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...
In the best of times, stock prices of different economic segments behave differently. So it isn’t surprising to find Sector ETFs travelling unique paths in ”challenging times.” For instance, if we are heading for the dreaded “double dip,” one might expect relative strength in consumer staples and health care. Staples (XLP) is currently showing relative strength, yet [...] Continue Reading...
Permabears will probably point to Thursday’s volatile stock sell-off as proof of a double-dip recession. They’ll also suggest that the market’s action is indicative of a major decline ahead. The problem that I have with ”get-me-noticed” predictions of devastation is the permanency of the position. For instance, when stocks move higher, permabears explain that it is either a [...] Continue Reading...
Why are so many financial articles attributing the 2.25% jump in equities to upbeat earnings reports? Honestly… it’s not like upside surprises haven’t been running at 3 out of 4 from the get-go. It’s not like 3M, AT&T or UPS presented game-changing insight into corporate America’s stellar profitability and respectable sales. Sure, some of the market gains are attributable to earnings [...] Continue Reading...
The University of Michigan’s Consumer Sentiment Report could not have been more dismal. The gauge fell to its lowest level of confidence since the 2009 start of the Obama Administration. The news weighed heavily on stocks, pushing the S&P 500 back into solid correction territory… roughly 12.5% off its April high. And yet, consumers and investors are as frightened [...] Continue Reading...
John P. Hussman can be remarkably outspoken. He may even be one of the brightest minds in the investment management business, where several hallmark Hussman Funds serve as admirable hedges against market demise. With that said, Mr. Hussman’s recent commentary of 6/14/10 caused my skepticism to perk up. In bold letters he wrote, “unless credit spreads, the S&P 500 or the yield [...] Continue Reading...
The Dow Industrials has dropped below 10,000 for the first time since February 8. Worse yet, the overwhelming majority of stock ETFs are noticeably lower than they were just one month ago. That said, many trend-followers look to the 200-Day moving average to determine the long-term direction of their specific investment. Here are 5 that may or may not surprise [...] Continue Reading...
