Archive for February, 2012

17
Feb
12

Second Dot Com Tech Bubble

Thanks to Zero interest rates and the Federal Reserve, yet again another Dot Com or Technology bubble has formed in the stock market. From the collapse from a height achieved of over 5,000 points in 2000, the NASDAQ has reached a 12 year high recently (ironically very close to the Elliot Wave retracement for the Fibonacci followers out there). Let’s look at the following companies with the most insane evaluations for this recent bubble:

* Apple Inc with a market cap of nearly $500 billion trading at over 5 times book value

* Amazon.com with a market cap of nearly $100 billion at it’s height recently trading at over 14 times book value

* Microsoft with a market cap of nearly $260 billion trading at nearly 5 times book value

* Oracle with a market cap of nearly $200 billion trading at nearly 5 times book value

* IBM with a market cap of nearly $230 billion trading at over 11 times book value

* Priceline.com with a market cap of nearly $30 billion at it’s height recently trading at over 12 times book value

* Citrix Systems with a market cap of nearly $16 billion at it’s height recently trading at over 5 times book value

* VMWare with a market cap of nearly $45 billion at it’s height recently trading at nearly 10 times book value

* Google with a market cap of nearly $520 billion trading at nearly 4 times book value

* Baidu.com with a market cap of nearly $45 billion trading at nearly 4 times book value

* Linkedin with a market cap of nearly $12 billion trading at it’s height at nearly 20 times book value

With many of the above companies exaggerating Goodwill on their books to inflate their book values, can you imagine how even more overinflated their stocks actually really are? With various other tech companies trading at or near all time highs within this latest stock market rally, why does the US Fed and Treasury keep repeating their mistakes of the past? Are the Fed and Treasury doing this because they do not have the business knowledge to build a strong economy any other way (aka the old fashioned way)? Is it accidental or is it to deliberately make the few wealthy investors much wealthier?

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07
Feb
12

Should Habs Hire Patrick Roy as GM?

Currently tied for last place in the NHL Eastern Conference, the Montreal Canadiens playoff hopes are pretty much finished for this rather disappointing season. With 19 years since last winning the Stanley Cup, the team is going through it’s longest drought in franchise history. Since Serge Savard was last GM of the once storied franchise, Rejean Houle, Andre Savard, Bob Gainey and Pierre Gauthier have all failed to return the Habs to championship form afterwards. With the farm team rather thin on talent, the Habs franchise could lose for years to come. But who could replace Pierre Gauthier and not repeat the same mistakes as him and his predecessors have made to bring the franchise to it’s current state?

The answer is plain and simple and it’s Patrick Roy. Since taking ownership and coaching the Quebec Remparts of the Q, Roy has established himself as a person who simply knows hockey. Patrick Roy has been able to ensure that his Remparts have been a contender or championship team in his entire tenure as owner. Patrick Roy knows the Quebec league players inside out, has a nack for scouting players and maximizing their potential and also knows how to develop his prospects. His goalies have always been dominant in the entire league, not to mention his forwards in their offensive play (something the Habs are lacking right now).

The main thing about Roy is that he knows how to win and that is something none of the candidates the media has mentioned for a possible replacement for the struggling Gauthier have any experience at. Roy’s passion for the game compliments his knowledge. Any player who played with him during his career knew that although he didn’t wear the C, he was the Team Captain. He pointed out to his players defensive strategies and how the opposing offensive were setting up in his own zone. He fired up his team with his passion. Roy’s history of taking an ordinary team and going all the way would restore greatness to this all but finished Montreal Canadiens franchise. With a franchise record low 3 players of French Canadian background playing for the NHL Montreal Canadiens right now, it is time to bring back the greatest player of the past 30 years that the franchise once had to run the reins as GM. The Habs need Patrick Roy as GM to win.