By GuruFocus, Contributor T. Rowe Price Equity Income Fund just reported their second quarter portfolio. The fund is run by Brian Rogers, CIO of T. Rowe Price. With the stock market making new highs every day, this is what Brian Rogers wrote in his recent commentary: …read more
Source: FULL ARTICLE at Forbes Latest
By Robert Lenzner, Forbes Staff The President of the Federal Reserve Bank of Boston, Erick Rosengren, suggested this week that there could still be runs on money market mutual funds, as took place at the peak of the 2008 financial crisis, since these funds have “no capital” and invest in uninsured short term securities of banks and other financial service firms. While debate over potential regulatory solutions for money market funds continues on, the Boston Fed chief, emphasized that the safety of the money market mutual funds are a “significant unresolved issue.” As of April 13 there was $903.56 billion in retail money market funds sponsored by Fidelity, T. Rowe Price, Dreyfus, Invesco and others, The total amount of all kinds of money market funds, some owned by institutional investors, was $2.6 trillion. The average weekly yield was a record low of only 0.02%. He also singled out the issue of capital for the broker-dealer fraternity, where he raised the problem of “virtually no change for broker-dealers since the collapse of Lehman Brothers in September, 2008 and the shotgun marriage of Merrill Lynch into BankAmerica. The solution Rosengren recommended was that the “larger(these investment firms) get the higher the capital ratio”: should be imposed on them. The Boston Fed chief executive, speaking at Bard College’s Levy Institute conference on the economy and financial markets, seemed to be suggesting that the cause for this vacuum in policy is that “Regulatory bodies haven’t evolved as much as the financial markets.” In other words, 5 years after the 2008 meltdown we still have a major challenge in trying to make the global financial system secure against runs and speculative bubbles. There is still further to go in the structural reorganization of the danger from derivatives, but he believes clearing derivatives contracts on exchanges and the decline in bilateral transactions has reduced an element of risk. Nevertheless, Rosengren made crystal clear in conversation after his talk that he “sees no bubbles anywhere, not even in real estate where prices are still below their 2006 peak.” He believes prices of residential real estate in Boston and New York are still 15-20% under their peak– and prices in Miami, Phoenix, Las Vegas, California– are still priced at a steeper discount to the peak in 2006. As for the economy in general, Rosengren sees “traction” picking up momentum, in which case he would support the “prudent” position of gradually reducing the QE stimulus program. However, he is troubled by the fact that monetary policy(quantitative easing and record low interest rates) are in conflict with fiscal policy, the restraint of sequester and reduction of federal, state and local government spending, ie “the Obama cuts.”
By Chris Hill, The Motley Fool
Filed under: Investing
The following video is from Thursday’s MarketFoolery podcast, in which host Chris Hill, along with analysts Matt Argersinger, Andy Cross, and Bryan Hinmon, discuss the top business and investing stories of the day.
Which investors are worth following? In this installment of MarketFoolery, our analysts talk about why they’re following Cook and Bynum’s Richard Cook and Dowe Bynum, Martin Capital’s Frank Martin, Alleghany‘s CEO Weston Hicks, and T. Rowe Price‘s Preston Athey.
Looking for more great advice?
The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.
The relevant video segments can be found between 1:07 and 6:56.
For the full video of today’s MarketFoolery, click here.
The article 4 Investors Worth Following originally appeared on Fool.com.
Andy Cross has no position in any stocks mentioned. Bryan Hinmon, CFA, has no position in any stocks mentioned. Chris Hill has no position in any stocks mentioned. Fool contributor Matthew Argersinger owns shares of Alleghany. The Motley Fool owns shares of Alleghany. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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From: http://www.dailyfinance.com/2013/04/11/4-investors-worth-following/
By Adam Levine-Weinberg, The Motley Fool
Filed under: Investing
Troubled PC giant Dell has been embroiled in a months-long battle with shareholders over founder and CEO Michael Dell‘s plan to take the company private (with help from Silver Lake Partners and Microsoft ). Two of Dell’s major shareholders, Southeastern Asset Management and T. Rowe Price, protested that the proposed buyout price of $13.65 was too low. Subsequently, Blackstone Group offered to pay $14.25 per share for Dell, and activist investor Carl Icahn offered to buy 58% of the company for $15 per share.
The recent bidding war has driven the Dell stock price well beyond the original proposed deal price of $13.65. However, last week Dell filed a discouraging proxy statement, which indicated that management expects things to get significantly worse for the company before any potential turnaround. The Special Committee of independent directors that evaluated the rival proposals concluded that the certainty of $13.65 cash from Michael Dell and Silver Lake was superior for shareholders to the Blackstone and Icahn bids, which would leave part of the company trading publicly. With Dell stock still trading at a premium to the Dell/Silver Lake offer — $14.30 as of Monday’s close — it is high time for shareholders to sell and lock in gains.
PC weakness continues
Dell’s big long-term problem is the decline of the PC, which has been cannibalized by the growth of mobile computing (i.e., tablets and even smartphones). The PC replacement cycle has slowed dramatically, pressuring Dell and competitors like Hewlett-Packard . Last year, HP had to write down the value of the Compaq trade name by $1.2 billion due in large part to declining PC sales. Yet the PC business is just a small part of what HP does, representing less than 30% of revenue and less than 10% of segment earnings from operations last quarter.
By contrast, while Dell has been trying to diversify into services, software, networking, and other growth areas, PC sales still represent half of the company’s revenue, and roughly 25%-30% of earnings. As a result, Dell has a lot more to lose from the continuation of weak PC sales than HP. In last week’s proxy filing, Dell stated that uptake of Microsoft’s new Windows 8 has been poor, and enterprise upgrades to Windows 7 PCs have unexpectedly slowed as well. According to a study by Boston Consulting Group (commissioned by Dell), PC division revenue could decline by as much as $10 billion over the next four years.
What’s the solution?
Michael Dell seems to be planning to double down on investments to move the company aggressively into the enterprise hardware, software, and services markets. The investments necessary to execute this transformation will depress profitability for several years. Given the strong competition in those markets from IBM, HP, and others, success is not assured.
It’s hard to fault Michael Dell for taking drastic measures to revitalize the business he founded in his dorm room decades ago. The more moderate transformation strategy …read more
Source: FULL ARTICLE at DailyFinance
Filed under: Family Money, Personal Finance, Budgeting
April is Financial Literacy month, which is the personal finance industry’s cue to ramp up its message that high school — and the home — is ground zero for the movement. After all, if we can teach teens to handle money responsibly, we can ensure that the next generation of adults won’t make a mess of things. Right?
Unfortunately, teens don’t have quite as much faith in their own financial futures as most people, according to a new survey by Junior Achievement USA/Allstate Foundation.
Nearly 60 percent of teens said they don’t expect to be ready to financially support themselves by age 24 — a far cry from the same survey two years ago, when 75 percent of teens felt the same. Only 25 percent of teens said they’d be prepared by age 27.
That’s a more than double the number in the same survey two years ago, when just 12 percent of teens felt the same.
To be fair, they have reasons to be wary of flying the coop. The job market, though slowly improving, isn’t exactly stellar, the cost of college tuition is perpetually rising, and student loans rates have tripled in the last decade.
“Parents continue to be the No.1 influence on teens when it comes to money, so helping their teens set financial goals and take steps to meet them should pay off financially for both teens and their parents,” said Don Civgin, president and chief executive officer of Allstate Financial.
Therein lies the central issue of financial literacy: Whose job is it to teach kids how to manage money — their teachers or their parents?
Mom and Dad may know which snacks to pack, how to fix a flat and when to lecture about college and safe sex, but it’s not like they have to pass a financial literacy test before bringing children into the world.
In a T. Rowe Price survey, more than half of parents said they only feel ‘fairly’ prepared to discuss finances with their children. Another 18 percent said they aren’t prepared at all.
On the other hand, financial literacy is part of the curriculum in roughly half the country in the U.S. There are free financial literacy services for teens, but convincing them to learn about budgeting in lieu of playing after school sports is likely a tall order.
There’s a solid case for either side of the debate. The reality is that it will likely take both.
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<a target=_blank …read more
Source: FULL ARTICLE at DailyFinance
By Robert Lenzner, Forbes Staff Don’t punish the banks because you’ll be punishing their all suffering shareholders. The proper solution obviously is to break-up the banks into their stand-alone parts. Without government pressure, voluntarily, strategically, with the proper stated purpose of benefiting the banks shareholders, who have mostly not gotten back to the prices of the their shares in late 2006 or 2007. I’m told there are hints of this solution bubbling amongs the bank analyst fraternity. Spin off the asset management division that manages several hundred billion of other people’s money into a public company that will have the multiple of a T. Rowe Price, or a BlackRock, which will have a transparent cash flow and sell at some price-earnings multiple higher than a bank today and behave according to the way the stock market behaves. It would be regulated by the SEC and be dependent on its own performance and not a bunch of financial activities with leverage that few can understand, much less put a dollar value on. Then, spin off the consumer banking operation into a separate stand-alone business. Its profit margins will be transparent as the spread between the bank’s borrowing costs and the yield on the loans or mortgages it finances. I’d be willing to bet these operations, with more predictable earnings and a steady dividend would also sell at greater than 10 times earnings. These spin offs would be regulated by the Federal Deposit Insurance Commission (FDIC), which might well strongly suggest a cap on the leverage that can be used of between 10 and 15 times. Thirdly, the wholesale banking operations, the collateralized loans, the derivative positions, the futures, puts and calls would be in their own unit. Investors and analysts and regulators would be able to evaluate these institutions more rationally, especially if they are forced to disclose more exactly what they are doing globally and with whom. We need to know who is doing what to whom in numbers, in amounts of debt, even if wee don’t know the identity of all the counter-parties. It’s not clear to me this spin-off could sell well above 10 times earnings because the profits might be volatile. It would be regulated by the Federal Reserve Bank, who has the sophisticated understanding to guard the public interest from another run on the banks.(See my blog “Don’t Buy Another Share of a Bank Until You Read This Blog”) To maintain clean lines of independence I’d propose different boards of directors for each spin-off– possibly including some of the most prescient hardest working CEOS and directors of today’s institution, who would not have executive power over the spin-offs. The empire builders who are only happy getting larger by acquisition should be retired with a copper parachute. For the spin-offs to be successful, they have to be autonomous. Tomorrow, I will have a look at Citigroup, BankAmerica, Wells Fargo, JP Morgan, Goldman Sachs, Morgan Stanley and try to describe what values might be created from this plan. I’d bet my net worth …read more
Source: FULL ARTICLE at Forbes Latest
By Tim Brugger, The Motley Fool
Filed under: Investing
It’s deja vu all over again. On March 11, a Lenovo executive speculated about acquiring smartphone manufacturer BlackBerry . Lenovo CEO Yang Yuanqing’s recent quote in a French paper, in which he says he would “eventually consider buying” BlackBerry, comes just a couple of months after Lenovo’s CFO, Wong Wai Ming, alluded to the same thing.
Buyout talk makes for interesting water-cooler discussions, but does it suddenly make BlackBerry a better investment today than it was last week?
Investing in buyout talk can be risky
Shareholders sure didn’t mind Yuanqing’s latest blurb in the French paper; BlackBerry’s stock price jumped 14% on Monday. BlackBerry CEO Thorsten Heins isn’t talking about the latest quotes, but he previously said he didn’t know why Ming had made similar remarks. Unless there are stealthy meetings going on, Heins is probably wondering the same thing this go-round, too.
Though not entirely opposed to discussing a deal for BlackBerry, Heins has made it pretty clear he’d rather focus on the Z10 and Q10 rollouts, exploring licensing opportunities for BB10 and other revenue-generating initiatives, rather than put BlackBerry on the auction block. And in spite of BlackBerry’s recent stock-price jump, buyouts are far from a sure thing for investors.
In some cases, acquisitions can pay off, as Heinz shareholders found out recently following Warren Buffett’s attempt to get heavy into ketchup.
However, Dell offers the opposite side of the buyout coin. Initially, Dell owners were ecstatic with the 25% premium CEO Michael Dell and his group offered. But they quickly came down to Earth after big-time investors, including Carl Icahn, T. Rowe Price, and others, started grumbling about its valuation. The Dell deal may still get done, but it demonstrates the uncertainties surrounding investing on rumors, particularly buyout rumors.
What to really focus on
For mid- to long-term investors, BlackBerry only makes sense if it can accomplish Heins’ aggressive objectives, such as expanding revenue streams and winning back market share. But it’s a tall order to put a crimp in Apple‘s domestic iPhone dominance and 21% share of the global OS market, Samsung’s various smartphone alternatives, or Google‘s Android with its nearly 70% share of worldwide mobile devices running its Android OS. Unfortunately for BlackBerry, even its own backyard — the enterprise market — is getting harder to win.
As the lines between the personal and professional smartphone markets fade, Apple, Samsung, and Google become even more worrisome for BlackBerry. Some pooh-poohed the notion that Home Depot‘s decision to switch 10,000 of its executives from BlackBerrys to iPhones was significant. But the Home Depot news indicates a changing marketplace where more employees bring their own devices to work. Then there’s Samsung’s new Knox app, which allows its Google Android OS phone customers to securely switch between work and personal use. Those trends leave BlackBerry directly in the path of the biggest of the big hitters.
AT&T‘s decision to begin offering BlackBerry’s new Z10 in the States on March 22 was welcome news. Getting …read more
Source: FULL ARTICLE at DailyFinance
T. …read more
Source: FULL ARTICLE at Fox Business Headlines
Money manager T. …read more
Source: FULL ARTICLE at Fox Business Headlines
T. Rowe Price plans to vote against the landmark $24.4 billion buyout of Dell, a spokesman says, adding considerable weight to the expanding campaign against the deal. …read more
Source: FULL ARTICLE at Forbes Latest
By Narrative Science Optimism surrounds T. Rowe Price (TROW), as it gets ready to report its fourth quarter results on Tuesday, January 29, 2013. Analysts are expecting the company to book a profit of 89 cents a share, up from 73 cents a year ago.
Source: FULL ARTICLE at Forbes Markets
