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Post Modern Security Analysis

Managing complexity

At one time, securities were relatively simple ...

Modern capital markets have become so complex that security analysis methods of the 1930s are no longer adequate.

Excessive, daunting complexity is the reason that security analysts must move now beyond Graham & Dodd.

Complexity is not only in financial information, but in collateral issues such as institutional operations, the interaction of foreign and domestic taxation, and structural risks.

Post Modern Security Analysis

Analysis of corporate governance

Stakeholders have different interests ...

‘Corporate governance’ is a buzz-word that came into vogue as employee-executives were able to wrest control of public corporations from the real owners, long-term investors.

Misuse of stock buybacks, excessive executive remuneration, and conflicts of interests are issues that security analysts must now study.

The analyst’s question should be, ‘Which stakeholders control the company?’ and ‘Are their interests the same as those of investors?’

From Messiah to Anti-Christ

President Obama’s Lincoln moment

From Messiah to Anti-Christ?

In the Summer of 2009, Barack Obama found that Lincoln’s saying, “You can’t fool all of the people all of the time,” applied to his presidency. Massive deficit spending, an unpopular ‘health care reform’ bill, and the growing awareness that Obama’s campaign promises were largely lies, resulted in the honeymoon coming to an abrupt halt.

Obama’s growing unpopularity has encouraged Republicans to hope for a return to power in 2010, backed by grassroot revolt of a significant segment of the population.

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Featured articles on inside pages

Stock buybacks

Stock buybacks dry up

Since 1982, US equities have been driven upwards by stock buybacks. Federal Reserve statistics show corresponding sales of stocks as executives exercised options to take advantage of manipulated prices. More ...

Securities Analysis

Managing complexity

Modern capital markets have become so complex that security analysis methods of the 1930s are no longer adequate. Complexity goes beyond financial data to collateral issues such as operations, foreign and domestic taxation, and structural risks. More ...

US Politics

The decline of mainstream media

In September 2009, President Obama dominated television in his attempt to sell his government-run health plan, despite massive public opposition. Mainstream media has falling revenues and market share as people turn to unbiased sources. More ...

US equities

The productivity vs. population debate

The 'Baby Boomer Bomb' refers to the expected effect of the retirement of the Baby Boomer generation on capital markets, particularly equities. Two proposed 'solutions' to the problem are examined: Boomers being 'saved' by productivity and technology; and, alternatively, by selling their financial assets to the next generation..
More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

Signs of US losing its groove?

Thirty years ago, US income from abroad was more than double the amount of income that the US paid to the rest of the world. This year, or the next, this foreign income surplus may disappear forever. Is the US 'losing its groove'? More ...

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2010-08-13 13:03