Saturday, August 31, 2013

Maybe this is why no one is watching financial news (video).

The NY Post reported this week that CNBC viewership is the lowest it has been since 1993:
The business news cable network posted some of its worst ratings in 20 years this month — attracting an average of just 37,000 viewers aged 25 to 54 over a 24-hour period, according to just-released ratings data. 
That’s down 35 percent from a year ago, according to Nielsen, and the Comcast-owned network’s worst performance in the key advertiser demo since April 1993.
A few reasons for the low numbers:

There is no financial crisis to keep viewers on the edge of their seat.
Retail investors are still not trading.
The biggest market stories right now are:
  1. Which wonk is going to takeover as Fed Chairman for Ben Bernanke?  
  2. Can Congress raise the debt ceiling without shutting down the government?
  3. When will  the Fed taper their asset purchases?

OK, so maybe the stock market isn't a compelling drama right now.

Listen, there are a lot of good guys and smart people that go on tv and tell it like it is.  They admit when they're wrong and realize that predicting the market can be a guessing game.  They give good insight and color without making bold predictions.
But there are a few talking heads that love to take credit for being right and pound their chests and take victory laps on predictions that really come down to a coin flip a lot of times.

But you know what really pisses off the CNBC viewer at home and makes them tune out?

Spinning a losing call into a winning call and using hindsight to make fictitious trading predictions.

Ralph Acampora was on CNBC yesterday saying how bearish he's been (timely since the market has been getting smoked recently).

"I've seen this coming for 3 or 4 months due to the divergence of the market, etc. etc.".

Oh, Yeah?  This was Ralph July 12, 2013.  6 weeks ago and 800 points higher on the Dow:

This is just one example of the bullshit.  I could go to CNBC's website where all interviews are time-stamped and spend the rest of my Labor Day weekend embedding videos, but you get the point.

Financial journalism serves a great purpose, but until they get rid of these types of segments, no one will watch because no one takes them seriously.  Money is a serious business.

It doesn't have to be boring, but it can't be this form of "info-tainment" that lacks credibility.

Let the guys talk their books and scream at each other in  the Yahoo chatrooms.   Give viewers scoops, market moving news, and unbiased analysis and they'll come back.

Tuesday, August 27, 2013

Disney's ESPN is fighting to stay on top...DIS stock already showing signs of cracking.

As great as the Magic Kingdom and Pixar and Star Wars are, let's face it:  DIS stock is an ESPN story.

It has ridden the coattails of the $Billions in cable bundles ESPN generates on this awesome move from $16 to $67.

ESPN accounts for 43% of Disney's operating revenue.  Yes, 43%.

The NY Times wrote about the threat to ESPN's dominance this morning.  Here's an excerpt:

Beyond established cable rivals like NBCSN and CBS Sports Network, ESPN has a new and bold competitor in Fox Sports 1, which has a strong portfolio of rights. Mr. Skipper has made several early moves to strike back at Fox, hiring the political and sports statistician Nate Silver from The New York Times and bringing back Keith Olbermann to host a nightly show on ESPN2.
Meanwhile, companies like Google, Sony and Intel are planning virtual cable services that would be delivered on the Internet. They could lure consumers from traditional pay television as low-cost alternatives to traditional pay TV while also competing for major sports properties when ESPN’s contracts eventually expire. Mr. Skipper said he would make deals with these upstarts, but only on ESPN’s terms: they must take all of ESPN’s offerings, not just the ones they want.
With the rise of new competition come questions about the fate of existing customers.
Consumers are fleeing pay TV at a quickening pace: 898,000 in the past year, nearly twice the number in the previous year, the analyst Craig Moffett said. And in the past two years, ESPN has lost more than one million subscribers.
What’s more, ESPN ratings plunged 32 percent in the quarter that ended in June.
Click here for the full article:  NY Times

Disney has been priced to perfection and it is not a perfect story anymore.

Chemical weapons will get the US military involved every time

Weapons of Mass Destruction.  Remember those?

Were they, or were they not in Iraq?  It didn't matter.  Even without proof, the US went in there and turned the country upside down.  When someone uses a biological weapon on planet Earth, the US military will track you down.  If you use it on your own people, you will probably try to use it in Times Square eventually.

The case can be made that the Iraqi situation was political..oil, carryover from 1992, etc.  But in Syria, there is no doubt the current regime used chemical bombs.  The NSA has satellite and video proof.  So get ready.

From Wonkblog this a.m.:

By Ezra Klein and Evan Soltas, Published: August 27 at 8:23 am
“Make no mistake: President Obama believes there must be accountability for those who would use the world’s most heinous weapons against the world’s most vulnerable people.”
That was Secretary of State John Kerry on Monday. His whole press conference sounded like that. As my Post colleague Max Fisher wrote, it was hard to find “a single sentence” in Kerry’s remarks “that did not sound like a direct case for imminent U.S. military action against Syria.”
“Military action” doesn’t mean war, of course. The Obama administration appears to be leaning towards offshore missile strikes, possibly as part of a NATO-led campaign. Air strikes are possible, too, but Syria’s been purchasing high-tech anti-aircraft defenses from Russia for years. Actual air strikes sharply raise the likelihood of U.S. casualties.
That’s not something the public wants. A Reuters/Ipsos online poll found that only nine percent of Americans want to see the Obama administration intervene militarily in Syria. When asked whether the U.S. should intervene in the event that the Syrian regime used chemical weapons against civilians, only 25 percent said “yes.”
That could change, of course, if the media begins devoting more coverage to the atrocities and the Obama administration and key Republicans begin publicly making the case for intervention. But given that the public’s initial reaction is sharply against, any change in the numbers would be fragile — which is always a dangerous way to begin a military intervention. Particularly one that might quickly spin out of control.
“Syria has one of the biggest armies in the region,” says Heather Hurlburt, director of the National Security Network. “It has a lot of very expensive anti-aircraft material from Russia. It won’t be like Iraq or Libya.” And if nothing else, Assad’s use of chemical weapons, given President Obama’s “red line” rhetoric, suggests he’ll use anything he’s got to retain power.
Moreover, it’s not just Assad. “What’s missing from the headlines is that there are many different external actors with interests in the outcome in Syria that are funneling money and funneling resources,” says Leila Hilal, director of the Middle East Task Force at the New America Foundation. Iran is supporting the regime, in part through Hezbollah. Saudi Arabia and Qatar are supporting the rebels.
If there’s a “good” outcome here, it’s the one mentioned by Slate’s Fred Kaplan: A bombing campaign convinces Assad he can’t win outright and he instead comes to the table for a negotiated settlement. That’s not necessarily a likely outcome, but Kerry’s press conference on Monday suggests the Obama administration has concluded a good outcome is even less likely if they do nothing.

Monday, August 26, 2013

Kevin Spacey urges TV channels to give control to viewers and challenges the current content distribution model.

Double Oscar-winner Kevin Spacey has challenged TV channels to give "control" to their audiences or risk losing them at his address at the James MacTaggart Memorial Lecture at the Edinburgh Television Festival.

The Hollywood star, whose recent foray into television -- House Of Cards -- has been a commercial and critical hit after it was released on streaming service Netflix, said there was a danger of "thinking that something which is working now will necessarily work a year from now".

Spacey, who gave the keynote James MacTaggart Memorial Lecture at the Edinburgh Television Festival this evening, said: "Clearly the success of the Netflix model -- releasing the entire season of House Of Cards at once -- has proved one thing: the audience wants control. They want freedom. If they want to binge -- as they've been doing on House Of Cards -- then we should let them binge."

The actor said that way of working "demonstrated that we have learned the lesson that the music industry didn't learn -- give people what they want, when they want it, in the form they want it in, at a reasonable price, and they'll more likely pay for it rather than steal it".

Spacey, who starred in and was also executive producer on the show which was nominated for nine Emmy Awards, warned the audience of media executives that "labels" were becoming meaningless and they risked being "left behind".

He said: "If you watch a TV show on your iPad is it no longer a TV show? The device and length are irrelevant ... For kids growing up now there's no difference watching Avatar on an iPad or watching YouTube on a TV and watching Game Of Thrones on their computer. It's all content. It's all story."

Wednesday, August 21, 2013

Disney breaking down as ESPN is showing its vulnerability.

$61.80 level breaks.  $58.09 is the 200 dma = next target.

The $200 million hit from Lone Ranger, while not uncommon in the movie business, shows that it is risky and should not be entitled to a premium P/E ratio.

The cracks in ESPN’s “perfect story” are starting to show:  Competition from Fox Sports1 is legitimate.  Not to mention the NBC Sports and the NFL, NHL, MLB, NBA, Golf and Tennis channels.

ESPN = 43% of DIS' operating income and is losing its economic moat on sports broadcasting.

Also, this is the initial gap in cable fees between ESPN and FS1…that gap HAS to narrow…economics 101:

espn fs1 cable fees per subscriber chart

Tuesday, August 20, 2013

Indexes target 100 day moving average

The DJIA has already blown thru its 50 dma and 100 dma.

The S & P and Russell 2000 have blown thru their 50 dma and have yet to test their 100 dma.

The COMP has yet to test either.

History does not always repeat itself, but it does often rhyme.  My current approach is the following:  As the taper draws nearer and earnings season wraps up, all indexes will eventually test their 100 dma and bring their 200 dma into view.

50 dma = red
100 dma =pink
200 dma = yellow

Tuesday, August 13, 2013

The new tape

Twitter may be in the 4th or 5th inning, but the way in which Wall Street uses it is not even in the first inning. It's still batting practice.

Ask @Carl_C_Icahn if he thinks Twitter is the new tape.  His AAPL tweet has garnered a lot of attention, but frankly its just one extreme example of what goes on all day.

Traditional research serves its purpose, but Twitter, the blogosphere, and chat rooms are the new flow.

There's a ton of quality trade ideas, macro insights, and market intelligence out there in cyberspace.

I've got you covered.