Sunday, October 30, 2005

PeopleSupport (PSPT) Q3 review

After listening to the PSPT cc, I remain in the bullish camp. My notes are below. If you see any inaccuracies, please leave a comment at the bottom of this post.

  • 16.3 million in revs, up 37% yoy and 11% seq.
  • 16% operating margin (I believe this is pro-forma, ex-MIPS, stock option expense)
  • $50 million in cash
  • Q4 is a seasonally weaker period for PSPT
  • Client concentration: Top 3 last year were 69% of revs, now they are 60% of revs.
  • 31 total clients
  • Quadrupled accounts receivable management business (off a low base)
  • Verticals
    • Travel and Hospitality is largest vertical
    • Reps are certified as travel agents, competitive advantage
    • Clients include Expedia (up 15% yoy) and one of the largest hotel chains
    • Reps focus on cross-selling, up-selling
  • Telecom
    • Signed leading VOIP provider (Vonage maybe?) as a top 5 client
    • Also signed other VOIP clients
    • Inphonic also a small client in this space
  • Technology
    • Earthlink -- focused on sales/tech support/customer service
    • Resigned contract through early 2007
    • Network Solutions another client in this vertical, signed through 2006
  • Financial Services
    • E-Loan is a client here
    • Consumerinfo.com (Experian) is one PSPT's big clients, revs up 70% yoy, contract through mid-2006, automatic renewal
  • New clients
    • 1 potential significant client signed in quarter (significant=potential for $1 million annual revs)
    • Several $5 million+ clients in the pipeline
    • Total pipeline = 250+, 30 are at advanced stage
    • Of the 30, many are in financial services (money center banks)
  • Attrition rates are falling, 7% in 2Q05, now at 4% in Q305
  • Move into new PSPT center in Manila has gone smoothly
  • A/R business up 400%, still less than 5% of business, 200 employees
  • PSPT is looking at acq. in back office BPO, want acq. to be accretive in 6 mo.
  • SGA % to sales flat yoy
  • 60% of seats in new PSPT center built out in 2005. Remaining 40% will be built out in 2006.
  • $8.5-9 million in capex in 2005
  • 1st 9 mo. of 2005, OCF = 14.3 million, FCF = 8.6 million
  • No debt
  • 3,780 employees in Q2, 4,079 employees in Q3
  • Utilization rates: 68% in Q205, 77% in Q3, should be at similar levels to Q3 in Q4.
  • Guidance Q4: $15.3-15.8 million in revs, pro-forma EBIT of 1.6-1.8 million
  • DSO's in the mid 30's
  • CEO not particularly interested in share buybacks, back office BPO acq. in Phillipines is his focus
  • PSPT attracting larger sized prospects, longer sales cycles
{Note that I am long PSPT shares}

Saturday, October 29, 2005

NIC Inc. (EGOV) recap of the Q

courtesy of Stifel Nicolaus.

I agree with many of the analyst's points and would be more interested sub $5. Here's what I like:

  • strong recurring revenue stream.
  • EGOV hasn't lost any states up for re-bid
  • pipeline appears full, CA might put out RFP soon
  • strong OM% expansion, solid FCF generator
  • ~$50 million in cash
  • strong same state growth, particularly in non-DMV appications. This growth on the non-DMV side also serves to diversify revenue stream
  • potential for larger contribution from hunting/fishing licensing business

Jim Puplava is working overtime

at financialsense.com putting out another Storm Watch Update, "The Two Bens." Take a look.

Thursday, October 27, 2005

2 Bernanke skeptics

Peter Schiff from EuroPac Capital and Jim Grant of Grant's Interest Rate Observer (2nd article is in NY Times, registration req.)

portfolio/watch list notes

I closed out my one remaining MSO short position today around $19. None of my accounts have any MSO positions currently. Martha, you've served me well. AMZN failed to impress with its Q3 and outlook and shares are off sharply this week. AMZN never got to my $47 short sell target, so I missed out here. Oh well. Distressed debt co. ASFI has come in quite a bit lately from $32+ to $26.64. A couple more bucks and I'll take a very hard look. CBI (my energy infrastructure idea) got destroyed today (off 20%) on recent news that the CFO retired and earnings were delayed. Again, one to keep an eye on.

The latest from Mr. Kasriel at NTRS

Bond king Bill Gross

put out his November 2005 Outlook today.

Wednesday, October 26, 2005

PSPT reports

and shares climbed AH. I'll have more to say about this in the near future, but for now, here's the PR. I particularly like this section on revenue diversification:

"During the most recent quarter, seven clients each generated over five percent of our revenues, three of which generated over ten percent of our revenues. Three of these seven clients were signed in 2004, including two travel and hospitality divisions of a Fortune 500 company, as well as a leading VoIP telecommunications provider."

Sunday, October 23, 2005

notes from the CSGP Q32005 CC

  • $34.3 million in revs, up 4.4% seq. and 20% yoy
  • $0.06 in EPS, includes one-time charge for research center closure
  • $128 million in cash
  • Avg. annualized new contract value YTD 05 $7,757 vs. $7,698 for YTD 04
  • 52% of sales growth for the Q comes from new customers
  • 1,510 new customers YTD, 538 new customers in Q3 -- the 538 is down sequentially
  • 20% response rate from 90 day free trial to prospects in existing markets, CSGP is hoping for big conversion of these trial users in Q4 and 2006
  • "For Sale" listings soar on website (+61% YTD), the "For Sale" listings are bundled with Property and Comps.
  • renewal rate 93.2% in Q305 vs. 91.2% in Q304
  • NRB Retail database integration complete in next 3-4 weeks, May 06 NRB product offering
  • Expansion program (21 new markets) -- 90% of this area is canvassed. CSGP currently serving 6 of the 21. Pushed back 2 of 21 from Q3 to Q405
  • Ad-hoc work and advertising revenue (5% of total revs) was weaker than expected in Q.
  • Gross Margin% should decline in Q405.
  • Inside sales force group growing rapidly (more junior) and outside sales force size remains flat.
  • CFO Frank Carchedi puts a marker for equity based compensation per quarter in 2006 at $2 million. Co. moving away from stock options and toward restricted stock grants.

One stat from the press release that I found interesting: 2005 YTD operating margin, after adding back the 1x charge is at 5.5%. 2004 YTD operating margin is also 5.5%. 30% operating margins should be here soon.

Saturday, October 22, 2005

shorting Amazon.com (AMZN)

I believe that the recent run in AMZN shares from the mid-30's to $46 is nearly done. I'll be going short in the $47's. Here's why:


  • Gross Margin issues
AMZN has committed indefinitely to free shipping promotions and recently introduced it's Amazon Prime discounted shipping program. For H105, net shipping cost was 2.8% of sales compared to 2.7% in H12004. I see it as difficult if not impossible to make marked improvements to this figure by pulling back on free shipping without significantly impacting the top line. It's customers are addicted to the drug and if AMZN stops dealing, their customers will find another provider.

AMZN's international business is growing at a quicker rate than it's domestic business. If GM% stays where it is on the domestic side and international side, this will pressure the consolidated GM% because intl gm's are 400 bp worse than domestic (2Q05).

As Mark Mahaney from Citigroup notes, AMZN's Q2 improvement in GM was largely due to it's other line (co-branded credit card sales, third party sales). I definitely question the sustainability here.

  • Competition
Off the top of my head, I can think of the following on-line retailers that compete with AMZN on a variety of products: Yahoo (through search results and through Yahoo Shopping), EBAY, Shopping.com, Overstock.com, Google (through search and through Froogle), Buy.com. Plus the online/offline big box retailers are also competing hard for their share of the consumer's paycheck.

  • Valuation
AMZN analysts present their earnings estimates in proforma fashion. GAAP 2006 EPS consensus is more likely around $0.80. That's almost 60x where we are now. I think that's out of line for a co. that will have issues driving NA and int'l GM's higher, difficulty in driving the domestic rev growth rate higher and also has to deal with unrelenting competition. For a short, I see the downside to around $51 and the upside back down to around $35.

Thursday, October 20, 2005

Costar Group reports

{I am currently short shares of CSGP}

Revs for the Q in-line, eps a penny short. Guidance for Q4 calls for revs in-line and a penny upside in EPS. Still think valuation is absurd and don't believe regional expansion will support 25%+ intermediate top-line growth rate. I think 10-15% topline CAGR over next 3 years is more realistic. I also still question the analysts who feel that 25%+ operating margins for CSGP are in the bag (9% in the q if you add back the restructuring charge). From my brief look at the pr, I didn't see any mention of the famously high client retention rate. Must've slipped. I'll listen to the cc this weekend and report back with more detail then.

Tuesday, October 18, 2005

Bull vs. Bear on Constellation Brands (STZ)

In the bear corner is JP Morgan. Some JPM thoughts:

  • worried about Vincor acq. attempt, Vincor doesn't fill out any missing holes in STZ portfolio. Also STZ hasn't conducted due dilligence and Mondavi acq. is still being integrated
  • approx 30% of STZ business is in UK, UK Consumer weakening, fragmented manuf. base in UK creates comp. environment.
  • Australian wine glut pressuring prices in Australia and in UK
  • worried about strong US grape harvest on the back of Aussie glut
  • upside from beer will have less of an impact in H2
Our bull comes from DA Davidson:

  • on Vincor, STZ stated that acq isn't "must have" but that they were happy to take part in bidding
  • in the MRQ, on an apples-to-apples basis, wine sales up 10%. Monkey Bay, Twin Fin, Mondavi, Ruffino contribute.
  • Beer up 9% in MRQ compared to a flat to down beer market
  • Spirits sales only up 2%. Temp. slowdown, should be back up to 3-5% for full year.
  • GM% at 29.9%, up 190bp from last year
  • OM% at 16.5%, up 120bp from last year
  • paying down debt gets debt to 2.9B at year end
  • Strong pricing on wines going into holiday season -- fewer markdowns, reduced promotion

Here is the latest on STZ's attempt to acquire Vincor.

Apache (APA) Analyst Review

Bear Stearns and Citigroup each commented on the Analyst meeting that APA held on 9/22. Some thoughts:

  • APA thinks returns from drilling are far better than returns from acquisitions in this market
  • APA has 35 million acres worldwide in core areas
  • Capex for 2005 raised to $3.4B from gt $3B
  • Priorities for cash usage
    • Reinvestment (drilling or acq)
    • Debt repayment
    • Dividend increases
    • Cash build for future acq.
    • Share buybacks
  • APA hedging approx 5-10% of 2006 production
  • Core Areas
    • GOM--short-lived assets, cash cow, many E&P's are abandoning region but APA believes its exploitation expertise is an asset. Highest rates of return to co. In 2004, 29% of production, 21% of reserves
    • Central--long-lived domestic assets, low F&D costs, sustainable growth, 12% of production/23% of reserves in 2004.
    • Canada--top of the list of coal bed methane (unconventional) producers in Canada. Good progress on agreement with XOM, extended to 600k acres, 18% prod/25% reserves
    • Egypt--Lots of potential, plans to increase production in Bahariya from 9910 bbls/day in 2006 to 75k/day in 2010. 17%/12%
    • North Sea--looking at acq in this region, good job at cleaning up Forties. 11%/9%
    • Australia--7%/9%, most active driller in the Carnarvon Basin.
  • Both Citi and BS are at Outperform on APA with TP's of $82 and $85 respectively

Monday, October 17, 2005

Davenport Equity and Bear Stearns on IGT at G2E conf.

  • conference held in Sept.
  • 120 new titles introduced, 70% of which will be ready for casino floors in 6 months
  • casino operators/slot managers excited about server based gaming, not sure how IGT will work the pricing
  • Both Dav. and BS see few near term catalysts for IGT shares
  • IGT targeting server based gaming beta test (1 or 2 with 20-150 machines at each site) by yr. end
  • Dav doesn't think Q3 numbers ($0.31 in eps) will be a slam dunk. Co. sees 28 cents.

I agree with Fleckenstein

when he pegs Bernanke to be our next Fed chair. I see Bernanke as a second-rate Greenspan. And given what I think of Easy Al, that ain't too good.

Sunday, October 16, 2005

an old friend -- Petsmart (PETM)

PETM is a name that I had some success with in the past that has re-appeared on my radar screen.

Basics: recent price -- 21.66
Market Cap -- 3 billion
TTM sales -- 3.6 billion
ROE--around 20%
forward eps est -- 1.38
52 wk. range -- 21-36
stores--700+

Background:

There are basically 3 different parts of the pet supply market. The first, where PETM and Petco (PETC) compete, is the national chain pet supply segment (~25% of the total market). The second segment consists of warehouse clubs, discounters and supermarkets and the 3rd segment is made up of mom & pop pet supply shops. With American Pet Products Manuf. Assoc. calling for 5% market growth, a strong retailer like PETM believes that they still have a long way to go in terms of store expansion (up to 1400 stores in the plan).

What I like:

Industry structure -- With only PETC to worry about in its segment, I see PETM as stealing market share, particularly from mom and pop as the store expansion plans continue.

Pets as humans -- There are more than 100 million dogs and cats in the U.S. and many treat them as they would a child. This humanization trend yields increased spend/pet.

Pet Services growth -- Pet services, like PetsHotel and Doggie Day Care, are high margin and are expected to grow 20%+ in the future. Right now, services is about 7-8% of sales.

Loyalty program -- PETM just launched PetPerks, it's loyalty program for customers. Hope to learn more about customer behavior and be able to segment different customer groups. PETM will then allocate marketing $ accordingly.

Store updates -- PETM will continue with it's successful Eagle 2 remodeling program in 2006-8.

Vaulation-- Consensus calls for PETM to earn $1.38 next year, 16x today's price. I consider that inexpensive for what I feel is a 15% lt grower. Over the next 12-18 months, I see downside to about $19 and upside to $28

What worries me:

PETM recently took down EPS and SSS guidance blaming gas prices (impacted store traffic) and a weak consumer.

Aggressive store expansion -- Don't know if this is bad per se, but co. plans to open 70 net new stores in 2005 and 100 net new stores in 2006.

Operating issues -- Need to watch whether or not new Illinois DC causes any operational hiccups.

New ad campaign -- from "Mart to Smart" rolled out in Sept. Again, I'm not implying that this will be a disaster but advertising plus store expansion plus supply chain initiative will put pressure on operating expenses. Want to see if PETM execs can get operating margins going in the right direction in 2006.

Why not PETC?

There are a few reasons why I prefer PETM to PETC. PETM has a stronger focus on services, has stronger operating margins and inventory turns and a better debt/equity ratio. PETC has also guided for weaker SSS growth compared to PETM. PETC does trade at a slight forward PE discount to PETM but the difference is not significant.

Saturday, October 15, 2005

Barry Ritholtz writes for the Big Picture

The site's certainly worth a look. Here he offers his take on inflation data.

Excellent article from Jim Puplava on our Energy Crisis

There is No Plan B

Here's an interesting excerpt covering a point that I was unaware of:

Demand for refined petroleum and natural gas products is projected to continue to grow. However, these refined products are going to get more expensive due to environmental regulations. Robert Bryce at World Energy Monthly is forecasting that $5 diesel fuel is coming soon. “The surging cost of diesel over the next 12 to 18 months will be caused by new regulations, capacity constraints throughout the midstream and downstream, and soaring demand.”[5] According to Bryce beginning next June, American refiners will have to reduce the amount of sulfur in their diesel from 500 parts per million (ppm) to 15 ppm. In addition beginning in January of next year refiners must also reduce sulfur in gasoline from 90 ppm to 30 ppm.[6] This is the biggest change to motor-fuels since leaded gasoline was phased out three decades ago.

Bryce is predicting major disruptions in the ultra-low sulfur diesel (ULSD) market as a result of these new EPA mandates. The mandates add additional blends of gasoline to the already myriad blends required by different state, city, and federal environmental regulations. Now refineries will have to make up to 50 different blends of gasoline. These different blends will require special segregation in storage and shipping. Segregation of the different fuels will require more tanks and special pipes since they can’t mix different environmental blends of gasoline. That means more costs for refineries, which translates into higher costs for consumers.

All of this takes place next year when the US energy industry will still be making needed repairs to our damaged energy infrastructure as a result of the last two years of storms. Moreover, the US now imports over 1.1 million barrels of gasoline a day to meet demand. In the case of ULSD it is doubtful whether foreign refiners like Venezuela will make the added EPA changes to their refinery mix. US EPA standards are far stricter than those of Western Europe, Asia, or Latin America. Refiners could decide to ship their diesel outside the US in order to avoid the heavy costs of compliance. At the same time foreign exporters could refuse to comply with US EPA standards. Therefore the US may not be able to rely on foreign imports to meet its growing demands. Meanwhile demand will continue to grow for diesel fuel as many US and foreign car manufacturers are adding diesel engines to their product line due to better fuel efficiencies. What we have here is the classic case of the wrong policy at the wrong time. If you’re upset over $3 gasoline, you better buy some Zantac, because $4 and $5 gasoline is not too far away.

Thursday, October 13, 2005

John Makin from the AEI

publishes his Economic Outlook for October.

"More broadly, the loss in growth momentum that appeared during August (prior to Katrina) probably reflected an underlying tension in the U.S. economy. A 1 percentage point growth drag from persistent increases in energy prices has been offset by a 1 percent growth boost from household equity extraction out of the housing sector that, in turn, helped to support consumption. As energy prices have continued to rise and activity and prices in the housing sector have weakened, the net effect has been slower growth."

Wednesday, October 12, 2005

Any buying opportunities amidst the sell-off (PSPT, MMM, XRAY, SYY, VITA, oil/natgas)

It's tough to be a long. Believe me, I know. See APTM. But maybe the sell-off presents us with some opportunities. Here are some of the names where fresh money might be allocated:

PSPT--pretty severe beat down over the last month or so. Co. reports in about two weeks. PSPT has a lot of cash on the b/s for its market cap. We'll see how the co. guides on the upcoming cc, but I think you're getting a 20-25% grower over the next few years at an '06 PE of 12. {currently long PSPT}

MMM -- Investors have shunned MMM after the CEO left and also on fears that ROIC may have peaked. Some may also see MMM as a proxy for U.S. economic health. The last point is only partially true as MMM derives 50%+ of sales outside the U.S. ROIC fears largely stem from the CUNO (water ind.) acquisition that I like and think will pan out over the long-term. At $70.38, you get a 2.4% dividend yield. Plus MMM is well known for it's strong R&D efforts. I'm thinking hard about 3M here, no current position. FYI, here's a recent 3M presentation.

XRAY is the world leader in dental consumables, a pretty steady market in the US and W. Europe with stronger growth in Asia. Good R&D effort here, many annual product introductions. Many ops for acq. (industry consolidator), beta of minus 0.1. I'll consider going long here around $50.

SYY is the foodservice giant that seems to have bounced a bit at $31. Another low beta name with good prospects, high ROE, decent dividend with div. growth potential. Like it around $29.

VITA is another small cap growth stock (gasp!) that I've followed and written about previously. Stock got up to about $4.30 in the past month but now sits at $3.90. Successful with current lineup of VITOSS/VITAGEL product lines. Huge op for Cortoss with VCF. 50% top line grower for something like 9 straight q's. Maybe they'll get a profitable q next year. Will take a hard look around $3.60.

Oil/nat gas stocks (E&P plus oil services plus infrastructure) are still very much on my radar. Sell-off has been pretty abrupt in the names that I follow. Should nat gas prices come in a bit and oil prices dip into the low 50's, 15%+ moves to the downside would not be a surprise. If this scenario comes to pass, I'd have to re-evaluate, but stocks on the top of my mind are XTO, UPL and APA on the E&P side and BHI and BJS on the oil services side, and CBI on the energy infrastructure side. I do belive that any downward moves in commodity prices would be demand driven. I'm a "peak oiler" and don't believe that there is much we can do on the supply side. Do a search for Matt Simmons for more on peak oil.

Happy thoughts from Dr. Doom

Friday, October 07, 2005

Two moves today -- APTM and STZ

Yesterday I wrote briefly about APTM huge disappointment in Q3 and stated that I might pick up some more shares sub $11. Well I certainly got my chance and did add to my position at $7.84!! $11 is a distant memory. I picked up a few things from the CC the co. hosted today that I'd like to share. In general, CEO Choate and new president Wrubel did a good job at talking me off the ledge. Maybe my BS meter is broken, but they came across well on the call.

  • APTM has aggressively purged the lower quality publishers from it's network
  • One of the top 100 web sites has gone live (hope it's #9 and not #99). Could be significant rev. opportunity. PR could follow on this in the next few mo.
  • First time I heard APTM mention leads that provide phone # so that advertiser can follow up with a call (high priced leads obviously, but I question the volume).
  • I think I finally understand DRO vs. the feedback loop. Basically DRO works on the front-end to place the offer in the most appropriate place (where it can generate a response). The feedback loop works to aid the advertiser with conversion (i.e. purchase of the advertiser's product/service). So APTM and the advertiser hope to answer," of these responders to my offer, who will convert on the backend."
As I've said before, I still believe in this space and in APTM but due to recent blunders, the street is not going to give APTM anything until it can put together a few decent quarters. Wouldn't mind seeing Wrubel and Choate do some insider buying at these levels.

FYI: Here is what I originally wrote about APTM a few months back


On STZ, the co. reported a lukewarm quarter and offered somewhat weak guidance. I picked up some shares at $22.94. I think investors are worried about another expensive acq. at this time (Vincor). If STZ can manage to pick up Vincor at a decent price or not pick them up at all, still see this touching $30 sometime in 2006. Imported beer brands are strong and Mondavi opportunities in Europe are ripe for the picking.

The NTRS team issues it's Oct. Outlook

Paul Kasriel expects FFR declines to resume in 2H2006.

What will a new Fed Chair mean to the market?

Mr. Roach discusses in his Friday posting.

Thursday, October 06, 2005

Chicago Bridge and Iron (CBI)

CBI has been on my radar for several months now and has recently sold off pretty hard (intraday it was off 9%+). CBI business focuses on our growing needs for increased energy infrastructure. I'm going to try to be patient here, but at $23-25, I'll take a hard look. Here are the slides (pdf's) of a recent CBI presentation to give you a more solid background into the co.

Pain-- APTM disappoints again

Haven't I been down this road before with SONT? Aptimus put out a pr today taking down guidance for 2005 for the second time and announcing the resignation of their CFO. Way to go guys. As much as this hurts and as stupid as this may sound, I might pick up some more shares sub $11 tommorrow (if we get there). I still believe in the model and feel it's much too early to give the thumbs down to Wrubel and his (and Choat's) push to add top publishers to the network. $11 entry might make sense to those with a multi-year holding period.

Harley Davidson (HDI) – A Contrarian Opportunity?

HDI has gotten hammered over the past few months, closing today below $45. That’s well off the 52 week high of $62. Here are a few of the items weighing down Harley at the moment: worries about the 2006 models, recent weak sales/profit growth, higher interest rates, a deteriorating credit profile in Harley Davidson Financial Services, weak pricing for used bikes, worries about 2006 unit shipments, gas prices, an overburdened U.S. consumer. Plus Bank of America decided to downgrade HDI today sending shares down 6% on strong volume.

Though I still need to dig into the filings further, the contrarian in me likes the way this is shaping up. Harley is still the king in their motorcycle segment. Who are the competitors, Yamaha or Honda? I see them as more of the crotch rocket makers. And I think this classic motorcycle segment is in good shape due to the baby boomers set to retire who will likely flock to the open road. I wouldn’t be surprised to see HDI turn in 7-8% top line and 10-12% eps growth p.a. in the next few years. I can see them continuing to boost the dividend (yield now at 1.3%) and buying back shares in droves. ROE is strong here and HDI is currently trading at a rare discount to the S&P 500. Finally, respected value manager Bill Nygren of Oakmark has HDI as one of his top 25 holdings in the Oakmark Fund. I’ll post more here after conducting more research, but right now, I wouldn’t be surprised to see HDI in the mid-50’s in the next 1-2 years.

{post written on Wednesday}

Martha Stewart (MSO) - the beautiful slide continues

Today I covered two MSO long put positions (Dec 05). Maybe I could enjoy the ride for a few more weeks, but with these options, obviously time is not on my side. I still have some MSO shares short in another account that I'll consider closing out in the mid-teens.

Tuesday, October 04, 2005

what's up with PSPT?

PSPT has been on a pretty steady slide lately (on pretty good volume) but I still picked up some more shares around $7.80 last week. I've posted in the past on why I like PSPT here and here.

Marshall Aeurback

puts out a column at prudentbear.com every week that's worth a look. Here he discusses how the dollar's problems haven't gone away.

the Constellation Brands slide

Did the market have some knowledge of STZ's recent hostile takeover bid for Canadian winery Vincor? Looking at the chart from the past month as STZ slid from 28 to 25, it sure seems so. How do I feel about the proposed deal? While I'd rather STZ take a break, CEO Sands has shown himself to be an able integrator of past acquisitions. Co. has done a fine job with BRL Hardy (Australia) and also recently with Mondavi so I don't know why Vincor would be any different. Plus, though critics will whine about the debt load, STZ is a pretty solid OCF generator. As much as this might be an opportunity to pick up some cheap STZ shares, I'll wait to hear about the quarter when the co. reports on Thurs.

Bill Gross

presents a sequence for the popping of the housing bubble in his October Outlook.

Saturday, October 01, 2005

I'm on vacation at Grand View Lodge in beautiful Niswa, MN

While I'm gone, here are a few articles to chew on over the weekend:

The Maestro drops his Baton -- Roach's latest

Jim Puplava at financialsense.com interviews Mr. Kuntsler, author of "The Long Emergency." Transcript is available.

Marshall Aeurback discusses Gold's recent strength. He writes, "According to the American Enterprise Institute's Veronique de Rugy, this President had boosted total inflation-adjusted discretionary spending in his first term by 35.1 percent. By way of comparison, the “Great Society” President, Lyndon Baines Johnson, boosted discretionary spending 33.4 percent."
So sad.