that tells u that their making a bucketfull of $$$ with margin interest cost's and alternate commision from mm's.did u ever wonder how gs, merril and a list of investment brokerage houses that trade for themselves r able to always beat the avg by a wide margin in good mkt's and bad? i think that's the next big scandal that will b looked at
>>That bugabear has been brought up by every doomsayer since the e-brokers started up . . . in fact they've been predicting zero commission rates from the beginning. It hasn't happened even though there are and have been plenty of companies offering free trades for some time. Cut-rates are just one enticement among many.<<
In fact, come to think of it, that analyst needs to update his information bank. I just remembered that two or three years ago Ameritrade itself offered up to 20 free trades a month. Apparently that could've meant the demise of Ameritrade because Ameritrade called for the demise of Freetrade and inaugurated 'iZone', a self-directed, absolutely-no-frills account through which trades are $5.00.� I'd forgotten about that till just now.
Motley Fool had commented on Ameritrade's Freetrade demise:
But Ameritrade keeps quiet about iTrade. I haven't even come across an ad for it. The only way I can tell that it's still extant is that the iZone login page is not via Ameritrade but via TD Ameritrade, and the page's copyright is 2007.
In short, Ameritrade has met the cut-rate challenge. They just haven't told analysts.
>>That's not much. Hard to believe that's the reason. <<
Interesting. Then E*Trade was trying to embellish nonsubstance.
>>Seems contrived to me, but what do I know. I'm betting they (both AMTD and ETFC) do OK.<<
And I'll bet those two are the best known of all the OLBs. Sometimes I can't remember Schwab's name (I get as far as the 'S') and I never think of Brown. I didn't know Merrill Lynch offered trading accounts. But E*Trade and Ameritrade have been in front since before I started buying AOL one share at a time. With brand recognition like that, it will be hard for them to blow away.
>>Maybe, if something they did impacted the current ER or they needed another look at their projections.<<
If that's the case, I hope Apple gets caught up. I don't enjoy dividing my attention between two major ERs.
>>Yes, actually a superior and faster way to take in a CC.<<
Amen. I comprehend the written word better than the spoken word. My hearing is acute, but I guess the better brain connection is through my eyes. And the saved transcript is at one's elbow for future reference and memory correction. I don't mean to imply one's memory is in one's elbow�.�.�.
>>And likely purposely vague. I doubt E*trade has better seers than the rest of the market, hence my suspicions.<<
Better seers than JPM's and ML's, especially. I didn't see any mention of them guiding downward.
Here's an intriguing tidbit! Wondering about Ameritrade, I wandered over to Seeking Alpha. (Oh, I see I wondered as I wandered.) Ameritrade's transcript wasn't on the recent transcripts page, so I searched for it. Up popped some articles including one titled <Analyst Not Buying Ameritrade's Guidance Cut Explanation>. Does that pique your curiosity or does it not?!
Quoting from . . .
. . . Ameritrade's guidance makes E*Trade sound like Little Sir Echo:
<FP Trading Desk submits: TD Ameritrade Holding Corp. (AMTD) chief Joe Moglia said market volatility and lower activity rates are behind the company�s decision to slash its full year earnings guidance by 11%.
But that explanation is �less than straightforward,� according to Robert Ellis, an analyst with Boston-based research and consulting firm Celent LLC.
�In fact, greater volatility increases trading volume and revenue for online brokerage firms,� Mr. Ellis said.>
The analyst's conjecture is different from yours:
<A bigger factor affecting TD Ameritrade�s earning potential is lower commission rates from competitors, including Just2Trade, SogoInvest and Zecco, he said.
�If these firms catch on, TD Ameritrade may find itself in a perpetual spiral of lowering commission rates, even though it offers superior trading tools,� said the Celent analyst.>
Unlike E*Trade, Ameritrade had reported an 18% loss, so the two OLB's guidance explanations could well differ. But it's very interesting, regardless of E*Trade's and Ameritrade's stated reasons, that a professional analyst doubts, along with you, the same OLB story.
>>Daily Average Retail Trade. DARTs up good, DARTs down bad.<<
Thanks, PE. Going from tech to financial means a whole new parlance to learn.
>>. . . The size of the accounts is why the Merrills, JP Morgans, and such still rule.<<
Which reminds me to retrieve an AP article I just closed.
The article quotes E*Trade's Jarrett Lilien, who said <"Things are much more volatile, and this has made it harder to predict trading levels,"�.�.�. "The markets are almost back to levels they've been before, but retail hasn't really been the driver of this market. It's mostly institutional.">. He expands on that in the CC:
<Without a doubt, the strength that you are seeing in the Dow and in all these market indices is driven institutionally rather than retail. It's much more of an institutional engagement. And my guess is that a big part of that it is there is so much liquidity in the institutional market that has to be put into work, that institutions will look for volatility to trade.>
The AP artice also reported Lilien saying:
<. . . a portion of the concern in 2007 is because of credit risks in the mortgage market. E-Trade has about $50 million of its $29 billion loan portfolio linked to subprime loans.
Lilien said there's a "changed credit environment out there" and that it was prudent to raise E-Trade's provision for loan losses by $28 million.>
Does any of that fit E*Trade's reduced guidance or does it seem contrived? Does the guidance balk against analyst Ellis's opinion that "greater volatility increases trading volume and revenue"?
>>Yes, any change is always suspect, though I'd be more worried if they changed the ER to Friday after close.<<
Indeed. Friday after close was Nortel's favored day and time for announcements.
I went looking to see if I could find out why Apple's ER is a week later than usual, and came upon an older article about Apple's delaying its 10-K that was due 14 December. Maybe this was the delay in my foggy memory.
[[ . . . In its filing, the company said "management has concluded, and the audit committee agrees, that Apple will need to restate its historical financial statements to record non-cash charges for compensation expense relating to past stock option grants. The Company is in the process of finalizing its conclusions regarding the amount of such charges, the resulting tax and accounting impact, and which periods require restatement." ]]
Would that delay have had a domino effect, knocking Apple's current 10-Q into the next week?
>>But their CCs will probably overlap . . .oh well.<<
Split brain mode is hard to achieve. But at least the CCs are replayable, so we can listen to them one at a time. And thank heavens for Seeking Alpha's transcripts. I don't know how we ever could remember what we heard in CCs before Seeking Alpha came to the rescue. Their transcripts � free and open to street people � are a Class AAA service.
>>Some people will switch, but cut-rate is cut-rate. The desirable accounts are the people with a lot of assets or those who trade a lot. Those with a lot of assets are less concerned with the cut-rates, and the heavy traders get the cut-rates no matter where they are. I really don't think it's that big of a deal so far as profit is concerned.<<
This leaves the unpalatable alternative that E*Trade was telling the truth. LOL
But what E*Trade said in their CC was "Without question, like everyone else in the financial services sector, we are facing an environment that is different from the one anticipated even just a few months ago." That is _vague_. And E*Trade didn't say Ameritrade, or any other brokerage, was experiencing the same "different" environment. And certainly J. P. Morgan and Merrill Lynch didn't blame a "different environment" for their scintillating reports.
What is 'DART'? I'm guessing the 'RT' is 'Retail Trades', but I'm a blank on the 'DA'.
Also in its CC, E*Trade said "Despite the strong account growth we generated in the quarter, overall retail investor activity turned out to be a bit weaker than we had expected coming into the year. Nonetheless, total DART volume in quarter was 170,000, up 9% sequentially, but down 6% year-over-year."
Do you know whether E*Trade's prior quarter reported DART up or down over the prior year? over the prior quarter?
Was E*Trade trying to shift attention from its strong account growth?
>>I hope one of them will report before the open. That would be good.<<
Apple doesn't want anyone to know. First I asked the usual reliable sources (Knobias, Forbes's Event Calendar, Google, Yahoo's list of Apple news). Not even Google could unearth the time for Apple's ER.
Then *lightbulb!* it occurred to me to ask Apple. Are you aware that in their entire double tier of links to the Apple site's components, there is none to Investor Relations? Finally, after searching the Apple site for it, I found Apple, like other trustworthy companies, does have an Investor Relations. But, reminding of Apple's options shenanigans, not up front and within easy view!
Anyway, Apple is keeping with its tradition and announcing earnings results at 2 pm Pacific Time. Bye bye hopes for a BMO report from Apple. Now I'm wondering whether Apple delayed its ER because of some bookkeeping snag(s) related to the options probe or so fewer eyes would be upon a disappointing report. Though Apple's increased Mac sales can't disappoint. Faintly in my memory is a bookkeeping reason for delay, but I no can remember more.
The announcement for Apple's conference call is here (linked from Apple's legendary IR page):
Unlike Apple, Akamai provides a link right in front of your eyes to its IR page, and the headline there, dated the 23rd of March, says "Akamai To Hold First Quarter Investor Conference Call On Wednesday, April 25th At 4:30 PM ET."
So much for hope. At least Akamai will be reporting a half-hour before Apple.
>>I don't see any reason for it to falter. I hope it lodges solidly in the 13Ks.<<
That hope has a better chance of being realized than your hope for a BMO report from Apple or Akamai.
>>Maybe that lack of participation will be remedied soon if the rally continues. Then again, maybe it's fear of the Fed or the depressed mortgage industry. In a good economy financials do well, and this is a good economy.<<
Joe noted that, while the subprime mortgage state has affected banks somewhat, none of the banks reporting so far have felt a major hit. But you may have hit on it, just plain fear of a mortgage fallout could be keeping investors away. Maybe it's time for some contrarian energy.
The bank index (BKX) chart does show a strong upswing since the 13th, so could be the remedy has begun. I'm getting more and more hopeful about having bought ETFC when I did. I hope the sector's recent upswing doesn't do what the prior one did.
I don't know why Yahoo broke the link in my previous post. I put a paragraph between the angle-bracketed quote and the links. I'm going to try using double straight brackets for quoting articles and the like, to see whether that will ward off The Attacker. Anyway, if you'd like to compare the banking industry's chart against ETFC's, try this link. You'll have to scroll down a ways to its place in the newsletter. The banking index's symbol is BKX.
>>I'm not sure, beginning of this quarter maybe, but I doubt E*trade lost many accounts because of that, too much of what is offered in those extras is available for free in many places (Yahoo for example). The real time level 2 is the only thing I can think of the loss of which might bother anyone, mainly traders, and traders should easily meet the requirements to get it.<<
That's true. But I think if an OLB took away some of the services they'd been including in my account�.�.�. at the same time Bank of America and Wells Fargo were offering free trades�.�.�. I'd ask why in heck am I paying premium for bare bones. And then I'd migrate either to one of the aforementioned free-trades OLBs or to a bare bones OLB and get my trades for less. E*Trade's stripping away Yahoo-level freebies could not have set well with many E*Trade account holders. TD Waterhouse's clients migrated en masse to Scottrade when Waterhouse started charging for inactivity. I learned that from a Waterhouse rep, not from Scottrade.
Last night I read some of Seeking Alpha's transcript of E*Trade's CC, and my curiosity took me from there. It's too long to include in this post, and this double-threaded thread is getting too tangled, so I'll continue in a new thread.
>>Not for the moment with that Google ER, but next week Apple reports (and Akamai).<<
A double header. The crowds will go wild. We need to find an organ. I hope Steve Jobs will go back to his old ER schedule next quarter. I like one favorite stock reporting at a time.
>>I don't think the volume was high enough for any serious unloading, and I doubt anyone anticipates a bad ER.<<
Just the Dow record breakers have been enough to keep people in euphoria. By the way, remember yesterday morning you said something about the Dow looking like it will blast through 13,000? It came close! 12,961.
Last night I finally got around to opening Joe Duarte's last three newsletters. He said something that made me immediately think of ETFC:
< Market rallies that last tend to have certain components that are missing from the current rally, another sign of some peculiarity associated with the current scenario. One of them is the usual participation of the banking sector. Banking and brokerage stocks are key bellwethers for the market, since both are central to the wellbeing of the economy and Wall Street.
Yet, this rally has been marked by a lack of participation from the financial sector. The KBW Banking Index (BKX, below) has been flat since the rally started, and has the look of a tired sector.>
You can see his chart illustrating this in his shortened free online version. It'll remind you of ETFC's chart.