Salesforce.com Worth $128 If It Doesn?t Overspend On R&D

If R&D spending relative to gross profits continues to follow its historical growth trend, reaching about 15% by the end of our forecast period, it would imply 15% downside to our $128 price estimate for Salesforce.com stock.

Source: http://blogs.forbes.com/greatspeculations/2011/03/16/salesforce-com-worth-128-if-it-doesnt-overspend-on-rd/

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Japan's Earthquake Sends a Shockwave Through the Luxury Goods Business

Nearly half of all Japanese women over the age of 20 own a Louis Vuitton handbag, according to equity analysts MF Global. So if you're LVMH (LVMUY), the French parent of the trendy handbag maker, you have to be worrying about the effect of the Japanese earthquake and tsunami on your bottom line.

Luxury brands like Coach and Tiffany in the U.S., and Richemont (CFRUY), Swiss owner of such posh brands as Cartier and Montblanc, have taken huge hits to their stock prices as investors digest the consequences of a prolonged consumer drought in their biggest market.

"We believe the impact could be fairly significant given Japan is currently the largest luxury market globally," says Sunita Entwisle, a luxury analyst at Nomura Securities International. In London. "It's a declining market, but still an important one, and sales were beginning to pick up at the end of last year."

MF Global estimates that Japan accounts for 23% of the world market for hard and soft luxury goods, compared with 13% for China. But about 18% of luxury sales in Japan are made to Chinese tourists, who may just shift their shopping trips to places like Singapore.

Overall, the luxury goods index was down more than 4% Tuesday as news about further possible damage at nuclear power plants began to circulate.

New York-based Coach (COH), which gets 20% of its sales from Japan, has been among the hardest hit. It has 164 stores there, including three in the affected region around Tohoku. Coach shares have dropped 9% in the last two days. Tiffany (TIF) is another U.S. luxury stock that is vulnerable in Japan. It has 56 stores in the country, accounting for about 18% of total sales. Its shares are also down 9% since the earthquake hit last week.

"While not all parts of the country were equally affected physically, recent events will almost certainly dampen the consumer mood/spending," says Nomura analyst Paul Lejuez.

Will Japanese Buyers -- and Shopping Tourists -- Stay Home?

A number of European brands are also taking a hit. In France, Hermes has the largest exposure to Japan, which accounts for about 19% of sales. PPR, owner of Gucci, gets 15% of its sales there. British clothier Burberry (BURBY), whose plaid designs are beloved by office workers in Japanese corporations, only makes about 5% of its sales in Japan, but gets between 18% and 20% of its earnings from a licensing deal there.

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Source: http://www.dailyfinance.com/story/company-news/japan-earthquake-luxury-goods-business-sales/19880331/

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JPMorgan Blunts ETF Threat With Lower Fees

J.P. Morgan Asset Management recently decided to cut fees on one of its equity funds in the U.K. to attract cost conscious customers who have hesitated to reenter the market due to high management fees. We have a price estimate of $48.87 on JPMorgan?s stock, which is about 5% above the current market price.

Source: http://blogs.forbes.com/greatspeculations/2011/03/15/jpmorgan-blunts-etf-threat-with-lower-fees/

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The Types Of Compensation That Can Be Sought In An Accident Claim Following A Fatality

The untimely death of a loved one as the result of an accident that was not their fault is a terrible experience.  The shock of losing someone so suddenly and before their time is a massive shock and takes a long period to recover from.  What is more stressful is that there are often a [...]

Source: http://www.legaldebthelponline.com/2011/03/15/the-types-of-compensation-that-can-be-sought-in-an-accident-claim-following-a-fatality/

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Get Ready: FOMC Is Coming Up

bernanke swears

At about 2:15, the FOMC comes out with its latest move.

Deutsche Bank has a preview:

The one-day March FOMC meeting is the main focus of this week’s data docket. The biggest surprise in the January meeting statement was the lack of any meaningful language modification relative to December. The most significant development was the unanimous vote—a trend which we expect to continue today. However, the minutes of that meeting showed a moderately larger shift in attitudes among policymakers as participants “expressed greater confidence that the economic recovery would be sustained” and “strengthen” in coming quarters based on both reported economic data as well as anecdotal evidence from business contacts. In light of improving labor market data and an ongoing inflection in the inflation trend, we expect that today’s statement will express more substantial language changes while indicating that the current stance of policy will remain intact for the foreseeable future.

As for what to watch:

 We will watch to see if the characterization of inflation expectations as “stable” is moderately downgraded, as well. The prior discussion regarding the likely course of inflation appeared to be less unified than that pertaining to growth and unemployment. Many participants expected measures of core inflation to remain near current levels in coming quarters as a result of significant slack in resource markets and stable longer-term inflation expectations. However, the minutes also indicated, “[T]he importance of resource slack as a factor influencing inflation was debated, and some participants suggested that other variables [...] could be useful indicators of inflation pressures.” Despite evidence of improving economic activity, we continue to believe that QE2 will run to completion, although the more hawkish members of the Committee have vocally expressed that they will not support any additional expansion of the program.

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Source: http://feedproxy.google.com/~r/businessinsider/~3/8aJFKtHVY-0/fomc-preview-2011-3

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