Blog Posts by Henry Blodget

Apple (AAPL) CEO Tim Cook is going to get raked over the coals by Congress for the company's spectacular tax-dodging techniques.

No one is suggesting that any of these techniques are illegal.

No one is suggesting that Apple is doing anything that any number of other massive multi-national companies aren't doing.

And no one is suggesting that companies should voluntarily pay more taxes than they absolutely have to pay. According to tax expert David Cay Johnston, the Supreme Court "says a company or an individual has an absolute right to pay the minimum in tax the law requires." (But just because you can doesn't mean that it's proper, he adds).

But boy are Apple's tax-dodging techniques effective.

And, boy, do they make clear that the United States (and, ideally, other world governments) have to get together to simplify corporate tax policies. Or else this highly sophisticated tax-dodging will continue to become a bigger and bigger source of corporate profitability.

In preparation for

Yahoo! (YHOO) announced this morning that it is buying social blogging company Tumblr for $1.1 billion in cash.

Tumblr is a six-year old company based in New York. It is run by a charismatic 26 year-old entrepreneur named David Karp, who will pocket hundreds of millions of dollars on the deal and has therefore become an object of fascination for the New York tabloids.

Related: High School Dropout to Tech Titan

Tumblr allows users to create simple blogs and share words, pictures, and video. It is one of a handful of massive social publishing platforms created in the past decade, a group that also includes companies like Facebook (FB), Twitter, Instagram, and Pinterest.

Tumblr's audience is massive. The company's blogs receive 300 million unique visitors per month, and a staggering 120,000 new blogs are created every day (not blog posts--blogs). This mind-blowing traffic has made Tumblr one of the largest digital media companies in the world.

The Tumblr deal will vastly increase

President Obama's second term has suddenly become embroiled in three scandals that have put the Administration on the defensive:

• Questions about the White House's role in communications about the Benghazi embassy attack,
• The IRS's unfair targeting of conservative groups for tax harassment, and
• The Justice Department's decision to sub-poena phone records from AP reporters in an investigation of a national security leak.

These scandals have eclipsed whatever policy agenda the Administration might otherwise have been pursuing. And they have prompted some to suggest that the Republicans will clean up in the midterm elections and that President Obama's second term is already effectively over.

The Administration's political opponents are obviously doing everything they can to make the scandals sound positively outrageous and to hold the White House directly responsible for them.

And each of these events certainly deserves to be investigated.

As yet, however, despite the decibel level of the

Shareholder activism is a rough business.

Investors who amass large stockholdings and then demand changes are usually resisted and excoriated by the companies' managements, who do everything they can to defeat them. The resulting fights for control can often be public and ugly, with both sides seeking to dig up dirt or arguments with which to discredit the other side. In the end, either the activist shareholders or the incumbent managers emerge victorious, and the losers withdraw in bloody defeat.

One of the most famous and successful activist investors in the United States is hedge-fund manager Dan Loeb of Third Point.

Related: JPMorgan’s Dimon Problem: A $20 Billion Gamble?

Early in his career, Loeb became known for writing acid-tongued letters to managements, publicly ridiculing them for their incompetence. In recent years, Loeb's rhetoric has mellowed, but his punches have landed with even more sting. Last year, for example, after buying a big stake in the reeling Yahoo, Inc.,

The only successful new American car company in more than half a century, Tesla (TSLA), reported its first quarterly profit yesterday.

It wasn't a big profit.

But the fact that it was any sort of profit blew away investors, who instantly bid the company's stock up 25% to a new high near $70.

Helping fuel this gigantic move was presumably collective panic on the part of the many investors who are short Tesla's stock, betting that the electric car company will falter and its stock will tank.

When short-sellers are forced to "cover" their bets on unexpected good news, their panic buying often creates demand that drives stock prices through the roof. And Tesla's stock presumably benefitted from that.

Related: The Next Big U.S. IPO? It May Be Chrysler

But Tesla has defied critics and short-sellers from the beginning.

When entrepreneur Elon Musk and others founded the company a decade ago, most people assumed that Tesla's ride would be short-lived. After all, the fate of new American car

During the financial crisis, JP Morgan Chairman and CEO Jamie Dimon was the golden boy of Wall Street.

Dimon's bank, JP Morgan, was one of the only big Wall Street's banks that didn't obviously need a bailout during the crisis, and Dimon himself made a strong, likable, and articulate spokesperson for the industry in a period when everyone hated it.

After the financial crisis, however, Dimon was quick to criticize the Obama administration and others for bashing fat-cat bankers and quick to resist new Wall Street regulations, arguing that the industry didn't need any new rules and that firms could police themselves.

Then JP Morgan had a massive trading bet go awry, costing the firm $6 billion. And Dimon's critics pounced.

A $6 billion loss on a trade didn't put JP Morgan in jeopardy, but Dimon was forced to admit that the firm hadn't been aware how much risk it was taking. And that blew a big hole in Dimon's argument that Wall Street didn't need rules and baby-sitters.

And now, JP

It's May again, so that means you can't turn on financial TV without being bombarded with advice to dump all your stocks until the end of the summer when it's safe to buy them again.

This advice, "Sell in May and go away," is based on analyses of average market performance by month over the past 50 years.

Related: Dow 15,000: 'Sometimes a Bullish Market Is Just a Bullish Market'

As you would expect (based on the aphorism), and as you can see in this chart, May has tended to be a weak month for stock performance, though stocks have still delivered a positive return in the month. June has been negative. July and August, meanwhile, have been good. September has been the real disaster. All other months, with the exception of February, have been strongly positive.

So if, on average, June has seen negative returns and September has seen very negative returns, should you sell your stocks now and go away?

Absolutely not.

Unless you don't care about the tax and transaction costs you will incur

One of the most common numbers you hear if you listen to stock forecasts is the "P/E ratio"--the price of the stock or market relative to the company's earnings.

Sometimes, the P/E ratio can be very useful for getting a sense of whether a stock or market is cheap or expensive.

At other times, however, the number can be highly misleading.

One of the most common ways the P/E ratio can be misused, for example, is when investors cite the P/E of a small, rapidly growing company that currently has a low (or no) profit margin. In these cases, the company will often have an astronomically high P/E on its historical earnings, which can lead some investors to conclude that it is "ridiculously priced."

What these investors often don't realize, however, is that stocks trade based on future earnings expectations, not past earnings, and the company's earnings might be expected to grow extremely rapidly in the future. Investors who are looking at the stock's price relative to possible future