Yahoo stock drops on 3Q forecast warning

[touchring]

Yahoo stock drops on 3Q forecast warning

http://news.yahoo.com/s/ap/20060919/ap_on_bi_ge/yahoo_outlook

"I think in this current quarter we are seeing some slowing (in ads) with perhaps two of the largest sectors, in both autos and financial services," Semel said. "They are still growing, but they are not growing as quickly as we would have hoped in this moment of time."

The drop-off began about two to three weeks ago, Decker said, and will be significant enough to undercut Yahoo's financial performance for the quarter ending Sept. 30. She said it's still too early to tell if the advertising malaise would spread into other industries besides auto and financial services.

But the prospect of a slowdown in online advertising nevertheless rattled Wall Street, which has been operating under the assumption that Internet companies would fare relatively well even in a sluggish economic environment because of the Web's rapid overall growth.

"The Internet, and Yahoo in particular, was supposed to be a safe haven, so this is a little bit of a 'Whoops!' that tends to make people very nervous," said American Technology Research analyst Rob Sanderson.


Whoops!?

[Rubber Duck]

Just goes to show that over reliance on the US economy is a recipe for disaster!

[touchring]

Well, just another sign of what is to come in the short to medium term. Just make sure credit is manageable. Meanwhile, I'm thinking of placing my reserves in bonds now. Anyone knows about bonds and how interest rates will affect it?

[Rubber Duck]

Well, just another sign of what is to come in the short to medium term. Just make sure credit is manageable. Meanwhile, I'm thinking of placing my reserves in bonds now. Anyone knows about bonds and how interest rates will affect it?

The reason that Bonds are so popular and their is so much written about them is they are essentially a No Brainer. Consequentially returns are generally modest.

If you take Government Bonds, the risk of default is considered negligible for most developed economies. The price of bonds there reflects market interest rates. Interest rates go up, bond prices go down to compensate. Interest rates go down bond prices go up. The only slight complication is the term of the bond. If it is a ten year bond with 5 years left to run, the market value will reflect the expectations of interest rates over the remaining 5 year period.

When it comes to bonds, where there is significant risk of default generally known as Junk Bonds, the rates of returns offered are much higher, to compensate for the element of risk. In a nut shell and hypothetically, if there is a 50% chance that Ford is going to go bust, then you expect that that their bonds will sell for at least a 50% discount to similar bonds offering similar rates of return.

Bonds, with the exception of Junk Bonds, are essentially Widows and Orphans. That is why pension funds and the like invest heavily in bonds. Only a Schizophrenic would be both a IDN speculator and a Government Bond Investor. They are at totally opposite ends of the risk/reward spectrum.

[touchring]

Interest rates go down bond prices go up. The only slight complication is the term of the bond. If it is a ten year bond with 5 years left to run, the market value will reflect the expectations of interest rates over the remaining 5 year period.

If interest rates goes down, bond prices will go up. And when interest rates are going down, it had to be pretty bad. So might it be a hedge?

[Rubber Duck]

If interest rates goes down, bond prices will go up. And when interest rates are going down, it had to be pretty bad. So might it be a hedge?

Financial derivatives are used by large companies to hedge against all forms of risk. You can use Futures in Commodities, Stock Indices, Bonds, Gold or Currencies to hedge against whatever you like. Companies use these devices to mitigate losses in uncertain environments.

Some speculators invest on these markets. I have. I actually came out ahead, but concluded you would be better off staking your bets on the horses or at the roulette wheel. You are actually betting against market expectations, which are generally self-fulfilling prophecies. A pretty tough call by any standards!

[bwhhisc]

If interest rates goes down, bond prices will go up. And when interest rates are going down, it had to be pretty bad. So might it be a hedge?

Interest rates in the US probably aren't going to go down much, if at all. Prediction is they will stay flat for now. They just came back up from historic lows. Current interest on a 30 year mortgage in the US is about 6.25%. Real estate sale of homes has hit a slump with prices falling a good bit. Gas prices are temporarily back down 20% (to about $2.50 per gallon) so there is some offset on the overall numbers.

I would say now is the time to shift more capitol into IDNs, you have 12 month window to reg fee and pretty good assurance IE7/Vista is about to be released. :)

Seems England is going to hold their rates as well.
http://business.guardian.co.uk/story/0,,1876836,00.html

[touchring]

Interest rates in the US probably aren't going to go down much, if at all. Prediction is they will stay flat for now. They just came back up from historic lows. Current interest on a 30 year mortgage in the US is about 6.25%. Real estate sale of homes has hit a slump with prices falling a good bit. Gas prices are temporarily back down 20% (to about $2.50 per gallon) so there is some offset on the overall numbers.

I would say now is the time to shift more capitol into IDNs, you have 12 month window to reg fee and pretty good assurance IE7/Vista is about to be released. :)

Seems England is going to hold their rates as well.
http://business.guardian.co.uk/story/0,,1876836,00.html


That case, bonds doesn't look that good?