Archive for March 29th, 2010
Nikki Finke Poaches Hollywood Reporter’s TV Editor Nellie Andreeva
Wow. Nikki Finke knocks another blow to the Hollywood trades with her new hire: Nellie Andreeva, The Hollywood Reporter’s top TV editor.
Perhaps that was part of last week’s whisperings about Nikki’s alleged Hollywood Reporter editor in chief offer.
But as for Andreeva the ten-year Hollywood Reporter veteran comes to Deadline.com within the next two weeks. She will join Nikki’s growing staff, which includes other traditional Hollywood trade poaches former Variety reporter Mike Fleming and former Financial Times UK writer Tim Adler.
A new TV vertical will appear on Deadline.com soon.
The announcement called the hire part of Deadline.com’s “second phase” of editorial expansion. We are wondering which other star reporters are getting calls from Nikki?
Here’s Nikki in the statment:
“We wanted Deadline to provide full-time coverage of the TV industry but first needed to find the right TV beat journalist to do it. Lots of reporters cover the small screen’s consumer news, but few get in-depth and behind-the-scenes of the networks and studios and talent. After our search started, TV insiders quickly made it clear that our first choice had to be one of my fiercest competitors, Nellie Andreeva, who daily dominates The Hollywood Reporter‘s front page with her scoops. We didn’t know each other personally, so when I first made contact with her by email, Nellie thought someone was playing a prank on her! I’m now her biggest admirer because she is tough and talented, my favorite combination in a journalist.”
As for Andreeva: “Ten years ago, The Hollywood Reporter took a chance on me, a reporter from Bulgaria with zero Hollywood connections. For the last decade, it gave me the best editors, mentors, and friends I could’ve asked for. I probably never would have left if it weren’t for such a big new opportunity.”
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See Also:
- Nikki Finke Still Holding Her Own Against The Wrap
- Nikki Finke Was Offered Hollywood Reporter Editor In Chief Job, She Says
- HBO Creates A New Show About Feisty Blogger Nikki Finke?
And Now Let Us Analyze Likely Long-Term Stock Returns
It has been some time since we have looked at stock market valuations and expected future returns. I made a large point in Bull’s Eye Investing that long term returns are closely correlated with the valuation of the stock market upon entry. In fact, I argue that secular bull and bear markets should be viewed in terms of valuation and not prices. The market clearly goes from high valuations to low and back to high again over very long periods of time. The average length of a secular bull or bear cycle is 17 years.
Based on valuations, we are still in a secular bear market. But clearly we are in a bull phase, which within long term secular bear cycles are quite normal. They make for good trading opportunities. But should you invest now with a view to holding for 10-20 years?
This week’s Outside the Box from my friend Prieur du Plessis of Plexus Asset Managment looks at what long term return expectations might be from today’s stock market valuations. He offers us a range of expectations which I think should help you in your investment decision making process.
Dr Prieur du Plessis is chairman of Cape Town-based Plexus Asset Management and author of the Investment Postcards from Cape Town blog: http://www.investmentpostcards.com (Subscribe to e-mail updates of new articles by clicking on “Subscribe to Updates” in the top right-hand corner of the blog site and providing an e-mail address.)
I am on my way back to Dallas from a quick trip to Washington DC. The cherry blossoms are beautiful, even if the weather is gray.
John Mauldin, Editor
Outside the Box
US stock market returns – what is in store?
By Dr. Prieur du Plessis
Surging stock markets since the lows of March 2009 have caught most investors by surprise, especially as new pieces of the economics puzzle are not always rosy and do not quite seem to support an overly bullish case. In short, investors are increasingly struggling to make sense of the most likely direction of stock prices.
Are we perhaps nearing the end of a cyclical bull phase in a structural bull market? Or will strong earnings growth ensure the longevity of the bull? Or is a “muddle-through” trading range in store? It seems to be a case of so many pundits, so many views.
It is one thing to trade the market’s rallies and corrections, but this is easier said than done, with not many people actually getting it right with any degree of consistency. Others are of the opinion that the recipe for creating wealth is simply to follow the patient approach, saying that “it’s time in the market, not timing the market” that counts. But “buy-and-hold” investors in the S&P 500 Index are still 25.5% down from the levels of 10 years ago, the Dow Jones Industrial Index a similar 23.5% lower and the Nasdaq Composite Index a massive 52.5% under water.
This gives rise to the all-important question: does one’s entry level into the market, i.e. the valuation of the market at the time of investing, make a significant difference to subsequent investment returns?
In an attempt to cast light on this issue, my colleagues at Plexus Asset Management have updated a previous multi-year comparison of the price-earnings (PE) ratios of the S&P 500 Index (as a measure of stock valuations) and the forward real returns (considering total returns, i.e. capital movements plus dividends). The study covered the period from 1871 to March 2010 and used the S&P 500 (and its predecessors prior to 1957). In essence, PEs based on rolling average ten-year earnings were calculated and used together with ten-year forward real returns.
In the first analysis the PEs and the corresponding ten-year forward real returns were grouped in five quintiles (i.e. 20% intervals) (Diagram A.1).
The cheapest quintile had an average PE of 7.7 with an average ten-year forward real return of 11.4% per annum, whereas the most expensive quintile had an average PE of 23.4 with an average ten-year forward real return of only 3.8% per annum.
This analysis clearly shows the strong long-term relationship between real returns and the level of valuation at which the investment was made.
The study was then repeated with the PEs divided into smaller groups, i.e. deciles or 10% intervals (see Diagrams A.2 and A.3).
This analysis strongly confirms the downward trend of the average ten-year forward real returns from the cheapest grouping (PEs of less than six) to the most expensive grouping (PEs of more than 21). The second study also shows that any investment at PEs of less than 12 always had positive ten-year real returns, while investments at PE ratios of 12 and higher experienced negative real returns at some stage.
A third observation from this analysis is that the ten-year forward real returns of investments made at PEs between 12 and 17 had the biggest spread between minimum and maximum returns and were therefore more volatile and less predictable.
As a further refinement, holding periods of one, three, five and 20 years were also analyzed. The research results (not reported in this article) for the one-year period showed a poor relationship with expected returns, but the findings for all the other periods were consistent with the findings for the ten-year periods.
Although the above analysis represents an update to and extension of an earlier study by Jeremy Grantham’s GMO, it was also considered appropriate to replicate the study using dividend yields rather than PEs as valuation yardstick. The results are reported in Diagrams B.1, B.2 and B.3 and, as can be expected, are very similar to those based on PEs.
Based on the above research findings, with the S&P 500 Index’s current ten-year normalized PE of 20.3 and ten-year normalized dividend yield of 2.1%, investors should be aware of the fact that the market is by historical standards expensive. As far as the market in general is concerned, this argues for unexciting long-term returns, possibly a “muddle-through” trading range for quite a number of years to come.
Although the research results offer no guidance as to calling market tops and bottoms, they do indicate that it would not be consistent with the findings to bank on above-average returns based on the current ten-year normalized valuation levels. As a matter of fact, there is a distinct possibility of some negative returns off current price levels.
* Dr Prieur du Plessis is chairman of Cape Town-based Plexus Asset Management and author of the Investment Postcards from Cape Town blog: http://www.investmentpostcards.com (Subscribe to e-mail updates of new articles by clicking on ” Subscribe to Updates” in the top right-hand corner of the blog site and providing an e-mail address.)
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SEC STALKER: Google Sales Boss Nikesh Arora Made $26 Million Last Year (GOOG)
Nikesh Arora, the man in charge of Google’s global ad sales operation, received $26.3 million in compensation last year, according to an SEC filing release today.
While the SEC filing shows Nikesh pulling in big bucks, it’s a bit misleading. An accounting rule from the SEC pushed his total compensation to those heights.
His cash bonus and salary were $3.7 million.
Nikesh became global ad sales boss last April when Omid Kordestani stepped down from the role. Tim Armstrong probably would have been tapped, but he left to run AOL.
Also in the filing, we learn CFO Patrick Pichette earned $24.7 million overall, with $2.5 million as a cash bonus, Jonathan Rosenberg, SVP Products and Alan Eustace, SVP Engineering/Research, each received $15 million, each got $2 million as cash bonuses.
Here’s a table laying out compensation:
See Also: Who’s Who At Google New York
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Redpoint Ventures Drops Out Of The Foursquare Funding Race
Foursquare is down to three venture firms to lead its next round of funding, Dan Primack at peHub reports.
Redpoint Ventures has dropped out of the running to fund Foursquare’s next round, says Dan. Michael Arrington at TechCrunch previously reported the round would be $10 million at a $60 million to $70 million valuation.
Foursquare should make a decision in the next few weeks, says Dan. It’s just deciding which firm it’s most comfortable with.
Accel Partners, Andreessen Horowitz, and Khosla Ventures are still in the running.
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See Also:
- Four VC Firms Battle For Foursquare, Valuation Goes Stratospheric
- VCs Rush Forward With Cash, Declaring "Foursquare Crushed Gowalla"
- VCs Go Crazy For Foursquare: "Everybody And Their Mother Is Humping Their Leg"
Whoops! Commercial-Free TV Network Airs A Commercial, Apologizes
Since its founding almost 16 years ago, the Turner Classic Movies cable channel has promoted itself as running films “uncut and commercial-free.” But on Sunday night, the “commercial-free” part ended — temporarily and inadvertently, the channel said on Monday.
Read more at the New York Times >
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