StockbrokerPro.com NOTES, Wednesday, July 2, 2003
· New links on the website: In
INVESTING INFORMATION under GOLD, "goldstockcenter.com", under
MONEY MARKET FUNDS, "iMoneyNet.com"; In MISCELLANEOUS under
MOTIVATIONAL SITES are "markvictorhansen.com", "tut.com",
and "mrfire.com";
· Federal Judge Milton Pollack
has thrown out an investor class action lawsuit against Merrill Lynch.
This bodes well for the brokers since a number of these cases sit on
this judge's desk. Pollock was unmoved by the emails in which Merrill
analyst Henry Blodget and others referred to some of the stocks they
followed as "pieces of crap" or "pieces of junk."
The judge blamed the investors themselves for ignoring the stock market
bubble. The judge referred to these emails as "snippets" and
not the "legal cause" of the plaintiffs' losses. This ruling
will be looked to for guidance by other judges in similar investor suits.
This is a homerun for brokers and bad news for investors. The judge,
by the way, is 96-years-old and has a long history of presiding over
major securities-law cases. Regarding the Internet stock IPO's in this
case, Judge Pollack said that the investors who brought the suits were
"high-risk speculators" who knew or should have known "the
unjustifiable risks they were undertaking in the extremely volatile
and untested stocks at issue, and now hope to twist the federal securities
laws into a scheme of cost-free speculators' insurance." Powerful
words. He added: The plaintiffs "would have this court conclude
that the federal securities laws were meant to underwrite, subsidize,
and encourage their rash speculation in joining a free-wheeling casino
that lured thousands obsessed with the fantasy of Olympian riches, but
which delivered such riches to only a handful of lucky winners."
This judge sure doesn't mince words! Finally, he said he was "utterly
unconvinced" that Merrill intended to defraud the plaintiffs. He
said that the Merrill research reports were "replete with risk
warnings."
· Let's Party Like It's 1999: eBay,
Yahoo and Amazon, have each hit new 52 week highs!
· Margin account balances of New
York Stock Exchange member securities firms grew to $146.38 billion
in May from $135.91 billion at the end of the first quarter in March.
Margin debt hit a frenzied level peak at $278.53 billion in March of
2000.
· Wal-Mart saw June same-store
sales up 2-4%. The consumer is alive and well (at least the cheap consumer)!
· Chief Information Officers in
June planned to boost tech spending by 5.6% over the next 12 months,
up from 3.3% in May. Good news!
· The SEC ordered U.S. listed firms
to start submitting many stock-based pay plans to shareholder votes.
Good for shareholders!
· Merriam-Webster, which updates
its Collegiate Dictionary once a decade, just released its 11th edition.
The edition has 10,000 new words and 100,000 new meanings and revisions.
Shoot! I was just getting a handle on the 10th edition!
· In the first half of this year,
corporate bond issuance rose to $475 billion (up 9%), lead by a surge
in junk bonds to $64.8 billion and a 33% rise in convertible bonds to
$58.97 billion. Investment-grade issuance was flat at $351.3 billion.
There is money out there!
· Texas Instruments will build
a $3 billion chip plant with 300-millimeter wafer technology in Richardson,
Texas. It will break ground in December of 2005. We will see more of
this as the weaker dollar hits corporate growth strategies.
· Foreign investors owned $2.387
trillion more in U.S. assets than U.S. investors held in foreign assets
at the end of 2002. That's up $407.31 billion since 2001. The U.S. has
been a net debtor since 1985. The Commerce Department said 2002's rise
was due to foreign buys of U.S. corporate and government debt while
U.S. investors became net sellers of foreign securities. A weaker dollar
should reverse this at some point.
· The S&P rallied 14.9% in
the second quarter, its best showing since it was up 20.9% in the fourth
quarter of 1998. The Dow Jones Industrial Average finished up 12% for
the quarter (up 7.7% for the year and up 23% since hitting the low in
October). The Russell 2000, a small stock index, was up 23% in the second
quarter, beating the Nasdaq composite which was up a healthy 21%.
· Traders: Technically the market
is more likely to see 8400 on the Dow before it sees 9400.
· The Treasury market struggled
a little in June. After yields hit a 45-year low on June 13th, the yield
on the 10-year T-note rose from 3.1% to 3.5%.
· Money market fund balances are
still growing. Total net (including institutions and individuals) money
market fund assets are $2.2 trillion. This in spite of just 1% rates.
Wow!
· Money market reserves remain
at nearly 28% of the total stock market value. In 1982, reserves hit
22%, and the Dow tripled in just five years. In 1991, reserves reached
17% and, well, you know what the market did the following decade. Boom
time ahead at some point!
· Money market funds are being
merged to keep their share prices at $1. With interest rates so low,
those money market funds with high costs are merging with the larger/lower
costs funds to maintain that $1 per share price. If rates drop any lower,
there could be problems. Don't expect it, though.
· General Motors issued $16.5 billion
in bonds last week to fund its company's pension shortfall. Expect to
see more of this. Don't forget what pension fund managers do with their
cash. That's right, they invest it in the capital markets! The underfunded
status of corporate pension accounts is around $300 billion. That's
a lot of cash that will eventually fuel market action on the upside.
Big!
· Massachusetts reported a jobs
gain for two months in a row, April and May. Excellent! Hooray for Massachusetts!
· "Bushonomics" exported.
Germany, the engine of Europe's economy, has had a terrible three years.
Shroeder is taking a page from the Bush economic plan, and it's about
time. They are stepping up tax cuts to stimulate their economy. Their
top rate will be cut from 48.5% to 42% and the bottom rate will drop
from 19.9% to 15%. Even in France, there is a mass movement to oppose
the communist-dominated unions that have been trying to shut down the
French economy. These two events in these two significant European economies
is indicative of Europe's moving to get that continent moving again.
This is good news!
· Sorry, but I can't help myself
in commenting on this. I apologize in advance if I offend anyone. On
Friday, June 27, on page 5 of USA Today, in big headlines at the top
of the page was, "Sodomy ruling gives hope to many". Who writes
this stuff? Better yet, who approves this to be a headline? How are
we supposed to take this? Is English a second or third language for
the editors at USA Today? Do they really understand what words do when
put together? Combine this headline with Judge Pollack's ruling on the
investor suit and you might come to the conclusion that both rulings
benefit Wall Street analysts!
· Here are George Orwell's six
Golden Rules of writing (we should ALL follow them):
1) Never use a metaphor, simile, or other figure of
speech, which you are used to seeing in print. 2) Never use a long word
where a short one will do. 3) If it is possible to cut a word out, always
cut it out. 4) Never use the passive where you can use the active. 5)
Never use a foreign phrase, a scientific word or jargon word if you
can think of an everyday English equivalent. 6) Break any of these rules
sooner than say anything outright barbarous.
· Always remember: thoughts are
things. Everything in this physical world was once a thought. Here's
an excerpt from The Success Book by John Randolph Price, 1998, Hay House,
Inc.:
Everything comes to you or is repelled from you based on the vibration
of your energy field, and the vibration is established by your beliefs
and convictions. Accordingly, you can see that nothing is out of place
or out of order in your life. Everything is perfect based on your consciousness
and the outworking of the law. Your world is a mirror of your thoughts,
feelings, and concepts: all pressed out in material form and experience.
Do you like what you see? You are the architect and the builder, and
you have designed and produced your world to the exact specifications
of your consciousness.
To run around trying to fix your world with the consciousness that produced
the problem in the first place will only aggravate the situation even
more. You must draw forth from within a new awareness, understanding,
and knowledge of the universe, the power that sustains you, and the
nature of yourself. And with each degree in the shift in your consciousness,
more Reality is revealed in your world.
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From Broker Coach, David McKee (603)598-3794
www.simpleintellection.com
In working with my clients this last week, something came up which had
them improve their relationship with their clients remarkably.
The concept is "delusion."
If you are not well-versed in the make-up of delusion, its point of
origin and how to resolve it, you simply stagnate.
Your clients give you explanations on issues, but they are engaged with
views and attitudes that you don't have access to. This causes problems.
Frank Bettger, the author of
How I Raised Myself From Failure to Success in Selling says, "A
person has two reasons for saying a thing, the real one, and the one
that sounds good."
Delusion is the one that sounds good. It sounds good to them, but it's
based on events that they don't even recall.
I work with clients in a one-on-one setting. They explain situations
they are attempting to resolve. I get their limitations viewed and provide
them with the skills needed to advance. Send me examples of situations
so that I can work with them in these NOTES. This will make my NOTES
more useful to everyone. Email me or call me.
Email me at alidade@tellink.net
Thank you.
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