This time is different or so says Adam Parker, Morgan Stanley’s Chief U.S. Equity Strategist in missive earlier this week. What is different? Here is Mr. Parker in his own words. “People have been saying corporate margins are too high for years. Our judgment is that most of these metrics are irrelevant for making any market-based assessment in time frames less than a decade, if at all." Think again about Black Friday being smaller than Amazon Prime Day. This is a great example of how the new economy is taking over the old and how historical relationships between economic factors and … [Read more...]
Archives for September 2015
Monday Melee: Cash Is King
What we're reading. • U.S. Bonds Flash Warning Sign - The Wall Street Journal • Why GE's Diet Should Carry More Weight With Investors - The Wall Street Journal • As Xi visits the United States, China's economy is at a tipping point - Reuters • Cash beats stocks, bonds for first time in 25 years - Market Watch • Emerging Markets Go From Bad to Worse - The Wall Street Journal • Falling China Factory Gauges Rattles Hopes for Second-Half Growth - The Wall Street Journal … [Read more...]
Did Yellen Save the Stock Market?
Janet Yellen gave a speech yesterday at UMass Amherst titled Inflation Dynamics and Monetary Policy. Yellen was a bit more hawkish on monetary policy than she was during the press conference following the Fed’s latest meeting. The market is taking Yellen’s more hawkish tone as a sign that the global economy may not lead the U.S. into a depression after all. Good is good for asset prices again? Hallelujah to that. Or was it this report, by a JP Morgan derivatives analyst who became a rock star in the minds of many on Wall Street for his prescient calls on the market over the last month? The … [Read more...]
AOK with Vanguard GNMA
You can take comfort in knowing you’re AOK with Vanguard GNMA. Pay no attention to the doomsayers calling for the bursting of the bond bubble. “Vanguard GNMA is one of my two largest holdings, and I would like to see it as one of your top two,” writes Dick Young in the September issue of Intelligence Report. Dick continues: Buy Vanguard GNMA Ginnie Mae’s balance sheet doesn’t use derivatives to hedge or carry long-term debt. What Ginnie Mae does is guarantee investors the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans—mainly loans insured by … [Read more...]
Navigating a Hostile Market
Despite the correction in stock prices over the summer and the general choppiness in the market since, the more speculative oriented NASDAQ continues to outrun more investor friendly shares. We represent the investor-friendly market here by the dividend achievers index (companies with a record of paying and increasing dividends). The market is saying that a bird in the hand is no longer worth two in the bush. Investors are instead putting a premium on the prospect of there being two birds in the bush a decade or more in the future. Is that a strategy you want to partake in? Then we … [Read more...]
iPhone iOS9 Hack and Chinese Malware
Want to earn a cool million? Are you familiar with a security breach at Apple's app store? I was clued in to these stories from our in-house systems and network manager. A security firm is offering up the million dollar bounty, the largest to date and capped at $3 million, for the successful hack. "Rather than report vulnerabilities in software to the companies that make it to help fix hackable bugs, Vupen develops hacking techniques based on those bugs and typically sells them to multiple government customers," reports Wired. In a separate report from Wired, there are concerns related to how … [Read more...]
Music Video: Way Back Home
The Fed would do us all a whole lot of good by setting a proper course on interest rate increases. Instead it continues to pander to Wall Street and is five years late to the party. The Fed has clearly lost its “Way Back Home”. A better R&B quintet sound would be hard to find. Cornell Dupree was one of the top three R&B guitarists around. Larry Goldings is a top three Jazz Hammond B3 organ guy. Ronnie Cuber is a top three jazz baritone sax player (Way Back Home needs a baritone sax). Eddie Gomez is a top ten jazz bass player. Finally Steve Gadd seems to be everywhere at once and … [Read more...]
Monday Melee: Zero Rates for Longer
What We’re Reading • Stuck on Zero • If Only the Fed Would Get Out of the Way • The Federal Reserve Pulls a Lucy • The Fed Stands Pat -- And So Will The Economy • What a Fed Interest Rate Change Could Mean For Your Wallet … [Read more...]
VIDEO: Federal Reserve is Hostage to Markets: UBS
Steve Jobs and NEXT
When I was at Babson College I had an internship at a start-up company. At one of our retreats we watched the following video featuring Steve Jobs which I was reminded of reading this WSJ article. I recommend it to anyone thinking about going into business. I also can’t help but think there was an Apple Inc. with Steve and then there’s all the others. … [Read more...]