Before the bell on Monday, 5/7/2012, Warren Buffett announced that he’d eagerly acquire shares in two major U.S. corporations. Yet tech standouts like Apple (AAPL) and Google (GOOG) aren’t on his “buy list.” Maybe they should be. According to Birinyi Associates, the current price-to-earnings ratio of the Dow Industrials is 14.5. For the NASDAQ 100? 11.8. Mr. Buffett [...] Continue Reading...
Financial stocks rocketed ahead in the first quarter and Bank of America (BAC) recently received a high-profile upgrade. So why is the SPDR Select Sector Financials Fund (XLF) one of the worst performers over the last 5 days? Aluminum giant, Alcoa, surprised Wall Street with its stronger-than anticipated earnings report. So why is the SPDR Select Sector [...] Continue Reading...
My clients have benefited from a healthy slice of exposure to risk in 2012. Top ETF holdings include assets like SPDR S&P China (GXC), Vanguard Dividend Growth (VIG), iShares High Yield Corporate (HYG) and Vanguard Growth (VUG). My income-oriented winners like JP Morgan Alerian MLP (AMJ) and PowerShares CEF Income (PCEF) have been noticably slower on the [...] Continue Reading...
In the 2/10/2012 edition of USA Today, journalist Janice Lloyd presented a number of sobering stats for baby boomers. For example, the demand for knee replacements in the 45-64 age bracket has tripled over the past 10 years. What’s more, nearly 1/5 of the 4.5 million Americans who have already experienced total knee replacements may eventually require revisions due [...] 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...
Popular emerging markets in the BRIC configuration – Brazil, Russia, India, China – suffered through severe bear markets in 2011. Yet far too many writers attribute the 20%-33% declines to Europe’s sovereign debt crisis alone. It is true that the debt mess sent the U.S. dollar higher at the expense of the ruble, “real,” and the rupee. Contagion containment has also damaged the prospects for emerging market [...] Continue Reading...
On the first day of December, 2011, a number of brand name corporations hit new 52-week highs. Here are a few that caught my eye: McDonalds (MCD), Phillip Morris (PM), Diageo (DEO), Kraft (KFT) and Treehouse Foods (THS). Keep in mind, most of the media attention centers on the discretionary spending of the consumer (e.g., “Black Friday” widescreens, ”Cyber Monday” acquisitions of [...] Continue Reading...
Is it possible that commentators have underestimated Warren Buffett’s flexibility? Indeed, the Oracle of Omaha is best known for buying the cheapest names on “boring” brand name institutions, like Coca-Cola (KO), American Express (AXP) and Procter & Gamble (PG). He rarely showed interest in anything remotely “tech.” Yet during the summer of our discontent — when technology shares plummeted alongside double-dip recession fears [...] Continue Reading...
Here’s a disclaimer from the get-go. If the European Union fails to persuade the world that they’ve got a workable, TARP-like plan on Wednesday, feel free to disregard these 3 reasons to add more Stock ETFs to your current allocation. 1. 2008 Or 1998? Endless comparisons have been made between 2011’s sovereign debt toxicity and 2008’s subprime loan [...] Continue Reading...
Many folks are “banking” on a year-end rally. The catalyst? The European Union (EU) will come up with a massive recapitalization (a.k.a. bailout) of their financial institutions. In theory, if we no longer need to fret the collapse of the EU — the solvency of member nations, the functionality of its banks, etc. – investors should be able to return to corporate earnings. And most should like [...] Continue Reading...
