Doctor Jack's Stock Medicine

[DSteckler]

Is this a good thing, or is this a bad thing? Should one expect companies with lots of cash to buy back shares and/or increase dividends, which I think is a good thing, or are they sitting on boat-loads of cash because there's no potential for a better ROI than a money market account?

I would appreciate any and all responses.

Companies sitting on a boatload of cash rarely go out of business. OTOH, a stock is only useful to a shareholder under on of two conditions: 1) it goes up in price and/or, 2) it pays a dividend greater than money market's yield.

Just because a company is loaded with cash doesn't necessarily do any good for the shareholder if the price per share doesn't go up and/or they don't pay a dividend.

[Rob]

One Good Thing About It Is ...

That's true, Dave. My thought, though, was that if the coffers of the world's biggest companies are bulging with cash, this is eventually going to be a boon to the technology sector, as a tidal wave of tech upgrades sweeps over the horizon. The question is: how soon?

[DSteckler]

That's true, Dave. My thought, though, was that if the coffers of the world's biggest companies are bulging with cash, this is eventually going to be a boon to the technology sector, as a tidal wave of tech upgrades sweeps over the horizon. The question is: how soon?

MSFT was "forced" into declaring a dividend because they were sitting on a load of cash and institutional shareholders were clamoring for them to do something with it.

[Rob]

MSFT was "forced" into declaring a dividend because they were sitting on a load of cash and institutional shareholders were clamoring for them to do something with it.

I remember that. I think I may have been holding some MSFT shares at the time; either that or I had just recently bailed. If I remember correctly, at the time they had about $40 billion in cash. It was a few years ago.

[df21084]

Thanks

Companies sitting on a boatload of cash rarely go out of business. OTOH, a stock is only useful to a shareholder under on of two conditions: 1) it goes up in price and/or, 2) it pays a dividend greater than money market's yield.

Just because a company is loaded with cash doesn't necessarily do any good for the shareholder if the price per share doesn't go up and/or they don't pay a dividend.

Right. A company isn't forced to take any action regarding its cash position. Warren Buffett is sitting of gobs of cash, but BRK doesn't pay a dividend. I suppose that I'm curious as to what Dr. Jack's post was implying, if anything.

I'm glad that Dr. Jack posts on this site. I'm just not sure what, if anything, I should do with the information. (I'm just trying to learn, so I hope nobody misinterprets my posts.)

[Jack Haddad]

Aapl

Bought back 500 calls at .80/contract and wrote 500 June 57.50 at 3.40/contract. Testing the 59.25 os last week's low is imminent!

Bought back 500 June 57.50 calls at .45/contract, and wrote 500 july 55.00 calls at 5.00

[Jack Haddad]

Amd

Wrote 100 June 30.00 calls at 1.55/contract to hedge against my shares which I nought earlier at 30.61

Bought back 100 June 30.00 calls at .05 and wrote 100 July 27.50 calls at .95/contract

[Jack Haddad]

Ebay

Purchased 2 blocks at 33.12, and wrote 200 June 32.50 calls at 1.45

Bought back 200 June 32.50 calls at .05 and wrote 200 July 32.50 at .80/contract.

[Jack Haddad]

Hov

Decided to go with HOV instead. Snatched 3 blocks at 32.90 and wrote 300 June 30 calls for 3.40 in hope that my shares will get called away. I'll take
.50/contract for a return.

Bought back 300 June 30.00 calls at .05, and wrote the July 25.00 at 4.60

[Jack Haddad]

Tso

It has indeed retreated from the 70.55, habitually. The US incentives and open talks with Iran is not good for high oil prices. But, I bought 1 block at 66.21 and wrote 100 June 65.00 at 2.40/contract.

Bought back 100 June 65.00 calls at .05 and wrote the July 60.00 at 6.30

[Jack Haddad]

Orcl

Since June 2003, Oracle has purchased close to 20 software companies ( PeopleSoft, Oblix, Retek, TripleHop, Times Ten, ProfitLogic, Context Media, i-flex, G-Log, Innobase, Thor Technologies, OctetString, TempoSoft, 360Commerce, Seibel Systems, SleepyCat, HotSip, Portal Software, and Demantra). Also, since 2003, Oracle has increased from 9.50 billion to 14 billion in revenues in sales for the year ending in May 2006; that said, this begs the question: has this growth increase been the result of merger acquisitions or true organic growth?!

Comments/opinions?

[Jack Haddad]

Chip-tool growth continues to rise

The book-to-bill ratio in regard to chip-tool orders reported in May was 1.12, suggesting that the market is expanding. Anything above 1.0 is highly regarded. This marks the 4th consecutive month where the ratio stood above 1.0 This simply means that chip-tool companies received $112 in orders for every $100 in sales. The San Jose Semiconductor Equipment and Materials International Group said that orders rose 3% to 1.65 billion in May from a revised 1.6 billion in April.

[Jack Haddad]

Emerging markets

Less than six years after the worst bear market in many investors' memories, people were eagerly dabbling in some of the world's riskiest markets (India, China, South America) in a craze fueled by hopes of recouping money lost when the technology bubble burst. Many of those sufferers are now in double-digit losses. Let's learn a leson all over again.

[Jack Haddad]

INTC's technicals

The close on last Friday of 18.32 closed above the 20EMA channel-- which is quite important. Far more critical, is the breach of the 18.36 resistance made on May 19, 2006. If we breach through that level, then 18.75 shall be the next wall. On 6/13 and 6/14, the high volume was impressive, and we need continued interest in the stock to keep the volume up. It will be very intereting as we approach the July 19 earnings announcement; It appears that were currently experiencing is an "earning-run-up" type of upside.

According to my check, Intel should warn for the second quarter announcement. However, a lot of that may have already been baked in the stock price.

[Jack Haddad]

Msft

According to Robbie Bach, manager of the Xbox video game business, Microsoft is developing a music and video device to compete with Apples iPod and creating its own music service to rival Apples iTunes.