In my 10/27/11 commentary, “3 Reasons Stock ETF Investors Should Continue To Tread Lightly,” I pointed to the fact that the month-long stock surge had not come from the spectacular earnings season; in fact, the average return for individual securities on the session following a Q3 earnings report was -0.21%, suggesting that the entire October run-up emanated from enthusiasm for pan-European cooperation.
It follows that articles [...] 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...
Like IPOs, freshly launched ETFs receive prodigious praise out of the trading gate. And like many IPOs, many struggle to live up to the hype.
Consider the First Trust Cloud Computing Fund (SKYY). After 9 trading sessions, SKYY currently rests at its lowest close since its July 6 debut. And that’s after an enormous amount of positive press.
In reality, [...] Continue Reading...
Conventional commentary on Wednesday, 7/6/2011, described the trading as light and lackluster. Yet S&P SPDR Gold (GLD) climbed back above a critical trendline, PowerShares Developed Market Ex US (PXF) experienced 30x the normal trading volume and iShares DJ Transports (IYT) notched a new 52-week high.
Beginning with the yellow metal, some surmised that the “risk-on” trade [...] Continue Reading...
Two of the most bullish voices in the mainstream media include money manager Ken Fisher and Bob Doll, the chief equity strategist at Blackrock. Fisher experienced an epic “fail” by completely missing the 2007-2009 bear/financial collapse; he had little choice but to stick with a never-ending bullish theme to claim credit for calling the “turnaround.”
Bob Doll has always [...] Continue Reading...
Mainstream media reports have been weaving a positive spin into most of their features. Japan? The rebuilding process may actually increase worldwide economic growth. Libya? The ousting of Gaddafi may actually reduce geopolitical risk in the Middle East.
The problem with these “maybes” is that there is equally compelling evidence for negative outcomes. While I have no doubt [...] Continue Reading...
In March of 2008, I talked about Warren Buffett’s increasing financial interest in transportation companies like Burlington Northern Santa Fe. It served as a “lead-in” to the notion that the iShares DJ Transportation Index Fund (IYT) could tell you when the U.S. economy might heal.
Similarly, the folks at Morningstar recently mentioned that Buffett acquired the 2nd [...] Continue Reading...
Transportation companies (e.g., railways, air delivery, trucking, shipping, etc.) move materials and unfinished goods to industrial giants like Caterpillar, Boeing and General Electric. Many believe that if the transporters are “on the go,” then the economy is showing signs of health.
In contrast, some investors used to turn to the ”phone companies” for safer haven investing during recessionary periods. Historically, the higher-than-average [...] Continue Reading...
I try to be open about my investing biases. I prefer Asia ETFs to most Latin America ETFs, perhaps because I’ve lived in Hong Kong, Thailand and Taiwan. I’ve been a frequent advocate for income-producing U.S. assets like iShares S&P Preferred (PFF) and JP Morgan Alerian MLP (AMJ), often at the expense of reasonably valued common stock [...] Continue Reading...
InTrade.com currently predicts a 70% chance that Republicans will control the House Of Representatives after the 2010 elections. The site’s prediction market platform has Republican chances of claiming the Senate at approximately 28%.
Indeed, many expect big changes after the mid-terms. In fact, there’s a growing sense of giddiness about how high the markets might climb… particularly, if the entire [...] Continue Reading...
