October 11, 2007

Business Week update

From Wizbangblog!

Business News Update

SCOTUS

The U.S. Supreme Court heard arguments this week in connection with what ultimately will be yet another pro-business, anti-leftist securities fraud decision.

The Court next year will rule against so-called "third-party liability" for securities fraud. Outside accountants and lawyers and investment banks will be shielded from shakedown lawsuits when Enron and Worldcom-style implosions happen to take place.

For the liberal media's version of events you can click to read this AP article.

Cause & Effect

Speaking of courts and judges, Clinton-nominated district court judge Charles Breyer finalized that preliminary injunction against the Bush administration's extra-legislative crackdown on employers of illegal immigrants. Ross Perot and the various conservatives who elected Clinton were unavailable for comment.

Obviously this matter will make its way up to the U.S. Supreme Court. That'll be interesting.

CAFTA

Costa Ricans voted to join CAFTA. Ralph Nader wept.

Y-UAW-N

The liberal media cheered out loud for the UAW. Chrysler yawned.

Perhaps the "Fourth Estate" was looking for a catharsis or some sort of moral victory. I don't know. The end result was a foregone (pro-management) conclusion.

There's Gold in Them Thar Ice Packs

Newmont Mining will acquire Miramar Mining, setting the stage for increased gold production in the Arctic Circle.

BTW, there is no better hedge against inflation and a falling dollar than gold.

Breaking Up is Hard to Do

Sallie Mae slapped former suitor J.C. Flowers with a lawsuit. Sallie's jilted and wants Flowers to pay. Flowers won't be sending roses to Sallie. Sallie and her snippy girlfriends . . . oh, wait, sorry.

Here's a link to a Reuters article -- sans agenda -- outlining the aborted takeover of Sallie Mae and the ensuing reprisals and recriminations.

Money + Politics

Rutgers University reported New Jersey's population declined by over 231,000 between 2002 and 2006, the largest population decrease in the country.

That's true, Mrs. McGreevey, elections and thus tax and other policies certainly affect how people live their day-to-day lives. Especially the working classes.

Doubling Down

Speaking of New Jersey, gaming leviathan MGM announced plans to build a huge resort/casino in Atlantic City.

There is no better combination of business demographics, profit margins, and large barriers to entry, than those which apply to vacation resorts and casino gaming.

We have an aging population. Old people have lots of time on their hands.

We've had three separate wealth booms within the past 25 years. With the advent of reverse mortgages and the baby boomers sitting on piles of home equity, plus lower tax rates on stock dividends and cash-value based life insurance products, there are hundreds of billions of extra dollars out there poised to enter the system. Lots of those dollars will find their ways into hotels, resorts, slot machines and blackjack tables. You can bet on it.

The casino business is not like the tech business. It's not as if any Joe or Jane, or Bill or Sergey, can open up a casino resort in their garage or dorm room.

If I were running an investment fund -- which of course I am -- I'd be looking for attractively-priced casino operators. Especially those with strong ties to states in which non-Moonbats hold political power.

A well-run casino business with a low P/E ratio and a low price-to-book ratio is a no-brainer for a long-term investment. Roll those dice, honey.

Stock Markets

Speaking of stocks, the markets have been volatile this week. At various points the Dow Jones Industrial Average and the S&P 500 both set all-time record highs.

Incidentally, back in early-2003 you could have purchased contract employer and temporary staffer Manpower for around $30 per share. That was a time during which the liberal media was depressed about the economy, the job markets, GOP control of the Congress and state legislatures, President Bush, the upcoming war in Iraq, etc. Manpower was being sold off in a panic. On Wednesday, however, the company's shares closed at $68.71. As recently as July the stock was trading above $90.

$ 30 - March 2003 - depression in the media and panic selling on Wall Street
$ 90 - July 2007 - investors jubilant
$ 68 - October 2007 - investors manic-depressive; media angry

Morals of the story:

-- Buy low, sell high. Not vice-versa.
-- Being a media/market Lemming is no way to achieve your financial goals.


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