Posts by Michael Santoli
Michael Santoli at Yahoo Finance 1 hr ago
It started 18 years ago with one man hawking one shirt, a guy trying to persuade elite football players that it was simply better – that it would make them better.
Today, Under Armour (UA) is a $15.2 billion company run by that same guy, stalking the legacy giants of athletic gear, a made-in-America global brand that boasts one of the fastest growth records in consumer products and among the best stock performance in the market.
For these distinctions and how they were achieved -- and for the way the company has turned potential setbacks into wins in 2014 -- Under Armour is the Yahoo Finance Company of the Year.
The squishy retail sales trends of 2014 were a mere rumor for Under Armour, whose revenue and operating profit are on track to climb more than 30%, accelerating from their 2013 pace. Its share price has soared 62.5% this year. And Under Armour’s strong branding efforts, deeply rooted in its sports-performance heritage, earned it Marketer of the Year honors from Advertising Age magazine.
Winning with women
The Company of the Year judging
Michael Santoli at Yahoo Finance 2 days ago
There are plenty of handy guidelines for playing the stock market based on historical patterns and observed seasonal rhythms.
In 2014, it would have been best to ignore them. Close adherence to the calendar-based wisdom would have caused investors to miss much of the year’s upside and likely would have put them in the wrong kind of stocks for the rally that followed the October low.
Market commentators, and we in the financial media, make heavy use of such almanac-style “rules” such as: “As goes January, so goes the year,” and “Sell in May and go away.” Not so long ago, these maxims were little more than the obscure mumblings of Wall Street’s archivists and fodder for Yale Hirsch’s pioneering Stock Trader’s Almanac (carried on by his son, Yahoo Finance Contributor Jeffrey Hirsch).
Yet the prevalence of investment-oriented media with a need to apply some framework or storyline on the inscrutable markets, driven by the wisdom and madness of crowds, has made them mainstream. The ease with which historical market data can be shaped to back-test trends has also boosted their popularity.
The January Indicator
Sell in May and Go Away
Michael Santoli at Yahoo Finance 2 days ago
Young people these days just aren’t so into golf. But they still enjoy smacking golf balls, competing good-naturedly with friends, having a few drinks and meeting others.
This explains the swelling popularity of Topgolf, a fast-expanding chain of golf entertainment centers, at a time when participation in the real game of golf is bumping along near 20-year lows.
Topgolf originated in England, where a pair of golf-loving twin brothers sought a way to liven up driving-range sessions with some competition. They devised an array of targets that could read a microchip embedded in golf balls to score each player for accuracy and distance.
Now, there are 13 Topgolf locations -- three in the U.K., 10 in the U.S., concentrated in the Sun Belt -- and 11 more are under construction. The Dallas-based chain’s backers, which include golf-equipment standout Callaway Golf Co. (ELY), plan to roll out 10 to 12 new ones a year for the next several years, says CEO Ken May.
Michael Santoli at Yahoo Finance 7 days ago
Warmth is on sale this winter, and lower heating expenses could leave plenty of cash left over in some chillier parts of the country for the hot deals retailers are offering this holiday season.
The crash in oil prices has focused plenty of attention on how much Americans are saving on gasoline. Yet the related decline in some heating fuels – and the likelihood that last winter’s extreme cold won’t return – will deliver a nice windfall for many consumers in the Northeast and Midwest.
According to a forecast updated this week by the Energy Information Agency, the 6.5 million households that use heating oil – most of them in the Northeast – should save an average of $632 this winter compared to last year. That would amount to a drop of more than 26% – to an average $1,722 – from the record $2,354 the typical heating-oil household paid in the brutal winter of 2013-14.
There’s another welcome thought that can help keep consumers warm this winter.
Michael Santoli at Yahoo Finance 10 days ago
Stocks have managed to soar for nearly six years with the U.S. recovery merely sputtering along with frequent pauses. So what might the market be able to do now that the American economy appears ready to hum? Not all that much, maybe. Wall Street celebrated the pleasantly surprising November payroll report Friday that showed a gain of 321,000 jobs, with quickening of wage growth. And, indeed, the market had already been lifting consumer stocks in anticipation of a pickup in domestic spending, as employment grows and gasoline prices shrink. Jefferies & Co. market strategists note that Americans’ household net worth has never been as high as current levels at a time when the “misery index” of unemployment plus inflation has fallen toward “decade lows,” as it is now. Here we have the makings of a “new story” that could animate the bull market into next year, as discussed here recently. Yet investors and companies have arguably front-loaded domestic stock-market returns during this bull market, by milking high profit margins and using cheap debt to fuel share buybacks. This could mean that we’re in for a phase when Main Street outperforms Wall Street for a stretch, as companies pay up for workers, multinationals contend with sluggish growth overseas and we approach the long-awaited first interest-rate hike in more than eight years. The share of U.S. output going to private-sector profits is near a multi-decade high with labor's share around post-World War II lows. With worker earnings finally (and perhaps tentatively) starting to climb, this spread should move in reverse.
Michael Santoli at Yahoo Finance 13 days ago
It sounds like the setup to every Web 2.0 business disruption story: Venture-capital fortified software upstarts start giving away a service for which the entrenched oligopoly hasn’t cut prices in years.
When it comes to a new spawn of zero-commission stock-brokerage players and the incumbent online brokers, though, the story’s not likely to play out in the typical way.
Not only are the big five web brokers comfortable continuing to charge $7-$10 per trade as part of their broad set of investment offerings, but would-be disruptors don’t really view the clients of the established firms as their kind of customer at all.
A new broker called Robinhood Financial is preparing to offer free stock trades with no minimum account size, and claims a waiting list of a half million to download the app, set to be available soon for the iPhone.
Another approach is being taken by Loyal3, which allows individuals to buy stocks of a broad but select list of companies commission-free, including buzzy IPOs such as GoPro Inc. (GPRO) and trendy airline Virgin America Inc. (VA).
A ‘commoditized’ service
Michael Santoli at Yahoo Finance 17 days ago
We are likely witnessing the painful, undignified death of the commodity investment “supercycle.”
Oil prices cracked below $70 per barrel after OPEC declined to cut production. Gold sank toward $1150 an ounce after a Swiss vote to compel more central bank gold buying failed and gold holdings in the SPDR Gold ETF (GLD) shrank to a six-year low. Copper sagged beneath $3 per ounce on tepid China manufacturing activity.
As I discuss with Yahoo Finance Editor-in-Chief Aaron Task in the attached video, this collectively represents a global phenomenon of not enough dollars chasing too much “stuff” – an inversion of the classic (and flawed) monetarist definition of inflation.
This deflationary wave has swamped a huge commodity production and investment infrastructure that off more than a decade ago with the rise of China as an industrial power and voracious refiner of raw materials.
Michael Santoli at Yahoo Finance 22 days ago
Six years later, the echoes of the financial crisis are still audible: Banks continue to be fined for misbehavior, regulators continue to rewrite new financial rules, and the public remains mistrustful of Wall Street.
Yet Tim Massad, chair of the Commodity Futures Trading Commission, believes all this activity – albeit unfinished - is building toward more stable and trustworthy financial markets.
“We’ve got to get back to a reality, as well as a perception, that the markets are not only fair but that they are an engine of growth for our economy. They’re not simply a source of profit on Wall Street,” Massad said in an interview from the Global Financial Leadership Conference in Naples, Fla, this month. “We’re making good progress on that.”
Massad, who took the job leading the CFTC in June, helped oversee the Treasury Department's Troubled Asset Relief Program in the immediate crisis aftermath, and previously worked as a private-sector lawyer on financial matters including derivatives.
Indeed he does - six years after the crisis, and counting.
Michael Santoli at Yahoo Finance 23 days ago
Amid the the blissful calm of a new record stock market high, the sharp, fleeting panic of early October can seem like a mere bad dream.
Or was it a premonition of the turmoil that awaits investors facing an unbalanced world economy with central banks pulling in different directions?
Mohamed El-Erian, chief economic advisor for Allianz and former CEO of its Pimco asset management division, fears that the spasm of volatility last month was probably a preview of jumpier times ahead.
In particular, he is concerned that the rapid moves underway in currency markets, driven by stark variations in world growth rates and monetary policies, might make their way into equity markets into next year.
The reason the Standard & Poor’s 500 (^GSPC) tumbled 9% in a few weeks and the 10-year Treasury yield (^TNX) whooshed briefly below 2%, El-Erian says, was “because the two premises the markets had been relying on were shaken.”
Michael Santoli at Yahoo Finance 28 days ago
Light a couple of candles and sing for the “relentless rally,” the tireless gain-without-much-pain phase of this bull market, which has added $8 trillion worth of U.S. stock-market value since it began two years ago.
Sure, this bull market dates back five and a half years to the March 2009 climax of the financial crisis. But it was in mid-November of 2012, just after the election, when the character of the advance changed.
Investors at that point stopped expecting a crisis relapse with every sunrise, the economy moved out of intensive care and into recovery mode, Washington was stalemated to the point of irrelevance and central banks continued delivering easy-money medicine to an economy that decreasingly needed it.
As a result, markets re-embraced risk, stock prices started rising faster than corporate profits and companies turned toward aggressive deal making. This, I’ve called the “liftoff phase.”
Tailwinds pick up behind the U.S. consumer