Appears that I'm or We are in the same kind of situation. We are like the pigs surrounded by the always increasing ERP 'gates'.
We are also like the pigs in the stock market...
This story is also linked with communism and socialism.
The Wild and Free Pigs of the Okefenokee Swamp
by Steve Washam based on a telling by George Gordon
Some years ago, about 1900, an old trapper from North Dakota hitched up some horses to his Studebaker wagon, packed a few possessions—especially his traps—and drove south. Several weeks later he stopped in a small town just north of the Okefenokee Swamp in Georgia. It was a Saturday morning—a lazy day—when he walked into the general store. Sitting around the pot-bellied stove were seven or eight of the town’s local citizens.
The traveler spoke. "Gentlemen, could you direct me to the Okefenokee Swamp?" Some of the oldtimers looked at him like he was crazy. "You must be a stranger in these parts," they said. "I am. I’m from North Dakota," said the stranger. "In the Okefenokee Swamp are thousands of wild hogs." one old man explained. "A man who goes into the swamp by himself asks to die!" He lifted up his leg. "I lost half my leg here, to the pigs of the swamp." Another old fellow said, "Look at the cuts on me; look at my arm bit off!
Those pigs have been free since the Revolution, eating snakes and rooting out roots and fending for themselves for over a hundred years. They’re wild and they’re dangerous. You can’t trap them. No man dare go into the swamp by himself." Every man nodded his head in agreement.
The old trapper said, "Thank you so much for the warning. Now could you direct me to the swamp?" They said, "Well, yeah, it’s due south—straight down the road." But they begged the stranger not to go, because they knew he’d meet a terrible fate. He said, "Sell me ten sacks of corn, and help me load it in the wagon." And they did. Then the old trapper bid them farewell and drove on down the road. The townsfolk thought they’d never see him again.
Two weeks later the man came back. He pulled up to the general store, got down off the wagon, walked in and bought ten more sacks of corn. After loading it up he went back down the road toward the swamp.
Two weeks later he returned and again bought ten sacks of corn. This went on for a month. And then two months, and three. Every week or two the old trapper would come into town on a Saturday morning, load up ten sacks of corn, and drive off south into the swamp.
The stranger soon became a legend in the little village and the subject of much speculation. People wondered what kind of devil had possessed this man, that he could go into the Okefenokee by himself and not be consumed by the wild and free hogs.
One morning the man came into town as usual. Everyone thought he wanted more corn. He got off the wagon and went into the store where the usual group of men were gathered around the stove. He took off his gloves."Gentlemen," he said, "I need to hire about ten or fifteen wagons. I need twenty or thirty men. I have six thousand hogs out in the swamp, penned up, and they’re all hungry. I’ve got to get them to market right away."
"You’ve what in the swamp?" asked the storekeeper, incredulously. "I have six thousand hogs penned up. They haven’t eaten for two or three days, and they’ll starve if I don’t get back there to feed and take care of them." One of the oldtimers said, "You mean you’ve captured the wild hogs of the Okefenokee?" "That’s right."
"How did you do that? What did you do?" the men urged, breathlessly. One of them exclaimed, "But I lost my arm!" "I lost my brother!" cried another. "I lost my leg to those wild boars!" chimed a third. The trapper said, "Well, the first week I went in there they were wild all right. They hid in the undergrowth and wouldn’t come out. I dared not get off the wagon. So I spread corn along behind the wagon. Every day I’d spread a sack of corn. The old pigs would have nothing to do with it."
"But the younger pigs decided that it was easier to eat free corn than it was to root out roots and catch snakes. So the very young began to eat the corn first. I did this every day. Pretty soon, even the old pigs decided that it was easier to eat free corn. After all, they were all free; they were not penned up. They could run off in any direction they wanted at any time."
"The next thing was to get them used to eating in the same place all the time. So I selected a clearing, and I started putting the corn in the clearing. At first they wouldn’t come to the clearing. It was too far. It was too open. It was a nuisance to them."
"But the very young decided that it was easier to take the corn in the clearing than it was to root out roots and catch their own snakes. And not long thereafter, the older pigs also decided that it was easier to come to the clearing every day."
"And so the pigs learned to come to the clearing every day to get their free corn. They could still subsidize their diet with roots and snakes and whatever else they wanted. After all, they were all free. They could run in any direction at any time. There were no bounds upon them."
"The next step was to get them used to fence posts. So I put fence posts all the way around the clearing. I put them in the underbrush so that they wouldn’t get suspicious or upset. After all, they were just sticks sticking up out of the ground, like the trees and the brush. The corn was there every day. It was easy to walk in between the posts, get the corn, and walk back out."
"This went on for a week or two. Shortly they became very used to walking into the clearing, getting the free corn, and walking back out through the fence posts."
"The next step was to put one rail down at the bottom. I also left a few openings, so that the older, fatter pigs could walk through the openings and the younger pigs could easily jump over just one rail. After all, it was no real threat to their freedom or independence. They could always jump over the rail and flee in any direction at any time."
"Now I decided that I wouldn’t feed them every day. I began to feed them every other day. On the days I didn’t feed them the pigs still gathered in the clearing. They squealed, and they grunted, and they begged and pleaded with me to feed them. But I only fed them every other day. And I put a second rail around the posts."
"Now the pigs became more and more desperate for food. Because now they were no longer used to going out and digging their own roots and finding their own food. They now needed me. They needed my corn every other day. So I trained them that I would feed them every day if they came in through a gate. And I put up a third rail around the fence. But it was still no great threat to their freedom, because there were several gates and they could run in and out at will."
"Finally I put up the fourth rail. Then I closed all the gates but one, and I fed them very, very well. Yesterday I closed the last gate. And today I need you to help me take these pigs to market."
—end of story—
The Price of Free Corn
The allegory of the pigs has a serious moral lesson. This story is about federal money being used to bait, trap and enslave a once free and independent people. Federal welfare, in its myriad forms, has reduced not only individuals to a state of dependency. State and local governments are also on the fast track to elimination, due to their functions being subverted by the command and control structures of federal "revenue sharing" programs.
The bacon you save may be your own.
Thursday, January 31, 2008
Monday, January 28, 2008
MORE Pretty Ball Markers
Can't help to upload these beautiful ball markers pictures. Can purchase from shanodesigns.com.
Pretty Pretty Ball Marker
Well i seldom or don't use ball marker at all but hey i'm sure i will used it all the time if i have this .925 sterling silver and pink sapphire ball marker, 0.62 total carat weight..
Cost: $325 USD
www.shanodesigns.com
Beautiful Golf Shoes
UNUTZER - The Sparkle Iridescent Golf Shoe US$425
Was flipping through Golf for Women magazine and came across this beautiful silver sparkle shoes with removable soft spikes. So nice!! Any sponsors? :P
If i have the capital, i will open up a golf chic boutique for the chic and fun loving golfers.
Sunday, January 27, 2008
Singapore taxi drivers' earnings
I came upon an article on Shin Min Daily News few days ago commeting that taxi drivers earn $318 a day.. HAHA Should i believe?!
When i read on, it said calculation was based on the 24hr meter and the spokeperson was saying that of course, the earninges does not apply to all.
Huh?? Can one work 24 hrs non stop? How can they based on such measurements.. What if 15 days out the 30 days are raining? And so lucky that everyday can get the same no of passengers?
I can't find the article that i read few days ago, if not, i will haven scanned it, however while doing a search on the internet, found some articles and the latest article clarifying that the $318 was based on two shifts.
(With most taxis shared between two drivers, to defray costs and working hours, the average daily takings for each cabbie — before deducting rent and petrol costs — would work out to $159. Minus expenses, this would mean the average driver pockets about $85 a day.)
Alright, let's take an example that there is only one shift and the earnings before expenses is $159.
Estimates:
Rental - $90
Diesel - $ 40 (very conservative amount cause i think diesel now is $1.1-$1.3? And a full tank is like 80litres? lets say maybe 12 hrs drive don't used up 80 litres and this uncle don't turn on the air-conditioner and drive below 2rpm)
Total earnings after expenses= $159 - $90 - $40 = $29
$26 vs $85 as what they claim after expenses. Hmm.. where did i calculate wrongly? I didn't even include the makan money.
Alright.. Fine! fare increased probably does help the drivers lessen the burden from the increase in diesel price but i cant really stand that they always paint such rosy pictures that all these increase in fares has no disadvantages at all and keep sounding like it benefits the consumers by shortening the waiting time and drivers' earnings has been increase due to such wise decision making.
Friday • January 25, 2008
Ansley Ngansley@mediacorp.com.sg
IT was a figure that raised eyebrows and drew incredulous reactions from some taxi drivers as well as commuters — leading ComfortDelGro to yesterday clarify a mistaken impression.
On Tuesday, Transport Minister Raymond Lim had said in Parliament that a study of 5,000 taxis by the largest taxi operator here revealed that each generated $318 in daily average takings, up from $307 after last month’s fare hike.
On Internet forums, one netizen did the calculation that cabbies “earn $9,858 before expenses” each month, leaving some aghast, while others wondered if the data provided was correct.
And it was, but as ComfortDelGro has since clarified, $318 accounts for a taxi’s takings over two shifts.
With most taxis shared between two drivers, to defray costs and working hours, the average daily takings for each cabbie — before deducting rent and petrol costs — would work out to $159. Minus expenses, this would mean the average driver pockets about $85 a day.
“We have over 30,000 drivers and there will definitely be drivers who earn more than the average and those that earn less,” said ComfortDelGro spokeswoman Tammy Tan.
“It is still early days yet and we are still monitoring the situation closely to gauge demand.”
Even so, some taxi drivers that Today spoke to thought the estimate was a tad too optimistic.
“It’s tough to even make $70 a day now after we fork out rent and petrol,” said Mr Maurice Goh. “It didn’t use to be like this before the revision.”
Another driver, Mr Ong Eng Chuan, 72, insisted that his takings have dropped by as much as 20 per cent. “No matter what they say, people are still avoiding taking taxis, unless they really need to,” he said.
Another taxi operator, however, told Today it had conducted its own survey and interviews with cabbies, and the results were not too far from ComfortDelGro’s findings.
Premier Taxis’ managing director Lim Chong Boo, who has a fleet of 2,400 taxis, said: “The results are close to what the Minister revealed”.
While declining to be more precise, he noted: “We found out that some took home more after the revision, while some took home about the same as before but were making fewer trips.”
There were also those who made less money because they spent their time “sitting in coffeeshops”, said Mr Lim. “This is a time where you can separate the good drivers from the rest.”
Singapore’s second-largest cab company SMRT Taxis, with 3,000 vehicles on the road, declined to say if it had studied its drivers’ takings. But spokeswoman said the company frequently meets its cabbies in dialogue sessions and will continue to monitor the situation.
At least one taxi driver that Today spoke to, however, agreed he has benefited from the fare revision.
Mr Ho Kin Hwa, 49, who has been driving for five years, said his takings have improved by $10 to $15 a day, even as he is now making fewer trips.
The father of two drives a 15-hour full shift daily, for five days a week. On Saturdays and Sundays, he drives nine hours a day and shares the vehicle with a relief driver.
For Mr Ho, the math is simple: “It’s tiring but the more I drive, the more I earn.”
Jermyn ChowTue, Jan 22, 2008
The Straits Times
Drivers' earnings up, cab waiting times down
THE recent taxi fare hike may have just put a lid on a cab crunch which was threatening to boil over.If preliminary findings are anything to go by, Transport Minister Raymond Lim said the fare revision last month was 'effective' in meeting the increasing demand of taxis in the Central Business District (CBD).
Based on figures taken four weeks after the Dec 18 fare hike, Mr Lim said waiting times in the city area during peak hours have 'gone down substantially'.Mr Lim revealed that commuters in the city only have to wait for up to 6 minutes for a cab, significantly less than the 5 to 22 minutes before the fare hike.Waiting times at the Suntec City taxi stands - said to be the worst performing of the lot - have been cut drastically from 22 minutes to 4 minutes.
While some cabbies have complained that passengers are not flagging taxis, Mr Lim said their earnings have however gone up.Based on figures provided by ComfortDelGro, Singapore's biggest taxi operator, cabbies are pocketing about $11 more a day, earning about $318.
Mr Lim was responding to questions from MP for Tampines GRC Ms Irene Ng and MP for Tanjong Pagar GRC Mr Baey Yam Keng in Parliament.Mr Lim also allayed Ms Ng's fears, saying that the extra surcharges for cabs plying the city areas would not pinch the supply in the suburbs.The Transport Minister assured the House that the Land Transport Authority would continue to monitor the situation over the next 3 to 4 months and work with taxi operators and associations.
When i read on, it said calculation was based on the 24hr meter and the spokeperson was saying that of course, the earninges does not apply to all.
Huh?? Can one work 24 hrs non stop? How can they based on such measurements.. What if 15 days out the 30 days are raining? And so lucky that everyday can get the same no of passengers?
I can't find the article that i read few days ago, if not, i will haven scanned it, however while doing a search on the internet, found some articles and the latest article clarifying that the $318 was based on two shifts.
(With most taxis shared between two drivers, to defray costs and working hours, the average daily takings for each cabbie — before deducting rent and petrol costs — would work out to $159. Minus expenses, this would mean the average driver pockets about $85 a day.)
Alright, let's take an example that there is only one shift and the earnings before expenses is $159.
Estimates:
Rental - $90
Diesel - $ 40 (very conservative amount cause i think diesel now is $1.1-$1.3? And a full tank is like 80litres? lets say maybe 12 hrs drive don't used up 80 litres and this uncle don't turn on the air-conditioner and drive below 2rpm)
Total earnings after expenses= $159 - $90 - $40 = $29
$26 vs $85 as what they claim after expenses. Hmm.. where did i calculate wrongly? I didn't even include the makan money.
Alright.. Fine! fare increased probably does help the drivers lessen the burden from the increase in diesel price but i cant really stand that they always paint such rosy pictures that all these increase in fares has no disadvantages at all and keep sounding like it benefits the consumers by shortening the waiting time and drivers' earnings has been increase due to such wise decision making.
Friday • January 25, 2008
Ansley Ngansley@mediacorp.com.sg
IT was a figure that raised eyebrows and drew incredulous reactions from some taxi drivers as well as commuters — leading ComfortDelGro to yesterday clarify a mistaken impression.
On Tuesday, Transport Minister Raymond Lim had said in Parliament that a study of 5,000 taxis by the largest taxi operator here revealed that each generated $318 in daily average takings, up from $307 after last month’s fare hike.
On Internet forums, one netizen did the calculation that cabbies “earn $9,858 before expenses” each month, leaving some aghast, while others wondered if the data provided was correct.
And it was, but as ComfortDelGro has since clarified, $318 accounts for a taxi’s takings over two shifts.
With most taxis shared between two drivers, to defray costs and working hours, the average daily takings for each cabbie — before deducting rent and petrol costs — would work out to $159. Minus expenses, this would mean the average driver pockets about $85 a day.
“We have over 30,000 drivers and there will definitely be drivers who earn more than the average and those that earn less,” said ComfortDelGro spokeswoman Tammy Tan.
“It is still early days yet and we are still monitoring the situation closely to gauge demand.”
Even so, some taxi drivers that Today spoke to thought the estimate was a tad too optimistic.
“It’s tough to even make $70 a day now after we fork out rent and petrol,” said Mr Maurice Goh. “It didn’t use to be like this before the revision.”
Another driver, Mr Ong Eng Chuan, 72, insisted that his takings have dropped by as much as 20 per cent. “No matter what they say, people are still avoiding taking taxis, unless they really need to,” he said.
Another taxi operator, however, told Today it had conducted its own survey and interviews with cabbies, and the results were not too far from ComfortDelGro’s findings.
Premier Taxis’ managing director Lim Chong Boo, who has a fleet of 2,400 taxis, said: “The results are close to what the Minister revealed”.
While declining to be more precise, he noted: “We found out that some took home more after the revision, while some took home about the same as before but were making fewer trips.”
There were also those who made less money because they spent their time “sitting in coffeeshops”, said Mr Lim. “This is a time where you can separate the good drivers from the rest.”
Singapore’s second-largest cab company SMRT Taxis, with 3,000 vehicles on the road, declined to say if it had studied its drivers’ takings. But spokeswoman said the company frequently meets its cabbies in dialogue sessions and will continue to monitor the situation.
At least one taxi driver that Today spoke to, however, agreed he has benefited from the fare revision.
Mr Ho Kin Hwa, 49, who has been driving for five years, said his takings have improved by $10 to $15 a day, even as he is now making fewer trips.
The father of two drives a 15-hour full shift daily, for five days a week. On Saturdays and Sundays, he drives nine hours a day and shares the vehicle with a relief driver.
For Mr Ho, the math is simple: “It’s tiring but the more I drive, the more I earn.”
Jermyn ChowTue, Jan 22, 2008
The Straits Times
Drivers' earnings up, cab waiting times down
THE recent taxi fare hike may have just put a lid on a cab crunch which was threatening to boil over.If preliminary findings are anything to go by, Transport Minister Raymond Lim said the fare revision last month was 'effective' in meeting the increasing demand of taxis in the Central Business District (CBD).
Based on figures taken four weeks after the Dec 18 fare hike, Mr Lim said waiting times in the city area during peak hours have 'gone down substantially'.Mr Lim revealed that commuters in the city only have to wait for up to 6 minutes for a cab, significantly less than the 5 to 22 minutes before the fare hike.Waiting times at the Suntec City taxi stands - said to be the worst performing of the lot - have been cut drastically from 22 minutes to 4 minutes.
While some cabbies have complained that passengers are not flagging taxis, Mr Lim said their earnings have however gone up.Based on figures provided by ComfortDelGro, Singapore's biggest taxi operator, cabbies are pocketing about $11 more a day, earning about $318.
Mr Lim was responding to questions from MP for Tampines GRC Ms Irene Ng and MP for Tanjong Pagar GRC Mr Baey Yam Keng in Parliament.Mr Lim also allayed Ms Ng's fears, saying that the extra surcharges for cabs plying the city areas would not pinch the supply in the suburbs.The Transport Minister assured the House that the Land Transport Authority would continue to monitor the situation over the next 3 to 4 months and work with taxi operators and associations.
Taxi drivers earning $270 more after fare increased
My friend and I alight onto a Comfort Delgro cab at Orchard driven by a humorous uncle, and we were heading down to Mohammad Sultan and i decided to discuss abt the fare hike. (This is only the second time i took a cab after the hike increase, and i do feel for the taxi driver having a tougher life getting a passenger and also on my spending on cab, which leads to more walking, more MRT trips, less taxi rides.)
Me: Hi uncle, how's your business today?
Uncle: Aiya, ok lor..
Me: (Jokingly) Uncle, your company commented that your income increase $270 more per month leh.
Uncle: Haha, yeah lor, you dun know ah, drive taxi very good money wan.
(We were passing by the long taxi queues along Mohd Sultan and also then i think this cute uncle express his frustration in a humourous way)
Uncle: U see, U see, long taxi Q hor, but you don't get mistaken that we are waiting for customers. We park here cause we been earning too much for the day and we are deciding to take a rest or sleep.
Me: Haha, uncle, I'm really curious how do they come up with the $270 more amount.
Uncle: They probably interview only interview ONE out of 10000 drivers. Lucky him lar, earn so much. Uncle also earn alot ok, drive taxi very good ah, i also getting 12 months bonus leh, earn $10k - $20k a mth ah!
Me: Uncle, think can suggest to let the management people to become taxi drivers for few months hor, since u said can earn so muchhhh
(Laughing)
Uncle: But, dun know why i earn so much but still can't afford alot of things leh, cant buy bread ah, eat biscuit w Milo.
Me: Aiyo Milo expensive, biscuit with warm water lar...
Uncle: Yeah yeah, w warm water.. haha
After wishing uncle good luck and alight from the cab, i kind of feel that life is getting tougher.
Fri, Jan 04, 2008, The Straits Times
Demand for taxis falls since fare hike but cabbies' income unaffected
DEMAND for taxis has fallen since the fare hike three weeks ago, but at least one cab operator is confident cabbies' income has not suffered in spite of that.
Market leader ComfortDelGro Corp, which has about 65 per cent of the 23,900 taxis here, says preliminary data shows cabbies' earnings have actually risen.
'Our initial indications are that drivers' income has gone up by about 10-11 per cent since the fare changes were implemented on Dec 17,'' said ComfortDelGro spokesman Tammy Tan. 'The average driver takes back about $270 more per month.''
But Ms Tan said call bookings have fallen by over 20 per cent.
With long queues of taxis waiting for passengers in several parts of town, commuters are finding it less of a necessity to phone for a cab now.
Other operators are not certain how the fare hike - which has raised the cost of rides by at least 5 per cent - has affected cabbies' income.
Mr Johnny Harjantho, managing director of Smart Taxis, also said call bookings for Smart - which has about 800 cabs - have fallen by 'about 40 per cent''. He said this is not necessarily bad because the company has in the past found it hard to cater to all bookings.
SMRT Taxis, which has over 3,000 cabs, claimed its call bookings had shrunk by 'about 100 a day' (or an estimated 5 per cent), but said it had no indication of how cabbies' incomes were affected.
Premier Taxis, with about 2,200 cabs, said its call bookings have been 'pretty bad' since the fare hike.
Companies expect business to pick up soon as the new work and school year gets into full swing. 'The real test is what demand will be like after Chinese New Year,'' said Mr Harjantho.
Senior transport analyst Lim Jit Soon concurs. 'Frankly, it is too early to tell. People may be staying away initially, which is a knee-jerk reaction. Then they might come back.''
But he said even if the demand does not pick up, 'it's better for the industry as there will be fewer complaints about not being to get a taxi''.
Me: Hi uncle, how's your business today?
Uncle: Aiya, ok lor..
Me: (Jokingly) Uncle, your company commented that your income increase $270 more per month leh.
Uncle: Haha, yeah lor, you dun know ah, drive taxi very good money wan.
(We were passing by the long taxi queues along Mohd Sultan and also then i think this cute uncle express his frustration in a humourous way)
Uncle: U see, U see, long taxi Q hor, but you don't get mistaken that we are waiting for customers. We park here cause we been earning too much for the day and we are deciding to take a rest or sleep.
Me: Haha, uncle, I'm really curious how do they come up with the $270 more amount.
Uncle: They probably interview only interview ONE out of 10000 drivers. Lucky him lar, earn so much. Uncle also earn alot ok, drive taxi very good ah, i also getting 12 months bonus leh, earn $10k - $20k a mth ah!
Me: Uncle, think can suggest to let the management people to become taxi drivers for few months hor, since u said can earn so muchhhh
(Laughing)
Uncle: But, dun know why i earn so much but still can't afford alot of things leh, cant buy bread ah, eat biscuit w Milo.
Me: Aiyo Milo expensive, biscuit with warm water lar...
Uncle: Yeah yeah, w warm water.. haha
After wishing uncle good luck and alight from the cab, i kind of feel that life is getting tougher.
Fri, Jan 04, 2008, The Straits Times
Demand for taxis falls since fare hike but cabbies' income unaffected
DEMAND for taxis has fallen since the fare hike three weeks ago, but at least one cab operator is confident cabbies' income has not suffered in spite of that.
Market leader ComfortDelGro Corp, which has about 65 per cent of the 23,900 taxis here, says preliminary data shows cabbies' earnings have actually risen.
'Our initial indications are that drivers' income has gone up by about 10-11 per cent since the fare changes were implemented on Dec 17,'' said ComfortDelGro spokesman Tammy Tan. 'The average driver takes back about $270 more per month.''
But Ms Tan said call bookings have fallen by over 20 per cent.
With long queues of taxis waiting for passengers in several parts of town, commuters are finding it less of a necessity to phone for a cab now.
Other operators are not certain how the fare hike - which has raised the cost of rides by at least 5 per cent - has affected cabbies' income.
Mr Johnny Harjantho, managing director of Smart Taxis, also said call bookings for Smart - which has about 800 cabs - have fallen by 'about 40 per cent''. He said this is not necessarily bad because the company has in the past found it hard to cater to all bookings.
SMRT Taxis, which has over 3,000 cabs, claimed its call bookings had shrunk by 'about 100 a day' (or an estimated 5 per cent), but said it had no indication of how cabbies' incomes were affected.
Premier Taxis, with about 2,200 cabs, said its call bookings have been 'pretty bad' since the fare hike.
Companies expect business to pick up soon as the new work and school year gets into full swing. 'The real test is what demand will be like after Chinese New Year,'' said Mr Harjantho.
Senior transport analyst Lim Jit Soon concurs. 'Frankly, it is too early to tell. People may be staying away initially, which is a knee-jerk reaction. Then they might come back.''
But he said even if the demand does not pick up, 'it's better for the industry as there will be fewer complaints about not being to get a taxi''.
Tuesday, January 8, 2008
Welcome back! My Maruman Verity Golf Clubs
Heh, pull out the deal last minute cause the day when we suppose to meet the buyer, i went to Green Fairway to try out the Maruman Nano and Metabio clubs.
Was quite lucky to meet Ben at the Transview Shop, he was helpful and bring out Maruman Nano and Metabio for me to try.
Metabio seems to be better than Nano though Nano is more expensive and it comes with a titainum face, but i think it's because Metabio has a demo club whereas Nano when given me to try was a new club, thus they have to use masking tape to tap at the face and the grip, hence i feel that i can't really have a good feel of the club.
Ben passed me another third club, Ena for me to try. As i can't really make up my mind, Des suggest to buy more balls and borrow the clubs from Transview for a while. Think its a better idea as i also feel bad using up their balls and they are kind of like standing there waiting for my answer. Ben helped us to buy some balls and pass me the new Verity VIP iron and driver, which is the current model i have but mine was the much older model.
Guess what, i thought maybe getting a new club can make my ball go for a further distance, but it does not. It's me...however how i hit, it just lands at the same spot or worse, shorter distance than my current set.
Finally, decide to 'save money' to use back my own set though i find the new Maruman Verity and Ena are not bad. Ena only have the irons and cost $1200, means i have to also find Driver, Woods and putter, which means i got to spend more. Maruman Verity comes in a full set and also cost about $1200 so means it's a better deal. Anyway... since both doesn't add any more distance, i think i just stick to my current second hand model which i got it at only $300 a year plus ago.
The comforting thing was i got a new driver which cost only $99.
Was quite lucky to meet Ben at the Transview Shop, he was helpful and bring out Maruman Nano and Metabio for me to try.
Metabio seems to be better than Nano though Nano is more expensive and it comes with a titainum face, but i think it's because Metabio has a demo club whereas Nano when given me to try was a new club, thus they have to use masking tape to tap at the face and the grip, hence i feel that i can't really have a good feel of the club.
Ben passed me another third club, Ena for me to try. As i can't really make up my mind, Des suggest to buy more balls and borrow the clubs from Transview for a while. Think its a better idea as i also feel bad using up their balls and they are kind of like standing there waiting for my answer. Ben helped us to buy some balls and pass me the new Verity VIP iron and driver, which is the current model i have but mine was the much older model.
Guess what, i thought maybe getting a new club can make my ball go for a further distance, but it does not. It's me...however how i hit, it just lands at the same spot or worse, shorter distance than my current set.
Finally, decide to 'save money' to use back my own set though i find the new Maruman Verity and Ena are not bad. Ena only have the irons and cost $1200, means i have to also find Driver, Woods and putter, which means i got to spend more. Maruman Verity comes in a full set and also cost about $1200 so means it's a better deal. Anyway... since both doesn't add any more distance, i think i just stick to my current second hand model which i got it at only $300 a year plus ago.
The comforting thing was i got a new driver which cost only $99.
Monday, January 7, 2008
The best stocks for 2008
We've found ten stocks that will thrive despite - or even benefit from - the troubles facing the markets next year.
By Jon Birger, senior writer
For the record, our past Investor's Guide selections have excelled. Our ten stock picks for 2006 returned an average of 26% that year, vs.13% for the S&P. And through Dec. 3, our ten stocks for 2007 have outpaced the S&P 14% to 6%.
Now on to Fortune's best investments for 2008:
Annaly Capital Management
Annaly is a hedge fund disguised as a real estate investment trust that makes its money by investing in mortgage-backed securities. Sounds like a prescription for disaster, right? In reality, there's probably no company better positioned to profit from the ongoing mortgage crisis than this one.
What distinguishes Annaly (NLY) from its out-of-favor Wall Street peers is the fact that it doesn't take credit risk, only interest-rate risk. It buys mortgage-backed securities issued by government-sponsored enterprises like Fannie Mae and Freddie Mac; in other words, it has no exposure to subprime mortgages.
The securities Annaly owns are all guaranteed by Fannie, Freddie, or Ginnie Mae, which means they're implicitly guaranteed by the U.S. Treasury. Yes, there have been troubles at Fannie and Freddie, but trust us when we say that the value of Annaly stock would be the least of your concerns if the federal government ever allowed Fannie or Freddie to default.
What makes Annaly's business model so compelling right now is the widening gap between its borrowing costs (which are sinking as the Federal Reserve cuts rates and banks offer Annaly better borrowing terms) and the yields on the mortgage securities it holds (which haven't fallen nearly as far). In the third quarter, that interest-rate spread more than doubled, from 0.32% to 0.67%. A third of a percentage point may not sound like a lot, but it's huge when you've got a $45 billion portfolio.
This widening spread is fueling massive earnings growth - 57% in the third quarter and a projected 53% in 2008, according to analyst estimates. Schneider Value Fund portfolio manager Arnie Schneider thinks more Fed rate cuts are coming, which would juice Annaly's earnings even more.
Best of all, Annaly isn't priced like a growth stock, as it boasts a 5.2% dividend yield and trades at a mere nine times estimated 2008 earnings. Says Schneider: "It's the perfect recessionary stock."
Berkshire Hathaway
Let's dispense with the obvious. Warren Buffett, Berkshire Hathaway's illustrious chairman and CEO, is 77 years old. The line of succession remains murky. Berkshire's insurance businesses have benefited from unusually benign weather- namely, the dearth of U.S. hurricanes. And Berkshire stock has already risen 22% since August.
So why are we recommending Berkshire (BRK.B) now? Simple. Warren Buffett knows how to exploit panics. He bought 5% of American Express in 1963, following a financial crisis (involving vegetable oil, of all things) that had cut AmEx's stock price in half. He started buying up shares of Geico in 1976 when claim-cost miscalculations left the auto insurer teetering near bankruptcy. And he picked the pocket of financially troubled energy company Dynegy in 2002, paying $928 million for a natural gas pipeline that Dynegy had bought for $1.5 billion only months earlier.
With $40 billion in cash idling on Berkshire's balance sheet at the end of the third quarter, Buffett looks ready to plunge in should a financial company, bond insurer, or homebuilder with attractive land assets need a white knight. (Indeed, in early December, Buffett bought $2.2 billion in high-yield bonds from Texas power company TXU at a discount.)
"He's going to wait for the fat pitch and pounce," says ace value fund manager Jean-Marie Eveillard, explaining why Berkshire remains the biggest stock holding in his First Eagle Global fund, even though he believes Berkshire's market cap exceeds the value of its businesses. "The current circumstances in the economy and possibly in financial markets are exactly the kind of environment where Buffett will be able to see and seize opportunities."
Dick's Sporting Goods
Retail is tough even in the best of times. Still, if you look at the histories of America's retail category killers- Best Buy, Home Depot, Costco, Staples, etc.- there is always an inflection point at which the chain's geographic reach has not yet caught up with the proven success of its business model.
That's where Dick's Sporting Goods (DKS) is today, and it's why we think now is the time to invest in this emerging category killer. Though well established in the Midwest and Northeast - the company has grown from 61 stores to 341 in the past decade - Dick's has relatively few outposts in Southern and Western states like Florida and Texas and none in California.
Over the next seven years Dick's plans to more than double its store count, to 800. Another plus: It faces competition mostly from mom-and-pops; the top five U.S. sporting goods retailers account for only 17% of sales.
Dick's emphasizes a store-within-a-store sales approach. Each department has its own look and staff, which appeals to the enthusiast who purchases a lot of sporting goods. Then there is its innovative merchandising. Dick's has been phasing out its no-name, private-label apparel and equipment in favor of deals in which Reebok and Nike put their logos on products sold exclusively at Dick's (a strategy that analysts have dubbed "private brand" rather than "private label").
So now, for example, Nike swooshes can be found on Dick's hats, gloves, and outerwear. "What private brand does," explains Michael Baron, an analyst with Baron Growth fund, which owns 3% of outstanding Dick's shares, "is allow them to charge branded-product prices but with margins seven to eight percentage points higher." Through the first nine months of 2007, Dick's earnings per share rose 73% on sales growth of 28%. Another key barometer: Same-store sales rose at a terrific 8.6% clip in the third quarter.
What happens if the economy tanks? Industry experts say that sporting goods have proven resilient in the past. Indeed, in 2008, analysts expect a 19% increase in earnings per share. Says fund manager Thomas Ognar, who has 3% of his Wells Fargo Advantage Growth fund in Dick's: "People cut back on a lot of other things before not buying cleats for their kids."
Electronic Arts
There's a reason you won't find any major technology companies among our 2008 stock picks. More than 70% of tech purchases are made by businesses, according to tech tracker IDC, and spending is sagging. Cisco CEO John Chambers recently warned of "dramatic decreases" in orders from banks.
Still, if there's one tech niche that should be immune to a slowdown, it's videogames. Fueled by the success of the Nintendo Wii and Microsoft Xbox 360 consoles, videogame sales rose 39% in October, according to the NPD Group, after a 64% rise in September. "I can't tell you if corporate spending falls off a cliff or hangs in there in 2008," says Eric Fischman, portfolio manager of the MFS Emerging Growth fund. "But I can tell you with a high degree of confidence that videogame sales are going to be up."
Fischman's top game pick is a turnaround story - Electronic Arts (ERTS). The stock has stagnated since 2004, with earnings falling and critics charging that EA was too reliant on aging franchises like Madden NFL. But things started to look up in early 2007 when ex-president John Riccitiello returned as CEO after a three-year stint with a venture capital firm.
Riccitiello reorganized EA into four divisions (trimming 4% of the workforce in the process) and spent $860 million to acquire BioWare and Pandemic, two smaller game studios known for producing the kind of innovative action-adventure and role-playing games (such as BioWare's hit Baldur's Gate) long missing from EA's lineup. "By themselves, BioWare and Pandemic won't make us market leaders in either action-adventure or RPG, but it takes us from nowhere to being in the top two or three," says Riccitiello.
EA has also worked hard at playing catch-up in the red-hot Wii market. It's now the No. 2 developer of Wii games, behind only Nintendo. The result: Analysts expect earnings to rise 76% next year. "Compared to where they were a year ago," says Fischman, "it's like night and day."
Genentech
Once the darlings of biotech investors, Genentech shares have been in a prolonged slump since topping out at $96 in 2005. But the company itself remains a standout, and recent news provides the opportunity to buy the shares at a discount.
On Dec. 5, the stock was pounded, plunging 10% in a few hours. The reason: An FDA advisory panel voted against expanding the use of Avastin - a blockbuster Genentech (DNA) drug already approved to treat colon and lung cancer- for breast cancer.
The market overreacted. The advisory panel didn't dispute the core claim that Avastin is effective in fighting breast cancer, notes Sanford C. Bernstein & Co. analyst Geoffrey Porges. "What you heard from the panel," says Porges, "is not that this drug doesn't work in this indication but that we had an imperfect study, one with a lot of missing data." (As it happens, that study was enough to persuade the European authorities to endorse Avastin for breast cancer.)
Genentech has two Avastin studies in the works that are more comprehensive and that Porges believes will help it win FDA approval, eventually leading to a doubling of Avastin annual sales, now $2.5 billion, by 2011.
He arrives at that estimate via a recent Bernstein survey of 108 oncologists. The survey suggests that 80% of oncologists are already prescribing Avastin to treat some later-stage breast cancer, and that that percentage would rise to nearly 100% once there is FDA approval (which Porges now expects to come in early 2009).
The survey also indicates doctors' utilization of Avastin will double, from between 15% and 20% of their breast cancer patients today to between 35% and 40%. Says Porges: "I'd say the valuation upside is even more compelling now than it was before, though you might have to wait until the second half of next year to get that return."
Even with the FDA setback, Genentech is still expected to grow earnings 18% next year. And it's not as if Avastin is the only thing Genentech has going for it. There are early indications that its cancer drug Rituxin holds hope for treating autoimmune diseases like multiple sclerosis and lupus.
Tom Marsico, the growth fund manager whose eponymous firm owns 3.5% of the biotech's shares, is excited about Herceptin - considered a miracle drug for certain types of breast cancers - and Lucentis, which treats macular degeneration and might one day be used for vision loss related to diabetes. "What you're really investing in here," says Marsico, "is the premier pharmaceutical company in the world as far as innovation is concerned."
General Electric
CEO Jeffrey Immelt has been leading a successful makeover at General Electric, though you wouldn't know it from GE's flaccid stock price. Our bet is that in a stormy market investors will gravitate toward the ultimate blue chip and finally give Immelt the credit he deserves.
Since replacing Jack Welch six years ago, Immelt has sold off laggard operations such as insurance and plastics, putting more emphasis on manufacturing and infrastructure businesses. The timing has been excellent. Though achieving double-digit earnings growth will always be a challenge for a company so big and diversified, GE (GE, Fortune 500) seems well positioned to slough off whatever economic challenges may exist in the U.S.
The industrial and infrastructure businesses - which include aircraft engines, locomotives, water-treatment and desalinization plants, green energy (wind turbines and solar panels), and not-so-green energy (coal power turbines and coal gasification) - have all been reaping the rewards of the global economic boom. Half of GE sales now come from overseas.
The infrastructure divisions now account for 34% of total GE revenues, and they're growing at a 17% annualized rate. Better yet, from a shareholder perspective, these businesses are exactly the kind of "late cycle" performers that are awarded higher valuations when economic growth slows.
"Power, water, wind - all those infrastructure businesses are coming together a lot faster than anybody anticipated," says Bob Turner, founder and chief investment officer of Turner Investment Partners, a growth-fund shop with some $27 billion under management (including 8.6 million shares of GE as of Sept. 30).
About half of GE's earnings come from lending and investing, a fact that has weighed on the stock. But Immelt- who's quick to point out that GE has no exposure to troubled assets like collateralized debt obligations (CDOs) - sees GE's financial services exposure as an asset in today's market.
"These are classically the times where our financial service businesses do very well," he says. "This is a great time to be triple-A rated. We have a good cost of funds and availability of funds, and there are things that might have been trading for a 10% or 15% return six months ago that are going to be a 25% to 30% return today."
Goldman Sachs analyst Deane Dray argues that GE's business mix merits a P/E of 17 - a 10% premium to the S&P 500 and up from 15 today. Based on Dray's 2008 earnings estimate of $2.45 a share, a 17 P/E translates to a stock price of approximately $45- which also happens to be Turner's GE target. "You've got the best company in the world growing earnings 12% and a stock with a 3% dividend yield," says Turner. "You could be looking at a 25% return."
Jacobs Engineering
Normally we wouldn't recommend a stock that has doubled since the start of '07. But as we said, in a slowing economy, you want to own companies that can demonstrate superior earnings growth regardless of what's happening around them. Jacobs Engineering is such an enterprise.
Jacobs (JEC, Fortune 500) is one of the fastest growers in an exploding industry: construction and engineering. The company is hired to design and build oil refineries, biodiesel plants, hospitals, bridges, and water-treatment centers.
"These are the strongest markets we've seen in 30 years," says Jacobs CEO Craig Martin. Earnings jumped 39% in the fourth quarter of the fiscal year ended Sept. 30. That makes the company's 26 P/E look reasonable, especially since Jacobs should maintain a 35%-plus growth rate into 2008: It has a $13.6 billion backlog of orders (up 39% from the year before).
"From a global standpoint, the amount of infrastructure spending that's going to occur in coming years is staggering," says David Scott, manager of the Chase Mid-Cap Growth fund, which counts Jacobs as a top-five holding. "As the premier company in its field, Jacobs sits squarely in the middle of that boom."
Merrill Lynch
Question: What do you call it when an $8 billion asset writedown translates into a $30 billion loss in market cap? Answer: an overreaction. Yes, Merrill's shares deserved a punishment for the firm's mortgage-related bungling. But the public flogging has far exceeded the transgression, which is why smart investors should buy this stock before everyone else comes to their senses.
Even if Merrill (MER, Fortune 500) writes down another $6 billion in the fourth quarter, as S&P analyst Jeff Sexton recently predicted it will, stocks are valued on future earnings. There's little reason to believe this will have a big effect on 2008 profits, which analysts estimate at $7.68 a share. That means Merrill is trading at a mere eight times 2008 earnings (with a 2.4% dividend yield).
Why are we so confident that the mortgage debacle won't bleed into 2008? Two reasons. The first is Merrill's new CEO, John Thain, formerly CEO of the New York Stock Exchange and Goldman Sachs co-president. Thain used to run the mortgage desk at Goldman, and it's hard to believe he would have taken the Merrill job if the problems were worse than they appeared to be. "You know he did his due diligence," says Anton Schutz, manager of the Burnham Financial Services fund.
The second reason is that financial panics are almost always overblown. In the case of CDOs and other mortgage-backed assets, the problem for Merrill, et. al was not that the mortgages underlying the securities all went bad.
What happened is that the secondary market for these securities evaporated, forcing the institutions holding them to mark down their value. When this market bounces back, as surely will happen, Merrill stands to post sizable gains as it writes up the same assets it was forced to write down. "I've seen my share of credit crises," says Larry Puglia, manager of the T. Rowe Price Blue Chip Growth fund and himself a former bank analyst. "And absolutely that could be the case."
Petrobras
We're on record as saying that $95 a barrel is not a sustainable price for oil. Yet The Hottest Fund Manager in America - a.k.a. CGM's Ken Heebner- now has us hedging our bets.
For those unfamiliar with Heebner, understand that his stock picking over the past eight years has been genius (as it has been for much of his 30-year career). He made a bundle short-selling tech and telecom stocks in 2000. He bet big on homebuilders in 2001 only to get out just before they crashed. He plowed his homebuilder profits into energy stocks in 2005 and eventually doubled down on commodities with a big bet on copper.
The result: His CGM Focus fund was up 66% through early December - while juicing his returns with short positions on Indymac and Countrywide Financial, mortgage lenders whose stocks have been circling the drain.
With that kind of track record, we listened when Heebner laid out an argument that $100 oil is not only coming but will be here to stay. "There is still strong growth in Latin America, China, India, and a host of smaller countries like Poland and Thailand," he says.
That means a need for some 1.5 million more barrels of oil a day. The problem, Heebner explains, isn't just finding another 1.5 million barrels; it's finding them even as some of the most productive oil fields in the world are declining.
Heebner, who is a fanatical researcher, questions the conventional view that OPEC has enough spare capacity to fill much of that void. Heebner cites one Saudi Arabian source whom he declines to name who asserts that output at Ghawa r- a legendary Saudi field that produces about 6% of the world's oil - is declining at 9% a year. (The Saudi authorities vociferously dispute this.)
"So I'm connecting all the dots," Heebner says. "It's a tight situation to start with, but add to that a loss of a million barrels a day for the Saudis, and suddenly it gets very interesting on the upside for the price of oil."
That brings us to Petrobras (PBR), Brazil's largest oil company and the stock Heebner thinks is the best way to play oil right now. With petroleum prices so high, a big risk for oil companies is that host countries will demand a bigger and bigger share of the profits in the form of taxes or royalties. "One way you can avoid this," says Heebner, "is if the government owns half the company you've invested in. That's Petrobras."
Petrobras is cheap enough, at 16 times earnings, that it can be a winning investment even if Heebner is proven wrong about $100 oil. The company just announced a huge find offshore from Rio de Janeiro, a field said to have up to eight billion barrels of recoverable oil. (See correction.)
St. Joe
We have no idea whether the Florida real estate market has hit rock bottom. What we do know is that eventually it will bounce back. Demographics demand it, with the Census Bureau projecting a 33% population increase for Florida- the equivalent of six million new residents- between now and 2020.
And when Florida real estate does rebound, investors will be kicking themselves for not recognizing today's $28 stock price for St. Joe Co (JOE).- Florida's largest private landowner - as a rare opportunity. The stock traded as high as $82 in July 2005.
At $28, says Third Avenue Real Estate Value fund manager Michael Winer, whose firm owns 20% of St. Joe shares, "this is a fire-sale price that basically assumes the Florida market will never come back."
The way to value St. Joe isn't on its current earnings (which are awful) but on its land holdings. The company owns 710,000 acres of Florida real estate, mostly in the Panhandle region, 310,000 of which are situated within ten miles of the coast. The stock market is now valuing St. Joe's property at the equivalent of $3,700 an acre. Winer says a "fire-sale value" would be $5,000 an acre. Keefe Bruyette & Woods analyst Sheila McGrath puts the fair value at $7,200, "at least."
Moreover, St. Joe's Panhandle stronghold looks as though it will recover faster than the overall Florida market. In Panama City, for example, the number of home sales increased 4% between October 2006 and October 2007, vs. a 29% decline statewide.
McGrath sees another bullish indicator in the just-begun construction of a new airport in Panama City that, unlike the old one, will support commercial jets. The airport will give a huge boost to the local economy, she contends, much as the opening of Fort Myers's new airport in 1983 boosted real estate and tourism in southwest Florida. "In the short term, there is some headline risk," she says. "But all in all, I think St. Joe is ridiculously cheap."
By Jon Birger, senior writer
For the record, our past Investor's Guide selections have excelled. Our ten stock picks for 2006 returned an average of 26% that year, vs.13% for the S&P. And through Dec. 3, our ten stocks for 2007 have outpaced the S&P 14% to 6%.
Now on to Fortune's best investments for 2008:
Annaly Capital Management
Annaly is a hedge fund disguised as a real estate investment trust that makes its money by investing in mortgage-backed securities. Sounds like a prescription for disaster, right? In reality, there's probably no company better positioned to profit from the ongoing mortgage crisis than this one.
What distinguishes Annaly (NLY) from its out-of-favor Wall Street peers is the fact that it doesn't take credit risk, only interest-rate risk. It buys mortgage-backed securities issued by government-sponsored enterprises like Fannie Mae and Freddie Mac; in other words, it has no exposure to subprime mortgages.
The securities Annaly owns are all guaranteed by Fannie, Freddie, or Ginnie Mae, which means they're implicitly guaranteed by the U.S. Treasury. Yes, there have been troubles at Fannie and Freddie, but trust us when we say that the value of Annaly stock would be the least of your concerns if the federal government ever allowed Fannie or Freddie to default.
What makes Annaly's business model so compelling right now is the widening gap between its borrowing costs (which are sinking as the Federal Reserve cuts rates and banks offer Annaly better borrowing terms) and the yields on the mortgage securities it holds (which haven't fallen nearly as far). In the third quarter, that interest-rate spread more than doubled, from 0.32% to 0.67%. A third of a percentage point may not sound like a lot, but it's huge when you've got a $45 billion portfolio.
This widening spread is fueling massive earnings growth - 57% in the third quarter and a projected 53% in 2008, according to analyst estimates. Schneider Value Fund portfolio manager Arnie Schneider thinks more Fed rate cuts are coming, which would juice Annaly's earnings even more.
Best of all, Annaly isn't priced like a growth stock, as it boasts a 5.2% dividend yield and trades at a mere nine times estimated 2008 earnings. Says Schneider: "It's the perfect recessionary stock."
Berkshire Hathaway
Let's dispense with the obvious. Warren Buffett, Berkshire Hathaway's illustrious chairman and CEO, is 77 years old. The line of succession remains murky. Berkshire's insurance businesses have benefited from unusually benign weather- namely, the dearth of U.S. hurricanes. And Berkshire stock has already risen 22% since August.
So why are we recommending Berkshire (BRK.B) now? Simple. Warren Buffett knows how to exploit panics. He bought 5% of American Express in 1963, following a financial crisis (involving vegetable oil, of all things) that had cut AmEx's stock price in half. He started buying up shares of Geico in 1976 when claim-cost miscalculations left the auto insurer teetering near bankruptcy. And he picked the pocket of financially troubled energy company Dynegy in 2002, paying $928 million for a natural gas pipeline that Dynegy had bought for $1.5 billion only months earlier.
With $40 billion in cash idling on Berkshire's balance sheet at the end of the third quarter, Buffett looks ready to plunge in should a financial company, bond insurer, or homebuilder with attractive land assets need a white knight. (Indeed, in early December, Buffett bought $2.2 billion in high-yield bonds from Texas power company TXU at a discount.)
"He's going to wait for the fat pitch and pounce," says ace value fund manager Jean-Marie Eveillard, explaining why Berkshire remains the biggest stock holding in his First Eagle Global fund, even though he believes Berkshire's market cap exceeds the value of its businesses. "The current circumstances in the economy and possibly in financial markets are exactly the kind of environment where Buffett will be able to see and seize opportunities."
Dick's Sporting Goods
Retail is tough even in the best of times. Still, if you look at the histories of America's retail category killers- Best Buy, Home Depot, Costco, Staples, etc.- there is always an inflection point at which the chain's geographic reach has not yet caught up with the proven success of its business model.
That's where Dick's Sporting Goods (DKS) is today, and it's why we think now is the time to invest in this emerging category killer. Though well established in the Midwest and Northeast - the company has grown from 61 stores to 341 in the past decade - Dick's has relatively few outposts in Southern and Western states like Florida and Texas and none in California.
Over the next seven years Dick's plans to more than double its store count, to 800. Another plus: It faces competition mostly from mom-and-pops; the top five U.S. sporting goods retailers account for only 17% of sales.
Dick's emphasizes a store-within-a-store sales approach. Each department has its own look and staff, which appeals to the enthusiast who purchases a lot of sporting goods. Then there is its innovative merchandising. Dick's has been phasing out its no-name, private-label apparel and equipment in favor of deals in which Reebok and Nike put their logos on products sold exclusively at Dick's (a strategy that analysts have dubbed "private brand" rather than "private label").
So now, for example, Nike swooshes can be found on Dick's hats, gloves, and outerwear. "What private brand does," explains Michael Baron, an analyst with Baron Growth fund, which owns 3% of outstanding Dick's shares, "is allow them to charge branded-product prices but with margins seven to eight percentage points higher." Through the first nine months of 2007, Dick's earnings per share rose 73% on sales growth of 28%. Another key barometer: Same-store sales rose at a terrific 8.6% clip in the third quarter.
What happens if the economy tanks? Industry experts say that sporting goods have proven resilient in the past. Indeed, in 2008, analysts expect a 19% increase in earnings per share. Says fund manager Thomas Ognar, who has 3% of his Wells Fargo Advantage Growth fund in Dick's: "People cut back on a lot of other things before not buying cleats for their kids."
Electronic Arts
There's a reason you won't find any major technology companies among our 2008 stock picks. More than 70% of tech purchases are made by businesses, according to tech tracker IDC, and spending is sagging. Cisco CEO John Chambers recently warned of "dramatic decreases" in orders from banks.
Still, if there's one tech niche that should be immune to a slowdown, it's videogames. Fueled by the success of the Nintendo Wii and Microsoft Xbox 360 consoles, videogame sales rose 39% in October, according to the NPD Group, after a 64% rise in September. "I can't tell you if corporate spending falls off a cliff or hangs in there in 2008," says Eric Fischman, portfolio manager of the MFS Emerging Growth fund. "But I can tell you with a high degree of confidence that videogame sales are going to be up."
Fischman's top game pick is a turnaround story - Electronic Arts (ERTS). The stock has stagnated since 2004, with earnings falling and critics charging that EA was too reliant on aging franchises like Madden NFL. But things started to look up in early 2007 when ex-president John Riccitiello returned as CEO after a three-year stint with a venture capital firm.
Riccitiello reorganized EA into four divisions (trimming 4% of the workforce in the process) and spent $860 million to acquire BioWare and Pandemic, two smaller game studios known for producing the kind of innovative action-adventure and role-playing games (such as BioWare's hit Baldur's Gate) long missing from EA's lineup. "By themselves, BioWare and Pandemic won't make us market leaders in either action-adventure or RPG, but it takes us from nowhere to being in the top two or three," says Riccitiello.
EA has also worked hard at playing catch-up in the red-hot Wii market. It's now the No. 2 developer of Wii games, behind only Nintendo. The result: Analysts expect earnings to rise 76% next year. "Compared to where they were a year ago," says Fischman, "it's like night and day."
Genentech
Once the darlings of biotech investors, Genentech shares have been in a prolonged slump since topping out at $96 in 2005. But the company itself remains a standout, and recent news provides the opportunity to buy the shares at a discount.
On Dec. 5, the stock was pounded, plunging 10% in a few hours. The reason: An FDA advisory panel voted against expanding the use of Avastin - a blockbuster Genentech (DNA) drug already approved to treat colon and lung cancer- for breast cancer.
The market overreacted. The advisory panel didn't dispute the core claim that Avastin is effective in fighting breast cancer, notes Sanford C. Bernstein & Co. analyst Geoffrey Porges. "What you heard from the panel," says Porges, "is not that this drug doesn't work in this indication but that we had an imperfect study, one with a lot of missing data." (As it happens, that study was enough to persuade the European authorities to endorse Avastin for breast cancer.)
Genentech has two Avastin studies in the works that are more comprehensive and that Porges believes will help it win FDA approval, eventually leading to a doubling of Avastin annual sales, now $2.5 billion, by 2011.
He arrives at that estimate via a recent Bernstein survey of 108 oncologists. The survey suggests that 80% of oncologists are already prescribing Avastin to treat some later-stage breast cancer, and that that percentage would rise to nearly 100% once there is FDA approval (which Porges now expects to come in early 2009).
The survey also indicates doctors' utilization of Avastin will double, from between 15% and 20% of their breast cancer patients today to between 35% and 40%. Says Porges: "I'd say the valuation upside is even more compelling now than it was before, though you might have to wait until the second half of next year to get that return."
Even with the FDA setback, Genentech is still expected to grow earnings 18% next year. And it's not as if Avastin is the only thing Genentech has going for it. There are early indications that its cancer drug Rituxin holds hope for treating autoimmune diseases like multiple sclerosis and lupus.
Tom Marsico, the growth fund manager whose eponymous firm owns 3.5% of the biotech's shares, is excited about Herceptin - considered a miracle drug for certain types of breast cancers - and Lucentis, which treats macular degeneration and might one day be used for vision loss related to diabetes. "What you're really investing in here," says Marsico, "is the premier pharmaceutical company in the world as far as innovation is concerned."
General Electric
CEO Jeffrey Immelt has been leading a successful makeover at General Electric, though you wouldn't know it from GE's flaccid stock price. Our bet is that in a stormy market investors will gravitate toward the ultimate blue chip and finally give Immelt the credit he deserves.
Since replacing Jack Welch six years ago, Immelt has sold off laggard operations such as insurance and plastics, putting more emphasis on manufacturing and infrastructure businesses. The timing has been excellent. Though achieving double-digit earnings growth will always be a challenge for a company so big and diversified, GE (GE, Fortune 500) seems well positioned to slough off whatever economic challenges may exist in the U.S.
The industrial and infrastructure businesses - which include aircraft engines, locomotives, water-treatment and desalinization plants, green energy (wind turbines and solar panels), and not-so-green energy (coal power turbines and coal gasification) - have all been reaping the rewards of the global economic boom. Half of GE sales now come from overseas.
The infrastructure divisions now account for 34% of total GE revenues, and they're growing at a 17% annualized rate. Better yet, from a shareholder perspective, these businesses are exactly the kind of "late cycle" performers that are awarded higher valuations when economic growth slows.
"Power, water, wind - all those infrastructure businesses are coming together a lot faster than anybody anticipated," says Bob Turner, founder and chief investment officer of Turner Investment Partners, a growth-fund shop with some $27 billion under management (including 8.6 million shares of GE as of Sept. 30).
About half of GE's earnings come from lending and investing, a fact that has weighed on the stock. But Immelt- who's quick to point out that GE has no exposure to troubled assets like collateralized debt obligations (CDOs) - sees GE's financial services exposure as an asset in today's market.
"These are classically the times where our financial service businesses do very well," he says. "This is a great time to be triple-A rated. We have a good cost of funds and availability of funds, and there are things that might have been trading for a 10% or 15% return six months ago that are going to be a 25% to 30% return today."
Goldman Sachs analyst Deane Dray argues that GE's business mix merits a P/E of 17 - a 10% premium to the S&P 500 and up from 15 today. Based on Dray's 2008 earnings estimate of $2.45 a share, a 17 P/E translates to a stock price of approximately $45- which also happens to be Turner's GE target. "You've got the best company in the world growing earnings 12% and a stock with a 3% dividend yield," says Turner. "You could be looking at a 25% return."
Jacobs Engineering
Normally we wouldn't recommend a stock that has doubled since the start of '07. But as we said, in a slowing economy, you want to own companies that can demonstrate superior earnings growth regardless of what's happening around them. Jacobs Engineering is such an enterprise.
Jacobs (JEC, Fortune 500) is one of the fastest growers in an exploding industry: construction and engineering. The company is hired to design and build oil refineries, biodiesel plants, hospitals, bridges, and water-treatment centers.
"These are the strongest markets we've seen in 30 years," says Jacobs CEO Craig Martin. Earnings jumped 39% in the fourth quarter of the fiscal year ended Sept. 30. That makes the company's 26 P/E look reasonable, especially since Jacobs should maintain a 35%-plus growth rate into 2008: It has a $13.6 billion backlog of orders (up 39% from the year before).
"From a global standpoint, the amount of infrastructure spending that's going to occur in coming years is staggering," says David Scott, manager of the Chase Mid-Cap Growth fund, which counts Jacobs as a top-five holding. "As the premier company in its field, Jacobs sits squarely in the middle of that boom."
Merrill Lynch
Question: What do you call it when an $8 billion asset writedown translates into a $30 billion loss in market cap? Answer: an overreaction. Yes, Merrill's shares deserved a punishment for the firm's mortgage-related bungling. But the public flogging has far exceeded the transgression, which is why smart investors should buy this stock before everyone else comes to their senses.
Even if Merrill (MER, Fortune 500) writes down another $6 billion in the fourth quarter, as S&P analyst Jeff Sexton recently predicted it will, stocks are valued on future earnings. There's little reason to believe this will have a big effect on 2008 profits, which analysts estimate at $7.68 a share. That means Merrill is trading at a mere eight times 2008 earnings (with a 2.4% dividend yield).
Why are we so confident that the mortgage debacle won't bleed into 2008? Two reasons. The first is Merrill's new CEO, John Thain, formerly CEO of the New York Stock Exchange and Goldman Sachs co-president. Thain used to run the mortgage desk at Goldman, and it's hard to believe he would have taken the Merrill job if the problems were worse than they appeared to be. "You know he did his due diligence," says Anton Schutz, manager of the Burnham Financial Services fund.
The second reason is that financial panics are almost always overblown. In the case of CDOs and other mortgage-backed assets, the problem for Merrill, et. al was not that the mortgages underlying the securities all went bad.
What happened is that the secondary market for these securities evaporated, forcing the institutions holding them to mark down their value. When this market bounces back, as surely will happen, Merrill stands to post sizable gains as it writes up the same assets it was forced to write down. "I've seen my share of credit crises," says Larry Puglia, manager of the T. Rowe Price Blue Chip Growth fund and himself a former bank analyst. "And absolutely that could be the case."
Petrobras
We're on record as saying that $95 a barrel is not a sustainable price for oil. Yet The Hottest Fund Manager in America - a.k.a. CGM's Ken Heebner- now has us hedging our bets.
For those unfamiliar with Heebner, understand that his stock picking over the past eight years has been genius (as it has been for much of his 30-year career). He made a bundle short-selling tech and telecom stocks in 2000. He bet big on homebuilders in 2001 only to get out just before they crashed. He plowed his homebuilder profits into energy stocks in 2005 and eventually doubled down on commodities with a big bet on copper.
The result: His CGM Focus fund was up 66% through early December - while juicing his returns with short positions on Indymac and Countrywide Financial, mortgage lenders whose stocks have been circling the drain.
With that kind of track record, we listened when Heebner laid out an argument that $100 oil is not only coming but will be here to stay. "There is still strong growth in Latin America, China, India, and a host of smaller countries like Poland and Thailand," he says.
That means a need for some 1.5 million more barrels of oil a day. The problem, Heebner explains, isn't just finding another 1.5 million barrels; it's finding them even as some of the most productive oil fields in the world are declining.
Heebner, who is a fanatical researcher, questions the conventional view that OPEC has enough spare capacity to fill much of that void. Heebner cites one Saudi Arabian source whom he declines to name who asserts that output at Ghawa r- a legendary Saudi field that produces about 6% of the world's oil - is declining at 9% a year. (The Saudi authorities vociferously dispute this.)
"So I'm connecting all the dots," Heebner says. "It's a tight situation to start with, but add to that a loss of a million barrels a day for the Saudis, and suddenly it gets very interesting on the upside for the price of oil."
That brings us to Petrobras (PBR), Brazil's largest oil company and the stock Heebner thinks is the best way to play oil right now. With petroleum prices so high, a big risk for oil companies is that host countries will demand a bigger and bigger share of the profits in the form of taxes or royalties. "One way you can avoid this," says Heebner, "is if the government owns half the company you've invested in. That's Petrobras."
Petrobras is cheap enough, at 16 times earnings, that it can be a winning investment even if Heebner is proven wrong about $100 oil. The company just announced a huge find offshore from Rio de Janeiro, a field said to have up to eight billion barrels of recoverable oil. (See correction.)
St. Joe
We have no idea whether the Florida real estate market has hit rock bottom. What we do know is that eventually it will bounce back. Demographics demand it, with the Census Bureau projecting a 33% population increase for Florida- the equivalent of six million new residents- between now and 2020.
And when Florida real estate does rebound, investors will be kicking themselves for not recognizing today's $28 stock price for St. Joe Co (JOE).- Florida's largest private landowner - as a rare opportunity. The stock traded as high as $82 in July 2005.
At $28, says Third Avenue Real Estate Value fund manager Michael Winer, whose firm owns 20% of St. Joe shares, "this is a fire-sale price that basically assumes the Florida market will never come back."
The way to value St. Joe isn't on its current earnings (which are awful) but on its land holdings. The company owns 710,000 acres of Florida real estate, mostly in the Panhandle region, 310,000 of which are situated within ten miles of the coast. The stock market is now valuing St. Joe's property at the equivalent of $3,700 an acre. Winer says a "fire-sale value" would be $5,000 an acre. Keefe Bruyette & Woods analyst Sheila McGrath puts the fair value at $7,200, "at least."
Moreover, St. Joe's Panhandle stronghold looks as though it will recover faster than the overall Florida market. In Panama City, for example, the number of home sales increased 4% between October 2006 and October 2007, vs. a 29% decline statewide.
McGrath sees another bullish indicator in the just-begun construction of a new airport in Panama City that, unlike the old one, will support commercial jets. The airport will give a huge boost to the local economy, she contends, much as the opening of Fort Myers's new airport in 1983 boosted real estate and tourism in southwest Florida. "In the short term, there is some headline risk," she says. "But all in all, I think St. Joe is ridiculously cheap."
Best and worst stocks of 2007
http://money.cnn.com/2007/12/20/markets/stocks_winnerslosers/index.htm
Best and worst stocks of 2007
Wall Street ended a rough year with modest gains. These are the stocks and sectors that came out ahead - and far behind
Best and worst stocks of 2007
Wall Street ended a rough year with modest gains. These are the stocks and sectors that came out ahead - and far behind
Winners
2007 Fortune 500 Rank
Company name
2007 Total Returnto Investors
427
Mosaic
+342%
378
AK Steel Holding
+174%
318
Owens-Illinois
+168%
333
National Oilwell Varco
+140%
237
Amazon.com
+135%
322
Jacobs Engineering Grp.
+135%
121
Apple
+133%
426
GameStop
+125%
421
AGCO
+120%
221
Cummins
+117%
Losers
2007 Fortune 500 Rank
Company name
2007 Total Returnto Investors
255
Dana
-98%
83
Delphi
-96%
420
Beazer Homes USA
-84%
373
Hovnanian Enterprises
-79%
91
Countrywide Financial
-78%
215
Circuit City Stores
-78%
344
Calpine
-76%
216
US Airways Group
-73%
81
Washington Mutual
-68%
170
Pulte Homes
-68%
Friday, January 4, 2008
Bye Bye to my Maruman Verity Golf Clubs
Des just upload my golf set on yahoo auction last night, as he think i should upgrade to a new intermediate set.
Today he received a call from a interested buyer who will like to purchase this set for his daughter in law. I didn't expect it to sell so fast and kind of hesitate, i know it's silly but i seem to have feelings for these clubs. Was worried what if i can't get used to a new set and i find it a drag to search around Singapore for a new set and to decide which is good, why is that better, and of cos... i need to spend money again...
So any recommendations for a good intermediate set?
Thursday, January 3, 2008
It's never that easy...
Was reading the first page of Richard Smitten's book on Jesse Livermore and i thought its quite scary and sad that these men who have make it big in the stock market will end up in such manner one will never tot of... Its really never easy to make money in stocks repeatedly.
In 1923, seven men who had made it to the top of the financial success pyramid met together at the Edegewater Hotel in Chicago. Collectively, they controlled more wealth than the entire United States Treasury, and for years the media had held them up as examples of success.
Who were they? Charles Schwab, president of the world's largest steel company, Arthur Cutten, the greatest wheat speculator of his day, Richard Whitney, president of the New York Stock Exchange, Albert Fall, a member of the President;s Cabinet, Jesse Livermore, the greatest bear on Wall Street, Leon Fraser, president of the international Bank of Settlement, and Ivan Kruegger, the head of the world's largest monopoly.
What happened to them? Schwab and Cutten both died broke; Whiney spend years of his life in Sing Sing penitentiary; Fall also spend years in prison, but was released so he could die at home; and the others Livermore, Fraser and Kruegger, committed suicide.
(Donald McCullogh, Waking from the American Dream)
Reminds me of a short conversation on msn with my friend:
F: Yo, big time 'tai tai', what ya been doing? ( Society can't really accept one is not working and if you are not working, is either you strike a lottery, you are loaded or you are just a plain bummer. Here, my friend is being nice, calling me 'tai tai' instead of bummer.)
Me: Eat & Sleep
F: I think when the Casino is up, you can be a full time gambler.
Me: I think i don't really like that.
F: I heard from XXX you play stocks, full time trader is it? Come leh, give some tips. You must be doing well. (Damn..)
Me: Well..Am not a full time trader and definitely not doing well, and if really seems so easy, i could have bought a house at Nassim.
F: You should attend the Adam Khoo's partner, Conrad's seminar. He been doing very well in option trading.
Me: If do so well, why still need to organise and get people to join?
F: He showed all his trades in his blog.
Me: Can also not show those trades that lose $ right? It's never that easy lar...
F: Maybe, but if can earn a few thousands every month in trading also good wat.
Me: Ha... (Strangely, people always remembers how and who win loads of money but cant really remember how and who lose loads of money)
In 1923, seven men who had made it to the top of the financial success pyramid met together at the Edegewater Hotel in Chicago. Collectively, they controlled more wealth than the entire United States Treasury, and for years the media had held them up as examples of success.
Who were they? Charles Schwab, president of the world's largest steel company, Arthur Cutten, the greatest wheat speculator of his day, Richard Whitney, president of the New York Stock Exchange, Albert Fall, a member of the President;s Cabinet, Jesse Livermore, the greatest bear on Wall Street, Leon Fraser, president of the international Bank of Settlement, and Ivan Kruegger, the head of the world's largest monopoly.
What happened to them? Schwab and Cutten both died broke; Whiney spend years of his life in Sing Sing penitentiary; Fall also spend years in prison, but was released so he could die at home; and the others Livermore, Fraser and Kruegger, committed suicide.
(Donald McCullogh, Waking from the American Dream)
Reminds me of a short conversation on msn with my friend:
F: Yo, big time 'tai tai', what ya been doing? ( Society can't really accept one is not working and if you are not working, is either you strike a lottery, you are loaded or you are just a plain bummer. Here, my friend is being nice, calling me 'tai tai' instead of bummer.)
Me: Eat & Sleep
F: I think when the Casino is up, you can be a full time gambler.
Me: I think i don't really like that.
F: I heard from XXX you play stocks, full time trader is it? Come leh, give some tips. You must be doing well. (Damn..)
Me: Well..Am not a full time trader and definitely not doing well, and if really seems so easy, i could have bought a house at Nassim.
F: You should attend the Adam Khoo's partner, Conrad's seminar. He been doing very well in option trading.
Me: If do so well, why still need to organise and get people to join?
F: He showed all his trades in his blog.
Me: Can also not show those trades that lose $ right? It's never that easy lar...
F: Maybe, but if can earn a few thousands every month in trading also good wat.
Me: Ha... (Strangely, people always remembers how and who win loads of money but cant really remember how and who lose loads of money)
Wednesday, January 2, 2008
Merry Xmas & Happy New Year~
Didn't really feel that a New Year has started, perhaps i was not working and been lazing around for nearly 4 months.
Went around friend's houses for celebration and watching at the fireworks and also just signed up for Amore Fitness Club membership. Hope can lose some pounds and give my rusty muscles some good stretch from the Pilates and Yoga classes.
2007 was not a bad year for me but a year that i learned more about financial or investing stuff from zero knowledge. Realised portfolio was 120% gains, but right now am having close to 20k paper loss. Sigh.
I just bought 2 books, Hot Commodities by Jim Rogers & Jesse Livermore: World's Greatest Stock Trader by Richard Smitten.
Been wanting to know more about commodities and when I'm able to free up some cash, may invest on some commodities fund.
Went around friend's houses for celebration and watching at the fireworks and also just signed up for Amore Fitness Club membership. Hope can lose some pounds and give my rusty muscles some good stretch from the Pilates and Yoga classes.
2007 was not a bad year for me but a year that i learned more about financial or investing stuff from zero knowledge. Realised portfolio was 120% gains, but right now am having close to 20k paper loss. Sigh.
I just bought 2 books, Hot Commodities by Jim Rogers & Jesse Livermore: World's Greatest Stock Trader by Richard Smitten.
Been wanting to know more about commodities and when I'm able to free up some cash, may invest on some commodities fund.
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