUNortheast Utilities45.53.4559.455/30/2014
EQREquity Residential57.993.45#VALUE!6/19/2014
AIVApartment Investment & Management Co30.223.44335.825/14/2014
GEGeneral Electric Co25.893.453.116/26/2014
CSCOCisco Systems Inc22.413.3933.164/1/2014
DDominion Resources Inc/VA70.993.3872.885/28/2014
CVXChevron Corp118.913.3634.895/14/2014
WECWisconsin Energy Corp46.553.3556.965/14/2014
LLYEli Lilly & Co58.863.3344.895/13/2014
PSAPublic Storage168.493.32104.676/9/2014
MCDMcDonald's Corp98.033.355.55/30/2014
ABBVAbbVie Inc51.43.2776.994/11/2014
LMTLockheed Martin Corp163.243.26525/29/2014
PFEPfizer Inc32.123.2457.685/7/2014
CACA Inc30.973.2348.486/9/2014
PLDPrologis Inc40.833.23288.826/12/2014
CLXClorox Co/The88.013.2360.064/21/2014
CAGConAgra Foods Inc31.033.2252.554/30/2014
FFord Motor Co15.63.21224/28/2014
GMEGameStop Corp41.13.2136.45/22/2014
SYYSysco Corp36.133.2165.994/2/2014
KOCoca-Cola Co/The38.663.1657.856/11/2014
GISGeneral Mills Inc51.823.1646.794/8/2014
PEPPepsiCo Inc83.53.1451.25/28/2014
IGTInternational Game Technology14.063.1332.746/17/2014
MRKMerck & Co Inc56.773.1116.536/12/2014
HASHasbro Inc55.623.0972.884/29/2014
WUWestern Union Co/The16.363.0634.726/12/2014
SPGSimon Property Group Inc1643.05112.095/12/2014
IPInternational Paper Co45.883.0541.055/23/2014
KMBKimberly-Clark Corp110.253.0558.086/4/2014
DOWDow Chemical Co/The48.593.0534.446/26/2014
RSGRepublic Services Inc34.163.0460.876/27/2014
NEENextEra Energy Inc95.623.0365.236/4/2014
OXYOccidental Petroleum Corp95.293.0234.96/6/2014
DPSDr Pepper Snapple Group Inc54.463.0149.426/19/2014
WYWeyerhaeuser Co29.35384.955/7/2014
PGProcter & Gamble Co/The80.62.9956.754/23/2014
MCHPMicrochip Technology Inc47.762.97214.955/20/2014
VNOVornado Realty Trust98.562.96#VALUE!5/7/2014
CLFCliffs Natural Resources Inc20.462.9325.095/13/2014
KKellogg Co62.712.9336.165/30/2014
NUENucor Corp50.542.9396.746/30/2014

India is actually the country (among those looked at here) where the equity over performance is the most important with over 25% more in the equity return. (25.69% equity over performance)

China


TickerNameSharesApr 14 2014 PriceApr 14 2014 Values
OMCOmnicom Group Inc31$68.87$2,134.97
MSFTMicrosoft Corp73$39.18$2,860.14
JCIJohnson Controls Inc41$46.11$1,890.51
PEPPepsiCo Inc/NC29$83.55$2,422.95
ETNEaton Corp32$71.03$2,272.96
DOVDover Corp25$81.56$2,039
KNKnowles Corp12.5$30.02$375.25
ITWIllinois Tool Works Inc29$81.64$2,367.56
XLNXXilinx Inc38$51.69$1,964.22
SJMJM Smucker Co/The20$95.39$1,907.80
BLKBlackRock Inc12$298.47$3,581.64
TROWT Rowe Price Group Inc30$77.99$2,339.70
OXYOccidental Petroleum Corp23$94.32$2,169.36
COPConocoPhillips26$71.51$1,859.26
XOMExxon Mobil Corp20$97.86$1,957.20
ADIAnalog Devices Inc45$52.46$2,360.70
HASHasbro Inc31$53.65$1,663.15
MATMattel Inc44$38.14$1,678.16
INTCIntel Corp54$26.56$1,434.24
AFLAflac30$61.19$1,835.70
BAXBaxter International25$72.76$1,819
IVZInvesco Ltd68$34.41$2,339.88
VWOVanguard FTSE Emerging Markets61$41.26$2,516.86
BNDVanguard Total Bond Market33$81.54$2,690.82
Cash$337.42
USDP$50,818.45
SPX15.32335164$3,302.90$50,611.55

Like other BRIC stocks, equity wins (12.31% equity over performance)

Leveraged Japan


TickerNamePriceDividend YieldPayout RatioEx-Dvd
WINWindstream Holdings Inc9.110.99250.776/26/2014
DODiamond Offshore Drilling Inc51.66.7888.697/31/2014
FTRFrontier Communications Corp66.67362.426/11/2014
CTLCenturyLink Inc34.846.2#VALUE!5/30/2014
ESVEnsco PLC50.755.9136.96/12/2014
RIGTransocean Ltd42.855.2363.795/28/2014
HCPHCP Inc42.25.17106.925/8/2014
TAT&T Inc35.765.1553.137/9/2014
KMIKinder Morgan Inc/DE32.745.13138.487/31/2014
HCNHealth Care REIT Inc63.5453110.775/8/2014
TETECO Energy Inc17.914.9196.665/9/2014
NENoble Corp plc30.944.8525.28/7/2014
MOAltria Group Inc39.894.8181.436/13/2014
RAIReynolds American Inc55.944.7978.666/11/2014
SOSouthern Co/The44.494.72107.367/31/2014
TEGIntegrys Energy Group Inc58.564.6461.885/28/2014
PBCTPeople's United Financial Inc14.324.6187.677/30/2014
ETREntergy Corp73.134.5483.115/13/2014
DRIDarden Restaurants Inc49.114.4864.097/7/2014
VZVerizon Communications Inc47.394.4751.737/9/2014
EDConsolidated Edison Inc57.034.4267.895/12/2014
PMPhilip Morris International Inc85.344.4167.716/24/2014
PPLPPL Corp34.364.3479.796/10/2014
VTRVentas Inc66.984.33164.066/6/2014
FEFirstEnergy Corp33.424.31245.238/5/2014
DUKDuke Energy Corp73.524.2482.385/14/2014
LOLorillard Inc58.384.2169.925/28/2014
PNWPinnacle West Capital Corp54.664.1560.317/31/2014
PCGPG&E Corp44.864.06100.616/30/2014
SCGSCANA Corp52.254.0260.36/6/2014
PCLPlum Creek Timber Co Inc44.063.99135.515/14/2014
POMPepco Holdings Inc27.143.98245.456/6/2014
AEEAmeren Corp40.623.9475.816/9/2014
KIMKimco Realty Corp22.933.92174.486/30/2014
CNPCenterPoint Energy Inc24.473.88114.155/14/2014
IRMIron Mountain Inc27.83.88213.916/18/2014
MATMattel Inc39.343.8655.25/21/2014
XELXcel Energy Inc31.243.8458.436/17/2014
SPLSStaples Inc12.553.8244.266/25/2014
MACMacerich Co/The65.013.81208.325/7/2014
AEPAmerican Electric Power Co Inc53.363.7564.465/7/2014
PEGPublic Service Enterprise Group Inc39.623.7458.576/4/2014
KRFTKraft Foods Group Inc56.263.7345.056/26/2014
WMBWilliams Cos Inc/The43.523.7222.626/4/2014
FCXFreeport-McMoRan Copper & Gold Inc34.073.6784.827/10/2014
LEGLeggett & Platt Inc32.673.6787.716/18/2014
GASAGL Resources Inc53.53.6670.935/14/2014
CMSCMS Energy Corp29.783.6359.698/6/2014
CINFCincinnati Financial Corp49.023.5952.226/16/2014
COPConocoPhillips76.893.5941.665/15/2014
CVCCablevision Systems Corp173.53122.865/13/2014
OKEONEOK Inc63.733.51114.418/6/2014
IGTInternational Game Technology12.563.532.746/17/2014
PFEPfizer Inc29.963.4757.685/7/2014
GMEGameStop Corp38.153.4637.215/22/2014
GMGeneral Motors Co34.753.4506/6/2014
INTCIntel Corp26.173.4446.568/7/2014
EXCExelon Corp36.243.4273.555/13/2014
CVXChevron Corp125.363.4134.895/15/2014
STXSeagate Technology PLC50.513.4128.185/12/2014
WMWaste Management Inc44.113.4696.946/10/2014
SESpectra Energy Corp39.63.38795/7/2014
NUNortheast Utilities46.623.3759.455/28/2014
PAYXPaychex Inc41.493.3783.785/8/2014
DDominion Resources Inc/VA71.163.3772.885/28/2014
CACA Inc29.663.3748.486/9/2014
DTEDTE Energy Co77.933.3668.536/12/2014
AVBAvalonBay Communities Inc138.243.36932.946/30/2014
GRMNGarmin Ltd57.483.3460.316/13/2014
LLYEli Lilly & Co58.883.3344.895/13/2014
CSCOCisco Systems Inc22.963.3133.167/1/2014
GEGeneral Electric Co26.583.3153.116/26/2014
AIVApartment Investment & Management Co31.473.3335.825/14/2014
CAGConAgra Foods Inc30.353.2952.557/30/2014
EQREquity Residential60.793.29#VALUE!6/19/2014
ABBVAbbVie Inc51.363.2776.997/9/2014
PSAPublic Storage171.933.26105.026/11/2014
WECWisconsin Energy Corp48.023.2556.965/12/2014
CLXClorox Co/The87.313.2560.067/21/2014
LMTLockheed Martin Corp165.123.22525/29/2014
PLDPrologis Inc41.193.2288.826/9/2014
MCDMcDonald's Corp101.143.255.55/30/2014
FFord Motor Co15.743.18227/28/2014
PGProcter & Gamble Co/The81.73.1556.757/16/2014
SYYSysco Corp37.193.1265.997/2/2014
COHCoach Inc43.393.1133.736/4/2014
HASHasbro Inc55.523.172.887/29/2014
GISGeneral Mills Inc53.013.0946.797/7/2014
WUWestern Union Co/The16.273.0734.726/12/2014
PEPPepsiCo Inc85.913.0551.25/28/2014
KMBKimberly-Clark Corp110.233.0558.086/4/2014
IPInternational Paper Co45.883.0541.055/23/2014
OXYOccidental Petroleum Corp94.73.0434.96/6/2014
MCHPMicrochip Technology Inc46.763.04214.955/20/2014
DOWDow Chemical Co/The49.36334.446/26/2014
MRKMerck & Co Inc58.633116.536/12/2014
KOCoca-Cola Co/The40.762.9957.856/12/2014
SPGSimon Property Group Inc174.052.99112.095/14/2014
LYBLyondellBasell Industries NV93.662.9929.38/14/2014
SYMCSymantec Corp20.12.9905/22/2014

The Conclusion

FX easily won this one because of a massive underperformance in the EWV ETF (30.51% FX over performance)…but given the long term characteristics of leveraged ETF’s, I don’t consider this result as significant in any way.

Conclusion: There could be much said about this and I will have to spend more time but on average, the equity ETF’s over performed in the past year over the FX currency of each individual country. Will the tendency remain? It will be interesting to see.

As well, I find it very interesting that BRIC ETF’s were so one-sided compared to the others

BRIC: Equity over performance by 12.29% on average
Other countries: FX over performance by 0.74% on average

Any thoughts on the results or the reasons why? I am certain that a full post could be written on almost any of these countries but I certainly thought the result was still a very interesting one.

Hell has frozen over

By: ispeculatornew | Date posted: 02.09.2010 (5:00 am)

A few days ago, Eric Schmidt, the Google CEO had hinted on his Twitter page that “Can’t wait to watch the Superbowl tomorrow. Be sure to watch the ads in the 3rd quarter (someone said “Hell has indeed frozen over.“). Why? Because Google is not a company known for spending money on advertising, very far from it. It has been known as the ultimate example of viral marketing. Build a product good enough and users will promote the brand by themselves. And that is indeed what happened. Over the years, Google went from zero to the ultimate leader on the internet without even spending a hundredth of what other companies like Microsoft, Yahoo and Ask.com spent on their marketing campaigns. There were a few ads done by Google but mostly for products it runs or to find the best job candidates.

So seeing yesterday’s ad, one that cost $2.5 million to air during the third quarter of the Super Bowl was a shocker to almost everyone in the industry. First off, you can see the ad here:

Clever no doubt. Who could possibly tell a love story with such details in a 50 second span without even pronouncing a word. Google, that’s who. And the ad was generally seen as very positive by viewers at the time and even since then on sites such as Google’s own Youtube. But to me, the real question is why now? Why does Google feel like it now needs to spend money on marketing when it has done so well without it in years past? In his post, Mr. Schmidt defended the decision by saying that it had been incredibly popular in Youtube’s Google Search stories segment. But still, why now? Does Google really need more branding? Is it worried about Microsoft spending so much money on its own search engine Bing???

I’m uncertain but as Google clearly has lost some momentum in the past few months, it is possible that is simply trying to reinforce its very strong brand. In just a few seconds, it helps users remember what they love about Google and how it can help them in every phase of their life. I personally think it was money well spent and probably more about getting some positive attention rather than reacting to anything that has happened in the past few months (Bing, Nexus One, etc).  And if it is true that Google might come out with the top rated ad in this Super Bowl, then that once more shows off the genius behind the company as it was competing with many companies such as Budweiser, who run several ads every year.

New trade: Long Apple (AAPL) & Short Amazon(AMZN)

By: ispeculatornew | Date posted: 02.08.2010 (5:00 am)

I have written a few times about Apple and found it very interesting to see the reaction to the launch of the tablet a couple of weeks ago. Seems like expectations were so high for Steve Jobs that there was no way it could live up to the hype. But Apple remains very solid and I still expect sales of Ipod’s and Iphones to provide the high sales that are expected. The Ipad is a longer term project that does have a future and I do think that it will eventually become a solid contribution to Apple’s revenues/earnings.

I also think the recent direction of Apple into advertising and competing with Google will provide some diversification to the model. I had written about the impact of Apple’s Ipad on Amazon’s Kindle and the power shift from Amazon to Apple but what shocked me was seeing Amazon’s purchase of a company to advance its touch screen technology. Are these guys serious? They waited all of this time before considering Apple a serious enough threat? Kindles will still be sold and bring revenues to Amazon but I believe that putting too much energy into this battle with Apple will take away Amazon’s focus from what is its core; its sales and distribution network.

When taking a look at the P/E ratios of both companies, it is striking how expensive Amazon has become with Apple’s recent decline. It is trading at almost twice Apple’s ratios for the next two years as per Bloomberg estimates, something that makes little sense to me, especially when you consider how strong Apple’s core products continue to be.

TickerNamePriceDividend YieldEPS 5Y GrowthDVD 5Y GrowthDVD 1Y GrowthSales 5Y Growth
ESVEnsco PLC50.755.9116.9690.3753.8533.71
NENoble Corp plc30.944.8524.4750.85140.3810.21
LOLorillard Inc58.384.2117.7719.747.868.64
FCXFreeport-McMoRan Copper & Gold Inc34.073.67336.6426.768017.5
OKEONEOK Inc63.733.518.616.5424.649.25
CVXChevron Corp125.363.4132.03911.119.57
OXYOccidental Petroleum Corp94.73.0445.7715.5816.8116.22
SPGSimon Property Group Inc174.052.99412.0312.2610.477.5

In terms of traffic, the data is not as useful since Apple does not need nearly as much traffic given the average order size but still, you can see that traffic growth from Apple is slightly better than Amazon’s over the past 12 months (+17.25% for Apple vs +15.18% for Amazon). Again, maybe comparable but then why is Amazon trading at such a high P/E ratio?

Here are the stock charts for both companies:

Financial Ramblings: Super Bowl Special

By: ispeculatornew | Date posted: 02.06.2010 (8:35 am)

Good morning to you and welcome to the most important weekend of football and the biggest annual sports event in the world. The Super Bowl brings together die-hard fans (some passionnate enough to send a kid back home from school because he has the opponent’s team shirt on!), casual sports fans who do not watch all year long but are more than happy to see the Saints and Colts battle it out, but also all of those other fans who are either planning a Super Bowl party or attending one elsewhere.

Global Reach

I think that the Super Bowl’s real success is how it gets even non-fans to watch the game (the actual action lasts only 11 minutes according to a recent study). There is the spectacular half time show, the stars doing the national anthem but the incredible part is the commercials part. TV ads are an event in itself, something that is unmatched. Imagine being an advertiser. All year long you are running towards consumers trying to get them to see your ads. Then comes this 4 hour show where the audience is actually excited about seeing ads of their favourite brands. There are all kinds of theories about winning the Super Bowl ad game, but it seems clear that it is a unique opportunity for companies to get a good contact with their current and potential consumers. And it does not stop when the game ends. The best commercials will be seen by tens of millions of viewers after the Super Bowl on websites like Youtube. But the question of course is, are these ads worth it? They do cost millions of dollars to air.

Youtube could do more

I had written about this a while back but I think that Youtube certainly could generate a lot more money around the idea if it were one day able to create a similar type of event. There have been encouraging signs this year as Youtube has been more agressive in getting ad dollars related to the Super Bowl.

Imagine this, there are even studies that were done to see if there was a correlation between the Super Bowl winner and economic activity!

Betting also part of the Super Bowl

And finally, betting is a huge part of the game as well with fans betting on anything from the winner, to the winner of the coin toss or even how long Carrie Underwood’s (seen on the right) national anthem performance will be (over or under 1 minute and 42 seconds). Websites like Betfair will receive tens of millions of dollars of bets done around the world on every single detail that happens during the game.

And finally…foood!

Apart from perhaps Thanksgivings, the Super Bowl is one of the best days for grocery stores as clients come in to buy all kinds of healthy items such as chicken wings, beer, chips, soft drinks and more. Nothing like some great junk food in front of the Super Bowl right?

So that’s it for now, I hope you will all be able to enjoy the game, best of luck to everyone, as long as you are rooting for the Indianapolis Colts!:)

Yahoo (YHOO)…the next AOL(AOL)?

By: ispeculatornew | Date posted: 02.05.2010 (5:00 am)

When I think about Yahoo, what comes to mind is a group of different segments that used to dominant in their fields but never were upgraded enough to remain at the top of their fields. Yahoo dating used to be a leader in the field. Of course now, other players such as IAC Interactive have websites that have a lot more traffic and revenues.

Then, think of Yahoo Finance, which used to be the ultimate financial resource. It was a great property to generate advertising revenues and seemed far ahead of any competitors. But look at the website from a few years ago and you will hardly notice any improvements in today’s version. It is not much of a surprise to see that others such as Google and Marketwatch are stealing market share constantly.

Yahoo mail is another good example of a service that once was a leader with Microsoft’s Hotmail but has since been made to be the inferior product mainly by Google’s Gmail service.

What Yahoo used to be….

Yahoo was once a terrific web portal, a leader in all kinds of sectors on the internet. But then time went by and they did not adapt quickly enough. Now think of AOL. A decade ago, AOL was riding high as the leading internet service provider which helped generate traffic throughout its network. But after being merged in Time Warner, the company’s decline started and it never successfully moved on when it started losing those subscribers.

Now that AOL has became an independent company again, it has been busy selling off dead services and properties. Remember ICQ, the messenging service that was used by nearly the entire web? It had been bought by AOL to merge with its own messenger service to become a dominant force. Of course, who uses ICQ nowadays? But it is part of the pieces now being sold off by AOL.

Same for Yahoo?

Well Yahoo is still early on that path but it is going full speed trying to “catch up” on AOL. One of the early moves came yesterday when Yahoo confirmed it was selling “Hotjobs”, a once leading emplyment service to Monster.com, for 225$ millions. A few years ago, the value of HotJobs was much higher. But as the quality of the website did not improve to match competition, it lost users and revenues.

Yahoo does still have a few valuable properties, especially in its Asian operations, but also in Flickr, its social image network. But I would say the trend is still very clear, Yahoo is going down and is only a few years away from AOL, trying to get funding to somehow get momentum through fresh and popular content that would generate enough revenues to offset the other declining parts of the company.

What are your thoughts on Yahoo? I know I have been criticised for being negative on Yahoo but honestly I just don’t see how Yahoo can avoid becoming the next AOL.