In Search of the Perfect Investment

From Seeking Alpha at 10:17 PM last night:

Dell (DELL) and H-P (HPQ) won’t like this: Vizio, whose inexpensive TVs have long been a major headache for costlier, high-profile brands, will unveil its first PCs this week at CES (the Consumer electronics Show).  The company’s initial offerings will include iMac-like desktops with 24-inch and 27-inch displays, and ultrabooks with 15.6-inch and 14-inch displays, at (according to Vizio’s CTO) “a price that just doesn’t seem possible.”

This morning at 8:05 AM, I received Vizio’s  formal press release announcing its new  PCs. The release did not contain pricing information.

Vizio’s news does not spell good news for Dell and HP,  two large makers of PCs and laptops.Vizio is not public.

I’m leaving this evening to spend two days checking out the Consumer Electronic Show in Las Vegas. CES is the world’s biggest technology show. Fun, though not always enlightening.

More stocks to sell short. Neat piece in  Ten Stocks to Sell Short. The article contains

The large, mid-size and small companies in the S&P Composite 1500 index together have attracted more than 20,000 published analyst opinions on what to do with their shares. Barely 200 of these say to sell. Why? One innocent explanation is that clients of these analysts’ firms are more interested in hearing about stocks to buy than ones to sell, because most retail investors don’t engage in short-selling, or betting against stocks.

Another, not-as-innocent explanation is that the same firms that issue opinions on shares also court the companies under their coverage for lucrative investment banking business. Over the past decade, regulators have taken steps to reduce conflicts of interest among analysts, and studies show the link between investment banking relationships and “buy” recommendations has weakened. Analysts have also become a bit less optimistic in their recommendations, but a culture of sticking with “buys” and “holds” and avoiding “sells” remains.

Research by Kent Womack, a former Goldman Sachs executive who taught at Dartmouth for 16 years before heading to the University of Toronto in 2010, suggests two things to keep in mind when using analysts recommendations to inform stock-picking decisions. First, fresh recommendations are more telling than longstanding ones. That is, recent opinion changes tend to have more predictive power than the overall consensus of opinions. Second, “sells” tend to be more prescient than anything else. Analysts who take this rare stance, it seems, often have good reason.

Among thousands of North American companies, just three have at least five “sell” recommendations: Research in Motion (RIMM: 15.34, 0.29, 1.93%), whose Blackberry devices are rapidly losing market share for smart phones; Netflix (NFLX: 86.29, 6.99, 8.81%), which lost 800,000 U.S. subscribers in its third quarter (see “Bottom Fishing: Netflix Vs. H-P” ); and Genco Shipping & Trading (GNK: 6.66, -0.01, -0.15%), a New York City-based dry bulk shipper that some analysts say is in danger of breaching its debt covenants.

Note that plenty of other companies appear to be in worse shape than these but attract lower levels of analyst coverage, and thus fewer “sells”. Note, too, that “sell” recommendations reflect analysts predictions for share price declines, and not necessarily deeper financial trouble.

A second search for companies with two or more “sell” recommendations, including at least one issued in the past four weeks, turned up seven names. Two of them have three “sells” apiece: Safeway, a profitable grocer that faces rising competition from Wal-Mart (WMT: 59.00, -0.42, -0.71%) and others; and Salesforce.com (CRM: 101.06, 2.29, 2.32%), a thriving seller of cloud-based business software whose shares, even after a recent plunge, look pricey at 74 times earnings (see “Is Salesforce.com Worth 100 Times Earnings”).

The other five have two “sells” apiece. Sun Healthcare Group (SUNH: 3.94, -0.01, -0.25%) is an Irvine, Calif. operator of skilled nursing facilities that faces exposure to Medicare and Medicaid reimbursement concerns but nonetheless boosted earnings guidance this week. Memphis-based Pinnacle Airlines (PNCL: 0.93, 0.12, 14.81%) operates regional flights under agreements with Delta (DAL: 8.32, -0.01, -0.12%) and United Continental Holdings (UAL: 18.21, -0.18, -0.98%) and has recently posted losses. MEMC Electronic Materials (WFR: 3.85, -0.25, -6.10%) has been slammed by a global glut in solar wafers and panels.

Insurer Coventry Health Care (CVH: 29.39, -1.21, -3.95%) has underperformed larger industry players in recent years, but a Cantor Fitzgerald analyst initiated coverage with a “buy” recommendation in late December, writing that a turnaround is afoot. Finally, Veeco Instruments (VECO: 22.70, -0.18, -0.79%) makes equipment used by manufacturers of LED lights. Demand for those is expected to rise over the long-term, but a rush of equipment orders from Chinese manufacturers in recent years has left many with more capacity than they need this year, analyst say.

You can read the full piece in  Smart Money

“Oih Veh. My wonderful view.” See the building in the back. One of those topmost floors has my friend’s  conference room. It has the best views in Manhattan — from the south to the north of central Park, with views to the East and West side of the Manhattan. Jaw dropping view. However,

Marriott is putting up an 80-story hotel right in front. And there’s absolutely nothing he can do, except cry, and renegotiate his lease downwards (eventually). I took this photo on Sunday from the park, looking south,with a 200 mm lens on my Nikon D7000.

Wonder what this guy could do with a predator drone? Amazing video of a model airplane. Click here.

Why did God invent Christians? Because someone has to pay retail.

Well, now is the time to buy retail. Saks is offering 70% off  and every other retailer and his uncle is running extraordinary sales. The idea is to get rid of Winter stuff  and bring in the Spring stuff. The sales should end around January 20.

Goldman has riased its target on Apple from $520 to $550.

How yoga can wreck your body.

Big article in Sunday’s New York Times Magazine. The takeway: Yoga is NOT for you and me. Click here.

When I was young, extreme sports didn’t exist. But now they do incredible things.

You must watch this video – a compilation of slow-motion and extreme sport clips. If you were 18 and fearless, would you do this stuff? Click here.

Dan Good, associate editor, reviews the Nikon V1.

Until now, there were two types of cameras — lightweight point-and-shoot, and a heavyweight digital single lens reflex. Now there’s a new category of  in betweens — mirrorless, interechangeable lens cameras.

Years ago, camera makers had one or two models at any one time and introduced new ones every five years.  Now they have many and introduce new models every couple of months.  They expect you, the camera enthusiast to read the reviews and pick your poison. For many of us, that now means we own several cameras — one to slip in our pockets, one big heavy one to carry around our necks for our kids’ tennis matches and one in between. This is an “in between” camera.

This photo comes from a web site called dpreview.com. They have the most thorough camera reviews. Before you buy, always read them.

You’ll immediately notice four things about this new Nikon V1: the incredible eye-level electronic viewing system, the instant shutter release (no more lags), the interchangeable high-quality lenses,  and the price (it’s not cheap).

Before I go further, let me state: You will get the same great pictures from an iPhone as you will from a $2500 DSLR — if the lighting is bright and right, and your subjects are holding their smiles. Most cameras (including this one and the iPhone) will even do great movies. But when the light fades and the subjects move and and and, things get iffy, then you need something better. This is one of those cameras that is something better than a point and shoot and practically as good as more expensive DSLRs (digital single lens reflexes).

Do not buy this camera from my review. You must hold it in your hand and decide if it’s right for you. Here is why I love  my Nikon V1:

1. The electronic eye level viewfinder is stunning. It’s a TV for your eye. Holding a camera a foot in front of you is not a way to take real photos.
2. There’s no shutter lag, as there is on all point and shoot cameras.
3. There’s lots of pixels per photo to play with — 10 million pixels.
4. The quality of the interchangeable lens is much better than the built-in lenses in point and shoot cameras.
5. I can take movie and stills at same time.

What are the three things I most dislike about it?

1. It’s not small enough to carry in my pocket. But it is smaller and much lighter than my DSLR.
2. Its manual controls are not intuitive. Leave it on “auto”, the camera does a perfectly fine job of figuring exposure and focusing. My tendency to mess with controls can mess up my photo.
3. It’s not cheap. Amazon sells the camera with one lens (but not flash) for $849. Click here.

Favorite stupid cartoon.

Favorite In Search of the Perfect Investment strategy:

A newly married man asked his wife, ‘Would you have married me if my father hadn’t left me a fortune?’

‘Honey,’ the woman replied sweetly, ‘I’d have married you, no matter who left you a fortune.

Harry Newton who enjoys stating the obvious. And, today’s “obvious” is (drum roll): Please buy a Waterpik.

A puny $47 investment will buy thousands of dollars of saved dental bills.  Though I have no live teeth and my mouth is a gold mine of 70 years of dental experiments, my dentist assures me this thing works. And the first use — this weekend — proved him right, as I watched this gadget dislodge enough food to feed China and perhaps Burma. Click here.