Wednesday, December 12, 2012


Fascinating Fantasy

            Today’s financial markets are based on growth, specifically growth in consumer’s consumption of goods.  All of these goods in one way or another are dependent on natural resources, some more than others. If there is not growth in the economy (increase in amount of goods consumed) we are considered to be in a “recession”, which is not good. So my question is how can we constantly consume more, if the goods we are consuming are reliant on natural resources, which are finite? At what point to we simply not be able to keep up with the expectations of what we consider to be healthy growth in the economy? Is that the point we are at currently? I believe that we are currently stuck with too high of expectations of what healthy growth is. Or rather we should change our expectations of what is healthy growth in todays economy is. What if we changed the goals of what healthy growth was, or the way we measure the health of the economy? What if we changed the way we measure the health of the economy to the amount of innovation and new technologies that were produced in a year? Isn’t that what really matters today? We are all aware that the oil we use as fuel to power todays transportation systems will one day run out. Some day there will simply be no more oil to take out of the earth. So why don’t we measure the health of the economy on the amount of new technologies produced? I don’t know do you?

Please share your thoughts with me and the world

Wednesday, November 28, 2012

Fascination of P/E Ratios




When the Facebook IPO was the big news, there was someone on Bloomberg who was taking about amount the total investment behind Facebook compared to the amount of money they generated. This was when it “clicked” for me that any stock with a positive P/E ratio, has more investment than net profit. This is what really sparked my interest in P/E ratios and other questions like what is considered a typical P/E ratio and how do P/E ratios fluctuate over time. So then doesn’t this mean that these are inflated markets? (Markets where stocks are valued at more than they can earn in a year) How can it be that a company with a P/E ratio of say 11 is considered relatively cheap? ( The selling price of a stock at 11 times the net profit of a business is cheap?) Does a company with a positive P/E ratio have an inflated value? How can we value anything at more than the profits it produces? Doesn’t it seem illogical to value a company at  By allowing any publicly traded entity to trade at price above its yearly earnings are we allowing the public to inflate its value?
            This sparked a large idea for me; if you agree that we do indeed inflate the value of companies by allowing them to trade at a price above their total earnings per year are, could we inflate the value of other business entities besides large cooperation’s? Maybe as long as everyone else agrees with you? Idk what do u think? Is it rational to value publicly trade companies at a price above net profits? Personally I don’t think its very rational, however I understand that since everyone else thinks it is reasonable it makes it work.
            What I really want is a open discussion on this blog. Leave a comment, challenge something I said, voice your own opinion or just read my blog and keep your thoughts to yourself…but that no fun.

Wednesday, November 7, 2012

The List

I began pondering the value we put on things the other day; specifically our national debt and the value we assign to different publicly traded companies. The question i ended up thinking about the most was, "How many publicly traded companies ranked in descending order in terms of total market capitalization, would it take to reach $16 trillion?" I used the estimate of $16 trillion dollars for the total national debt, though some argue that it is much larger. What i found is that it would take the largest 183 companies in terms of total market capitalization added together to equal over 16 trillion dollars. Below is the table i made using numbers from 11/6/12. However this lead me to another question which is what value have we created with our national debt? What creates more value these companies below or the creation of national debt? And largest of is it even reasonable to think that we will ever dig our way out of a $16 trillion hole? When the largest 183 publicly traded companies in the world only just exceed $16 trillion of value all together. What do you think? This is only my first "real" post many more to come!


Ticker Company Industry Market Cap (Billions $)
AAPL Apple Inc. Computer Hardware 549.948
XOM Exxon Mobil Corporation Oil & Gas - Integrated 418.343
PTR PetroChina Company Limited (ADR) Oil & Gas Operations 256.58
MSFT Microsoft Corporation Software & Programming 249.38
WMT Wal-Mart Stores, Inc. Retail (Department & Discount) 245.856
CHL China Mobile Ltd. (ADR) Communications Services 226.293
GE General Electric Company Consumer Financial Services 226.065
GOOG Google Inc Computer Services 224.417
RDS.A Royal Dutch Shell plc (ADR) Oil & Gas - Integrated 224.086
IBM International Business Machines Corp. Computer Services 219.365
CVX Chevron Corporation Oil & Gas - Integrated 214.246
BRK.A Berkshire Hathaway Inc. Insurance (Prop. & Casualty) 214.148
T AT&T Inc. Communications Services 197.834
JNJ Johnson & Johnson Biotechnology & Drugs 195.171
PG The Procter & Gamble Company Personal & Household Prods. 187.76
PFE Pfizer Inc. Major Drugs 183.6
BBL BHP Billiton plc (ADR) Metal Mining 182.929
BHP BHP Billiton Limited (ADR) Metal Mining 182.929
HBC HSBC Holdings plc (ADR) Regional Banks 182.242
WFC Wells Fargo & Company Regional Banks 179.952
RHHBY Roche Holding Ltd. (ADR) Major Drugs 166.823
KO The Coca-Cola Company Beverages (Nonalcoholic) 164.919
NVS Novartis AG (ADR) Major Drugs 164.134
JPM JPMorgan Chase & Co. Money Center Banks 160.573
ORCL Oracle Corporation Software & Programming 150.596
PM Philip Morris International Inc. Tobacco 144.987
PBR Petroleo Brasileiro Petrobras SA (ADR) Oil & Gas - Integrated 139.251
MRK Merck & Co., Inc. Biotechnology & Drugs 139.094
TM Toyota Motor Corporation (ADR) Auto & Truck Manufacturers 137.594
BP BP plc (ADR) Oil & Gas - Integrated 134.729
BUD Anheuser-Busch InBev NV (ADR) Beverages (Alcoholic) 132.601
VOD Vodafone Group Plc (ADR) Communications Services 131.955
VZ Verizon Communications Inc. Communications Services 126.147
TOT TOTAL S.A. (ADR) Oil & Gas - Integrated 117.953
EC Ecopetrol S.A. (ADR) Oil & Gas Operations 117.308
ABV Companhia de Bebidas das Americas (ADR) Beverages (Alcoholic) 116.327
SNY Sanofi SA (ADR) Biotechnology & Drugs 115.631
V Visa Inc Consumer Financial Services 114.78
UL Unilever plc (ADR) Food Processing 110.726
UN Unilever N.V. (ADR) Food Processing 110.726
C Citigroup Inc. Money Center Banks 109.441
GSK GlaxoSmithKline plc (ADR) Major Drugs 109.264
INTC Intel Corporation Semiconductors 108.671
SPY SPDR S&P 500 ETF Trust Misc. Financial Services 108.547
PEP PepsiCo, Inc. Beverages (Nonalcoholic) 106.733
AMZN Amazon.com, Inc. Retail (Catalog & Mail Order) 106.142
BAC Bank of America Corp S&Ls/Savings Banks 105.086
QCOM QUALCOMM, Inc. Communications Equipment 102.933
ABT Abbott Laboratories Biotechnology & Drugs 102.07
VALE Vale SA (ADR) Metal Mining 99.388
CMCSA Comcast Corporation Communications Services 98.826
RIO Rio Tinto plc (ADR) Metal Mining 97.617
BTI British American Tobacco PLC (ADR) Tobacco 96.966
HD The Home Depot, Inc. Retail (Home Improvement) 94.034
CEO CNOOC Limited (ADR) Oil & Gas Operations 93.79
VLKAY Volkswagen AG (ADR) Auto & Truck Manufacturers 93.174
SLB Schlumberger Limited. Oil Well Services & Equipment 92.864
CSCO Cisco Systems, Inc. Communications Equipment 92.263
DIS The Walt Disney Company Broadcasting & Cable TV 90.288
SNP China Petroleum & Chemical Corp (ADR) Oil & Gas Operations 89.806
SI Siemens AG (ADR) Electronic Instr. & Controls 89.62
SAP SAP AG (ADR) Software & Programming 89.462
MCD McDonald's Corporation Restaurants 87.808
LFC China Life Insurance Company Ltd. (ADR) Insurance (Life) 84.386
LVMUY LVMH Moet Hennessy Louis Vuitton SA(ADR) Apparel/Accessories 84.169
RY Royal Bank of Canada (USA) S&Ls/Savings Banks 83.161
E Eni SpA (ADR) Oil & Gas - Integrated 81.914
WBK Westpac Banking Corporation (ADR) Money Center Banks 80.689
TSM Taiwan Semiconductor Mfg. Co. Ltd. (ADR) Semiconductors 80.142
STO Statoil ASA(ADR) Oil & Gas - Integrated 77.642
ONZBF Organizacion Soriana S.A.B. de C.V. Retail (Department & Discount) 77.143
BASFY BASF SE (ADR) Chemical Manufacturing 75.878
SAN Banco Santander, S.A. (ADR) Regional Banks 75.406
TD Toronto-Dominion Bank (USA) Money Center Banks 75.295
GLD SPDR Gold Trust (ETF) Misc. Financial Services 72.344
DEO Diageo plc (ADR) Beverages (Alcoholic) 72.012
NVO Novo Nordisk A/S (ADR) Biotechnology & Drugs 71.936
BAYRY Bayer AG (ADR) Major Drugs 71.777
UTX United Technologies Corporation Aerospace & Defense 71.399
ANZBY Australia and New Zealand Banking (ADR) Regional Banks 70.635
UPS United Parcel Service, Inc. Air Courier 70.072
COP ConocoPhillips Oil & Gas - Integrated 69.835
AMX America Movil SAB de CV (ADR) Communications Services 67.01
AMGN Amgen, Inc. Biotechnology & Drugs 66.317
ITUB Itau Unibanco Holding SA (ADR) Regional Banks 65.947
MO Altria Group, Inc. Tobacco 64.56
BNS The Bank of Nova Scotia (USA) Regional Banks 64.465
EBAY eBay Inc Retail (Catalog & Mail Order) 63.858
MTU Mitsubishi UFJ Financial Group Inc (ADR) Regional Banks 63.668
DCM NTT Docomo Inc (ADR) Communications Services 63.398
AXP American Express Company Regional Banks 63.07
OXY Occidental Petroleum Corporation Oil & Gas - Integrated 63.057
MMM 3M Co Constr. - Supplies & Fixtures 62.796
USB U.S. Bancorp Regional Banks 62.303
GS Goldman Sachs Group, Inc. Money Center Banks 59.486
BRGYY BG Group plc (ADR) Oil & Gas - Integrated 59.328
CVS CVS Caremark Corporation Retail (Drugs) 59.324
NABZY National Australia Bank Ltd. (ADR) Regional Banks 58.952
NTT Nippon Telegraph & Telephone Corp (ADR) Communications Services 58.889
TEF Telefonica S.A. (ADR) Communications Services 58.841
UBS UBS AG (USA) Investment Services 58.717
UNP Union Pacific Corporation Railroads 58.207
AZN AstraZeneca plc (ADR) Biotechnology & Drugs 57.7
VWO Vanguard MSCI Emerging Markets ETF Misc. Financial Services 57.654
BBD Banco Bradesco SA (ADR) Money Center Banks 57.363
NWSA News Corp Printing & Publishing 56.902
CAT Caterpillar Inc. Constr. & Agric. Machinery 56.742
LLY Eli Lilly & Co. Biotechnology & Drugs 56.607
UNH UnitedHealth Group Inc. Insurance (Accident & Health) 56.468
HMC Honda Motor Co Ltd (ADR) Auto & Truck Manufacturers 56.342
AZSEY Allianz SE (ADR) Insurance (Prop. & Casualty) 55.781
MA Mastercard Inc Consumer Financial Services 55.541
BMY Bristol Myers Squibb Co. Biotechnology & Drugs 54.621
ACN Accenture Plc Business Services 54.602
WMMVY Wal-mart de Mexico S A B de C V (ADR) Retail (Department & Discount) 53.984
BA The Boeing Company Aerospace & Defense 53.095
SU Suncor Energy Inc. (USA) Oil & Gas - Integrated 53.092
LUKOY LUKOIL (ADR) Oil & Gas - Integrated 52.87
TLSYY Telstra Corporation Limited (ADR) Communications Services 52.448
EMC EMC Corporation Computer Storage Devices 52.414
SRX Express Scripts Holding Co Retail (Drugs) 50.98
GILD Gilead Sciences, Inc. Biotechnology & Drugs 50.812
DDAIF Daimler AG (USA) Auto & Truck Manufacturers 50.546
CL Colgate-Palmolive Company Personal & Household Prods. 49.719
HON Honeywell International Inc. Scientific & Technical Instr. 49.196
AIG American International Group, Inc. Insurance (Prop. & Casualty) 48.423
LYG Lloyds Banking Group PLC (ADR) Money Center Banks 48.297
EPD Enterprise Products Partners L.P. Natural Gas Utilities 47.682
DTEGY Deutsche Telekom AG (ADR) Communications Services 47.597
MON Monsanto Company Chemical Manufacturing 47.071
SPG Simon Property Group, Inc Real Estate Operations 46.936
MDLZ Mondelez International Inc Food Processing 46.868
CHA China Telecom Corporation Limited (ADR) Communications Services 46.786
BCS Barclays PLC (ADR) Regional Banks 46.583
FB Facebook Inc Computer Services 46.037
DUK Duke Energy Corp Electric Utilities 45.106
EONGY E.ON AG (ADR) Electric Utilities 44.884
BBVA Banco Bilbao Vizcaya Argentaria SA (ADR) Money Center Banks 44.145
AAUKY Anglo American plc (ADR) Metal Mining 43.077
MDT Medtronic, Inc. Medical Equipment & Supplies 43.05
NKE NIKE, Inc. Footwear 42.92
CAJ Canon Inc. (ADR) Computer Peripherals 42.465
ABB ABB Ltd (ADR) Electronic Instr. & Controls 42.315
COST Costco Wholesale Corporation Retail (Specialty) 42.261
F Ford Motor Company Auto & Truck Manufacturers 42.095
TSCDY Tesco PLC (ADR) Retail (Grocery) 42.063
DB Deutsche Bank AG (USA) Regional Banks 41.884
BAM Brookfield Asset Management Inc. (USA) Investment Services 41.676
TGT Target Corporation Retail (Specialty) 41.52
DD E I Du Pont De Nemours And Co Chemical Manufacturing 41.336
NGG National Grid plc (ADR) Electric Utilities 41.126
TWX Time Warner Inc. Broadcasting & Cable TV 40.842
DANOY Groupe Danone SA (ADR) Food Processing 40.06
GM General Motors Company Auto & Truck Manufacturers 40.043
TEVA Teva Pharmaceutical Industries Ltd (ADR) Biotechnology & Drugs 39.498
NSANY Nissan Motor Co., Ltd. (ADR) Auto & Truck Manufacturers 38.834
SBUX Starbucks Corporation Food Processing 38.768
SO The Southern Company Electric Utilities 38.761
EEM iShares MSCI Emerging Markets Indx (ETF) Misc. Financial Services 38.73
IMO Imperial Oil Limited (USA) Oil & Gas Operations 38.615
BMO Bank of Montreal (USA) Regional Banks 38.544
VMW VMware, Inc. Software & Programming 38.336
ITYBY Imperial Tobacco Group PLC (ADR) Tobacco 37.969
CNI Canadian National Railway (USA) Railroads 37.914
AXAHY AXA (ADR) Insurance (Life) 37.739
LOW Lowe's Companies, Inc. Retail (Home Improvement) 37.707
FCX Freeport-McMoRan Copper & Gold Inc. Metal Mining 37.46
MFG Mizuho Financial Group Inc. (ADR) Regional Banks 37.382
SUHJY Sun Hung Kai Properties Limited (ADR) Construction Services 37.331
CHU China Unicom (Hong Kong) Limited (ADR) Communications Services 37.219
EFA iShares MSCI EAFE Index Fund (ETF) Misc. Financial Services 36.925
SFTBF Softbank Corp (USA) Communications Services 36.906
EMR Emerson Electric Co. Scientific & Technical Instr. 36.73
SGTZY Surgutneftegas OAO (ADR) Oil & Gas Operations 36.692
MET Metlife Inc Insurance (Life) 36.681
LVS Las Vegas Sands Corp. Casinos & Gaming 36.53
BIDU Baidu.com, Inc. (ADR) Computer Services 36.255
DHR Danaher Corporation Scientific & Technical Instr. 36.158
ZURVY Zurich Insurance Group Ltd (ADR) Insurance (Prop. & Casualty) 36.149
DOW The Dow Chemical Company Chemicals - Plastics & Rubber 36.049
HINKY Heineken N.V. (ADR) Beverages (Alcoholic) 35.933
BAX Baxter International Inc. Medical Equipment & Supplies 35.841
SYT Syngenta AG (ADR) Chemical Manufacturing 35.822
Total Market Capitalization (in billions)  $16,014.92

Sunday, November 4, 2012

The Plan

I recently started this blog, my plan is to talk about my thoughts on the market and also share some of the articles I read. Currently I read The Economist, Barron's, Time, The Wall Street Journal, and Andy Xie's articles from Caixin Online. So if you feel like u recognize an idea i am talking about from one of these exquisite publications... you probably do. This being the first post i want to make it known i encourage anyone and everyone reading this to leave comment on any post. Discussion and debate is a great way to learn.


Enjoy this sunday