It finally dawned on me. The very best analogy for the whole European mess would be the basic plot line of the classic comedy “Animal House”.
Greece is the party hardy Delta house. Failing grades, dilapidated facilities, garbage everywhere thanks to a general strike. Germany and France are the combined evil forces of the snooty Omega house and Dean Wormer. I’m not sure who’s who. Nevertheless, they conspire to assert control over the mythical Faber College, forcing everyone to conform and do it their way.
The austerity measures being dictated to Greece sound a lot like Dean Wormer’s “double secret probation”. Nobody is really sure what the hell it is and, in the back of their minds, they know it probably won’t reign in the rogue Greeks anyway.
Greece’s attitude, especially now with their threatened referendum on the bailout totally reminds me of Otter’s speech after they’ve completely trashed Flounder’s brother’s Lincoln. Here’s the clip (warning...salty language):
http://youtu.be/zOXtWxhlsUg
In the end, the Delta’s get expelled. But, as a last hurrah, they cause complete chaos and completely dismantle the homecoming parade. (Warning...salty language again)
http://youtu.be/pX71mALOPKs
I genuinely hope that a Greek expulsion or withdrawal doesn’t cause create chaos in Europe. Unfortunately, it probably will and rest assured we’ll get a dose over here as well. But I’m afraid everyone is following the script fairly accurately.
Well, it wasn’t over when the Germans bombed Pearl Harbor and it’s not over till we meet this week’s three lil’ piggies.
“Did they convert?”
Calamos Asset Management (CLMS)
Recent Price: 11.89
P/E: 11.11
Current Yield: 3.2%
The Skinny
Since 2008, financial stocks have probably felt like Soviet free thinkers during Stalin’s many purges: at any minute there’ll be a knock at the door. While there’s more than good reason to avoid or hate bank stocks, the tide may be turning for non-bank financials. CLMS is one of the few hugely successful, independent money management shops out there. Stock looks pretty good. Q2 EPS surprised coming in at 32 cents versus a consensus of 26 cents. Operating margins clocked in at a respectable 42.3%. And, on a general level, these guys are just good at what they do. The founder, John Calamos, Sr. is still at the helm and their products (separate accounts and mutual funds) are widely used and respected.
The Danger
Despite standing out from the financial firm crowd, CLMS is still a financial stock and the overall sour mood among investors will keep a damper on that. And, like all asset managers, the firm has experienced it’s predicted spate of mutual fund outflows as nervous individual investors rebalance adding more money to the mattress bucket of their portfolio. Not good revenues in the long run. The overall dicey nature of the market will keep the outlook cloudy for financials in the near term even for a top flight outfit like Calamos.
“Where’s the sling?”
iShares MSCI Singapore Index Fund (EWS)
Recent Price: 12.12
P/E: NA
Current Yield: 4.4%
The Skinny
After tearing it up for the last few years, emerging markets are taking a bit of a siesta. Maybe that’s an opportunity. For us Amerikaners, picking emerging market stocks is always a daunting task. Handy ETF’s to the rescue! Historically, the iShares international baskets have always been a decent choice. Singapore is probably a decent place to look in Asia ex-China, ex-Japan. Yield is attractive. The average P/E for the basket is around 12.7 times which is reasonable. Singapore is one of the more orderly and developed emerging markets out there. So, you get the go go growth of an emerging economy with a relatively stable country.
The Danger
Emerging market investing, whether in good times or bad, is not for those of weak intestinal constitution. The EWS beta vs. the S&P 500 is 1.16 or 16% more volatile than the index. This puppy will jump around. The basket is also heavily weighted in Singaporean financial stocks. Panics and economic problems in emerging markets are always magnified. Financials typically bear that brunt.
“The home of Dr. Johnny Fever”
Cincinnati Bell 6.75% Convertible Preferred (CBB-PB)
Recent Price: 40.06
P/E: NA
Current Yield: 8.42%
The Skinny
This is a weird one…after all…y’know I’m always gonna give you a weird one. Interesting yield. 20% discount to its par price of $50. Cincinnati Bell (CBB) is an interesting little company. Revenue has been fairly consistent over the last 5 years. The company has done a good job getting costs under control
And has a good foot hold in it’s core niche. Shares trade at a 20% discount to par which beefs the yield up nicely.
The Danger
The issuer, Cincinnati Bell (CBB), while at last profitable, has a spotty history. In addition, they’re carrying lots of debt. The rating isn’t the best, either. B3/CCC is officially junky junk. Definitely not for the widows and orphans. Lastly, it’s a convert. The conversion is based on the price of the common at $34.674 so it’s a wee bit under water. This is an odd duck. Don’t chase it unles you really understand how to swim in the pond.
Follow us @yieldpig on Twitter. Don't cost nothin'
Greece is the party hardy Delta house. Failing grades, dilapidated facilities, garbage everywhere thanks to a general strike. Germany and France are the combined evil forces of the snooty Omega house and Dean Wormer. I’m not sure who’s who. Nevertheless, they conspire to assert control over the mythical Faber College, forcing everyone to conform and do it their way.
The austerity measures being dictated to Greece sound a lot like Dean Wormer’s “double secret probation”. Nobody is really sure what the hell it is and, in the back of their minds, they know it probably won’t reign in the rogue Greeks anyway.
Greece’s attitude, especially now with their threatened referendum on the bailout totally reminds me of Otter’s speech after they’ve completely trashed Flounder’s brother’s Lincoln. Here’s the clip (warning...salty language):
http://youtu.be/zOXtWxhlsUg
In the end, the Delta’s get expelled. But, as a last hurrah, they cause complete chaos and completely dismantle the homecoming parade. (Warning...salty language again)
http://youtu.be/pX71mALOPKs
I genuinely hope that a Greek expulsion or withdrawal doesn’t cause create chaos in Europe. Unfortunately, it probably will and rest assured we’ll get a dose over here as well. But I’m afraid everyone is following the script fairly accurately.
Well, it wasn’t over when the Germans bombed Pearl Harbor and it’s not over till we meet this week’s three lil’ piggies.
“Did they convert?”
Calamos Asset Management (CLMS)
Recent Price: 11.89
P/E: 11.11
Current Yield: 3.2%
The Skinny
Since 2008, financial stocks have probably felt like Soviet free thinkers during Stalin’s many purges: at any minute there’ll be a knock at the door. While there’s more than good reason to avoid or hate bank stocks, the tide may be turning for non-bank financials. CLMS is one of the few hugely successful, independent money management shops out there. Stock looks pretty good. Q2 EPS surprised coming in at 32 cents versus a consensus of 26 cents. Operating margins clocked in at a respectable 42.3%. And, on a general level, these guys are just good at what they do. The founder, John Calamos, Sr. is still at the helm and their products (separate accounts and mutual funds) are widely used and respected.
The Danger
Despite standing out from the financial firm crowd, CLMS is still a financial stock and the overall sour mood among investors will keep a damper on that. And, like all asset managers, the firm has experienced it’s predicted spate of mutual fund outflows as nervous individual investors rebalance adding more money to the mattress bucket of their portfolio. Not good revenues in the long run. The overall dicey nature of the market will keep the outlook cloudy for financials in the near term even for a top flight outfit like Calamos.
“Where’s the sling?”
iShares MSCI Singapore Index Fund (EWS)
Recent Price: 12.12
P/E: NA
Current Yield: 4.4%
The Skinny
After tearing it up for the last few years, emerging markets are taking a bit of a siesta. Maybe that’s an opportunity. For us Amerikaners, picking emerging market stocks is always a daunting task. Handy ETF’s to the rescue! Historically, the iShares international baskets have always been a decent choice. Singapore is probably a decent place to look in Asia ex-China, ex-Japan. Yield is attractive. The average P/E for the basket is around 12.7 times which is reasonable. Singapore is one of the more orderly and developed emerging markets out there. So, you get the go go growth of an emerging economy with a relatively stable country.
The Danger
Emerging market investing, whether in good times or bad, is not for those of weak intestinal constitution. The EWS beta vs. the S&P 500 is 1.16 or 16% more volatile than the index. This puppy will jump around. The basket is also heavily weighted in Singaporean financial stocks. Panics and economic problems in emerging markets are always magnified. Financials typically bear that brunt.
“The home of Dr. Johnny Fever”
Cincinnati Bell 6.75% Convertible Preferred (CBB-PB)
Recent Price: 40.06
P/E: NA
Current Yield: 8.42%
The Skinny
This is a weird one…after all…y’know I’m always gonna give you a weird one. Interesting yield. 20% discount to its par price of $50. Cincinnati Bell (CBB) is an interesting little company. Revenue has been fairly consistent over the last 5 years. The company has done a good job getting costs under control
And has a good foot hold in it’s core niche. Shares trade at a 20% discount to par which beefs the yield up nicely.
The Danger
The issuer, Cincinnati Bell (CBB), while at last profitable, has a spotty history. In addition, they’re carrying lots of debt. The rating isn’t the best, either. B3/CCC is officially junky junk. Definitely not for the widows and orphans. Lastly, it’s a convert. The conversion is based on the price of the common at $34.674 so it’s a wee bit under water. This is an odd duck. Don’t chase it unles you really understand how to swim in the pond.
Follow us @yieldpig on Twitter. Don't cost nothin'
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