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125 Years of the Dow Jones Industrial Average

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The Dow Jones Industrial Average has reached 125 years old. The index was created in 1896, and has evolved through Great Depressions, recessions, and booms to take on its current form. Karen Langley and Peter Santilli report in The Wall Street Journal: One hundred twenty-five years ago, the Dow Jones Industrial Average made its debut. The index of 12 smokestack companies closed that first trading day, May 26, 1896, at 40.94. It included General Electric Co. as well as long-forgotten names like American Cotton Oil and Distilling & Cattle Feeding. Since then, the Dow has evolved with … [Read more...]

Legendary Silicon Valley Investor: ‘SPAC Fad Indicative of Later Stages of Cycle’

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Gary Silverman interviews legendary Silicon Valley investor Sand Roberston for the FT. Silverman writes of the interview: Sandy Robertson is worried about what’s happening in the markets these days, and that matters. Few people in the financial world have seen more than he has. Robertson is best known as a pioneering dealmaker in Silicon Valley, where he helped start two of the “Four Horsemen” investment banks that dominated technology underwriting in the 1990s — Robertson Stephens and Montgomery Securities. But his career dates to the 1960s, when as a Smith Barney broker covering Nebraska … [Read more...]

Stocks: S&P 500 Hit 25 Records this Year

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You may have noticed the food and beverage industry needs workers. Like, right now. You can expand that out to most businesses in the service industry. Your Survival Guy will place the blame on big government unemployment checks and on the lockdowns freaking people out. Case in point, we escaped to the city this weekend to meet friends, and when the sun went down, it turned into a ghost town. No taxis, no Uber, which is basically operating with on-and-off strikes. Why? Because the governor isn’t allowing them to charge higher prices when demand surges. According to him, the city’s still in a … [Read more...]

Analyst: Current S&P Valuations Point to Zero Return for 10 Years

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Karen Ward, a chief market strategist for JPMorgan Asset Management has taken to the Financial Times to warn investors that current S&P 500 valuations suggest returns of zero-percent for the next ten years. She writes: How worried should we be about stock market valuations? In my day-to-day conversations with clients, it seems that investors are unsure. On the one hand, they can see the US economy is bouncing back quickly, vaccines are being rolled out more rapidly in continental Europe and both governments and central banks are in no rush to rein in stimulus. For the global economy, … [Read more...]

AT&T Prides Itself on Stability of Growth

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Recently AT&T released its first-quarter earnings report in which it notched more cellphone users, more fiber-optic customers, and more HBO subscribers. The company lauded its "stability" compacted to competitors. Drew FitzGerald reports for The Wall Street Journal: The Dallas company reported 44.2 million domestic HBO and HBO Max subscribers, up from 41.5 million three months earlier, as its media division sought to gain on rivals like Netflix Inc. NFLX -1.10% and Walt Disney Co. That figure included viewers who signed up for the company’s new online streaming video service as well as … [Read more...]

Where Are We With This Stock Market? Well…

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When legendary Dow Theorist Richard Russell was still alive, he wrote about the three phases of a bull stock market. He’d write to his valued readers that you know you’re in the third phase when everyone’s talking about stocks (or dogecoin, or bitcoin, etc.). The third phase of a bull market is full of FOMOs—buyers with a “fear of missing out” on the next best thing, like lemmings jumping off a cliff. The third phase is crazy, fueled by emotion, with a narrative that goes something like this: It’s different this time. Well, yes, every day is different. And there are plenty of stories telling … [Read more...]

NJ Deli $35k in Sales, $100 Mil Valuation

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In times like these everyone looks like a winner. What could possibly go wrong? Investors have driven the market valuation of an over-the-counter traded company that owns one deli in Paulsboro, New Jersey to $100,000,000. The deli only generated sales of about $35,000 in the last two years. Recently, hedge fund manager David Einhorn used the stock as an example of the mania taking place in markets today. CNBC's Jesse Pound reports: The Paulsboro, New Jersey-based Your Hometown Deli is the sole location for Hometown International, which has an eye-popping market value despite totaling $35,748 … [Read more...]

Did You Miss the Biggest Market Rally in over Eight Decades?

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U.S. stocks just completed their largest 12-month rally since 1936 (see the chart below). The S&P 500 gained 74.9% from March 23, 2020, through March 23, 2021. Investors who bailed out of the market in March or April of last year because of the unprecedented size and scope of the pandemic created too much uncertainty, are surely soaked with regret today. Stocks are volatile. Savvy investors recognize that going in. Maintaining proper balance and perspective is vital to successfully riding through bear markets as well as bull markets. The Financial Times has more on the historic … [Read more...]

Here Comes Another Round of Roulette for Retail Investors

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Young Americans are getting hooked on speculating in stocks with government money. Each stimulus payment has seen more retail investors new to the game gamble their money on the words of online stock discussion boards or tips from friends. While everyone should try to invest for retirement, this is probably not the best approach. The Financial Times reports on retail investors' plans for the next round of stimulus money: Retail investors, who are playing an increasingly large role in the US stock market, are planning to deploy a significant proportion of upcoming stimulus cheques in equities, … [Read more...]