In one of the news reports on US Airways, following the miraculous Hudson River splashdown, it was mentioned that the company’s stock had a nice bounce following the event. That sounded odd to me so I checked the chart and here’s what I found. US Airways stock (LCC) peaked way back in 1998 at 83. Then it crashed to less than a buck. It rebounded to 32 in 2003 … and crashed again to less than a buck. In 2006, it flew up to 63 … and then plummeted to 1 1/2. And in 2008, thanks to falling fuel...
My investing idea for this week is fairly far off the radar. It’s an emerging markets company called Chemical and Mining Company of Chile (Sociedad Quimica Y Minra) (SQM). This medium-sized chemical and fertilizer company (last year’s sales were $1.68 billion) produces potassium nitrate, iodine, and lithium carbonate and distributes them around the world. The company is thriving because it has a rich source for its minerals. But even more important, it has worked to create value-added products from what it mines, avoiding the extreme fluctuations that the commodity markets are prone to. Its other products include specialty plant...
The city fathers of Salem, where I live, recently announced that the trash contractor would no longer pick up cardboard boxes. All cardboard boxes must now be cut down to flat sheets, no larger than 3 feet by 3 feet, and bundled so the recycling contractor can take them away. I’m not a big fan of cutting down cardboard boxes; it’s a bit dangerous, and it takes time. So the boxes started to pile up in my garage. And then this past weekend, I had a brainstorm. I took a smaller cardboard box, filled it with crumpled newspaper and...
If you’ve ever thought about how you–one lone individual out there making your investment decisions on your own–can possibly hope to beat the results of a large mutual fund, here’s how. Yes, it’s true that a big investment company has enormous resources. Analysts can chop and count every number about the target company, figuring out the history of the company’s revenues, earnings, cash flow, free cash flow, working capital, debt, overhead, liabilities, taxes, expenses, productivity, raw materials, etc. They can figure every valuation ratio in the book and even invent more. They can also visit every company whose stock...
Last Thursday, in a financial story that you may have missed, Nasdaq OMX Group announced that it had created a new index. It’s called the Nasdaq OMX Government Relief Index and it is now trading under the symbol QGRI. The components of the index will be the companies that receive $1 billion or more under the Troubled Asset Relief Program (TARP) or any other government handout program. There’s a kind of twisted logic to this new index, whose initial roster of companies includes Bank of America, Citigroup, General Motors, Goldman Sachs, J.P. Morgan and Morgan Stanley. After all, if...
