As investors, we need perspective. It's how we come to rational conclusions. To that end, here are 10 observations about the economy, individual companies and the equity markets.
Some points are serious, others are meant to be amusing. Whatever the case, I'm confident you'll walk away with a smile.
With that in mind, let's get started:
: Everybody is so busy bashing networking equipment-makers that most retail and institutional investors have failed to realize these guys have more than $1.4 billion in cash and equivalents on their balance sheet -- or $4.71 per share. Folks, you can pick up the stock for roughly $4.15 per share.
Despite having 152 times as many stores as
Krispy Kreme Doughnuts
has a market capitalization that exceeds Krispy Kreme's by only 19.5 times. McDonald's has 29,000 stores with a market cap of $38 billion, while Krispy Kreme has 190 stores with a market cap of $1.94 billion.
Can you say "bubble?"
Thinking about what to get that special someone for Christmas -- for less than $100? How about one share each of 3Com,
Advanced Micro Devices
Total cost: $97.15, less commissions.
If you had purchased a 30-pack of Budweiser two years ago and returned each of the cans for a nickel deposit, you would have fared much better on a percentage basis than if you had bought one share of CMGI at the same time. And, hey, you would have gotten to drink the beer, too!
How rich is Bill Gates? Even though
has lost more than 23% of its value over the last 12 months, you'd have to spend $97 a second for the next 12 years to liquidate Gates' fortune.
If Gates was a public company, he'd be the 37th largest in the U.S. Taking inflation into account, however, John D. Rockefeller was the richest American. With more than $900 million to his name, his net worth would have topped $189 billion in today's dollars. That's five times richer than Gates.
Standard & Poor's 500 Index
returned 6.46% on average within 12 months after the
cut interest rates five successive times. This figure includes the Great Depression. If the Depression is not included in the calculation, the S&P 500 returned 20% on average each time the Fed cut rates on five consecutive occasions. Remember, the Fed has cut rates nine times this year.
Although many investors have pooh-poohed
near-term prospects, long-term demand for aircraft remains sound. In fact, Boeing estimates that the number of aircraft worldwide could approach 32,000 by 2019. That's a 42% increase from current levels.
Insider buying is not always a good indicator. In fact, based on Form 4 filings,
chief executive bought 10,000 shares on Sept. 24 at an average price of $1.29 per share. Unfortunately for him, the company filed for bankruptcy on Oct. 15. Duh!
It would take
21 years at its trailing five-year average growth rate of 11% to earn what
earns in just one quarter. That's based on Wal-Mart's most recent second-quarter income of $1.6 billion, and Kmart's expected earnings per share of 35 cents, or $175 million, in fiscal 2002.
According to Oracle's most recent proxy statement, during fiscal 2001 the company spent $942,000 on leased aircraft. The firm that supplied the planes and the pilots? Wing & A Prayer, which is owned by Larry Ellison.
That's it, folks. I hope you enjoyed reading this article half as much as I enjoyed writing it.
One final note:
Check out the new product we've developed here at
called "Era of Value." The biweekly newsletter contains a model portfolio of my top stock picks, as well as a host of other timely updates and investment suggestions geared specifically toward the value investor.
Click here to check it out. I'm confident you'll like what you see.
In keeping with TSC's editorial policy, Glenn Curtis doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Curtis welcomes your feedback and invites you to send it to