Salient to Investors: In March 2013, up to 79 percent of swaps must be backed by collateral and go through clearinghouses. Lloyd Blankfein at Goldman Sachs said clearinghouses could be the world’s biggest systemic threat. Supurna VedBrat at BlackRock said they are the new too-big-to-fail. JPMorgan is the biggest swaps dealer in the US with $72
READ MORE... →Salient to Investors: Brian Frank at Frank Capital Partners writes: Value stocks are driven more by actual cash-flows than by optimistic future projections, and therefore are less prone to deeply disappointing investors with “lower-than-expected” forecasts. Growth and momentum stocks drove 2012 stock market performance and have probably come too far too fast,
READ MORE... →Salient to Investors: Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of the 32 upgrades, downgrades and changes in credit outlook in 2013, versus the longer-term average of 47 percent of over 300 changes since 1974. The IMF reported in January 2012 that prices
READ MORE... →Salient to Investors: The average analyst expects capital spending by S&P 500 companies to drop 1.3 percent in 2013 after 3 years of growth. Bears say the last decline was at the end of 2008, just before stocks slumped to a 12-year low, and expect CEO pessimism to sap the rally. Bulls say
READ MORE... →Salient to Investors: David Sowerby at Loomis Sayles it’s a tug of war between the fiscal cliff and global monetary easing – most bullish is valuation and an accommodative Fed. The average analyst expects capital spending by S&P 500 companies to drop 1.3 percent in 2013 after 3 years of growth. Bears say the last decline was at
READ MORE... →Salient to Investors: Allan Conway at Schroder Investment Mgmt said: Emerging-market equities will return as much as 20 percent in 2013 as consumers drive growth, leaving them less reliant on the US and Europe. India and China will drive economic growth among developing nations in 2013 The increasing relative resilience of emerging
READ MORE... →Salient to Investors: Warren Buffett and Charles Munger favor stock buybacks when two conditions are met: the company has ample funds to take care of operational and liquidity needs the stock is selling at a material discount to the company’s intrinsic business value, conservatively calculated. Read the full article at http://www.bloomberg.com/news/2012-12-12/berkshire-expands-buyback-will-pay-up-to-120-of-book-value.html
READ MORE... →Salient to Investors: Bloomberg and Strategas Research Partners report the average S&P 500 company cut interest expenses to 2.39 percent of sales in the 12 months ended Sept. 30, the lowest since at least 2002. With borrowing expenses at record lows, companies are finding it harder to squeeze costs, causing profit margins to
READ MORE... →Salient to Investors: Shane Oliver at AMP Capital Investors said economic data looks OK and has been supporting the share market, but we will have to see a resolution of the fiscal cliff for the rally to continue. The MXAP trades at 14.2 x estimated earnings versus 13.6 x for the S&P 500 and 12.6 x for
READ MORE... →Salient to Investors: In 2001, Bain and Co. found that from Aug. 16, 2000, to Aug. 15, 2001 companies that laid off 3 percent or less of their workforces rose 9 percent for the period versus 4 percent average increase for the S&P, versus flat for companies that laid off 3 to 10
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