5 Important Charts

The blog will be on brief hiatus until May 1, so until then I thought I’d post 5 of my most important data-points for readers to look at and ponder until then.  The 5 points are the monetary base, 10 year yield, high yield spreads, US population and GDP per capita.  These represent the value of the currency, the risk free rate of return, the price of risk, growth and productivity in 5 charts.  Get those 5 variables right and you’re in business.

S&P to Gold Ratio

Below is a longer term chart of the ratio of the price of the S&P 500 to the GLD ETF (the data source I’m working from doesn’t have the physical gold price).  It shows that despite the S&P rally since October and the pullback in gold, the “currency agnostic” value of the S&P (priced in gold) is still below where it was this time last year.

How Much Can Apple Go Up In One Year?

With Apple back up above $600 in aftermarket trading, the stock is now up 48% year to date.  For reference, below is the performance of Apple’s stock on an annual basis going back to 1999.  The most the stock ever went up in one year was 202% in 2004, when the iPhone was just a glimmer in Steve Job’s eye.

From the beginning of the stock’s bull run in 2003 through the end of 2011, the stock returned an annualized 56.8% per year.  If the stock rises by that much in 2012 it would end the year at $635.

Wedge Forming in Gold

I’ve mentioned before on the blog that there are a few formations that bring out the closet technician in me.  One of them is a wedge, because it must resolve itself one way or the other.  There happens to be a significant wedge that’s been forming in gold over the last several months that pits the long term trend against the lower highs that have been made since September.  To cap it off, the formation is culminating just in time for the Fed to speak tomorrow.  Could be an interesting show…

Largest FCPA Settlements

Reposted from fcpablog.com (there really is a blog for everything I guess) below is a list of the 10 largest settlements under the foreign corrupt practices act.  The largest settlement was $800m and the average of the 10 largest settlements is $317m.  Based on worries about an FCPA violation, WMT’s stock has lost almost $10B worth of market cap today, 12.5x the largest settlement.

1. Siemens (Germany): $800 million in 2008.
2. KBR / Halliburton (USA): $579 million in 2009.
3. BAE (UK): $400 million in 2010.
4. Snamprogetti Netherlands B.V. / ENI S.p.A (Holland/Italy): $365 million in 2010.
5. Technip S.A. (France): $338 million in 2010.
6. JGC Corporation (Japan) $218.8 million in 2011.
7. Daimler AG (Germany): $185 million in 2010.
8. Alcatel-Lucent (France): $137 million in 2010.
9. Panalpina (Switzerland): $81.8 million in 2010.
10. Johnson & Johnson (USA): $70 million in 2011.

Food For Thought

Despite the fact that it was down 2.7% today, CMG is still one of the best performing S&P 500 stocks year to date.  It’s up 24% so far this year and 752% since the March ’09 lows.  In order to get a sense of the company’s valuation, below is a comp table for competing restaurants centered around the number of restaurants that they own or franchise.  Chipotle has 1230 restaurants that it operates with a value of $11m per store.  Even Panera only has a value of $2.9m per store, while lowly Wendy’s only has a value of $283 thousand per store.  If In-n-out ever came public I wonder where it would fit on this table.

Long Term Natural Gas Chart

There aren’t a lot of charts that look like natural gas.  Over the last 5 years it’s gone from one extreme to the other.  It was caught up in the same energy bubble that oil was in 2008, but thanks to a true technological paradigm shift everything changed.

For a longer term perspective, a multi decade chart is below: