Strong Q1 Finish

March 30, 2012

Happy Friday! It’s the end of the quarter, the best for US equities since 1998. The S&P 500 is set to close the quarter up 11.5%, the Russell 2000 over 12%, and the Dow just under 8% (get some Apple).

Research in Motion (RIMM) announced another weak quarter, with revenue declining 19% year over year. Founder Jim Balsillie has announced he will be leaving the board as the company examines plans to stem the decline. RIMM now has 77 million subscribers (up 3 million in the quarter), and given the company’s $7 billion market cap, those subs are valued at under $100 each. By comparison, Netflix (NFLX) subscribers are valued closer to $300 per subscriber. I don’t have the economics per subscriber at RIMM, but I know that NFLX subs generate approximately $1.20 per month in EBIT.

The BRIC countries, meeting in New Delhi yesterday, criticized US and UK economic policy as well as the IMF. The countries urged the US to abandon quantitative easing and pursue “responsible” economic policies.

You might want to think twice before posting your whereabouts on Facebook. Thanks to The Onion for this video clip. http://youtu.be/ZJ380SHZvYU.

The Fed issued a report saying the market for mortgage backed securities has improved over the past three months. The report also cited improved liquidity in other consumer loan backed assets.

Sir Howard Stringer, the longtime CEO of Sony Corporation, is officially serving his last day as CEO. He will be the chairman until June 30^th.

Demand for the Mega Millions lotto has reached a feverish pitch as it climbs to almost $550 million. The prize is a record for the multi-state lottery. The odds of winning are 175 million to one. My 10-year old suggested it would be a good idea to buy all 175 million combinations to capture the prize. He is correct, however, it would require a large bundle of $20 bills, and quick picking 17.5 million $10 tickets would take roughly 11 years to purchase at a pace of three per minute. I do like the way he’s thinking.

The Final Four is this weekend. CBS is in heaven with no Cinderella stories in the mix, just old time traditional powers.

Have a great weekend

Ned