Enterprising Investor Forum

More and more market observers are starting to compare what is happening to the financials to the faith of tech stocks in 2000-2002.

If this is true, investors should not be betting on such a quick recovery of the sector.

The Bespoke Investment Group (here), has compiled the following data that shows what the discussion is all about.

Maybe, investors should be prepared to accept that the financials will indeed recover but that we will not go back to the levels we experienced in the past.

This would not be the first time one particular sector has experienced a bubble…

Wall Street vs. Main Street:

Enjoy!

It’s always refreshing to listen to Marty Whitman… he has a way of putting things into perspective:

Enjoy!

We have already talked about Mr. Biggs when we reviewed his excellent book ‘Hedgehogging‘ which offers readers a truly fascinating account of Wall Street and the hedge fund world (read review here). Today we are posting a very interesting interview he recently gave.

He discusses how the financial distress we are witnessing is part of a classic 8-10 year cycle in global markets and that despite the fact that this is a particularly severe one, it is nothing new. Calling a bottom is impossible but Mr. Biggs feels that we are close and that is why he has moved back into the markets. He stronlgy feels that there is a big rally coming (something like 1000 points on the Dow) and he does not want to miss it.

Are things fine? Not really but they are not as bad as market pricing would suggest. There are still a lot of problems to figure out but he feels that the world is not going to end and that this is the time to place your bets.

Enjoy!

Despite John Thain insisting that the latest round of write-downs was the last, Merrill Lynch is at it again!

They have announced that they would sell a big part of their toxic asset-backed securities and issue new stock to raise another $8.5 billion. When will this end?

Once again, questions are being raised about how many of these brokerages and banks will be around in 24-36 months time…

Talk about putting your money where your mouth is! Robert Steel, President and CEO of Wachovia, spent 16.1 million dollars on 1 million shares.

Despite announcing a second-quarter loss of 8.9 billion dollars, Steel confirmed his belief in the company and the fact that he could turn things around. Having said this, he then went out and made this massive buy the following day stating: “I made the investment because I believe in the core strengths of the organization and that it is an excellent investment.”

As far as insider buys go, you can always argue how much they really mean and that with the kind of salaries that CEOs make, sometimes, they are more of PR stunts but this buy definitely shows someone who is intent on getting things back on track and who is incredibly closely aligned to all other shareholders…

Link to Insider Transactions: here.

One of the mega trends that all investors should be looking at is CO2 reduction.  How this will develop and how to profit from this is not a very easy call as this is a very complex issue and moreover, one which is highly impacted by legislation and enormous power/interest struggles.

One company we recently came across could be an interesting way to gain some exposure to this and despite not having analyzed it in detail we still wanted to share this with you.

Climate Exchange (mainly listed in Europe but also in the US CXCHF.PX) owns the European Climate Exchange which accounts for roughly 80% of exchange-traded volumes of CO2 in Europe and also owns the Chicago Climate Exchange, which is the only CO2 emissions trading platform in the US.

We are sure that there are other exchanges that will try to challenge them and enter this market but they will be playing catch-up. Goldman Sachs has been behind this project and the own 10% of Climate Exchange PLC… and we all know that Goldman usually makes winning bets.

We will continue to keep an eye on this sector and hopefully bring you some further updates in the near future.

Please read our disclaimer.

We missed our Monday investing humor post so here it is:

Enjoy!

We hope that most of you regularly pick up a copy of Barron’s but if you haven’t gone through the latest edition, we recommend you pick it up and turn to the article “Forecast: Clouds with Sunshine” written by Eric J. Savitz.

The articles gives a very good and comprehensive update on the solar industry, it’s difficulties and future prospects. As most people know, the big challenge is to produce solar energy at a lower cost than that of other alternative fuels. Furthermore, state aids and overall hype means that this sector has become very crowded and might have gotten a bit ahead of itself for the time being.

No doubt that long-term this will be a winning bet but with governments like Germany and Spain (the two biggest markets worldwide) reducing aids and other short-term disappointments, investors will have to carefully decide with which companies they want to place their bets.

It could be pretty bad until about 2010…. these companies will risk being overcapitalized until then!

Enjoy!