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September 16, 2006

Weekend Headlines

posted by MR WAVETHEORY at 9/16/2006 03:07:00 AM
1. Steve Cohen of SAC Capital is no longer a day trader. Apparently, he now wants to be like Warren Buffett. He looks kind of bald in the photo.
In years past, Mr. Cohen might have sold frantically as the market fell. He had achieved celebrity status in the hedge-fund world, overshadowing such influential managers as George Soros and Julian Robertson Jr., with a hair-trigger approach to trading that was extraordinarily profitable. When stocks appeared to be mispriced, Mr. Cohen would pounce, then he would bail out as soon as they ticked in the right direction. His success had inspired a generation of scrappy Wall Streeters -- some of them with no experience whatsoever handling other people's money -- to open their own hedge funds.

That quick-trading game is now over, says Mr. Cohen. With about 7,000 hedge funds competing for investment ideas, good stock investments are getting more scarce. "It's hard to find ideas that aren't picked over, and harder to get real returns and differentiate yourself," he says. "We're entering a new environment. The days of big returns are gone."

2. Forbes says the best time to buy IPOs is after the initial public offering.
Of the 427 stocks, 339 (79%) underperformed the S&P 500, and a similar number are now worth less than their first-day closing price. The usual pattern we have observed in new-issue results is clear here, namely, that busy years are bad years. In mania-driven 2000, underwriters took 238 technology stocks to market and raised $39 billion. These stocks have an average loss of 71% and a relative-to-market score of 34.

Interesting fact is that Goldman Sachs underwrote the most offerings (dollar wise) but Lehman Brother's IPOs had the best performance since 2000.

3. Traffic is rising fast. Akamai, VitalStream, and Limelight are benefiting big.
But Akamai's stock multiple -- it trades at 52 times expected 2006 earnings -- makes it a rich target. Small rivals Vital-Stream (VSTH) and Limelight are enjoying blistering growth; Vital-Stream's $6 million revenues in the second quarter were just 6% of Akamai's, but they rose 57%, and its customers include MySpace (NWS) and Walt Disney (DIS). Limelight co-founder and chief strategist Michael Gordon claims that by clustering hundreds of servers in a few locations, he is actually better positioned to deliver big video files. Not surprisingly, Akamai dismisses that as marketing hype. Still, Limelight has picked up such notable customers as YouTube.com and the new movie service from Amazon.com (AMZN). A bigger threat, though, could be looming from Akamai's own customers. Right now, Microsoft and Yahoo are both clients; Akamai says it isn't allowed to discuss Google Inc. (GOOG), which leads some analysts to believe it's one as well.
4. It's Hard to Search Video even with Blinkx.
A search on Blinkx for "CBS doubles ratings" turned up a clip of Fox News' analysis of the anchor's debut.

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3 Comments:

Anonymous Christian Cadeo said...

Funny you bring that up about Cohen, I read that article yesterday and had to do a double-take on the photo as he looks completely different than what I remeber he looks like. Unfortantly the guy owns all the rights to his pic so it is impossible to find an old one to compare him with.

He kind of looks like Dr. Evil.

9:53 AM  
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