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- matttheduck
- tele
- Kirk
- Rande
- Kirk
- SteveT
- Mark_J
- Rande
- Rande
- JackSwanson
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» matttheduck - buy low, sell high
here's a guy that understands that rubric:Saudi billionaire buys up Internet stock during decline
SPECIAL TO WORLD TRIBUNE.COM
Friday, May 19, 2000
LONDON -- Saudi Arabia hasn't discovered the Internet. It's taking over.
Saudi billionaire Alwaleed Bin Talal has acquired $1 billion worth of shares in Internet companies and hi-tech companies. The nephew of King Fahd took advantage of recent stock declines in the technology and information sphere, according to Middle East Newsline.
The acquisitions by Bin Talal, chairman of Kingdom Holding Co., were made last month. These included a $50 million stake in such U.S.-based Internet giants as Amazon.com, DoubleClick.com, eBay.com, InfoSpace.com, Internet Capital Group Inc., and Priceline.com.
To complement the holdings, Bin Talal bought $150 million in AT&T and a $200 million stake in MCI WorldCom.
A company statement said Bin Talal also bought $50 million of shares in blue chip offers such as Coca-Cola Co., Ford Motor Co. and Walt Disney Co.
So far, Bin Talal has sunk more than $1.3 billion in media and technology stocks. He is estimated to be worth $20 billion.
Friday, May 19, 2000
-- posted by matttheduck
» Kirk - Tactical Allocation shift
Tele...Perhaps the $1.3B is a tactical allocation from selling oil futures at $30/bl and buying US stocks his higher oil prices have caused to go down due to fear of inflation?
Not a bad way to wage war... raise oil prices, sell oilfutures and then use the money to buy US Stocks that tank from the inflation fears.
-- posted by Kirk
» Rande - Kudlow takes issue with Greenspan.
Kudlow takes issue with Greenspan. He’s not alone, certainly. Hard to blame some for being cynical and even paranoid about the “powers that be” having it in for the rank-and-file investor. Could it be the elite just can’t tolerate the notion of too many millionaires, too much prosperity? Expect the political rhetoric to heat up in the months ahead as Greenspan’s veneer of infallibility is increasingly questioned. After all, the stakes are high and it’s not an exact science we’re talking about. More like a guessing game, actually, or a game of chess. Guess who the pawns are.Nevertheless, I remain bullish on the long term and believe the fundamental economic forces in play are too strong to be overcome by even an overactive Fed. Short-term turbulence, to be sure, but those with vision and patience will be rewarded.
-- posted by Rande
» Kirk - Stop Spending...
This is pretty easy... IF we want to hurry things along... stop spending for awhile. Every bit helps.What if Labor organized a "Take a Vacation Day" to show their "pleasure" with higher rates? 1 day lost in a 22 day work month would slow GM and other factory production by about 4%. How could the government get upset anyway? 8)
Of course, profits would get slammed....but the message would be clear. I wonder if labor will do anything?
-- posted by Kirk
» Mark_J - Rande, couldn't agree with your last point more.
Rande, couldn't agree with your last point more. Things are going good in this country. Even if the stock market may be in "bumpy ride" territory while valuations and interest rates and manias settle down, the overall future for America remains EXTREMELY positive.I sorta agree with Kudlow's point, but think that a .50 move in June AND another .50 move in August that he discusses may be a bit pessimistic.
I ain't no eco-non-o-mist, but my take is that Greenspan has been tapping the breaks, and hasn't deviated. This .50 move now may be because of the election and XMAS. I think he may want to raise rates .75 (including this week's hike) before the election. By doing the big-nasty .50 hike now, he basically frees himself from making a .25 move in August near the conventions. Now he can hike rates another .25 in June, let August slip by with just a nasty comment or two, we'll have the election and Christmas, then the Fed will take another look to see how these moves are taking next year.
But I'm a programmer. What do I know?
-- posted by Mark_J
» Rande - Mark,
Mark,That scenario sounds as good as any to me. Also agree that Kudlow was a bit on the pessimistic side, but we need to remember he has a political background and is highly partisan. Could be as much rhetoric as substantive analysis. Not that analysis is overly helpful when Greenspan will do what he wants to do regardless. Frustrating.
-- posted by Rande
» Rande - Wow!
Wow! What a wonderful day in the neighborhood for the Bay Area. Supposed to be even better tomorrow -- just in time for the Bay to Breakers (where a good number of folks can always be counted on to say, "Let's get naked").Meanwhile, ran across a great piece from Mellon Private Asset Management (May 2000 "Investment Update"). One of the best and most balanced commentaries I've read in some time. Thought I'd share some excerpts:
The October 1987 market decline of 33% in the Standard & Poor's 500 Stock Index did not foretell a recession. Instead, stock valuations became divorced from economic reality. The combination of escalating stock prices and interest rates mixed as well as gasoline and matches. The decline was fueld by a derivative-based investment strategy known as portfolio insurance. Twenty percentage points of the 33% drop occurred in a day. (Portfolio insurance was another of the schemes assured of making money only for those who dreamed it up and sold it.) The present market volatility has similarities to the decline of 1987 in that it is not foretelling a US or global economic recession or crisis. The three market corrections of the 1990s were triggered in 1990 by the Gulf War and in 1997 and 1998 by the global currency crisis. The present market turbulence is not driven by economic factors or global issues.
The present correction and market volatility is a reaction to the excessive speculation by market participants and the valuation disparity between many technology stocks and everything else. The rubber band separating technology and all other stocks had simply stretched too far. The rubber band has snapped back somewhat in the last few weeks, but the vibrations from the recoil likely will continue for a while.
We do not believe that the broad market -- that is, most stocks -- can again make sustained progress until the Fed is perceived to be near completing its escalation in short-term interest rates.
Even though it may be counter-intuitive, the stock market usually does not perform well in periods of exceptional economic strength and usually is particularly strong during periods of economic weakness, hence its role as a leading economic indicator. The amazing strength of the US economy coupled with the Fed's efforts to restrict money supply growth has reduced the fuel for the stock market's engine. Thus, a moderation in growth and a benign Fed would provide a more constructive environment for stock market appreciation. Even if the economy slows, we believe that profit growth will remain good, although reduced from the 20% gains in the first quarter of 2000.
The world keeps changing, keeping the investment business ever fascinating. the knowledge economy requires less money to finance its growth -- just ask any corporate loan officer. So should strong economic growth, shrinking liquidity and weak bond and stock markets go hand-in-hand as they once did? Isn't strong growth supposed to be really bad for bonds? Yet, strong US growth presently is generating large budget surpluses, which are being used to pay down debt. The more growth, the greater the surplus, the better for Treasury bonds. A similar anomaly is the lack of an inflation probelm even though unemployment has continued to decline. To the shock of economists, productivity has escalted to offset inflationary tendencies. These examples argue for an investor staying well diversified across a variety of asset classes because economic and investment truths change.
-- posted by Rande
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