April 24, 2007

Top 5 Reasons American Express Is a Crack Whore

posted by MR WAVETHEORY at 4/24/2007 08:12:00 PM
American Express Company (NYSE AXP) is in major trouble. It's credit quality is deteriorating faster than you can say "SOS." It has gotten into trouble by granting credit to everybody under they sun and here are 5 reasons American Express is like a crack whore. In fact, I will prove to you that the credit card business is quite similar to the drug business :-) (I mean this in a lighthearted way, so don't get carried away at the analogies!)

1) American Express gives 12 months of 0% interest. Yay! Free Money? Crack whores? First hit is free.

2) American Express raises interest to 20% after 12 months. Oh crap! Crack whores? Second hit will cost you money.

3) American Express gives you points for spending. Crack whores let you score with them when you spend!

4) American Express gives you a personal concierge so that you can arrange a nice menage et trois any where you want to be. Crack whores? Well .... they'll show you a good time!

5) American Express will take away your credit immediately you lose your job. Crack whores? No money. No honey!

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Who Doesn't Own Google?

posted by MR WAVETHEORY at 4/24/2007 09:36:00 AM
I was doing some daily stock research when I looked up the institutional ownership of Google (Nasdaq GOOG) on Nasdaq.com (Nasdaq NDAQ). It's got some nice data on all the nasdaq listed stocks. In total, Google has 770 institutional shareholders and together they own 77.8% of the stock. And guess how many funds don't own Google? Alot of them. According to Wikipedia, there are over 8000 mutual funds in America alone which means 90% of funds in America do not own Google. Wow, that's alot of fund!? But does that mean it will continue going up?

If you subtract 77.8% from 100%, you end up with 22.2% which is close to what the management team and founders own. If the founders don't sell their stock, the "supply" of Google will decline as more shareholders climb on board, but does that tell the whole story?

Here are some interesting stats:

Ownership Analysis # Of Holders Shares
Total Shares Held: 770 179,682,516
New Positions: 106 2,174,356
Increased Positions: 420 11,798,102
Decreased Positions: 249 10,547,348
Holders With Activity: 669 22,345,450
Sold Out Positions: 48 1,406,647

Let me translate this for you:

770 shareholders (institutional) own Google.
106 shareholders were new to Google during the last quarter.
420 shareholders increased their position by 11 million shares while a 249 shareholders reduced their positions by a similar amount.

What's very interesting is that institutional shareholders are vigorously trading Google. 669 shareholders had "activity" - basically, they were churning the stock furiously :-). That means the number of shareholders who actually own it as a long term "Buffett" type investment was a mere 101 shareholders or 12% of the shareholder base. The rest? They are traders!

You can infer several things from these numbers. Within the known universe of Google holders, close to about 10% of them believe it is actually a long term investment. 90% of them believe it is a great trading vehicle.

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