A Simple Recipe for Beating the Market 3 to 1
Over more than eight decades of stock market history, a dividend focused approach has been a winning investment strategy. Consider that if you invested $100 in the stock market in 1927—as measured here by a portfolio of large-capitalization stocks— today your portfolio would be worth $190,000. A... Read the full story
Netflix: The Risk of High Expectations
Most of you are no doubt familiar with Netflix—the leading DVD and video-streaming rental business in America. Up until recently, Netflix was a high flyer—a momentum stock. From year-end 2009 to June 2011, the shares rose over 375%—the highest return in the S&P 500. During the company’s 18-month... Read the full story
Home Prices Tumble and Confidence Plunges
The commerce department released September new home sales yesterday. The number of new homes sold in September came in at an annual rate of 313,000—13,000 more than economists’ average estimate. But new home prices tumbled to a post-bubble low. The average price of a new home in the U.S. fell to... Read the full story
Did the Fed Just Signal QE3?
Are you ready for another round of reckless money printing from the most activist Federal Reserve in U.S. history? Last week, the doves (easy money advocates) on the Federal Open Market Committee (FOMC) started laying the groundwork for a third round of quantitative easing. Is that a tacit admission... Read the full story
A Truly Terrifying Chart
The chart below is the spread between French and German government bonds. Equity markets have rallied on hopes that an American-styleshock and awe bailout package from France and Germany can solve the euro-area’s debt crisis, but the bond market has other ideas. The French-German spread has blown-out... Read the full story
3 Reasons Dividends Trump Buybacks
In September, Warren Buffett announced that the Berkshire Hathaway board authorized a multibillion-dollar share-buyback program. Berkshire shares soared as much as 12% on the news. The market’s reaction to the buyback announcement is common. When companies announce buyback plans, their stocks often... Read the full story
Disturbing Jobs Data
Weekly jobless claims, a leading indicator of both the labor market and the U.S. economy were released this morning. Claims came in at 404,000, a drop of 1,000 from last week, but still above the crucial 400,000 mark that signals trouble. The four week moving average, which smoothes out the weekly volatility,... Read the full story
Coping with Manic Markets
The S&P 500 leapt higher by 3.4% today on yet another plan-to-make-a-plan out of Europe and on news that the Chinese government will boost its stake in the nation’s largest banks. The benchmark index closed above its 50-day moving average for the first time since July. In the span of only five... Read the full story
Diverging Performance
The S&P 500 hit a cyclical bull market high on April 29 of this year. During a volatile session on Tuesday, the index dipped into official bear market territory (a drop of more than 20% from a recent high), but a stunning final hour rally of more than 4% helped the index narrowly escape the official... Read the full story
Welcome to the Bear Market
On a closing basis, the S&P 500 hasn’t dropped the necessary 20% to be considered an official bear market, but for all intents and purposes U.S. stocks are in a bear market. If you measure the index on an intra-day basis, the peak to trough decline was 21.58% at today’s low. And if not for a... Read the full story
