Stock market commentary for Saturday, April 1, 2006 in now posted

My latest daily stock market commentary, for Saturday, April 1, 2006 is now posted. Click here to read it.

-- Jack Krupansky

Stock market commentary for Friday, March 31, 2006 in now posted

My latest daily stock market commentary, for Friday, March 31, 2006 is now posted. Click here to read it.

-- Jack Krupansky

Bill Gross: *@?#»! Bond Trading and the Tyranny of Indexation

PIMCO's "Bond King" Bill Gross has posted his latest monthly April 2006 Investment Outlook (IO) letter, entitled "*@?#»! Bond Trading and the Tyranny of Indexation." I haven't read it carefully yet, but it is certainly an interesting rant.

It almost sounds as if he's trying to incite an exodus from the U.S. bond market and even from dollar-denominated assets. He says "PIMCO suggests in the near term that a total boycott of the bond market is impractical since non-economic central bank buyers should continue to dominate. We do suggest, however, a strategic boycott of most risk assets based on the reality that an investor is not being paid adequately to hold them, as well as the Greenspan assumption that today’s low risk premiums ultimately lead to future periods that end badly. In turn, we currently suggest a substitution of near cash assets and non-dollar currencies for standard index assets."

I'll read his letter more carefully over the coming days.

Read his letter yourself and let me know what you think.

-- Jack Krupansky

Stock market commentary for Thursday, March 30, 2006 in now posted

My latest column, for Thursday, March 30, 2006 is now posted. Click here to read it.

-- Jack Krupansky

GM and Google stock

One thing to consider about both GM and Google is the "index effect". GM is in the S&P 500 index and Google will be after the close of trading on Friday (and has been expected for months). Index funds which are committed to matching the S&P 500 index (Vanguard, Fidelity, et al) have no choice but to hold GM (with Google coming). That helps to keep the stock propped up. That's not the only factor at play here, but it may be enough.

Also, with rising interest rates, it's getting more expensive for hedge funds to finance leveraged short positions. Some of these guys with a short-term trading mentality may be "tacking some money off the table". If your hedge fund had shorted GM at $19, how would you feel about their performance right now? That's a psychological consideration they have to accommodate, regardless of where they think GM will be headed next year or even longer term. GM is likely to be a yo-yo over the coming few years, but how many hedge fund investors will tolerate such yo-yo performance?

-- Jack Krupansky

Google Finance

Google now has a beta version of a service they call Google Finance. You can check it out, but it seems awfully lame (currently) compared to Yahoo Finance or MSN MoneyCentral or MarketWatch.

-- Jack Krupansky

Stock market commentary for Wednesday, March 29, 2006 in now posted

My latest column, for Wednesday, March 29, 2006 is now posted. Click here to read it.

-- Jack Krupansky

Stock market commentary for Tuesday in now posted

I'm back home in Boulder after travelling to the VentureOne Summit venture capital conference in SanFrancisco and a small entrepreneurial conference here in the Denver area. My latest column, for Tuesday, March 28, 2006 is now posted. Click here to read it.

-- Jack Krupansky

Warren Buffett's annual 2005 Chairman's Letter for Berkshire-Hathaway

Warren Buffett has just published his annual 2005 Chairman's Letter for Berkshire-Hathaway. It's well worth reading. If you think derivatives are a piece of cake, here's Warren's advice:

Long ago, Mark Twain said: “A man who tries to carry a cat home by its tail will learn a lesson that can be learned in no other way.” If Twain were around now, he might try winding up a derivatives business. After a few days, he would opt for cats.

-- Jack Krupansky