By G B Hart @ Shutterstock.com It's been a few years since oil was a favorite of institutional investors, but the hiatus appears to be over. Institutional investors are coming back to energy as it becomes the market's best-performing sector. Gregory Zuckerman reports for The Wall Street Journal: Big investors are starting to warm to energy. For more than five years, endowments, pension funds and other so-called institutional investors shunned the oil-and-gas industry because of big losses and concerns about climate change. Now some investors are coming back as energy emerges as the stock … [Read more...]
FAANGS Fall Like a Ton of BRICS
Do you remember the BRICS? Did you think "this time is different?" It turns out, that catchy acronyms are not the best way to invest. Ruchir Sharma explains in the Financial Times: Given the battering markets have dealt so far this year to tech stocks, led by the Faangs, it is worth stepping back and recognising what is coming apart: the whole concept of acronym investing. The unbundling of the Faangs is much like the fall of the big emerging markets, known as the Brics, a decade ago. A hot theme seizes the imagination of investors. Marketers coin an acronym to capture the trend and it … [Read more...]
The Truth About the S&P 500 is Finally Out
You have been reading warnings about the S&P 500 and the truth behind it here on Your Survival Guy for years. Now, everyone else is catching up. The big firms making up a disproportionately large part of the index’s value are suffering declines and bringing the index with them. Matt Murray writes in The Wall Street Journal’s 10 Point email: The 2022 pullback in U.S. stocks is changing investors’ behavior, with more volatility expected. The breadth of the market’s selloff has been striking, dragging valuations lower and tempering enthusiasm for risky bets in the options market. Shares … [Read more...]
Jeff Bezos Echoes Alarm of One of His Favorite Investors
Jeff Bezos has amplified the warning to investors of Bill Gurley, a general partner from Benchmark Capital. MarketWatch reports: Onto our call of the day, which comes from Bill Gurley, general partner at Benchmark Capital and a venture capitalist who made a $11 million bet in Uber UBER, -4.37% in 2011. Several of his more than a half million followers on Twitter sat bolt upright after this Twitter thread: “An entire generation of entrepreneurs & tech investors build their entire perspectives on valuations during the second half of a 13-year amazing bull run. The ‘unlearning’ process … [Read more...]
Stock Splits: Addition through Division?
"The perception is sort of the driving factor." It's a "psychological boost." These words spoken by directors at wealth funds refer to stock splits. Despite having little to no effect on the value of a company's shares, stock splits are popular with investors. Tesla recently announced it would seek to split its stock again. The Wall Street Journal reports: Tesla Inc. on Monday said it would seek to split its highly priced stock for the second time in two years. Already in 2022, both Google parent Alphabet Inc. and Amazon.com Inc. have unveiled plans for 20-for-1 splits. Stock splits … [Read more...]
Stock Market Games Are Teaching Kids All the Wrong Lessons
You rarely encourage your children to take “extreme risks.” That, unfortunately, is what’s happening with stock picking games played by high schoolers around the country. To “win,” you have to earn the most and to do so, you must take on massive leverage and perform risky trades. Does anyone really think that’s the lesson kids should be learning about their finances? Jason Zweig of The Wall Street Journal reports on the counterintuitive lessons being taught by the stock-picking games at school, writing: Every year, more than a million high-school students across the U.S. learn about … [Read more...]
CHINA COVID OUTBREAK: Stocks Plummet as Lockdowns Linger
Stock prices are falling rapidly in Hong Kong as China is hit with a renewed COVID-19 outbreak in important cities like Shenzhen. Dave Sebastian reports for The Wall Street Journal: The rout in Chinese stocks deepened as the country’s escalating battle with Covid-19 rattled a market already contending with potential U.S. delistings, domestic regulatory pressure and the global economic consequences of the war in Ukraine. After a recent surge in coronavirus infections, authorities have imposed restrictions on cities including Shenzhen, the southern financial and technology hub where … [Read more...]
TECH WRECK: Scale of Wealth Destruction Underappreciated
Is the "Tech Wreck" a new dot-com bubble bursting? In the Financial Times, Robin Wigglesworth suggests that the scale of wealth destruction currently happening in the market is underappreciated. He writes: At what point does the slump in US technology stocks stop being dismissed as a mere “tech wreck” primarily centred on the most speculative companies and become considered a fully-fledged dotcom crash 2.0? The combination of increasingly hawkish central banks and Russia’s invasion of Ukraine has been toxic for equity markets this year. The MSCI All-Country World index is now down 12 per … [Read more...]
A Penny Saved Is a Penny Burned
Investors are reducing their bets on speculative "penny" stocks. According to FINRA, trades of over-the-counter (OTC) stocks have fallen each month for the last 11 months straight. Nicholas Megaw reports for FT: Many of the riskiest areas of financial markets experienced a surge in activity at the height of the coronavirus pandemic, with amateur traders attracted by rebounding asset prices, government stimulus cheques and an escape from lockdown boredom. However, the Finra figures are the latest sign of their retreat as volatility rises and the Federal Reserve prepares to raise interest … [Read more...]
Has the Day of the Shorts Finally Arrived?
Short bets on the S&P 500 are soaring, and the price of the index has dropped for days. Has the day short investors have been waiting for finally arrived? Bloomberg reports: Whatever happens in Ukraine or how it affects Federal Reserve policy, the outcome will land in markets where investors have had time to prepare for the worst. It may be one reason the worst has so far been avoided. They’ve been steadily boosting bets against equities, shaking off a reluctance to short tracing to last year’s meme stock upheaval. Bearish bets on the largest exchange-traded fund tracking the S&P … [Read more...]
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