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There was very interesting post yesterday by Professor Mark Perry of the University of Michigan's School of Management. While we've all been coping with rising prices at the pump and at the supermarket, he's got another way to look at the numbers.

In truth, in spite of all the noise and fear, we've actually seen prices go down dramatically in a number of products. While we focus on food and energy prices, we've seen the following:

• Computers have seen prices go down by 90% over the past 10 years.
• TVs have experience a 76% drop over the same period of time.
• Even autos have dropped by 3.4%

What to make of all this? Professor Perry looks at these drops in light of the fact that average hourly earnings have increased by 40% over the last 10 years. Or, in other words, Perry posits "...there are many, many products that are significantly cheaper today than ten years ago, especially after adjusting for increases in earnings."

So, why don't we pay attention to these dips that make it massively more affordable for me to set up my 73" Flat Panel TV screen?

While Prof. Perry credits the gradual nature of these price drops, I think it's human psychology. Behavioral finance has shown that in investing, we focus a lot more on losses than on gains. So too at the pump -- we're thinking about how much more a gallon of gas costs us than how much less a MacBookPro costs from a couple of years ago.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund

Investors have watched the precipitous fall in the U.S. dollar over the past few years with trepidation. Investors in Israeli stocks trading in the U.S. have witnessed the once-lowly shekel dominate the dollar (and most other global currencies) over the past two years. It looks, at least from some uber-investors' perspectives, that the dollar may be set to reverse -- a boon for those companies with significant sales in the U.S.

Bloomberg has an article out this morning saying that bond guru, Bill Gross, the manager of the world's largest bond fund, the $129 billion Pimco Total Return Fund, has turned negative on the euro for the first time since its inception in 1999. According to the article, Gross's firm, Pimco, believes that according to purchasing power parity, a measure used to account for differences in exchange rates across countries, the euro is overvalued by 30%.

And Gross isn't the only one who is concerned that Europe may suffer a bigger slowdown than the U.S. in a world confronted with slowing growth and financial snafus. The same Bloomberg article says that according to a recent poll conducted by Bloomberg of global strategists, many think that the euro has seen its day and that the dollar is poised for a rally (hard to believe in the face of Fannie Mae and IndyMac).

Europe's Trichet-led Central Bank has signaled that it may be done raising rates. In fact, given the choice between fighting inflation and re-energizing a sputtering economy, some are betting that the ECB may need to actually lower rates. With a Fed-led plan to bailout the U.S. banking system and the bottoming out of the dollar, it looks like Gross and Co. are betting against the euro for years to come.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

I don't know about you, but I'm tired of watching all the red on the screen. Everyday we're faced with doomsday predictions facing the real estate market, the credit crunch, rising inflation, natural disasters, and my favorite, the Iranian threat facing the entire world.

Bloomberg is out with a story this morning that details the soaring arson rate in foreclosed homes around the U.S. As foreclosed homes are vacated, arson rates are on the rise. Not surprisingly, the highest arson rates are in the states with the highest foreclosure rates.

According to Bloomberg, "Last year, fires in vacant Nevada buildings increased 4 percent from a year earlier." Local officials think that number may grow this year. Bloomerg further states, "The state had the worst foreclosure rate in the U.S. during the first quarter, with one filing for every 54 households, according to data compiled by RealtyTrac Inc. The national rate was one filing per 194 households, analysts at the Irvine, California company said."

How can investors play this without taking out policies on their neighbors' houses? Investors may want to look at Tyco International (NYSE: TYC). Yes, that same company that had corporate execs dipping both hands into the cookie jar and spending on lavish parties, apartments, umbrella stands -- all during the excesses of the late 1990's. Well, the company is a leader in Fire and Safety products: everything from sprinkler systems in office buildings to its ADT division, a leading alarm monitoring firm.

The stock hasn't done much after the company broke itself up into three separate, publicly traded companies. It's pretty diversified in its products and does have a lot of exposure to the building industry -- so, a prolonged downturn in the housing industry could affect the firm. But it's got some world class products, a global sales and marketing infrastructure and is diversified in its businesses to capture global growth.

Hopefully, it won't crash and burn like the foreclosed, U.S. homeowner.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author is long TYC stock.

You can say a lot about the Swiss (sorry Mom!), but at least they are always on time. There is a great article over on the BBC that details Switzerland's obsession with time. Everywhere you turn in Switzerland, there's a watch, a clock, or a timer of sorts. I love visiting my Mom who's a recent transplant to Zurich. The trains, the shows, food service -- everything is exactly on time.

It's going to be interesting when hordes of tourists from across Europe and hinder pour into Switzerland June 7 for the start of the European football (that's soccer to you and me) championships. Extra trams and trains are already being rolled out to make sure fans make it everywhere they need to go -- on time.

So, how does one think about "playing" the Euro 2008?

As China continues its massive economic expansion, the country is in a continuous state of flux. According to the New York Times, China has requested its six telecommunication firms to consolidate their assets, effectively paving the way for fixed-line operators to get into the mobile arena.

According to the same Times article, "the parent of China Telecom will buy a mobile phone network from the parent of China Unicom (NYSE: CHU), which in turn will merge with the company that controls the China Netcom Group (NYSE: CN) ... China will issue three third-generation wireless licenses after the overhaul is completed."

The big short-term loser of this directive appears to be China Mobile (NYSE: CHL). The stock was down about 7% Monday off the news. The firm's stronghold on the mobile telecom market in China is now effectively weakened as China Telecom and Netcom can gear up to compete against China Mobile.

Why should this interest investors? Again, according to the Times, China had almost 600 million mobile phone users at the end of April, exceeding the combined populations of the United States and Japan. In the world's largest mobile market in terms of users, the $100 billion market is poised to ramp up given that just over half of all Chinese own mobile phones and a lot less than that have Internet connections.

Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com an d a former equity analyst for a leading multinational hedge fund.

According to an article on Bloomberg, "European defense contractors have sought work and acquisitions in the U.S., where military spending has grown faster than in their home markets. BAE Systems Plc, Europe's largest weapons maker, bought Jacksonville, Florida-based Armor Holdings Inc., the biggest maker of armor for Humvee transports, last year for more than $4.1 billion."

Now an Italian firm is bidding $5.2 billion for DRS Technologies (NYSE: DRS). According to the same article in Bloomberg, the acquiring firm, Finmeccanica, makes carbon-fiber frames for Boeing Co. (NYSE: BA)'s 300-seat 787 Dreamliner, and its AgustaWestland helicopter division has a supply contract with Lockheed Martin Corp. (NYSE: LMT) for the U.S. presidential fleet. DRS makes flight recorders, sensors and thermal-imaging devices that are used on U.S. military helicopters and ships.

Finmeccanica is partly owned by the Italian government. An acquisition like this rounds out the Italian defense supplier's product-line and positions it well to penetrate U.S. military spending. Much of the premium paid by the Italians has been realized already as the venerable Wall Street Journal reported of the possible deal last week.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Everyone is talking about solar. Whether you believe that solar energy will somehow displace an oil-driven economy or not (I don't), some of these stocks like First Solar (NASDAQ: FSLR) and JA Solar (NASDAQ: JASO) have seen big gains over the past few years.

The success of solar companies has not been lost on ETF firms with their constant new products hitting the market. A smaller ETF firm called Claymore Securities looks to be first to the market with a solar ETF, the Claymore/MAC Global Solar Energy Index ETF, with an aptly-named ticker, (NYSE: TAN).

Here's Claymore's website for the recently launched ETF. From the firm's website, the index defines a company engaged in solar energy as falling into two main categories:

1. Solar photovoltaic power, which involves the conversion of sunlight into electricity through the photovoltaic process; and

2. Thermal solar power, which involves using energy from the sun to heat fluids for purposes of water or space heating or to produce electricity.

This market is tough. Pros and novices alike are having a tough time. Particularly in a down market, a market commentators like to call a ""stock picker's market," I find it illustrative to dig deeper into the holdings of those special professional money managers that have found a way to make a go of it.

Take the CGM Focus (CGMFX) fund. This fund consistently shows up at the top of 1-year, 3-year, and multi-year best performers. CGM Focus has returned on average 37% per year for the past five years. While this is absolutely no guarantee that it will continue to perform like this, fund manager Chuck Heebner seems to have the special sauce -- at least for now.

So, what has been so successful for the fund?

Commodity picks like fertilizer plays Potash (NYSE: POT) and Mosaic (NYSE: MOS) have been big positions and have been big winners. Steel plays like US Steel (NYSE: X) have performed very nicely for CGM as well.

Looking at what worked is somewhat like looking into a rear-view mirror. These gains were in the past. What's Heebner and team buying now?

American Airlines, a subsidiary of AMR Corp. (NYSE: AMR), has announced that it received the green light from aviation officials to return all of its 300 grounded jets to service. The jets were temporarily grounded as the Federal Aviation Administration surprised the airlines as officials thought the required repairs had been made weeks ago . Officials said that "the wiring still was not secured and stowed properly in wheel wells."

American, the U.S.'s largest airlines, resumed flying the MD-80s today after canceling more than 3,000 flights this week. The AP story linked to above quoted an S&P analyst who reckoned the cancellations cost the struggling airlines at least $30 million.

There is quite a row going on at SeekingAlpha (warning: foul language) where top media blogger, Jeff Jarvis, has recently turned his sights on the airline industry as a whole. Jarvis, well-known for his views on the death of old media, Jarvis augers that without change the whole industry is in a death-spiral.

Says Jarvis, "I think the essence of their future is: They [the airlines] have to explore new value by having a decent relationship with us, using that new value to improve the experience so they can have a decent relationship. Screwing your customers is the least sustainable business model."

Them's fightin' words...

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Fellow BloggingStocks contributor, Aaron Katsman, and I were discussing the pros and cons of investing in high-yield bonds this morning. You know, those types of risky bonds that pay a pretty good yield in return for investors lending a risky company their hard-earned cash. Inevitably, Washington Mutual's name came up.

Is it worth the risk of default to get some juicy yield?

Dunno, but just as we were discussing the troubled lender, some news rolled out over the wires.

Washington Mutual (NYSE: WM), the largest savings and loan in the U.S., announced it's taking an investment totaling $7 billion from an investor group led by private equity firm, TPG, or Texas Pacific Group.

Well, that helps provide some stability. At least for a while.

Readers of IsraelNewsletter.com know that one of the Israeli firms we follow is Gilat Satellite (NASDAQ: GILT). In fact, my colleague Aaron Katzman and I have featured Gilat here on BloggingStocks and gave a synopsis of what we felt was the long case for Gilat.

We've speculated for months that Gilat was about to be acquired for a premium over its current stock price. The Israeli communications provider has been very active from a sales point of view, landing deals with the U.S. Postal Service, building a network for Verizon (NYSE: VZ) and expanding its global distribution. It had turned down offers earlier last year. Prominent hedge fund, York Capital, owned a big chunk of Gilat's debt, which it converted into stock last year, making it a 30% holder. Pretty bullish signal for Gilat.

Well, the firm announced that it is to be acquired by a group of investors for $11.40/share recently. I'm blogging this less as giving us a pat on the back (though, it does feel good to get one right) but to point out an interesting part of the deal.

The deal isn't supposed to close for another six months or so. Interestingly, in a squirmy market, this stock is trading almost 7% down from its acquisition price. A 6% return for six months, or an annualized 12%, isn't a bad return if you think the deal is going to go through. I won't handicap this deal, but the consortium appears serious about its offer and its ability to get the deal done. In a bad market, it's very possible that a deal like this falls through. We saw a similar thing occur with ECI Telecom, an Israeli buyout last year, that traded almost 10% below its purchase price leading right up to the deal.

Worth taking a look and doing the research.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Just announced this morning, global drug manufacturer Novartis (NYSE: NVS) is offering to buy a minority stake in the world's largest eye-care firm, Alcon (NYSE: ACL), by buying the stake from food conglomerate Nestle (OTC: NSRGY).

Essentially, the deal is to happen in two parts. The first stage appears to be a purchase of a 25% stake in Alcon for around $11 billion. This purchase comes with an option to purchase an additional 52% stake for about $28 billion.

Novartis will pay $143.18 a share for the purchase of the 25% stake. The option to purchase the 52% stake will come at a fixed share price of $181 and can come between 2010 and 2011.

From a statement on Nestle's website, the food maker plans to use the proceeds to reduce debt and the cash will also "support opportunities for profitable growth in line with the group's nutrition, health and wellness orientation.''

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Research in Motion (NASDAQ: RIMM), the company behind the super popular BlackBerry messaging device, delivered strong forecasts that topped what analysts were expecting. In spite of what many fear to be a very dour situation for technology companies, and particularly those focused on the consumer electronics, RIMM put up some very impressive numbers, propelling the stock upwards in pre-market trading.

Instead of paring back spending, consumers seem to be continuing its spending (at least on Crackberries) as the company reported that it had nearly doubled its revenues in the last year.

There are now officially 14 million RIMM devices out there. ``The BlackBerry has moved from being an enterprise tool to being something that soccer moms are using," said one analyst interviewed by Bloomberg.

As armchair analysts, we should ask ourselves why does RIMM continue to perform even in the face of recession/depression/chicken-little-sky-is-caving-in scenarios?

I think obsession is the word to describe it.

Readers should be intrigued to know that the BBC reported that mega-star Madonna "sleeps with her BlackBerry" under her pillow, just in case she "remembers something during the night."

Um, ever heard of paper and pen?

For those addicted to the aptly-nicknamed Crackberry, they just can't stop. Try to get their attention over dinner? Sorry, their shifty eyes are always glancing down. Want a quiet, intimate time alone with the family? Oops, I forgot, someone is attached by what I call "the world's longest leash."

And what if that someone is yours truly? Guilty as charged...

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

As a family, we try to sit down together every night for dinner. It's a small thing, but it's the only time all day that the seven of us can both talk and listen. I walk in from work listening to my iPod and the kids ask me, "Whattya listening to?". The answer, I explained, is Yael Naim, recent holder of a top single New Soul.

Turns out that Apple (NASDAQ: AAPL)'s Steve Jobs personally picked her tune to launch the new MacBook Air, which seemed to have launched her status. Almost overnight, New Soul became the top selling song on Apple's music download site/software, iTunes. It turns out that this stint at the top was short lived as Apple, it seems, enjoyed its own form of New Years present as users rushed to redeem iTunes gift certificates. Nevertheless, while Apple has contributed to Yael Naim's success, she has also contributed to Apple's as well.

And with this surge of continuing sales for Apple's music division, Apple has recently ousted big-boy Wal-Mart (NYSE: WMT) as the #1 music retailer in the U.S. Ars Technica breaks out the numbers: 30% of retail music is now purchased online, and Apple has the largest share of retail sales including Wal-Mart and walmart.com sales.

Pretty impressive, eh?

"I'm a new soul, I came to this strange world hoping I could learn a bit bout how to give and take..."

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

While I spend most of my time looking for the next Google, Inc. (Nasdaq: GOOG) amongst public companies, I have friends who pursue similar goals but at different stages of company growth. They're venture capitalists. They get to bet OPM (Other Peoples' Money) on finding the next Sergei and Larry in a garage.

Don Dodge had an interesting article today on the state of the market for seed-stage investors, called Angels. In Angels Investors put $26 billion in 57,000 companies, Don examines what 2007 had in store for startup investors. One thing that surprised me was that angels are "the largest source of seed stage and early stage start-up capital, with 39% of 2007 angel investments going there." With a lot of money looking for a home for professional Venture Capitalists, I would have thought that smaller, angel-type investors wouldn't be the largest source of funding for startups.

Some other interesting, salient points Dodge drives home: