Posted by Mark Bunting on April 29, 2009

Investors, especially those who dabble in emerging markets, must always be on the lookout for events that could positively or adversely affect their portfolios.

Some geopolitical or exogenous events can come out of the blue, while others, with a bit of research, can be anticipated -- like the election in India.

The ruling United Progressive Alliance is battling the main opposition Bharatiya Janata Party with the votes to be counted on May 16.

Morgan Stanley and Credit Suisse analysts are recommending that investors exit or reduce their positions in Indian ETFs and stocks before that date.

Credit Suisse thinks that investors could be in for a "sharp disappointment" from the election results. Morgan Stanley analysts say that India's main stock index, the Sensex, could fall 16% by the end of the year.

The concern is that the new government will not be able to revive an economy that's expected to grow at a rate of 6% annually, the slowest pace in six years.

The Sensex, as of today, is up 13.6% year-to-date after having fallen 52% last year. But, Morgan Stanley sees downside risks as the government performs a "tough balancing act of stimulating the economy as well as curtailing the burgeoning fiscal deficit."

Earnings this fiscal year for Indian companies will fall on average by 20%, according to the analysts. And, Morgan Stanley says investors should be "selling the rallies."

If they're right, that means an exchange-traded fund that tracks Indian stocks, like Powershares India Portfolio (PIN-N), could unwind some of the 32% gain it's posted since early March.

 

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Posted by Michael Kane on April 29, 2009

Three-time Olympic gold medalist in rowing Marnie McBean stopped by BNN to promote a charitable event called Right to Play: Nail and Sail… in which entrants build boats and sail them across Ashbridge’s Bay in Toronto’s Beach neighbourhood.

I took the opportunity to ask her how the recession is affecting Olympic athletes.

She pointed out that most potential Olympians need the funding that comes from endowments and with donations down an estimated 46%, there is less money for the rental of training facilities and for travel to pre-Olympic events.

Because of this, the length of time spent training is being reduced significantly and athletes must choose carefully which competitions they want to enter leading up to the 2010 games.

Marnie was inducted into the Canadian Sports Hall of Fame in 1997 and it goes almost without saying that she’s there not only for her athletic ability but for her determination to reach her goals. Those are two qualities highly-valued in sport.

I asked her if economic difficulties, lack of money and lack of training would keep potential Olympians from getting to the 2010 games. "Nope," she said. "It’ll get done."

That ability to adjust expectations and still see beyond the challenge would be a good quality for the rest of us to have as well, right now.

Click HERE to watch Marnie McBean on Lunch Money

For more information on Nail and Sail click HERE.

 

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Posted by Pat Bolland on April 29, 2009

For the past almost 30 years I've been wearing a bow tie on Fridays. It goes back to my days on Bay Street.

As a fund-raiser for the United Way, several brokerage firms offered to allow employees to "go casual" on Fridays – for a fee, which was then donated to the Way.

Now remember, unlike today, going casual was a no-no in most business communities, so the brokers, those that loved the two-Martini lunches (those are gone too, sadly), loved it!

I was trying to build my book, meeting new clients almost daily. I was young and couldn't risk looking unprofessional. I grew a beard to look older. I wore nice suits. How could I abandon my tie to help the Way?

Solution: a bow tie. It was casual, yet intellectual. My grandfather wore one daily when he was at Bell.

On a Thursday night I called my grandfather to ask if I could pop by to learn how to tie a bow tie. He suggested that he could do it over the phone.

"Do you still have tie-up shoes?" he asked. I said that I did. "Go get 'em," he instructed me.

He told me to tie and untie the shoes six times, three times with my eyes closed. Then he had me put the bow tie around my neck, close my eyes and repeat the process.

"Now open your eyes," he said. "It’s a mess, right?"

After three minutes he had me adjusting it to almost perfection. Keeping it slightly askew shows it's real … and adds mystery.

I still wear one every Friday. A little notoriety is relished by the wisest of men … according to Grandpa.

 

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Posted by Andrew Bell on April 23, 2009

Electric car maker Zenn Motor Co. (ZNN-X) is shooting off sparks today – the stock has soared 50% to trade at $5.19 on the TSX Venture Exchange – as investors wager on the prospect of a battery that's powerful enough to run an auto and can be charged in minutes.

The company said its Texas-based partner, EEStor, has won third-party certification for the "permittivity," or power-storage capacity, of its battery technology, dubbed the Electrical Energy Storage Unit.

We've asked Zenn CEO and founder Ian Clifford if the news might have leaked out in advance. Zenn stock has been climbing in recent days, rising to $3.45 at yesterday's close from $2.14 last week. 

Zenn has the right to use the EEStor power unit – technically a "Barium-Titanate nano capacitor" – in its cars. "This puts the EEStor technology one step closer to a commercial 'battery,' which the company plans to deliver to Zenn Motor Co. by year end 2009," Paradigm Capital analyst Marvin Wolff says.

Zenn’s current car has a top speed of 40 kilometres per hour but it plans to release a highway-capable car, powered by EEStor, by the end of this year.

Wolff calls Zenn a Buy and hiked his one-year target to $10.90 from $5.50 today. Paradigm helped sell $15 million of new shares for Zenn last year.

Versant analyst Massimo Fiore says "the extra significance of the announcement for investors in ZNN stock is also the ability to participate in EEStor's other applications (renewable energy, military via EEStor's relationship with Lockheed Martin, electric load levelling, electric storage, electronic devices)." Zenn owns 3.8% of the equity of EEStor with options to go to 11.4%.

Fiore calls Zenn a Buy, with a one-year target of $6.50. "We will abstain from updating our valuation model until Zenn reviews the results and releases their findings," he says.

Before you buy in to Zenn, remember that there's a lot of battery hype and there are a lot of rival technologies out there.

Joel Schindall, a Massachusetts Institute of Technology professor, told a reporter last year that he didn't doubt that EEStor "have built a device on a small scale that does store the amounts of energy they are talking about. I just don't know if they can manage the process of scaling it up ... for commercial applications."

According to EEStor, the new battery can be charged in 3 to 6 minutes compared with the 3 hours or more required for existing vehicle batteries. The researcher also says that its battery uses no hazardous materials, unlike rivals.

The battery is said to offer one-tenth the weight and volume of a lead acid battery for the same energy output.

Paradigm's Wolff says other advantages are expected to be "little degradation of charge retention with extreme heat or extreme cold,"  "over one million deep charge and discharge cycles" and "ability to transfer electricity extremely quickly between two ESU's."

He enthuses that "this milestone by EEStor is very significant as EEStor has achieved permittivity levels that eclipse any other electrical storage device that can be used commercially."

One bullish note:  EEStor has attracted an investment from legendary venture fund Kleiner Perkins Caufield & Byers out of Menlo Park, Calif.

 

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Posted by Viewer Comment on April 23, 2009

Amanda Lang's blog Ontario cellphone ban rankles, moved several readers to respond. Among them:   

I support a cellphone ban for drivers. It has been shown that talking on phones is equivalent to alcohol intoxication in terms of its impairment effects on the driver.

While I agree that there are other distractions while driving that cause similar risk, cellphone use while driving has become rampant. It has for many become a lifestyle to talk on phones while driving, which is a hazard not only to the driver but passengers and other vehicles.

I am usually not in favour of government intervention but this safety hazard is so significant that outlawing it is the only way to bring it under control given how embedded it has become in our Canadian culture.

In terms of the other distractions there are already laws against driving without undue care and attention.
Dwight

Governments of all stripes just bite at the chance to be SEEN to be doing something (just look at the bankrupt state of California rushing to save the world from CO2 emissions by banning so-called dirty oil).

Your points are all good ones. Has the government banned the ubiquitous CB radio from the cabs of highway trucks? No. Have they banned the increasing use of GPS units for directions, which draw the attention of the driver to a map on a screen and away from the road? No.

What about the huge, bright, flashing, image-changing electronic billboards whose very purpose is to distract the driver? No ban there.

No, this is not about safety - it's about being seen to do something.
Jim

It's true that we cannot legislate intelligent behaviour, but when hundreds of thousands of Canadians start flossing whilst driving then you bet your bootees it'll be banned.
Marilyn

The cell phone ban is for one reason, the governments and insurance companies can disallow or reduce injury/damage claims and it is easily proved as the time and date of all calls are recorded.

This also creates another level of legal harassment that can be deployed to intimidate, raise money and create legal work for the legal folks.

Public safety is just the scapegoat that is trotted out to appease the fanatics and guilt the masses into submission.
Jim

I do agree with you on the premise that laws are now becoming too intrusive & specific, but it cannot be ignored that distraction on the roads is a major issue that needs to be addressed. When drivers are not focused on the road, accidents happen.

Being in my early 20s I've seen this whole issue develop, and seeing first-hand the bad results of driving while distracted through friends, peers and others driving (from those driving manual while talking on phones, to mothers texting with kids in the passenger seats) I tend to agree with this legislation as the results can be the same as drunk driving.

If older generations could wait to contact someone why can't we?
Alex 

I agree, the government is intruding far too much in our lives with the cellphone ban.  Ironically, studies have shown it isn't just talking on cellphones while driving that can lead to accidents -- it's talking, period.  So hands-free phones like Bluetooth don't help.  (Sorry to give the nanny statists any ideas.) 

Allowing cellphones, but ticketing us for any form of reckless driving, would protect both our rights and our safety.
Gralee

 

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Posted by Amanda Lang on April 22, 2009

I’m trying to decide why Ontario’s new cellphone ban makes me so mad.

It’s tempting to conclude I simply don’t like the idea of living in a nanny state. But upon reflection I’ve decided it has to do with dental floss.

Let me explain.

The new law, passed by earnest lawmakers today -- no doubt just before they debated upping the sentencing guidelines for jay-walking -- doesn’t come into effect immediately. So you don’t have to get Bluetooth or some other wireless system today. But get ready.

Banned from use in moving vehicles are not just cellphones, but other hand-held devices, such as video games and iPods.

So why am I so very irritated?

After all, it’s not as though I think my fellow drivers should be gaming while they drive. There is little doubt that distracted drivers cause accidents.

So why not make it illegal? One reason does have to do with the intrusiveness of the law. In general it’s better if laws are broad and vague, not narrow and specific.

I would rather our system of laws set out principles we all agree upon (property rights for instance), rather than try to second guess the various behaviours of the citizenry (don’t back your car into your neighbour’s fence).

Which brings me to dental floss. When I think of the crazy things people do in cars, I think of driving behind a caramel-coloured Lexus one day which was weaving around like mad.

As I pondered whether its driver might be intoxicated at 9 a.m., I passed him in the other lane – and had a clear view of a middle-aged man flossing while he drove.

Now dental floss was left out of Ontario’s bill. But maybe it should be in there – I have no doubt that man is more dangerous wielding that little strip of waxed cotton than I have ever been wielding my cellphone.

If I do happen to become erratic because of my cellphone, by all means pull me over. Fine me, ticket me, do whatever is due under the reckless driving law that already exists. But don’t try to anticipate my bad behaviour and accompanying props in advance.

I’m not defending my right to break the law (although if you recall the hue and cry that arose in Ontario when the Rae government brought in photo-radar to crack down on speeding, it seems my fellow citizens do feel strongly about their right to at least evade the law occasionally), but I think all of us should ask how far we think government should go to insert itself into our lives.

If you agree and you live in Ontario, call your MPP. From your car. While you still can.

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Posted by Michael Kane on April 22, 2009

When I was in high school, The Greening of America by Charles Reich was a bestseller. It tells a tale of, as Bob Dylan wrote, "music in the cafes at night and Revolution in the air."

Very attractive stuff at the time.

It talked of changing phases of consciousness, culminating with the hippie culture of the day. But of course that didn’t mean the evolution/revolution would actually end there.

In 1976, on a voyage of discovery that included a stop in San Francisco, I found the book The Origin of Consciousness in the Breakdown of the Bicameral Mind by Princeton psychologist Julian Jaynes.

His basic theory, as I understand it, is that originally, humans did not have the kind of "consciousness" we experience today, and that the defining moments in the development of consciousness appear to come from events that spark great and widespread fear.

For primitive mankind, widespread killing by invading armies was horrifying enough to leave survivors "beside themselves" in terms of consciousness.

As the green shoots of economic recovery sprout in different places at different times, I will be watching to see if the fear generated by the nearly unprecedented economic violence has left people with a new level of consciousness befitting Mr. Reich’s America.

 

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Posted by Andrew Bell on April 13, 2009

Investors like certainty. And word that Teck Cominco (TCK.B-T) has locked in the crucial price for hard coking coal seems to be cheering the market today.

Teck is up more than 8 percent to trade over $10.70. The stock surged 18 percent last week on hope the company can tackle its debt load.

BMO analyst Tony Robson says the resource giant is reported to have struck a deal to sell hard coking coal in Asia at  $125-126 US a tonne for the fiscal year starting April 1, a key determinant of profitability as the company struggles to control its debt load. The price is in line with BMO's forecast of $120 and slightly below UBS's prediction of $129.

Greg Waller, Teck's VP for investor relations, refused to comment.

BMO's Robson calls the stock "underperform," with a target of just $3 Cdn. Cash flow from the company's Elk Valley coal operations "remains insufficient to pay back all or most of the $5.3 billion US bridge loan due October 2009," he warns. 

Robson says asset sales, a potential equity issue and a rollover of the debt is more likely than not to happen but "without this occurring investors should note that Teck’s financial position is precarious."

 

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Posted by Michael Kane on April 3, 2009

There is no Facebook in my future.

I was on Facebook for about an hour. I joined a long time ago in order to stay in touch with a past girlfriend. But on my first visit to her page, I found nothing but the ravings of faceless men saying how much they like socializing with her.

I immediately killed my Facebook page.

MySpace was a novel idea. But Facebook won that fight. Now the process has moved along and Twitter has attracted the big cyberbuzz. Twitter, you see, has the added marketing cachet of onomatopoeia.

Ferdinand de Saussure theorized that onomatopoeia is the only true language… because the sound of the word mimics what the word is describing. For example, as BNN’s David Barmak pointed out to me, you can distinguish quite clearly that a "boom" is different than a "bang."

Twittering is what birds do when they’re happy. So you have these creatures engaging in social activity – sitting in a nest, perching in a tree or on a wire – chirping happily.

The people who came up with Twitter knew what they were doing. They understood the allegory.

That is one beautiful job of marketing.

Now how am I going to do them one better?

 

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Posted by Andrew Bell on April 2, 2009

U.S. songwriter Jonathan Mann has been tackling economic and business topics, to the delight of YouTube viewers.

His tribute to Paul Krugman, the Nobel Prize winner and New York Times leftish economic commentator, has drawn more than 165,000 hits, and he's also wrtten one for economics professor Nouriel Roubini. 

Now Mann has penned an ode to The Close. You can find it at http://www.youtube.com/watch?v=OI-m2H_8q_c.

We're planning to have Mann on The Close at around 4:20 tomorrow.

Click HERE to watch Jonathan Mann on The Close. 

 

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