Wall Street

Merrill Lynch Ending

by
Merrill Lynch Ending 1

Once upon a time, the name Merrill Lynch was the most recognized, and maybe most respected Wall Street name. I even worked for the financial advisors part of Merrill Lynch out of the Denver office for a few years back in my financial planner days. Then, in 2008, when the financial markets blew up, it turned out that Merrill Lynch had been selling toxic real estate securities… to itself. That, plus a lot of other damage from the Great Recession drove Merrill Lynch into the arms of Bank of America, who scooped up the company. BoA kept the Merrill Lynch name all of these years since, no doubt hoping that eventually the brand might recapture some of its cache. But, it turns out that American memories aren’t that short, and Merrill Lynch is no longer special, just another part of Wall Street. The Bank of America name actually carries just as much value, if not more. So, BoA has announced that they’ll be ditching the Merrill brand, although it will keep some of the branded financial products (and those will continue to have the trademark bull logo.)

Goldman Sachs Report Card Accountability

by

There is precious little accountability in the world of stock market analysis. I’ve written before about how Goldman Sachs’ chief market analyst (at the time) predicted an up year for stocks during every single year from before the internet bubble burst through to when she finally stopped making market predictions after again predicting  a higher stock market for 2008. If you’re recent market history is a bit fuzzy, 2008 was a disastrous year for stocks and the start of the so-called Great Recession. Even where there appears to be accountability, it is often easily gamed. Analysts get rankings from various financial groups, but those are often laughable. If an analyst has a “Buy” on a stock and that company reports after-hours that its main product slaughters babies by the thousands, when the analyst cuts his outlook before the market opens, he gets credit for shifting his prediction before the ensuing drop in the stock price. So, it was a little breath of fresh air, when MarketWatch decided to take a quick look at the report card for Goldman Sachs’ 2013 investment recommendations. Goldman Sachs 2013 Investment Calls Report Card Remember in elementary school when the teacher had you self-grade some papers. You …

Read More

What Are Expected Earnings?

by

It’s earnings season again, and interest in running high in many companies including technology giants like Amazon, Apple, Facebook, and so on. With each earnings report, there is typically commentary noting how the company’s actual reported earnings ended up comparing to the expected earnings. This phrasing comes up so often, that most investors are used to the terminology long before they actually make any investments, but it is useful to understand just what expected earnings are, and who it is that generates those estimates. How Companies Report Earnings Publicly traded companies are required to issue financial reports about their company on a regular basis. These earnings reports are generated and published each quarter. In addition, companies generate an annual financial report, which typically accompanies the fourth quarter earnings report. There are very specific rules that govern when and how a company can disclose “material information.” A company’s financial information is most definately material. The basic rule is that companies may not make any disclosure of material information without doing so publicly. Just what counts as public has evolved slowly over the last few years, but the basic point is that all investors must get the same information at the same …

Read More