Warren Buffett suggests that we buy when others are fearful. On the other hand, buying when others are afraid is rarely as profitable as purchasing when others are catatonic. So just how petrified are institutional investors, insiders and the investing public? The S&P 500 has shed 125-plus points in 3 1/2 weeks. That is a a [...] Continue Reading...
In 2011, S&P 500 profits expanded 15%. And yet, the benchmark’s price finished in the very same place that it started the year. In essence, since prices flat-lined and earnings experienced double-digit growth, a fundamentally inexpensive stock market via the price-to-earnings ratio (P/E) became even cheaper. The most common reason cited for P/E contraction in 2011? The Euro Zone debt crisis. Obviously, sovereign [...] Continue Reading...
Factual headlines are often misleading. For example, a popular financial portal offered, ”October consumer confidence weakest since March 2009.” Most people might interpret this to mean that consumers aren’t spending and/or won’t be spending their money, resulting in less revenue for economically sensitive corporations. However, actual consumer spending has been on the rise… 1.1% in September alone. Equally important, Retail ETFs [...] Continue Reading...
The number “88″ means a lot of different things to different people around the world. For some, it expresses the notion that the universe is both infinitely large and infinitely small. Others see it as a message of eternal love. Meanwhile, Chinese culture recognizes “8″ as its luckiest number, with “88″ symbolizing even greater fortunes. However, 8/8 is a rather dismal date for the [...] Continue Reading...
Short-sellers and program traders are in charge… for now. Going into Wednesday’s (8/3/11) session, PowerShares QQQ (QQQ) sat directly atop its 200-day moving average. After falling below the key trendline early, QQQ springboarded to finish with a 1% gain. Or consider the S&P 500 SPDR Trust (SPY). It fell precisely -10% from its April 29 intra-day high to its August 3 [...] Continue Reading...
One of the “constant” declarations of the current earnings season? Of those reporting, roughly 3/4 of corporations exceeded profit-per-share estimates. On the other hand, it’s not uncommon for 2/3 to 3/4 of companies to beat lowered expectations; key executives help to create “beatable” numbers. In addition, each of 8 major economic sectors typically have corporations that, historically speaking, raise the earnings-per-share [...] Continue Reading...
At the start of the week, analysts were wondering whether or not stocks could “hold the line.” Specifically, the bulls were simply hoping that the current price on the S&P 500 would stay above its 200-day moving average. However, the S&P 500 had little trouble holding the 1263 level. In fact, by Thursday, June 30, the U.S. stock [...] Continue Reading...
Every once in a while, I receive an e-message that makes me chuckle. Here’s one that caused me to snort Tejava tea out of my nose. “What’s a HOLDR? It sounds less like an investment and more like the messed-up character from The Catcher In The Rye.” In truth, the inquirer could readily unlock a suitable answer with a Google search. On the other [...] Continue Reading...
It often pays to gander at individual companies that are languishing on the list of New 52-Week Lows. In general, if you identify a number of brand name corporations that fit into a particular industry, there’s a high probability that a Sub-Sector ETF has been rattled as well. For instance, Bank of America (BAC) and Hudson City Bancorp (HCBK) reached [...] Continue Reading...
Until recently, scores of gurus had questioned the sector rotation into non-cyclical sectors. April jobs numbers were “phenomenal” and corporate earnings were sensational. Why should investors sell in May and go away? Yet telecom, health care and consumer staples (e.g., toothpaste, peanut butter, etc.) were rocketing up the relative strength percentile rankings. And many analysts explained that the April-May [...] Continue Reading...
