Tag Archives: ORCL

The Major Bubble That Nobody Is Talking About

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By Eric Parnell:

“Be fearful when others are greedy and greedy when others are fearful”

–Warren Buffett

A major bubble is currently inflating in investment markets. Yet nobody is talking about it. It’s not that the category in question isn’t getting any attention. To the contrary, it is being talked about at length nearly every day. But what is missing from the discussion is the fact that all of the signs of a massive bubble are now falling into place.

For the purpose of this article, I have taken a different approach with the analysis. Instead of introducing the investment that is showing signs of a bubble, I will be exploring the evidence first in order to avoid any behavioral biases associated with the specific investment in question.

While the bull market for this investment has been underway for nearly two years, it has only recently entered into a parabolic advance over the


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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French economy slips into recession. France slid into recession during Q1 as the French economy contracted 0.2% Q/Q after shrinking by the same amount in Q4. With unemployment at record levels and President François Hollande’s popularity at all-time lows, the country faces an uphill battle to right the ship as it struggles to bring its deficit in line with the EU-mandated 3%, while simultaneously restoring growth. Economists project a 0.2% contraction for the full year and a survey of French citizens shows just 11% believe Hollande can bring down the jobless rate by year’s end.

CBO slashes deficit estimate. The federal deficit will narrow to $642B in the fiscal year ending in September, the CBO said Tuesday — a meaningful improvement from February’s projection of $845B. The revision comes courtesy of higher tax receipts and dividend payments to the Treasury from Fannie (FNMA.OB) and Freddie (FMCC.OB).


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Escape Strategies For When The Stock Market Starts To Burn

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By Eric Parnell:

It was one of the most infamous building fires in U.S. history. The date was November 28, 1942. The place was the Cocoanut Grove, arguably the finest nightclub in all of New England. Up until that fateful day, The Grove was the place to be seen and was frequented by sport stars, celebrities and power elites. It was also, however, a place with dubious ties and there was a tragic accident just waiting to happen. And so it did on the Saturday after Thanksgiving in 1942 when a fire rapidly engulfed the establishment in just 15 minutes, killing 492 guests and severely injuring another 166. The Cocoanut Grove fire resulted in important changes in building code fire safety as well as advancements in the treatment of burn victims. And over 70 years on, it also provides some important lessons about the strategies that should accompany investing in the stock market


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Key Signals To Watch For A Major Stock Market Top

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By Eric Parnell:

It is a question that is on the minds of many investors today. They are watching the stock market relentlessly rising nearly every single trading day, with even the smallest of dips being bought in pushing the stock market to new highs. Yet they stand back and look at the fundamental data and see a complete disconnect between the direction of stock prices and the underlying economic reality. And believing that the rally is being completely fueled by the flood of monetary liquidity that continues to flow into the markets, they remain convinced that this will all end badly just as it has a few times before since the start of the new millennium. But this leads to the key question – exactly when will the market finally reach a major market top and plunge into a sharp correction? Fortunately, the recent past has provided us with some key signposts


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Fundamentals For Salesforce.com Point To Higher Prices

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ByRichard Tarjeft:

Salesforce.com Inc. (CRM) operates on a global scale. It sells cloud computing and services such as marketing research, performance management and consulting. It is a significant, though not dominant, player in the technology/app software sector. Based on a broad view of the industry, broader economic trends and thorough fundamental analysis, buying salesforce.com for a mid-term trade is advised.

Competitor and Economic Perspective

Oracle (ORCL) and SAP (SAP), both direct competitors, have market caps of over $90B and EBITDA values of $17.29B and $7.19B, respectively. CRM is small by comparison, with a market cap of about $24B and EBITDA of $84M. This data indicates room for growth and stock price increases as CRM figures more prominently with large-scale potential customers and clients. Cash flow and competition analysis hints that CRM has substantial room to grow. Though the stock is volatile, the overall trend is likely to be further increases in the


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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Nikkei soars anew as BOJ gets busy. The Nikkei (NKY) jumped 2.8% to 13,192.59, its highest close since August 2008, while the yen dropped below 99 to the dollar for the first time in four years, as the Bank of Japan began its grand stimulus experiment in its attempt to pull the country out of deflation. The BOJ said it would acquire ¥1T ($10.3B) of Japanese government bonds with maturities of 5-10 years and ¥200B of bonds with maturities exceeding 10 years. At the time of writing, the yen was -1.1% at 98.53 to the dollar.

GE to buy Lufkin Industries in $3.3B deal. General Electric (GE) has agreed to acquire Lufkin Industries (LUFK), a provider of pumps and other equipment to the oil and gas industry, for $88.50 a share in a $3.3B deal. The price represents a 38% premium to Lufkin’s close


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Technology Stocks Worth Consideration At Market Highs

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By Eric Parnell:

The stock market as measured by the benchmark S&P 500 Index finally arrived at a new all-time high on the final day of the first quarter. While this represented a grand accomplishment for those that are bullish on stocks, many investors are understandably trepidatious about either taking the plunge or continuing further in this market after its recently strong run. This is particularly true given the notably shaky fundamental backdrop for the market. But for those risk sensitive investors still seeking opportunities in stocks, the technology sector may still offer some appeal.

So how much further can we expect the stock market (SPY) to rise anyway? With the Fed pumping billions of dollars of liquidity daily into the financial system, there is no telling how high the stock market could rise. At its current rate, we could see the S&P 500 cross 2000 by the end of year. Why not?


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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ECB gives Cyprus until Monday to reach bailout deal. The ECB has upped the stakes over Cyprus, threatening to cut off emergency funding to the country’s banks on Monday if it hasn’t agreed to a bailout deal by then. Cypriot President Nicos Anastasiades is in talks with party leaders to find a solution, while Finance Minister Michael Sarris is still in Moscow as he seeks a rescue from Russia.

Deterioration at eurozone factories hits EU shares and the euro. The contraction in eurozone manufacturing has unexpectedly deepened this month, with PMI falling to 46.6 from 47.9 in February. Even German manufacturing shrank after growing in February. "The concern is that the (economic) downturn has gathered pace again," says Markit. Instead of stabilization as many have been hoping for, the slump could "intensify in the coming months." The data dragged down European shares and the euro, which


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