discounted gas

May 9, 6:05 AM ET

A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices.

Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon.

But the state Department of Agriculture, Trade and Consumer Protection says those deals violate Wisconsin's Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.

Bhandari said he received a letter from the state auditor last month saying the state would sue him if he did not raise his prices. The state could penalize him for each discounted gallon he sold, with the fine determined by a judge.

Bhandari, who bought the station a year ago, said he worries customers will think he stopped the discounts because he wants to make more money. About 10 percent of his customers had used the discount cards.

Dale Van Camp said he bought a $50 card to support the local youth hockey program. It would have saved him about $100 per year on gas, he said.

May 9, 3:08 PM ET

It's dense, gassy and a bit of oddball, but a planet orbiting a star in the constellation Hercules may be the hottest known yet, scientists said on Wednesday.

The planet -- HD 149026b -- is smaller than the typical gas giant and its atmosphere is much heavier, contributing to its staggering temperature of 3,700 degrees Fahrenheit (2,040 Celsius), they said.

The discovery comes as astronomers create the first-ever climate map of a more typical gas giant.

Both findings, reported in the journal Nature, will help scientists gain a better understanding of climate on planets outside our solar system.

University of Central Florida's Joseph Harrington describes the hot planet as a black ball with a red spot staring right at its star.

"It looks like the evil eye," he said in a telephone interview.

The planet is a so-called "hot Jupiter," a gas giant that orbits very close to its star.

It is one of 14 planets outside our solar system that passes in front of and behind its parent star as seen by Earth -- known as "transiting" planets.

By measuring changes in the amount of light given off by the star as the planet crosses its path, Harrington and colleagues were able to deduce its temperature.

"This planet is off the temperature scale that we expect for planets," said Drake Deming of NASA's Goddard Space Flight Center in Greenbelt, Maryland, who worked on the study.

Harrington said for a planet to get so hot, it must be absorbing most of the light that reaches it. That light is radiated back in the form of a dim red glow.

HD 149026b is located 279 light-years from Earth with a light-year being the distance light travels in a year -- about 6 trillion miles.

While Harrington and colleagues have found the most extreme of the hot Jupiters, researchers at the Harvard-Smithsonian Center for Astrophysics have created a rough climate map for a more garden-variety gas giant.

Using NASA's Spitzer space telescope, researchers measured changes in infrared light coming from the planet HD 189733b in the constellation Vulpecula some 60 light-years from Earth.

The planet is tidally locked to its star, so that one side always faces the star and the other side is always dark.

What the study revealed is a planet with supersonic winds more than six times faster than those on Jupiter that are distributing heat evenly around the planet, even the side that does not face its sun.

"You've got this big belt of wind that is whipping around the planet," Heather Knutson of the Harvard-Smithsonian Center said in a telephone interview.

Harrington said Knutson's work will come to serve as the model for mapping climate on other planets.

"It's a Rosetta Stone," he said.

Are trend-following systems as effective today as in the good old days?
Many of you e-mailed me with this question a couple of weeks ago, following my column that took Douglas Fabian to task for deviating from the moving-average system that his newsletter had made famous several decades ago. See April 24 column
Perhaps that was unfair, some of you argued, given evidence in the late 1990s suggesting that moving average systems had stopped working. See Oct. 12, 2005, column
Given that evidence, Fabian hardly can be criticized for looking for other market timing indicators that haven't lost their touch, can he?
These are all good and fair questions. Fortunately, for this column, I have some answers, courtesy of a study that calculated the 200-day moving average's track record back to 1979, nearly 30 years ago.
Not to bury my lead too much: The study shows that the moving average's failure in the 1990s was merely temporary; this decade, it has reverted to its longer-term pattern of success.
The study was conducted by Ned Davis Research for Israel-based Psagot Mutual Funds, which shared the study with me. The study encompassed the period from late 1979 and until last week, over which time buying and holding the S&P 500 index (SPX :
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SPX1,512.58, +4.86, +0.3% ) produced a 10.2% annualized return.
In contrast, a strategy that switched between the S&P 500 and commercial paper according to whether the S&P 500 was above or below its 200-day moving average produced an 11% annualized return. And not only did the strategy market more money than buying and holding, it did so while being significantly less risky than the overall market. That's a winning combination.
There's more than one way of measuring the extent to which this strategy reduced risk, of course. One is to simply look at the percentage of time that it was out of the market, which turns out to be around a quarter of the time. Another is to measure the volatility of returns; according to Ned Davis Research, the standard deviation of the moving average system's annual returns is 13% less than for buying and holding.
(Sticklers for detail may quibble that the 200-day moving average that Ned Davis Research studied is not the same as the 39-week moving average utilized by Fabian's newsletter. But the two moving averages are very similar, since 39 weeks equals 195 trading days. I'm confident that the track record of the 39-week moving average would be quite close to that of the 200-day moving average.)
More relevant to a discussion of Fabian's recent track record, however, is what the Ned Davis Research study shows for this decade. From Jan. 1, 2000, through the past week, the 200-day moving average strategy analyzed by Ned Davis Research beat a buy-and-hold by 1.8 percentage points per year, on an annualized basis. And it did so while being out of the stock market nearly 40% of the time. The volatility of its returns this decade was 35% less than for buying and holding.
In other words, the 200-day moving average system has performed better this decade than it did on average over the previous two decades.
This finding prompted me to check in with Blake LeBaron, a finance professor at Brandeis University, who has extensively studied moving averages as a market-timing tool. He said that the apparent success of the moving average system in the stock market this decade would certainly seem to cast doubt on one of the hypotheses that had been advanced in the 1990s for why the system was lagging the market. That hypothesis was that the system had become a victim of its own success, with too many investors following it and thereby discounting away any profits that it would otherwise have produced.
Instead, LeBaron indicated, the moving average's success this decade now makes an alternate hypothesis more likely: That the decade of the 1990s was merely an exception to the longer-term rule. That would certainly stand to reason, of course, since moving average systems have a particularly hard time when the market is going up - since any time spent out of the market will lead to market-lagging performance.
The bottom line? Don't count the moving-average system out for timing the stock market. There is no evidence that its performance this decade is any less impressive than its long-term record.
And there is especially no such evidence now: The 200-day moving average has been on a buy signal since mid-August 2006, when the S&P 500 stood around 1,285 and even the bulls were not envisioning as bullish a nine months as we've actually experienced

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