Is it just me or has the quarterly earnings season become nauseating? At Young Research we try to spend as little time as possible scrutinizing the short-term results of the companies we follow for Intelligence Report and Global Investment Strategy. But the quarterly earnings headlines are unavoidable in the Wall Street Journal and other financial publications. The chief focus of the media seems to be on quarterly earnings surprises—whether or not a company beat the consensus earnings per share estimate. Companies that beat estimates often see their shares rise and those that miss see their … [Read more...]
Archives for April 2012
What We’re Reading 4-27-12
Congress Finally Takes on the Fed, George Melloan, The Wall Street Journal Why the Euro Isn't Worth Saving, Matthew O’Brien, The Atlantic TARP: Billions in Loans in Doubt, McGrane, Sidel, and Sparshott, The Wall Street Journal US Tire Tariffs: Saving Few Jobs at High Cost, Gary Clyde Hufbauer, PIIE … [Read more...]
VIDEO: Sell in May & Go Away?
Bernanke: Krugman Policy ‘Reckless’
On April 24 The New York Times Magazine published an article by Nobel Prize winning economist Paul Krugman. In his article, Krugman lambastes Federal Reserve Chairman Ben Bernanke for not doing more to help the economy. Krugman seems upset that Bernanke once advocated for greater intervention by the Bank of Japan to stem economic malaise in the Japanese economy, but the Fed Chairman will not intervene more forcefully to help the U.S. economy. The “evidence” for Krugman’s critique comes mostly in this paragraph: In a hard-hitting 2000 paper titled “Japanese Monetary Policy: A Case of … [Read more...]
Big Drop in New Orders a Bad Sign for Economy
More fallout from new orders came this month. Manufacturers’ new orders for durable goods fell the most since January 2009, the heart of the Great Recession. A late 2011 boost from temporary stimulus measures in the tax code is obscuring a trend of eight months of weakness in new orders. Particularly hard hit were new orders for nondefense capital goods, down 10.5%. Its subcomponent, new orders for nondefense capital goods excluding aircraft parts, fell by 0.8%. The measure is a component of the Conference Board’s Leading Economic Index. The fall could be a sign of future Leading … [Read more...]
Why Stocks Go Up
Stocks have been wild lately. They swing up; they swing down. Listen to the boys and girls on CNBC and you hear, “You bet this market’s got some legs—it should continue up.” Then the next morning Spain has trouble selling bonds, and stocks fall 100 points at the open. You could have had a better night watching Modern Family. For my money, it’s the increase in dividends that makes a stock go up. You buy a stock, it pays a dividend, and then next year it increases that dividend. What’s not to like? If a company increases its dividends for a loooong time, then it becomes one of the dividend … [Read more...]
Fear and Greed: Read the Market like Warren Buffet
If you tune into to CNBC regularly, you’ve likely come across a segment where the commentators are talking about the VIX Index. You may have wondered what the significance of the VIX was and what its implications are for your portfolio. The VIX isn’t like the Dow Jones or the S&P 500—it doesn’t track the movement of stock prices. The VIX is a measure of risk. Some call it the “fear gauge.” According to the Chicago Board of Options Exchange, the organization that publishes the index, the VIX is a “key measure of market expectations of near-term volatility conveyed by S&P 500 stock … [Read more...]
What We’re Reading 4-20-12
How the Fed Favors The 1%, Mark Spitznagel, The Wall Street Journal Sowing Seeds of the Next Major Crisis, Francesco Guerrera, The Wall Street Journal Open sesame, The Economist VIDEO: Maximizing after-tax returns, Joel Dickson, Vanguard … [Read more...]
Is This What a Recovery Feels Like?
A slew of industrial reports were released by the Federal Reserve this week. All of the releases’ headline numbers missed analysts’ estimates. The picture painted by the charts below indicates an uneven recovery hampered by residual weaknesses in certain sectors of the economy. The Empire State Manufacturing Survey came out Monday. Growth in New York’s manufacturing industry slowed, with prices still climbing. One of the biggest problems New York manufacturers cited for their business was trouble finding skilled employees, especially those with advanced computer skills and those with an … [Read more...]