April 30th, 2008 by tommy
Here goes an unpopular post for sure… it begins with me saying that I AM GLAD that gas is expensive. Finally. It’s about time. Dammit. I have long been a proponent of a significant gas tax. Taxes have two main purposes: to raise revenue, and to control behavior at mass. A heftier gas tax, such as what we witness in Europe, is long overdue in our country. And, unfortunately, a significant gas tax is almost an impossibility politically. Look at our friend Mr. Obama, and we see how much heat he is taking just by not taking an immediate accepting position on a summer gas tax hiatus. Sorry folks, but high gas prices are good.
So, the only real way for a similar consumption curb is to see the actual price of oil greatly appreciate. The absurd mass adaptation of SUVs and other gas guzzlers all through the 1990’s was abhorrent. Having lived many years in Europe, and seeing how high oil prices affect both driving (and carpooling) habits, and consumer decisions on what type of car to drive, I can attest first hand to the benefits of making gas more expensive. With the multitude of interviews in the media recently showing ‘average’ consumers being affected by gas prices, I continually see them being interviewed as they go about driving alone, not carpooling, not exploring public transportation, etc. Guess what folks: maybe it’s time for a little change in our habits.
April 26th, 2008 by tommy
Oil at $120 a barrel, consumer discretionary spending weakness, consumer awareness on the effects of non essential carbon emission output… it all looks like a perfect storm for the airline industry. Despite already battered stock prices, could there be still more downside left in the market? Will it take government bailout to save the beleaguered airline industry, or will market forces enact their natural forces towards correction towards a new balance point. Certainly if the latter occurs, we will witness the death of more airlines, following the macabre path of Aloha, Frontier, and other airlines that have gone down in 2008.
The day JetBlue is rumored to remove it’s TV service from flights, the long time marketing focus of their “Jet Blue Experience”, one has to wonder what type of death spiral we are continuing to witness. The airline has already managed to grasp at small incremental upselling tactics such as charging $10 for extra legroom seats, $20 for a second checked baggage piece, and selling headphones (starting June 1st) rather than giving them out complimentary.
Skybus is closing shop. ATA as well. Given the current state of affairs, it’s a given that we will be witnessing the death of more airlines in coming quarters.
April 22nd, 2008 by tommy
I must have heard from over a dozen people that swore to me that if you did not file your taxes on time for 2008 (and instead filed for an extension) that you did not qualify for a tax rebate check. After speaking with a CPA, according to his professional insight, you are still DEFINITELY going to get a rebate check (assuming you qualify) even if you file late.
I am posting this simply because there seems to be a ton of incorrect information floating around about this issue. So, if you missed the initial April 15th deadline date, don’t despair: it’s not too late to get a little bit of your money back. Hopefully you can find some great ways to invest the money and let it grow! Good luck.
April 17th, 2008 by tommy
Current fears and uncertainties in the investment market place have lowered the PE ratios on many growth stocks. This situation yields to a perfect situation to find opportunities for GARP money managers. What is GARP? Growth At a Reasonable Price. The GARP approach strives to find the benefits of growth investing while assigning an additional discipline for value. Further insights on the definition of GARP can be found on the investopedia website. Long term studies in academic finance have shown that value investing tends to outperform growth investing due to the tendency for human error to systematically overestimate the longevity of growth factors when valuing equities.
GARP investing attempts to mollify this negative aspect of growth investing by discovering growth stocks that still fit inside a threshold of reasonable price valuation. Let’s take a look at Google for example. There is no argument that Google is a growth stock. On the eve of Google publishing their Q1 2008 results, with the stock down 39% from its 52 week high, it becomes an easier and easier argument to make that at this price, the long term growth of Google is now attainable at a reasonable price. Chinese counterpart Baidu for example is trading at 57x future expected price to earnings, vs. Google’s 32.6 (Yahoo incidentally is at 48.4x, but given speculation on sweetened Microsoft takeover offer, the metric is not germane to the argument at hand).
GOOG is just one such example. But with tech being beat of up in the first three months of this year, there are many such buys available at the moment. Now just might be the perfect time to grab those growth stocks at a reasonable price.
