Over the past few weeks, there has been a resurgence in acquisition activity, fueling an already strong market rally. This news has spanned all regions of the economy ranging from the transportation sector (Burlington Northern being taken over by Berkshire Hathaway) to pharmaceuticals (Schering Plough being acquired by Merck). Most recently, in the consumer sector, Kraft announced its intention to take over confectionery giant Cadbury while Hewlett Packard announced plans to buy 3com. While the deals almost always push up the stock price of the company being acquired, the M&A activity is a welcome development for the investment banking industry, which is still suffering from the hangover of the financial crisis of 2007 and 2008. Investment banks have received nearly $4 billion in revenue from these transactions in 2009, and should this consolidation trend continue, it could be very good news for the entire financial sector. [click to continue…]
Many analysts are building up the coming weeks as one of the most important earnings seasons in recent memory, a report card on the strength and sustainability of the economic recovery in the U.S. So far, the grades have been stellar.
Intel revenue and profits declined from a year ago, but the chip maker managed to beat Wall Street’s expectations, indicating that the bettered chip industry may be on the brink of a comeback. In the financial sector, J.P. Morgan reported much better-than-expected results on the back of strength in its investment banking unit. Despite continued loan losses, J.P. Morgan saw “broad-based growth” in several of its businesses according to chairman and CEO Jamie Dimon. The upbeat results gave hope to investors expecting most major financial institutions to post earnings declines. [click to continue…]
Even the most vocal supporters of passive management and indexing have to admit that certain investor track records are far too stellar to attribute entirely to luck. While I’ve frequently disparaged the concept of active investing, I’m still eager to hear what trends legendary investors are following. The Wall Street Journal’s Gregory Zuckerman recently compiled some [...]
