CW on The Live Desk with Martha MacCallum

Administrator's Note: We hope you were able to catch Cody on The Live Desk with Martha MacCallum yesterday afternoon.  If not, here are the clips, broken down by segment.  Topics included the Democrats' Iraq war policies, the investigation of Smartmatic Corporation, and risqué Halloween costumes.

Segment 1


Segment 2

Segment 3

CW on The Live Desk with Martha MacCallum

I'll be back on The Live Desk with Martha MacCallum again tomorrow at 1:30pm.   Here's a pretty funny pic from last week's appearance.  Sometimes it's all in the context, huh?

CW on RM: Digging Into the Options Debacle

Digging Into the Options Debacle
10/26/2006 10:54 AM

Let's talk about this options backdating debacle.

Most important to this discussion is that managements at companies that backdated options misled us investors about how profitable their companies were. They told us that they were paying their richest executives a certain amount in a certain, legal and straightforward manner.

But that wasn't the case. They were issuing options and then going back and pricing them at the lowest prices they could, but they never told any of us that. They misled us!

This is an outrageous violation of the fiduciary obligation to shareholders. Backdating options to low prices of the past is a way of shifting shareholder value from investors to those who were awarded the options without anyone's knowledge. If they wanted to backdate and told us that was what they were doing, there would be nothing to fret over now.

There would be none of these "noncash charges," which at Broadcom now total more than 1,500,000,000 dollars (written that way for emphasis). Such charges wouldn't exist at all if they had simply disclosed what they were doing when they were doing it. No, every time a company takes a noncash charge because of options backdating, it's because they misled their investors in the past and now have to own up to it.

It seems that all of Wall Street, including the mainstream publications and, of course, the sell-side has bought into the line of thinking from Apple, F5, Broadcom and others, which have admitted the problem, but want to act like it's no big deal.

The general public deserves to understand the reality of this scandal, and we should tell it like it is. That means avoiding the accepted buzzwords that those with vested interests in making this debacle go away have invented to explain it away.

Misleading millions of investors, not to mention the IRS, to the tune of hundreds of millions or even billions of dollars is a huge deal. It's wrong. It's not OK. And I expect the IRS and the SEC to come down hard on these companies.

Let's stop phrasing it as if it's simply a footnote on the 10-K.

These companies and the managements misled us. Period.

At the time of publication, the firm in which Willard is a partner was net long Apple, although positions can change at any time and without notice.

CW on RM: Cable: A Bet Against the Revolution

Cable: A Bet Against the Revolution
10/24/2006 11:57 AM

In his blog today, Jim Cramer wrote that AT&T and Comcast are poised to prosper. I disagree.

I believe both companies face secular declines in their core businesses. That secular decline has nothing to do with the competition between these two dinosaurs and their respective industries. No, it's never been about telco vs. cable. It's about broadcast vs. on-demand from the Internet.

The Internet's ability to distribute content on demand will completely disrupt the pricing paradigm in video distribution. Think about it this way: Cable companies like to talk about "bundling" -- that "triple play" concept in which voice, video and Internet are all on one bill -- as a positive for their customers. They actually have the nerve to call getting that stuff bundled together on one bill a "convenience." Hah! You know what I'd find convenient? To stop paying out the nose for a bundle of garbage that I'll never bother watching.

Cable companies sell me a bundle of 150 channels, even though I only want access to about 15 of them. So 90% of the channels for which I'm paying are a complete waste. But the cable companies will only offer me channels packaged that way. At least I can get the paper bill for that "bundled" cable on the same bill as my Internet and phone, though!

But it gets even worse. Not only do I want just 10% of the channels that I'm forced to pay for when I become a customer, but I also want to watch only about five to 10 hours of each of those channels every month. But the cable company "bundles" my favorite programs with hours and hours of other programming that I will never watch on those channels.

For example, I like "The Daily Show" on Comedy Central. But when that show is over, the cable company makes me pay for "Drawn Together" or whatever it pushes into my TV set. In other words, I'm paying $150 a month for 150,000 hours of programming -- when all I want is 100 hours of programming a month. That means I'm watching less than one-tenth of 1% of the programming I'm paying for.

With the advent of ever-faster broadband, ever-faster processors and ever-better software, we're already seeing video Web sites that allow you to watch on demand only the content that you want. YouTube.com is just the first shot across the bow in the video revolution. Apple's iTunes store is another. My new video Web site that's still in beta is another. (I'll tell you more soon!)

The ability of cable companies to bundle the 99.9% of content that you don't want with the 0.1% of content that you do want will go the same way as the ability of music companies to bundle 10 terrible songs with one good one.

You want to fight the empowering of the consumer? You want to bet that the cable companies can fight the price erosion that's just about to start impacting their business? That's not a good bet. As my trademarked phrase states, "They can't stop the revolution." They just can't.

Sell Comcast, cable and all of those that are trying to stop the revolution, because they will lose.

At the time of publication, the firm in which Willard is a partner was net long Apple and Google, although positions can change at any time and without notice.

CW on The Live Desk with Martha MacCallum

Administrator's Note: We hope you were able to catch Cody on The Live Desk with Martha MacCallum this afternoon.  Topics included Barack Obama and Hillary Clinton as Democratic cadidates in 2008, Madonna's adoption problems, and another example of Little Brother is Watching You™. Here are the clips in VOD form.

Segment 1


Segment 2

Segment 3

CW on Cavuto on Business

Administrator's Note: We hope you were able to catch Cavuto on Business this morning.   If not, here are the clips, broken down by segment.

“Common Good” & Capitalism: Is There A Difference?


Post-Prison Pensions For Congressmen?


Scandal Free Stocks


Fox On The Spot

CW on RM: Google, SanDisk and Broadcom, Oh My

Google, SanDisk and Broadcom, Oh My
10/19/2006 4:46 PM

How about these closes, eh? Another close with powerful buying, and the markets close near their highs on the day. A barrage of earnings are hitting so let's hit 'em back:

1. Google shows Apple-esque upside, and since they don't waste our lives playing those silly guidance games, it's only the results that count. (My first boss on Wall Street used to always say, "We're in the results business, Cody."). The stock's flying after hours, up almost $30. That's results, too.

2. SanDisk beats on both the top and the bottom lines, and given how big the comps were from last year, the numbers and growth are very impressive. No guidance yet. The company talks about 200% bit growth in 2006. That's a mind-blowing number, and the company continues to figure out how to profit off that bit growth. The result, at least after-hours so far, is a stock that is down $3 or $4.

3. Broadcom talks about "current near-term industrywide challenges" in their report, which only gives top-line numbers because they're still sorting out how badly they misled investors on their options backdating fiasco. First off, I hate seeing them call the industry's inventory problems a "current" challenge. "Current" is a redundant word, and by using it, Broadcom's simply trying to shape perception that those inventory challenges will quickly pass. They don't know that, or the inventory challenges wouldn't be there to begin with. The numbers are OK overall, though this report will rightly rile up more chatter about a semi inventory glut.

Most of the other semiconductor companies, from Xilinx to PMC-Sierra reported decent to good numbers relative to expectations, but there will have to be a lot more parsing of the numbers before any real analysis can be applied. Somehow, I think the inventory situation is getting worse, not better, overall.

Google will once again be the story of the day tomorrow. I don't think the rest of the market will find the juice as punchy as Google will, though. But the bulls sure do remain in control of the juicer.

P.S. I won't be blogging Friday, but I will be on "Cavuto on Business" on Fox News Saturday at 10:30 a.m. EDT. We'll be talking politics, the market and more.

At the time of publication, the firm in which Willard is a partner was new long Google, SanDisk and Apple, although positions can change at any time and without notice.

CW on RM: First Crack in the Bulls' Armor

First Crack in the Bulls' Armor
10/19/2006 9:05 AM

Once again on Wednesday, the market closed on the upswing and near the day's highs. The pattern of strong closes continues, and that keeps stoking the bulls.

The fundamental-loving bulls see their stocks consistently moving higher or holding their gains. It's been a nice, steady, stair-step rally. That keeps those fundie bulls feeling good about their analysis and confident that the market will continue to power higher.

And the technical-analysis-loving bulls have their conventional wisdom that strong closes are a bullish pattern. So the recent closes keep the TA bulls feeling good about their analysis and confident that the market will continue to power higher.

Nobody has made a dime trying to call a top in this market, and perhaps that's still the case. But the ugly results from most of the semiconductor companies and the nasty 2.5% hit they took yesterday are a first chink in that fundamental, emotional and technical bull armor. I've been considering adding to my Semiconductor HOLDRs puts, and I still see the best approach to this market as "sell semis; buy tech."

So many earnings reports are pouring in that it's hard to see straight.

Advanced Micro Devices is getting crushed today off a drop in gross margins and its inability to execute in new technologies that it will need to have any success against Intel. With Intel's big inventory load, the pricing power in that PC processor world will be nothing to write home about.

eBay's endless lowering of guidance continues. However, when I listened to the call, I thought the company might finally have gotten estimates low enough that it could stop this pattern of lowering guidance, slightly beating, lowering guidance and then slightly beating.

Apple is the toast of Wall Street this morning. Its iPod sales were pretty good, and the Street likes that Apple said it saw a good uptick in demand when it rolled out the new nanos. Mac unit sales were up 100,000 or so above most of the analysts' estimates, and that has people into the whole "halo effect" again. I think Apple is headed much higher over time, and I'll continue to hold mine, but I wouldn't chase this stock today.

Nokia is impressive, especially in the units-sold metric: 88 million in one quarter. The stock is down a bit this morning, in large part because the average selling price of the handsets fell about 10%.

No pricing power in chips. Dropping pricing in handsets. Inflation is out there, but it sure isn't in tech.

One more day of big earnings this week, so don't lose focus.

At the time of publication, the firm in which Willard is a partner was net short SMH and net long Apple, although positions can change at any time and without notice.

Cody on Cavuto on Business This Saturday

Administrator's Note: Cody will be on Cavuto on Business this Saturday at 10:30am EST on Fox News. Hope to see you there!

CW on RM: Tech Enterprise Spending Rises

Tech Enterprise Spending Rises
10/18/2006 9:44 AM

The two biggest tech reports last night confirmed that enterprise spending on technology is indeed rising. We originally heard that from Microsoft and Cisco a couple months ago when they reported earnings last quarter and said that demand in the enterprise was strong enough that forward estimates should go higher. So far this quarter, the big enterprise tech tells -- IBM, EMC and Intel-- have reported strong quarters and estimates have been raised around the Street.

IBM even got some upgrades and with Intel also up premarket, it should help the Dow to move past the 12,000 barrier.

Yahoo!, a serial disappointer under its Old-Hollywood mindset leadership, disappointed yet again last night, with a report that reflected its earlier warning for last quarter and a lowering of guidance for the next. I'd postulated yesterday that much of the fundamental ugliness has been more than priced into the stock, and with it up a little bit today, that seems to be the case. Yahoo!'s not without risk though, and it's certainly not as "safe" as Microsoft was when it was at such levels. That said, I'm looking to build a trading position in this name and might even start that this week.

Motorola's forward guidance has the bear syndicate out in force today proclaiming the death of handset growth. They've proclaimed that pretty much any time any company anywhere has ever used the word "wireless" in a press release, though, so I wouldn't panic on that front just yet. Even if the handset biz has peaked, there will be plenty of time to get short some of the worst-positioned names. I'd written yesterday that Motorola's likely to be down today unless it was just a blowout quarter. A warning on next quarter doesn't count. Stay away from Motorola. It is priced for much better forward results than it just indicated is likely for the near term.

The poor outlooks from Novellus and Linear Technology, along with Motorola's ugly report, mean that a lot of semi stocks will be under big pressure today, despite Intel's strong numbers, which themselves entailed some inventory issues. I didn't buy those puts yesterday, and as Intel's such a big part of the semi indices and ETFs, the ugliness away from it will likely be hidden. I'll reconsider those puts today, as the semis still seem to be the most vulnerable subsector of tech. I will let readers know if I buy any.

Let's hit it hard -- we have lots more earnings flow to navigate.