Wednesday, January 30, 2013

Goldman Sachs and the Global Markets

We're in a better part of the cycle right now,said Gary Cohn,President and Chief Operating Officer of Goldman Sachs.Our results in 2012 were a direct reflection of what our customers needed and wanted to do,and we've been there to facilitate that.We have adapted our business to really accommodate and facilitate our customers' needs.
We are a fiduciary for our shareholders.We increased our dividend two times in 2012.
I think we've got our compensation right for our people.We're in a very competitive industry and the capital we have is human capital.The average 2012 pay was about 400k.
As I look out at 2013,I feel that we're in a relatively good position in terms of head count.We look at global GDP.If we see an upward move,that will stimulate our customers and we will hire people to serve them.
The zero interest rate policy will end at some point and that will be positive for our business.I'm fairly bullish about global stock markets.With blue chip stocks,you're long inflation and long global growth.
We can't be the buyer of last resort of fixed income.Somebody has to buy it.The zero interest rate policy clearly drives down currency values.
I think a sudden or dramatic backup in rates would be shocking to the market.I'm not sure that capital can come back into the market quick enough.Just because it's a bond doesn't mean it doesn't go down.Bond prices go down as interest rates go up.
Goldman Sachs(GS)

Wednesday, January 23, 2013

Betting On Banking:Should You Invest in Chase and Citigroup

JP Morgan Chase reported earnings of 1.48 versus a consensus estimate of 1.16,and revenue of 24.37 billion dollars versus an estimate of 24.41 billion.We think that the numbers were good,in line,said Jason Goldberg,CFA,an analyst at Barclays.Mortgage results continue to be the story.Asset management and commercial banking also had a good quarter.
We have an overweight on the stock.We think you'll see several metrics in the right direction.They're growing the top and bottom lines.Not too bad.It is trading well below tangible book value.
The stock has outperformed the market and the sector since Jamie Dimon joined as CEO.It's certainly one of our favourites in 2013.We also like Citigroup and US Bank.
Gerard Cassidy of RBC Capital Markets thinks Citigroup is in a good position to obtain some capital return for shareholders.Their Q4 report as well as their reducing exposure to risky assets over the past 2-3 years will support their case with regulators.
JP Morgan Chase was at 46.14 in afterhours Wednesday trading,down 0.09;while Citigroup was at 41.85,down 0.17;and US Bank was at 32.70,down 0.39.
JP Morgan Chase(JPM),Citigroup(C),US Bank(USB)

Wednesday, January 16, 2013

Europe and Asia:Voices and Trends

China is waiting for the new leadership in March,according to Ronald Wan,Managing Director at China Merchant Securities.For the real policies,it has to wait until Q2 or Q3.They need to prolong growth by increasing consumption and breaking up the state-owned entertprises.It makes it difficult for private enterprise to even lend money.
The key thing is the policy on urbanisation and consumption.The RMB will grow 2-3% this year.It's still relatively attractive.
The Hong Kong property market will grow 5-10% this year,said Henderson Land.
In Europe,there's been a big improvement in the periphery,said Mark Matthews,Head of Research-Asia at Bank Julius Baer.The massive pain they've been going through is starting to yield results.There are good things to look at even in beaten-up markets like France.
We went from an underperform to a neutral in Europe,adds Liz Ann Sonders,Senior Vice President and Chief Investment Strategist at Charles Schwab.We're certainly sticking with that market perform.
Tech has been our longest term outperform rating.For now,we think you don't want to make a lot of sector bets in the market.
Jack Ablin,Executive Vice President at BMO Private Bank,said it's remarkable.I see more problems,more and more volatility.We probably want to play an equity exposure away from the US,or at least away from the consumer.

Wednesday, January 9, 2013

Should You Invest in the Big Banks

Citigroup is viewed favourably by Todd Hagerman,Managing Director and Head of the Multinational and Regional Bank Group at Sterne Agee.Citi just announced a major restructuring,setting themselves up for the capital review programme.As well,there will be major actions over the next 6-12 months by new CEO Mike Corbat.
Citi is also well-positioned to return capital to shareholders.It has an improved regulatory situation.The ongoing US budgetary problems will cause increased volatility in the market.Buy on the dips and take advantage of it.
Sterne Agee has a buy rating on Citi,with a price target of 52.00.It has also raised JP Morgan Chase from a hold to a buy.Their regulatory risk has subsided.I don't think the risk is too high.We certainly think there will be a buyback and a dividend increase.
TD Bank has topped the Royal Bank of Canada as the leading arranger of syndicated loans among the Canadian banks.
Citigroup(C),JP Morgan Chase(JPM),Toronto Dominion Bank(TD)

Wednesday, January 2, 2013

Harvard Business Review's Best CEOs List

Harvard Business Review has published its Best-Performing CEOs in the World 2012 list.Number one on the list is the late Steve Jobs of Apple Computer.The top living CEO is Jeff Bezos of Amazon.
The list is based on three metrics:industry-adjusted shareholder returns;country-adjusted shareholder returns;and increase in market capitalisation over entire tenure.It is drawn from 3143 CEOs in 37 countries,and is the only global ranking of CEOs over their entire tenure.
Under Jeff Bezos,Amazon delivered industry-adjusted shareholder returns of 12,266%,and saw Amazon's value increase by 111 billion dollars.Meg Whitman of Hewlett-Packard is the top woman CEO,coming in at number nine on the list.The only other woman on it is China's Dong Mingzhou of Gree Electric Appliances.
Yun Jong-Yong,formerly of Samsung Electronics,is number three;while Roger Agnelli,formerly of Brazilian miner Vale,is number four.Hyundai's Chung Mong-Koo is number six,and India's Y.C. Deveshwar of ITC consumer goods is number seven.
On average,the CEOs delivered total shareholder returns of 1,385% and increased market value by 40.2 billion dollars.This was the third annual edition of the list.
To recap the top four,they were:1.Steve Jobs,Apple;2.Jeff Bezos,Amazon;3.Yun Jong-Yun,Samsung;4.Roger Agnelli,Vale.
Apple Computer(AAPL),Amazon(AMZN)