If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. Getting the Schwab done
There's a new player in the ETF space. Charles Schwab (Nasdaq: SCHW) launched four exchange-traded funds on Tuesday, giving investors a new way to play large caps, small caps, and international stocks.
Schwab isn't phoning it in here. The ETFs have dirt cheap expense ratios between 0.08% and 0.15%. The discount broker is also sweetening the offerings by making them commission-free for Schwab customers.
Low expenses? No commissions? If Vanguard and its conventional indexing cronies aren't worried, it's probably because they're still haunted by those creepy Schwab ads with the rotoscoping animation.
2. Don't get mad, get satrad
Satellite radio's signal isn't fading after all. Sirius XM Radio (Nasdaq: SIRI) had nearly as many nuggets of good news in its latest quarterly report as its receivers have channels.
- Sirius XM broke even before debt restructuring charges, surpassing analyst expectations for a small deficit.
- Tacking on 102,295 net subscriber additions during the quarter is huge, especially after shedding listeners during the two previous quarters.
- The number of paying subscribers rose both sequentially and year over year.
- Free cash flow was positive, clocking in at $26.7 million.
- Subscriber acquisition costs fell, from $74 to $69 for each gross addition.
The company also broke from its radio silence. CEO Mel Karmazin had suspended providing any kind of guidance beyond adjusted operating income targets a year ago. Sirius XM is now comfortable in also forecasting that its subscriber count will grow next year.
I guess you can't spell Karmazin without karma.
3. Come on in, the IPO waters are fine
Debutantes are still welcome down Wall Street, as long as they bring their pedigree papers.
Hyatt Hotels (NYSE: H) and Ancestry.com (Nasdaq: ACOM) went public yesterday, never trading below their IPO prices. The hotelier and the genealogy website closed 12% and 5% higher, respectively.
Only a handful of companies have braved the brutal underwriting environment to go public this year. The key to a successful debut appears to be a recognized brand and some kind of financial momentum to win over the first wave of buyers.
4. A marketing pitch in 140 characters or less
If Twitter isn't ready to monetize its site, leave it to Amazon.com (Nasdaq: AMZN). The world's most popular online retailer is giving its affiliate marketers something to tweet about.
Members of the Amazon Associates program now have a "Share on Twitter" button on every Amazon.com product page. The option immediately creates a Twitter update, complete with a shortened link containing the associate's referral code. In other words, if someone buys an Amazon product from that link through Twitter, the affiliate makes as much as 15% on the sale.
If you thought Twitter was a hotbed for spam before, just imagine how things will get when real money is at stake for clever tweets with actionable links.
I like it. Twitter isn't some national treasure. It's a platform, and Amazon is using it to its financial advantage.
5. I've been working on the railroad
You know what the worst thing is about playing Monopoly with Warren Buffett? The dude keeps buying up all of the railroads.
Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) is buying rail giant Burlington Northern in a $44 billion deal. It becomes the largest purchase in Berkshire Hathaway history.
Is it a good fit? I'll have to trust Buffett on this. I think the guy is overpaying, but it's hard to second-guess Buffett. He can place a hotel on the "Go to Jail" square unquestioned. However, the reason this move makes it onto this week's list of smart moves is that Buffett is sending a very positive message about the market by stepping in as a buyer after months of rallying equities.
Well played, Buffett. Can I be the thimble next time?
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