Stocks Furthest Above and Below 50-Day Moving Averages [View article]
I have held several big pharma stocks for decades, and those I purchased before the mid-1990's have served me well over time with decent dividends and appreciation. However, since the mid-1990's many have underperformed and dropped in value to what appear to now be bargain basement prices. Despite these incredibly low valuations, I have added hesitantly to my pharma positions because:
(a) Risk of government price regulation. (b) Risk of cutting dividends (indeed SGP cut theirs substantially several years ago, and now PFE just halved theirs, and I wonder how much longer MRK or BMY will maintain their dividends, with their stock prices being so low). (c) Risk of mismanagers destroying excellent balance sheets to enlarge their personal empires with acquisitions (like PFE and MRK just did).
Thus, it is not surprising to see the stocks out of favor. The only reason that you see ABT on the list above is that it had been an outlier that resisted the group's death spiral until recently. You do not see PFE, MRK, BMY, in the list because they have been down for so long, that their 50dma has been uniformly down for a long time.
On Apr 04 12:45 PM old trader wrote:
> I noticed that a fair number of the "under 50 dma" group are in the > healthcare sector. I wonder how much of the underperformance of the > sector is because of concern over the adminstration's health care > reforms, how much is due to investors becoming somewhat more aggressive > in their outlook, and how much might be due to company-specific porblems. > > > It might be worth "checking under the hood" of some of these.
Bailouts Affect Industry Winners Too [View article]
It's the same with banks. When the fed backstops Citi's toxic waste, allowing it to resume piling debt at terms that don't reflect the risk, how can a better run bank (like WFC or UST) compete?
For that matter, how can any business compete in an economy where the fed or treasury pick the winners and losers?
Big Bank vs. Big Car: The Bailouts Have Just Begun [View article]
No bailouts should be given to any company. However, the angst over the Detroit bailout is astonishing, given the lack of meaningful debate over the far larger bailout of the financial industry.
The automakers problems are partly mismanagement, partly the result of historic changes beyond their control, whereas the financial industry's mismanagement is totally self-inflicted.
GM: More Bailout-Worthy than Citigroup [View article]
A voice of reason.
Yes, all bailouts are bad. But if we're going to do it anyway, then auto industry more worthy than banks. The banks created their own mess, whereas the auto industry fell victim to historic events that left them saddled with expensive labor and obligations in a globalized economy with plenty of cheap manufacturing labor.
I am puzzled that many people are so upset at auto workers making "an excessive" $75/hr, but perfectly happy to see legions of unnecessary Wall Street employees making, on average, $200/hr. I submit that the true value to the economy of an auto worker is greater than that of an average Wall Street employee.
Geithner to Put Chrysler in Bankruptcy Next Week [View article]
Stocks Furthest Above and Below 50-Day Moving Averages [View article]
(a) Risk of government price regulation.
(b) Risk of cutting dividends (indeed SGP cut theirs substantially several years ago, and now PFE just halved theirs, and I wonder how much longer MRK or BMY will maintain their dividends, with their stock prices being so low).
(c) Risk of mismanagers destroying excellent balance sheets to enlarge their personal empires with acquisitions (like PFE and MRK just did).
Thus, it is not surprising to see the stocks out of favor. The only reason that you see ABT on the list above is that it had been an outlier that resisted the group's death spiral until recently. You do not see PFE, MRK, BMY, in the list because they have been down for so long, that their 50dma has been uniformly down for a long time.
On Apr 04 12:45 PM old trader wrote:
> I noticed that a fair number of the "under 50 dma" group are in the
> healthcare sector. I wonder how much of the underperformance of the
> sector is because of concern over the adminstration's health care
> reforms, how much is due to investors becoming somewhat more aggressive
> in their outlook, and how much might be due to company-specific porblems.
>
>
> It might be worth "checking under the hood" of some of these.
The Bailouts Are Doomed - All of Them [View article]
Bailouts Affect Industry Winners Too [View article]
For that matter, how can any business compete in an economy where the fed or treasury pick the winners and losers?
GMAC: Happy to Lend You Some of Your Own Money [View article]
Paulson Grasps the Automaker Nettle [View article]
Big Bank vs. Big Car: The Bailouts Have Just Begun [View article]
The automakers problems are partly mismanagement, partly the result of historic changes beyond their control, whereas the financial industry's mismanagement is totally self-inflicted.
GM: More Bailout-Worthy than Citigroup [View article]
Yes, all bailouts are bad. But if we're going to do it anyway, then auto industry more worthy than banks. The banks created their own mess, whereas the auto industry fell victim to historic events that left them saddled with expensive labor and obligations in a globalized economy with plenty of cheap manufacturing labor.
I am puzzled that many people are so upset at auto workers making "an excessive" $75/hr, but perfectly happy to see legions of unnecessary Wall Street employees making, on average, $200/hr. I submit that the true value to the economy of an auto worker is greater than that of an average Wall Street employee.